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NetBank Reports $.18 EPS for Second Quarter 2004

Friday 30 July 2004 11:29 CET | News

NetBank has reported earnings for the second quarter of 2004. Net income totaled $8.5 million or $.18 per share for the quarter, compared with $14.2 million or $.29 per share for the second quarter of 2003.

Through the six months year-to-date, the company has recorded net income of $17.9 million or $.38 per share, compared with $24.9 million or $.51 per share for the same period a year ago. Based on the companys continued strong financial position, the board of directors declared a dividend of $.02 per share payable to shareholders of record on August 15, 2004. The dividend will be disbursed on September 15, 2004. Quarterly highlights include: - The banking segment contributed 36% of total income. - The banks net interest spread, after provision, expanded to 169 basis points (bps), an increase of 24 basis points from last quarter. - Record non-conforming loan volumes helped the company achieve total loan production of $3.9 billion, a quarter-over-quarter increase of $645 million or 20%. - Loan sales totaled $3.4 billion, a decrease of $338 million or 9% from last quarter. - The companys annualized balance sheet turn equaled 2.4 times. Management also repurchased 368,936 shares of the companys common stock during the quarter. The average price paid per share was $10.98. Management has approval to buy back an additional 1.1 million shares under previous board authorizations. Banking Segment The banks pre-tax income, before gains on securities and net hedge results, improved meaningfully again this quarter. It rose to $4.0 million, an increase of $535,000 or 15% from last quarter. This increase relates to continued growth of the banks earning assets. Earning assets totaled $4.3 billion at quarter-end, up $133 million or 13% on an annualized basis. As anticipated, servicing results were adversely affected by $3.9 million, pre-tax, in additional amortization and impairment expense due to heightened pre-payment speeds and $1.8 million, pre-tax, in hedging losses. These charges were offset in part by a recovery of impairment reserves totaling $9.7 million, pre-tax. The recovery relates to an adjustment of certain valuation assumptions the company uses for its servicing portfolio. These adjustments took into account the significant rise in market rates over the past few months and a marked increase in secondary market activity for servicing rights. Bank deposits totaled $2.5 billion at quarter-end, a decrease of $195 million or 7% from last quarter. The decline in deposits was centered primarily in escrow accounts held for the banks mortgage operations and in retail certificates of deposit. These accounts fell by $90 million and $58 million respectively. Within the small business area, deposits grew to $43 million, an increase of $9.5 million or 29% from last quarter. This growth reflects an increase in new customers as well as deepening relationships with existing customers. The average small business checking account balance increased by $1,160 to $5,844 and the average small business money market balance by $5,701 to $41,231. Updates on other key performance statistics for the banking segment include: - The indirect auto lending operation originated $124 million in loans, a quarter-over-quarter increase of $37 million. The loans carried an average FICO score above 725. - Production through our commercial equipment leasing business totaled $42 million, up by $3 million from last quarter. There have been no material changes in the companys litigation over leases originated by Commercial Money Center, Inc. (CMC). The company continues to seek performance of bonds issued on the leases by Illinois Union Insurance Company, an affiliate of ACE INA Group; Safeco Insurance Company, an affiliate of Safeco; and Royal Indemnity Company, an affiliate of Royal and Sun Alliance Group. Based on legal expenses and unrealized income, the CMC litigation affected second quarter results by $2.7 million, pre-tax, or $.04 per share, after-tax. The year-to-date CMC effect t


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Categories: Banking & Fintech | Online & Mobile Banking
Countries: World
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