Attached files
| file | filename |
|---|---|
| 8-K - 8-K - INTERMOUNTAIN COMMUNITY BANCORP | a8-kq32013cover.htm |
FOR IMMEDIATE RELEASE
CONTACT: | Curt Hecker, CEO | |
Intermountain Community Bancorp | ||
(208) 263-0505 | curt.hecker@panhandlebank.com | |
Doug Wright, Executive Vice President & CFO | ||
Intermountain Community Bancorp | ||
(509) 363-2635 | doug.wright@intermountainbank.com | |
Intermountain Community Bancorp Reports Third Quarter Earnings
Sandpoint, Idaho, October 24, 2013 - Intermountain Community Bancorp (NASDAQ - IMCB), the holding company for Panhandle State Bank, reported $1.5 million, or $0.23 per diluted share, in net income applicable to common shareholders for the quarter ended September 30, 2013, as compared to net income of $1.5 million, or $0.23 per share, and $343,000, or $0.05 per share, in the second quarter of 2013 and the third quarter of 2012, respectively. For the third quarter of 2013, lower interest and operating expense and a modest recovery of loan loss provision expense offset lower interest and other income to produce comparable results to the second quarter. Reductions in interest, operating and loan loss provision expenses also drove the improvement over the third quarter of last year.
For the nine-month period ending September 30, 2013, net income applicable to common shareholders was $4.0 million, or $0.62 per diluted share, compared to $978,000, or $0.17 per diluted share for the same time period in 2012 as a result of lower loan loss provisions, higher non-interest income and lower operating expenses, which offset lower net interest income.
"We continue to see steady growth in our regional markets despite uneven economic growth and external volatility," said Curt Hecker, Chief Executive Officer of the Company. "The Bank is actively engaged in fostering economic development through support of local businesses, and we feel this is key to our ongoing organic growth," he added.
Third Quarter 2013 Highlights (at or for the period ended September 30, 2013, compared to June 30, 2013, and September 30, 2012)
▪ | Interest expense continued to decline, totaling $901,000 for the third quarter of 2013, compared to $951,000 for the second quarter of 2013 and $1.3 million in the third quarter of 2012. For the 9 months ended September 30, 2013, interest expense is down $1.2 million or 30.3% from the same period a year ago. |
▪ | Operating expense declined to $8.1 million from $8.2 million in both the second quarter of 2013 and third quarter of 2012, respectively. For the 9 months ended September 30, 2013, operating expense is down $272,000 or 1.1% from the prior year. |
▪ | $82,000 in loan loss provision was recovered during the third quarter, resulting in total provision for the 9-month 2013 period of $344,000, a 90.7% reduction from the $3.7 million recorded for the same |
time period in 2012. The Company has experienced net recoveries of previous loans charged off for two consecutive quarters.
▪ | Nonperforming assets (NPAs) dropped to 0.77% of total assets at September 30, 2013 from 1.00% at June 30, 2013 and 1.18% at September 30, 2012, as the Company continued to reduce problem assets. The Company's "Texas Ratio" (Non-performing assets divided by tangible equity plus the allowance for loan loss) now stands at 5.8%. |
▪ | Company CEO Curt Hecker represented Idaho and community bankers nationwide at a national forum hosted by the Federal Reserve Board and the Conference of State Bank Supervisors. He participated in a panel addressing the critical role community banks play for small businesses and overall US economic growth. |
Assets and Loan Portfolio Summary
Assets totaled $923.8 million at September 30, 2013, compared to $930.6 million at June 30, 2013 and $953.3 million at September 30, 2012, respectively. The reduction from prior periods primarily reflects the use of cash to pay down non-core liabilities, including brokered Certificates of Deposit ("CDs") and Federal Home Loan Bank advances. Net loans receivable decreased by $2.5 million from June 30, but were up $17.4 million, or 3.5%, over September 30, 2012. Increases in commercial real estate and agricultural loans led to the improvement over last year, as the Company saw modest increases in loan demand in its markets.
The following tables summarize the Company's loan portfolio by type and geographic region, and provide trending information over the prior year.
LOANS BY CATEGORIES | |||||||||||||||||
(Dollars in thousands) | 9/30/2013 | % of total | 6/30/2013 | % of total | 9/30/2012 | % of total | |||||||||||
Commercial loans | $ | 111,238 | 21.1 | % | $ | 113,699 | 21.4 | % | $ | 115,203 | 22.5 | % | |||||
Commercial real estate | 185,116 | 35.1 | 190,816 | 36.0 | 174,965 | 34.2 | |||||||||||
Commercial construction | 6,305 | 1.2 | 10,085 | 1.9 | 2,573 | 0.5 | |||||||||||
Land and land development | 34,172 | 6.5 | 30,895 | 5.8 | 33,814 | 6.6 | |||||||||||
Agriculture | 97,453 | 18.4 | 94,831 | 17.8 | 87,851 | 17.2 | |||||||||||
Multifamily | 15,802 | 3.0 | 15,271 | 2.9 | 17,849 | 3.5 | |||||||||||
Residential real estate | 61,185 | 11.6 | 58,309 | 11.0 | 59,367 | 11.6 | |||||||||||
Residential construction | 1,721 | 0.3 | 2,004 | 0.4 | 532 | 0.1 | |||||||||||
Consumer | 9,084 | 1.7 | 8,843 | 1.7 | 9,724 | 1.9 | |||||||||||
Municipal | 6,107 | 1.1 | 6,029 | 1.1 | 9,827 | 1.9 | |||||||||||
Total loans receivable | $ | 528,183 | 100.0 | % | $ | 530,782 | 100.0 | % | $ | 511,705 | 100.0 | % | |||||
Allowance for loan losses | (8,030 | ) | (8,042 | ) | (9,088 | ) | |||||||||||
Net deferred origination costs | 86 | — | 235 | ||||||||||||||
Loans receivable, net | $ | 520,239 | $ | 522,740 | $ | 502,852 | |||||||||||
LOAN PORTFOLIO BY LOCATION September 30, 2013 | ||||||||||||||||||||
(Dollars in thousands) | North Idaho - Eastern Washington | Magic Valley Idaho | Greater Boise Area | E. Oregon, SW Idaho, excluding Boise | Other | Total | % of Loan type to total loans | |||||||||||||
Commercial loans | $ | 80,249 | $ | 4,880 | $ | 9,741 | $ | 15,111 | $ | 1,257 | $ | 111,238 | 21.1 | % | ||||||
Commercial real estate | 126,447 | 10,191 | 9,401 | 17,943 | 21,134 | 185,116 | 35.1 | |||||||||||||
Commercial construction | 5,124 | — | 145 | — | 1,036 | 6,305 | 1.2 | |||||||||||||
Land and land development | 25,120 | 1,412 | 5,652 | 1,327 | 661 | 34,172 | 6.5 | |||||||||||||
Agriculture | 1,946 | 4,513 | 24,383 | 62,771 | 3,840 | 97,453 | 18.4 | |||||||||||||
Multifamily | 9,803 | 150 | 4,630 | 30 | 1,189 | 15,802 | 3.0 | |||||||||||||
Residential real estate | 43,910 | 3,435 | 4,564 | 6,809 | 2,467 | 61,185 | 11.6 | |||||||||||||
Residential construction | 1,608 | — | — | 113 | — | 1,721 | 0.3 | |||||||||||||
Consumer | 5,399 | 1,100 | 748 | 1,540 | 297 | 9,084 | 1.7 | |||||||||||||
Municipal | 4,784 | 1,323 | — | — | — | 6,107 | 1.1 | |||||||||||||
Total | $ | 304,390 | $ | 27,004 | $ | 59,264 | $ | 105,644 | $ | 31,881 | $ | 528,183 | 100.0 | % | ||||||
Percent of total loans in geographic area | 57.7 | % | 5.1 | % | 11.2 | % | 20.0 | % | 6.0 | % | 100.0 | % | ||||||||
Asset Quality
Nonperforming loans totaled $2.9 million at September 30, 2013, down from $4.8 million at June 30, 2013 and $5.6 million at the end of the same period last year. The allowance for loan loss coverage of non-performing loans increased to 281.8% in the third quarter, up from 167.6% at June 30, 2013 and 161.2% at September 30, 2012, respectively.
NPAs were $7.1 million at quarter end, compared to $9.3 million at June 30, 2013, and $11.3 million at September 30, 2012. Outstanding troubled debt restructured loans totaled $9.2 million, down from $11.8 million at June 30, 2013, but up from $2.9 million at September 30, 2012.
Classified loans totaled $23.1 million at quarter end, down from $26.3 million at June 30, 2013 and $32.7 million at September 30, 2012. Classified loans are loans in which the Company anticipates potential problems in obtaining repayment of principal and interest per the contractual terms, but does not necessarily believe that losses will occur.
The following table summarizes nonperforming assets by type and provides trending information over the prior year.
NPA BY CATEGORY | ||||||||||||||||||||
(Dollars in thousands) | 9/30/2013 | % of total | 6/30/2013 | % of total | 9/30/2012 | % of total | ||||||||||||||
Commercial loans | $ | 1,066 | 15.0 | % | $ | 1,417 | 15.2 | % | $ | 3,400 | 30.2 | % | ||||||||
Commercial real estate | 261 | 3.7 | 2,728 | 29.3 | 1,021 | 9.1 | ||||||||||||||
Land and land development | 4,415 | 62.3 | 4,626 | 49.6 | 6,204 | 55.0 | ||||||||||||||
Agriculture | 527 | 7.4 | 276 | 3.0 | 26 | 0.2 | ||||||||||||||
Residential real estate | 814 | 11.5 | 173 | 1.9 | 609 | 5.4 | ||||||||||||||
Consumer | 3 | 0.1 | 91 | 1.0 | 12 | 0.1 | ||||||||||||||
Total NPA by Categories | $ | 7,086 | 100.0 | % | $ | 9,311 | 100.0 | % | $ | 11,272 | 100.0 | % | ||||||||
Commercial, commercial real estate and land development NPAs all showed decreases from the prior quarter, reflecting paydowns from sales activity. The increase in agricultural loans reflects moderately increased
stress on this portfolio, and the increase in residential real estate resulted from the addition of one larger home loan. Land and land development loans still comprise the greatest proportion of NPA totals, primarily as a result of one large relationship. The majority of NPAs are in the North Idaho/Eastern Washington region, reflecting the Company's higher loan totals in these areas.
OREO balances totaled $4.2 million at September 30, 2013, compared to $4.5 million at June 30, 2013 and $5.6 million at September 30, 2012. The Company sold 1 property totaling $280,000 in the third quarter and had a reduction of the net valuation adjustments of $14,000. A total of 3 properties remained in the OREO portfolio at quarter end, all of which are in land and land development.
Investment Portfolio, Deposit, Borrowings and Equity Summary
Investments available for sale increased by $8.4 million during the quarter, as the Company reinvested cash into a mix of shorter government agency securities and longer municipal bonds. The portfolio is down $25.3 million, however, from the same period ago, as the Company sold longer-term securities earlier in the year to reduce interest rate risk and moved several municipal bonds, totaling $8.2 million, into the held-to-maturity portfolio. The value of the Company's bond holdings generally stabilized during the third quarter, after falling in the second quarter as a result of increasing market rates in May and June. Prepayments on the Company's mortgage-backed securities also slowed, although they still remain at relatively high levels. "Weak economic growth, political uncertainty, and volatility resulting from speculation about Federal Reserve Board actions continue to create challenging investment and lending environments" said Chief Financial Officer Doug Wright. "Both the bank and its customers continue to approach the markets cautiously," he added.
Deposits totaled $711.1 million at September 30, 2013, compared to $699.5 million at June 30, 2013 and $722.1 million at the end of the third quarter last year. The table below provides information on both current composition and trends in the deposit portfolio.
DEPOSITS | ||||||||||||||||||||
(Dollars in thousands) | 9/30/2013 | % of total | 6/30/2013 | % of total | 9/30/2012 | % of total | ||||||||||||||
Non-interest bearing demand accounts | $ | 240,116 | 33.8 | % | $ | 224,472 | 32 | % | $ | 214,524 | 29.7 | % | ||||||||
Interest bearing demand accounts | 100,572 | 14.1 | 100,490 | 14.4 | 89,941 | 12.5 | ||||||||||||||
Money market accounts | 217,110 | 30.5 | 222,161 | 31.8 | 216,767 | 30.0 | ||||||||||||||
Savings & IRA accounts | 66,683 | 9.4 | 64,390 | 9.2 | 74,315 | 10.3 | ||||||||||||||
Certificates of deposit (CDs) | 35,827 | 5.0 | 37,495 | 5.4 | 47,509 | 6.6 | ||||||||||||||
Jumbo CDs | 50,613 | 7.1 | 50,362 | 7.2 | 59,433 | 8.2 | ||||||||||||||
Brokered CDs | — | — | — | — | 18,994 | 2.6 | ||||||||||||||
CDARS CDs to local customers | 151 | 0.1 | 151 | — | 601 | 0.1 | ||||||||||||||
Total Deposits | $ | 711,072 | 100.0 | % | $ | 699,521 | 100.0 | % | $ | 722,084 | 100.0 | % | ||||||||
Demand deposit account increases over both prior time periods reflect growth in business customer cash balances, customer preferences for shorter durations and seasonal activity. Money market accounts have been relatively stable, while the decrease in savings account balances from last year reflects the termination of a third party contract under which the Company held savings balances to secure credit cards. The Company continues to repay higher cost funding and has no brokered or other wholesale CDs outstanding. Non-interest bearing demand deposits comprise 33.8% of the deposit portfolio, as compared to 29.7% a year ago. Overall, low-cost transaction deposits represent 78.4% of the deposit portfolio, up from 72.2% at September 30, 2012.
Stockholders' equity totaled $115.0 million at September 30, 2013, compared to $113.0 million at June 30, 2013 and $113.6 million at September 30, 2012. The increase over last quarter and the prior year reflects earnings improvement, which more than offset the reduction in the value of the Company's securities portfolio since last year. Tangible book value per common share totaled $13.66 at September 30, 2013, compared to $13.38 at June 30, 2013 and $13.51 at September 30, 2012. The September 30, 2012 numbers have been adjusted for a 1-for-10 reverse stock split implemented by the Company in the fourth quarter of 2012.
Tangible stockholders' equity to tangible assets was 12.4%, compared to 12.1% at June 30, 2013 and 11.9% at the end of September last year. Tangible common equity to tangible assets was 9.5%, compared to 9.3% at June 30, 2013 and 9.1% at September 30, 2012.
Income Statement Summary
Net income applicable to common shareholders for the second quarter totaled $1.5 million, or $0.23 per common diluted share, compared to a net income applicable to common shareholders of $1.5 million, or $0.23 per common diluted share in the second quarter of 2013, and $343,000, or $0.05 per common diluted share in the third quarter of 2012. For the nine-month period ended September 30, 2013, net income applicable to common shareholders totaled $4.0 million, or $0.62 per common diluted share, compared to $978,000, or $0.17 per common diluted share for the same time period in 2012. Per share results for the quarter and nine-month period ending September 30, 2012 have been adjusted for the impact of a 1-for-10 reverse stock split, which became effective in October, 2012.
Third quarter 2013 net interest income before provision totaled $7.4 million, down from $7.5 million in the second quarter of 2013 and $7.7 million in the third quarter of 2012. The decrease from prior quarters reflects lower loan and investment interest income as downward pressure continued on asset yields. Decreasing interest expense partially offset the decrease in asset yields. The net interest margin was 3.46% for the third quarter, compared to 3.59% in the second quarter of 2013 and 3.47% in the third quarter of 2012. The yield on interest earning assets was 3.88% for the third quarter of 2013, versus 4.04% in both the second quarter of 2013 and the third quarter of 2012. The cost on interest-bearing liabilities was 0.44% for the quarter ended September 30, 2013, down from 0.48% and 0.60% for the quarters ended June 30, 2013 and September 30, 2012, respectively.
After experiencing two consecutive quarters of net recoveries on loans previously charged off, Intermountain recovered $82,000 of previously recorded provision for loan loss in the third quarter, after recording provisions of $247,000 in the second quarter of 2013 and $1.2 million in the third quarter of 2012, respectively. The Company experienced net recoveries of $70,000 during the third quarter, compared to net recoveries of $117,000 during the second quarter of 2013 and net chargeoffs of $2.3 million in the quarter ending September 30, 2012. For the nine-month period ended September 30, 2013, net charge-offs were $258,000 versus $7.3 million for the same period in 2012.
The tables below provide information on other income for the current three- and nine-month periods in comparison to prior periods.
Three Months Ended | 9/30/2013 | % of Total | 6/30/2013 | % of Total | 9/30/2012 | % of Total | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Fees and service charges | $ | 1,858 | 73 | % | $ | 1,964 | 68 | % | $ | 1,620 | 63 | % | ||||||||
Loan related fee income | 506 | 20 | 627 | 22 | 768 | 30 | ||||||||||||||
Net gain on sale of securities | 180 | 7 | 163 | 6 | — | — | ||||||||||||||
Net gain (loss) on sale of other assets | (8 | ) | — | 2 | — | (7 | ) | — | ||||||||||||
Other-than-temporary credit impairment on investment securities | — | — | (21 | ) | (1 | ) | (34 | ) | (1 | ) | ||||||||||
BOLI income | 83 | 3 | 85 | 3 | 86 | 3 | ||||||||||||||
Hedge fair value adjustment | 89 | 4 | 80 | 3 | (6 | ) | — | |||||||||||||
Unexercised warrant liability fair value adjustment | (179 | ) | (7 | ) | (54 | ) | (2 | ) | (49 | ) | (2 | ) | ||||||||
Other income | (4 | ) | — | 40 | 1 | 174 | 7 | |||||||||||||
Total | $ | 2,525 | 100 | % | $ | 2,886 | 100 | % | $ | 2,552 | 100 | % | ||||||||
Nine Months Ended | 9/30/2013 | % of Total | 9/30/2012 | % of Total | |||||||
(Dollars in thousands) | |||||||||||
Fees and service charges | 5,429 | 68 | % | 4,657 | 61 | % | |||||
Loan related fee income | 1,768 | 22 | 2,216 | 29 | |||||||
Net gain on sale of securities | 384 | 5 | 585 | 8 | |||||||
Net gain on sale of other assets | (2 | ) | — | 15 | — | ||||||
Other-than-temporary credit impairment on investment securities | (63 | ) | (1 | ) | (357 | ) | (5 | ) | |||
BOLI income | 252 | 3 | 260 | 3 | |||||||
Hedge fair value adjustment | 235 | 3 | (300 | ) | (4 | ) | |||||
Unexercised warrant liability fair value | (177 | ) | (2 | ) | 108 | 1 | |||||
Other income | 149 | 2 | 572 | 7 | |||||||
Total | 7,975 | 100 | % | 7,756 | 100 | % | |||||
Other income in the third quarter of 2013 was $2.5 million, down from $2.9 million and $2.6 million in the second quarter of 2013 and third quarter of 2012, respectively. Lower mortgage origination income and a negative fair value adjustment on the Company's unexercised warrant liability produced most of the decrease. Reflecting higher mortgage rates in the third quarter, mortgage refinance activity slowed for both the Company and the industry.
For the comparative nine-month periods, other income increased by $219,000 as increases in investment services income and hedge fair value adjustments offset lower mortgage origination fees, secured savings contract income and unexercised warrant liability fair value adjustments.
The tables below provide information on operating expenses for the current three- and nine-month periods in comparison to prior periods.
Three Months Ended | 9/30/13 | % of Total | 6/30/13 | % of Total | 9/30/12 | % of Total | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Salaries and employee benefits | $ | 4,133 | 51 | % | $ | 4,283 | 53 | % | $ | 4,103 | 50 | % | ||||||||
Occupancy expense | 1,120 | 14 | 1,174 | 14 | 1,230 | 15 | ||||||||||||||
Technology | 982 | 12 | 925 | 11 | 894 | 11 | ||||||||||||||
Advertising | 194 | 2 | 180 | 2 | 178 | 2 | ||||||||||||||
Fees and service charges | 88 | 1 | 85 | 1 | 141 | 2 | ||||||||||||||
Printing, postage and supplies | 176 | 2 | 173 | 2 | 178 | 2 | ||||||||||||||
Legal and accounting | 350 | 5 | 483 | 6 | 507 | 6 | ||||||||||||||
FDIC assessment | 145 | 2 | 165 | 2 | 306 | 4 | ||||||||||||||
OREO operations | 139 | 2 | 32 | — | 39 | — | ||||||||||||||
Other expense | 766 | 9 | 720 | 9 | 666 | 8 | ||||||||||||||
Total | $ | 8,093 | 100 | % | $ | 8,220 | 100 | % | $ | 8,242 | 100 | % | ||||||||
Nine Months Ended | 9/30/2013 | % of Total | 9/30/2012 | % of Total | |||||||||
(Dollars in thousands) | |||||||||||||
Salaries and employee benefits | $ | 12,591 | 52 | % | $ | 12,110 | 49 | % | |||||
Occupancy expense | 3,479 | 14 | 3,688 | 15 | % | ||||||||
Technology | 2,783 | 11 | 2,688 | 11 | % | ||||||||
Advertising | 488 | 2 | 459 | 2 | % | ||||||||
Fees and service charges | 267 | 1 | 466 | 2 | % | ||||||||
Printing, postage and supplies | 566 | 2 | 779 | 3 | % | ||||||||
Legal and accounting | 1,181 | 5 | 1,292 | 5 | % | ||||||||
FDIC assessment | 495 | 2 | 927 | 4 | % | ||||||||
OREO operations | 281 | 1 | 263 | 1 | % | ||||||||
Other expense | 2,359 | 10 | 2,090 | 8 | % | ||||||||
Total | $ | 24,490 | 100 | % | $ | 24,762 | 100 | % | |||||
Operating expenses decreased to $8.1 million in the third quarter of 2013, compared to $8.2 million in both prior periods, as decreases in occupancy, FDIC insurance, legal and accounting expenses offset increases in technology and OREO expenses. Technology expenses included additional one-time costs related to system upgrades that are expected to result in cost savings in future periods.
The Company recorded $24.5 million in operating expense for the nine-month period ended September 30, 2013, down from $24.8 million for the same nine-month period in 2012. Occupancy, FDIC insurance, printing, supplies, legal and accounting expenses were lower, which offset increases in salary, technology and other expenses.
The Company did not record any income tax provision or benefit during the quarter as it offset taxable income with net operating losses that it has carried forward from prior years. The Company maintains a $6.8 million tax valuation allowance, resulting in a net deferred tax asset of $14.9 million.
About Intermountain Community Bancorp:
Intermountain is headquartered in Sandpoint, Idaho, and operates as four separate divisions with nineteen banking locations in three states. Its banking subsidiary, Panhandle State Bank, offers financial services through northern Idaho offices in Sandpoint, Ponderay, Bonners Ferry, Priest River, Coeur d'Alene, Post Falls, Rathdrum and Kellogg. Intermountain Community Bank, a division of Panhandle State Bank, operates branches in southwest Idaho in Weiser, Payette, Nampa, Caldwell and Fruitland, as well as in Ontario, Oregon. Intermountain Community Bank Washington, a division of Panhandle State Bank, operates branches in downtown Spokane and Spokane Valley, Washington. Magic Valley Bank, a division of Panhandle State Bank, operates branches in Twin Falls and Gooding, Idaho.
All data contained in this report have been prepared on a consolidated basis for Intermountain Community Bancorp. IMCB's shares are quoted on the NASDAQ, ticker symbol IMCB. Additional information on Intermountain Community Bancorp, and its internet banking services, can be found at www.intermountainbank.com.
Forward Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include but are not limited to statements about the Company's plans, objectives, expectations and intentions and other statements contained in this report that are not historical facts. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. Actual results may differ materially from the results discussed in these forward-looking statements because of numerous possible risks and uncertainties. These include but are not limited to the following and the other risks described in the “Risk Factors,” “Business,” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections, as applicable, of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012: the possibility of adverse economic developments that may, among other things, increase default and delinquency risks in the Company's loan portfolio; shifts in interest rates that may result in lower interest rate margins; shifts in the demand for the Company's loan and other products; declines in the housing and real estate market; increases in unemployment or sustained high levels of unemployment; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment. Readers are cautioned that forward-looking statements in this release speak only as of the date of this release. The Company does not undertake any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
INTERMOUNTAIN COMMUNITY BANCORP CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||||||
9/30/2013 | 6/30/2013 | 9/30/2012 | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents: | |||||||||||
Interest-bearing | $ | 17,795 | $ | 33,474 | $ | 45,015 | |||||
Non-interest bearing and vault | 7,972 | 7,003 | 6,016 | ||||||||
Restricted cash | 12,236 | 12,464 | 12,710 | ||||||||
Available-for-sale securities, at fair value | 265,000 | 256,616 | 290,311 | ||||||||
Held-to-maturity securities, at amortized cost | 26,241 | 22,991 | 14,843 | ||||||||
Federal Home Loan Bank of Seattle stock, at cost | 2,228 | 2,228 | 2,290 | ||||||||
Loans held for sale | 721 | 1,081 | 5,070 | ||||||||
Loans receivable, net | 520,239 | 522,740 | 502,852 | ||||||||
Accrued interest receivable | 4,310 | 4,463 | 4,542 | ||||||||
Office properties and equipment, net | 35,420 | 35,408 | 36,031 | ||||||||
Bank-owned life insurance | 9,725 | 9,642 | 9,387 | ||||||||
Other real estate owned (“OREO”) | 4,236 | 4,512 | 5,636 | ||||||||
Prepaid expenses and other assets | 17,641 | 17,936 | 18,589 | ||||||||
Total assets | $ | 923,764 | $ | 930,558 | $ | 953,292 | |||||
LIABILITIES | |||||||||||
Deposits | $ | 711,072 | $ | 699,521 | $ | 722,084 | |||||
Securities sold subject to repurchase agreements | 64,409 | 85,605 | 56,989 | ||||||||
Advances from Federal Home Loan Bank | 4,000 | 4,000 | 29,000 | ||||||||
Unexercised stock warrant liability | 1,004 | 826 | 899 | ||||||||
Cashier checks issued and payable | 3,174 | 2,278 | 266 | ||||||||
Accrued interest payable | 307 | 316 | 2,124 | ||||||||
Other borrowings | 16,527 | 16,527 | 16,527 | ||||||||
Accrued expenses and other liabilities | 8,321 | 8,440 | 11,819 | ||||||||
Total liabilities | 808,814 | 817,513 | 839,708 | ||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Common stock - voting shares | 96,358 | 96,358 | 96,330 | ||||||||
Common stock - non-voting shares | 31,941 | 31,941 | 31,941 | ||||||||
Preferred stock, Series A | 26,894 | 26,770 | 26,430 | ||||||||
Accumulated other comprehensive income (1) | (331 | ) | (641 | ) | 3,724 | ||||||
Accumulated deficit | (39,912 | ) | (41,383 | ) | (44,841 | ) | |||||
Total stockholders' equity | 114,950 | 113,045 | 113,584 | ||||||||
Total liabilities and stockholders' equity | $ | 923,764 | $ | 930,558 | $ | 953,292 | |||||
Book value per common share, excluding preferred stock | $ | 13.67 | $ | 13.39 | $ | 13.53 | |||||
Tangible book value per common share, excluding preferred stock (2) | $ | 13.66 | $ | 13.38 | $ | 13.51 | |||||
Shares outstanding at end of period (3) | 6,443,294 | 6,443,294 | 6,441,986 | ||||||||
Stockholders' Equity to Total Assets | 12.44 | % | 12.15 | % | 11.91 | % | |||||
Tangible Common Equity to Tangible Assets | 9.53 | % | 9.27 | % | 9.13 | % | |||||
(1) Net of deferred income taxes. | |||||||||||
(2) Amount represents common stockholders' equity less other intangible assets divided by total common shares outstanding. | |||||||||||
(3) Share numbers for September 30, 2012 have been adjusted to reflect the impact of a 1-for-10 reverse stock split, effective, October 5, 2012. | |||||||||||
INTERMOUNTAIN COMMUNITY BANCORP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
9/30/2013 | 6/30/2013 | 9/30/2012 | ||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||
Interest income: | ||||||||||||
Loans | $ | 6,802 | $ | 6,893 | $ | 7,031 | ||||||
Investments | 1,517 | 1,580 | 1,896 | |||||||||
Total interest income | 8,319 | 8,473 | 8,927 | |||||||||
Interest expense: | ||||||||||||
Deposits | 471 | 510 | 736 | |||||||||
Other borrowings | 430 | 441 | 522 | |||||||||
Total interest expense | 901 | 951 | 1,258 | |||||||||
Net interest income | 7,418 | 7,522 | 7,669 | |||||||||
Recovery of (provision for) losses on loans | 82 | (247 | ) | (1,154 | ) | |||||||
Net interest income after provision for losses on loans | 7,500 | 7,275 | 6,515 | |||||||||
Other income: | ||||||||||||
Fees and service charges | 1,858 | 1,964 | 1,620 | |||||||||
Loan related fee income | 506 | 627 | 768 | |||||||||
Net gain on sale of securities | 180 | 163 | — | |||||||||
Net gain (loss) on sale of other assets | (8 | ) | 2 | (7 | ) | |||||||
Other-than-temporary impairment (“OTTI”) losses on investments (1) | — | (21 | ) | (34 | ) | |||||||
Bank-owned life insurance | 83 | 85 | 86 | |||||||||
Fair value adjustment on cash flow hedge | 89 | 80 | (6 | ) | ||||||||
Unexercised warrant liability fair value adjustment | (179 | ) | (54 | ) | (49 | ) | ||||||
Other | (4 | ) | 40 | 174 | ||||||||
Total other income | 2,525 | 2,886 | 2,552 | |||||||||
Operating expenses: | ||||||||||||
Salaries and employee benefits | 4,133 | 4,283 | 4,103 | |||||||||
Occupancy | 1,120 | 1,174 | 1,230 | |||||||||
Technology | 982 | 925 | 894 | |||||||||
Advertising | 194 | 180 | 178 | |||||||||
Fees and service charges | 88 | 85 | 141 | |||||||||
Printing, postage and supplies | 176 | 173 | 178 | |||||||||
Legal and accounting | 350 | 483 | 507 | |||||||||
FDIC assessment | 145 | 165 | 306 | |||||||||
OREO operations | 139 | 32 | 39 | |||||||||
Other expenses | 766 | 720 | 666 | |||||||||
Total operating expenses | 8,093 | 8,220 | 8,242 | |||||||||
Net income before income taxes | 1,932 | 1,941 | 825 | |||||||||
Income tax expense | — | — | — | |||||||||
Net income | 1,932 | 1,941 | 825 | |||||||||
Preferred stock dividend | 461 | 460 | 482 | |||||||||
Net income applicable to common stockholders | $ | 1,471 | $ | 1,481 | $ | 343 | ||||||
Earnings per share — basic (1) | 0.23 | 0.23 | 0.05 | |||||||||
Earnings per share — diluted (1) | 0.23 | 0.23 | 0.05 | |||||||||
Weighted average common shares outstanding — basic (1) | 6,443,294 | 6,443,294 | 6,441,986 | |||||||||
Weighted average common shares outstanding — diluted (1) | 6,497,886 | 6,484,762 | 6,458,227 | |||||||||
(1) Share numbers for September 30, 2012 have been adjusted to reflect the impact of a 1-for-10 reverse stock split, effective, October 5, 2012. | ||||||||||||
INTERMOUNTAIN COMMUNITY BANCORP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||
Nine Months Ended | |||||||
9/30/2013 | 9/30/2012 | ||||||
(Dollars in thousands, except per share amounts) | |||||||
Interest income: | |||||||
Loans | $ | 20,406 | $ | 21,157 | |||
Investments | 4,689 | 6,016 | |||||
Total interest income | 25,095 | 27,173 | |||||
Interest expense: | |||||||
Deposits | 1,542 | 2,302 | |||||
Borrowings | 1,295 | 1,769 | |||||
Total interest expense | 2,837 | 4,071 | |||||
Net interest income | 22,258 | 23,102 | |||||
Recovery of (provision for) losses on loans | (344 | ) | (3,688 | ) | |||
Net interest income after provision for losses on loans | 21,914 | 19,414 | |||||
Other income (expense): | |||||||
Fees and service charges | 5,429 | 4,744 | |||||
Loan related fee income | 1,768 | 2,129 | |||||
Net gain on sale of securities | 384 | 585 | |||||
Net gain on sale of other assets | (2 | ) | 15 | ||||
Other-than-temporary impairment on investments | (63 | ) | (357 | ) | |||
Bank-owned life insurance | 252 | 260 | |||||
Fair value adjustment on cash flow hedge | 235 | (300 | ) | ||||
Unexercised warrant liability fair value adjustment | (177 | ) | 108 | ||||
Other income | 149 | 572 | |||||
Total other income, net | 7,975 | 7,756 | |||||
Operating expenses: | |||||||
Salaries and employee benefits | 12,591 | 12,110 | |||||
Occupancy expense | 3,479 | 3,688 | |||||
Technology | 2,783 | 2,688 | |||||
Advertising | 488 | 459 | |||||
Fees and service charges | 267 | 466 | |||||
Printing, postage and supplies | 566 | 779 | |||||
Legal and accounting | 1,181 | 1,292 | |||||
FDIC assessment | 495 | 927 | |||||
OREO operations | 281 | 263 | |||||
Other expenses | 2,359 | 2,090 | |||||
Total operating expenses | 24,490 | 24,762 | |||||
Income before income taxes | 5,399 | 2,408 | |||||
Income tax expense | — | — | |||||
Net income | 5,399 | 2,408 | |||||
Preferred stock dividend | 1,380 | 1,430 | |||||
Net Income applicable to common stockholders | $ | 4,019 | $ | 978 | |||
Income per share - basic (1) | $ | 0.62 | $ | 0.17 | |||
Income per share - diluted (1) | 0.62 | 0.17 | |||||
Weighted-average common shares outstanding - basic (1) | 6,443,193 | 5,593,487 | |||||
Weighted-average common shares outstanding - diluted (1) | 6,488,094 | 5,610,026 | |||||
(1) Share numbers for September 30, 2012 have been adjusted to reflect the impact of a 1-for-10 reverse stock split, effective, October 5, 2012. | |||||||
INTERMOUNTAIN COMMUNITY BANCORP KEY PERFORMANCE RATIOS | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
9/30/2013 | 6/30/2013 | 9/30/2012 | 9/30/2013 | 9/30/2012 | |||||||
Net Interest Spread: | |||||||||||
Yield on Loan Portfolio | 5.02 | % | 5.29 | % | 5.38 | % | 5.18 | % | 5.48 | % | |
Yield on Investments & Cash | 1.92 | % | 1.99 | % | 2.10 | % | 1.93 | % | 2.30 | % | |
Yield on Interest-Earning Assets | 3.88 | % | 4.04 | % | 4.04 | % | 3.94 | % | 4.19 | % | |
Cost of Deposits | 0.26 | % | 0.29 | % | 0.40 | % | 0.29 | % | 0.43 | % | |
Cost of Advances | 3.07 | % | 1.99 | % | 2.21 | % | 2.60 | % | 2.21 | % | |
Cost of Borrowings | 1.72 | % | 1.89 | % | 1.74 | % | 1.77 | % | 2.10 | % | |
Cost of Interest-Bearing Liabilities | 0.44 | % | 0.48 | % | 0.60 | % | 0.47 | % | 0.65 | % | |
Net Interest Spread | 3.44 | % | 3.56 | % | 3.44 | % | 3.47 | % | 3.54 | % | |
Net Interest Margin | 3.46 | % | 3.59 | % | 3.47 | % | 3.49 | % | 3.56 | % | |
Performance Ratios: | |||||||||||
Return on Average Assets | 0.83 | % | 0.84 | % | 0.34 | % | 0.77 | % | 0.34 | % | |
Return on Average Common Stockholders' Equity | 6.70 | % | 6.77 | % | 1.58 | % | 6.11 | % | 2.04 | % | |
Return on Average Common Tangible Equity (1) | 6.70 | % | 6.77 | % | 1.58 | % | 6.12 | % | 2.05 | % | |
Operating Efficiency | 81.39 | % | 78.98 | % | 80.64 | % | 81.00 | % | 80.24 | % | |
Noninterest Expense to Average Assets | 3.46 | % | 3.54 | % | 3.41 | % | 3.48 | % | 3.46 | % | |
(1) Average common tangible equity is average common stockholders' equity less average other intangible assets. | |||||||||||
INTERMOUNTAIN COMMUNITY BANCORP LOAN AND REGULATORY CAPITAL DATA | ||||||||||
9/30/2013 | 6/30/2013 | 9/30/2012 | ||||||||
(Dollars in thousands) | ||||||||||
Loan Data | ||||||||||
Net Charge-Offs to Average Net Loans (QTD Annualized) | (0.05 | )% | (0.09 | )% | 1.79 | % | ||||
Loan Loss Allowance to Total Loans | 1.52 | % | 1.52 | % | 1.79 | % | ||||
Nonperforming Assets: | ||||||||||
Accruing Loans-90 Days Past Due | $ | 42 | $ | — | $ | — | ||||
Nonaccrual Loans | 2,808 | 4,799 | 5,636 | |||||||
Total Nonperforming Loans | 2,850 | 4,799 | 5,636 | |||||||
OREO | 4,236 | 4,512 | 5,636 | |||||||
Total Nonperforming Assets (“NPA”) | $ | 7,086 | $ | 9,311 | $ | 11,272 | ||||
Outstanding Troubled Debt Restructured Loans | 9,212 | 11,791 | 2,873 | |||||||
NPA to Total Assets | 0.77 | % | 1.00 | % | 1.18 | % | ||||
NPA to Net Loans Receivable | 1.36 | % | 1.78 | % | 2.24 | % | ||||
NPA to Estimated Risk Based Capital | 5.60 | % | 7.46 | % | 9.17 | % | ||||
NPA to Tangible Equity + Allowance for Loan Loss | 5.76 | % | 7.69 | % | 9.20 | % | ||||
Loan Delinquency Ratio (30 days and over) | 0.31 | % | 0.22 | % | 0.21 | % | ||||
9/30/2013 | 6/30/2013 | 9/30/2012 | ||||||||
Allowance for Loan Loss by Loan Type | (Dollars in thousands) | |||||||||
Commercial loans | $ | 1,764 | $ | 1,900 | $ | 3,073 | ||||
Commercial real estate loans | 2,514 | 2,736 | 2,728 | |||||||
Commercial construction loans | 154 | 231 | 67 | |||||||
Land and land development loans | 1,206 | 956 | 1,654 | |||||||
Agriculture loans | 928 | 692 | 187 | |||||||
Multifamily loans | 35 | 54 | 56 | |||||||
Residential real estate loans | 1,255 | 1,195 | 1,042 | |||||||
Residential construction loans | 38 | 44 | 13 | |||||||
Consumer loans | 107 | 203 | 198 | |||||||
Municipal loans | 29 | 31 | 70 | |||||||
Totals | $ | 8,030 | $ | 8,042 | $ | 9,088 | ||||
Regulatory Capital | Estimated | Actual | Actual | |||||||
Total capital (to risk-weighted assets): | 9/30/2013 | 6/30/2013 | 9/30/2012 | |||||||
The Company | 21.13 | % | 20.93 | % | 20.86 | % | ||||
Panhandle State Bank | 20.08 | % | 19.72 | % | 19.28 | % | ||||
Tier 1 capital (to risk-weighted assets): | ||||||||||
The Company | 19.88 | % | 19.67 | % | 19.61 | % | ||||
Panhandle State Bank | 18.83 | % | 18.47 | % | 18.02 | % | ||||
Tier 1 capital (to average assets): | ||||||||||
The Company | 12.92 | % | 12.90 | % | 11.97 | % | ||||
Panhandle State Bank | 12.24 | % | 12.12 | % | 11.11 | % | ||||