-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G2G+SGRQGoyjLsM+EpC47GXfCsb6rFNVNyxxjkkF46LI7z8LXmoudrOSi0xnWIuv L7/H3AwsRF862bsJfElq5Q== 0001157523-03-006066.txt : 20031030 0001157523-03-006066.hdr.sgml : 20031030 20031030073902 ACCESSION NUMBER: 0001157523-03-006066 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031029 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031030 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMERCIAL FEDERAL CORP CENTRAL INDEX KEY: 0000744778 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 470658852 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11515 FILM NUMBER: 03965101 BUSINESS ADDRESS: STREET 1: 13220 CALIFORNIA STREET CITY: OMAHA STATE: NE ZIP: 68154 BUSINESS PHONE: 4025549200 MAIL ADDRESS: STREET 1: COMMERCIAL FEDERAL BUILDING STREET 2: 13220 CALIFORNIA STREET CITY: OMAHA STATE: NE ZIP: 68154 8-K 1 a4505140.txt COMMERCIAL FEDERAL CORP. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 30, 2003 ---------------- COMMERCIAL FEDERAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) NEBRASKA 1-11515 47-0658852 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification Number) 13220 CALIFORNIA STREET, OMAHA, NEBRASKA 68154 - --------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (402) 554-9200 -------------- NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 1 COMMERCIAL FEDERAL CORPORATION FORM 8-K CURRENT REPORT Item 7. Financial Statements, Pro Forma Financial Information and Exhibits: - ---------------------------------------------------------------------------- (c) Exhibits Exhibit 99.1 Press release dated October 30, 2003 Item 12. Results of Operations and Financial Condition: - -------------------------------------------------------- On October 30, 2003, the Registrant issued its earnings release for the three and nine months ended September 30, 2003. The earnings release is attached to this report as Exhibit 99.1, which is furnished herewith. 2 SIGNATURES ------------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMMERCIAL FEDERAL CORPORATION ------------------------------ (Registrant) Date: October 30, 2003 /s/ David S. Fisher ----------------- ---------------------------- David S. Fisher Executive Vice President and Chief Financial Officer (Duly Authorized Officer) 3 EX-99 3 a4505140ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Commercial Federal Reports Third Quarter Earnings of $22.3 Million OMAHA, Neb.--(BUSINESS WIRE)--xx--Commercial Federal Corporation today announced net income of $22.3 million, or $0.51 per diluted share, for the quarter ended September 30, 2003. For the nine-month period ended September 30, 2003, net income totaled $68.1 million, or $1.53 per diluted share. "The Company continues to expand its retail and commercial customer base while adding higher margin loans and core deposits. Continued progress on these primary goals will enhance the revenue from our core business moving forward thereby increasing franchise value and shareholder returns," stated William A. Fitzgerald, chairman of the board and chief executive officer. Key Growth Indicators: -- Retail checking accounts are up 4.5% year-over-year. Growth in the number of checking accounts continues to be one of our key strategies to build our customer base and enhance revenue. -- Commercial checking accounts are up 14.9% year-over-year. The Company has continued to aggressively market its commercial banking products as we expand this line of business. -- Core deposits grew $589.0 million or 20% over the same period last year. Strong growth in checking and money market savings deposits accounted for this increase. -- Commercial operating average outstanding balances are up 27% over the same period last year. Higher commercial lending activity has remained steady in many of our markets as we continue to build our commercial loan relationships. -- Home equity outstanding balances are up 1% year-over-year. Given the extremely high volumes of mortgage refinancings for the first nine months of the year, home equity loan and line payoffs have been high. However, for the last four consecutive months we have seen increases to the outstanding balances. "The Company has put forth its plan to increase core banking relationships and revenues by concentrating on these key growth areas, while maintaining good efficiency and strong credit quality. The Company has also taken steps to reduce the size of the balance sheet by selling low-yielding assets and paying off high-cost wholesale debt thereby freeing up capital supporting these assets. This excess capital can be used to support other initiatives to increase shareholder returns," stated Chief Financial Officer David S. Fisher. "Third quarter results were impacted by the continued mortgage refinancing boom, with net interest margin particularly impacted. As these prepayments slow, which we have seen already, our margin will immediately show significant improvement in the fourth quarter and will continue to expand moving forward," continued Mr. Fisher. Results for the Quarter: Net Interest Income Accelerated amortization of $5.2 million in net deferred loan origination costs and premiums (commonly referred to as FAS91) resulting from a sharp increase in loan prepayments negatively impacted the yield on interest earning assets by 18 basis points for the third quarter. Absent this accelerated amortization, margin would have been in the 2.35% range. We also accelerated the amortization of the premiums paid on mortgage-backed securities. Credit Risk Management Credit quality remained strong during the third quarter with total nonperforming loans declining to $57.1 million from $61.9 million for the quarter ended June 30, 2003. Total nonperforming loans represented 0.71% of total loans at September 30, 2003, compared with 0.79% at June 30, 2003 and 1.0% at September 30, 2002. Net loan charge-offs were $5.5 million, compared with $4.4 million for the previous quarter. For the nine months ended September 30, 2003, net charge-offs totaled $14.4 million, compared with $13.9 million for the same period one year ago. For the current year, delinquency levels for loans 30 or more days past due reached a low point at September 30. Noninterest Income Commercial Federal's retail banking operations continued to generate strong results in the quarter. Total noninterest income was $44.2 million for the quarter, compared with $28.0 million for the quarter ended September 30, 2002. Retail fees and charges totaled $14.8 million, compared with $14.6 million for the same period a year ago. For the nine-months ended September 30, 2003, retail fees and charges totaled $43.3 million, compared with $40.9 million for the same period last year, a 6% increase year-over-year. Noninterest income in the quarter included the impact of reduced revenue from interchange fees for debit card purchases that resulted from a third-party settlement of debit card litigation with VISA Inc. earlier this year. The settlement, which went into effect August 1, 2003, reduced third quarter revenue by approximately $540,000. The mortgage banking operations include activities associated with the Company's mortgage servicing and secondary marketing operations. Revenues from these operations are partially offset by the amortization of and valuation adjustments related to its mortgage servicing rights asset. During the third quarter 2003, the Company recorded a valuation recovery of $51.8 million, and amortization expense of $22.0 million related to its mortgage servicing rights asset. The Company partially offset the net of this valuation recovery and amortization expense by recognizing $31.3 million in net pre-tax losses on the sales of securities, changes in fair values of hedging instruments and a loss on the termination of certain hedging instruments. Operating Expenses For the quarter ended September 30, 2003, general and administrative expenses fell by $4.0 million in the quarter totaling $67.1 million, compared with $71.1 million for the previous quarter, reflecting decreased commissions and incentives, particularly related to the lower level of residential loan originations. Advertising expense for the quarter declined primarily due to the cancellation of a debit card promotion. Balance Sheet and Capital Ratios Total assets as of September 30, 2003 were $12.5 billion, compared to $12.9 billion and $13.5 billion as of June 30, 2003 and September 30, 2002, respectively. The size of the balance sheet was intentionally reduced during the quarter to decrease the size of certain lower yielding portfolios while paying down Federal Home Loan Bank debt, thereby reducing the overall capital needs and the interest rate risk profile of the Company. For the quarter, core deposits increased $63 million compared to the quarter ended June 30, 2003 and were up $589 million from the quarter ended September 30, 2002. During the quarter, the Company repurchased 1,648,800 shares of its common stock. For the nine-month period ended September 30, 2003, a total of 2,988,700 shares were repurchased. The Company has 2,252,100 shares remaining in its share repurchase authorizations. As of September 30, 2003, shares outstanding totaled 42,381,367. As of September 30, 2003, stockholders' equity was $761.2 million, after spending $39.8 million in the quarter on the Company's share repurchase program. Stockholders' equity was $747.6 million as of June 30, 2003. The capital ratios of the Company's banking subsidiary continued to exceed regulatory requirements for classification as "well-capitalized," the highest regulatory standard. Commercial Federal Corporation (NYSE:CFB) is the parent company of Commercial Federal Bank, a $12.5 billion federal savings bank that currently operates branches located in Nebraska, Iowa, Colorado, Kansas, Oklahoma, Missouri and Arizona. Commercial Federal operations include consumer and commercial banking services including mortgage origination and servicing, commercial and industrial lending, small business banking, construction lending, cash management, insurance and investment services, and Internet banking. Commercial Federal's Web site, http://www.comfedbank.com, will host a live webcast of the investor conference call to discuss third quarter results on Thursday, October 30, 2003 at 10:30 a.m. Central Time. The site also includes access to company news releases, annual reports, quarterly financial statements, and SEC filings. Certain statements contained in this release are forward-looking in nature. These statements are subject to risks and uncertainties that could cause Commercial Federal's actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to Commercial Federal include, but are not limited to, changes in general economic conditions, changes in interest rates, changes in regulations or accounting methods, and price levels and conditions in the public securities markets generally. COMMERCIAL FEDERAL CORPORATION CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (Dollars in Thousands) - ---------------------------------------------------------------------- September 30, June 30, September 30, ASSETS 2003 2003 2002 - ---------------------------------------------------------------------- Cash (including short-term investments of $1,137, $1,067 and $368) $168,111 $248,500 $197,719 Investment securities available for sale, at fair value 1,050,040 1,288,081 1,319,304 Mortgage-backed securities available for sale, at fair value 1,130,463 1,317,756 1,746,689 Loans held for sale, net 687,010 1,037,935 777,971 Loans receivable, net of allowances of $107,995, $108,706 and $109,493 7,894,337 7,748,521 8,120,979 Federal Home Loan Bank stock 241,206 247,817 285,112 Foreclosed real estate 48,350 43,000 40,220 Premises and equipment, net 144,170 143,088 148,762 Bank owned life insurance 238,724 235,504 224,849 Other assets 720,340 441,389 442,085 Core value of deposits, net of accumulated amortization of $62,999, $61,781 and $57,135 18,050 19,268 23,914 Goodwill 162,717 162,717 162,717 - ---------------------------------------------------------------------- Total Assets $12,503,518 $12,933,576 $13,490,321 - ---------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------------------------------------------------- Liabilities: Deposits $6,592,859 $6,768,368 $6,163,289 Advances from Federal Home Loan Bank 3,959,906 4,436,264 5,508,180 Other borrowings 598,941 573,081 615,193 Other liabilities 590,607 408,233 457,741 - ---------------------------------------------------------------------- Total Liabilities 11,742,313 12,185,946 12,744,403 - ---------------------------------------------------------------------- Commitments and Contingencies - - - - ---------------------------------------------------------------------- Stockholders' Equity: Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued - - - Common stock, $.01 par value; 120,000,000 shares authorized; 42,381,367, 43,940,224 and 45,226,837 shares issued and outstanding 424 439 452 Additional paid-in capital - 33,469 62,020 Retained earnings 849,134 835,184 775,566 Accumulated other comprehensive loss, net (88,353) (121,462) (92,120) - ---------------------------------------------------------------------- Total Stockholders' Equity 761,205 747,630 745,918 - ---------------------------------------------------------------------- Total Liabilities and Stockholders' Equity $12,503,518 $12,933,576 $13,490,321 - ---------------------------------------------------------------------- Certain amounts in prior periods have been reclassified for comparative purposes to conform to the September 30, 2003 presentation. COMMERCIAL FEDERAL CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in Thousands Except Per Share Data) - ---------------------------------------------------------------------- Three Months Ended September 30, June 30, September 30, ------------------------------------- 2003 2003 2002 - ---------------------------------------------------------------------- Interest Income: Investment securities $16,233 $16,846 $19,635 Mortgage-backed securities 8,688 12,638 22,498 Loans receivable 128,291 140,401 153,721 - ---------------------------------------------------------------------- Total interest income 153,212 169,885 195,854 Interest Expense: Deposits 36,547 38,974 43,766 Advances from Federal Home Loan Bank 51,545 54,772 63,216 Other borrowings 4,830 5,037 6,776 - ---------------------------------------------------------------------- Total interest expense 92,922 98,783 113,758 Net Interest Income 60,290 71,102 82,096 Provision for Loan Losses (5,475) (4,273) (9,142) - ---------------------------------------------------------------------- Net Interest Income After Provision for Loan Losses 54,815 66,829 72,954 Other Income (Loss): Retail fees and charges 14,805 15,009 14,614 Loan servicing fees 10,911 11,958 9,656 Amortization of mortgage servicing rights (21,989) (18,454) (6,894) Mortgage servicing rights valuation adjustment 51,800 (29,793) (34,754) Gain (loss) on sales of securities and changes in fair values of derivatives, net (31,294) 39,131 19,575 Gain on sales of loans 9,329 8,506 14,659 Bank owned life insurance 3,219 3,242 3,475 Other operating income 7,398 7,627 7,692 - ---------------------------------------------------------------------- Total other income 44,179 37,226 28,023 Other Expense: General and administrative expenses - Compensation and benefits 30,233 31,841 29,060 Occupancy and equipment 10,188 10,495 9,912 Data processing 4,460 4,604 4,416 Advertising 3,742 5,606 3,480 Communication 3,505 3,432 3,261 Item processing 3,210 3,837 3,582 Outside services 3,410 3,226 3,296 Loan expenses 3,909 2,667 1,091 Foreclosed real estate, net 289 1,004 978 Other operating expenses 4,141 4,349 2,745 - ---------------------------------------------------------------------- Total general and administrative expenses 67,087 71,061 61,821 Amortization of core value of deposits 1,218 1,548 1,549 - ---------------------------------------------------------------------- Total other expense 68,305 72,609 63,370 - ---------------------------------------------------------------------- Income Before Income Taxes 30,689 31,446 37,607 Income Tax Provision 8,378 8,744 10,938 - ---------------------------------------------------------------------- Net Income $22,311 $22,702 $26,669 - ---------------------------------------------------------------------- Net Income Per Basic Share $.51 $.51 $.59 Net Income Per Diluted Share $.51 $.51 $.58 - ---------------------------------------------------------------------- Dividends Declared Per Common Share $.10 $.10 $.09 - ---------------------------------------------------------------------- Weighted Average Shares Outstanding Used in Basic EPS 43,523,639 44,302,234 45,276,800 Weighted Average Shares Outstanding Used in Diluted EPS 43,933,969 44,582,227 45,791,436 - ---------------------------------------------------------------------- Certain amounts in prior periods have been reclassified for comparative purposes to conform to the September 30, 2003 presentation. COMMERCIAL FEDERAL CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in Thousands Except Per Share Data) - ---------------------------------------------------------------------- Nine Months Ended September 30, September 30, ---------------------------- 2003 2002 - ---------------------------------------------------------------------- Interest Income: Investment securities $50,655 $58,082 Mortgage-backed securities 37,773 73,162 Loans receivable 411,043 455,797 - ---------------------------------------------------------------------- Total interest income 499,471 587,041 Interest Expense: Deposits 115,135 137,553 Advances from Federal Home Loan Bank 163,237 182,721 Other borrowings 14,879 19,422 - ---------------------------------------------------------------------- Total interest expense 293,251 339,696 Net Interest Income 206,220 247,345 Provision for Loan Losses (16,894) (21,271) - ---------------------------------------------------------------------- Net Interest Income After Provision for Loan Losses 189,326 226,074 Other Income (Loss): Retail fees and charges 43,317 40,935 Loan servicing fees 33,906 28,730 Amortization of mortgage servicing rights (52,505) (20,313) Mortgage servicing rights valuation adjustment 8,479 (50,832) Gain on sales of securities and changes in fair values of derivatives, net 26,837 28,315 Gain on sales of loans 23,315 21,636 Bank owned life insurance 9,765 10,258 Other operating income 20,681 23,474 - ---------------------------------------------------------------------- Total other income 113,795 82,203 Other Expense: General and administrative expenses - Compensation and benefits 92,887 85,906 Occupancy and equipment 31,119 28,508 Data processing 13,739 13,247 Advertising 13,478 10,725 Communication 10,351 9,490 Item processing 10,516 10,665 Outside services 9,027 10,755 Loan expenses 9,002 3,615 Foreclosed real estate, net 2,674 4,700 Other operating expenses 11,987 9,800 - ---------------------------------------------------------------------- Total general and administrative expenses 204,780 187,411 Amortization of core value of deposits 4,315 4,819 - ---------------------------------------------------------------------- Total other expense 209,095 192,230 - ---------------------------------------------------------------------- Income Before Income Taxes 94,026 116,047 Income Tax Provision 25,882 33,862 - ---------------------------------------------------------------------- Net Income $68,144 $82,185 - ---------------------------------------------------------------------- Net Income Per Basic Share $1.54 $1.81 Net Income Per Diluted Share $1.53 $1.79 - ---------------------------------------------------------------------- Dividends Declared Per Common Share $.29 $.26 - ---------------------------------------------------------------------- Weighted Average Shares Outstanding Used in Basic EPS 44,306,196 45,325,049 Weighted Average Shares Outstanding Used in Diluted EPS 44,645,852 45,971,511 - ---------------------------------------------------------------------- Certain amounts in prior periods have been reclassified for comparative purposes to conform to the September 30, 2003 presentation. COMMERCIAL FEDERAL CORPORATION MORTGAGE SERVICING RIGHTS AND MORTGAGE BANKING OPERATIONS (Dollars in Thousands) - ---------------------------------------------------------------------- Three Months Ended September 30, June 30, September 30, ---------------------------------------- 2003 2003 2002 - ---------------------------------------------------------------------- Mortgage Servicing Rights: Beginning balance $190,398 $179,860 $139,542 Mortgage servicing rights retained through loan sales 19,916 20,378 10,767 Purchases of mortgage servicing rights 8,942 8,015 1,272 Amortization expense (21,989) (18,454) (6,894) Sale of mortgage servicing rights - (9,904) - Other items, net - 10,503 - ------------- ------------ ------------- Balance before valuation allowance 197,267 190,398 144,687 ------------- ------------ ------------- Valuation allowance beginning balance 121,465 93,586 35,719 Amounts charged (credited) to operations (51,800) 29,793 34,754 Sale of mortgage servicing rights - (1,914) - ------------- ------------ ------------- Valuation allowance ending balance 69,665 121,465 70,473 ------------- ------------ ------------- Mortgage servicing rights, net of valuation allowance $127,602 $68,933 $74,214 ============= ============ ============= Fair value at the periods ended $129,136 $68,933 $74,841 ============= ============ ============= Mortgage servicing rights as a percentage of servicing portfolio 1.13% 0.61% 0.76% ============= ============ ============= Mortgage servicing rights as a multiple of servicing fees 3.42x 1.82x 2.30x ============= ============ ============= - ---------------------------------------------------------------------- Loans Serviced for Other Institutions: Beginning balance $11,864,111 $11,848,058 $9,652,792 Additions to portfolio 1,562,189 1,498,788 788,941 Purchases 529,639 515,173 115,740 Loan payments (2,195,435) (1,995,558) (780,574) Sales, net 8,054 (509,946) - Sub servicing released, net of payments and other adjustments (457,012) - - Other items, net (3,984) (2,350) (3,463) ---------------------------------------- Ending balance excluding sub servicing 11,307,562 11,354,165 9,773,436 Sub servicing retained on sale of loans serviced - 509,946 - ------------- ------------ ------------- Ending balance including sub servicing $11,307,562 $11,864,111 $9,773,436 ============= ============ ============= Weighted average servicing fee 0.33% 0.32% 0.33% ============= ============ ============= Weighted average coupon note rate 6.18% 6.47% 7.00% ============= ============ ============= - ---------------------------------------------------------------------- Certain Components of Mortgage Banking and Treasury Activities: Loan servicing fees $10,911 $11,958 $9,656 Amortization of mortgage servicing rights (21,989) (18,454) (6,894) ------------- ------------ ------------- Loan servicing fees, net (11,078) (6,496) 2,762 Mortgage servicing rights valuation adjustment 51,800 (29,793) (34,754) Gain (loss) on sales of securities and changes in fair values of derivatives, net (31,294) 39,131 19,575 Gain on sales of loans 9,329 8,506 14,659 ------------- ------------ ------------- Total of certain components of mortgage banking and treasury activities $18,757 $11,348 $2,242 ============= ============ ============= - ---------------------------------------------------------------------- COMMERCIAL FEDERAL CORPORATION DEPOSITS AND LOANS (In Thousands) - ---------------------------------------------------------------------- September 30, June 30, September 30, 2003 2003 2002 - ---------------------------------------------------------------------- Deposits by State: Colorado $2,042,681 $2,033,740 $2,017,866 Nebraska 1,776,262 1,919,919 1,456,334 Iowa 1,061,398 1,072,456 997,889 Kansas 639,769 659,112 655,003 Oklahoma 538,570 552,556 564,918 Missouri 314,335 311,178 283,077 Arizona 219,844 219,407 188,202 ------------- ----------- ------------- Total deposits $6,592,859 $6,768,368 $6,163,289 ============= =========== ============= Deposits by Type: Checking accounts - Interest bearing $524,871 $515,322 $481,963 Noninterest bearing 658,575 633,291 433,234 ------------- ----------- ------------- Total retail checking excluding escrow accounts 1,183,446 1,148,613 915,197 Money market accounts 1,042,342 958,303 269,020 Savings accounts 1,334,492 1,390,740 1,787,052 ------------- ----------- ------------- Total core deposits 3,560,280 3,497,656 2,971,269 Custodial escrow accounts 443,132 564,871 369,012 Certificates of deposit 2,589,447 2,705,841 2,823,008 ------------- ----------- ------------- Total deposits $6,592,859 $6,768,368 $6,163,289 ============= =========== ============= - ---------------------------------------------------------------------- Loans Receivable, before allowance for losses: Residential real estate $3,456,176 $3,494,661 $4,131,864 Commercial real estate 1,943,384 1,895,194 1,763,787 Construction, net of loans-in-process 493,145 508,573 518,505 Commercial operating and other 519,314 421,879 311,564 Consumer home equity 840,825 812,218 833,568 Consumer other 749,488 724,702 671,184 ------------- ----------- ------------- Total loans receivable, before allowance for losses $8,002,332 $7,857,227 $8,230,472 ============= =========== ============= - ---------------------------------------------------------------------- COMMERCIAL FEDERAL CORPORATION ALLOWANCE FOR LOSSES ON LOANS (In Thousands) - ---------------------------------------------------------------------- September 30, June 30, September 30, 2003 2003 2002 - ---------------------------------------------------------------------- THREE MONTHS ENDED: - ------------------- Beginning balance $108,740 $108,920 $104,001 Provision charged to operations 5,475 4,273 9,142 Charge-offs (6,787) (6,003) (4,336) Recoveries 1,295 1,582 951 Change in estimate of allowance for bulk purchased loans (715) (32) (34) - ---------------------------------------------------------------------- Ending balance $108,008 $108,740 $109,724 - ---------------------------------------------------------------------- NINE MONTHS ENDED: - ------------------ Beginning balance $106,291 n/a $102,451 Provision charged to operations 16,894 n/a 21,271 Charge-offs (20,085) n/a (18,143) Recoveries 5,687 n/a 4,245 Change in estimate of allowance for bulk purchased loans (779) n/a (100) - ---------------------------------------------------------------------- Ending balance $108,008 n/a $109,724 - ---------------------------------------------------------------------- Summary of charge-offs, net of recoveries: - ------------------------------------------ Three months ended $5,492 $4,421 $3,385 ============= ========= ============= Nine months ended $14,398 n/a $13,898 ============= ============= - ---------------------------------------------------------------------- Allocation of allowance: - ------------------------ Specific $5,659 $6,025 $9,915 Special problem 32,749 34,613 34,185 Nonspecific 69,600 68,102 65,624 ------------- --------- ------------- $108,008 $108,740 $109,724 ============= ========= ============= - ---------------------------------------------------------------------- COMMERCIAL FEDERAL CORPORATION NONPERFORMING ASSETS AND LOANS (Dollars in Thousands) - ---------------------------------------------------------------------- September 30, June 30, September 30, 2003 2003 2002 - ---------------------------------------------------------------------- Nonperforming Assets: Nonperforming loans: Residential real estate $33,802 $34,338 $42,306 Residential construction 3,556 7,784 2,562 Commercial real estate 8,701 8,381 25,135 Commercial construction 3,160 4,371 2,666 All other 7,861 7,034 9,922 ------------- ------------ ------------- Total nonperforming loans 57,080 61,908 82,591 ------------- ------------ ------------- Real estate: Residential 12,588 12,251 13,683 Residential construction 30,798 24,187 23,252 Commercial 4,964 5,078 - Commercial construction - 1,484 3,285 ------------- ------------ ------------- Total real estate 48,350 43,000 40,220 ------------- ------------ ------------- Troubled debt restructurings - commercial 4,933 4,961 1,567 ------------- ------------ ------------- Total nonperforming assets $110,363 $109,869 $124,378 ============= ============ ============= Total assets $12,503,518 $12,933,576 $13,490,321 ============= ============ ============= Nonperforming assets to total assets .88% .85% .92% ============= ============ ============= Summary of Nonperforming Assets: Residential $80,744 $78,560 $81,803 Nonresidential 29,619 31,309 42,575 ------------- ------------ ------------- $110,363 $109,869 $124,378 ============= ============ ============= - ---------------------------------------------------------------------- Nonperforming loans to loans receivable (1) .71% .79% 1.00% Nonperforming assets to total assets .88% .85% .92% Allowance for loan losses to: Loans receivable (1) 1.35% 1.38% 1.33% Nonperforming assets 97.87% 98.97% 88.22% Total nonperforming loans 189.22% 175.65% 132.85% Nonresidential nonperforming assets 364.66% 347.31% 257.72% - ---------------------------------------------------------------------- (1) Ratios are calculated based on the net book value of loans receivable before deducting allowance for loan losses. COMMERCIAL FEDERAL CORPORATION SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS AND RATIOS (Dollars in Thousands Except Per Share Data) - ---------------------------------------------------------------------- September 30, June 30, September 30, 2003 2003 2002 - ---------------------------------------------------------------------- Cash, investment securities and FHLB stock $1,459,357 $1,784,398 $1,802,135 Mortgage-backed securities 1,130,463 1,317,756 1,746,689 Loans held for sale, net 687,010 1,037,935 777,971 Loans receivable, net 7,894,337 7,748,521 8,120,979 Intangible assets 180,767 181,985 186,631 Other assets 1,151,584 862,981 855,916 Total assets 12,503,518 12,933,576 13,490,321 - ---------------------------------------------------------------------- Deposits 6,592,859 6,768,368 6,163,289 Advances from Federal Home Loan Bank 3,959,906 4,436,264 5,508,180 Other borrowings 598,941 573,081 615,193 Other liabilities 590,607 408,233 457,741 Stockholders' equity 761,205 747,630 745,918 Total liabilities and stockholders' equity 12,503,518 12,933,576 13,490,321 - ---------------------------------------------------------------------- Book value per common share $17.96 $17.01 $16.49 Stock price $24.35 $21.20 $21.77 Common shares outstanding 42,381,367 43,940,224 45,226,837 Weighted average shares outstanding per basic EPS 43,523,639 44,302,234 45,276,800 Weighted average shares outstanding per diluted EPS 43,933,969 44,582,227 45,791,436 - ---------------------------------------------------------------------- Nonperforming assets $110,363 $109,869 $124,378 Nonperforming assets to total assets .88% .85% .92% Weighted average interest rates (durings): Yield on interest-earning assets 5.28% 5.73% 6.41% Rate on deposits and interest-bearing liabilities 3.11% 3.27% 3.64% Net interest rate spread 2.17% 2.46% 2.77% Net annualized yield on interest-earning assets 2.10% 2.40% 2.69% Loans serviced for other institutions $11,307,562 $11,864,111 $9,773,436 - ---------------------------------------------------------------------- Three months ended: - ------------------- Return on average assets .70% .69% .79% Return on average equity 12.60% 11.89% 13.61% Average equity to average assets 5.53% 5.80% 5.80% G & A expenses to average assets 2.09% 2.16% 1.83% Operating efficiency ratio 64.22% 65.60% 56.14% - ---------------------------------------------------------------------- Nine months ended: - ------------------ Return on average assets .70% n/a .84% Return on average equity 12.19% n/a 14.30% Average equity to average assets 5.72% n/a 5.85% G & A expenses to average assets 2.10% n/a 1.91% Operating efficiency ratio 63.99% n/a 56.87% - ---------------------------------------------------------------------- COMMERCIAL FEDERAL CORPORATION AVERAGE BALANCES AND REGULATORY CAPITAL (Dollars in Thousands) - ---------------------------------------------------------------------- September 30, June 30, March 31, 2003 2003 2003 - ---------------------------------------------------------------------- Three Months Ended: - ------------------- Average Balances: Total assets $12,811,205 $13,155,433 $13,101,428 Total loans, net 8,800,868 8,902,699 8,668,060 Total loans, before allowances for loan losses 8,909,476 9,011,377 8,773,891 Total mortgage-backed securities 1,160,610 1,414,739 1,584,690 Total deposits 6,821,942 6,730,636 6,465,854 Total stockholders' equity 708,267 763,666 765,112 Total interest-earning assets 11,507,173 11,869,514 11,825,331 Total deposits and interest-bearing liabilities 11,749,995 12,032,153 11,947,339 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- December 31, September 30, 2002 2002 - ---------------------------------------------------------------------- Three Months Ended: - ------------------- Average Balances: Total assets $13,408,194 $13,511,423 Total loans, net 8,851,961 8,865,656 Total loans, before allowances for loan losses 8,960,880 8,971,536 Total mortgage-backed securities 1,741,933 1,797,775 Total deposits 6,277,235 6,186,698 Total stockholders' equity 736,489 783,612 Total interest-earning assets 12,191,686 12,205,340 Total deposits and interest-bearing liabilities 12,286,057 12,296,090 - ---------------------------------------------------------------------- Nine Months Nine Months Year Ended Ended Ended Year to Date: 9/30/03 9/30/2002 12/31/2002 - ---------------------------------------------------------------------- Average Balances: Total assets $13,021,626 $13,096,504 $13,175,562 Total loans, net 8,803,462 8,566,709 8,638,609 Total loans, before allowances for loan losses 8,911,178 8,670,588 8,743,759 Total mortgage-backed securities 1,385,127 1,821,183 1,799,174 Total deposits 6,674,115 6,251,922 6,258,302 Total stockholders' equity 745,473 766,130 758,659 Total interest-earning assets 11,745,275 11,846,929 11,931,794 Total deposits and interest- bearing liabilities 11,909,105 11,953,064 12,034,963 - ---------------------------------------------------------------------- September 30, June 30, March 31, Regulatory Capital: 2003 2003 2003 - ---------------------------------------------------------------------- Tangible $748,928 $784,326 $768,827 Core 736,543 777,933 760,612 Total risk-based 873,404 913,088 899,378 Tier 1 risk-based 736,543 777,933 760,612 Tangible % 6.09% 6.17% 5.88% Core % 6.00% 6.12% 5.82% Total risk-based % 10.86% 11.55% 11.00% Tier 1 risk-based % 9.13% 9.84% 9.30% - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- December 31, September 30, Regulatory Capital: 2002 2002 - ---------------------------------------------------------------------- Tangible $743,048 $752,804 Core 734,870 746,244 Total risk-based 871,408 882,768 Tier 1 risk-based 734,870 746,244 Tangible % 5.81% 5.71% Core % 5.75% 5.67% Total risk-based % 10.92% 10.88% Tier 1 risk-based % 9.21% 9.20% - ---------------------------------------------------------------------- CONTACT: Commercial Federal Corporation, Omaha Investor Relations: John J. Griffith, 402-514-5336 -----END PRIVACY-ENHANCED MESSAGE-----