Matrix Bancorp (NASDAQ:MTXC)
Historical Stock Chart
From Jun 2019 to Jun 2024
![Click Here for more Matrix Bancorp Charts. Click Here for more Matrix Bancorp Charts.](/p.php?pid=staticchart&s=N%5EMTXC&p=8&t=15)
Matrix Bancorp, Inc. (NASDAQ: MTXC)
-- Net income for the first quarter 2006 was $5.5 million, or
$0.64 per diluted share, including $1.6 million, or $0.19 per
diluted share from discontinued operations
-- Net interest margin expands 14 basis points on a year over
year basis
-- Commercial loans grew 21%
-- Five regional branch presidents now in place
Matrix Bancorp, Inc. (NASDAQ: MTXC) (the "Company"), a
Denver-based holding company whose principal subsidiary, Matrix
Capital Bank, is a community bank focused on expansion across
Colorado's Front Range market, announced today results for the quarter
ended March 31, 2006.
For the first quarter 2006, the Company reported net income of
$5.5 million, or $0.64 per basic and diluted share, as compared to
$2.9 million, or $0.44 per basic and diluted share reported for the
quarter ended March 31, 2005. Net income for the quarter ended March
31, 2006, was positively impacted by the previously announced sale of
certain assets and operations of Matrix Bancorp Trading, Inc., on
which the after-tax gain on sale of approximately $2.4 million is
included in income from discontinued operations. Also positively
affecting the first quarter 2006 results was the settlement of two
separate litigation matters at Matrix Capital Bank and Matrix
Financial Services Corporation included in noninterest income totaling
approximately $1.4 million, after-tax.
The Company's assets totaled $2.15 billion on March 31, 2006, as
compared to $2.08 billion at December 31, 2005. The increase in assets
is primarily due to an increase in investment securities, which
increased $115.2 million since December 31, 2005, to $655.4 million at
March 31, 2006. This increase was the result of the deployment of
repayments from the single family whole loan portfolio as well as
overall growth of the balance sheet at Matrix Bank from the
reinvestment of its earnings. Also during the first quarter 2006, the
Company's commercial loan portfolio (SBA loans, commercial,
construction, land and commercial real estate) increased $29.7 million
to $209.1 million at March 31, 2006, as compared to $179.4 million at
December 31, 2005. This increase was the result of production from
Matrix Bank's newly appointed community banking professionals.
Residential loans in the Company's held for sale portfolio declined
$91.8 million due to repayments, exchanges with FNMA of whole loans
for securities and sales in the loan portfolio at Matrix Financial.
Deposits, including custodial escrow balances, increased $66.1 million
since December 31, 2005, to $1.24 billion at March 31, 2006. The
increase in deposits was the net effect of the attraction of new
community bank and institutional deposits, and utilization of brokered
deposits for liability management. In the first quarter, due to the
repurchase of shares discussed below, the Company's borrowings from
FHLBank increased by $76.0 million to $691.0 million at March 31,
2006.
During the first quarter 2006, the Company completed the
repurchase of shares under the previously announced tender offer,
which closed on January 23, 2006. The Company repurchased 4,184,277
common shares for approximately $79.5 million. This repurchase was
charged against additional paid in capital which resulted in the
decrease of $73.7 million in shareholders' equity to $107.0 million at
March 31, 2006, as compared to $180.7 million at December 31, 2005.
Scot T. Wetzel, President and CEO, commented: "For the first
quarter of 2006, we are pleased with the progress the Company made in
executing our business plan to build a community-banking branch
network across key Colorado geographic markets. In less than four
months, we have announced the hiring of five newly appointed regional
branch presidents, their teams and a new chief credit executive, whose
leadership and experience will lead the re-branding of our Company and
its new community focus. These individuals will work to draw customers
into our network as we introduce our community bank brand into our
targeted markets. We are on track to open our first two new branch
locations, in Boulder and Cherry Creek North, during the second half
of 2006. Additionally, we have announced that we will present our
proposed new name and identity, United Western Bancorp, Inc., to our
shareholders during our annual meeting in June 2006 for their
approval."
Michael J. McCloskey, Chief Operating Officer, added: "The Company
has also made significant progress within other areas of our operating
strategy in that we have divested two of our non-banking subsidiaries
during the first quarter, have announced the sale of ABS School
Services and are continuing our analysis of the remaining operations
to ensure that we have the appropriate business focus on and resource
allocation to our core competencies going forward. We believe that
both the sale of the assets of Matrix Bancorp Trading and MTXC Realty
during the first quarter, and the sale of ABS School Services, LLC,
which closed May 5, 2006, demonstrate our commitment to the execution
of our community banking business plan, focused on business and
consumer loan and deposit generation, as well as the continued growth
of our trust services subsidiary, Sterling Trust."
Financial Highlights
Net Interest Income. Net interest income before provision for
credit losses totaled $13.5 million for the quarter ended March 31,
2006, as compared to $10.9 million for the quarter ended March 31,
2005. The increase is attributable to an overall increase in the
Company's average balance of interest-earning assets to $2.02 billion
for the quarter ended March 31, 2006, as compared to $1.74 billion for
the quarter ended March 31, 2005. The yield on those interest-earning
assets increased to 5.27% for the first quarter of 2006 as compared to
4.59% for the first quarter of 2005. There was an increase in the
average balance of the Company's interest-bearing liabilities to $1.80
billion for the quarter ended March 31, 2006, as compared to $1.52
billion for the quarter ended March 31, 2005. The cost of the
interest-bearing liabilities also increased to 2.93% for first quarter
of 2006 as compared to 2.36% for first quarter of 2005. The increase
in yield on the interest-earning assets and in the rate on
interest-bearing liabilities was in response to the increase in the
overall interest rate environment over the period and in the change in
mix of assets and liabilities that comprise the balances. The
Company's net interest margin increased to 2.66% for the first quarter
of 2006 as compared to 2.52% for the first quarter of 2005. The
increase in the net interest margin is due to the impact from the
yield on the interest-earning assets increasing more than the cost of
our interest-bearing liabilities, combined with the effect of a higher
balance of interest earning assets in total and as a percentage of
total assets. This reverses a trend of compression in the Company's
interest rate margin experienced in 2005 which was due primarily to
the flattening of the yield curve in 2005.
Provision for Credit Losses. The provision for credit losses was
$960 thousand for the first quarter of 2006 as compared to $760
thousand for the first quarter of 2005. The increase in the provision
is attributable to the Company's reevaluation of loan loss reserve
levels associated with our commercial loan portfolio. During the first
quarter 2006, Matrix Bank's new credit risk management team revised
the estimated loss factors that are applied to certain of our
commercial loans to reflect credit and risk management's experience
with inherent losses in these types of loans.
Noninterest Income. Noninterest income was $9.3 million for the
first quarter of 2006 as compared to $8.7 million for the first
quarter of 2005. The increase is primarily due to other income for the
first quarter of 2006 including $2.3 million received for two
significant legal settlements, one at Matrix Financial and another at
Matrix Bank. Both of the settlements relate to loan losses previously
recorded. Other income also includes an increase of $580 thousand for
fees received from the deployment of certain New Market Tax Credits.
These items were offset by decreases of $760 thousand in loan
administration fees due to decreases in the size of our mortgage
servicing portfolio, decreases of $810 thousand in trust services
income due to the sale of trust operations of Matrix Bank in April
2005 and decreases of $480 thousand in levels of gain on sale of loans
and securities which level is dependent on market conditions and the
timing of sales in the marketplace, primarily on loans purchased and
resold from our servicing portfolio and SBA loan portfolio.
Noninterest Expense. Noninterest expense for the first quarter of
2006 was $16.2 million as compared to $15.0 million for the first
quarter of 2005, due primarily to increases in subaccounting fees and
in compensation and benefits. Increases of $2.0 million in
subaccounting fees at Matrix Bank to $4.6 million for the quarter
ended March 31, 2006, are due to increases in the levels of
institutional deposits held on which subaccounting services are
incurred, and increases in the level of the subaccounting fees, which
generally move with changes in the Federal Open Market Committee
target rate for overnight deposits. The Company also experienced
increases in compensation and employee benefits expense of $550
thousand as a result of the hiring of employees at Matrix Bank to
implement the community banking strategy, including the senior members
of the branches and personnel in credit and administration to support
our anticipated community bank loan growth, as well as expense of
approximately $100 thousand associated with various stock options
granted during the quarter, due to the implementation of Statement of
Financial Accounting Standard No. 123R, "Share-Based Payment." The
impact of these increases was offset by a decrease in other general
and administrative expense due to inclusion of a $980 thousand
recovery of a portion of the market value adjustment against the value
of our single-family loans held for sale portfolio. In addition, there
is a continued decrease in the level of amortization of mortgage
servicing rights to $1.5 million for the first quarter 2006 due to
lower repayment activity and the continued decline in the outstanding
balance of our mortgage servicing rights asset as compared to December
31, 2005.
Capital. Matrix Bank remains a well capitalized institution.
Matrix Bank's tier 1 risk-based, total risk-based and leverage capital
ratios are approximately 6.34%, 15.27% and 14.61%, respectively, as of
March 31, 2006, all of which are well in excess of regulatory
requirements. These ratios reflect the low risk levels associated with
the securities and single family loan portfolio, and the prudent
leverage of Matrix Bank's balance sheet.
Conference Call
The Company's management will host a conference call to review the
results of operations for the first quarter 2006 and other topics that
may be raised during the discussion on Thursday, May 11, 2006, at 9:00
a.m. Mountain time. To access the call, participants should dial
800-240-4186 at least ten minutes prior to the start of the call.
International callers should dial 303-262-2138. To hear a live web
simulcast or to listen to the archived web cast following the
completion of the call, please visit the Company's web site at
www.matrixbancorp.com, click on the investor relations tab and then
select conference calls to access the link to the call. Refer to
conference identification number 33859.
Denver-based Matrix Bancorp, Inc. is focused on developing its
community-based banking network through its subsidiary, Matrix Capital
Bank, by strategically positioning branches across Colorado's Front
Range market. The area spans the Eastern slope of the Rocky Mountains
-- from Pueblo to Fort Collins, and includes the metropolitan Denver
marketplace. Matrix Bank plans to grow its network to an estimated
five to seven community bank branches over the next three to five
years. The Company recently identified "United Western" as its
proposed new brand name and anticipates a formal change in legal and
trade names during the second or third quarter of 2006, after
receiving applicable regulatory and shareholder approvals. For more
information, please visit our web site at www.matrixbancorp.com.
Forward-Looking Statements
Certain statements contained in this earnings release that are not
historical facts, including, but not limited to, statements that can
be identified by the use of forward-looking terminology such as "may,"
"will," "expect," "anticipate," "predict," "believe," "plan,"
"estimate" or "continue" or the negative thereof or other variations
thereon or comparable terminology, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, and involve a number of risks and uncertainties. The actual
results of the future events described in such forward-looking
statements in this earnings release could differ materially are: the
timing of regulatory approvals or consents for new branches or other
contemplated actions; the availability of suitable and desirable
locations for additional branches; and the continuing strength of our
existing business, which may be affected by various factors, including
but not limited to interest rate fluctuations, level of delinquencies,
defaults and prepayments, general economic conditions, competition;
the delay in or failure to receive any required shareholder approvals
of the contemplated actions; and the risks and uncertainties discussed
elsewhere in the annual report for the year ended December 31, 2005,
filed with the Securities and Exchange Commission on March 15, 2006;
and the uncertainties set forth from time to time in the Company's
periodic reports, filings and other public statements.
-0-
*T
MATRIX BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share information)
March 31, December 31,
2006 2005
------------- ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 17,770 $ 15,877
Interest-earning deposits and federal funds
sold 19,312 18,355
Investment securities - available for sale 22,734 14,462
Investment securities - held to maturity 529,694 421,010
Investment securities - trading 102,980 104,722
Loans held for sale, net 850,250 927,442
Loans held for investment, net 448,540 425,943
FHLBank stock, at cost 40,951 34,002
Mortgage servicing rights, net 19,587 20,708
Accrued interest receivable 10,615 9,752
Other receivables 20,430 19,387
Premises and equipment, net 16,353 17,154
Bank owned life insurance 22,672 22,454
Other assets, net 19,199 19,898
Income taxes receivable and deferred income
tax asset 1,354 3,696
Foreclosed real estate, net 3,422 4,526
------------- ------------
Total assets $ 2,145,863 $ 2,079,388
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits $ 1,183,292 $ 1,124,044
Custodial escrow balances 56,250 49,385
FHLBank borrowings 691,004 615,028
Borrowed money 29,044 29,581
Junior subordinated debentures owed to
unconsolidated subsidiary trusts 61,372 61,372
Deferred income tax liability 2,047 -
Other liabilities 15,868 19,250
------------- ------------
Total liabilities 2,038,877 1,898,660
------------- ------------
Shareholders' equity:
Common stock, $0.0001 par value 1 1
Treasury stock - -
Additional paid-in capital 28,993 108,395
Retained earnings 77,831 72,314
Accumulated other comprehensive income 161 18
------------- ------------
Total shareholders' equity 106,986 180,728
------------- ------------
Total liabilities and shareholders'
equity $ 2,145,863 $ 2,079,388
============= ============
*T
-0-
*T
MATRIX BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share information)
(Unaudited)
Quarter Ended
March 31,
2006 2005
-------- --------
Interest and dividend income:
Loans $17,564 $15,554
Investment securities 8,329 4,005
Interest-earning deposits and federal funds sold 759 351
-------- --------
Total interest and dividend income 26,652 19,910
Interest expense:
Deposits 4,201 3,268
FHLBank advances 7,428 4,142
Borrowed money and junior subordinated debentures 1,554 1,552
-------- --------
Total interest expense 13,183 8,962
Net interest income before provision for credit
losses 13,469 10,948
Provision for credit losses 957 758
-------- --------
Net interest income after provision for credit
losses 12,512 10,190
Noninterest income:
Loan administration 2,273 3,035
Brokerage 553 695
Trust services 1,704 2,515
Real estate disposition services 168 422
Gain on sale of loans and securities 251 731
Gain on sale of other assets 100 -
Litigation settlements 2,250 -
Other 1,978 1,273
-------- --------
Total noninterest income 9,277 8,671
Noninterest expense:
Compensation and employee benefits 5,679 5,129
Amortization of mortgage servicing rights 1,517 1,774
Recovery of mortgage servicing rights impairment (276) (175)
Occupancy and equipment 960 983
Postage and communication 287 359
Professional fees 525 623
Mortgage servicing rights subservicing fees 681 825
Data processing 222 303
Subaccounting fees 4,638 2,652
Other general and administrative 1,962 2,531
-------- --------
Total noninterest expense 16,195 15,004
-------- --------
Income from continuing operations before income taxes 5,594 3,857
Income tax provision 1,715 1,343
-------- --------
Income from continuing operations 3,879 2,514
-------- --------
Discontinued operations:
Income from discontinued operations, including gain
on sale of assets of $3,859 and $0, net of income
tax provision (benefit) of $1,147 and $(46),
respectively 1,638 406
-------- --------
Net income $ 5,517 $ 2,920
======== ========
*T
-0-
*T
MATRIX BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share information)
(Unaudited)
Quarter Ended
March 31,
2006 2005
------ ------
Income from continuing operations per share - basic $0.45 $0.38
------ ------
Income from continuing operations per share - assuming
dilution $0.45 $0.38
------ ------
Income from discontinued operations per share - basic $0.19 $0.06
------ ------
Income from discontinued operations per share - assuming
dilution $0.19 $0.06
------ ------
Net income per share - basic $0.64 $0.44
====== ======
Net income per share - assuming dilution $0.64 $0.44
====== ======
*T
-0-
*T
MATRIX BANCORP, INC. AND SUBSIDIARIES
OPERATING RATIOS AND OTHER SELECTED DATA
(Dollars in thousands, except share information)
(Unaudited)
Quarter Ended March 31,
2006 2005
----------- ------------
Weighted average shares - basic 8,579,396 6,620,850
Weighted average shares - assuming dilution 8,632,135 6,697,884
Number of shares outstanding at end of period 7,556,573 6,620,850
Average Balances
----------------
Loans receivable $1,348,543 $ 1,381,270
Interest-earning assets 2,024,352 1,735,656
Total assets 2,150,211 1,899,097
Interest-bearing deposits 1,012,048 885,504
FHLBank and other borrowings 786,567 634,665
Interest-bearing liabilities 1,798,615 1,520,169
Shareholders' equity 116,623 93,365
Operating Ratios & Other Selected Data(1)
-----------------------------------------
Return on average equity 13.30 % 10.77 %
Net interest margin(2) 2.66 % 2.52 %
Net interest margin - Matrix Capital
Bank(2) 2.94 % 2.94 %
Balance of servicing portfolio $1,600,754 $2,162,031
Average prepayment rate on owned servicing
portfolio 18.90 % 19.84 %
Book value per share (end of period) $ 14.16 $ 14.29
Loan Performance Ratios(1)
--------------------------
Annualized net charge offs/average loans 0.03 % 0.17 %
Allowance for loan and valuation
losses/total loans 0.83 % 0.84 %
----------------------------
(1) Calculations are based on average daily balances where available
and monthly averages otherwise, as applicable.
(2) Net interest margin has been calculated by dividing net interest
income before provision for credit losses by average
interest-earning assets.
*T