COMMUNITY FIRST INC - FORM 8-K - EX-99.1 - UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. - December 13, 2012

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8-K - FORM 8-K - COMMUNITY FIRST INCd452500d8k.htm

Exhibit 99.1

Exhibit 99.1 Unaudited Pro Forma Condensed Consolidated Financial Information

The following Unaudited Pro Forma Condensed Consolidated Financial Statements of Community First, Inc. (the “Company”) are included herein:

 

  •  

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2012

 

  •  

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2012

 

  •  

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011

 

  •  

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

The Unaudited Pro Forma Condensed Consolidated Financial Statements and related Notes presented reflect the sale of certain assets and liabilities associated with the Company’s bank subsidiary’s Cool Springs branch location (the “Cool Springs Branch”), which was completed on December 7, 2012.

The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared by applying pro forma adjustments to the Unaudited Condensed Consolidated Financial Statements included in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2012. The Unaudited Pro Forma Condensed Consolidated Balance Sheet reflects the sale of the Cool Springs Branch assuming the sale had occurred as of September 30, 2012. The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2012 reflects the sale of the Cool Springs Branch assuming the sale had occurred at the beginning of the year 2012. The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011 reflects the sale of the Cool Springs Branch assuming the sale occurred at the beginning of the year 2011. The pro forma adjustments, as described in the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements, are based on currently available information. While such adjustments are subject to change, management believes such adjustments are reasonable and directly attributable to the assets and liabilities sold in connection with the Cool Springs Branch.

The Unaudited Pro Forma Condensed Consolidated Financial Statements are presented for informational purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the sale occurred on, or as of, the dates indicated, nor are they necessarily indicative of the Company’s future operating results or financial position.

Additionally, the gain on the branch sale may differ from the amount shown herein due to changes in deposits from September 30, 2012 and the closing date of the transaction and other adjustments based on the final closing of the transaction.

Community First, Inc.

Consolidated Balance Sheet

(Unaudited, Condensed)

 

     September 30, 2012  
(amounts in thousands, except share and per share data)   

As
Reported

(a)

    

Pro Forma
Adjustments

(b)

     Pro
Forma		  

Assets

       

Cash and due from banks

    $ 102,595      $ (24,064 )    $ 78,531   

Federal funds sold

      —          —          —     
  

 

 

    

 

 

    

 

 

  

Cash and cash equivalents

      102,595        (24,064 )      78,531   

Time deposits in other financial institutions

      500        —          500   

Securities available for sale, at fair value

      68,270        —          68,270   

Loans held for sale, net of allowance of $490

      24,352        (24,352 )      —     

Loans

      327,039        —          327,039   

Allowance for loan losses

      (11,624 )      —          (11,624 ) 
  

 

 

    

 

 

    

 

 

  

Net loans

      315,415        —          315,415   
  

 

 

    

 

 

    

 

 

  

Restricted equity securities, at cost

      1,727        —          1,727   

Premises and equipment, net

      8,983        —          8,983   

Premises and equipment held for sale, net

      4,886        (4,886 )      —     

Accrued interest receivable

      1,296        (93 )      1,203   

Core deposit and customer relationship intangibles, net

      1,393        —          1,393   

Other real estate owned, net

      16,880        —          16,880   

Bank owned life insurance

      9,258        —          9,258   

Other assets

      4,596        (80 )      4,516   
  

 

 

    

 

 

    

 

 

  

Total Assets

    $ 560,151      $ (53,475 )    $ 506,676   
  

 

 

    

 

 

    

 

 

  

Liabilities and Shareholders’ Equity

       

Deposits:

       

Noninterest-bearing

    $ 47,868      $ —        $ 47,868   

Noninterest-bearing held for sale

      1,813        (1,813 )      —     

Interest-bearing

      394,647        —          394,647   

Interest-bearing held for sale

      54,075        (54,075 )      —     
  

 

 

    

 

 

    

 

 

  

Total Deposits

      498,403        (55,888 )      442,515   
  

 

 

    

 

 

    

 

 

  

Federal Home Loan Bank advances

      13,000        —          13,000   

Subordinated debentures

      23,000        —          23,000   

Repurchase agreement

      7,000        —          7,000   

Accrued interest payable

      3,594        (149 )      3,445   

Other liabilities

      6,512        (38 )      6,474   
  

 

 

    

 

 

    

 

 

  

Total Liabilities

      551,509        (56,075 )      495,434   
  

 

 

    

 

 

    

 

 

  

 

2

Community First, Inc.

Consolidated Balance Sheet

(Unaudited, Condensed)

(Continued)

 

     September 30, 2012  
(amounts in thousands, except share and per share data)    As Reported
(a)		     Pro Forma
Adjustments
(b)		     Pro Forma  

Shareholders’ Equity

       

Senior Preferred shares, no par value; 5% cumulative. Authorized 2,500,000 shares; issued 17,806 with liquidation value of $19,138

      17,806        —          17,806   

Warrant Preferred shares, no par value; 9% cumulative. Issued 890 with liquidation value of $890

      890        —          890   

Net discount on preferred shares

      (279 )      —          (279 ) 

Total preferred shares

      18,417        —          18,417   

Common stock, no par value. Authorized 10,000,000 shares; issued 3,274,205 shares

      28,588        —          28,588   

Accumulated deficit

      (38,345 )      2,600        (35,745 ) 

Accumulated other comprehensive (loss), net

      (18 )      —          (18 ) 
  

 

 

    

 

 

    

 

 

  

Total Shareholders’ Equity

      8,642        2,600        11,242   
  

 

 

    

 

 

    

 

 

  

Total Liabilities and Shareholders’ Equity

    $ 560,151      $ (53,475 )    $ 506,676   
  

 

 

    

 

 

    

 

 

  

 

3

Community First, Inc.

Consolidated Statement of Operations

(Unaudited, Condensed)

 

     For the Nine Months Ended  
(amounts in thousands, except share and per share data)    September 30, 2012  
   As Reported
(a)		     Pro Forma
Adjustments
(c)		     Pro Forma  

Interest income:

       

Loans, including fees

    $ 16,336      $ (1,034 )    $ 15,302   

Taxable securities

      888        —          888   

Tax-exempt securities

      266        —          266   

Federal funds sold and other

      220        (45 )      175   
  

 

 

    

 

 

    

 

 

  

Total interest income

      17,710        (1,079 )      16,631   

Interest expense:

       

Deposits

      3,873        (490 )      3,383   

FHLB advances and federal funds purchased

      261        —          261   

Subordinated debentures and other

      1,300        —          1,300   
  

 

 

    

 

 

    

 

 

  

Total interest expense

      5,434        (490 )      4,944   
  

 

 

    

 

 

    

 

 

  

Net interest income

      12,276        (589 )      11,687   

Provision for loan losses

      2,700        —          2,700   
  

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      9,576        (589 )      8,987   

Noninterest income:

       

Service charges on deposit accounts

      1,256        (13 )      1,243   

Gain on sale of loans

      137        —          137   

Gain on sale of securities available for sale

      1,215        —          1,215   

Gain on sale of branches

      1,466        2,600        4,066   

Other

      693        (115 )      578   
  

 

 

    

 

 

    

 

 

  

Total noninterest income

      4,767        2,472        7,239   

Noninterest expense:

       

Salaries and employee benefits

      5,479        (245 )      5,234   

Regulatory and compliance

      1,070        —          1,070   

Occupancy

      964        (110 )      854   

Furniture and equipment

      403        (9 )      394   

Data processing fees

      890        (30 )      860   

Advertising and public relations

      158        (1 )      157   

Operational expense

      297        (14 )      283   

Other real estate owned expense

      1,707        —          1,707   

Other

      2,650        (50 )      2,600   
  

 

 

    

 

 

    

 

 

  

Total noninterest expenses

      13,618        (459 )      13,159   
  

 

 

    

 

 

    

 

 

  

Income before income tax expense

      725        2,342        3,067   

Income tax expense (benefit)

      —          —          —     
  

 

 

    

 

 

    

 

 

  

Net income

      725        2,342        3,067   

Preferred stock dividends declared

      (728 )      —          (728 ) 

Accretion of preferred stock discount

      (140 )      —          (140 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss) allocated to common shareholders

    $ (143 )    $ 2,342      $ 2,199   
  

 

 

    

 

 

    

 

 

  

Loss per share allocated to common shareholders

       

Basic

    $ (0.04 )    $ 0.72      $ 0.68   

Diluted

      (0.04 )      0.72        0.68   

Weighted average common shares outstanding

       

Basic

      3,274,049        —          3,274,049   

Diluted

      3,274,049        —          3,274,049   

 

4

Community First, Inc.

Consolidated Statement of Operations

(Unaudited)

 

     For the Year Ended
December 31, 2011		  
(amounts in thousands, except share and per share data)    As Reported
(d)		     Pro Forma
Adjustments
(e)		     Pro Forma  

Interest income:

       

Loans, including fees

    $ 26,308      $ (1,378 )    $ 24,930   

Taxable securities

      1,598        —          1,598   

Tax-exempt securities

      459        —          459   

Federal funds sold and other

      321        (60 )      261   
  

 

 

    

 

 

    

 

 

  

Total interest income

      28,686        (1,438 )      27,248   

Interest expense:

       

Deposits

      7,082        (958 )      6,124   

FHLB advances and federal funds purchased

      375        —          375   

Subordinated debentures and other

      1,631        —          1,631   
  

 

 

    

 

 

    

 

 

  

Total interest expense

      9,088        (958 )      8,130   
  

 

 

    

 

 

    

 

 

  

Net interest income

      19,598        (480 )      19,118   

Provision for loan losses

      13,029        —          13,029   
  

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      6,569        (480 )      6,089   

Noninterest income:

       

Service charges on deposit accounts

      1,809        (34 )      1,775   

Gain on sale of loans

      343        —          343   

Gain on sale of branch

      —          2,600        2,600   

Other

      1,201        (132 )      1,069   
  

 

 

    

 

 

    

 

 

  

Total noninterest income

      3,353        2,434        5,787   

Noninterest expense:

       

Salaries and employee benefits

      8,353        (761 )      7,592   

Regulatory and compliance

      1,390        —          1,390   

Occupancy

      1,543        (287 )      1,256   

Furniture and equipment

      737        (86 )      651   

Data processing fees

      931        (56 )      875   

Advertising and public relations

      357        (13 )      344   

Operational expense

      706        (27 )      679   

Other real estate owned expense

      3,016        —          3,016   

Other

      9,496        (144 )      9,352   
  

 

 

    

 

 

    

 

 

  

Total noninterest expenses

      26,529        (1,374 )      25,155   
  

 

 

    

 

 

    

 

 

  

Income (loss) before income tax expense

      (16,607 )      3,328        (13,279 ) 

Income tax expense (benefit)

      (1,555 )      —          (1,555 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss)

      (15,052 )      3,328        (11,724 ) 

Preferred stock dividends declared

      (970 )      —          (970 ) 

Accretion of preferred stock discount

      (175 )      —          (175 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss) allocated to common shareholders

    $ (16,197 )    $ 3,328      $ (12,869 ) 
  

 

 

    

 

 

    

 

 

  

Loss per share allocated to common shareholders

       

Basic

    $ (4.95 )    $ 1.02      $ (3.93 ) 

Diluted

      (4.95 )      1.02        (3.93 ) 

Weighted average common shares outstanding

       

Basic

      3,273,301        —          3,273,301   

Diluted

      3,273,301        —          3,273,301   

 

5

Community First, Inc.

Notes to the Unaudited Pro Forma Consolidated Financial Statements

 

(a) Amounts represent historical financial information from the Company’s Quarterly Report on Form 10-Q as of and for the period ended September 30, 2012.
(b) We have made adjustments to the Unaudited Pro Forma Condensed Balance Sheet as of September 30, 2012 to reflect the sale of the assets and liabilities that were included in the Cool Springs Branch sale as if the sale occurred on September 30, 2012. The pro forma adjustments per the sale are as follows:

 

Description

   

Balance Sheet Location

    Amount  

Cash paid

    Cash and due from banks    $ 24,064   

Loans sold

    Loans held for sale    $ 24,352   

Premises and equipment sold

    Premises and equipment held for sale    $ 4,886   

Accrued interest receivable sold

    Accrued interest receivable    $ 93   

Deferred rent receivable

    Other assets    $ 18   

Mortgage servicing asset

    Other assets    $ 62   

Noninterest-bearing deposits sold

    Noninterest-bearing deposits held for sale    $ 1,813   

Interest-bearing deposits sold

    Interest-bearing deposits held for sale    $ 54,075   

Accrued interest payable sold

    Accrued interest payable    $ 149   

Accrued property taxes

    Other liabilities    $ 38   

Gain on sale of branch

    Retained earnings (accumulated deficit)    $ 2,600   

 

(c) Represents nine months of income and expenses related to the Company’s assets and liabilities sold with the Cool Springs Branch.
(d) Amounts represent historical financial information from the Company’s Annual Report on Form 10-K for the period ended December 31, 2011.
(e) Represents twelve months of income and expenses related to the Company’s assets and liabilities sold with the Cool Springs Branch.

 

6

COMMUNITY FIRST INC Reports