SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 6, 2003
----------------
COMMERCIAL FEDERAL CORPORATION
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(Exact name of registrant as specified in its charter)
NEBRASKA 1-11515 47-0658852
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
13220 CALIFORNIA STREET, OMAHA, NEBRASKA 68154
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (402) 554-9200
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
COMMERCIAL FEDERAL CORPORATION
FORM 8-K
CURRENT REPORT
Item 9. Regulation FD Disclosure:
On February 6, 2003, Commercial Federal Corporation (the "Corporation")
issued a press release announcing the results of its operations for the
fourth quarter and the year ended December 31, 2002. That press release
included selected financial and operational information including
activity in the loans serviced for other institutions for the three
months ended December 31, 2002. That activity as originally made public
was in error. The following presents such information for the three
months ended December 31, 2002, as originally filed with the press
release and the revised amounts.
(In Thousands)
Original Revised
------------- ---------------
Beginning balance $ 9,773,436 $ 9,773,436
Additions to portfolio 517 1,412,803
Purchases of loans to service 1,776,291 1,776,291
Loan payments (18,489) (1,427,804)
Other items, net - (2,971)
------------- ---------------
Ending balance $ 11,531,755 $ 11,531,755
============= ===============
These revisions did not affect the ending balance of loans serviced for
other institutions as reported.
Pursuant to Regulation FD, the Corporation's press release for the
fourth quarter and the year ended December 31, 2002 that was released
to the public on February 6, 2003 follows. This press release includes
the corrected selected financial and operational information filed as
reported above.
Date: February 6, 2003
Contact: John J. Griffith
Investor Relations Director
(402) 514-5336
Commercial Federal Reports 23% Increase in 2002 EPS
OMAHA, Nebraska, February 6, 2003 -- Commercial Federal Corporation (NYSE: CFB),
the parent company of Commercial Federal Bank, one of the largest financial
institutions in the Midwest, today announced net income of $108.5 million, or
$2.37 per diluted share, for the year ended December 31, 2002. This compares to
net income of $97.7 million, or $1.93 per diluted share, for the year ended
December 31, 2001.
Net income for the quarter ended December 31, 2002 was $26.3 million, or $.58
per diluted share, compared to net income of $25.1 million, or $.53 per diluted
share, for the quarter ended December 31, 2001.
Results of operations for 2002 compared with the prior year are affected by the
required changes in 2002 in the accounting for goodwill acquired in business
combinations. For 2001, adjusted earnings per diluted share would have been
$2.10 including the benefit of eliminating goodwill amortization totaling $8.1
million.
William A. Fitzgerald, chairman of the board and chief executive officer stated,
"The Company had an outstanding quarter and record year, in spite of the
continued weakness in the national economy. Record low interest rates led
continued strong performance of the Company's mortgage banking operations. The
Company's core banking operations produced solid financial results and enhanced
the strength of our balance sheet.
Return on average assets (ROA) and return on average equity (ROE) for 2002 were
..82% and 14.30%, respectively. This compares to an ROA of .76% and ROE of 12.23%
for 2001. Book value per share increased to $16.74 at the end of 2002, from
$15.98 at the end of 2001.
Mr. Fitzgerald concluded, "As we begin 2003, Commercial Federal remains focused
on our strategy to expand share in our high growth core markets and provide
long-term value for our investors."
Chief Financial Officer David S. Fisher stated, "We are pleased with the
Company's financial results for 2002, which were strengthened by record mortgage
loan volume due to the low interest rate environment. Mortgage loan volumes
increased more than 40% from 2001. Given economic uncertainties, we cannot
predict that this level of mortgage volume will continue through 2003.
Mr. Fisher concluded, "Core consumer and commercial banking units are performing
well and Commercial Federal's credit risk profile remains solid. As we continue
to successfully grow loans and deposits, earnings will grow over the long-term."
Highlights of the Quarter
Net Interest Income
Net interest income totaled $80.4 million for the fourth quarter of 2002,
compared to $82.1 million for the 2002 third quarter and $82.1 million for the
fourth quarter of 2001. For the year, net interest income totaled $327.7
million, compared with $307.4 million for 2001. The net interest margin for the
quarter decreased to 2.67%, compared with 2.82% for the same period last year
and 2.77% for the quarter ended September 30, 2002.
The Company's net interest margin continues to compress as the rates on the
Company's earning assets continue to decline with the drop in market interest
rates, while the rate reductions have not resulted in similar reductions in the
rates paid on deposits and borrowings. Further interest rate reductions in
market rates during 2003 would place additional pressure on the Company's net
interest margin.
Noninterest Income
The Company's retail and mortgage banking operations continued to generate
strong results in the fourth quarter. Retail banking fees are a major portion of
recurring noninterest income. The primary components of this income include
deposit-related fees and charges, debit card and transaction-related revenues,
and other retail fees. For the 2002 fourth quarter, retail fees totaled $14.3
million compared to $14.6 million for the September 30, 2002 quarter and $14.4
million for the fourth quarter of 2001. Retail fee income was $55.3 million for
2002 compared to $53.5 million for 2001. Retail fee income for 2002 increased
7.0% over 2001 after adjusting for the $1.6 million in fee income lost from the
34 branches sold in 2001.
The mortgage banking business includes activities associated with the Company's
mortgage servicing and mortgage banking operations, offset by the amortization
and valuation adjustments related to its mortgage servicing rights asset. During
the 2002 fourth quarter, the Company recorded an impairment adjustment of $9.6
million. In addition, amortization of existing mortgage servicing rights
increased by $3.8 million over the September 30, 2002 quarter. The Company
offset this impairment and amortization by realizing $12.3 million in pre-tax
gains on the sales of securities and changes in fair values of hedging
instruments. For 2002, the Company recorded impairment losses totaling $60.4
million on its mortgage servicing rights compared to $19.1 million for 2001.
These losses were offset by pre-tax gains on the sales of securities and loans
totaling $76.8 million and $24.2 million, respectively, for calendar years 2002
and 2001.
Operating Expenses
General and administrative expenses for the quarter totaled $74.1 million
compared with $61.7 million for the September 30, 2002 quarter and $64.8 million
for the 2001 fourth quarter. Expenses for the 2002 fourth quarter included
charges and losses totaling $8.5 million, resulting from asset impairment
losses, prepayment of debt, adjustments to deferred loan costs and an additional
charitable trust contribution.
Credit Quality Overview
Overall credit quality remains strong as the Company continues to aggressively
manage its nonperforming assets portfolio. In the quarter ended December 31,
2002, nonperforming assets decreased by $10.4 million to $114.0 million,
compared to $124.4 million at September 30, 2002. For the year nonperforming
assets fell by $17.5 million. Total NPAs represented .87% of total assets at the
end of 2002, compared to .92% at September 30, 2002 and 1.02% at December 31,
2001.
Net charge-offs in the fourth quarter of 2002 totaled $13.1 million, compared
with $3.4 million for the September 30, 2002 quarter. Charge-offs for the 2002
quarter included $8.8 million in specific reserves previously allocated on $11.0
million of nonresidential nonperforming loans. For the year, net loan
charge-offs totaled $27.0 million, compared to $19.8 million for the year ending
December 31, 2001.
During the 2002 fourth quarter, the Company added $9.7 million to the loan loss
allowance. Allowance for losses on loans totaled $106.3 million at December 31,
2002, compared with $102.5 million at December 31, 2001. The allowance for
losses to nonresidential nonperforming assets at December 31, 2002 was 353%,
compared to 258% at September 30, 2002 and 243% at December 31, 2001.
Balance Sheet and Capital Ratios
Total assets at December 31, 2002 were $13.1 billion, compared to $13.5 billion
at September 30, 2002 and $12.9 billion at December 31, 2001. Total deposits
increased $276 million in the quarter ended December 31, 2002, with core deposit
products, including checking, money market and savings accounts accounting for
$253 million of this increase. For the year, deposits increased $43 million
totaling $6.4 billion at December 31, 2002.
Stockholders' equity was $756.5 million at December 31, 2002, compared with
$745.9 million at September 30, 2002 and $734.7 million at December 31, 2001.
The capital ratios of the Company's banking subsidiary continued to exceed
regulatory requirements for classification as "well-capitalized," the highest
regulatory standard.
Capital Management
During the quarter, the Company redeemed all of the fixed-rate 9.375 %
cumulative trust preferred securities of the CFC Preferred Trust. This
redemption totaled $45 million plus accrued interest. The redemption was funded
primarily from the proceeds of a new term and revolving credit agreement dated
December 30, 2002. The Company repurchased 259,200 shares of its common stock
during the last half of 2002 at a cost of $6.2 million. These repurchased shares
were part of the 500,000-share buyback authorization passed by the Company's
Board of Directors in February 2002. In November
2002, the Board authorized the repurchase of an additional five million shares
of the Company's stock. This repurchase is expected to be completed by June 30,
2004.
Commercial Federal Corporation is the parent company of Commercial Federal Bank,
a $13.1 billion federal savings bank that operates branches located in Nebraska,
Iowa, Colorado, Kansas, Oklahoma, Missouri and Arizona. Commercial Federal
provides consumer and commercial banking services including mortgage origination
and servicing, commercial and industrial lending, small business banking,
construction lending, cash management, brokerage and insurance services, and
Internet banking.
Commercial Federal's Web site, http://www.comfedbank.com, will host a live
webcast of the investor conference call to discuss 2002 fourth quarter results
on Thursday, February 6, 2003 at 10:30 a.m. Central Time. The site also includes
access to company news releases, annual reports, quarterly financial statements,
and SEC filings.
Certain statements contained in this release are forward-looking in nature.
These statements are subject to risks and uncertainties that could cause
Commercial Federal's actual results or financial condition to differ materially
from those expressed in or implied by such statements. Factors of particular
importance to Commercial Federal include, but are not limited to, changes in
general economic conditions, changes in interest rates, changes in regulations
or accounting methods, and price levels and conditions in the public securities
markets generally.
#
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------------------------
December 31, September 30, December 31,
ASSETS 2002 2002 2001
----------------------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Audited)
Cash (including short-term investments of $505, $368 and $590) $ 200,581 $ 197,719 $ 206,765
Investment securities available for sale, at fair value 1,296,050 1,319,304 1,150,345
Mortgage-backed securities available for sale, at fair value 1,632,622 1,746,689 1,829,728
Loans held for sale, net 868,569 777,971 337,050
Loans receivable, net of allowances of $106,148, $109,493 and $102,359 7,703,016 8,120,979 8,066,375
Federal Home Loan Bank stock 283,193 285,112 253,946
Real estate, net 51,482 52,293 57,476
Premises and equipment, net 148,374 148,762 158,691
Bank owned life insurance 228,958 224,849 214,585
Other assets 483,540 430,012 435,174
Core value of deposits, net of accumulated amortization of $61,268,
$59,719 and $54,900 22,365 23,914 28,733
Goodwill 162,717 162,717 162,717
----------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 13,081,467 $ 13,490,321 $ 12,901,585
----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------------------------------------------------------------------
Liabilities:
Deposits $ 6,439,041 $ 6,163,289 $ 6,396,522
Advances from Federal Home Loan Bank 4,848,997 5,508,180 4,939,056
Other borrowings 603,306 615,193 520,213
Other liabilities 433,602 457,741 311,140
----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 12,324,946 12,744,403 12,166,931
----------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies - - -
----------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued - - -
Common stock, $.01 par value; 120,000,000 shares authorized;
45,189,112, 45,226,837 and 45,974,648 shares issued and outstanding 452 452 460
Additional paid-in capital 61,713 62,020 80,799
Retained earnings 797,778 775,566 705,160
Accumulated other comprehensive loss, net (103,422) (92,120) (51,765)
----------------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 756,521 745,918 734,654
----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 13,081,467 $ 13,490,321 $ 12,901,585
----------------------------------------------------------------------------------------------------------------------------------
F-1
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
--------------------------------------------------
2002 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
Interest Income:
Investment securities $ 18,554 $ 19,635 $ 19,344
Mortgage-backed securities 19,885 22,498 28,800
Loans receivable 151,573 153,721 160,375
-----------------------------------------------------------------------------------------------------------------------------------
Total interest income 190,012 195,854 208,519
Interest Expense:
Deposits 42,043 43,766 61,688
Advances from Federal Home Loan Bank 60,989 63,216 59,813
Other borrowings 6,597 6,776 4,926
-----------------------------------------------------------------------------------------------------------------------------------
Total interest expense 109,629 113,758 126,427
Net Interest Income 80,383 82,096 82,092
Provision for Loan Losses (9,731) (9,142) (8,265)
-----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Loan Losses 70,652 72,954 73,827
Other Income (Loss):
Retail fees and charges 14,344 14,614 14,381
Loan servicing fees, net (318) 2,762 5,040
Mortgage servicing rights valuation adjustment (9,585) (34,754) 3,983
Gain (loss) on sales of securities and changes
in fair values of derivatives, net 12,268 19,575 (7,315)
Gain on sales of loans 14,537 14,659 7,130
Bank owned life insurance 3,858 3,476 3,483
Real estate operations (2,098) (1,237) (3,805)
Other operating income 8,094 8,804 7,844
-----------------------------------------------------------------------------------------------------------------------------------
Total other income 41,100 27,899 30,741
Other Expense (Gain):
General and administrative expenses -
Compensation and benefits 28,116 29,060 26,646
Occupancy and equipment 10,448 9,912 9,356
Data processing 4,614 4,416 4,595
Advertising 4,446 3,480 4,107
Communication 3,581 3,261 3,639
Item processing 3,560 3,582 3,900
Outside services 5,403 2,465 3,318
Other operating expenses 13,895 5,521 11,798
Exit costs and termination benefits - - (2,526)
-----------------------------------------------------------------------------------------------------------------------------------
Total general and administrative expenses 74,063 61,697 64,833
Amortization of core value of deposits 1,549 1,549 1,662
Amortization of goodwill - - 1,951
-----------------------------------------------------------------------------------------------------------------------------------
Total other expense 75,612 63,246 68,446
-----------------------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes 36,140 37,607 36,122
Income Tax Provision 9,861 10,938 11,006
-----------------------------------------------------------------------------------------------------------------------------------
Net Income $ 26,279 $ 26,669 $ 25,116
-----------------------------------------------------------------------------------------------------------------------------------
Per Common Share:
Net Income $ .58 $ .58 $ .53
-----------------------------------------------------------------------------------------------------------------------------------
Dividends Declared Per Common Share $ .09 $ .09 $ .08
-----------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding 45,485,399 45,791,436 47,163,740
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F-2
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
======================================================================================================
Twelve Months Ended
December 31,
----------------------------------
2002 2001
======================================================================================================
Interest Income:
Investment securities $ 76,636 $ 76,237
Mortgage-backed securities 93,047 109,657
Loans receivable 607,370 685,480
======================================================================================================
Total interest income 777,053 871,374
Interest Expense:
Deposits 179,596 310,367
Advances from Federal Home Loan Bank 243,710 234,213
Other borrowings 26,019 19,365
======================================================================================================
Total interest expense 449,325 563,945
Net Interest Income 327,728 307,429
Provision for Loan Losses (31,002) (38,945)
======================================================================================================
Net Interest Income After Provision for Loan Losses 296,726 268,484
Other Income (Loss):
Retail fees and charges 55,279 53,519
Loan servicing fees, net 8,099 22,680
Mortgage servicing rights valuation adjustment (60,417) (19,058)
Gain on sales of securities and changes
in fair values of derivatives, net 40,583 15,422
Gain on sales of loans 36,173 8,739
Bank owned life insurance 14,115 13,863
Real estate operations (6,926) (6,971)
Other operating income 33,294 32,447
======================================================================================================
Total other income 120,200 120,641
Other Expense (Gain):
General and administrative expenses -
Compensation and benefits 114,022 105,120
Occupancy and equipment 38,956 37,726
Data processing 17,861 18,019
Advertising 15,171 11,995
Communication 13,071 13,731
Item processing 14,225 16,413
Outside services 13,833 13,765
Other operating expenses 31,232 31,521
Exit costs and termination benefits - (15,566)
======================================================================================================
Total general and administrative expenses 258,371 232,724
Amortization of core value of deposits 6,368 7,211
Amortization of goodwill - 8,134
======================================================================================================
Total other expense 264,739 248,069
======================================================================================================
Income Before Income Taxes 152,187 141,056
Income Tax Provision 43,723 43,374
======================================================================================================
Net Income $ 108,464 $ 97,682
======================================================================================================
Per Common Share:
Net Income $ 2.37 $ 1.93
======================================================================================================
Dividends Declared Per Common Share $ .35 $ .31
======================================================================================================
Weighted Average Shares Outstanding 45,849,983 50,492,919
======================================================================================================
F-3
COMMERCIAL FEDERAL CORPORATION
MORTGAGE SERVICING RIGHTS AND MORTGAGE BANKING OPERATIONS
(In Thousands)
(Unaudited)
===========================================================================================================================
Three Months Ended
December 31, September 30, December 31,
2002 2002 2001
===========================================================================================================================
Mortgage Servicing Rights:
Beginning balance $ 74,214 $ 103,823 $ 102,723
Mortgage servicing rights retained through loan sales 18,511 10,767 12,569
Purchases of mortgage servicing rights 15,925 1,272 -
Valuation adjustments (9,585) (34,754) 3,983
Amortization expense (10,712) (6,894) (5,129)
---------------- --------------- -----------------
Ending balance $ 88,353 $ 74,214 $ 114,146
================ =============== =================
Valuation allowances $ 80,058 $ 70,473 $ 19,641
================ =============== =================
---------------- --------------- -----------------
Mortgage servicing rights as a percentage of servicing portfolio 0.77% 0.76% 1.20%
================ =============== =================
---------------- --------------- -----------------
Mortgage servicing rights as a multiple of servicing fees 2.32x 2.30x 3.44x
================ =============== =================
Loans Serviced for Other Institutions:
Beginning balance $ 9,773,436
Additions to portfolio 1,412,803
Purchases of loans to service 1,776,291
Loan payments (1,427,804)
Other items, net (2,971)
---------------- --------------- -----------------
Ending balance $ 11,531,755 $ 9,773,436 $ 9,488,621
================ =============== =================
---------------- --------------- -----------------
Weighted average servicing fee 0.33% 0.33% 0.35%
================ =============== =================
---------------- --------------- -----------------
Weighted average coupon note rate 6.82% 7.00% 7.16%
================ =============== =================
==================================================================================================================================
Year Ended Year Ended Three Months Three Months
12/31/02 12/31/01 Ended 12/31/02 Ended 12/31/01
==================================================================================================================================
Mortgage Banking Income:
Loan servicing fees $ 39,124 $ 39,772 $ 10,394 $ 10,169
Amortization of mortgage servicing rights (31,025) (17,092) (10,712) (5,129)
---------------- --------------- ----------------- -----------------
Loan servicing fees, net 8,099 22,680 (318) 5,040
Mortgage servicing rights valuation
adjustment (60,417) (19,058) (9,585) 3,983
Gain (loss) on sales of securities
and changes in fair value of
deriviatives 40,583 15,422 12,268 (7,316)
---------------- --------------- ----------------- -----------------
Mortgage servicing rights
valuation adjustment, net (19,834) (3,636) 2,683 (3,333)
Gain on sales of loans 36,173 8,739 14,537 7,130
---------------- --------------- ----------------- -----------------
Total mortgage banking income $ 24,438 $ 27,783 $ 16,902 $ 8,837
================ =============== ================= =================
================================================================================
F-4
COMMERCIAL FEDERAL CORPORATION
DEPOSITS AND LOANS
(In Thousands)
(Unaudited)
----------------------------------------------------------------------------------------------------------------------------------
December 31, September 30, December 31,
2002 2002 2001
----------------------------------------------------------------------------------------------------------------------------------
Deposits by State:
Colorado $ 2,015,845 $ 2,017,866 $ 2,118,720
Nebraska 1,740,421 1,456,334 1,393,912
Iowa 982,714 997,889 1,033,526
Kansas 659,671 655,003 714,436
Oklahoma 555,275 564,918 631,933
Missouri 287,587 283,077 301,272
Arizona 197,528 188,202 182,826
Minnesota - - 19,897
------------- ------------- -------------
Total deposits $ 6,439,041 $ 6,163,289 $ 6,396,522
============= ============= =============
Deposits by Type:
Checking accounts:
Interest bearing $ 494,847 $ 481,963 $ 498,722
Noninterest bearing 974,483 802,246 699,924
------------- ------------- -------------
Total checking 1,469,330 1,284,209 1,198,646
Money market accounts 505,679 269,020 304,620
Savings accounts 1,618,593 1,787,052 1,939,596
------------- ------------- -------------
Total core deposits 3,593,602 3,340,281 3,442,862
Certificates of deposit - non core 2,845,439 2,823,008 2,953,660
------------- ------------- -------------
Total deposits $ 6,439,041 $ 6,163,289 $ 6,396,522
============= ============= =============
During calendar year 2001, deposits totaling $446,267 were sold 2001 Quarter Ended
pursuant to the branch divestiture initiative. The following details -----------------------------------------------------
the sale of these deposits by the applicable 2001 quarter: December 31 September 30 June 30
------------- ------------- -------------
Core deposits ($171,737 total) $ 31,407 $ 100,800 $ 39,530
Certificates of deposit ($274,530 total) 61,776 142,122 70,632
------------- ------------- -------------
Total deposits sold ($446,267) $ 93,183 $ 242,922 $ 110,162
============= ============= =============
----------------------------------------------------------------------------------------------------------------------------------
Loans Receivable, before allowance for losses:
Single-family fixed $ 1,874,930 $ 2,008,699 $ 2,249,617
Single-family adjustable 1,905,272 2,207,974 2,143,885
------------- ------------- -------------
Total single-family 3,780,202 4,216,673 4,393,502
Commercial real estate 1,503,213 1,457,291 1,354,674
Construction (net of LIP) 568,170 573,884 597,698
Multi-family 273,072 281,068 298,439
Consumer and other 1,684,507 1,701,556 1,524,421
------------- ------------- -------------
Total loans receivable, before allowance for losses $ 7,809,164 $ 8,230,472 $ 8,168,734
============= ============= =============
----------------------------------------------------------------------------------------------------------------------------------
F-5
COMMERCIAL FEDERAL CORPORATION
ALLOWANCE FOR LOSSES ON LOANS
(Unaudited)
----------------------------------------------------------------------------------------------------------------------
December 31, September 30, December 31,
(In Thousands) 2002 2002 2001
----------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED:
-------------------
Beginning balance $ 109,724 $ 104,001 $ 99,755
Provision charged to operations 9,731 9,142 8,265
Charges (14,550) (4,336) (6,927)
Recoveries 1,430 951 1,408
Change in estimate of allowance for bulk purchased loans (44) (34) (50)
----------------------------------------------------------------------------------------------------------------------
Ending balance $ 106,291 $ 109,724 $ 102,451
----------------------------------------------------------------------------------------------------------------------
TWELVE MONTHS ENDED:
--------------------
Beginning balance $ 102,451 n/a $ 83,439
Provision charged to operations 31,002 n/a 38,945
Charges (32,693) n/a (25,074)
Recoveries 5,675 n/a 5,318
Change in estimate of allowance for bulk purchased loans (144) n/a (172)
Reduction to allowance on sale of securitized loans - n/a (5)
----------------------------------------------------------------------------------------------------------------------
Ending balance $ 106,291 n/a $ 102,451
----------------------------------------------------------------------------------------------------------------------
SUMMARY OF CHARGE-OFFS, NET OF RECOVERIES:
Three months ended $ (13,120) $ (3,385) $ (5,519)
================ ================ ================
Twelve months ended $ (27,018) n/a $ (19,756)
================ ================
----------------------------------------------------------------------------------------------------------------------
December 31, September 30, December 31,
2002 2002 2001
-----------------------------------------------------
Reserves:
Specific $ 3,561 $ 9,915 $ 10,508
Special Problem 35,766 34,185 30,957
Nonspecific 66,964 65,624 60,986
---------------- ---------------- ----------------
$ 106,291 $ 109,724 $ 102,451
================ ================ ================
----------------------------------------------------------------------------------------------------------------------
F-6
COMMERCIAL FEDERAL CORPORATION
NONPERFORMING ASSETS AND LOANS
(Dollars in Thousands)
(Unaudited)
=================================================================================================================
December 31, September 30, December 31,
2002 2002 2001
=================================================================================================================
Nonperforming Assets:
Nonperforming loans:
Residential real estate $ 43,939 $ 42,306 $ 49,913
Residential construction 2,455 2,562 2,879
Commercial real estate 15,306 25,135 23,298
Commercial construction 2,584 2,666 125
All other 8,130 9,922 6,929
------------ ------------ ------------
Total nonperforming loans 72,414 82,591 83,144
------------ ------------ ------------
Real estate:
Residential 14,648 13,683 14,554
Residential construction 22,810 23,252 21,892
Commercial construction - - 3,870
All other 2,550 3,285 4,892
------------ ------------ ------------
Total real estate 40,008 40,220 45,208
------------ ------------ ------------
Troubled debt restructurings
Residential - - 84
Commercial 1,547 1,567 3,057
------------ ------------ ------------
Total troubled debt restructurings 1,547 1,567 3,141
------------ ------------ ------------
Total nonperforming assets $ 113,969 $ 124,378 $ 131,493
============ ============ ============
Nonperforming assets to total assets .87% .92% 1.02%
============ ============ ============
Summary of Nonperforming Assets:
Residential $ 83,852 $ 81,803 $ 89,322
Nonresidential 30,117 42,575 42,171
------------ ------------ ------------
$ 113,969 $ 124,378 $ 131,493
============ ============ ============
================================================================================================================
Nonperforming loans to total loans .82% .90% .96%
Nonperforming assets to total assets .87% .92% 1.02%
Allowance for losses to total loans 1.20% 1.20% 1.18%
Allowance for losses to nonperforming assets 93.26% 88.22% 77.91%
Allowance for losses to nonresidential nonperforming assets 352.93% 257.72% 242.94%
================================================================================================================
F-7
COMMERCIAL FEDERAL CORPORATION
SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS AND RATIOS
(Unaudited)
=========================================================================================================
December 31, September 30, December 31,
(Dollars in Thousands Except Per Share Data) 2002 2002 2001
=========================================================================================================
Cash, investment securities and FHLB stock $ 1,779,824 $ 1,802,135 $ 1,611,056
Mortgage-backed securities 1,632,622 1,746,689 1,829,728
Loans receivable, net 8,571,585 8,898,950 8,403,425
Intangible assets 185,082 186,631 191,450
Other assets 912,354 855,916 865,926
Total assets 13,081,467 13,490,321 12,901,585
--------------------------------------------------------------------------------------------------------
Deposits 6,439,041 6,163,289 6,396,522
Advances from Federal Home Loan Bank 4,848,997 5,508,180 4,939,056
Other borrowings 603,306 615,193 520,213
Other liabilities 433,602 457,741 311,140
Stockholders' equity 756,521 745,918 734,654
Total liabilities and stockholders' equity 13,081,467 13,490,321 12,901,585
========================================================================================================
Book value per common share $ 16.74 $ 16.49 $ 15.98
Tangible book value per common share (1) $ 12.65 $ 12.37 $ 11.82
Stock price $ 23.35 $ 21.77 $ 23.50
Common shares outstanding 45,189,112 45,226,837 45,974,648
Weighted average shares outstanding 45,485,399 45,791,436 47,163,740
========================================================================================================
Nonperforming assets $ 113,969 $ 124,378 $ 131,493
Nonperforming assets to total assets .87% .92% 1.02%
Weighted average interest rates (durings):
Yield on interest-earning assets 6.23% 6.41% 7.05%
Rate on interest-bearing liabilities 3.56% 3.64% 4.23%
Net interest rate spread 2.67% 2.77% 2.82%
Net yield on interest-earning assets 2.64% 2.69% 2.78%
Loans serviced for other institutions $ 11,531,755 $ 9,773,436 $ 9,488,621
========================================================================================================
Three months ended:
-------------------
Return on average assets .78% .79% .77%
Return on average equity 14.27% 13.61% 14.10%
Return on average tangible equity (2) 19.09% 17.90% 19.37%
Average equity to average assets 5.49% 5.80% 5.49%
G & A expenses to average assets 2.21% 1.83% 2.00%
Operating efficiency ratio 60.97% 56.09% 57.46%
Twelve months ended:
--------------------
Return on average assets .82% n/a .76%
Return on average equity 14.30% n/a 12.23%
Return on average tangible equity (2) 19.02% n/a 16.30%
Average equity to average assets 5.76% n/a 6.21%
G & A expenses to average assets 1.96% n/a 1.81%
Operating efficiency ratio 57.68% n/a 54.37%
========================================================================================================
(1) Determined by dividing total stockholders' equity less core value of
deposits and goodwill by common shares outstanding.
(2) Determined by dividing net income by average stockholders' equity minus the
average balances of core value of deposits and goodwill.
F-8
COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
(Unaudited)
==============================================================================================================================
December 31, September 30, June 30, March 31, December 31,
2002 2002 2002 2002 2001
==============================================================================================================================
Three Months Ended:
------------------
Average Balances:
Total assets $ 13,408,194 $ 13,511,423 $ 12,924,321 $ 12,846,461 $ 12,975,446
Total loans, net 8,851,961 8,865,656 8,447,815 8,381,332 8,557,834
Total loans, before allowances 8,960,880 8,971,536 8,550,402 8,484,475 8,659,832
Total mortgage-backed securities 1,741,933 1,797,775 1,834,009 1,832,143 1,838,301
Total deposits 6,277,235 6,186,698 6,256,952 6,313,508 6,556,132
Total stockholders' equity 736,489 783,612 776,414 737,862 712,325
Total interest-earning assets 12,191,686 12,205,340 11,703,685 11,625,386 11,813,990
Total interest-bearing liabilities 12,286,057 12,296,090 11,815,264 11,741,746 11,789,523
==============================================================================================================================
Year Year Six Months Year
Ended Ended Ended Ended
Year to Date: 12/31/02 12/31/01 12/31/00 6/30/00
------------ ---------------------------------------------------------------
Average Balances:
Total assets $ 13,175,562 $ 12,857,135 $ 13,724,748 $ 13,507,546
Total loans, net 8,638,609 8,782,321 10,257,240 9,798,198
Total loans, before allowances 8,743,759 8,872,003 10,330,206 9,877,010
Total mortgage-backed securities 1,799,174 1,690,967 1,338,706 1,291,061
Total deposits 6,258,302 7,122,069 7,465,924 7,433,114
Total stockholders' equity 758,659 798,889 909,247 958,664
Total interest-earning assets 11,931,794 11,724,847 12,659,728 12,328,807
Total interest-bearing liabilities 12,034,963 11,704,421 12,539,841 10,069,053
==============================================================================================================================
December 31, September 30, June 30, March 31, December 31,
Regulatory Capital: 2002 2002 2002 2002 2001
------------------ --------------------------------------------------------------------------------
Tangible $ 743,048 $ 752,804 $ 723,100 $ 702,648 $ 706,534
Core 734,870 746,244 715,665 705,428 709,770
Total risk-based 871,408 882,768 846,021 847,013 850,713
Tier 1 risk-based 734,870 746,244 715,665 705,428 709,770
Tangible % 5.81% 5.71% 5.60% 5.60% 5.58%
Core % 5.75% 5.67% 5.61% 5.62% 5.60%
Total risk-based % 10.92% 10.88% 10.77% 11.37% 11.38%
Tier 1 risk-based % 9.21% 9.20% 9.11% 9.47% 9.50%
==============================================================================================================================
F-9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMERCIAL FEDERAL CORPORATION
------------------------------
(Registrant)
Date: February 7, 2003 /s/ David S. Fisher
---------------- ------------------------------
David S. Fisher
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer)