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8-K - CURRENT REPORT - NB&T FINANCIAL GROUP INCd467904d8k.htm

Exhibit 99.1

NB&T Financial Reports Earnings for 2012

January 15, 2013

NB&T Financial Group, Inc. (Nasdaq: NBTF), parent company of The National Bank and Trust Company (the “Bank”), Wilmington, Ohio, announced net income for 2012 of $3.9 million, or $1.13 per share, compared to net income of $3.8 million for 2011, or $1.11 per share. Net income increased primarily due to increased non-interest income of approximately $817,000 and reduced non-interest expenses of approximately $1.6 million, offset by a decline in net interest income and increased provision for loan losses.

Net income for the fourth quarter of 2012 was $1.1 million, or $.32 per share, compared to $617,000, or $.18 per share, for the fourth quarter of 2011.

President & CEO, John Limbert, commented, “We increased net income for the year 2%, while simultaneously reducing problem assets 24%. It was a year-long effort with several of the larger resolutions finally occurring in the fourth quarter.”

Net interest income was $22.1 million for 2012, compared to $23.4 million for 2011. Net interest margin decreased to 3.48% for 2012, compared to 3.77% for the previous year. The net interest margin decreased primarily due to a change in asset mix from higher-yielding loans to lower-yielding securities. Average loans, which had an average rate of 5.49%, declined $8.6 million, while average overnight investments and securities, with an average rate of 1.46%, increased $20.9 million in 2012. Net interest income for the fourth quarter of 2012 remained relatively unchanged at $5.7 million, compared to the fourth quarter of 2011.

The provision for loan losses for 2012 was $4.3 million, compared to $2.9 million the previous year. Net charge-offs were $4.2 million in 2012, compared to $2.0 million in 2011. During the fourth quarter of 2012, the Bank charged down $910,000 on two commercial real estate loans based on appraisal or auction. These two loans previously had specific reserves of approximately $813,000. In addition, we resolved three problem relationships with loan balances of approximately $1.6 million. Resolution included charging off $1.0 million, for which $889,000 had been specifically reserved. Primarily as a result of these actions, net charge-offs were $2.1 million in the fourth quarter of 2012, compared to $341,000 in the same quarter last year, and the provision for loan losses was $682,000, compared to $1.5 million for the same quarter in 2011. Additionally, nonperforming loans declined to $10.6 million at December 31, 2012, compared to $12.1 million at December 31, 2011.

Total non-interest income was $10.5 million for 2012, compared to $9.7 million for 2011. Non-interest income for 2012 was higher due to the Bank’s termination of its rights under the single-family FDIC loss share guarantee for which approximately $405,000 was received in 2012. The Bank still maintains an FDIC loss share guarantee on approximately $30.0 million of non-single family loans. The Company also realized non-taxable income of approximately $359,000 on a bank-owned life insurance death benefit in excess of surrender value received in 2012. Non-interest income for the fourth quarter of 2012 was $2.1 million, compared to $2.7 million for the same quarter last year. In the fourth quarter of 2011, the Bank realized gains on sales of securities of approximately $620,000.

Total non-interest expense was $23.5 million in 2012, compared to $25.1 million in 2011. The decline in expense is due to overall expense reduction primarily in the areas of personnel, benefit costs, branch hours, marketing and other operating costs. In addition, the costs to maintain other-real-estate properties has declined in the past year as the number of properties declines. For the fourth quarter of 2012, total non-interest expense was $5.7 million, compared to $6.1 million for the same period in 2011.


SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except per share data)

(Unaudited)

 

    Three Months Ending     Twelve Months Ending  
    12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011     12/31/2012     12/31/2011  

Statements of Income

             

Interest income

  $ 6,277      $ 6,197      $ 6,278      $ 6,527      $ 6,685      $ 25,279      $ 28,172   

Interest expense

    560        749        896        964        999        3,169        4,734   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

    5,717        5,448        5,382        5,563        5,686        22,110        23,438   

Provision for loan losses

    682        1,973        332        1,300        1,525        4,287        2,935   

Other non-interest income

    2,133        2,977        2,176        2,116        2,080        9,402        7,904   

Other-than-temporary impairment charge

    —          —          (35     —          —          (35     —     

Net gains on sales of securities

    —          1,013        161        —          620        1,174        1,820   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

    2,133        3,990        2,302        2,116        2,700        10,541        9,724   

Total non-interest expenses

    5,745        5,934        5,801        6,014        6,116        23,494        25,123   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    1,423        1,531        1,551        365        745        4,870        5,104   

Income taxes

    336        257        396        4        128        993        1,303   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 1,087      $ 1,274      $ 1,155      $ 361      $ 617      $ 3,877      $ 3,801   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per Share Data

             

Basic earnings per share

  $ 0.32      $ 0.37      $ 0.33      $ 0.11      $ 0.18      $ 1.13      $ 1.11   

Diluted earnings per share

    0.32        0.37        0.33        0.11        0.18        1.13        1.11   

Dividends per share

    0.30        0.30        0.30        0.30        0.30        1.20        1.20   

Book value at quarter end

    20.70        20.79        20.72        20.63        20.68        20.70        20.68   

Average basic shares outstanding

    3,422        3,424        3,425        3,424        3,423        3,424        3,424   

Average diluted shares outstanding

    3,426        3,432        3,431        3,434        3,431        3,430        3,436   

Balance Sheet Items (Quarter End)

             

Total assets

  $ 651,075      $ 669,838      $ 687,226      $ 697,620      $ 675,588      $ 651,075      $ 675,588   

Securities

    133,020        137,998        156,161        154,437        139,744        133,020        139,744   

Loans, including loans held for sale

    402,184        400,036        396,500        394,367        404,470        402,184        404,470   

Allowance for loan losses

    4,760        6,135        4,508        4,573        4,668        4,760        4,668   

Deposits

    559,568        576,348        592,979        602,963        581,383        559,568        581,383   

Borrowings

    15,310        15,310        15,310        15,310        15,310        15,310        15,310   

Total shareholders' equity

    70,820        71,153        70,955        70,663        70,790        70,820        70,790   

Assets Under Management

             

Total assets

  $ 651,075      $ 669,838      $ 687,226      $ 697,620      $ 675,588      $ 651,075      $ 675,588   

Cash management sweep accounts

    28,471        37,477        40,739        41,095        33,834        28,471        33,834   

Market value of trust assets

    216,914        215,743        193,906        205,219        197,274        216,914        197,274   

Market value of brokerage assets

    73,178        71,417        67,082        69,832        67,282        73,178        67,282   

Loans serviced for others

    47,735        48,984        53,419        52,800        52,667        47,735        52,667   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets under management

  $ 1,017,373      $ 1,043,459      $ 1,042,372      $ 1,066,566      $ 1,026,645      $ 1,017,373      $ 1,026,645   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Selected Financial Ratios

             

Return on average assets (annualized)

    0.65     0.74     0.67     0.21     0.36     0.56     0.56

Return on average equity (annualized)

    6.06        7.10        6.30        2.04        3.39        5.45        5.33   

Dividend payout ratio

    93.75        81.08        90.91        272.73        166.67        106.19        108.11   

Net interest margin

    3.67        3.42        3.38        3.46        3.61        3.48        3.77   

Non-interest expense to total revenue

    73.18        62.87        75.49        78.32        72.93        71.95        75.76   

Average loans to average total assets

    59.82        57.80        56.87        56.54        58.55        57.69        59.62   

Asset Quality

             

Nonaccrual loans

  $ 9,815      $ 12,179      $ 11,962      $ 9,647      $ 12,007      $ 9,815      $ 12,007   

Accruing and 90 or more days past due

    778        247        165        327        133        778        133   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

  $ 10,593      $ 12,426      $ 12,127      $ 9,974      $ 12,140      $ 10,593      $ 12,140   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other real estate owned

    1,327        2,196        3,032        3,500        3,520        1,327        3,520   

Net charge-offs

    2,057        346        397        1,395        341        4,195        1,981   

Non-performing loans to total loans

    2.63     3.11     3.06     2.53     3.00     2.63     3.00

Loan loss allowance to total loans

    1.18        1.53        1.14        1.16        1.15        1.18        1.15   

Loan loss allowance to non-performing loans

    44.94        49.37        37.17        45.85        38.45        44.94        38.45   

Accruing loans 30+ days past due to total loans

    0.46        0.64        0.36        0.49        0.63        0.46        0.63   

Net charge-offs to average loans

    2.04        0.35        0.41        1.41        0.34        1.06        0.49   
Capital              

Average equity to average total assets

    10.64     10.38     10.66     10.13     10.55     10.34     10.47

Tier 1 leverage ratio**

    11.27        10.97        10.80        10.66        11.03        11.27        11.03   

Total risk-based capital ratio**

    19.92        19.51        19.20        19.20        19.15        19.92        19.01   

 

** Estimated for current quarter end