Sound Federal Bancorp (NASDAQ:SFFS)
Historical Stock Chart
From Jun 2019 to Jun 2024
![Click Here for more Sound Federal Bancorp Charts. Click Here for more Sound Federal Bancorp Charts.](/p.php?pid=staticchart&s=N%5ESFFS&p=8&t=15)
Sound Federal Bancorp, Inc. Announces Second Fiscal Quarter Earnings
WHITE PLAINS, N.Y., Oct. 27 /PRNewswire-FirstCall/ -- Sound Federal Bancorp,
Inc. (the "Company"), the holding company for Sound Federal Savings (the
"Bank"), announced net income of $1.7 million or diluted earnings per share of
$0.13 for the quarter ended September 30, 2003, as compared to $2.0 million or
diluted earnings per share of $0.15 for the quarter ended September 30, 2002, a
decrease of 18.7% in net income. For the six months ended September 30, 2003,
net income amounted to $3.4 million or diluted earnings per share of $0.26 as
compared to $4.2 million or diluted earnings per share of $0.32 for the same
period in the prior year. The decrease in net income for the quarter ended
September 30, 2003 as compared to the same quarter in the prior year is
primarily attributable to a $439,000 increase in non-interest expense and a
$63,000 decrease in net interest income partially offset by a decrease of
$143,000 in income tax expense. The decrease in net income for the six months
ended September 30, 2003 reflects an increase of $1.6 million in non-interest
expense partially offset by an increase of $182,000 in net interest income and a
decrease of $455,000 in income tax expense.
In connection with the second-step mutual-to-stock conversion of Sound Federal,
MHC that was completed on January 6, 2003, a total of 7,780,737 shares of common
stock were sold at a price of $10.00 per share. In addition, 5,444,263 shares
were issued to existing stockholders of our mid-tier holding company resulting
in an exchange ratio of 2.7667. At the completion of the second-step
conversion, the Company had 13,225,000 shares issued and outstanding.
Bruno J. Gioffre, Chairman of the Board, commented, "The interest rate
environment continues to be a challenging one for the thrift industry. In
recognition of this, we continue to increase our adjustable-rate loan production
and to shorten the maturity of our other securities as well as to continue to
expand our presence in the commercial mortgage market. One-to-four family
adjustable rate mortgage loans amounted to $103.7 million or 24% of total loans
at September 30, 2003 as compared to $83.7 million or 19.5% at March 31, 2003.
Adjustable-rate mortgage-backed securities amounted to $151.6 million or 42% of
our securities portfolio as compared to $150.3 million or 51% at March 31, 2003.
By continuing to emphasize ARM loan production, we are preparing for the
anticipated increase in market interest rates. We continue to grow the deposit
base both in our existing branches and through de-novo branch openings.
Deposits increased by $49.1 million or 8.1% in the first half of fiscal 2004.
The current interest rate environment allows us to open new branches and grow
our deposit base at a relatively low cost. We then grow our new branches in our
continually expanding market area by offering a full range of services to our
new customers. Asset quality continues to be good. Although our non-performing
loans increased to $1.8 million at September 30, 2003 as compared to $889,000 at
June 30, 2003, this increase was primarily due to the delinquency of one
borrower's mortgage and home equity loans. These loans amounted to $811,000 and
are secured by a single family home with a total loan-to-value ratio of less
than 60%."
Mr. Gioffre continued, "As always, we continue to pursue a business plan
designed to grow stockholder value. We are pursuing a buy-back strategy as part
of this business plan and have acquired 77,000 shares of the Company's common
stock since we announced our stock buyback program in July. In addition, we
increased our quarterly cash dividend by 20% -- from $0.05 per share to $0.06
per share. We continue to explore opportunities to expand our market presence,
to build franchise value and to deploy the capital raised in the Company's
second-step conversion. As always, we appreciate your investment in Sound
Federal."
The Company's total assets amounted to $851.0 million at September 30, 2003 as
compared to $796.1 million at March 31, 2003. The $54.9 million increase in
total assets is primarily due to a $62.8 million increase in securities
available for sale to $357.9 million and a $9.5 million increase in net loans to
$437.2 million, partially offset by a $22.4 million decrease in federal funds
sold. The asset growth was funded principally by a $49.1 million increase in
deposits to $653.4 million and a $20.0 million increase in borrowings to $55.0
million partially offset by a $10.5 million decrease in amounts due to brokers
for securities purchased.
Total stockholders' equity decreased $541,000 to $137.8 million at September 30,
2003 as compared to $138.3 million at March 31, 2003. The decrease reflects the
purchase of 77,000 shares of the Company's common stock at a cost of $1.2
million, dividends paid of $1.3 million and a decrease in accumulated other
comprehensive income of $1.9 million, partially offset by net income of $3.4
million and an increase in additional paid-in capital of $178,000. The decrease
in stockholders' equity attributed to accumulated other comprehensive income
(loss) is primarily due to a net unrealized holding loss of $3.2 million on
securities available for sale, less a $1.3 million income tax effect.
Net interest income for the quarter ended September 30, 2003 amounted to $6.2
million, a $63,000 decrease from the same period in the prior year. The
interest rate spread was 2.85% and 3.77% for the quarters ended September 30,
2003 and 2002, respectively. The net interest margin for those periods was
3.14% and 3.94%, respectively. For the six months ended September 30, 2003, net
interest income amounted to $12.7 million as compared to $12.6 million for the
same period in the prior year. The interest rate spread was 2.94% and 3.89% and
the net interest margin was 3.25% and 4.06% for the respective six-month
periods. The decreases in interest rate spread and net interest margin for the
comparative quarters are primarily the result of the effect of mortgage
refinancings and lower returns on our investment portfolio, as interest rates
remain at 40-year lows. If interest rates remain at these low levels or
decrease further, the yields earned on our interest-earning assets may continue
to decrease and adversely affect the Company's interest rate spread and net
interest margin.
Non-interest income totaled $228,000 and $224,000 for the quarters ended
September 30, 2003 and 2002, respectively. For the six months ended September
30, 2003, non-interest income amounted to $513,000 as compared to $394,000 for
the same period in 2002. The increase in non-interest income was primarily due
to higher levels of income from service charges on deposit accounts, late
charges on loans and various other service fees.
Non-interest expense totaled $3.6 million for the quarter ended September 30,
2003 as compared to $3.2 million for the quarter ended September 30, 2002. This
increase is due primarily to increases of $383,000 in compensation and benefits,
$199,000 in occupancy and equipment expense and $67,000 in other non-interest
expense, partially offset by decreases of $69,000 in data processing fees and
$141,000 in advertising and promotion expense. For the six months ended
September 30, 2003, non-interest expense increased $1.5 million to $7.6 million
as compared to $6.1 million for the same period in the prior year. This
increase is due to increases of $947,000 in compensation and benefits, $317,000
in occupancy and equipment expense, $125,000 in advertising and promotion
expense and $247,000 increase in other non-interest expense.
The increase in compensation expense is due primarily to normal salary
increases, additional staff to support the growth in the Company's lending
operations and for the Stamford branch, which opened in September 2003, and
additional ESOP expense. The increase in ESOP expense reflects the increase in
shares committed to be released for allocation as a result of the second-step
conversion and the increase in the market value of those shares. Compensation
expense is recognized for the ESOP equal to the fair value of shares committed
to be released for allocation to participant accounts. The difference between
the fair value at that time and the ESOP's original acquisition cost is charged
or credited to stockholders' equity. For the quarter and six months ended
September 30, 2003, this difference amounted to $106,000 and $178,000,
respectively, as compared to $69,000 and $108,000 for the same periods in 2002.
The increase in occupancy and equipment expense is primarily due to two new
branch locations (Somers, New York and Stamford, Connecticut) and the Company's
new corporate office which opened in April 2003.
The Bank is a federally-chartered savings bank offering traditional financial
services and products through its New York branches in Mamaroneck, Harrison, Rye
Brook, New Rochelle, Peekskill, Yorktown, Somers and Cortlandt in Westchester
County and New City in Rockland County, and in Connecticut in Greenwich and
Stamford.
This press release contains certain forward-looking statements consisting of
estimates with respect to the financial condition, results of operations and
business of the Company and the Bank. These estimates are subject to various
factors that could cause actual results to differ materially from these
estimates. Such factors include (i) the effect that an adverse movement in
interest rates could have on net interest income, (ii) customer preferences,
(iii) national and local economic and market conditions, (iv) higher than
anticipated operating expenses and (v) a lower level of or higher cost for
deposits than anticipated. The Company disclaims any obligation to publicly
announce future events or developments that may affect the forward-looking
statements herein.
Balance sheets, statements of income and other financial data are attached.
Sound Federal Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per
share data)
September 30, March 31,
2003 2003
Assets
Cash and due from banks $10,911 $8,776
Federal funds sold and other
overnight deposits 13,739 36,121
Securities available for sale, at
fair value 357,891 295,048
Loans, net:
Mortgage loans 438,401 428,575
Consumer loans 1,366 1,551
Allowance for loan losses (2,562) (2,442)
Total loans, net 437,205 427,684
Accrued interest receivable 3,604 3,678
Federal Home Loan Bank stock 5,303 4,141
Premises and equipment, net 5,711 5,467
Deferred income taxes 1,490 392
Goodwill 13,970 13,970
Other assets 1,164 811
Total assets $850,988 $796,088
Liabilities and Stockholders' Equity
Liabilities:
Deposits $653,395 $604,260
Borrowings 55,000 35,000
Mortgagors' escrow funds 1,948 4,603
Due to brokers for securities
purchased -- 10,495
Accrued expenses and other
liabilities 2,865 3,409
Total liabilities 713,208 657,767
Stockholders' equity:
Preferred stock ($0.01 par value;
1,000,000 shares authorized;
none issued and outstanding) -- --
Common stock ($0.01 par value;
24,000,000 shares authorized;
13,247,133 shares issued) 132 132
Additional paid-in capital 95,573 95,395
Treasury stock, at cost (77,000
shares at September 30, 2003) (1,203) --
Common stock held by the Employee
Stock Ownership Plan (6,808) (7,059)
Common stock awards under the
Recognition and Retention Plan (28) (100)
Retained earnings 51,980 49,937
Accumulated other comprehensive
(loss) income, net of taxes (1,866) 16
Total stockholders'
equity 137,780 138,321
Total liabilities and
stockholders' equity $850,988 $796,088
Sound Federal Bancorp and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
For the For the Six
Quarter Ended Months Ended
September 30, September 30,
2003 2002 2003 2002
Interest and Dividend Income
Loans $6,490 $7,626 $13,259 $15,240
Mortgage-backed and other securities 2,701 2,007 5,538 4,047
Federal funds sold and other
overnight deposits 46 127 174 232
Other earning assets 35 38 92 84
Total interest and dividend income 9,272 9,798 19,063 19,603
Interest Expense
Deposits 2,665 3,102 5,544 6,186
Borrowings 384 411 749 827
Other interest-bearing liabilities 18 17 35 37
Total interest expense 3,067 3,530 6,328 7,050
Net interest income 6,205 6,268 12,735 12,553
Provision for loan losses 75 50 125 125
Net interest income after provision
for loan losses 6,130 6,218 12,610 12,428
Non-Interest Income
Service charges and fees 228 211 513 381
Gain on sale of real estate owned -- 13 -- 13
Total non-interest income 228 224 513 394
Non-Interest Expense
Compensation and benefits 2,006 1,623 3,998 3,051
Occupancy and equipment 584 385 1,146 829
Data processing service fees 189 258 431 487
Advertising and promotion 137 278 551 426
Other 732 665 1,506 1,259
Total non-interest expense 3,648 3,209 7,632 6,052
Income before income tax expense 2,710 3,233 5,491 6,770
Income tax expense 1,060 1,203 2,124 2,579
Net income $1,650 $2,030 $3,367 $4,191
Basic earnings per share (1) $0.13 $0.16 $0.27 $0.33
Diluted earnings per share (1) $0.13 $0.15 $0.26 $0.32
(1) Earnings per share data for the 2002 periods have been adjusted to
reflect the shares issued in the second-step conversion
Sound Federal Bancorp, Inc. and Subsidiary
Other Financial Data
(Unaudited)
(Dollars in thousands, except per share data)
At or for the Quarter Ended
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2003 2003 2003 2002 2002
Net interest income $6,205 $6,530 $6,888 $6,398 $6,268
Provision for loan
losses 75 50 100 50 50
Non-interest income 228 285 267 229 224
Non-interest expense:
Compensation and
benefits 2,006 1,992 1,839 1,650 1,623
Occupancy and
equipment 584 562 422 495 385
Other non-interest
expense 1,058 1,430 1,066 1,185 1,201
Total non-interest
expense 3,648 3,984 3,327 3,330 3,209
Income before income tax
expense 2,710 2,781 3,728 3,247 3,233
Income tax expense 1,060 1,064 1,420 1,220 1,203
Net income $1,650 $1,717 $2,308 $2,027 $2,030
Total assets $850,988 $835,635 $796,088 $779,465 $672,632
Loans, net 437,205 422,461 427,684 434,166 442,724
Securities available for
sale:
Mortgage-backed
securities 264,359 250,529 211,484 148,754 111,762
Other securities 93,532 88,752 83,564 73,061 47,416
Deposits 653,395 633,265 604,260 592,417 565,834
Borrowings 55,000 35,000 35,000 34,973 35,012
Stockholders' equity 137,780 139,822 138,321 68,246 66,179
Performance Data:
Return on average
assets (1) 0.80% 0.85% 1.17% 1.14% 1.21%
Return on average
equity (1) 4.76% 4.97% 7.75% 12.07% 12.52%
Average interest rate
spread (1) 2.85% 3.07% 3.41% 3.66% 3.77%
Net interest margin (1) 3.14% 3.39% 3.79% 3.81% 3.94%
Efficiency ratio 56.71% 58.46% 46.80% 50.25% 49.53%
Per Common Share Data:
Basic earnings per
common share (2) $0.13 $0.14 $0.19 $0.16 $0.16
Diluted earnings per
common share (2) $0.13 $0.14 $0.18 $0.15 $0.15
Book value per share (3) $10.46 $10.55 $10.44 $14.27 $13.85
Tangible book value per
share (3) $9.40 $9.50 $9.39 $11.35 $10.93
Dividends per share (2) $0.05 $0.05 $0.05 $0.03 $0.03
Capital Ratios:
Equity to total assets
(consolidated) 16.19% 16.73% 17.38% 8.76% 9.84%
Tier 1 leverage capital
(Bank) 10.82% 11.14% 11.29% 6.14% 6.76%
Asset Quality Data:
Total non-performing
loans $1,751 $889 $477 $795 $876
Total non-performing
assets $1,751 $889 $477 $966 $1,048
(1) Ratios are annualized.
(2) Per share data for quarters prior to March 31, 2003 have been
adjusted to reflect the shares issued in the second-step conversion
completed on January 6, 2003.
(3) Computed based on total common shares issued, less treasury shares.
DATASOURCE: Sound Federal Bancorp, Inc.
CONTACT: Anthony J. Fabiano, Senior Vice President, Chief Financial
Officer and Corporate Secretary of Sound Federal Bancorp, Inc.,
+1-914-761-3636
Web site: http://www.soundfed.com/