Business Services Industry
Bremer Reports Second Quarter 2004 Earnings
Business Wire, July 30, 2004
BREMER FINANCIAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share amounts)
Three months ended
June 30,
------------------------
2004 2003 Change
----------- ----------- --------
Operating Results:
Total interest income $ 68,678 $ 69,113 (0.63)%
Total interest expense 21,245 22,696 (6.39)
----------- -----------
Net interest income 47,433 46,417 2.19
Provision for credit losses 943 2,678 (64.79)
----------- -----------
Net interest income after
provision for credit losses 46,490 43,739 6.29
Noninterest income 19,388 22,460 (13.68)
Noninterest expense 43,226 42,293 2.21
----------- -----------
Income before income tax expense 22,652 23,906 (5.25)
Income tax expense 7,706 8,519 (9.54)
----------- -----------
Net income $ 14,946 $ 15,387 (2.87)%
=========== ===========
Net income per share $ 1.25 $ 1.28 (2.87)%
Dividends paid per share 0.45 0.45 -
Tax equivalent net interest
income $ 49,500 $ 48,415 2.24 %
Net (recoveries)/ charge-offs (345) 1,633 NM
Selected Financial Ratios:
Return on average assets 1.04 % 1.16 % (0.12)
Return on average equity (1) 12.58 13.83 (1.25)
Average equity to average
assets (1) 8.26 8.42 (0.16)
Net interest margin (2) 3.66 3.93 (0.27)
Operating efficiency ratio (3) 62.75 59.67 3.08
Net charge-offs to average loans
and leases (0.03) 0.17 (0.20)
June 30 June 30
2004 2003
----------- -----------
Balance Sheet Data:
Total assets $5,870,480 $5,445,232 7.81 %
Securities (4) 1,237,419 1,193,827 3.65
Loans and leases (5) 4,280,321 3,847,940 11.24
Total deposits 4,037,001 3,760,254 7.36
Short-term borrowings 891,244 677,422 31.56
Long-term debt 426,929 494,291 (13.63)
Total shareholders' equity and
redeemable Class A common stock 475,643 452,516 5.11
Per share book value of common
stock 39.64 37.71 5.11
Asset Quality:
Reserve for credit losses $ 61,288 $ 62,315 (1.65)%
Nonperforming assets 18,045 33,834 (46.67)
Nonperforming assets to total
loans, leases and OREO 0.42 % 0.88 % (0.46)
Reserve to nonperforming loans
and leases 409.95 203.91 206.04
Reserve to total loans and leases 1.43 1.62 (0.19)
Six months ended
June 30,
------------------------
2004 2003 Change
----------- ----------- --------
Operating Results:
Total interest income $ 135,826 $ 138,013 (1.58)%
Total interest expense 42,634 45,519 (6.34)
----------- -----------
Net interest income 93,192 92,494 0.75
Provision for credit losses 3,886 6,156 (36.87)
----------- -----------
Net interest income after
provision for credit losses 89,306 86,338 3.44
Noninterest income 39,728 45,265 (12.23)
Noninterest expense 84,584 83,179 1.69
----------- -----------
Income before income tax expense 44,450 48,424 (8.21)
Income tax expense 15,106 16,849 (10.35)
----------- -----------
Net income $ 29,344 $ 31,575 (7.07)%
=========== ===========
Net income per share $ 2.45 $ 2.63 (7.07)%
Dividends paid per share 0.90 0.90 -
Tax equivalent net interest
income $ 97,331 $ 96,486 0.88 %
Net (recoveries)/ charge-offs 1,504 2,640 (43.03)
Selected Financial Ratios:
Return on average assets 1.04 % 1.22 % (0.18)
Return on average equity (1) 12.51 14.36 (1.85)
Average equity to average
assets (1) 8.28 8.50 (0.22)
Net interest margin (2) 3.66 4.02 (0.36)
Operating efficiency ratio (3) 61.71 58.68 3.03
Net charge-offs to average loans
and leases 0.07 0.14 (0.07)
December 31
2003 Change
----------- -----------
Balance Sheet Data:
Total assets $5,673,709 3.47 %
Securities (4) 1,314,440 (5.86)
Loans and leases (5) 3,964,015 7.98
Total deposits 4,050,976 (0.34)
Short-term borrowings 639,358 39.40
Long-term debt 460,157 (7.22)
Total shareholders' equity and
redeemable Class A common stock 467,427 1.76
Per share book value of common
stock 38.95 1.76
Asset Quality:
Reserve for credit losses $ 58,906 4.04 %
Nonperforming assets 23,936 (24.61)
Nonperforming assets to total
loans, leases and OREO 0.60 % (0.18)
Reserve to nonperforming loans
and leases 289.63 120.32
Reserve to total loans and leases 1.49 (0.06)
------------------------------------
(1) Calculation includes shareholders' equity and redeemable class A
common stock.
(2) Tax-equivalent basis (TEB).
(3) Noninterest expense as a percentage of tax-equivalent net interest
income and noninterest income.
(4) Includes securities held-to-maturity and securities available-for-
sale.
(5) Net of unearned discount and includes nonaccrual loans and leases.
BREMER FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY BALANCE SHEET AND INCOME STATEMENT
(dollars in thousands)
Three months ended June 30,
---------------------------------------------
2004 2003
--------------------- ----------------------
Average Average
Average Rate/ Average Rate/
Balance Yield (1) Balance Yield (1)
---------- ---------- ----------- ----------
Summary Average Balance
Sheet:
Total loans and
leases (2) $4,129,993 5.72 % $3,775,010 6.26 %
Total securities (3) 1,295,194 3.71 1,152,295 4.21
Total other earning
assets 16,385 1.28 11,824 2.55
---------- -----------
Total interest earning
assets (4) $5,441,572 5.23 % $4,939,129 5.77 %
Total noninterest
earning assets 344,023 364,361
---------- -----------
Total assets $5,785,595 $5,303,490
========== ===========
Noninterest bearing
deposits $ 723,841 $ 641,834
Interest bearing
deposits 3,314,223 1.47 % 3,069,224 1.71 %
Short-term borrowings 793,810 1.19 590,301 1.31
Long-term debt 434,717 6.25 494,375 6.21
---------- -----------
Total interest
bearing liabilities $4,542,750 1.88 % $4,153,900 2.19 %
Other noninterest
bearing liabilities 41,186 61,253
Minority interest 150 150
Total shareholders'
equity and
redeemable
Class A common stock 477,668 446,353
---------- -----------
Total liabilities and
equity $5,785,595 $5,303,490
========== ===========
Three months ended June 30,
---------------------------------------------
2004 2003 $ Change % Change
---------- ---------- ----------- ----------
Summary Income Statement:
Total interest income $ 68,678 $ 69,113 $ (435) (0.63)%
Total interest expense 21,245 22,696 (1,451) (6.39)
---------- ---------- -----------
Net interest income 47,433 46,417 1,016 2.19
Provision for credit
losses 943 2,678 (1,735) (64.79)
---------- ---------- -----------
Net interest income
after provision for
credit losses 46,490 43,739 2,751 6.29
Service charges 7,823 7,634 189 2.48
Insurance 2,132 1,786 346 19.37
Trust 2,745 2,444 301 12.32
Brokerage 1,781 1,345 436 32.42
Gain on sale of loans 3,166 6,208 (3,042) (49.00)
Gain on sale of
securities 18 1,637 (1,619) (98.88)
Other 1,723 1,406 317 22.40
---------- ---------- -----------
Total noninterest
income 19,388 22,460 (3,072) (13.68)
Salaries and wages 20,489 19,599 890 4.54
Employee benefits 5,542 6,100 (558) (9.15)
Occupancy 3,002 2,801 201 7.18
Furniture and
equipment 2,524 2,570 (46) (1.79)
Data processing fees 2,704 2,498 206 8.25
FDIC premiums and
examination fees 457 439 18 4.10
Amortization of
intangibles 684 716 (32) (4.47)
Other 7,824 7,570 254 3.36
---------- ---------- -----------
Total noninterest
expense 43,226 42,293 933 2.21
---------- ---------- -----------
Income before income
tax expense 22,652 23,906 (1,254) (5.25)
Income tax expense 7,706 8,519 (813) (9.54)
---------- ---------- -----------
Net income $ 14,946 $ 15,387 $ (441) (2.87)%
========== ========== ===========
Six months ended June 30,
---------------------------------------------
2004 2003
--------------------- ----------------------
Average Average
Average Rate/ Average Rate/
Balance Yield (1) Balance Yield (1)
---------- ---------- ----------- ----------
Summary Average Balance
Sheet:
Total loans and
leases (2) $4,038,246 5.75 % $3,715,534 6.35 %
Total securities (3) 1,294,012 3.78 1,116,217 4.50
Total other earning
assets 14,658 1.33 14,257 1.80
---------- -----------
Total interest earning
assets (4) $5,346,916 5.26 % $4,846,008 5.91 %
Total noninterest
earning assets 350,315 368,221
---------- -----------
Total assets $5,697,231 $5,214,229
========== ===========
Noninterest bearing
deposits $ 704,955 $ 631,626
Interest bearing
deposits 3,298,560 1.50 % 3,061,457 1.77 %
Short-term borrowings 723,761 1.18 520,480 1.31
Long-term debt 447,435 6.22 495,207 6.23
---------- -----------
Total interest
bearing liabilities $4,469,756 1.92 % $4,077,144 2.25 %
Other noninterest
bearing liabilities 50,835 62,003
Minority interest 150 150
Total shareholders'
equity and redeemable
Class A common stock 471,535 443,306
---------- -----------
Total liabilities and
equity $5,697,231 $5,214,229
========== ===========
Six months ended June 30,
---------------------------------------------
2004 2003 $ Change % Change
---------- ---------- ----------- ----------
Summary Income Statement:
Total interest income $ 135,826 $138,013 $ (2,187) (1.58)%
Total interest expense 42,634 45,519 (2,885) (6.34)
---------- ---------- -----------
Net interest income 93,192 92,494 698 0.75
Provision for credit
losses 3,886 6,156 (2,270) (36.87)
---------- ---------- -----------
Net interest income
after provision for
credit losses 89,306 86,338 2,968 3.44
Service charges 15,095 14,732 363 2.46
Insurance 4,915 4,024 891 22.14
Trust 5,364 4,784 580 12.12
Brokerage 3,316 2,582 734 28.43
Gain on sale of loans 5,427 10,520 (5,093) (48.41)
Gain on sale of
securities 2,068 5,839 (3,771) (64.58)
Other 3,543 2,784 759 27.26
---------- ---------- -----------
Total noninterest
income 39,728 45,265 (5,537) (12.23)
Salaries and wages 39,995 37,887 2,108 5.56
Employee benefits 11,144 12,271 (1,127) (9.18)
Occupancy 6,061 5,590 471 8.43
Furniture and
equipment 5,154 5,072 82 1.62
Data processing fees 5,343 4,983 360 7.22
FDIC premiums and
examination fees 920 876 44 5.02
Amortization of
intangibles 1,369 1,433 (64) (4.47)
Other 14,598 15,067 (469) (3.11)
---------- ---------- -----------
Total noninterest
expense 84,584 83,179 1,405 1.69
---------- ---------- -----------
Income before income
tax expense 44,450 48,424 (3,974) (8.21)
Income tax expense 15,106 16,849 (1,743) (10.35)
---------- ---------- -----------
Net income $ 29,344 $ 31,575 $ (2,231) (7.07)%
========== ========== ===========
-------------------------------
(1) Calculation is based on interest income including $2,068 and
$1,998 for the three months ended June 30, 2004 and June 30, 2003
and $4,139 and $3,992 for the six months ended June 30, 2004 and
June 30, 2003 to adjust to a fully taxable basis using the federal
statutory rate of 35%.
(2) Net of unearned discount and includes nonaccrual loans and leases.
(3) Excluding net unrealized gain (loss) on securities
available-for-sale.
(4) Before deducting the reserve for credit losses.
COPYRIGHT 2004 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning
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