Haven Bancorp Reports Third Quarter Earnings; Columbia Federal Savings Bank Renamed CFS Bank

Business Wire, Oct 23, 1997

WOODHAVEN, N.Y.--(BUSINESS WIRE)--Oct. 23, 1997--Haven Bancorp, Inc. (Nasdaq: HAVN), the holding company for Columbia Federal Savings Bank, today reported net income of $2.5 million, or $0.53 per share ($0.53 per share, fully diluted), for the third quarter of 1997. This compares with $77,000, or $0.02 per share ($0.02 per share, fully diluted), earned in the third quarter of 1996. The 1996 quarter included a one-time $6.8 million special assessment to recapitalize the Savings Association Insurance Fund. Excluding the SAIF assessment, a pension benefit credit and a state tax benefit, earnings for the third quarter of 1996 would have been $3.1 million, or $0.69 per share.

Net income for the nine months ended September 30, 1997, was $8.1 million, or $1.77 per share ($1.75 per share, fully diluted), versus $6.0 million, or $1.35 per share ($1.35 per share, fully diluted), reported in the first nine months of 1996. Excluding the special items, net income for the first nine months of 1996 would have equaled $9.5 million, or $2.14 per share.

Commenting on the results, Philip S. Messina, President and Chief Executive Officer, stated, "We were once again pleased with Haven's financial performance in this period amidst the ever-changing landscape resulting from the supermarket branch program. We have opened twenty-five supermarket branches, including our first Manhattan location at Pike Slip this past Tuesday. Last quarter we stated that branch openings are proceeding as planned from a financial and profit standpoint and this remains the case. As we look forward to our future branch network, we believed it was critical to have a unique identity throughout the Tri-state region. Consequently, we have changed the name of Columbia Federal Savings Bank to CFS Bank. We expect to begin using the new signage when we open our next Pathmark in-store branch in Baldwin, Long Island, which is scheduled for next week. We continue to be encouraged by the overall results of the in-store banking program.

"We have seen no interruption of the excellent momentum in our underlying business trends. During the third quarter, loan originations and purchases totaled $125 million compared to originations and purchases of $96 million in the third quarter of 1996. For the first nine months of 1997, loan originations and purchases totaled $325 million, a 35% increase over last year's first nine month volume of $241 million. Average mortgage loans outstanding in the third quarter of 1997 were 48% above last year's average for this period, contributing to the increase in net interest income. We experienced continued strong results in our major non-interest income categories, deposit account fees and fees from CFS Investment Services. Development costs associated with the in-store banking program rose substantially, but within our expectations."

Net interest income for the third quarter of 1997 was $13.2 million, a 10.3% increase over net interest income of $12.0 million earned in the third quarter of 1996. The net interest margin in the 1997 third quarter was 3.06%, a fifteen basis point decline from the 1996 third quarter net interest margin of 3.21%. The net interest margin in 1997 continues to reflect the balance sheet leveraging related to the $25 million trust preferred securities issued in February, 1997.

For the nine months of 1997, net interest income totaled $39.0 million, a 10.5% increase over the $35.3 million recorded in the nine months of 1996. The net interest margin for the nine months ended September 30, 1997, was 3.16% compared to 3.26% for the nine months of 1996.

Average interest-earning assets rose by 15.7% in the third quarter of 1997 compared to the 1996 quarter. Loan origination volume, including purchases, in the third quarter of 1997 totaled $125.2 million, compared to $95.6 million originated and purchased in the third quarter of 1996. For the nine months of 1997, average interest-earning assets increased by 13.9% over the nine months of 1996. Loan origination and purchase volume for the nine months of 1997 totaled $325.3 million, a 34.8% increase over the $241.4 million originated and purchased in the nine months of 1996.

The provision for loan losses in the third quarter of 1997 was $700,000, equal to the year-earlier period. The allowance for loan losses was $12.0 million at September 30, 1997, or 1.12% of total loans. For the nine months of 1997, the provision for loan losses totaled $2.2 million compared to $2.5 million for the nine months of 1996.

Non-interest income for the third quarter of 1997 rose 42.7% over the 1996 third quarter to $3.2 million from $2.3 million. Deposit fees increased 67.5% in the 1997 quarter to $1.5 million from $867,000 a year ago. CFS Investment Services' discount brokerage, insurance and mutual fund fees increased 22.3% over the 1996 third quarter. For the nine months of 1997, non-interest income was $8.4 million, a 16.4% increase over the $7.2 million for the nine months of 1996.