A spurt of consumer and real estate lending sent profits and revenues soaring last year at Centennial Beneficial Corp. of Orange, and the prosperity has continued through the first quarter of 1985, company officials said Tuesday.
Centennial, which owns a mortgage banking company, two consumer loan companies and a thrift and loan association and is 75% owner of a new bank in Sacramento, said that earnings for its fiscal 1984, which ended Sept. 30, totaled $622,000, nearly quadruple the $165,000 in profits reported for the previous fiscal year.
And for the first quarter of fiscal 1985, a period that ended Dec. 31, Centennial's profits hit $266,700, down 10% from the $296,100 reported a year ago but equivalent to nearly 43% of the company's total earnings for the prior 12 months.
Consolidated revenue for fiscal 1984 was $5.26 million, up 48% from the $3.56 million reported for the same period last year.
Revenue for the first quarter of 1985 totaled $1.9 million, up 46% from the $1.3 million posted for first three months of fiscal 1984 and about 43% of Centennial's gross income for all of the previous year.
Assets as of Sept. 30 were $41.7 million, a 66% increase from the $25.1 million in assets reported at the end of Centennial's 1983 fiscal year. As of Dec. 31, the company had $55 million in assets, more than double the $27.1 million reported a year earlier and 32% higher than the Sept. 30 total. An $18 million secondary issue of common stock begun late in fiscal 1984 and completed on the first quarter of 1985 netted the company about $16.9 million and was responsible for a large part of the asset increase, according to Centennial Chairman John Joseph.
A significant increase in the value of Centennial's loan portfolio also boosted assets. The company reported $29.7 million worth of loans at the end of fiscal 1984, up 62% from the $18.3 million loan portfolio held at the end of fiscal 1983.
For the first quarter of 1985, Centennial's combined loan portfolio totaled $43.5 million, more than double the $20.6 million reported for the same period last year and a 46.5% increase from the Dec. 31 total.
The majority of the loans were written by two subsidiaries, Heritage Thrift & Loan Assn. and Centennial Beneficial Mortgage Co.
Interest income, loan fees and loan-servicing fees earned by the mortgage banking company accounted for the bulk of the consolidated profits over the past 15 months, according to J. David Cheshier, Centennial Beneficial Corp.'s vice president and treasurer.
Joseph said that profits at Heritage were reduced by the costs of opening the thrift and loan's third branch, in Costa Mesa, during fiscal 1984.
But although Centennial Beneficial Mortgage has been the premier profit maker for the company, he said, all of Centennial's wholly owned subsidiaries were profitable during the past five quarters, including Centennial Beneficial Loan Co. and Chancellor Financial Services Inc., both consumer lending companies.
In addition, the holding company itself earned more than $1.1 million in fiscal 1984 from interest on the $9.1 million it raised during the year from a secondary public offering of common stock. The offering closed during the first quarter of the 1985 fiscal year with total sales of $18 million and total net proceeds of about $16.9 million, Joseph said Tuesday.
Joseph said most of the proceeds from the stock sale are being retained by the holding company to finance future growth, which includes the anticipated acquisition early this year of Sunwest Bank of Tustin. He said Centennial is considering purchasing one or more additional banks, but has not yet identified any acquisition targets.
The Sunwest acquisition has been in negotiation since last February and Cheshier said Tuesday that Centennial officials expect the deal to close by late March if no unexpected difficulties occur.
Veribanc Inc., a private bank rating firm in Wakefield, Mass., recently reported that Sunwest's problem loans as of Sept. 30 exceeded its total loan-loss reserves and shareholder equity. But Joseph said that Centennial has sufficient capital because of its recent stock issue to handle any financial difficulties that would arise if enough problem loans turned into outright loan losses at Sunwest and ate into the bank's equity.
A bank's problem loans are defined by regulators as loans that are delinquent by 90 days or more but still are accruing principal and interest, loans 90 days or more past due that are not accruing interest or principal and renegotiated loans in which the original terms have been adjusted in favor of the borrower.