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| 8-K - CURRENT REPORT - NB&T FINANCIAL GROUP INC | d612217d8k.htm |
Exhibit 99.1
NB&T Financial Reports Earnings for Third Quarter 2013
October 15, 2013
NB&T Financial Group, Inc. (Nasdaq: NBTF), parent company of The National Bank and Trust Company (“NB&T”), Wilmington, Ohio, announced net income for the third quarter of 2013 of $1.1 million, or $.31 per share, compared to net income of $1.3 million, or $.37 per share, for the third quarter of 2012. Non-interest income was higher in the third quarter of 2012 due to three items: 1) gains of approximately $1 million realized on the sale of securities; 2) termination of the Bank’s single-family FDIC loss share guarantee for approximately $405,000, and 3) realization of non-taxable income of approximately $359,000 on a bank-owned life insurance death benefit in excess of surrender value. These items were partially offset by a $1.5 million higher loan loss provision in the third quarter last year, compared to the same quarter this year. In addition, net income is down due to continued margin compression, partially offset by lower non-interest expenses. Net income for the first nine months of 2013 was $3.2 million, or $.94 per share, compared to $2.8 million, or $.81 per share, for the same period in 2012.
Comparing the first nine months of 2013 to 2012, President & CEO, John Limbert, commented, “The net interest margin in this rate environment continues to be a challenge. Fortunately, we have been able to reduce non-interest expenses to offset most of the margin decrease. Additionally, our asset quality measures are improved and contributed to a lower loan loss provision through the first nine months of 2013, compared to the same period last year.”
Net interest income was $5.1 million for the third quarter of 2013, compared to $5.4 million for the third quarter of 2012. Net interest margin decreased to 3.33% for the third quarter of 2013, compared to 3.42% for the same quarter last year. The net interest margin decreased primarily due to continued repricing of new and variable-rate assets to lower rates. Net interest income for the first nine months of 2013 was $15.6 million, compared to $16.4 million for the first nine months of 2012.
The provision for loan losses for the third quarter of 2013 was $400,000, compared to $2.0 million in the same quarter last year. Net charge-offs were $319,000 in the third quarter of 2013, compared to $346,000 in the third quarter of 2012. Year to date net charge-offs for 2013 were $716,000, compared to $2.1 million for the first nine months of 2012. The provision for loan losses for the nine months ended September 30, 2013 was increased to add specific loan reserves of approximately $1.2 million for one commercial loan, bringing the total specific reserve on this loan to $2.0 million. Non-performing loans were $8.3 million at September 30, 2013, compared to $12.4 million at September 30, 2012.
Total non-interest income was $2.1 million for the third quarter of 2013, compared to $4.0 million for the third quarter of 2012. The decrease is primarily due to the realization of approximately $1.0 million in securities sale gains in the third quarter last year. No securities were sold in the third quarter of 2013. In addition, the Company realized non-recurring income of $764,000 in the third quarter of 2012 related to the termination of the single-family FDIC loss share guarantee and the bank-owned life insurance death benefit. Non-interest income for the first nine months of 2013 was $7.4 million, compared to $8.4 million for the same period last year.
Total non-interest expense was $5.5 million for the third quarter of 2013, compared to $5.9 million for the third quarter of 2012. The decline in expense is due to continued focus on expense reduction primarily in the areas of personnel and processing efficiency. In addition, net costs associated with the operation of other real estate have declined approximately 74%, or $176,000, compared to the same quarter last year due to a decline in other real estate owned balances from $2.2 million at September 30, 2012 to $1.4 million at September 30, 2013.
On September 17, 2013, the Board of Directors declared a dividend of $0.30 per share, payable October 21, 2013 to shareholders of record on September 30, 2013.
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(Unaudited)
| Three Months Ending | Nine Months Ending | |||||||||||||||||||||||||||
| 9/30/2013 | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 9/30/2013 | 9/30/2012 | ||||||||||||||||||||||
| Statements of Income |
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| Interest income |
$ | 5,510 | $ | 5,586 | $ | 5,896 | $ | 6,277 | $ | 6,197 | $ | 16,992 | $ | 19,002 | ||||||||||||||
| Interest expense |
438 | 473 | 519 | 560 | 749 | 1,430 | 2,609 | |||||||||||||||||||||
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| Net interest income |
5,072 | 5,113 | 5,377 | 5,717 | 5,448 | 15,562 | 16,393 | |||||||||||||||||||||
| Provision for loan losses |
400 | 1,300 | 140 | 682 | 1,973 | 1,840 | 3,605 | |||||||||||||||||||||
| Other non-interest income |
2,147 | 2,450 | 1,986 | 2,133 | 2,977 | 6,583 | 7,269 | |||||||||||||||||||||
| Other-than-temporary impairment charge |
— | — | — | — | — | — | (35 | ) | ||||||||||||||||||||
| Net gains (losses) on sales of securities |
— | 817 | (36 | ) | — | 1,013 | 781 | 1,174 | ||||||||||||||||||||
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| Total non-interest income |
2,147 | 3,267 | 1,950 | 2,133 | 3,990 | 7,364 | 8,408 | |||||||||||||||||||||
| Total non-interest expenses |
5,523 | 5,605 | 5,886 | 5,745 | 5,934 | 17,014 | 17,749 | |||||||||||||||||||||
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| Income before income taxes |
1,296 | 1,475 | 1,301 | 1,423 | 1,531 | 4,072 | 3,447 | |||||||||||||||||||||
| Income taxes |
228 | 336 | 282 | 336 | 257 | 846 | 657 | |||||||||||||||||||||
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| Net income |
$ | 1,068 | $ | 1,139 | $ | 1,019 | $ | 1,087 | $ | 1,274 | $ | 3,226 | $ | 2,790 | ||||||||||||||
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| Per Share Data |
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| Basic earnings per share |
$ | 0.31 | $ | 0.33 | $ | 0.30 | $ | 0.32 | $ | 0.37 | $ | 0.94 | $ | 0.81 | ||||||||||||||
| Diluted earnings per share |
0.31 | 0.33 | 0.30 | 0.32 | 0.37 | 0.94 | 0.81 | |||||||||||||||||||||
| Dividends per share |
0.30 | 0.30 | 0.30 | 0.30 | 0.30 | 0.90 | 0.90 | |||||||||||||||||||||
| Book value at quarter end |
19.89 | 19.83 | 20.58 | 20.70 | 20.79 | 19.83 | 20.79 | |||||||||||||||||||||
| Average basic shares outstanding |
3,416 | 3,415 | 3,420 | 3,422 | 3,424 | 3,417 | 3,424 | |||||||||||||||||||||
| Average diluted shares outstanding |
3,438 | 3,426 | 3,427 | 3,426 | 3,432 | 3,429 | 3,432 | |||||||||||||||||||||
| Balance Sheet Items (Quarter End) |
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| Total assets |
$ | 645,410 | $ | 659,827 | $ | 673,729 | $ | 651,075 | $ | 669,838 | $ | 645,410 | $ | 669,838 | ||||||||||||||
| Securities |
138,818 | 134,154 | 144,156 | 133,020 | 137,998 | 138,818 | 137,998 | |||||||||||||||||||||
| Loans, including loans held for sale |
404,545 | 410,202 | 407,818 | 402,184 | 400,036 | 404,545 | 400,036 | |||||||||||||||||||||
| Allowance for loan losses |
5,884 | 5,803 | 4,670 | 4,760 | 6,135 | 5,884 | 6,135 | |||||||||||||||||||||
| Deposits |
558,075 | 572,926 | 577,349 | 559,568 | 576,348 | 558,075 | 576,348 | |||||||||||||||||||||
| Borrowings |
14,310 | 14,310 | 15,310 | 15,310 | 15,310 | 14,310 | 15,310 | |||||||||||||||||||||
| Total shareholders’ equity |
68,127 | 67,682 | 70,290 | 70,820 | 71,153 | 68,127 | 71,153 | |||||||||||||||||||||
| Assets Under Management |
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| Total assets |
$ | 645,410 | $ | 659,827 | $ | 673,729 | $ | 651,075 | $ | 669,838 | $ | 645,410 | $ | 669,838 | ||||||||||||||
| Cash management sweep accounts |
44,852 | 38,019 | 40,799 | 28,471 | 37,477 | 44,852 | 37,477 | |||||||||||||||||||||
| Market value of trust assets |
246,043 | 237,884 | 238,532 | 216,914 | 215,743 | 246,043 | 215,743 | |||||||||||||||||||||
| Market value of brokerage assets |
78,757 | 76,668 | 77,707 | 73,178 | 71,417 | 78,757 | 71,417 | |||||||||||||||||||||
| Loans serviced for others |
43,024 | 42,496 | 43,626 | 47,735 | 48,984 | 43,024 | 48,984 | |||||||||||||||||||||
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| Total assets under management |
$ | 1,058,086 | $ | 1,054,894 | $ | 1,074,393 | $ | 1,017,373 | $ | 1,043,459 | $ | 1,058,086 | $ | 1,043,459 | ||||||||||||||
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| Selected Financial Ratios |
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| Return on average assets (annualized) |
0.65 | % | 0.69 | % | 0.61 | % | 0.65 | % | 0.74 | % | 0.65 | % | 0.54 | % | ||||||||||||||
| Return on average equity (annualized) |
6.22 | 6.48 | 5.81 | 6.06 | 7.10 | 6.17 | 5.24 | |||||||||||||||||||||
| Dividend payout ratio |
96.77 | 90.91 | 100.00 | 93.75 | 81.08 | 95.74 | 111.11 | |||||||||||||||||||||
| Net interest margin |
3.33 | 3.34 | 3.50 | 3.67 | 3.42 | 3.39 | 3.42 | |||||||||||||||||||||
| Non-interest expense to total revenue |
76.51 | 66.89 | 80.33 | 73.18 | 62.87 | 74.21 | 71.57 | |||||||||||||||||||||
| Average loans to average total assets |
62.32 | 61.10 | 59.42 | 59.82 | 57.80 | 60.97 | 56.99 | |||||||||||||||||||||
| Asset Quality |
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| Nonaccrual loans |
$ | 8,273 | $ | 9,006 | $ | 9,097 | $ | 9,815 | $ | 12,179 | $ | 8,273 | $ | 12,179 | ||||||||||||||
| Accruing and 90 or more days past due |
30 | 73 | 1,285 | 778 | 247 | 30 | 247 | |||||||||||||||||||||
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| Total nonperforming loans |
$ | 8,303 | $ | 9,079 | $ | 10,382 | $ | 10,593 | $ | 12,426 | $ | 8,303 | $ | 12,426 | ||||||||||||||
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| Other real estate owned |
1,426 | 1,894 | 1,868 | 1,327 | 2,196 | 1,426 | 2,196 | |||||||||||||||||||||
| Net charge-offs |
319 | 167 | 230 | 2,057 | 346 | 716 | 2,138 | |||||||||||||||||||||
| Non-performing loans to total loans |
2.05 | % | 2.21 | % | 2.55 | % | 2.63 | % | 3.11 | % | 2.05 | % | 3.11 | % | ||||||||||||||
| Loan loss allowance to total loans |
1.46 | 1.42 | 1.15 | 1.18 | 1.53 | 1.46 | 1.53 | |||||||||||||||||||||
| Loan loss allowance to non-performing loans |
70.87 | 63.92 | 44.98 | 44.94 | 49.37 | 70.87 | 49.37 | |||||||||||||||||||||
| Accruing loans 30+ days past due to total loans |
0.25 | 0.57 | 0.59 | 0.46 | 0.64 | 0.25 | 0.64 | |||||||||||||||||||||
| Net charge-offs to average loans |
0.31 | 0.16 | 0.23 | 2.04 | 0.35 | 0.24 | 0.72 | |||||||||||||||||||||
| Capital |
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| Average equity to average total assets |
10.43 | % | 10.60 | % | 10.54 | % | 10.64 | % | 10.38 | % | 10.43 | % | 10.38 | % | ||||||||||||||
| Tier 1 leverage ratio** |
11.50 | 11.23 | 11.20 | 11.27 | 10.97 | 11.50 | 10.97 | |||||||||||||||||||||
| Total risk-based capital ratio** |
19.45 | 18.98 | 19.08 | 19.51 | 19.51 | 19.45 | 19.51 | |||||||||||||||||||||
| ** | Estimated for current quarter end |