CoVest Bancshares, Inc. Reports a Record Net Income and Earnings
per Share For The Third Quarter of 2003 DES PLAINES, Ill., Oct. 28
/PRNewswire-FirstCall/ -- CoVest Bancshares, Inc.'s Net income for
the third quarter of 2003 was $1,770,000, up 4% over $1,708,000 for
the same period in 2002, and up 4% over $1,707,000 for the second
quarter of 2003. Basic earnings per share were $0.52, a 4%
increase, compared to $0.50 for the same period in 2002. Diluted
earnings per share were $0.50, a 4% increase, compared to $0.48 for
the same period in 2002. (Logo:
http://www.newscom.com/cgi-bin/prnh/19991105/CHBHLOGO ) Return on
average equity and return on average assets for the third quarter
of 2003 were 13.94% and 1.17%, respectively, compared to 14.58% and
1.15% for the same quarter in 2002. Return on average equity and
return on average assets for the second quarter of 2003 were 13.80%
and 1.11%, respectively. The Company's efficiency ratio (defined as
total non-interest expense divided by the sum of net interest
income and total non-interest income) for the third quarter of 2003
was 54.31%, compared to 53.86% for the same period in 2002. The
Company's efficiency ratio for the second quarter of 2003 was
55.89%. The goal for calendar year 2003 is to maintain an
efficiency ratio at lower than 56%. Net interest income for the
third quarter of 2003 increased $144,000, or a 3% increase,
compared to the same period in 2002, or a 3% decrease, compared to
the second quarter of 2003. Net interest margin for the third
quarter of 2003 was 3.59%, compared to 3.58% for the same period in
2002 versus 3.64% for the second quarter of 2003. The net interest
spread for the third quarter of 2003 was 3.28%, a 3% increase,
compared to 3.18% for the third quarter of 2002, or a 2% decrease,
compared to 3.35% for the second quarter of 2003. The average yield
on interest earning assets for the third quarter of 2003 was 5.47%,
a 77 basis point decrease, compared to 6.24% for the same period in
2002. The average cost of interest bearing liabilities for the
third quarter of 2003 was 2.19%, an 87 basis point decrease,
compared to 3.06% for the same period in 2002. The decrease in the
cost of average interest bearing liabilities exceeded the decrease
in the yield on average interest earning assets. The increase in
average non-interest bearing deposits by $4.2 million, or 13%,
contributed to the improved interest margin. The Company's total
interest income (tax equivalent) on earning assets decreased 10% to
$8,013,000 for the third quarter of 2003, compared to $8,930,000
for the same period in 2002. It was the Company's strategy since
2002 to concentrate in funding adjustable rate loans to minimize
exposure to rising interest rates. The Company has been asset
sensitive since February 2002. The Company's loan portfolio was
comprised of 83% in adjustable/floating rate loans at September 30,
2003. The average balance of loans for the third quarter of 2003
increased 9% to $546.0 million, compared to $503.0 million for the
same period in 2002. The biggest increase was in multi-family
loans, which is mostly comprised of adjustable rate term loans with
floors and prepayment penalties established upon origination. The
Company repurchased $16.5 million of medium-term multi-family loan
participations that have an average yield of 7.00%, in April 2003.
Loan principal prepayments in the multi-family loan portfolio for
the third quarter of 2003 totaled $13.3 million. Loan costs
associated with loan prepayments, which are accounted for as
reduction to interest income, amounted to $46,000 for the third
quarter of 2003. The average yield on loans for the third quarter
of 2003 decreased to 5.54%, a 115 basis point decrease, compared to
6.69% for the same period in 2002. The increased volume of loans
partially offset the effect of income reduction from falling rates.
In February 2002, the Company set a 5.00% floor on its home equity
loan portfolio. The average balance of home equity and home
improvement loans decreased 18% to $25.7 million for the third
quarter of 2003, compared to $31.3 million for the same period in
2002. The Company's ALCO Committee at its May 2003 meeting approved
the removal of the 5.00% floor, effective August 2003. The Company
hopes that this change in pricing strategy will help to increase
loan volume. The average balance of securities for the third
quarter of 2003 decreased 43% to $39.5 million, compared to $68.9
million for the same period in 2002. The Company tries to limit its
security purchases to cover collateral requirements for its
borrowings and repurchase agreements. The average yield on
securities for the third quarter of 2003 was 4.60%, a 14 basis
point decrease, compared to 4.74% for the same period in 2002.
Overnight investments averaged $2.2 million in the third quarter of
2003, a 68% decrease, compared to $6.8 million for the same period
in 2002. The redeployment of funds to higher yielding loans
contributed to a higher interest margin for the third quarter of
2003, compared to the same period in 2002 and the second quarter of
2003. Included in equity investments at the holding company are
$1.9 million of trust preferred issues with fixed rates ranging
from 6.75% to 10.00%. Total interest expense for the third quarter
of 2003 decreased 28% to $2,765,000, compared to $3,815,000 for the
third quarter of 2002. The average balance of interest-bearing
deposits was $446.3 million for the third quarter of 2003, an 18%
increase, compared to $379.1 million for the same period in 2002.
Money market accounts decreased 25% to $71.9 million and
certificates of deposit decreased 20% to $134.7 million, while
savings accounts increased 51% to $121.4 million. Until April 1,
2003, the relationship savings (with related checking accounts)
rate was 2.25% while the regular savings (with no related checking
accounts) rate was 1.75%. The decline in the average weekly money
market account index to 1.05% for the second quarter and the
reduced rates on short-term certificates of deposit caused
customers to shift their deposits to savings accounts. In April
2003, the Company reduced the relationship savings rate to 1.50%
and the regular savings rate to 1.00%. The relationship savings
accounts totaled $95.5 million at September 30, 2003, compared to
$97.7 million at March 31, 2003. The Company believes the new
savings account pricing is still competitive in its market area.
Purchased certificates of deposit increased 54% to $76.4 million
for the third quarter of 2003, compared to $49.7 million for the
same period in 2002. The cost of purchased funds for the third
quarter of 2003 was 137 basis points less than that of the same
period in 2002. The total cost of deposits for the third quarter of
2003 was 2.19%, 87 basis points less than the 3.06% for the same
period in 2002. The average balance of borrowings for the third
quarter of 2003 decreased 15% to $59.3 million, compared to $70.1
million for the same period in 2002. The average cost of borrowings
for the third quarter of 2003 was 4.00%, 27 basis points less than
4.27% for the same period in 2002. The provision for loan losses
was $161,000 for the third quarter of 2003 versus $217,000 for the
same period in 2002. The net charge-offs for the third quarter of
2003 were $160,000, compared to $16,000 for the same period in
2002. The ratio of net charge-offs to average loans for the third
quarter of 2003 was 0.03%, compared to 0.00% for the same period in
2002. The ratio of allowance for loan losses to total outstanding
loans at September 30, 2003 was 1.30%, compared to 1.32% at
September 30, 2002. On a quarterly basis, management of the Company
meets to review the adequacy of the allowance for loan losses. Each
loan officer grades his or her individual commercial credits and
the Company's outsourced loan review function validates the
officers' grades. In the event that the loan review results in a
downgrade of the loan, it is included in the allowance analysis at
the lower grade. The grading system is in compliance with the
regulatory classifications and the allowance is allocated to the
loans based on the regulatory grading, except in instances where
there are known differences (i.e. collateral value is nominal,
etc). Once the specific portion of the allowance is calculated,
management then calculates a historical portion for each loan
category based on loan loss history, current economic conditions
and trends in the portfolio, including delinquencies and
impairments. As a result of this analysis, management believes that
the allowance for losses on loans at September 30, 2003 was at a
level adequate to absorb probable incurred losses on existing
loans, although there can be assurance that such losses will not
exceed the estimated amounts. Non-interest income for the third
quarter of 2003 increased $79,000, or a 7% increase, compared to
the third quarter of 2002. Loan charges and servicing fees
decreased $12,000. An average of 489 loans was serviced in the
third quarter of 2003, compared to 872 loans in the third quarter
of 2002. Prepayment fees decreased 9% to $234,000 for the third
quarter of 2003, compared to $258,000 for the same period in 2002.
Loan prepayments for the third quarter of 2003 totaled 22 loans for
$13.3 million, compared to 25 loans for $15.8 million for the same
period in 2002. Mortgage banking fees for the third quarter of 2003
increased 56% to $318,000, compared to $205,000 for the same period
in 2002. Other income for the third quarter of 2003 increased 42%
to $91,000, compared to $64,000 for the same period in 2002.
Non-interest expense for the third quarter of 2003 increased
$180,000, or a 5% increase, compared to the third quarter of 2002.
Compensation and benefits increased $181,000 to $1,751,000,
compared to $1,570,000. Incentive compensation on retail banking
increased $6,000. Commissions increased $90,000 due to greater
mortgage loan originations in the third quarter of 2003, compared
to the same period in 2002. Bonus expense decreased $86,000.
Payroll taxes increased $40,000. Group medical self-insurance
increased $145,000, compared to 2002 due to medical insurance being
accrued based on average insurance claims, compared to 2002 where
accrual was based on maximum insurance claims. Post retirement
expenses decreased $14,000 as the plan was frozen in 2002 and
benefits will only be provided to current retirees. Education and
training expenses increased $18,000. Occupancy and equipment
expenses decreased $66,000 due to planned computer upgrades and the
purchase of a replacement van being put on hold due to the pending
merger. Data processing expenses increased $8,000. Other expenses
increased $60,000. The Company incurred $61,000 of merger related
expenses in the third quarter of 2003, compared to $103,000 in the
second quarter of 2003. No merger related costs were incurred in
the third quarter of 2002. The second quarter expenditures were
related to the terminated merger proposal, while the third quarter
expenditures were evenly split between the terminated merger
proposal and the proposed merger with First Midwest Bancorp, Inc.
Income tax expense increased $37,000 to $1,019,000 for the third
quarter of 2003, compared to $982,000 for the same period in 2002.
The effective tax rate was 37% for the third quarter of 2003,
compared to 38% for the same period in 2002. Total assets were
$609.1 million as of September 30, 2003, compared to $608.9 million
at December 31, 2002. Total liabilities remained relatively
constant at $557.6 million as of September 30, 2003, compared to
$560.3 million at December 31, 2002. Stockholders' equity increased
6% to $51.5 million as of September 30, 2003, compared to $48.6
million at December 31, 2002. Cash and cash equivalents increased
53% to $11.6 million at September 30, 2003 from $7.6 million at
December 31, 2002. The increase resulted from an increase in cash
in banks to cover higher reserves and compensating balances.
Securities decreased 18% to $40.5 million as of September 30, 2003
from $49.2 million at December 31, 2002. In this low rate
environment, the Company has tried to limit its investment security
purchases to cover collateral requirements for its borrowings and
repurchase agreements. Net loans receivable increased 1% to $540.2
million as of September 30, 2003, compared to $535.0 million at
December 31, 2002. The multi-family loan portfolio increased 12% to
$283.9 million as of September 30, 2003, compared to $252.7 million
at December 31, 2002. The Company repurchased $16.5 million of
previously participated multi-family loans in April 2003. The
multi-family loan portfolio is comprised of adjustable rate loans
indexed to prime, the 91- day Treasury bill rate, and 1 year, 3
year and 5 year Treasury notes. The loans have floors and
prepayment penalties established upon origination. The loan
principal prepayments in the multi-family loan portfolio amounted
to $48.2 million for the first nine months of 2003. Construction
loans increased 1% to $55.0 million as of September 30, 2003,
compared to $54.4 million at December 31, 2002. The increase in
construction loans represented draws on previously approved
commitments. The increases in multi-family loans and construction
loans were offset by decreases in commercial loans by 5%,
commercial real estate loans by 14%, mortgage loans by 8% and
consumer loans by 18%. In the consumer loan portfolio, auto loans
decreased 40% to $4.4 million as of September 30, 2003, compared to
$7.3 million at December 31, 2002. Automobile manufacturers' low
percentage rate loans continue to impact the new loan fundings.
Total deposits decreased 1% to $470.5 million as of September 30,
2003, compared to $473.6 million at December 31, 2002. Non-interest
bearing checking accounts increased 9% to $36.6 million as of
September 30, 2003, compared to $33.7 million as of December 31,
2002. Interest-bearing checking accounts increased 18% to $41.2
million as of September 30, 2003, compared to $34.8 million at
December 31, 2002. Savings accounts increased 28% to $121.9 million
as of September 30, 2003, compared to $94.9 million at December 31,
2002. In April 2003, the Company reduced its regular savings (with
no related checking account) account rate from 1.75% to 1.00% and
its relationship savings (with related checking account) account
rate from 2.25% to 1.50%. The relationship savings accounts totaled
$95.5 million at September 30, 2003, compared to $97.7 million at
March 31, 2003. The Company believes that the savings account
pricing is still very competitive in its market area. Money market
accounts decreased 21% to $67.3 million as of September 30, 2003,
compared to $85.4 million at December 31, 2002. The Company
believes that the decrease in the average weekly money market
account index rate to 1.06% caused the decrease in the accounts.
The floor rate for money market accounts has been 1.00% since
January 30, 2003. Certificates of deposit decreased 15% to $131.8
million as of September 30, 2003, compared to $156.0 million at
December 31, 2002. Purchased certificates of deposit increased 5%
to $70.0 million as of September 30, 2003, compared to $66.9
million at December 31, 2002. The Company uses brokered
certificates primarily to extend the length of deposit maturities.
A total of $11.1 million in brokered certificates of deposit with
an average rate of 1.71% was purchased in the second quarter of
2003. There were no purchases of brokered deposits in the third
quarter of 2003. Total borrowings increased 6% to $79.1 million as
of September 30, 2003, compared to $74.3 million at December 31,
2002. Short-term borrowings decreased 3% to $46.1 million as of
September 30, 2003, compared to $47.4 million at December 31, 2002.
At September 30, 2003, the Company had purchased $26.0 million of
overnight borrowings. Long-term borrowings increased 22% to $33.0
million as of September 30, 2003, compared to $27.0 million at
December 31, 2002. The Company entered into two FHLB fixed term
advances for $3.0 million each, at a cost of 2.06% with a 3-year
term, and 2.77% with a 5-year term during the second quarter of
2003. Stockholders' equity totaled $51.5 million at September 30,
2003, compared to $48.6 million at December 31, 2002. The number of
shares outstanding excluding unallocated Employee Stock Ownership
Plan shares was 3,382,018 and the book value per common share
outstanding was $15.23, a 12% increase over $13.62 book value at
December 31, 2002. On February 22, 2002, the Employee Stock
Ownership Plan purchased 81,477 shares of CoVest Bancshares, Inc.
common stock, held in the Company's treasury, for an aggregate
purchase price of $1,500,000, or $18.41 per share. Shares issued to
the ESOP are allocated to ESOP participants based on principal
repayments made by the ESOP on the loan from the Company. The loan
is secured by shares purchased with the loan proceeds and will be
repaid by the ESOP with contributions from the Company. $555,586 of
principal plus interest has been repaid since the inception of the
loan. The Company announced its 26th stock repurchase program in
March 7, 2003, enabling the Company to repurchase 100,000 shares of
its outstanding stock. A total of 43,946 shares were repurchased at
an average price of $26.74 through October 28, 2003. At September
30, 2003, the allowance for loan losses was $7.1 million, compared
to $7.0 million at December 31, 2002. The Company recognized net
charge-offs of $596,000 for the nine months ended September 30,
2003. During this period, the Company recorded a $159,000 recovery
on a multi-family loan which is currently in non accrual status. In
June 2002, $159,000 was charged off on this loan. The loan will
remain in non-accrual status pending a continuing overall
improvement in the outstanding credit. The Company provided
$676,000 to the allowance for loan losses for the nine months ended
September 30, 2003. The ratio of the allowance for loan losses to
outstanding loans at September 30, 2003 was 1.30%, the same level
as at December 31, 2002. Management believes that the allowance for
loan losses at September 30, 2003 was at a level adequate to absorb
probable incurred losses on existing loans. However, there can be
no assurance that such losses will not exceed estimated amounts. At
September 30, 2003, total non-performing loans amounted to
$2,591,000, or 0.48% of net loans, compared to $5,967,000, or 1.12%
of net loans at December 31, 2002. The ratio of non-performing
loans to total assets was 0.79% at September 30, 2003, compared to
0.98% at December 31, 2002. The $3,016,000 commercial real estate
loans in non-accrual status at December 31, 2002 were to related
borrowers. $617,000 of this amount was charged-off in 2003, with
the remaining amount on this credit relationship being transferred
to other real estate owned and other assets when title was
obtained. The $1,503,000 of non-performing multi-family loans
consists of $276,000 of loans to related borrowers and loans of
$191,000 and $1,036,000, respectively. The $1,036,000 loan was
originally for $1,426,000 and $159,000 of this loan was charged off
prior to its move to non-accrual status in June 2002. In June 2003,
this loan was upgraded and the $159,000 that had been charged off
was reversed and booked as recovery, with an increase in the
balance of the loan to $1,036,000. The Company considered these
loans in the September 30, 2003 analysis for allowance for loan
losses. As of September 30, 2003, loans delinquent 90 days or more
and still accruing amounted to $297,000. The $1,416,000 of
commercial loans and $38,000 of consumer loans delinquent 90 days
or more and still accruing at December 31, 2002 have been made
current. The $14,000 that was commercial lease loan delinquent 90
days or more and still accruing at December 31, 2002 was
charged-off in the first quarter. The $661,000 other real estate
owned at December 31, 2002 was sold in February 2003. The Company
incurred $57,000 of expenses and a loss on the sale was $27,000,
which was included as a reduction to other income. As indicated
above, the Company transferred two non-accrual commercial real
estate loans to related borrowers totaling $2,200,000 to other real
estate owned in September when title was obtained. Along with other
financial institutions, management shares a concern for the outlook
of the economy for the remainder of 2003 and beyond. A slowdown in
economic activity has severely impacted several major industries as
well as the economy as a whole. Even though there are numerous
indications of emerging strength, it is not certain that this
strength is sustainable. In addition, consumer confidence may be
negatively impacted by the decline in equity prices. These events
could still adversely affect cash flows for both commercial and
individual borrowers, as a result of which, the Company could
experience increases in problem assets, delinquencies and losses on
loans. PROPOSED MERGER First Midwest Bancorp, Inc. and the Company
jointly announced on September 11, 2003 the execution of a
definitive agreement for First Midwest to acquire the Company. The
merger is expected to be completed in the fourth quarter of 2003,
subject to customary closing conditions, including regulatory
approvals and approval by the Company's stockholders. SPECIAL NOTE
CONCERNING FORWARD-LOOKING STATEMENTS This document (including
information incorporated by reference) contains, and future oral
and written statements of the Company and its management may
contain, forward-looking statements, within the meaning of such
term in the Private Securities Litigation Reform Act of 1995, with
respect to the financial condition, results of operations, plans,
objectives, future performance and business of the Company.
Forward-looking statements, which may be based upon beliefs,
expectations and assumptions of the Company's management and on
information currently available to management, are generally
identifiable by the use of words such as "believe," "expect,"
"anticipate," "plan," "intend," "estimate," "may," "will," "would,"
"could," "should" or other similar expressions. Additionally, all
statements in this document, including forward-looking statements,
speak only as of the date they are made, and the Company undertakes
no obligation to update any statement in light of new information
or future events. The Company's ability to predict results or the
actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on
the operations and future prospects of the Company and its
subsidiaries include, but are not limited to, the following: * The
strength of the United States economy in general and the strength
of the local economies in which the Company conducts its operations
which may be less favorable than expected and may result in, among
other things, a deterioration in the credit quality and value of
the Company's assets. * The economic impact of past and any future
terrorist attacks, acts of war or threats thereof and the response
of the United States to any such threats and attacks. * The effects
of, and changes in, federal, state and local laws, regulations and
policies affecting banking, securities, insurance and monetary and
financial matters. * The effects of changes in interest rates
(including the effects of changes in the rate of prepayments of the
Company's assets) and the policies of the Board of Governors of the
Federal Reserve System. * The ability of the Company to compete
with other financial institutions as effectively as the Company
currently intends due to increases in competitive pressures in the
financial services sector. * The inability of the Company to obtain
new customers and to retain existing customers. * The timely
development and acceptance of products and services, including
products and services offered through alternative delivery channels
such as the Internet. * Technological changes implemented by the
Company and by other parties, including third party vendors, which
may be more difficult or more expensive than anticipated or which
may have unforeseen consequences to the Company and its customers.
* The ability of the Company to develop and maintain secure and
reliable electronic systems. * The ability of the Company to retain
key executives and employees and the difficulty that the Company
may experience in replacing key executives and employees in an
effective manner. * Consumer spending and saving habits which may
change in a manner that affects the Company's business adversely. *
Business combinations and the integration of acquired businesses
which may be more difficult or expensive than expected. * The
costs, effects and outcomes of existing or future litigation. *
Changes in accounting policies and practices, as may be adopted by
state and federal regulatory agencies and the Financial Accounting
Standards Board. * The ability of the Company to manage the risks
associated with the foregoing as well as anticipated. These risks
and uncertainties should be considered in evaluating forward-
looking statements and undue reliance should not be placed on such
statements. Additional information concerning the Company and its
business, including other factors that could materially affect the
Company's financial results, is included in the Company's filings
with the Securities and Exchange Commission. COVEST BANCSHARES,
INC. FINANCIAL HIGHLIGHTS (Unaudited) THREE MONTHS ENDED SEPT 30,
SEPT 30, 2003 2002 %CHANGE Earnings: Net Interest Income (FTE)
$5,248,000 $5,115,000 3% Net Income $1,770,000 $1,708,000 4% Per
Share Basic $0.52 $0.50 4% Diluted $0.50 $0.48 4% Key Ratios:
Return on Average Assets 1.17% 1.15% 2% Return on Average Equity
13.94% 14.58% -4% Net Interest Margin 3.59% 3.58% 0% Average
Stockholders' Equity to Average Assets 8.38% 7.90% 6% Risk-Based
Capital Ratios: Tier I Company 12.0% 10.9% 10% Bank 11.3% 10.7% 6%
Total Company 13.3% 12.2% 9% Bank 12.6% 11.9% 6% Common Stock Data:
Cash Dividends Declared per Share $0.08 $0.08 0% Book Value per
Share $15.23 $13.97 9% Price/Earnings Ratio 14.35x 10.99x 31%
COVEST BANCSHARES, INC. FINANCIAL HIGHLIGHTS (Unaudited) NINE
MONTHS ENDED SEPT 30, SEPT 30, 2003 2002 %CHANGE Earnings: Net
Interest Income (FTE) $15,851,000 $15,924,000 0% Net Income
$4,907,000 $5,001,000 -2% Per Share Basic $1.45 $1.46 -1% Diluted
$1.37 $1.39 -1% Key Ratios: Return on Average Assets 1.08% 1.12%
-4% Return on Average Equity 13.16% 14.45% -9% Net Interest Margin
3.60% 3.68% -2% Average Stockholders' Equity to Average Assets
8.19% 7.74% 6% Risk-Based Capital Ratios: Tier I Company 12.0%
10.9% 10% Bank 11.3% 10.7% 6% Total Company 13.3% 12.2% 9% Bank
12.6% 11.9% 6% Common Stock Data: Cash Dividends Declared per Share
$0.24 $0.24 0% Book Value per Share $15.23 $13.97 9% Price/Earnings
Ratio 14.35x 10.99x 31% COVEST BANCSHARES, INC. CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Dollars in
thousands, except per share data) SEPT 30, 2003 DEC 31, 2002 ASSETS
CASH ON HAND AND IN BANKS $11,557 $7,562 INTEREST BEARING DEPOSITS
51 17 CASH AND CASH EQUIVALENTS 11,608 7,579 SECURITIES: Securities
Available-for-Sale 32,419 41,489 Federal Home Loan Bank and Federal
Reserve Bank Stock 8,120 7,681 TOTAL SECURITIES 40,539 49,170 LOANS
RECEIVABLE: Commercial Loans 53,750 56,799 Multi-Family Loans
283,900 252,766 Commercial Real Estate Loans 72,843 84,607
Construction Loans 55,045 54,404 Commercial Leases 173 522 Mortgage
Loans 49,676 54,037 Consumer Loans 31,243 37,902 Mortgage Loans
Held for Sale 712 1,026 TOTAL LOANS RECEIVABLE 547,342 542,063
Allowance for Loan Losses (7,118) (7,039) LOANS RECEIVABLE, NET
540,224 535,024 ACCRUED INTEREST RECEIVABLE 2,239 2,639 PREMISES
AND EQUIPMENT 8,224 8,824 OTHER REAL ESTATE OWNED 2,200 661
GOODWILL 958 1,084 MORTGAGE SERVICING RIGHTS 66 128 OTHER ASSETS
3,079 3,812 TOTAL ASSETS $609,137 $608,921 See accompanying notes
to unaudited consolidated financial statements COVEST BANCSHARES,
INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)
(Unaudited) (Dollars in thousands, except per share data) SEPT 30,
2003 DEC 31, 2002 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES:
Deposits: Non-Interest Bearing $36,609 $33,700 Interest Bearing
Checking 41,254 34,836 Savings Accounts 121,864 94,885 Money Market
Accounts 67,376 85,372 Certificates of Deposit 131,846 155,988
Jumbo CDs 1,530 1,880 Purchased CDs 70,030 66,946 470,509 473,607
Short-Term Borrowings and Securities Sold U/A to Repurchase 46,087
47,370 Long-Term Advances from Federal Home Loan Bank 33,000 27,000
Advances from Borrowers for Taxes and Insurance 3,232 5,587 Accrued
Expenses and Other Liabilities 4,810 6,771 TOTAL LIABILITIES
557,638 560,335 STOCKHOLDERS' EQUITY: Common Stock, par value $.01
per share; 7,500,000 authorized shares; 4,403,803 shares issued at
9/30/03 and 12/31/02 respectively 44 44 Additional Paid-in Capital
19,174 18,831 Retained Earnings 50,913 46,838 Treasury Stock,
955,478 shares and 923,422 shares, held at cost at 9/30/03 and
12/31/02, respectively (18,061) (16,603) Unearned ESOP shares (944)
(1,202) Accumulated Other Comprehensive Income 373 678 TOTAL
STOCKHOLDERS' EQUITY 51,499 48,586 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $609,137 $608,921 See accompanying notes to
unaudited consolidated financial statements COVEST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited) (Dollars in thousands, except per share data) THREE
MONTHS ENDED NINE MONTHS ENDED SEPT 30, SEPT 30, SEPT 30, SEPT 30,
2003 2002 2003 2002 INTEREST INCOME Loans and Leases Receivable
$7,557 $8,114 $23,283 $25,396 Mortgage-Backed and Related
Securities - 43 - 157 Taxable Securities 230 535 791 1,442 Tax
Exempt Securities 36 55 125 181 Other Interest and Dividend Income
173 155 497 467 Total Interest Income 7,996 8,902 24,696 27,643
INTEREST EXPENSE Deposits 2,171 3,066 7,108 9,499 Advances from
Federal Home Loan Bank 551 697 1,663 2,112 Other Borrowed Funds 43
52 137 202 Total Interest Expense 2,765 3,815 8,908 11,813 NET
INTEREST INCOME 5,231 5,087 15,788 15,830 Provision for Loan Losses
161 217 676 853 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
5,070 4,870 15,112 14,977 NON-INTEREST INCOME Loan Charges and
Servicing Fees 236 248 630 689 Loan Prepayment Fees 234 258 817
1,213 Mortgage Banking Fees 318 205 778 473 Deposit Related Charges
and Fees 332 308 975 915 Gain on Sale of Securities/Loans - 39 50
113 Insurance and Annuity Commissions 14 24 62 47 Other 91 64 119
185 Total Non-Interest Income 1,225 1,146 3,431 3,635 NON-INTEREST
EXPENSE Compensation and Benefits 1,751 1,570 5,533 5,306
Commissions and Incentives 213 204 502 542 Occupancy and Equipment
435 501 1,358 1,458 Federal Deposit Insurance Premium 20 19 58 60
Data Processing 290 282 863 808 Advertising 215 212 576 622 Other
Real Estate Owned - 5 24 278 Amortization of Goodwill 41 51 125 154
Amortization of Mortgage Servicing Rights 19 20 62 65 Other 522 462
1,604 1,425 Total Non-Interest Expense 3,506 3,326 10,705 10,718
INCOME BEFORE INCOME TAXES 2,789 2,690 7,838 7,894 Income Tax
Provision (1,019) (982) (2,931) (2,893) NET INCOME $1,770 $1,708
$4,907 $5,001 Basic Earnings per Share $0.52 $0.50 $1.45 $1.46
Diluted Earnings per Share $0.50 $0.48 $1.37 $1.39 Total
Comprehensive Income $1,482 $1,567 $4,602 $5,014 See accompanying
notes to unaudited consolidated financial statements COVEST
BANCSHARES, INC. AVERAGE BALANCE SHEET The following table sets
forth certain information related to the Company's average balance
sheet. It reflects the average yield on assets and average cost of
liabilities for the periods indicated, on a fully tax equivalent
basis, as derived by dividing income or expense by the average
daily balance of assets or liabilities, respectively, for the
periods indicated. (Dollars in Thousands) THREE MONTHS ENDED SEPT
30, 2003 SEPT 30, 2002 AVERAGE AVERAGE AVERAGE YIELD/ AVERAGE
YIELD/ BALANCE INTEREST COST BALANCE INTEREST COST INTEREST EARNING
ASSETS: Commercial Loans(A)(B) $54,516 $650 4.77% $52,789 $784
5.94% Multi-Family Loans(A)(B) 274,334 3,674 5.36 223,746 3,500
6.26 Commercial Real Estate Loans(A)(B) 75,878 1,048 5.52 77,859
1,220 6.27 Construction Loans(A)(B) 56,503 827 5.85 50,908 891 7.00
Commercial Leases(B) 207 4 7.73 966 13 5.38 Mortgage Loans(A)(B)
51,955 891 6.86 55,483 1,017 7.33 Consumer Loans (A) 32,599 462
5.67 41,701 689 6.61 Securities 27,173 284 4.18 50,230 618 4.92
Mortgage-Backed and Related Securities - - - 2,355 43 7.30 Equity
Investments 10,231 168 6.57 9,533 128 5.37 Other Investments 2,243
5 0.89 6,802 27 1.59 Total Interest- Earning Assets $585,639 $
8,013 5.47% $572,372 $ 8,930 6.24% Non-Interest Earning Assets
19,945 20,659 TOTAL ASSETS $605,584 $593,031 INTEREST-BEARING
LIABILITIES: Interest- Bearing Checking $40,450 $131 1.30% $32,031
$107 1.32% Savings 121,401 433 1.43 80,274 505 2.52 Money Market
71,920 191 1.06 95,950 402 1.68 Certificates of Deposits 134,669
933 2.77 168,651 1,560 3.70 Jumbo CDs 1,529 5 1.31 2,197 12 2.18
Purchased CDs 76,356 478 2.50 49,687 481 3.87 FHLB Advances 46,630
551 4.73 61,065 697 4.57 Other Borrowed Funds 12,679 43 1.33 9,079
52 2.29 Total Interest- Bearing Liabilities $505,634 $ 2,765 2.19%
$498,934 $ 3,815 3.06% Non-Interest Bearing Deposits 37,468 33,282
Other Liabilities 11,705 13,960 TOTAL LIABILITIES $554,807 $546,176
Stockholders' Equity 50,777 46,855 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $605,584 $593,031 NET INTEREST INCOME (Tax
Equivalent) $5,248 $5,115 NET INTEREST RATE SPREAD (C) 3.28% 3.18%
NET INTEREST MARGIN (D) 3.59% 3.58% (A) Includes cash basis loans.
(B) Includes deferred fees/costs. (C) Interest Rate Spread is
calculated by subtracting the average cost of interest-bearing
liabilities from the average rate on interest-earning assets. (D)
Net Interest Margin is calculated by dividing net interest income
by average interest-earning assets. COVEST BANCSHARES, INC. AVERAGE
BALANCE SHEET The following table sets forth certain information
related to the Company's average balance sheet. It reflects the
average yield on assets and average cost of liabilities for the
periods indicated, on a fully tax equivalent basis, as derived by
dividing income or expense by the average daily balance of assets
or liabilities, respectively, for the periods indicated. (Dollars
in thousands) NINE MONTHS ENDED SEPT 30, 2003 SEPT 30, 2002 AVERAGE
AVERAGE AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST COST BALANCE
INTEREST COST INTEREST EARNING ASSETS: Commercial Loans(A)(B)
$54,227 $2,051 5.04% $52,179 $2,321 5.93% Multi-Family Loans(A)(B)
264,493 10,932 5.51 226,853 10,785 6.34 Commercial Real Estate
Loans(A)(B) 80,739 3,528 5.83 79,323 4,128 6.94 Construction
Loans(A)(B) 55,093 2,423 5.86 51,352 2,785 7.23 Commercial
Leases(B) 317 14 5.89 1,286 57 5.91 Mortgage Loans(A)(B) 53,303
2,810 7.03 56,152 3,147 7.47 Consumer Loans (A) 34,663 1,525 5.87
43,305 2,174 6.69 Securities 31,558 979 4.14 45,671 1,716 5.01
Mortgage-Backed and Related Securities - - - 2,857 157 7.33 Equity
Investments 10,013 471 6.27 9,357 366 5.22 Other Investments 3,373
26 1.03 8,519 101 1.60 Total Interest- Earning Assets $587,779
$24,759 5.62% $576,854 $27,737 6.41% Non-Interest Earning Assets
19,469 19,628 TOTAL ASSETS $607,248 $596,482 INTEREST-BEARING
LIABILITIES: Interest- Bearing Checking $37,268 $358 1.28% $30,591
$304 1.33% Savings 115,256 1,399 1.62 69,474 1,299 2.49 Money
Market 75,887 647 1.14 102,023 1,307 1.71 Certificates of Deposits
141,170 3,251 3.07 169,728 4,975 3.91 Jumbo CDs 1,743 21 1.61 4,961
96 2.58 Purchased CDs 72,558 1,433 2.63 53,658 1,518 3.77 FHLB
Advances 52,777 1,662 4.20 64,396 2,112 4.37 Other Borrowed Funds
13,050 137 1.40 11,684 202 2.31 Total Interest- Bearing Liabilities
$509,709 $ 8,908 2.33% $506,515 $11,813 3.11% Non-Interest Bearing
Deposits 36,107 32,135 Other Liabilities 11,712 11,671 TOTAL
LIABILITIES $557,529 $550,321 Stockholders' Equity 49,719 46,161
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $607,248 $596,482 NET
INTEREST INCOME (Tax Equivalent) $15,851 $15,924 NET INTEREST RATE
SPREAD (C) 3.29% 3.30% NET INTEREST MARGIN (D) 3.60% 3.68% (A)
Includes cash basis loans. (B) Includes deferred fees/costs. (C)
Interest Rate Spread is calculated by subtracting the average cost
of interest-bearing liabilities from the average rate on
interest-earning assets. (D) Net Interest Margin is calculated by
dividing net interest income by average interest-earning assets.
http://www.newscom.com/cgi-bin/prnh/19991105/CHBHLOGO
http://photoarchive.ap.org/ DATASOURCE: CoVest Bancshares, Inc.
CONTACT: Paul A. Larsen, Executive Vice President, Chief Financial
Officer, Treasurer of CoVest Bancshares, +1-847-294-6500 Web site:
http://www.covestbanc.com/
Copyright
Covest Bancshares (NASDAQ:COVB)
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Covest Bancshares (NASDAQ:COVB)
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