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SouthTrust Announces Record First-Quarter Earnings and Earnings
Per Share
Highlights: * Q1 earnings per share increase 12%
BIRMINGHAM, Ala., April 21 /PRNewswire-FirstCall/ -- SouthTrust Corporation
today announced earnings per diluted share of $0.55 on record earnings of
$183.0 million for the first quarter of 2004. Earnings per diluted share were
up 12 percent and net earnings increased by 7 percent compared to the first
quarter of 2003. The dividend increased by 14 percent to an annual rate of
$0.96 per share, effective April 1. This marks the 53rd consecutive quarter of
increased earnings and over thirty years of increased dividends. Of the top
thirty banks in the United States, very few can match the SouthTrust record.
SouthTrust is the country's 17th largest bank.
"SouthTrust began 2004 with another quarter of solid core earnings that once
again highlights our company's ability to perform well in a continually
changing economic environment," said Wallace D. Malone Jr., Chairman and CEO of
SouthTrust. "The results from this quarter reflect an improving environment for
SouthTrust. Our credit quality remains excellent and lending activity continues
to show signs that we are experiencing an improving economy. In addition, our
expenses remain well under control, clearly demonstrating that our significant
investments in technology and process improvements are delivering excellent and
expected results. We are confident that if the current trends continue, 2004
will be another record year for SouthTrust."
"Net-interest income for the quarter decreased 1 percent to $412.8 million.
Our net-interest margin percentage for the first quarter of 2004 was 3.50
percent compared to 3.51 percent in the fourth quarter of 2003, and 3.69
percent in the first quarter of 2003. Even though market interest rates were
relatively flat for much of the quarter, our margin percentage was relatively
stable during the first quarter. The quarter-over-quarter margin stability
we've achieved gives us a high level of confidence that our balance sheet is
positioned to allow SouthTrust to continue to produce good results as the
economy improves and interest rates rise. Within the context of today's rate
environment, we expect our margin percentage to remain relatively stable
through the end of 2004. This means we are well-positioned for margin income to
improve if the anticipated growth in the economy occurs as we expect," Malone
said.
Non-interest income increased to $166.4 million in the first quarter of 2004,
up 2 percent from the same period in 2003. Non-interest income was largely
affected because of a decrease in mortgage banking income, which fell 61
percent to $6.6 million. All other non-interest income rose 9 percent.
"We expected mortgage income to be lower than in past quarters because a large
portion of our mortgage loan production in 2003 was from refinancings. As
mortgage rates rose from record lows in mid-2003, refinancing activity
predictably slowed," Malone said.
Non-interest expense for the first quarter of 2004 was $285.4 million, a 4
percent decrease from the same period in 2003. For the quarter, the company's
efficiency ratio improved to 49.52 percent compared to 51.17 percent in the
first quarter of 2003.
"Controlling expenses and maximizing efficiency continue to receive a high
level of focus at SouthTrust. Our everyday emphasis on these areas produces
excellent, long-term results," Malone said.
At quarter end, total assets were $52.7 billion, an increase of 3 percent over
first quarter 2003 assets of $51.3 billion. Total deposits increased 10 percent
from first quarter 2003 to $35.5 billion. Core deposits continued to show good
growth, increasing 5 percent to $27.8 billion for the quarter from $26.4
billion in the first quarter of 2003. Stockholders' equity was $4.5 billion,
which was a strong 8.54 percent of total assets.
During the first quarter of 2004, loans grew $612 million, or at an annualized
rate of 7 percent, to $35.9 billion from $35.3 billion at the end of the fourth
quarter of 2003. This also reflects an increase of 4 percent over the first
quarter 2003 level of $34.4 billion.
"Loan demand continues to show signs of improvement, particularly in the
commercial and real-estate construction areas. Even though we have been in a
slower lending environment for an extended period of time, we are seeing an
increase in the number of lending opportunities and we certainly have the
capacity and the organization to efficiently handle much higher loan growth.
The quantity and quality of the lending opportunities our sales culture
continues to generate makes us quite confident in our ability to have excellent
growth as the Southern economy continues to improve," Malone said.
Credit quality remains a core strength at SouthTrust. For the first quarter,
net loans charged off were $27.5 million, or 0.31 percent of loans, compared to
$28.4 million, or 0.34 percent of loans, in the first quarter of 2003.
"Low credit losses have long been a strength for SouthTrust. In fact, if you
exclude losses related to our credit card operation, which is a line of
business that most of our peers do not have, our losses would have been only
0.25 percent in the first quarter," Malone said.
Non-performing assets continue to show a favorable trend. Total non- performing
assets as of March 31, 2004, were $221.1 million, or 0.62 percent of loans plus
other non-performing assets. This is a decrease from the Dec. 31, 2003, level
of $224.1 million, or 0.63 percent of loans plus other non- performing assets.
The company's loan-loss reserve for first quarter was 1.40 percent of loans. In
addition, the loan-loss reserve coverage of non- performing loans was 289
percent.
During the quarter, SouthTrust continued to focus on building its presence in
high-growth, high-population markets. On February 5, the company announced it
had entered a definitive agreement to purchase Lakeland, Fla., based
FloridaFirst Bancorp, Inc. (NASDAQ:FFBK) and its subsidiary, FloridaFirst Bank.
The acquisition will increase SouthTrust's presence in Central Florida by 19
branches -- 10 in Lakeland, two in Winter Haven, four in Bradenton and one each
in Sebring, Avon Park and Wildwood. The acquisition is scheduled to close
during the second quarter pending necessary stockholder and regulatory
approval. FloridaFirst reported assets of $821 million as of Dec. 31, 2003.
SouthTrust Corporation ( http://www.southtrust.com/ ) is a $52.7 billion
regional bank holding company with headquarters in Birmingham, Ala. SouthTrust
operates 712 banking and loan offices and 894 ATMs in Alabama, Florida,
Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas and
Virginia. The company offers a complete line of banking and other related
financial services to commercial and retail customers. SouthTrust is a Forbes
Platinum 400 company that trades on the NASDAQ Stock Market under the symbol
SOTR. The company is listed on the S&P 500 index and the Keefe, Bruyette &
Woods BKX Index.
Cautionary Statement Regarding Forward-Looking Statements
This release includes forward-looking statements and projections, made in
reliance on the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The company has made every reasonable effort to ensure that
the information and assumptions on which these statements and projections are
based are current, reasonable, and complete. However, a variety of factors
could cause actual results to differ materially from the projections,
anticipated results or other expectations expressed in this release. While the
company makes these statements and projections in good faith, neither the
company nor its management can guarantee that the anticipated future results
will be achieved.
Detailed financial tables are available at
http://www.investor.southtrust.com/
SOUTHTRUST CORPORATION
Financial Highlights
Three Months Year Ended
Ended March 31, % Ended December 31, %
2004 2003 Change 2003 2002 Change
SUMMARY INCOME
STATEMENT
(Fully taxable
equivalent,
in thousands)
Interest income $567,864 $617,479 $2,378,683 $2,677,968
Interest expense 155,070 199,377 713,776 960,327
Net interest
income 412,794 418,102 1,664,907 1,717,641
Tax equivalent
adjustment (2,836) (2,884) (11,598) (12,557)
Provision for
loan losses 27,522 29,400 124,550 126,732
Net interest income
after provision
for loan losses 382,436 385,818 1,528,759 1,578,352
Non-interest income
(excluding
securities
transactions) 163,441 164,327 679,689 613,913
Securities
transactions 2,933 (1,096) 23 2,601
Non-interest
expense 285,354 298,027 1,179,849 1,232,369
Income before
income taxes 263,456 251,022 1,028,622 962,497
Income taxes 80,499 79,677 323,436 312,626
Net income $182,957 $171,345 6.8% $705,186 $649,871 8.5%
EARNINGS & DIVIDENDS
(Dollars in thousands,
except per share data)
Basic:
Earnings per share $0.55 $0.50 10.0% $2.08 $1.87 11.2%
Average shares
outstanding 331,027 345,514 338,452 346,731
Diluted:
Earnings per share $0.55 $0.49 12.2% $2.06 $1.85 11.4%
Average shares
outstanding 335,251 350,494 342,498 350,937
Cash dividends
declared per share $0.24 $0.21 14.3% $0.84 $0.68 23.5%
PERFORMANCE RATIOS
Return on
average assets 1.42% 1.38% 1.38% 1.33%
Return on average
tangible assets 1.44 1.40 1.41 1.36
Return on
average equity 16.58 15.15 15.87 15.12
Return on average
tangible equity 20.21 18.33 19.37 18.56
Net interest
margin (FTE) 3.50 3.69 3.58 3.85
Net loans charged-off
to net average loans 0.31 0.34 0.36 0.34
Allowance to net
loans outstanding 1.40 1.45 1.42 1.46
Non-interest expense
as a % of average
total assets 2.22 2.39 2.32 2.53
Efficiency ratio 49.52 51.17 50.32 52.86
SELECTED AVERAGE
BALANCES
(Dollars in millions,
except per share data)
Total assets $51,734.1 $50,493.9 2.5% $50,934.3 $48,706.8 4.6%
Earning assets 47,664.9 46,356.7 2.8% 46,757.9 44,856.0 4.2%
Loans, net of
unearned income 35,553.4 34,395.7 3.4% 34,524.4 33,386.3 3.4%
Total deposits 35,858.0 32,589.7 10.0% 33,861.0 31,439.2 7.7%
Stockholders'
equity 4,438.4 4,587.6 -3.3% 4,443.0 4,299.1 3.3%
SELECTED PERIOD
END BALANCES
(Dollars in millions,
except per share data)
Mar 31 Mar 31 % Dec 31 Dec 31 %
2004 2003 Change 2003 2002 Change
Total assets $52,672.9 $51,348.6 2.6% $51,924.9 $50,570.9 2.7%
Loans, net of
unearned income 35,892.1 34,440.4 4.2% 35,280.2 34,237.6 3.0%
Total deposits 35,514.9 32,312.8 9.9% 34,746.6 32,945.4 5.5%
Core deposits 27,825.9 26,433.1 5.3% 27,278.7 26,392.3 3.4%
Stockholders'
equity 4,497.2 4,523.1 -0.6% 4,359.8 4,627.6 -5.8%
Shares outstanding
(in thousands) 329,821 341,882 330,243 346,924
Book value per
share $13.64 $13.23 $13.20 $13.34
Number of
banking offices 712 693 717 710
Number of ATMs 894 871 893 882
Full-time equivalent
employees 12,407 12,950 12,363 13,228
DATASOURCE: SouthTrust Corporation
CONTACT: David Oliver, Corporate Communications, +1-205-254-5523, or
Bill Prater, Investor Relations, +1-205-254-5187, both of SouthTrust
Corporation
Web site: http://www.southtrust.com/
http://www.investor.southtrust.com/