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): October 16, 2001
THE COLONIAL BANCGROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13508 63-0661573
(State of Incorporation) (Commission File No.) (IRS Employer I.D. No.)
Colonial Financial Center, Suite 800
One Commerce Street, Montgomery, Alabama 36104
(Address of Principal Executive Office) (Zip code)
Registrant's telephone number, including area code: 334-240-5000
Item 9. Regulation FD Disclosure
For more information contact: October 16, 2001
Lisa Free (334) 240-5105
Flake Oakley (334) 240-5061
COLONIAL BANCGROUP ANNOUNCES
QUARTERLY EARNINGS
. Cash earnings per diluted share from continuing operations of $0.29 for the
quarter and $0.85 year to date
. Income from continuing operations was $30.756 million or $0.28 per diluted
share for the quarter
. Loan quality remains excellent with an annualized net-charge off ratio of
0.27% year-to-date and non-performing assets of 0.74%
MONTGOMERY, AL --- The Colonial BancGroup, Inc. Chairman and CEO, Robert E.
Lowder announced today that for the quarter ended September 30, 2001, cash
earnings from continuing operations were $0.29 per diluted share compared to
$0.27 in 2000, a 7% increase. Income from continuing operations was $30,756,000
or $0.28 per diluted share, an increase of 8% in income and 8% in earnings per
share over the third quarter of 2000.
"Considering the national crisis and difficult economic conditions, this
has been an excellent quarter for Colonial. Operating income is in line with our
expectations and
1
asset quality remains among the best in the industry," said Mr. Lowder.
Over the course of 2001, as the economy has slowed, the Company has
increased its emphasis on quality credits. This coupled with declining demand
has resulted in some slow-down in loan growth within the Company's regional
banks. Excluding single-family mortgage loans, regional loan growth was 6.2% on
an annualized basis for the third quarter 2001. Single-family mortgage loans
declined $133 million from the previous quarter resulting in an overall decrease
of $34 million, or 1.4% annualized, in loans for the quarter.
Net charge-offs for the third quarter were $9.2 million, or 0.38%
annualized, of average loans. One borrower whose business has been affected by
the slowing economy represents approximately 30% of the total charge-offs for
the quarter. For the first nine months of 2001, annualized net charge-offs were
relatively low at 0.27% of average loans. Total non-performing assets were $71.7
million at September 30, 2001 or 0.74% of loans and other real estate owned,
increasing by 2.1% or $1.5 million from the second quarter. The allowance for
loan losses represented 1.15% of loans and 190% of non-performing loans at
September 30, 2001. The Company continues to maintain low levels of net
charge-offs and non-performing assets comparing favorably to industry averages.
"As in past recessionary times, Colonial has brought renewed focus both to
asset quality measurements and expense control. With respect to asset quality, I
am pleased that our conservative underwriting standards has strengthened our
balance sheet in difficult times. And, I am equally pleased that our third
quarter focus in reducing noninterest expense has resulted in a 5% savings over
the second quarter," said Mr. Lowder.
2
In 2000, the Company exited the mortgage servicing business. The financial
results for this line of business have been separately reported as discontinued
operations in all periods presented. As part of that process, during the quarter
the Company revised its estimates of the cost to complete the disposition of
this business resulting in a $613,000 after-tax expense in the quarter,
resulting in net income per diluted share of $.27 for the quarter and $.80
year-to-date.
----------------------------------------------------------------------------------------------------------------------
Nine Months Ended Sept. 30, Three Months Ended Sept. 30,
Earnings Summary % Change % Change
(Dollars in thousands, except per share amounts) 2001 2000 00 to 01 2001 2000 00 to 01
----------------------------------------------------------------------------------------------------------------------
Income from continuing operations (net of income taxes) $89,289 $89,217 0% $30,756 $28,561 8%
Income (Loss) from discontinued operations (net of
income taxes) (613) (4,699) (613)
Net income $88,676 $84,518 $30,143 $28,561
Earnings per share:
Cash earnings from continuing operations (net of income
taxes) (1)
Basic $ 0.85 $ 0.84 1% $ 0.30 $ 0.27 11%
Diluted $ 0.85 $ 0.83 2% $ 0.29 $ 0.27 7%
Income from continuing operations (net of income taxes)
Basic $ 0.81 $ 0.80 1% $ 0.28 $ 0.26 8%
Diluted $ 0.80 $ 0.80 0% $ 0.28 $ 0.26 8%
Net Income
Basic $ 0.80 $ 0.76 5% $ 0.27 $ 0.26 4%
Diluted $ 0.80 $ 0.76 5% $ 0.27 $ 0.26 4%
(1) Cash earnings excludes amortization of intangibles.
On October 11, 2001 the Company completed the previously announced
acquisition of 13 Union Planters offices in Alabama and Florida. This
transaction along with the previously announced merger with Manufacturer's Bank
in Tampa will bring the total assets of the Company to approximately $13
billion. The Company's Bay Area Region in Tampa will have approximately $850
million in assets with 21 branches.
Colonial BancGroup currently operates 259 offices in Alabama, Florida,
Georgia,
3
Nevada, Tennessee and Texas and is traded on the New York Stock Exchange under
the symbol CNB. In most newspapers the stock is listed as ColBgp.
-----------------------------------------------------------------------------------------------------------------------
Three Months Ended Sept. 30,
Earnings Summary % Change
(Dollars in thousands, except per share amounts) 2001 2000 00 to 01
-----------------------------------------------------------------------------------------------------------------------
Continuing Operations:
Net interest income (taxable equivalent) $102,935 $97,038 6%
Provision for possible loan losses 7,601 8,861 -14%
Noninterest income 20,416 20,649 -1%
Noninterest expense 66,852 62,976 6%
Income from continuing operations (net of income taxes) $30,756 $28,561 8%
Income (Loss) from discontinued operations (net of income taxes) (613)
Net income $30,143 $28,561
Earnings per share:
Income from continuing operations (net of income taxes)
Basic $ 0.28 $ 0.26 8%
Diluted $ 0.28 $ 0.26 8%
Cash earnings from continuing operations (net of income taxes) (1)
Basic $ 0.30 $ 0.27 11%
Diluted $ 0.29 $ 0.27 7%
Selected Ratios:
Income from continuing operations (net of income taxes)
Average assets 1.00% 0.99%
Average shareholders' equity 14.92% 15.92%
Continuing Operations Ratios:
Efficiency ratio 54.20% 53.52%
Noninterest income (annualized) to average assets 0.66% 0.72%
Noninterest expense (annualized) to average assets 2.19% 2.20%
Cash Earnings from continuing operations (net of income taxes) (1)
Average assets 1.06% 1.04%
Average shareholders' equity 15.90% 16.63%
Cash Basis Ratios:
Efficiency ratio 53.14% 52.42%
Noninterest income (annualized) to average assets 0.66% 0.72%
Noninterest expense (annualized) to average assets 2.12% 2.16%
Consolidated:
Net interest margin 3.53% 3.65%
Equity to assets 6.72% 6.31%
Tier one leverage 6.56% 6.50%
-----------------------------------------------------------------------------------------------------------------------
(1) Cash earnings excludes amortization of intangibles.
Nine Months Ended Sept. 30,
Earnings Summary % Change
(Dollars in thousands, except per share amounts) 2001 2000 00 to 01
--------------------------------------------------------------------------------------------------------------------
Continuing Operations:
Net interest income (taxable equivalent) $306,332 $295,436 4%
Provision for loan losses 24,498 21,822 12%
Noninterest income 62,728 57,606 9%
Noninterest expense 202,603 188,075 8%
4
Income from continuing operations (net of income taxes) $ 89,289 $ 89,217 0%
Income (Loss) from discontinued operations (net of income taxes) (613) (4,699)
Net income $ 88,676 $ 84,518
Earnings per share:
Income from continuing operations (net of income taxes)
Basic $ 0.81 $ 0.80 1%
Diluted $ 0.80 $ 0.80 0%
Cash earnings from continuing operations (net of income taxes) (1)
Basic $ 0.85 $ 0.84 1%
Diluted $ 0.85 $ 0.83 2%
Selected Ratios:
Income from continuing operations (net of income taxes)
Average assets 0.98% 1.06%
Average shareholders' equity 15.00% 17.03%
Continuing Operations Ratios:
Efficiency ratio 55.18% 53.27%
Noninterest income (annualized) to average assets 0.69% 0.68%
Noninterest expense (annualized) to average assets 2.22% 2.23%
Cash Earnings from continuing operations (net of income taxes) (1)
Average assets 1.03% 1.10%
Average shareholders' equity 15.85% 17.76%
Cash Basis Ratios:
Efficiency ratio 53.72% 52.16%
Noninterest income (annualized) to average assets 0.69% 0.68%
Noninterest expense (annualized) to average assets 2.16% 2.18%
Consolidated:
Net interest margin 3.55% 3.79%
Equity to assets 6.72% 6.31%
Tier one leverage 6.56% 6.50%
--------------------------------------------------------------------------------------------------------------------
(1) Cash earnings excludes amortization of intangibles.
---------------------------------------------------------------------------------------------------------------------------------
% Change
Statement of Condition Summary Sept. 30, Dec. 31, Sept. 30, Sept. 30,
(Dollars in thousands, except per share amounts) 2001 2000 2000 00 to 01
---------------------------------------------------------------------------------------------------------------------------------
Total assets $12,489,020 $11,727,637 $11,475,528 9%
Loans 9,725,389 9,416,770 9,107,393 7%
Total earning assets 11,767,013 10,936,187 10,709,231 10%
Deposits 8,048,183 8,143,017 8,043,850 0%
Shareholders' equity 839,285 756,852 723,576 16%
Book value per share $7.58 $6.86 $6.56 16%
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Sept. 30, Dec. 31 Sept. 30,
2001 2000 2000
---------------------------------------------------------------------------------------------------------------------------------
Nonperforming Assets
Total non-performing assets ratio 0.74% 0.54% 0.56%
Allowance as a percent of nonperforming loans 190% 256% 234%
Net charge-offs ratio (annualized):
Quarter to date 0.38% 0.25% 0.29%
Year to date 0.27% 0.21% 0.21%
---------------------------------------------------------------------------------------------------------------------------------
5
More detailed information on Colonial BancGroup's quarterly earnings is
available on the company's website at www.colonialbank.com or in the Current
--------------------
Report on Form 8-K filed today with the Securities and Exchange Commission.
Copies of the Form 8-K are also available from the contact persons listed above.
This release and the above referenced Current Report on Form 8-K of which
this release forms a part contain "forward-looking statements" within the
meaning of the federal securities laws. The forward-looking statements in this
release are subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in or implied by the statements.
Factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among other things, the
following possibilities; (i) an inability of the company to realize elements of
its strategic plans for 2001 and beyond; (ii) increases in competitive pressure
in the banking industry; (iii) general economic conditions, either nationally or
regionally, that are less favorable than expected; and (iv) changes which may
occur in the regulatory environment. When used in this Report, the words
"believes," "estimates,", "plans," "expects," "should," "may," "might,"
"outlook," and "anticipates," and similar expressions as they relate to
BancGroup (including its subsidiaries) or its management are intended to
identify forward-looking statements.
6
THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands, except per share amounts)
-----------------------------------------------------------------------------------------------------
% Change
September 30, December 31, September 30, September 30,
2001 2000 2000 2000 to 2001
-----------------------------------------------------------------------------------------------------
Statement of Condition Summary
Total assets.................................. $ 12,489,020 $ 11,727,637 $ 11,475,528 9%
Loans......................................... 9,725,389 9,416,770 9,107,393 7%
Total earning assets.......................... 11,767,013 10,936,187 10,709,231 10%
Deposits...................................... 8,048,183 8,143,017 8,043,850 0%
Shareholders' equity.......................... 839,285 756,852 723,576 16%
Book value per share.......................... $ 7.58 $ 6.86 $ 6.56 16%
-----------------------------------------------------------------------------------------------------
Nine Months Ended Three Months Ended
September 30, September 30,
------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
2001 2000 2000 to 2001 2001 2000 2000 to 2001
------------------------------------------------------------------------------------------------------------------------------------
Earnings Summary
Continuing Operations:
Net interest income (taxable
equivalent)............................ $ 306,332 $ 295,436 4% $ 102,935 $ 97,038 6%
Provision for loan losses .............. 24,498 21,822 12% 7,601 8,861 -14%
Noninterest income...................... 62,728 57,606 9% 20,416 20,649 -1%
Noninterest expense..................... 202,603 188,075 8% 66,852 62,976 6%
Income from continuing operations (net of
income taxes) $ 89,289 $ 89,217 0% $ 30,756 $ 28,561 8%
Loss from discontinued operations and
loss on disposal (net of income taxes) (613) (4,699) (613) -
Net income.................................... $ 88,676 $ 84,518 $ 30,143 $ 28,561
Average shares outstanding.................... 110,643 110,917 110,738 110,260
Average diluted shares outstanding............ 111,653 111,650 111,858 110,965
Earnings per share:
Income from continuing operations (net of
income taxes)
Basic.................................... $ 0.81 $ 0.80 1% $ 0.28 $ 0.26 8%
Diluted.................................. $ 0.80 $ 0.80 0% $ 0.28 $ 0.26 8%
Cash earnings from continuing operations (net
of income taxes) (1)
Basic.................................... $ 0.85 $ 0.84 1% $ 0.30 $ 0.27 11%
Diluted.................................. $ 0.85 $ 0.83 2% $ 0.29 $ 0.27 7%
Selected Ratios:
Income from continuing operations (net of
income taxes)
Average assets ............................. 0.98% 1.06% 1.00% 0.99%
Average shareholders' equity................ 15.00% 17.03% 14.92% 15.92%
Continuing Operations Ratios:
Efficiency ratio........................ 55.18% 53.27% 54.20% 53.52%
Noninterest income (annualized) to
average assets......................... 0.69% 0.68% 0.66% 0.72%
Noninterest expense (annualized) to
average assets......................... 2.22% 2.23% 2.19% 2.20%
Cash Earnings from continuing operations (net
of income taxes) (1)
Average assets ............................. 1.03% 1.10% 1.06% 1.04%
Average shareholders' equity................ 15.85% 17.76% 15.90% 16.63%
Cash Basis Ratios:
Efficiency ratio........................ 53.72% 52.16% 53.14% 52.42%
Noninterest income (annualized) to
average assets......................... 0.69% 0.68% 0.66% 0.72%
Noninterest expense (annualized) to
average assets......................... 2.16% 2.18% 2.12% 2.16%
Consolidated:
Net interest margin..................... 3.55% 3.79% 3.53% 3.65%
Equity to assets........................ 6.72% 6.31%
Tier one leverage....................... 6.56% 6.50%
------------------------------------------------------------------------------------------------------------------------------------
(1) Cash earnings excludes amortization of intangibles.
September 30, December 31, September 30,
2001 2000 2000
------------------------------------------------------------- --------------------------------
Nonperforming Assets
Total non-performing assets ratio............. 0.74% 0.54% 0.56%
Allowance as a percent of nonperforming loans. 190% 256% 234%
Net charge-offs ratio (annualized):
Quarter to date.......................... 0.38% 0.25% 0.29%
Year to date............................. 0.27% 0.21% 0.21%
------------------------------------------------------------- --------------------------------
THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
----------------------------------------------------------------------------------------------------------------------------
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------------------------------------------------------------------------------------------------------------
2001 2000 2001 2000
----------------------------------------------------------------------------------------------------------------------------
Interest Income:
Interest and fees on loans...................................................... $599,849 $579,127 $188,058 202,489
Interest on investments......................................................... 75,815 81,234 27,060 27,227
Other interest income........................................................... 1,809 1,967 374 712
----------------------------------------------------------------------------------------------------------------------------
Total interest income........................................................... 677,473 662,328 215,492 230,428
----------------------------------------------------------------------------------------------------------------------------
Interest Expense:
Interest on deposits............................................................ 254,281 256,576 75,647 92,718
Interest on short-term borrowings............................................... 55,455 68,375 12,987 26,870
Interest on long-term debt...................................................... 63,850 44,564 24,764 14,674
----------------------------------------------------------------------------------------------------------------------------
Total interest expense.......................................................... 373,586 369,515 113,398 134,262
----------------------------------------------------------------------------------------------------------------------------
Net Interest Income............................................................. 303,887 292,813 102,094 96,166
Provision for loan lossess ..................................................... 24,498 21,822 7,601 8,861
----------------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Possible Loan Losses.................... 279,389 270,991 94,493 87,305
----------------------------------------------------------------------------------------------------------------------------
Noninterest Income:
Service charges on deposit accounts............................................. 30,254 28,354 10,493 9,676
Wealth Management............................................................... 6,499 6,842 1,975 1,900
Electronic Banking.............................................................. 4,783 4,086 1,636 1,393
Mortgage Origination............................................................ 5,414 4,516 1,896 2,106
Securities gains(losses), net................................................... 1,899 (40) - 21
Other income.................................................................... 13,879 13,848 4,416 5,553
----------------------------------------------------------------------------------------------------------------------------
Total noninterest income....................................................... 62,728 57,606 20,416 20,649
----------------------------------------------------------------------------------------------------------------------------
Noninterest Expense:
Salaries and employee benefits.................................................. 103,313 94,509 34,264 32,158
Occupancy expense of bank premises, net......................................... 25,257 22,479 8,578 7,788
Furniture and equipment expenses................................................ 21,497 21,521 7,142 7,277
Amortization of intangibles..................................................... 5,363 3,898 2,093 1,297
Other expense................................................................... 47,173 45,668 14,775 14,456
----------------------------------------------------------------------------------------------------------------------------
Total noninterest expense....................................................... 202,603 188,075 66,852 62,976
----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes........................... 139,514 140,522 48,057 44,978
Applicable income taxes......................................................... 50,225 51,305 17,301 16,417
----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations............................................... 89,289 89,217 30,756 28,561
Discontinued Operations:
Net loss from discontinued operations and loss on disposal,
net of income taxes of $(371), $(2,844), $(371) and $0 for the nine
months ended September 30, 2001 and 2000 and for the three
months ended September 30, 2001 and 2000................................... (613) (4,699) (613) -
----------------------------------------------------------------------------------------------------------------------------
Net Income...................................................................... $ 88,676 $ 84,518 $ 30,143 $28,561
----------------------------------------------------------------------------------------------------------------------------
Earnings per share:
Income from continuing operations:
Basic...................................................................... $ 0.81 $ 0.80 $ 0.28 $ 0.26
Diluted.................................................................... $ 0.80 $ 0.80 $ 0.28 $ 0.26
Net Income
Basic ..................................................................... $ 0.80 $ 0.76 $ 0.27 $ 0.26
Diluted.................................................................... $ 0.80 $ 0.76 $ 0.27 $ 0.26
THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollars in thousands, except per share amounts)
------------------------------------------------------------------------------------------------------------------------------------
September 30, December 31, September 30,
2001 2000 2000
------------------------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks............................................................ $ 265,420 $ 348,891 $ 280,628
Interest-bearing deposits in banks and federal funds sold.......................... 96,799 15,855 61,122
Securities available for sale...................................................... 1,888,081 1,449,386 1,482,962
Investment securities.............................................................. 32,076 44,310 47,814
Mortgage loans held for sale....................................................... 24,668 9,866 9,940
Loans.............................................................................. 9,725,389 9,416,770 9,107,393
Less:
Allowance for loan losses ........................................................ (112,074) (107,165) (103,861)
------------------------------------------------------------------------------------------------------------------------------------
Loans, net......................................................................... 9,613,315 9,309,605 9,003,532
Premises and equipment, net........................................................ 183,381 184,831 186,239
Excess of cost over tangible and identified intangible
assets acquired, net.............................................................. 89,491 74,393 75,691
Other real estate owned............................................................ 12,805 8,928 6,510
Accrued interest and other assets.................................................. 282,984 281,572 321,090
------------------------------------------------------------------------------------------------------------------------------------
Total.............................................................................. $ 12,489,020 $ 11,727,637 $ 11,475,528
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
Deposits........................................................................... $ 8,048,183 $ 8,143,017 $ 8,043,850
FHLB short-term borrowings......................................................... 50,000 425,000 475,000
Other short-term borrowings........................................................ 1,563,943 1,463,328 1,475,526
Subordinated debt.................................................................. 274,047 111,900 111,929
Trust preferred securities......................................................... 70,000 70,000 70,000
FHLB long-term debt................................................................ 1,196,603 547,022 347,136
Other long-term debt............................................................... 88,062 102,325 134,475
Other liabilities.................................................................. 358,897 108,193 94,036
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Total liabilities.................................................................. 11,649,735 10,970,785 10,751,952
Shareholders' equity:
Common Stock, $2.50 par value; 200,000,000 shares authorized 113,147,165,
113,081,198 and 113,083,937 shares issued at
September 30, 2001, December 31, 2000 and September 30, 2000, respectively...... 282,868 282,703 282,710
Treasury shares (2,423,512, 2,773,782 and 2,788,420 at September 30, 2001,
December 31, 2000 and September 30, 2000, respectively)............................ (25,506) (26,467) (26,607)
Additional paid in capital........................................................ 122,093 118,600 118,650
Retained earnings................................................................. 439,308 390,442 374,361
Unearned compensation............................................................. (3,661) (2,541) (2,942)
Accumulated other comprehensive income (loss), net of taxes 24,183 (5,885) (22,596)
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Total shareholders' equity......................................................... 839,285 756,852 723,576
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Total.............................................................................. $ 12,489,020 $ 11,727,637 $ 11,475,528
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THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
AVERAGE VOLUME AND RATES
(Unaudited)
(Dollars in thousands)
------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------
September 30, June 30,
2001 2001
----------------------------------------------------------------------------------------------------------------------------------
Average Average
Volume Interest Rate Volume Interest
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Assets
Loans, net.................................................. $ 9,765,986 $187,921 7.64% $10,121,974 $ 203,111
Mortgage loans held for sale................................ 22,733 357 6.28% 22,788 382
Investment securities and securities available for sale
and other interest-earning assets.......................... 1,805,698 28,055 6.21% 1,509,902 24,557
----------------------------------------------------------------------------------------- -----------------------------
Total interest-earning assets(1)............................ 11,594,417 $216,333 7.42% 11,654,664 $ 228,050
----------------------------------------------------------------------------------------- -----------------------------
Nonearning assets........................................... 640,208 649,082
------------------------------------------------------------------------------ -----------------
Total assets.............................................. $ 12,234,625 $12,303,746
---------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
Interest-bearing deposits................................... $ 6,947,488 $ 75,647 4.32% $ 7,124,565 $ 85,203
Short-term borrowings....................................... 1,472,966 12,987 3.50% 1,704,153 19,223
Long-term debt.............................................. 1,663,935 24,861 5.93% 1,404,817 20,988
----------------------------------------------------------------------------------------- -----------------------------
Total interest-bearing liabilities........................... 10,084,389 $113,495 4.47% 10,233,535 $ 125,414
----------------------------------------------------------------------------------------- -----------------------------
Noninterest-bearing demand deposits.......................... 1,227,566 1,181,195
Other liabilities............................................ 104,043 97,734
---------------- -----------------
Total liabilities............................................ 11,415,998 11,512,464
Shareholders' equity......................................... 818,627 791,282
------------------------------------------------------------------------------ -----------------
Total liabilities and shareholders' equity..................... $ 12,234,625 $12,303,746
---------------------------------------------------------------------------------------------------------------------------------
Rate differential.............................................. 2.95%
Net yield on interest-earning assets.......................... $102,838 3.53% $ 102,636
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--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
September 30,
2000
--------------------------------------------------------------------------------------------------------------------------------
Average
Rate Volume Interest Rate
--------------------------------------------------------------------------------------------------------------------------------
Assets
Loans, net.................................................. 8.05% $ 8,953,208 $ 202,640 9.01%
Mortgage loans held for sale................................ 6.69% 7,820 169 8.64%
Investment securities and securities available for sale
and other interest-earning assets.......................... 6.51% 1,674,933 28,591 6.80%
-------------------------------------------------------------- -------------------------
Total interest-earning assets(1)............................ 7.84% 10,635,961 $ 231,400 8.67%
-------------------------------------------------------------- -------------------------
Nonearning assets........................................... 812,206
-------------------------------------------------------------- -----------
Total assets.............................................. $11,448,167
--------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
Interest-bearing deposits................................... 4.80% $ 6,866,967 $ 92,718 5.37%
Short-term borrowings....................................... 4.52% 1,626,957 26,870 6.57%
Long-term debt.............................................. 6.00% 895,477 14,630 6.50%
-------------------------------------------------------------- --------------------------------
Total interest-bearing liabilities.......................... 4.92% 9,389,401 $ 134,218 5.69%
-------------------------------------------------------------- --------------------------------
Noninterest-bearing demand deposits......................... 1,250,118
Other liabilities........................................... 95,156
-----------
Total liabilities........................................... 10,734,675
Shareholders' equity........................................ 713,492
-------------------------------------------------------------- -----------
Total liabilities and shareholders' equity..................... $11,448,167
---------------------------------------------------------------------------------------------------------------------
Rate differential.............................................. 2.92% 2.98%
Net yield on interest-earning assets........................... 3.53% $ 97,182 3.65%
---------------------------------------------------------------------------------------------------------------------
(1) Interest earned and average rates on obligations of states and political
subdivisions are reflected on a tax equivalent basis. Tax equivalent
interest earned is : actual interest earned times 145%. The taxable
equivalent adjustment has given effect to the disallowance of interest
expense deductions, for federal income tax purposes, related to certain
tax-free assets.
Note: Above table of average volume and rates is reflected on Colonial
BancGroup, Inc. consolidated basis.
8-K Supplemental
Net Interest Margins
--------------------
Net interest margins remained constant at 3.53% for the third quarter compared
to 3.53% for the second quarter of 2001. As reflected in the chart below the
Company is asset sensitive in the first month then liability sensitive through
one year. Therefore, reductions in the Fed Funds rate and associated short term
rates have a negative impact initially with the benefits from rate reductions in
later months as liabilities catch up and reprice to lower levels.
Schedule of rate sensitive assets and liabilities as of September 30, 2001:
1 month 1 month
and less to 1 year 1 year+
-------- --------- -------
($ in 000's):
Rate Sensitive Assets $5,430 $2,077 $4,182
Rate Sensitive Liabilities
Estimated* - 1,198 1,223
Contractual 2,387 3,340 1,916
------ ------ ------
Total $2,387 $4,538 $3,139
Rate/Yields %
Rate Sensitive Assets 6.25% 7.63% 7.59%
Rate Sensitive Liabilities
Estimated* - 2.17% 1.51%
Contractual 3.89% 5.30% 5.51%
Total 3.89% 4.47% 3.96%
*Estimated liability cashflows are for the interest-bearing demand and savings
deposits.
These deposits may not reprice in these time buckets and may not reprice the
full amount of any change in market rates.
1
Loan Growth
-----------
Loan growth for the quarter consisted of the following:
$ Growth (millions) Annualized %
Mortgage Warehouse Lending $ (10) (5)
Single-family real estate (133) (25)
Regional bank lending 109 6
----- -----
Total $ (34) (1)
Single-family real estate represents primarily adjustable rate loans held in the
bank's portfolio. Demand for this type of loan has declined as more borrowers
are looking for fixed rate loans, which are sold in the secondary market.
Mortgage warehouse lending consists of a self-contained lending unit that funds
mortgage loans held for sale in the secondary market by various independent
mortgage companies. Loan growth has slowed in the regional banks as most
borrowers are conservatively reducing their demand for credit due to the slowing
of the economy.
Noninterest Expense
-------------------
As a result of slowing loan demand, the company took initiatives in the third
quarter to reduce noninterst expenses. Accordingly, total noninterest expense
excluding amortization of intangibles and approximately $437,000 in merger
related expenses has decreased by $3.4 million or 5% as compared to the second
quarter of 2001.
Acquisitions
------------
The previously announced acquisition of 13 branches from Union Planters was
completed on October 11, 2001. This acquisition will be accounted for as a
purchase with approximately $21 million in intangible assets to be recongnized
in the transaction. The allocation of the intangibles between core deposits and
goodwill is being evaluated.
The previously announced merger of Colonial and Manufacturers Bank of Florida
is expected to occur prior to the end of October. This transaction is expected
to
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be accounted for as a pooling of interests with prior periods restated to
include results on a combined basis. This restatement is expected to dilute
Colonial's previously reported earnings per share for the first three quarters
of 2001 by $.01 to $.02 per share.
These transactions are not expected to have a material impact on the cash or
operating earnings of Colonial BancGroup for the fourth quarter of 2001.
However, the Company does expect to record merger related expenses of
approximately $2.0 million after tax during the quarter.
Future Earnings Outlook
-----------------------
The net impact of lower rates, slower loan demand and maintenance of strong loan
loss reserves currently result in earnings per share expectations to not differ
materially from $1.10 for 2001 with cash earnings of approximately $1.15. This
estimate excludes the dilution of approximately $.01 to $.02 as a result of the
restatement for the pooling of Manufacturers Bank and also excludes anticipated
merger related expenses as noted above.
As outlined previously, the Company's interest rate sensitivity position is
expected to result in a negative impact to these earnings forecasts from any
further Fed Funds rate reductions in the fourth quarter. This negative impact
would be expected to be substantially offset with lower funding costs in 2002.
Based on current information the Company does not expect net charge-off or
nonperforming asset ratios to increase materially over the remainder of the
year.
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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 hereunto duly authorized.
THE COLONIAL BANCGROUP, INC.
-------------------------------
(Registrant)
Date: October 16, 2001 /s/ W. Flake Oakley, IV
--------------------------
BY: W. Flake Oakley
ITS: Chief Financial Officer
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