VIST FINANCIAL CORP - FORM 8-K - EX-99.1

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8-K - 8-K - VIST FINANCIAL CORP	a11-21721_18k.htm

Exhibit 99.1


		For additional information, contact:

		Edward C. Barrett
		Executive Vice President
		Chief Financial Officer
		Daytime: 610.603.7251

		NASDAQ: VIST
		www.VISTfc.com
For Immediate Release

VIST Financial Corp.

Announces Second Quarter 2011 Earnings & Cash Dividend

Wyomissing, Pennsylvania, July 26, 2011. VIST Financial Corp. (NASDAQ: VIST) reported net income of $1.3 million for the second quarter of 2011, as compared to $2.5 million for the same period in 2010. Basic and diluted earnings per common share were $0.14 for the second quarter of 2011, as compared to basic and diluted earnings per common share of $0.34 for the same period in 2010. Excluding a non-recurring $1.9 million gain recognized during the second quarter of 2010, pre-tax income for the quarter increased by 42%, as compared to the same period in 2010.

For the first six months of 2011, the Company reported net income of $1.8 million, as compared to $3.2 million for the same period in 2010. Basic and diluted earnings per common share were $0.15 for the first six months of 2011, as compared to basic and diluted earnings per common share of $0.40 for the same period in 2010.

The operating results for the second quarter and for the first six months of 2011 were negatively impacted by (i) $200,000 and $1.0 million, respectively, of net losses recognized on the sale of other real estate owned, as compared to $600,000 for both of the same periods in 2010 and (ii) approximately $400,000 of integration expenses associated with the previously announced acquisition of Allegiance Bank of North America (“Allegiance”). The operating results for the second quarter and for the first six months of 2010 reflected a gain of approximately $1.9 million recognized on the sale of a 25% equity interest in First HSA, LLC related to the transfer of approximately $89.0 million of health savings account deposits in the second quarter of 2010.

Commenting on the second quarter 2011 results, Robert D. Davis, President and Chief Executive Officer of VIST Financial Corp. said, “We are pleased with the positive momentum building across our banking, insurance and investment business lines. This momentum has resulted in our second quarter reported net income of $1.3 million. While we are making progress on a linked quarter basis, our financial results will continue to be influenced for the balance of the year with elevated asset quality costs and the potential of additional OTTI charges. In spite of the slow pace of improvement in our regional business climate, we continue to be optimistic about the future opportunities for VIST Financial.”

Davis stated, “At VIST Bank, our commercial loan pipeline is strong which suggests an annual growth rate of 4-6% in 2011. Our asset quality metrics remain stable with non-performing assets to total assets of 2.35%. Net charge-offs for the quarter totaled $1.7 million with provision expense totaling $1.8 million, providing adequate coverage of both total loans and non-performing loans at quarter end. VIST Insurance and VIST Capital Management are both generating increased revenue for the second quarter of 2011 as compared to the second quarter of 2010.”

“As reported previously, the Allegiance Bank acquisition of November 19, 2010, is now complete and is accretive to shareholder return,” Davis continued. “All former Allegiance

customers have been fully converted to VIST Bank systems which will eliminate a significant portion of the $400,000 merger and conversion related expenses incurred in the first six months in 2011.”

Davis concluded, “We are pleased that our board of directors has declared a cash dividend. By this action, our board respects both the need to preserve capital while demonstrating confidence in our future operating results.”

Net interest income increased $3.3 million, or 16%, to $23.1 million for the first six months of 2011, as compared to $19.8 million for the same period in 2010. The increase in net interest income for the first six months of 2011 reflects a higher level of total loans resulting from strong commercial loan growth, in addition to the covered loans acquired in the Allegiance acquisition, and a reduction in interest expense on deposits. The average balance of loans (including covered loans) for the first six months of 2011 increased by $94.2 million or 10%, to $995.8 million, as compared to $901.6 million for the same period in 2010. The cost of interest-bearing deposits for the first six months of 2011 decreased to 1.48%, as compared to 1.85% for same period in 2010. The Corporation’s taxable-equivalent net interest margin percentage for the first six months of 2011, improved to 3.70% as compared to 3.42% for same period in 2010.

The provision for loan losses was $4.1 million for the first six months of 2011, as compared to $4.6 million for the same period in 2010. The allowance for loan losses as a percentage of total loans increased to 1.65% at June 30, 2011, as compared to 1.55% at December 31, 2010, and 1.43% at June 30, 2010. The increased level of the allowance for loan losses reflects continued credit risk related to certain commercial credits that remain stressed as a result of the prolonged economic downturn. At June 30, 2011, total non-performing assets were $32.8 million or 2.3% of total assets compared to $32.4 million or 2.4% of total assets at December 31, 2010. The Corporation closely monitors the loan portfolio and the adequacy of the loan loss reserve by regularly evaluating borrower financial performance, underlying collateral values and other relevant factors.

Total assets increased by approximately $169.4 million or 13%, to $1.46 billion at June 30, 2011 from $1.29 billion at June 30, 2010. Total deposits increased by approximately $185.9 million or 18%, to $1.19 billion at June 30, 2011 from $1.01 billion at June 30, 2010. In addition to the deposits assumed in the Allegiance acquisition, our deposit growth has been attributable to our ability to attract and retain lower cost core deposits. In addition to the covered loans acquired in the Allegiance acquisition, our loan growth has been the result of strong commercial loan growth.

Declaration of Cash Dividend

The Corporation reported that the Board of Directors declared a cash dividend of $0.05 per share on the Company’s common stock to shareholders of record on August 1, 2011 payable August 15, 2011.

VIST Financial Corp. is diversified financial services company headquartered in Wyomissing, PA, offering banking, insurance, investments, and wealth management services throughout Berks, Southern Schuylkill, Montgomery, Delaware, Philadelphia and Chester Counties.

This release may contain forward-looking statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company’s control. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

Quarterly Shareholder and Investor Conference Call

VIST Financial Corp. will host a quarterly investor conference call on Wednesday, July 27, 2011 at 8:30 a.m. ET. Interested parties can join the conference call and ask questions by dialing 877.317.6789 or listening through the computer by clicking on the following link:

https://services.choruscall.com/links/visit110727.html

The conference call can also be accessed through a link located under the Investor Relations page within VIST Financial Corp’s website: http://www.VISTfc.com.

To replay the conference call, dial 877.344.7529 (Conference # 10002291) which will be available one hour after the end of the call on July 27, 2011. The conference call will be archived for 90 days and will be available at the link above and on the Company’s Investor Relations webpage.

VIST FINANCIAL CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except share data)

	June 30,			December 31,			June 30,
	2011			2010			2010
Assets
Cash and due from banks	$	16,719		$	15,443		$	25,357
Federal funds sold	2,021			1,500			7,385
Interest-bearing deposits in banks	140			872			286
Total cash and cash equivalents	18,880			17,815			33,028

Mortgage loans held for sale	1,536			3,695			3,109
Securities available for sale	347,760			279,755			261,292
Securities held to maturity	2,657			2,022			2,086
Federal Home Loan Bank stock	6,416			7,099			5,715
Loans, net of allowance for loan losses ($15,439 at June 30, 2011; $14,790 at December 31, 2010 and $12,825 at June 30, 2010)	917,629			939,573			882,759
Covered loans	58,954			66,770			—
Premises and equipment, net	6,555			5,639			5,976
Other real estate owned	2,337			5,303			5,148
Covered other real estate owned	520			247			—
Identifiable intangible assets	3,521			3,795			4,411
Goodwill	41,858			41,858			39,999
Bank owned life insurance	19,590			19,373			19,141
FDIC prepaid deposit insurance	3,008			3,985			4,902
FDIC indemnification asset	6,988			7,003			—
Other assets	19,814			21,080			21,038
Total assets	$	1,458,023		$	1,425,012		$	1,288,604

Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	121,116		$	122,450		$	114,362
Interest bearing	1,070,306			1,026,830			891,210
Total deposits	1,191,422			1,149,280			1,005,572
Securities sold under agreements to repurchase	105,131			106,843			110,384
Borrowings	—			10,000			10,000
Junior subordinated debt, at fair value	18,470			18,437			19,308
Other liabilities	6,576			8,005			8,650
Total liabilities	1,321,599			1,292,565			1,153,914

Shareholders’ Equity
Preferred stock: $0.01 par value; authorized 1,000,000 shares; $1,000 liquidation preference per share; 25,000 shares of Series A 5% (increasing to 9% in 2014) cumulative preferred stock issued and outstanding; Less: discount of $1,251 at June 30, 2011, $1,480 at December 31, 2010 and $1,694 at June 30, 2010	23,749			23,520			23,306
Common stock, $5.00 par value; authorized 20,000,000 shares	32,931			32,732			32,586
Stock Warrants	2,307			2,307			2,307
Surplus	65,621			65,506			65,466
Retained earnings	13,266			12,960			13,706
Accumulated other comprehensive loss	(1,259		)	(4,387		)	(2,490		)
Treasury stock: 10,484 shares at cost	(191		)	(191		)	(191		)
Total shareholders’ equity	136,424			132,447			134,690
Total liabilities and shareholders’ equity	$	1,458,023		$	1,425,012		$	1,288,604

Common Stock:
Shares issued	6,586,106			6,546,273			6,517,124
Shares outstanding	6,575,622			6,535,789			6,506,640

VIST FINANCIAL CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(Dollar amounts in thousands, except share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Interest and dividend Income
Interest and fees on loans	$	13,507		$	12,415		$	27,486		$	24,858
Interest on securities:
Taxable	3,109			2,894			5,662			5,841
Tax-exempt	334			450			668			846
Dividend income	22			8			44			18
Other interest income	10			266			15			274
Total interest income	16,982			16,033			33,875			31,837

Interest expense
Interest on deposits	3,832			4,238			7,616			8,740
Interest on short-term borrowings	—			18			—			18
Interest on securities sold under agreements to repurchase	1,187			1,198			2,363			2,380
Interest on borrowings	—			89			7			187
Interest on junior subordinated debt	407			344			813			689
Total interest expense	5,426			5,887			10,799			12,014

Net interest income	11,556			10,146			23,076			19,823
Provision for loan losses	1,860			2,010			4,090			4,610
Net interest income after provision for loan losses	9,696			8,136			18,986			15,213

Non-interest income:
Customer service fees	433			549			850			1,132
Mortgage banking activities, net	149			231			318			365
Commissions and fees from insurance sales	3,176			3,092			6,013			6,168
Broker and investment advisory commissions and fees	157			151			337			286
Earnings on bank owned life insurance	120			113			218			191
Other commissions and fees	478			558			916			1,062
Gain on sale of equity interest	—			1,875			—			1,875
Other (loss) income	(33		)	198			(23		)	241
Net losses on sale of other real estate owned	(208		)	(578		)	(1,012		)	(594		)
Net realized gains on sales of securities	293			194			382			286
Total other-than-temporary impairment losses on investments	(206		)	(6		)	(198		)	(946		)
Portion of non-credit impairment loss recognized in other comprehensive loss	(36		)	(47		)	(108		)	797
Net credit impairment loss recognized in earnings	(242		)	(53		)	(306		)	(149		)

Total non-interest income	4,323			6,330			7,693			10,863

Non-interest expense:
Salaries and employee benefits	5,989			5,419			11,900			10,838
Occupancy expense	1,193			1,069			2,493			2,217
Furniture and equipment expense	729			662			1,394			1,286
Marketing and advertising expense	566			261			885			507
Identifiable intangible amortization	137			138			275			271
Professional services	747			745			1,803			1,354
Outside processing expense	928			854			1,997			1,885
FDIC deposit and other insurance expense	542			524			1,225			1,056
Other real estate owned expense	412			617			824			1,098
Other expense	918			997			1,723			1,849
Total non-interest expense	12,161			11,286			24,519			22,361

Income before income taxes	1,858			3,180			2,160			3,715
Income tax expense	550			654			346			476
Net income	1,308			2,526			1,814			3,239
Preferred stock dividends and discount accretion	(428		)	(419		)	(855		)	(839		)
Net income available to common shareholders	$	880		$	2,107		$	959		$	2,400

Per Common Share Data
Average shares outstanding	6,572,691			6,213,284			6,567,122			6,030,134
Basic earnings per common share	$	0.14		$	0.34		$	0.15		$	0.40
Average shares outstanding for diluted earnings per share	6,613,536			6,268,026			6,614,659			6,076,656
Diluted earnings per common share	$	0.14		$	0.34		$	0.15		$	0.40
Cash dividends declared per common share	$	0.05		$	0.05		$	0.10		$	0.10

Net interest margin (fully taxable equivalent)	3.67		%	3.43		%	3.70		%	3.42		%

VIST FINANCIAL CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED SELECTED FINANCIAL DATA

(Dollar amounts in thousands)

	As Of and For The Three-Month Period Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2011			2011			2010			2010			2010

Loans outstanding	$	933,068		$	926,194		$	954,363		$	927,579		$	895,584
Covered loans outstanding	58,954			62,818			66,770			n/a			n/a
Troubled debt restructurings (accruing)	8,790			11,115			10,772			12,975			6,333
Allowance for loan losses	15,439			15,283			14,790			14,418			12,825

NON-PERFORMING ASSETS:
Non-accrual loans	$	30,273		$	28,120		$	26,513		$	25,938		$	22,204
Loans past due 90 days or more still accruing	215			456			594			196			294
Total non-performing loans	30,488			28,576			27,107			26,134			22,498
Other real estate owned	2,337			1,769			5,303			3,531			5,148
Total non-performing assets	$	32,825		$	30,345		$	32,410		$	29,665		$	27,646

ASSET QUALITY STATISTICS:
Net charge-offs to average loans (annualized)	0.74		%	0.74		%	0.75		%	0.77		%	0.72		%
Allowance for loan losses as a percent of loans	1.65		%	1.65		%	1.55		%	1.55		%	1.43		%
Allowance for loan losses as a percent of non-performing loans	50.64		%	53.48		%	54.56		%	55.17		%	57.02		%
Allowance for loan losses as a percent of non-performing assets	47.03		%	50.36		%	45.63		%	48.60		%	46.39		%
Net charge-offs	1,704			1,737			1,678			1,957			1,955
Non-performing assets to total assets *	2.35		%	2.25		%	2.39		%	2.18		%	2.15		%

NON-PERFORMING COVERED ASSETS:
Covered non-accrual loans	$	5,805		$	4,036		$	4,408		n/a			n/a
Covered other real estate owned	520			711			247			n/a			n/a

* Excludes covered assets

VIST FINANCIAL CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED SELECTED FINANCIAL DATA

(Dollar amounts in thousands)

	Average Balances				Average Balances
	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Assets
Federal funds sold	$	18,293	$	6,772	$	13,879	$	17,825
Investment securities and interest bearing cash	304,938		343,947		292,675		306,701
Federal Home Loan Bank stock	6,518		5,715		6,735		5,715
Mortgage loans held for sale	1,178		2,064		1,228		1,515
Loans:
Commercial loans	765,507		716,289		771,518		724,631
Consumer loans	110,778		126,218		112,776		128,422
Mortgage loans	50,735		49,237		51,562		48,529
Total loans	$	927,020	$	891,744	$	935,856	$	901,582

Covered loans	58,017		—		$	59,938	$	—

Interest-earning assets	1,309,446		1,244,527		1,303,576		$	1,227,623

Goodwill and intangible assets	45,463		43,997		45,531		44,056
Total assets	$	1,430,348	$	1,364,309	$	1,423,029	$	1,346,607

Liabilities and shareholders’ equity
Deposits:
Non-interest bearing deposits	$	119,639	$	110,944	$	119,306	$	106,673

Interest bearing deposits:
NOW, money market and savings	574,214		535,200		556,536		516,099
Time deposits	471,277		425,298		480,862		436,993
Total Interest-Bearing Deposits	1,045,491		960,498		1,037,398		953,092

Total deposits	$	1,165,130	$	1,071,442	$	1,156,704	$	1,059,765

Securities sold under agreements to repurchase	$	105,120	$	110,137	105,957		112,966
Borrowings	—		24,620		691		17,903
Junior subordinated debt	18,592		19,710		18,516		19,684
Interest-bearing liabilities	1,169,203		1,114,965		1,162,562		1,103,645

Shareholders’ equity	$	134,275	$	130,431	$	133,245	$	128,154

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