ICBC Independence Community Bank (MM)

Independence Community Bank Corp. Reports Earnings for the Second Quarter of 2005 BROOKLYN, N.Y., July 18 /PRNewswire-FirstCall/ -- Independence Community Bank Corp. (NASDAQ:ICBC) reported today that net income for the three months ended June 30, 2005 was $54.1 million, a decline of 7% compared to the same period in 2004, and diluted earnings was $0.66 per share, an 11% decline compared to the same period in 2004. However, for the six months ended June 30, 2005, net income increased to $113.9 million, or 18% as compared to the same period in 2004 although diluted earnings decreased to $1.38 per share, or 6%, as compared to the same period in 2004. On a linked quarter basis, diluted earnings per share decreased from $0.72 for the first quarter of 2005 to $0.66 for the second quarter of 2005. The earnings and per share data for 2005 reflect the inclusion of the operations of Staten Island Bancorp, Inc. ("Staten Island") which merged with the Company on April 12, 2004 and the related issuance of 28.2 million shares of the Company's common stock in connection with the merger. Alan H. Fishman, President and Chief Executive Officer, commented, "As anticipated, the Company has experienced continued margin compression in the current interest rate environment. The decline in earnings was primarily driven by the flattening of the current yield curve combined with the historically low level of interest rates on multi-family loans. This combination resulted in lower demand for multi-family loans originated for sale in the secondary market, a key driver of fee income, since it has become less attractive to our borrowers." Highlights * Net interest margin was 3.22% for the quarter ended June 30, 2005 as compared to 3.38% for the quarter ended March 31, 2005. During the second quarter, the decline in net interest margin was primarily attributable to (i) the rise in the cost of funds which continues to outpace the upward repricing of interest-earning assets as general market rates of interest continued their upward trend and (ii) the final amortization of the purchase accounting premium recorded on the certificate of deposit portfolio assumed in the acquisition of Staten Island which reduced the margin by 10 basis points. We believe the pressure on net interest margin will continue in the short-term based upon the current shape of the yield curve. * The Company originated loans totaling $1.32 billion, excluding mortgage warehouse lines of credit, during the quarter ended June 30, 2005, of which $980.9 million were retained for portfolio with the remainder being originated for sale in the secondary market. * Core deposits increased by $136.5 million to $7.17 billion at June 30, 2005 compared to December 31, 2004 through the combination of five de novo branch openings, new business development and the introduction of the Independence RewardsPlus Checking(TM) product during the first half of 2005. * As part of its long-term asset/liability management strategy, the Company selectively chose to utilize certain certificates of deposit promotions as a lower cost funding source, reducing dependence on wholesale borrowings. Borrowings as a percentage of assets declined to 29.3% at June 30, 2005 compared to 33.3% at December 31, 2004. * Income from mortgage-banking activities declined significantly in 2005 compared to 2004 as customer demand for multi-family loans originated for sale in the secondary market softened in the current interest rate cycle. * The increase in non-interest expense from the prior quarter in 2005 was primarily due to additional legal and professional service costs associated with loan workouts. * Asset quality continues to improve; the Company recorded a $0.5 million net charge-off for the quarter ended June 30, 2005 and a $0.7 million net recovery for the six months ended June 30, 2005. * Non-performing assets as a percentage of total assets were 0.22% at June 30, 2005 compared to 0.29% at December 31, 2004. The allowance for loan losses as a percentage of total loans was 0.86% at June 30, 2005 compared to 0.90% at December 31, 2004. No provision for loan losses was required for the second quarter of 2005. * As a result of the current economic environment, the Company expects to return current year earnings to shareholders through a combination of stock repurchases and dividends. -- The Company repurchased 2.6 million shares of stock at an aggregate cost of $97.8 million for the six months ended June 30, 2005, of which 1.8 million shares were purchased in the second quarter at an aggregate cost of $64.9 million. -- The Company has increased its dividend payout ratio over the past few quarters. Post Earnings Announcement Conference Call The Company will conduct a conference call on July 19, 2005 at 9:00 a.m., Eastern Time, to discuss highlights of its second quarter 2005 earnings. The call will be simultaneously webcast on the Company's investor relations web page at http://investor.myindependence.com/. The conference call will also be available via dial-in at 877-704-5380 for domestic callers and at 913-312-1294 for international callers. There will be a replay of this conference call beginning July 19, 2005 at 12:00 Noon, Eastern Time. The replay will remain available through July 29, 2005. The replay can be accessed by dialing 888-203-1112 for domestic callers and 719-457-0820 for international callers. The replay passcode is 1493522. ----------------------------------------- Independence Community Bank Corp. is the holding company for Independence Community Bank. The Bank, originally chartered in 1850, currently operates 123 branches located in the greater New York City metropolitan area, which includes the five boroughs of New York City, Nassau and Suffolk Counties and New Jersey. At its banking offices located on Staten Island, the Bank conducts business as SI Bank & Trust, a division of Independence Community Bank. The Bank has three key business divisions, Commercial Real Estate Lending, Consumer Banking and Business Banking, and actively targets small and mid-size businesses. The Bank maintains its community orientation by offering its diverse communities a wide range of financial products and by emphasizing customer service, superior value and convenience. The Bank's web address is http://www.myindependence.com/. ------------------------------------------ Note: This news release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of significant gains or losses that are unusual in nature or non- recurring. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Statements contained in this release which are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Words such as "expect," "feel," "believe," "will," "may," "anticipate," "plan," "estimate," "intend," "should," and similar expressions are intended to identify forward- looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) growth opportunities may not be fully realized or may take longer to realize than expected; (2) operating costs may be greater than expected; (3) competitive factors which could affect net interest income and non-interest income and general economic conditions which could affect the volume of loan originations, deposit flows and real estate values; (4) the levels of non-interest income and the amount of provisions for loan losses as well as other factors discussed in the documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. INDEPENDENCE COMMUNITY BANK CORP. Consolidated Statements of Financial Condition (Dollars in thousands) June 30, December 31, June 30, 2005 2004 2004 (Unaudited) (Audited) (Unaudited) ASSETS: Cash and due from banks $351,097 $360,877 $407,399 Securities available-for-sale: Investment securities 391,707 454,305 655,349 Mortgage-related securities 3,260,807 3,479,482 3,492,192 Total securities available-for-sale 3,652,514 3,933,787 4,147,541 Loans available-for-sale 185,684 96,671 232,255 Mortgage loans 9,882,427 9,315,090 9,144,891 Other loans 2,013,087 1,933,502 1,955,082 Total loans 11,895,514 11,248,592 11,099,973 Less: allowance for possible loan losses (102,101) (101,435) (105,141) Total loans, net 11,793,413 11,147,157 10,994,832 Premises, furniture and equipment, net 163,309 162,687 150,247 Accrued interest receivable 67,799 64,437 64,072 Goodwill 1,191,790 1,155,572 1,132,075 Intangible assets, net 73,255 79,056 77,140 Bank owned life insurance ("BOLI") 328,506 321,040 313,734 Other assets 337,275 432,146 498,459 Total assets $18,144,642 $17,753,430 $18,017,754 LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits $10,007,447 $ 9,305,064 $ 9,355,116 Borrowings 4,920,774 5,511,972 5,633,320 Subordinated notes 396,772 396,332 395,867 Escrow and other deposits 299,477 104,304 214,640 Accrued expenses and other liabilities 225,706 131,715 269,204 Total liabilities 15,850,176 15,449,387 15,868,147 Stockholders' equity: Common stock ($.01 par value, 250,000,000, 250,000,000 and 125,000,000 shares authorized at June 30, 2005, December 31, 2004, and June 30, 2004, respectively; 104,243,820 shares issued at June 30, 2005, December 31, 2004 and June 30, 2004; 83,364,441, 84,928,719 and 83,391,820 shares outstanding at June 30, 2005, December 31, 2004 and June 30, 2004, respectively) 1,042 1,042 1,042 Additional paid-in-capital 1,904,405 1,900,252 1,874,021 Treasury stock at cost; 20,879,379, 19,315,101 and 20,852,000 shares at June 30, 2005, December 31, 2004 and June 30, 2004, respectively (419,793) (341,226) (368,125) Unallocated common stock held by ESOP (61,795) (64,267) (66,739) Unvested restricted stock awards under stock benefit plans (12,034) (9,701) (10,696) Retained earnings, partially restricted 892,789 821,702 745,410 Accumulated other comprehensive loss: Net unrealized loss on securities available-for-sale, net of tax (10,148) (3,759) (25,306) Total stockholders' equity 2,294,466 2,304,043 2,149,607 Total liabilities and stockholders' equity $ 18,144,642 $ 17,753,430 $18,017,754 INDEPENDENCE COMMUNITY BANK CORP. Consolidated Statements of Income (In thousands, except per share data) (Unaudited) For the For the Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2005 2005 2004 2005 2004 Interest income: Mortgage loans $128,563 $124,832 $110,999 $253,395 $183,123 Other loans 29,344 27,240 24,900 56,584 43,330 Loans available-for-sale 1,248 1,457 3,421 2,705 3,604 Investment securities 4,386 4,509 6,248 8,895 9,709 Mortgage-related securities 37,662 39,826 35,699 77,488 58,548 Other 2,665 2,316 1,294 4,981 1,862 Total interest income 203,868 200,180 182,561 404,048 300,176 Interest expense: Deposits 37,046 26,931 17,534 63,977 30,060 Borrowings 36,070 36,780 30,164 72,850 52,054 Subordinated notes 3,904 3,903 4,020 7,807 5,710 Total interest expense 77,020 67,614 51,718 144,634 87,824 Net interest income 126,848 132,566 130,843 259,414 212,352 Provision for loan losses -- -- 2,000 -- 2,000 Net interest income after provision for loan losses 126,848 132,566 128,843 259,414 210,352 Non-interest income: Net gain (loss) on securities 1,980 3,110 (2,123) 5,090 648 Net (loss) gain on loans (161) 205 2 44 96 Mortgage-banking activities 4,703 3,959 13,266 8,662 17,758 Service fees 16,399 15,609 18,643 32,008 32,238 BOLI 4,018 3,774 3,666 7,792 6,302 Other 3,014 2,902 2,051 5,916 5,916 Total non-interest income 29,953 29,559 35,505 59,512 62,958 Non-interest expense: Compensation and employee benefits 35,941 36,227 34,590 72,168 61,565 Occupancy costs 12,833 12,340 11,186 25,173 19,119 Data processing fees 3,992 3,867 5,312 7,859 8,443 Advertising 2,238 2,175 2,444 4,413 4,291 Other 16,285 13,349 16,519 29,634 26,086 Total general and administrative expenses 71,289 67,958 70,051 139,247 119,504 Amortization of identifiable intangible assets 2,873 2,928 2,602 5,801 2,745 Total non-interest expense 74,162 70,886 72,653 145,048 122,249 Income before provision for income taxes 82,639 91,239 91,695 173,878 151,061 Provision for income taxes 28,510 31,478 33,447 59,988 54,670 Net income $54,129 $59,761 $58,248 $ 113,890 $96,391 Basic earnings per share $0.68 $0.74 $0.77 $1.42 $1.53 Diluted earnings per share $0.66 $0.72 $0.74 $1.38 $1.47 INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) At or For the Three At or For the Six Months Ended Months Ended June 30, March 31, June 30, June 30, June 30, 2005 2005 2004(1) 2005 2004(1) Performance Ratios: Return on average assets (2) 1.21% 1.34% 1.40% 1.28% 1.47% Return on average equity (2) 9.41% 10.34% 11.55% 9.87% 12.70% Return on average tangible assets (2) 1.31% 1.44% 1.49% 1.37% 1.53% Return on average tangible equity (2) 20.98% 22.19% 22.65% 21.60% 20.71% Non-interest expense to average assets 1.66% 1.59% 1.75% 1.63% 1.86% Efficiency ratio(3) 46.00% 42.79% 41.58% 44.38% 43.52% Average Balances: Average shares outstanding - basic 79,672,843 80,450,757 75,357,063 80,059,651 62,805,957 Average shares outstanding - diluted 82,128,428 83,225,206 78,612,300 82,674,668 65,746,206 June 30, March 31, December 31, June 30, 2005 2005 2004 2004 Capital and Other Ratios: Book value per share $27.52 $27.11 $27.13 $25.78 Tangible book value per share $12.35 $12.08 $12.59 $11.28 Average equity to average assets 12.89% 12.98% 12.77% 12.14% Tangible equity to tangible assets 6.10% 6.14% 6.47% 5.59% Leverage ratio (Bank only) 5.60% 5.62% 5.51% 5.37% Tier 1 risk-based (Bank only) 7.03% 7.39% 7.36% 6.61% Total risk-based capital (Bank only) 10.88% 11.44% 11.47% 10.70% Deposits: Core deposits: Savings $ 2,391,073 $2,519,627 $2,630,416 $2,791,746 Money market 1,193,798 1,407,410 1,701,287 1,796,758 Interest-bearing demand 2,035,058 1,776,493 1,214,190 1,006,505 Non-interest-bearing demand 1,550,181 1,458,096 1,487,756 1,526,459 Total core deposits 7,170,110 7,161,626 7,033,649 7,121,468 Certificates of deposit 2,837,337 2,677,494 2,271,415 2,233,648 Total deposits $10,007,447 $9,839,120 $9,305,064 $9,355,116 INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) June 30, March 31, December 31, June 30, 2005 2005 2004 2004 Loan Portfolio Composition: Mortgage loans on real estate: Single-family residential $1,904,043 $1,967,934 $2,071,074 $2,507,280 Cooperative apartment loans 378,777 400,113 418,988 422,867 Multi-family residential 4,212,316 3,991,842 3,800,649 3,588,727 Commercial real estate 3,397,846 3,237,405 3,034,254 2,633,817 Total principal balance - mortgage loans 9,892,982 9,597,294 9,324,965 9,152,691 Less net deferred fees 10,555 10,278 9,875 7,800 Total mortgage loans on real estate 9,882,427 9,587,016 9,315,090 9,144,891 Commercial business loans, net of deferred fees 838,486 817,748 809,392 881,512 Other loans: Mortgage warehouse lines of credit 676,551 496,743 659,942 652,040 Home equity loans and lines of credit 461,782 430,033 416,351 365,818 Consumer and other loans 36,268 40,482 47,817 55,904 Total principal balance - other loans 1,174,601 967,258 1,124,110 1,073,762 Less net deferred fees -- -- -- 192 Total principal balance - other loans 1,174,601 967,258 1,124,110 1,073,570 Total loans receivable 11,895,514 11,372,022 11,248,592 11,099,973 Less allowance for loan losses 102,101 102,554 101,435 105,141 Loans receivable, net $11,793,413 $11,269,468 $11,147,157 $10,994,832 Loans Available-for-Sale Composition: Single-family residential $3,675 $59,994 $74,121 $77,165 Multi-family residential 182,009 27,635 22,550 155,090 Total loans available-for-sale $185,684 $87,629 $96,671 $232,255 June 30, March 31, December 31, June 30, 2005 2005 2004 2004 Asset Quality: Non-performing loans: Non-accrual loans $37,253 $39,305 $43,644 $62,379 Loans past due 90 days or more as to: Interest and accruing 11 27 117 20 Principal and accruing (4) 739 1,323 5,517 1,294 Total non-performing loans 38,003 40,655 49,278 63,693 Other real estate owned 1,747 2,224 2,512 1,203 Total non-performing assets $39,750 $42,879 $51,790 $64,896 Non-performing assets to total assets 0.22% 0.24% 0.29% 0.36% Allowance for loan losses to non-performing loans 268.67% 252.25% 205.84% 165.07% Allowance for loan losses to total loans 0.86% 0.90% 0.90% 0.95% Net charge offs to average loans - quarter ended 0.004% N/A 0.031% 0.001% Net charge offs to average loans - year-to-date N/A N/A 0.043% 0.005% INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) For the Three Months Ended June 30, 2005 March 31, 2005 June 30, 2004 Average Average Average Balance Rate (2) Balance Rate (2) Balance Rate (2) Net Interest Margin: Interest-earning assets: Loans receivable: Mortgage loans $ 9,751,220 5.32% $ 9,497,556 5.32% $ 8,304,133 5.51% Commercial business loans 831,729 6.79 813,216 6.68 848,015 6.06 Mortgage warehouse lines of credit 558,031 5.97 532,536 5.47 639,842 4.20 Consumer and other loans 485,660 5.64 474,002 5.61 398,066 5.40 Total loans 11,626,640 5.48 11,317,310 5.44 10,190,056 5.47 Mortgage-related securities 3,444,278 4.37 3,610,473 4.41 3,516,383 4.06 Investment securities 380,351 4.61 413,217 4.36 647,907 3.86 Other interest-earning assets 265,842 4.02 295,419 3.18 339,864 1.72 Total interest-earning assets 15,717,111 5.19 15,636,419 5.13 14,694,210 4.97 Non-interest -earning assets 2,133,825 2,177,059 1,911,124 Total assets $17,850,936 $17,813,478 $16,605,334 Interest-bearing liabilities: Deposits: Savings deposits 2,466,423 0.34 2,582,776 0.38 2,660,686 0.34 Interest-bearing demand and money market deposits 3,485,534 1.79 3,224,266 1.56 2,768,904 1.10 Certificates of deposit 2,746,039 2.83 2,487,108 1.97 2,196,162 1.41 Total interest-bearing deposits 8,697,996 1.71 8,294,150 1.32 7,625,752 0.92 Non-interest -bearing demand deposits 1,465,842 -- 1,437,109 -- 1,365,590 -- Total deposits 10,163,838 1.46 9,731,259 1.12 8,991,342 0.78 Subordinated notes 396,675 3.95 396,453 3.99 395,814 4.08 Borrowings 4,809,352 3.01 5,189,591 2.87 4,949,415 2.45 Total interest-bearing liabilities 15,369,865 2.01 15,317,303 1.79 14,336,571 1.45 Non-interest -bearing liabilities 179,258 184,439 252,096 Total liabilities 15,549,123 15,501,742 14,588,667 Total stockholders' equity 2,301,813 2,311,736 2,016,667 Total liabilities and stockholders' equity $17,850,936 $17,813,478 $16,605,334 Net interest-earning assets $347,246 $319,116 $357,639 Interest rate spread (2) 3.18% 3.34% 3.52% Net interest margin (2) 3.22% 3.38% 3.56% Average interest-earning assets to average interest-bearing liabilities 102.26% 102.08% 102.49% INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) For the Six Months Ended June 30, 2005 June 30, 2004 Average Average Balance Rate (2) Balance Rate (2) Net Interest Margin: Interest-earning assets: Loans receivable: Mortgage loans $9,625,089 5.32% $6,611,660 5.65% Commercial business loans 822,523 6.74 719,876 6.17 Mortgage warehouse lines of credit 545,354 5.73 541,867 4.24 Consumer and other loans 479,863 5.63 363,825 5.33 Total loans 11,472,829 5.46 8,237,228 5.59 Mortgage-related securities 3,526,916 4.39 2,835,768 4.13 Investment securities 396,693 4.48 475,361 4.08 Other interest-earning assets 280,548 3.58 273,128 1.49 Total interest-earning assets 15,676,986 5.16 11,821,485 5.08 Non-interest-earning assets 2,155,325 1,328,812 Total assets $17,832,311 $13,150,297 Interest-bearing liabilities: Deposits: Savings deposits 2,524,278 0.36 2,141,544 0.35 Interest-bearing demand and money market deposits 3,355,622 1.68 2,250,306 0.77 Certificates of deposit 2,617,289 2.42 1,771,899 1.68 Total interest-bearing deposits 8,497,189 1.52 6,163,749 0.98 Non-interest-bearing demand deposits 1,451,555 -- 1,057,946 -- Total deposits 9,948,744 1.30 7,221,695 0.84 Subordinated notes 396,565 3.97 285,734 4.02 Borrowings 4,998,421 2.94 3,919,926 2.67 Total interest-bearing liabilities 15,343,730 1.90 11,427,355 1.55 Non-interest-bearing liabilities 181,834 205,546 Total liabilities 15,525,564 11,632,901 Total stockholders' equity 2,306,747 1,517,396 Total liabilities and stockholders' equity $17,832,311 $13,150,297 Net interest-earning assets $333,256 $394,130 Interest rate spread (2) 3.26% 3.53% Net interest margin (2) 3.30% 3.59% Average interest-earning assets to average interest-bearing liabilities 102.17% 103.45% (1) The merger with Staten Island Bancorp, Inc. ("SIB") was completed on April 12, 2004. As a result, SIB's assets and liabilities and results of operations were included in the Consolidated Statement of Financial Condition and Consolidated Statement of Income effective as of such date. (2) Presented on an annualized basis. (3) Reflects in each period presented adjusted operating expense (net of amortization of identifiable intangible assets) as a percentage of the aggregate of net interest income and adjusted non-interest income (excluding gains and losses on loans and securities). Amortization of identifiable intangible assets is excluded from the calculation since it is a non-cash expense and gains and losses on loans and securities are excluded since they are generally considered by the Company's management to be non-recurring in nature. The operating efficiency ratio is not a financial measurement required by generally accepted accounting principles in the United States of America. However, the Company believes such information is useful to investors in evaluating the Company's operations. (4) Reflects loans that are 90 days or more past maturity which continue to make payments on a basis consistent with the original repayment schedule. DATASOURCE: Independence Community Bank Corp. CONTACT: Kathleen A. Hanrahan, First Vice President, Investor Relations, +1-718-722-5400, or Frank W. Baier, Executive Vice President, Chief Financial Officer, +1-718-923-3506, both of Independence Community Bank Corp. Web site: http://www.myindependence.com/

Copyright