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Bank holding companies

SFFed Corp. Reports Net Loss for Quarter Ended March 31, 1995

Strategic Insights

— 2 min read

San Francisco Federal Savings and Loan Association, the primary subsidiary of SFFed Corp., reported a net loss for the quarter ended March 31, 1995, due in part to a significant reduction in net interest income and a pre-tax charge of $3.6 million for provisions related to real estate loans and foreclosed real estate. This compares to a net loss of $5.5 million for the same period in 1994.

The net loss for the 1995 quarter was $0.2 million, or $0.03 per share, compared to a net loss of $5.5 million, or $0.70 per share, for the year-earlier period. Net interest income for the first quarter of 1995 was $17.7 million, a decrease from $21.1 million for the same period in 1994.

Key Takeaways:

  • The primary cause of the net loss was a reduction in net interest income, largely due to the company's cost of funds increasing faster than the yield on its earning assets.
  • Net interest income for the first quarter of 1995 was $17.7 million, a decrease of 15.9% from $21.1 million for the year-earlier quarter.
  • Operating expenses for the first quarter of 1995 totaled $16.7 million, the same as for the year-earlier quarter, but decreased to 1.74% of average assets from 2.02% for the year-earlier quarter.
  • Nonperforming assets declined to 1.80% of total assets at March 31, 1995, compared to 1.91% at December 31, 1994 and 3.02% a year earlier.
  • Roger L. Gordon, chairman and chief executive officer, stated that the increasing yield on the Company's primarily adjustable-rate loan portfolio has increased the Company's interest rate margin at the end of March compared to the end of December 1994.
  • The company converted $200 million of its real estate loans held for investment into mortgage-backed securities to obtain additional borrowing flexibility during the first quarter of 1995.

Statistics:

  • Net loss for the 1995 quarter: $0.2 million
  • Net loss for the year-earlier quarter (1994): $5.5 million
  • Net interest income for the first quarter of 1995: $17.7 million
  • Net interest income for the first quarter of 1994: $21.1 million
  • Operating expenses for the first quarter of 1995: $16.7 million
  • Average interest rate margin on total assets for the 1995 quarter: 1.79%
  • Average interest rate margin on total assets for the year-earlier quarter (1994): 2.45%
  • Nonperforming assets at March 31, 1995: 1.80% of total assets
  • Total assets at March 31, 1995: $3.97 billion
  • Stockholders' equity at March 31, 1995: $195 million

Sources:

  • SFFed Corp. PR Newswire press release, April 24, 1995
  • SFFed Corp. "CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION"

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