EX-99.1 3 a83099exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 [HAWTHORNE LOGO] HAWTHORNE FINANCIAL CORPORATION PRESS RELEASE JULY 22, 2002 IMMEDIATE RELEASE Contact: Ms. Simone Lagomarsino, President and Chief Executive Officer (310) 725-5631 Ms. Karen Abajian, Chief Financial Officer (310) 725-1890 HAWTHORNE FINANCIAL ANNOUNCES SECOND QUARTER 2002 RESULTS (El Segundo, CA) Hawthorne Financial Corporation (NASDAQ:HTHR), parent company of Hawthorne Savings, F.S.B., today announced second quarter earnings for 2002 of $5.3 million, or $0.69 per diluted share, compared with earnings of $3.6 million, or $0.48 per diluted share after extraordinary item, for the second quarter of 2001. Net earnings year-to-date for 2002 were $11.2 million, or $1.46 per diluted share, compared with net earnings of $6.6 million, or $0.88 per diluted share, for the six months ended June 30, 2001. Net income for the three and six months ended June 30, 2002, resulted in an annualized return on average assets ("ROA") of 1.14% and 1.20%, respectively, and an annualized return on average equity ("ROE") of 17.03% and 18.27%, respectively, compared with an annualized ROA of 0.82% and 0.75%, respectively, and an annualized ROE of 13.30% and 12.36%, respectively, for the three and six months ended June 30, 2001. Income before income taxes and extraordinary item increased 46.83% and 63.47%, respectively, for the three and six months ended June 30, 2002, to $9.3 million from $6.3 million and to $19.6 million from $12.0 million, during the same periods in 2001. The Company's net interest income before provision for credit losses increased 13.44% to $16.5 million and 17.43% to $34.1 million, during the three and six months ended June 30, 2002, compared with $14.6 million and $29.0 million for the three and six months ended June 30, 2001. The Company's resulting net interest margin for the three and six months ended June 30, 2002, was 3.56% and 3.68%, compared with 3.30% for both the three and six months ended June 30, 2001. The Company's yield on average earning assets was 6.80% and 7.00% for the three and six months ended June 30, 2002, compared with 8.40% and 8.59% during the same periods in 2001. During the three and six months ended June 30, 2002, interest of $0.6 million and $1.0 million, respectively, was collected on loans that were brought current, producing a positive but nonrecurring impact on the Company's net interest margin of 13 basis points and 11 basis points, respectively. The Bank experienced strong loan originations during the first six months of 2002, recording new commitments of $334.3 million, consistent with the same period in 2001. Although loan production was strong, the Bank experienced accelerated prepayments of higher yielding assets during the first six months of 2002, which totaled $327.7 million, with a weighted average rate of 7.77%. The new loans originated were recorded at an average yield of 6.47%. The average cost of funds for the Company decreased to 3.57% and 3.67% during the three and six months ended June 30, 2002, compared with 5.59% and 5.81% during the same periods in 2001. "We are extremely pleased with our loan origination levels for the first half of the year," said Simone Lagomarsino, president and chief executive officer of Hawthorne Financial Corporation. "In a lending environment dominated by mortgage refinancing, we capitalized on our superior customer service and originated $177.5 million in single family residential loans, of which 67% were for home purchase transactions." "Growing our loan portfolio by originating quality loans, continues, as always, to be a key focus. We believe our acquisition of First Fidelity will assist us in this process, as First Fidelity's results show that they have a proven asset generating capability. First Fidelity's net loans have grown 11.3%, on an annualized basis, this year, and have averaged a growth rate of approximately 12.3% over the past three years," Ms. Lagomarsino added. "I am pleased not only with the strength of our financial performance, but more importantly with the integrity of our results," said Ms. Lagomarsino. "A culture of high ethical standards is deeply ingrained throughout the HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 2 OF 10 Company beginning with our Board of Directors, six out of seven of whom are outside directors. Our management team and Board of Directors enthusiastically support the call for higher standards of corporate governance, and we are committed to ensuring that trust, integrity and honesty are never compromised at Hawthorne." Provisions for credit losses totaled $0.2 million and $0.7 million for the three and six months ended June 30, 2002, compared with $1.0 million and $2.5 million for the three and six months ended June 30, 2001. The decrease in the provision for credit losses was due to the overall improvement in asset quality. At June 30, 2002, the ratio of total allowance for credit losses to loans receivable, net of specific allowance and deferred fees and costs was 1.77%, compared with 1.76% at December 31, 2001 and 1.75% at June 30, 2001. Nonaccrual loans totaled $6.1 million at June 30, 2002 (or 0.33% of total assets), compared with nonaccrual loans of $20.7 million (or 1.11% of total assets) at December 31, 2001 and $27.5 million (or 1.52% of total assets) at June 30, 2001. Total classified loans were $45.1 million at June 30, 2002, compared with $58.0 million at December 31, 2001. Delinquent loans totaled $11.9 million at June 30, 2002, compared with $7.7 million at December 31, 2001. The Company held no other real estate owned properties at June 30, 2002, compared with $1.3 million at December 31, 2001. Underwriting standards for construction loans were further tightened during the first six months of 2002. As a result, construction loans decreased to 12.0% of the total loan portfolio from 15.9% at December 31, 2001. The Bank remains committed to the seasoned builders with whom it has established relationships, but believes it is prudent to reduce construction exposure until the national economy is on a stronger footing. The California housing market continues to show surprising strength with pockets of softness only in higher-end homes. Noninterest revenues were $1.2 million and $2.5 million for the three and six months ended June 30, 2002, compared with noninterest revenues of $1.5 million and $3.0 million earned during the same periods in 2001. For 2002, loan related fees decreased due to the lower risk nature of the loans underwritten and the competitive lending environment during the last three years. The Company remains focused on becoming more efficient. Over the past three years, the Company has maintained a consistent expense run rate while continuing to grow earning assets. This performance is depicted in the ratio of general and administrative expenses as a percentage of average assets. On an annualized basis, this ratio has improved to 1.76% for the six months ended June 30, 2002, compared with 2.00% and 2.08% for the comparable periods in 2001 and 2000, respectively. Total general and administrative expenses ("G&A") were $8.3 million and $16.3 million for the three and six months ended June 30, 2002, compared with $8.7 million and $17.7 million of G&A incurred during the same periods in 2001. The decrease in G&A for the six months ended June 30, 2002 was primarily due to a decrease of $1.2 million in professional fees, as a result of first quarter 2002 insurance company reimbursements totaling $0.7 million for legal fees related to litigation and fewer outstanding legal issues. The efficiency ratios were 46.66% and 44.63% for the three and six months ended June 30, 2002 compared with 54.36% and 54.87% for the three and six months ended June 30, 2001. Excluding the $0.7 million insurance reimbursement for legal fees related to litigation, the efficiency ratio for the six months ended June 30, 2002 was 46.58% Total assets were $1.84 billion at June 30, 2002, down slightly from total assets of $1.86 billion at December 31, 2001. Net loans receivable at June 30, 2002, totaled $1.59 billion, reflecting an annualized decrease of 13.70% compared with net loans receivable of $1.71 billion at December 31, 2001. As previously mentioned, the Bank continued to experience an increase in loan prepayments during the first six months of 2002 as borrowers refinanced out of their variable rate loans into fixed rate loans. For the three and six months ended June 30, 2002, average earning assets were $1.86 billion for both periods, an increase of 5.36% and 5.42%, over average earning assets of $1.76 billion for both the three and six month periods ended June 30, 2001. Ms Lagomarsino said, "We have taken steps in recent months to invest excess liquidity on our balance sheet into an investment portfolio of U.S. Government Agency mortgage backed securities with an average life of 2 to 4 years. We anticipate that the yield on this portfolio will be approximately 300 basis points higher than the current yield earned on these assets, which will provide support to the net interest margin during the last half of the year." HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 3 OF 10 Total deposits of $1.19 billion at June 30, 2002, remained consistent with the $1.20 billion at December 31, 2001. Certificates of deposit decreased $163.9 million, while transaction accounts increased $156.2 million, or 83.43% annualized, to $530.7 million at June 30, 2002, from $374.5 million at December 31, 2001. As a percentage of total deposits, transaction accounts have increased to 44.52% at June 30, 2002, compared with 31.21% of total deposits at December 31, 2001. Certificates of deposit totaled $661.3 million, or 55.48% of total deposits at June 30, 2002, compared with 68.79% of total deposits, or $825.2 million, at December 31, 2001. The change in the deposit mix had a positive impact on the Company's total interest costs during 2002. Once again, Hawthorne's outstanding customer service was recognized by the community earlier this year when voted "The Best Bank in the South Bay" by the readers of a local South Bay newspaper, the Easy Reader. Our "extreme service" continues to translate into an improved cross-sell ratio, defined as the number of different types of loan and/or deposit products and services per household serviced, which increased to 2.69 per household at June 30, 2002, from 2.37 at December 31, 2001. Consistent with our ongoing commitment to improve shareholder value, on June 21, 2002, the Company repurchased 500,000 shares of stock from members of the Bass Family, for an aggregate purchase price of $14.5 million. Prior to the repurchase, members of the Bass Family exercised warrants to purchase an aggregate of 314,978 shares of common stock. Assuming the repurchase transaction was executed on the first day of the second quarter of 2002, diluted earnings per share for the second quarter would have been positively impacted by $0.03. Due to the additional shares that are expected to be issued, for the pending acquisition, the impact of this repurchase on earnings per share in the future, although still accretive, will not be as significant. At June 30, 2002, the Bank is categorized as well-capitalized with core, tier 1 and risk-based capital ratios of 9.12%, 13.31% and 14.57%, respectively. The minimum ratios for well-capitalized banks are 5%, 6% and 10% for core capital, tier 1 and risk-based capital, respectively. The Company was recently included in the Russell 2000 Index for 2002. The Russell 2000 Index is a broad-based market index that is based on total market capitalization. Ms. Lagomarsino added, "We are proud to be included in the Russell 2000. This important milestone is attributable to our strategy of building value for our shareholders." In March 2002, the Company announced the execution of a definitive agreement to acquire First Fidelity Bancorp, Inc. and its subsidiary, First Fidelity Investment and Loan. The acquisition, which is subject to shareholder and regulatory approval, provides for the Company to issue 1,266,555 shares of Hawthorne Financial Corporation stock and $37.4 million in cash for the 1,815,115 shares of First Fidelity Bancorp, Inc. stock and 88,000 options outstanding. The Company's stockholders are being asked to approve the issuance of shares at the annual stockholders' meeting, to be held on July 23, 2002. Regulatory applications have been filed and, pending shareholder and regulatory approval, completion of the transaction is expected to occur in August 2002. Second quarter and year-to-date results for First Fidelity Investment and Loan can be found at www.1stFidelity.com or by contacting their headquarters in Tustin, CA, at (949) 936-3235. During the Hawthorne Financial Corporation investor conference call scheduled for Monday, July 22, 2002, at 1:00 p.m. EDT, additional information regarding the acquisition will be discussed. To participate in the conference call, please call (800) 521-5428 Toll Free and reference "Hawthorne Savings -- ID #2061921." Audio access to the conference call will also be available through a live Webcast over the Internet at www.hawthornesavings.com. The Webcast of this conference call will be available for replay through August 19, 2002 by accessing the same link. Hawthorne Savings, F.S.B., operates nine branches in the coastal counties of Southern California. The Company specializes in real estate secured loans in the niche markets that it serves, including: 1) permanent loans collateralized by single family residential property, 2) permanent and construction loans secured by multi-family residential and commercial real estate, 3) loans for the construction of individual single family residential homes and the acquisition and development of land for the construction of such homes. The Company funds its loans predominantly with retail deposits generated through its nine full service retail offices. Provided the acquisition of First Fidelity is completed, the Bank will add four branches, two each in coastal Orange and San Diego counties. HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 4 OF 10 This press release contains forward-looking statements as referenced in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently unreliable and actual results may vary. Factors which could cause actual results to differ from these forward-looking statements include changes in the competitive marketplace, changes in the interest rate environment, potential increased prepayment speeds on the Company's outstanding loan portfolio, economic conditions, outcome of pending litigation, risks associated with credit quality, the possibility that the Company will not obtain stockholder or regulatory approval of the merger of Hawthorne and First Fidelity, and other factors discussed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 5 OF 10
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (Dollars in thousands) JUNE 30, DECEMBER 31, 2002 2001 ----------- ----------- Assets: Cash and cash equivalents $ 185,740 $ 98,583 Investment securities, at fair value 19,720 -- Loans receivable (net of allowance for estimated credit losses of $28,657 in 2002 and $30,602 in 2001) 1,592,200 1,709,283 Real estate owned -- 1,312 Accrued interest receivable 8,742 9,677 Investment in capital stock of Federal Home Loan Bank, at cost 25,220 24,464 Office property and equipment at cost, net 4,152 4,237 Deferred tax asset 2,668 4,363 Other assets 6,342 4,278 ----------- ----------- Total assets $ 1,844,784 $ 1,856,197 =========== =========== Liabilities and Stockholders' Equity: Liabilities: Deposits: Noninterest-bearing $ 37,268 $ 35,634 Interest-bearing 1,154,651 1,164,011 ----------- ----------- Total deposits 1,191,919 1,199,645 FHLB advances 459,000 484,000 Senior notes 25,778 25,778 Capital securities 36,000 14,000 Accounts payable and other liabilities 12,623 12,325 ----------- ----------- Total liabilities 1,725,320 1,735,748 ----------- ----------- Stockholders' Equity: Common stock -- $0.01 par value; authorized 20,000,000 shares; issued and outstanding, 6,763,628 shares (2002) and 5,920,266 shares (2001) 68 59 Capital in excess of par value-- common stock 46,880 44,524 Retained earnings 93,621 82,435 ----------- ----------- 140,569 127,018 Accumulated other comprehensive income 11 -- Less: Treasury stock, at cost-- 1,060,802 shares (2002) and 560,719 shares (2001) (21,116) (6,569) ----------- ----------- Total stockholders' equity 119,464 120,449 ----------- ----------- Total liabilities and stockholders' equity $ 1,844,784 $ 1,856,197 =========== ===========
SUPPLEMENTAL INFORMATION - BANK CAPITAL JUNE 30, DECEMBER 31, 2002 2001 ----------- ----------- Core capital $ 167,964 $ 154,981 Ratio 9.12% 8.36% Tier 1 capital $ 167,964 $ 154,981 Ratio 13.31% 11.63% Risk-based capital $ 183,888 $ 169,278 Ratio 14.57% 12.70%
HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 6 OF 10
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------- ---------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) 2002 2001 2002 2001 -------- -------- -------- -------- Interest revenues: Loans $ 30,385 $ 35,838 $ 62,893 $ 72,754 Investment and other securities 69 -- 69 -- Fed funds and other 1,089 1,128 1,950 2,726 -------- -------- -------- -------- Total interest revenues 31,543 36,966 64,912 75,480 -------- -------- -------- -------- Interest costs: Deposits 8,493 16,146 18,027 33,447 FHLB advances 5,141 5,085 10,293 10,613 Senior notes 805 956 1,611 2,162 Capital securities 599 229 903 237 -------- -------- -------- -------- Total interest costs 15,038 22,416 30,834 46,459 -------- -------- -------- -------- Net interest income 16,505 14,550 34,078 29,021 Provision for credit losses 170 1,000 670 2,500 -------- -------- -------- -------- Net interest income after provision for credit losses 16,335 13,550 33,408 26,521 Noninterest revenues: Loan related and other fees 832 1,164 1,752 2,362 Deposit fees 363 308 736 641 -------- -------- -------- -------- Total noninterest revenues 1,195 1,472 2,488 3,003 Income from real estate operations, net -- 2 69 162 Noninterest expenses: General and administrative expenses: Employee 4,700 4,519 9,732 9,009 Operating 1,516 1,586 3,019 3,150 Occupancy 941 1,064 1,855 2,009 Professional 599 786 706 1,895 Technology 371 517 740 1,027 SAIF premiums and OTS assessments 132 238 268 481 Legal settlements/other -- -- 20 110 -------- -------- -------- -------- Total general and administrative expenses 8,259 8,710 16,340 17,681 -------- -------- -------- -------- Income before income taxes and extraordinary item 9,271 6,314 19,625 12,005 Income tax provision 3,987 2,685 8,439 5,128 -------- -------- -------- -------- Income before extraordinary item 5,284 3,629 11,186 6,877 Extraordinary item, related to early extinguishment of debt (net of taxes of $185) -- -- -- (255) -------- -------- -------- -------- Net income $ 5,284 $ 3,629 $ 11,186 $ 6,622 ======== ======== ======== ======== Basic earnings per share before extraordinary item $ 0.91 $ 0.69 $ 2.00 $ 1.32 ======== ======== ======== ======== Basic earnings per share after extraordinary item $ 0.91 $ 0.69 $ 2.00 $ 1.27 ======== ======== ======== ======== Diluted earnings per share before extraordinary item $ 0.69 $ 0.48 $ 1.46 $ 0.91 ======== ======== ======== ======== Diluted earnings per share after extraordinary item $ 0.69 $ 0.48 $ 1.46 $ 0.88 ======== ======== ======== ======== Weighted average basic shares outstanding 5,821 5,277 5,597 5,228 ======== ======== ======== ======== Weighted average diluted shares outstanding 7,665 7,512 7,646 7,555 ======== ======== ======== ========
HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 7 OF 10
SUPPLEMENTAL INFORMATION - CLASSIFIED ASSETS (UNAUDITED) (Dollars in thousands) JUNE 30, DECEMBER 31, JUNE 30, 2002 2001 2001 ---------- ------------ ---------- Risk elements: Nonaccrual loans $ 6,081 $ 20,666 $ 27,508 Real estate owned, net -- 1,312 336 ---------- ---------- ---------- 6,081 21,978 27,844 Performing loans classified substandard or lower(1) 38,984 37,341 28,128 ---------- ---------- ---------- Total classified assets $ 45,065 $ 59,319 $ 55,972 ========== ========== ========== Total classified loans $ 45,065 $ 58,007 $ 55,636 ========== ========== ========== Loans restructured and paying in accordance with modified terms(2) $ 2,317 $ 4,506 $ 12,710 ========== ========== ========== Gross loans before allowance for credit losses $1,620,857 $1,739,885 $1,710,602 ========== ========== ========== Loans receivable, net of specific allowance and deferred (fees) and costs $1,619,807 $1,736,310 $1,704,901 ========== ========== ========== Delinquent loans: 30 - 89 days $ 9,920 $ 2,742 $ 8,105 90 + days 1,931 4,982 5,309 ---------- ---------- ---------- Total delinquent loans $ 11,851 $ 7,724 $ 13,414 ========== ========== ========== Allowance for credit losses: General $ 27,607 $ 27,027 $ 24,151 Specific(3) 1,050 3,575 5,701 ---------- ---------- ---------- Total allowance for credit losses $ 28,657 $ 30,602 $ 29,852 ========== ========== ========== Net loan charge-offs: Net charge-offs for the quarter ended $ 189 $ 13 $ 1,881 Percent to loans receivable, net of specific allowance and deferred (fees) and costs (annualized) 0.05% 0.00% 0.44% Percent to beginning of period allowance for credit losses (annualized) 2.64% 0.17% 24.48% Selected asset quality ratios at period end: Total nonaccrual loans to total assets 0.33% 1.11% 1.52% Total allowance for credit losses to loans receivable, net of specific allowance and deferred (fees) and costs 1.77% 1.76% 1.75% Total general allowance for credit losses to loans receivable, net of specific allowance and deferred (fees) and costs 1.70% 1.56% 1.42% Total allowance for credit losses to nonaccrual loans 471.25% 148.08% 108.52% Total classified assets to Bank core capital and general 23.04% 32.59% 32.89% allowance for credit losses
-------------- (1) Excludes nonaccrual loans. (2) Troubled debt restructured loans not classified and not on nonaccrual. (3) In December 2000, a $5.2 million specific allowance was identified for one nonaccrual commercial loan, whose major tenant filed for Chapter 11 bankruptcy protection. The required reserve was reclassified from general allowance to specific allowance. A 51% controlling interest in this tenant was acquired by a strong investor during 2001. During the third quarter of 2001, the tenant ratified a renegotiated lease, which enabled the Bank to revise its internal valuation and consequently, reduce the specific allowance for this loan to $3.0 million. This loan was discounted at payoff in March 2002, which resulted in a charge-off of $2.2 million. HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 8 OF 10
THREE MONTHS ENDED JUNE 30, ----------------------------------------------------------------------------------- 2002 2001 ---------------------------------------- ---------------------------------------- WEIGHTED WEIGHTED AVERAGE REVENUES/ AVERAGE AVERAGE REVENUES/ AVERAGE (DOLLARS IN THOUSANDS) BALANCE COSTS YIELD/COST BALANCE COSTS YIELD/COST ---------- ---------- ---------- ---------- ---------- ---------- Assets: Interest-earning assets: Loans receivable (1) $1,654,830 $ 30,385 7.35% $1,664,754 $ 35,838 8.62% Cash and cash equivalents 169,220 707 1.68 77,356 858 4.45 Investment securities 8,722 69 3.17 -- -- Investment in capital stock of Federal Home Loan Bank 25,001 382 6.13 21,184 270 5.11 ---------- ---------- ---------- ---------- Total interest-earning assets 1,857,773 31,543 6.80 1,763,294 36,966 8.40 ---------- ---- ---------- ----- Noninterest-earning assets 2,479 1,944 ---------- ---------- Total assets $1,860,252 $1,765,238 ========== ========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Deposits $1,151,892 $ 8,493 2.96% $1,178,962 $ 16,146 5.49% FHLB advances 468,615 5,141 4.34 384,000 5,085 5.24 Senior notes 25,778 805 12.50 30,628 956 12.50 Capital securities 33,824 599 7.08 9,000 229 10.18 ---------- ---------- ---------- ---------- Total interest-bearing liabilities 1,680,109 15,038 3.57 1,602,590 22,416 5.59 ---------- ----- ---------- ----- Noninterest-bearing checking 37,130 33,269 Noninterest-bearing liabilities 18,891 20,260 Stockholders' equity 124,122 109,119 ---------- ---------- Total liabilities and stockholders' equity $1,860,252 $1,765,238 ========== ========== Net interest income $ 16,505 $ 14,550 ========== ========== Interest rate spread 3.23% 2.81% ===== ===== Net interest margin 3.56% 3.30% ===== =====
-------------- (1) Includes the interest on nonaccrual loans only to the extent that it was paid and recognized as interest income. HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 9 OF 10
SIX MONTHS ENDED JUNE 30, -------------------------------------------------------------------------------- 2002 2001 ---------------------------------------- ------------------------------------- WEIGHTED WEIGHTED AVERAGE REVENUES/ AVERAGE AVERAGE REVENUES/ AVERAGE (DOLLARS IN THOUSANDS) BALANCE COSTS YIELD/COST BALANCE COSTS YIELD/COST ---------- ---------- ---------- ---------- --------- ---------- Assets: Interest-earning assets: Loans receivable (1) $1,686,078 $ 62,893 7.48% $1,658,493 $72,754 8.81% Cash and cash equivalents 144,078 1,194 1.67 84,308 2,117 5.06 Investment securities 4,385 69 3.17 -- -- Investment in capital stock of Federal Home Loan Bank 24,805 756 6.15 21,032 609 5.84 ---------- ---------- ---------- ------- Total interest-earning assets 1,859,346 64,912 7.00 1,763,833 75,480 8.59 ---------- ----- ------- ----- Noninterest-earning assets 1,751 1,700 ---------- ---------- Total assets $1,861,097 $1,765,533 ========== ========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Deposits $1,156,907 $ 18,027 3.14% $1,182,799 $33,447 5.70% FHLB advances 476,265 10,293 4.30 384,000 10,613 5.50 Senior notes 25,778 1,611 12.50 34,556 2,162 12.51 Capital securities 23,967 903 7.54 4,724 237 10.03 ---------- ---------- ---------- ------- Total interest-bearing liabilities 1,682,917 30,834 3.67 1,606,079 46,459 5.81 ---------- ----- ------- ----- Noninterest-bearing checking 36,546 32,495 Noninterest-bearing liabilities 19,177 19,825 Stockholders' equity 122,457 107,134 ---------- ---------- Total liabilities and stockholders' equity $1,861,097 $1,765,533 ========== ========== Net interest income $ 34,078 $29,021 ========== ======= Interest rate spread 3.33% 2.78% ===== ===== Net interest margin 3.68% 3.30% ===== =====
-------------- (1) Includes the interest on nonaccrual loans only to the extent that it was paid and recognized as interest income. HAWTHORNE FINANCIAL CORPORATION SECOND QUARTER 2002 RESULTS JULY 22, 2002 PAGE 10 OF 10 HAWTHORNE FINANCIAL CORPORATION (UNAUDITED) (Dollars in thousands)
NET LOAN PORTFOLIO COMPOSITION JUNE 30, 2002 DECEMBER 31, 2001 ----------------------- ----------------------- BALANCE PERCENT BALANCE PERCENT ---------- ------- ---------- ------- Single family residential $ 887,770 55.05% $ 913,255 52.68% Income property: Multi-family 284,315 17.63% 254,530 14.68% Commercial 208,965 12.96% 235,156 13.57% Development: Multi-family 77,199 4.79% 102,682 5.92% Commercial 38,514 2.39% 68,431 3.95% Single family construction: Single family residential 78,249 4.85% 104,158 6.01% Land 33,282 2.06% 48,719 2.81% Other 4,359 0.27% 6,617 0.38% ---------- ------ ---------- ------ Total loan principal(1) $1,612,653 100.00% $1,733,548 100.00% ========== ====== ========== ======
-------------- (1) Excludes net deferred fees and costs.
SELECTED FINANCIAL DATA THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------- ------------------- 2002 2001 2002 2001 ----- ----- ----- ----- PERFORMANCE RATIOS Return on average assets(1) 1.14% 0.82% 1.20% 0.75% Return on average equity(1) 17.03% 13.30% 18.27% 12.36% Efficiency ratio(2) 46.66% 54.36% 44.63% 54.87% GROWTH RATIOS(1) Total assets -1.23% 6.17% Loans receivable, net -13.70% 9.04% Total deposits -1.29% 7.08%
JUNE 30, ------------------- 2002 2001 ----- ----- Bank Capital Ratios Core capital 9.12% 8.09% Tier 1 capital 13.31% 11.35% Risk-based capital 14.57% 12.41% BOOK VALUE PER SHARE AS OF JUNE 30, 2002 Basic $20.95 Diluted $16.26
-------------------- (1) Annualized. (2) Represents total general and administrative expenses (excluding legal settlements/other) divided by net interest income before provision for credit losses and noninterest revenues. JUNE 30,