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Pelican Financial, Inc. Reports Record Q3, 9-month Results
ANN ARBOR, Mich., Oct. 29 /PRNewswire-FirstCall/ -- Pelican Financial, Inc. ,
the holding company for Washtenaw Mortgage Company and Pelican National Bank,
posted record results for the third quarter and nine months ended September 30,
2003, Charles C. Huffman, President and CEO, announced today.
Third-quarter results
The Corporation recorded net income of $3,374,096, or $0.75 per share, a sharp
turn-around from the year-earlier net loss of $504,017, or $0.11 per share.
Washtenaw Mortgage Company recorded its best quarter, with net income rising to
$3,834,346, from a year-earlier net loss of $948,123. The results for Q3 2003
include an accounting credit of $2,416,090, equivalent to $0.54 per share, and
the Q3-2002 results include an accounting charge of $5,009,077, equivalent to
$1.12 per share, for mortgage-servicing-rights adjustments and a credit of
$413,449 for the cumulative effect of a change in accounting principle.
Mortgage volume for Q3-2003 was $1.0 billion, compared with mortgage volume of
$598.0 million for Q3 2002.
Pelican National Bank posted noticeably lower results from margin compression,
higher operating expenses, and a rise in the quarter's loan-loss provision. The
net loss for the quarter was $246,376, compared with net income of $513,935 for
the third quarter of 2002. The loan-loss provision, which was increased due to
deterioration in collateral value of nonperforming loans, now stands at 1.11%.
Nine-month results
PFI, Inc.'s results for the nine months ended September 30, 2003 were positive,
as well, with exceptionally strong performance at the mortgage company
offsetting lower results of the Bank. Net income jumped 460% to $9,562,245, or
$2.13 per share, from $1,706,955, or $0.38 per share a year ago. The
improvement came from a 22% increase in net interest income and a 96% jump in
noninterest income. The results include loan-servicing-rights- impairment
charges of $2,219,089, equal to $0.50 per share, for the current year, and
$7,890,600, or $1.77 share, for the first nine months of 2002.
Washtenaw Mortgage ended the nine months on very positive footing. Net income
rose to $9,898,960 from $583,636 for the first three quarters of 2002. Mortgage
volume totaled $3.2 billion, compared with $1.8 billion a year ago.
Pelican National Bank posted net income of $311,061, off from year-earlier net
income of $1,411,317. As noted, the decline reflects margin compression, higher
operating expenses from staff additions in connection with the opening of two
new branches, and a higher loan-loss provision.
Pelican National Bank closed the quarter with a larger balance sheet. Assets
stood at $205,257,162, up from $186,687,958 at the start of the year and
$183,778,595 a year ago. Loans outstanding totaled $109,234,775, compared with
$105,144,284 at December 31, 2002, and $104,697,009 the year before. Deposits,
likewise, increased to $172,762,694, from $153,851,714 at yearend- 2002, and
$150,747,752 at September 30, 2002.
Charles C. Huffman, President and CEO said, "Overall, our results were
outstanding, especially given the soft loan demand and margin pressure at
Pelican National Bank and weakening of mortgage-refinancing demand at Washtenaw
Mortgage Company.
"We saw healthy growth in both loans and core deposits at our Bank subsidiary.
The Bank launched a very successful money-market promotion to build core
deposits. The bank has acquired two new branch sites that will open in the
first half of 2004.
"At the mortgage subsidiary, the servicing portfolio has shown strong growth to
$2.7 billion. The mortgage company carries the related mortgage-
servicing-rights asset at a value of 89 basis points or a multiple of 2.97 of
the weighted-average service fee.
"Mortgage production surpassed $1 billion for the second consecutive quarter.
Loan production peaked in July at over $500 million, as the mortgage subsidiary
reaped rewards from having leveraged its technology and strengthened its
infrastructure. Additionally, retail loan production has reached $100 million
year to date, including $28 million for the quarter.
"In anticipation of the rise in interest rates, we have developed new loan
products, including interest only loans and second mortgage loan products. We
are hopeful that we will receive final regulatory approval to separate the
mortgage subsidiary from the bank holding company and establish two new publicly
traded companies."
In July 2003, Pelican Financial, Inc. announced that it was seeking regulatory
approval to spin-off Washtenaw Mortgage Company from Pelican Financial, Inc. and
establish two separate publicly traded entities with shareholders receiving
identical holdings in each corporation.
Pelican Financial, Inc. is the holding company for Washtenaw Mortgage Company,
headquartered in Ann Arbor, Michigan, and Pelican National Bank of Naples,
Florida. Founded in 1981, Washtenaw Mortgage Company is a leading wholesale
mortgage banker operating in more than 40 states. Pelican National Bank,
founded in 1997, is a full service community bank with branches in Naples, Fort
Myers, Bonita Springs, and San Carlos, Florida.
This news release contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
statements are based on management's current expectations and are subject to
risks and uncertainties which could cause actual results to differ materially
from those described in the forward-looking statements. Among these risks are
regional and national economic conditions, competitive and regulatory factors,
legislative changes, mortgage-interest rates, cost and availability of borrowed
funds, our ability to sell mortgages in the secondary market, and housing sales
and values. These risks and uncertainties are included in the Corporation's
filings with the Securities and Exchange Commission, available free via EDGAR.
The Company assumes no responsibility to update or clarify forward-looking
statements.
PELICAN FINANCIAL, INC.
Consolidated Balance Sheets
September 30, December 31,
2003 2002
(Unaudited)
ASSETS
Cash and cash equivalents
Cash and demand deposits due from banks $3,460,900 $10,410,554
Interest-bearing deposits 81,875,401 33,005,000
Federal funds sold 2,356,162 13,946,381
Total cash and cash equivalents 87,692,463 57,361,935
Accounts receivable, net 5,720,588 7,962,115
Securities available for sale 4,704,661 2,560,305
Federal Reserve & Federal Home Loan
Bank Stock 1,230,000 1,330,000
Loans held for sale 144,575,261 192,488,348
Loans receivable, net 109,868,942 104,533,053
Mortgage servicing rights, net 22,720,128 13,799,691
Other real estate owned 1,575,367 1,293,148
Premises and equipment, net 2,802,242 2,410,902
Other assets 2,043,346 1,958,466
$382,932,998 $385,697,963
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $78,618,523 $87,304,821
Interest-bearing 91,129,097 66,428,958
Total deposits 169,747,620 153,733,779
Due to bank 21,412,516 34,849,016
Notes payable 52,124,144 43,866,403
Repurchase agreements 56,734,911 82,987,994
Federal Home Loan Bank borrowings 18,000,000 18,000,000
Other liabilities 24,936,882 20,430,113
Total liabilities 342,956,073 353,867,305
Shareholders' equity
Preferred stock, 200,000 shares
authorized; none outstanding
Common stock, $.01 par value 10,000,000
shares authorized; 4,470,241 and 4,440,241
outstanding at September 30, 2003 and
December 31, 2002, respectively 44,702 44,402
Additional paid in capital 15,453,939 15,345,573
Retained earnings 24,654,633 16,426,842
Accumulated other comprehensive income
net of tax (176,349) 13,841
Total shareholders' equity 39,976,925 31,830,658
$382,932,998 $385,697,963
PELICAN FINANCIAL, INC.
Consolidated Statements of Income and Comprehensive Income (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Interest income
Loans, including fees $5,917,794 $4,872,986 $17,498,023 $15,249,280
Investment securities 80,333 85,206 284,594 377,446
Federal funds sold and
overnight accounts 152,285 112,174 397,302 231,677
Total interest
income 6,150,412 5,070,366 18,179,919 15,858,403
Interest expense
Deposits 574,782 845,392 1,707,516 2,587,961
Other borrowings 1,999,287 1,485,750 5,652,430 4,421,523
Total interest
expense 2,574,069 2,331,142 7,359,946 7,009,484
Net interest income 3,576,343 2,739,224 10,819,973 8,848,919
Provision for loan
losses 518,000 40,000 888,000 270,000
Net interest income
after provision for
loan losses 3,058,343 2,699,224 9,931,973 8,578,919
Noninterest income
Gain on sales of
securities - 22,698 129,360 72,768
Service charges on
deposit accounts 40,950 38,602 141,159 110,724
Servicing income 1,861,858 1,621,425 5,305,973 4,541,042
Gain on sales of
mortgage servicing
rights and loans,
net 11,702,010 5,680,457 38,252,995 17,473,914
Other income 196,952 310,470 711,057 530,092
Total noninterest
income 13,801,770 7,673,652 44,540,544 22,728,540
Noninterest expense
Compensation and
employee benefits 7,653,937 3,236,691 21,329,877 11,249,231
Occupancy and
equipment 673,633 550,028 1,989,264 1,375,014
Telephone 185,030 138,210 518,898 427,390
Postage 188,470 155,159 593,337 434,920
Amortization of
mortgage servicing
rights 1,705,940 1,137,893 4,355,425 3,264,755
Mortgage servicing
rights valuation
adjustment (2,416,090) 5,009,077 2,219,089 7,890,600
Other noninterest
expense 3,768,860 1,494,938 8,950,858 4,652,073
Total noninterest
expense 11,759,780 11,721,996 39,956,748 29,293,983
Income (loss) before
income taxes and
cumulative effect of
change in accounting
principle 5,100,333 (1,349,120) 14,515,769 2,013,476
Provision for income
taxes 1,726,237 (431,654) 4,953,524 719,970
Income (loss) before
cumulative effect of
change in accounting
principle 3,374,096 (917,466) 9,562,245 1,293,506
Cumulative effect of
change in accounting
principle, net of tax - 413,449 - 413,449
Net income (loss) $3,374,096 $(504,017) $9,562,245 $1,706,955
Basic earnings (loss)
per share before
cumulative effect of
change in accounting
principle $0.76 $(0.20) $2.15 $0.29
Per share cumulative
effect of change in
accounting principle - 0.09 - 0.09
Basic earnings (loss)
per share $0.76 $(0.11) $2.15 $0.38
Diluted earnings (loss)
per share before cumulative
effect of change in
accounting principle $0.75 $(0.20) $2.13 $0.29
Per share cumulative effect
of change in accounting
principle - 0.09 - 0.09
Diluted earnings (loss)
per share $0.75 $(0.11) $2.13 $0.38
Comprehensive income
(loss) $3,175,389 $(510,974) $9,372,055 $1,721,865
DATASOURCE: Pelican Financial, Inc.
CONTACT: Howard Nathan, CFO of Pelican Financial, Inc., +1-734-662-9733;
or Mike Marcotte of Marcotte Financial Relations, +1-248-656-3873, for Pelican
Financial, Inc.