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| 8-K - 8-K - LaPorte Bancorp, Inc. | a3q158-k.htm |
FOR IMMEDIATE RELEASE
Contact: | Michele M. Thompson President and Chief Financial Officer |
Phone: | (219) 362-7511 |
Fax: | (219) 326-6048 |
LAPORTE BANCORP, INC. ANNOUNCES EARNINGS
FOR THE THIRD QUARTER OF 2015
LaPorte, Indiana, October 23, 2015 – LaPorte Bancorp, Inc. (the “Company”) (Nasdaq: LPSB), the holding company for The LaPorte Savings Bank (the “Bank”), reported net income of $1.1 million, or $0.20 per diluted share, for the three months ended September 30, 2015, compared to $1.3 million, or $0.25 per diluted share, for the three months ended September 30, 2014. Net income for the nine months ended September 30, 2015 was $3.3 million, or $0.63 per diluted share, compared to $3.4 million, or $0.62 per diluted share, for the nine months ended September 30, 2014.
Lee A. Brady, Chief Executive Officer of LaPorte Bancorp, Inc. commented, “We are pleased to see continued growth in our commercial loan portfolio during the third quarter compared to the prior year period, which continues to be a strategic focus for us going forward. Commercial loans increased 28.2%, or $33.4 million, at September 30, 2015 compared to December 31, 2014. Our third quarter operating results were solid, although down slightly from the prior year periods, primarily due to increases in noninterest expense and the provision for loan losses. The increase in the total loan portfolio did contribute to an increase to the allowance.”
Mr. Brady continued, “Our tangible book value per share increased to $13.61 at September 30, 2015 from $13.00 per share at December 31, 2014, primarily due to an increase in shareholders’ equity combined with a decrease in outstanding shares due to repurchase activity during 2015. Through October 21, 2015, we have repurchased 181,881 shares at an average price of $12.70 per share under this plan. Since the completion of our second step conversion in October 2012, we have repurchased 787,690 shares at an average price per share of $11.33. In addition, we remain well capitalized for regulatory purposes at September 30, 2015.”
Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014
Net interest income was relatively stable at $3.9 million for the three months ended September 30, 2015 and 2014. Net interest margin increased five basis points to 3.29% for the three months ended September 30, 2015 compared to 3.24% for the prior year period. Net interest income increased due to an $83,000 decrease in interest expense as the average balance of interest-bearing liabilities decreased by $11.7 million, or 3.1%, and the average cost of interest-bearing liabilities decreased by six basis points for the three months ended September 30, 2015 as compared to the prior year period. Partially offsetting these decreases was a decrease of $40,000 in interest income due to lower average balances and average yields on interest-earning assets.
Interest income decreased slightly by $40,000, or 0.9%, to $4.6 million for the three months ended September 30, 2015 compared to the prior year period. During the third quarter of 2015, interest income on securities available for sale decreased $187,000, or 21.7%, to $676,000 compared to the same 2014 period primarily due to a decrease of $29.2 million, or 18.5%, in the average balance of these securities to $128.7 million for the third quarter of 2015 from $157.9 million for the third quarter of 2014. The decrease in taxable securities was primarily used to fund the increase in loan balances in addition to shifting a portion of taxable securities to interest earning time deposits, which resulted in shorter durations but lower yields. Management believes this strategy to be prudent given the uncertainty with the
LaPorte Bancorp, Inc. - Page 2
current interest rate environment. Partially offsetting this decrease in interest income on securities was a $120,000 increase in interest income from loans to $3.8 million for the third quarter of 2015 compared to the prior year period primarily due to a 3.6% increase in the average balance of loans outstanding to $309.2 million for the third quarter of 2015 from $298.3 million for the prior year period.
Interest income on commercial construction loans increased $110,000, or 500.0%, during the third quarter of 2015 primarily due to a $9.6 million, or 473.2%, increase in the average balance of these loans from the prior year period as a result of new loan originations and participations purchased in 2015. Interest income on five or more family commercial real estate loans increased $65,000, or 26.0%, during the third quarter of 2015 primarily due to an 18.4% increase in the average balances on these loans for the third quarter of 2015 when compared to the prior year period. Interest income on commercial land loans increased $43,000, or 62.3%, due to a 46.4% increase in the average balance of these loans during the third quarter of 2015 when compared to the prior year period. Interest income on home equity loans and lines of credit increased $17,000, or 12.8%, due to a 17.5% increase in the average balance of these loans during the third quarter of 2015 when compared to the prior year period as a result of focused efforts to generate new consumer loan originations during 2015.
Partially offsetting the above mentioned increases, interest income on mortgage warehouse loans decreased $90,000, or 6.0%, during the third quarter of 2015 primarily due to an $18.0 million, or 14.9%, decrease in the average balance of these loans when compared to the prior year period. Our outstanding mortgage warehouse balances were impacted by the levels of participations sold during the quarter as two financial institutions were participants in our warehouse lending program for the entire third quarter of 2015. The decrease in the warehouse balances will assist in funding the increase in the commercial loan portfolio. Overall, the number of transactions and activity increased from the prior year period due to an increase in the number and limits of our warehouse lines. We implemented the participation program with other financial institutions to allow us to continue to grow our customer base and provide ample funding for all of our warehouse customers without increasing our outstanding balances. We continue to receive fee income related to all warehouse transactions in addition to servicing income on the participated balances. Interest income on commercial and industrial loans also decreased $35,000, or 19.0%, during the third quarter of 2015 as the average balance and the average yield earned on these loans for the third quarter of 2015 decreased from the comparable prior year quarter.
Interest expense decreased $83,000, or 10.6%, to $700,000 for the three months ended September 30, 2015 from $783,000 for the prior year period. Interest expense on deposit accounts decreased $121,000, or 27.9%, to $312,000 for the third quarter of 2015 primarily due to a 43 basis point decrease in the average cost of certificates of deposit and IRAs combined with a 4.4% decrease in the average outstanding balance of these deposits when compared to the prior year period.
In addition, interest expense on borrowings increased $38,000 during the third quarter of 2015 from the prior year period. Interest expense related to Federal Home Loan Bank (“FHLB”) advances increased $36,000 during the third quarter of 2015 primarily due to a 60 basis point increase in the average cost of these borrowings as two of the Bank’s 2015 $10.0 million notional forward-starting swaps tied to $10.0 million FHLB advances started in March and June 2015. The fixed interest rates associated with these swaps are 2.09% and 2.23%, respectively, with the Bank receiving one month LIBOR. These swaps mature in five years in March and June 2020, respectively. Partially offsetting the increase in the cost of FHLB advances is a $13.9 million decrease in the average balance of these borrowings when compared to the prior year period.
The provision for loan losses increased $100,000 during the third quarter of 2015 from the prior year period, primarily due to an increase in charge-offs, which were all specifically reserved for prior to the third quarter of 2015, and an increase in total loan balances at September 30, 2015.
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Noninterest income increased $12,000, or 1.7%, to $699,000 for the three months ended September 30, 2015 from $687,000 for the prior year period. Gains on mortgage banking activities increased $31,000 as mortgage originations from purchase activity and associated sales were higher during the third quarter of 2015 when compared to the prior year period. Wire transfer fees increased $31,000 during the third quarter of 2015 due to the increase in mortgage warehouse activity when compared to the prior year period. Loan servicing fees also increased by $12,000 due to $32,000 of servicing fees recorded on mortgage warehouse loan participations offset by higher provisions for mortgage servicing rights during the third quarter of 2015 when compared to the prior year period. In addition, net gains on the sales of securities increased $10,000 when compared to the prior year period. Partially offsetting these increases was a $16,000 decrease in service charges on deposit accounts due to lower overdraft-related fees and service charges on checking accounts during the third quarter of 2015. Net gains on other assets decreased $4,000 during the third quarter of 2015, primarily due to a $17,000 write-down on our branch property in Rolling Prairie that is held for sale. Other income decreased $53,000 from the prior year period, primarily due to timing differences of reimbursable loan closing expenses and other miscellaneous income items.
Noninterest expense increased $252,000, or 8.6%, to $3.2 million for the three months ended September 30, 2015 when compared to the prior year period. Salaries and employee benefits expense increased $114,000, which included an increase in payroll expense of $34,000 related to annual merit increases, the addition of a commercial lender, and higher mortgage commissions during the third quarter of 2015 when compared to the prior year period. Stock-based compensation expense increased $111,000 during the third quarter of 2015 when compared to the prior year period due to the stock option and restricted stock awards granted during the fourth quarter of 2014. The expense related to the Company’s employee stock ownership plan also increased $15,000 in the third quarter of 2015 due to our increasing stock price. Group insurance costs increased $13,000 due to higher health care costs in 2015. These increases were partially offset by a $72,000 increase in deferred lending costs due to increased commercial and mortgage loan originations during the third quarter of 2015 when compared to the prior year period.
Collection and other real estate owned expenses increased $43,000 due to legal and collection costs during the third quarter of 2015. Bank examination expenses increased $32,000 due to the timing of audits and reviews for the third quarter of 2015 compared to the prior year period. Data processing expense increased $24,000 during the third quarter of 2015 due to higher core processing costs combined with upgrades to our disaster recovery and back up systems. Advertising expenses increased $21,000 during the third quarter of 2015 related to advertising for mortgages and home equity loans and lines of credit and mobile remote deposit capture. Other expenses also increased by $26,000 due to higher loss reserves related to our pooled captive insurance subsidiary and debit card fraud expense.
Income before income taxes decreased $297,000, or 18.3%, to $1.3 million for the three months ended September 30, 2015 from $1.6 million for the prior year period, which led to a decrease in income tax expense for the three months ended September 30, 2015 to $258,000 from $285,000 for the prior year period. The Company’s effective tax rate for the three months ended September 30, 2015 was 19.4%, an increase from 17.5% for the comparable 2014 period. The increase in the effective tax rate was primarily due to an increase in taxable income at the Company’s taxable entities combined with increased tax expense in California related to our mortgage warehouse activities.
Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014
Net interest income increased $798,000, or 7.2%, to $11.8 million for the nine months ended September 30, 2015 from $11.0 million for the prior year period. Net interest margin increased 21 basis points to 3.35% for the nine months ended September 30, 2015 compared to 3.14% for the prior year period. The increase in net interest income was primarily attributable to a $395,000, or 2.9%, increase in interest income as the average balance of interest earning assets increased by $2.1 million and the average yield earned on these assets increased 10 basis points from the prior year period. In addition, interest expense for the nine months ended September 30, 2015 decreased $403,000, or 16.9%, due to a 13 basis point decrease in the average cost of interest-bearing liabilities and a $7.0 million, or 1.9%, decrease in the average balance of interest-bearing liabilities for the nine months ended September 30, 2015 compared to the prior year period.
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The increase in interest income to $13.8 million for the nine months ended September 30, 2015 from $13.4 million for the prior year period was primarily due to an increase in loan interest income totaling $886,000 to $11.4 million as the average balance of loans outstanding increased by 10.0% to $308.8 million for the nine months ended September 30, 2015 from $280.6 million for the prior year period. The increase in the average balance of loans was partially offset by an eight basis point decrease in the average yield earned on loans due to current lower market interest rates and fees earned during the nine months ended September 30, 2015 compared to the prior year period.
Interest income on mortgage warehouse loans increased $702,000, or 18.3%, during the nine months ended September 30, 2015 due to a $12.2 million, or 11.6%, increase in the average balance of these loans and a 30 basis point increase in the average yield earned on these loans when compared to the prior year period. Our average outstanding mortgage warehouse balances increased during the nine months ended September 30, 2015 primarily due to an increase in the number of our warehouse lines. Our participation program with two other financial institutions has allowed us to continue to grow our customer base and provide ample funding for all of our warehouse customers without increasing our outstanding balances.
Interest income on commercial construction loans also increased $129,000, or 80.1%, during the nine months ended September 30, 2015 primarily due to a $5.9 million, or 218.0%, increase in the average balance of these loans which was partially offset by a decrease in loan fees earned when compared to the prior year period. Interest income on commercial land loans increased $99,000, or 48.3%, during the nine months ended September 30, 2015 primarily due to a $1.7 million, or 21.9%, increase in the average balance of these loans combined with a 78 basis point increase in their average yield earned when compared to the prior year period. Interest income on five or more family commercial real estate loans increased $59,000, or 9.1%, during the nine months ended September 30, 2015 primarily due to a $2.2 million, or 13.3%, increase in the average balance of these loans partially offset from a 19 basis point decrease in the average yield earned on these loans when compared to the prior year period. Interest income on home equity loans and lines of credit increased $51,000, or 13.1%, during the nine months ended September 30, 2015 primarily due to a $1.9 million, or 16.5%, increase in the average balance of these loans from the prior year period.
Partially offsetting the above mentioned increases, interest income on commercial and industrial loans decreased $86,000, or 16.4%, during the nine months ended September 30, 2015, which was primarily due to a $1.2 million, or 6.6%, decrease in the average balance of these loans and a 40 basis point decrease in the average yield earned on these loans. Interest income on commercial real estate loans decreased $85,000, or 2.7%, during the nine months ended September 30, 2015 due to a 20 basis point decrease in the average yield earned on these loans from the comparable prior year period. Interest income on consumer and other loans decreased $33,000, or 21.2%, during the nine months ended September 30, 2015 from the comparable prior year period due to low growth with lower current yields and repayments of higher-yielding automobile dealer loans.
Interest income on investment securities decreased $507,000 for the nine months ended September 30, 2015 compared to the prior year period primarily due to a $27.7 million, or 16.8%, decrease in the average outstanding balance of investment securities. During the nine months ended September 30, 2015, the Company sold approximately $21.5 million of investment securities available-for-sale and utilized $20.2 million of proceeds from maturities and principal repayments for liquidity purposes to fund increased loan balances and repay FHLB advances.
Interest expense decreased $403,000, or 16.9%, to $2.0 million for the nine months ended September 30, 2015 from $2.4 million for the prior year period. Interest expense on deposit accounts decreased $439,000, or 32.0%, to $932,000 for the nine months ended September 30, 2015 primarily due to a 52 basis point decrease in the average cost of certificates of deposit and IRAs combined with a 3.3% decrease in the average outstanding balance of these deposits when compared to the prior year period.
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Interest expense on borrowings increased $36,000 for the nine months ended September 30, 2015 from the prior year period. Interest expense on FHLB advances increased $60,000 for the nine months ended September 30, 2015 primarily due to a 19 basis point increase in the average cost of these borrowings and was partially offset by a $3.3 million decrease in the average balance of FHLB advances when compared to the prior year period. The average cost of these borrowings increased primarily due to the start of two of the Bank’s $10.0 million notional interest rate swaps which are each tied to a $10.0 million FHLB advance with fixed interest rates of 2.09% and 2.23%, respectively, with the Bank receiving one month LIBOR. These swaps mature in five years in March and June 2020, respectively. Partially offsetting the increase in interest expense on FHLB advances was a $24,000 decrease in interest expense on our subordinated debentures as the fixed-interest rate swap tied to this debt matured during the first quarter of 2014 causing the average cost of this debt to decrease by 62 basis points from the prior year period.
The provision for loan losses increased $255,000 for the nine months ended September 30, 2015 from the prior year period. This increase was primarily due to an increase in outstanding loan balances of $56.9 million at September 30, 2015 compared to September 30, 2014.
Noninterest income increased $170,000, or 8.7%, to $2.1 million for the nine months ended September 30, 2015 from $1.9 million for the prior year period. During the nine months ended September 30, 2015, we realized an increase in net gains on other assets of $126,000 compared to the prior year period due to lower write-downs on other real estate owned and assets held for sale. Wire transfer fees increased $96,000 during the nine months ended September 30, 2015 due to the increase in mortgage warehouse activity when compared to the prior year period. Gains on mortgage banking activities increased $81,000 as mortgage originations from purchase activity and associated sales were higher during the nine months ended September 30, 2015 when compared to the prior year period. Partially offsetting these increases was a $72,000 decrease in service charges on deposit accounts due to lower overdraft-related fees and service charges on checking accounts combined with the loss of a large deposit relationship during the first quarter of 2015. Other income decreased $73,000 due to timing differences of reimbursable loan closing expenses and other miscellaneous income items.
Noninterest expense increased $602,000, or 6.7%, to $9.6 million for the nine months ended September 30, 2015 when compared to the prior year period. Salaries and employee benefits expense increased $458,000, which included an increase in payroll expense of $214,000 related to annual merit increases, higher bonuses for mortgage warehouse employees due to its higher profitability, the addition of a commercial lender, and higher mortgage commissions during the nine months ended September 30, 2015 when compared to the prior year period. Stock-based compensation expense increased $338,000 during the nine months ended September 30, 2015 when compared to the prior year period due to the stock option and restricted stock awards granted during the fourth quarter of 2014. The expense related to the Company’s employee stock ownership plan also increased $42,000 during the nine months ended September 30, 2015 when compared to the prior year period due to our increasing stock price. Group insurance costs increased $39,000 due to higher health care costs in 2015. These increases were partially offset by a $215,000 increase in deferred lending costs due to increased commercial and mortgage loan originations during the nine months ended September 30, 2015 when compared to the prior year period.
Bank examination fees increased by $87,000 during the nine months ended September 30, 2015 when compared to the prior year period due to timing of audits and reviews, including $17,500 in consent fees for the 2013 audited financial statements of the Company and its 401(k) employee benefit plan which was paid to our previous independent registered public accounting firm. Advertising expenses increased $56,000 during the nine months ended September 30, 2015 when compared to the prior year period as we increased our advertising for mortgages and home equity loans and lines of credit and mobile remote deposit capture during 2015. Data processing expenses also increased $24,000 primarily due to increased core processing costs combined with an upgrade of our disaster recovery and back up systems. Partially offsetting these increases was a $35,000 decrease in FDIC insurance due to our Tier 1 leverage capital ratio and improving asset quality trends for the nine months ended September 30, 2015 compared to the prior year period.
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Income before income taxes increased $111,000, or 2.8%, to $4.1 million for the nine months ended September 30, 2015 from $4.0 million for the prior year period which led to a $169,000 increase in income tax expense for the nine months ended September 30, 2015 to $739,000 from $570,000 for the prior year period. The Company’s effective tax rate for the nine months ended September 30, 2015 was 18.1%, an increase from 14.3% for the comparable 2014 period. The increase in the effective tax rate was primarily due to increased pre-tax income at the Company’s taxable entities combined with increased tax expense in California related to our mortgage warehouse activities.
Asset Quality
Total nonperforming assets decreased $884,000, or 17.4%, to $4.2 million at September 30, 2015 from $5.1 million at December 31, 2014, and the nonperforming assets to total assets ratio decreased to 0.77% at September 30, 2015 from 0.98% at December 31, 2014.
During the third quarter of 2015, nonperforming loans decreased $260,000 to $3.6 million at September 30, 2015 from $3.9 million at June 30, 2015. Nonperforming consumer loans decreased due to the partial paydown from the sale of collateral and remaining $103,000 charge-off of one loan that totaled $203,000. Commercial land nonaccrual loans decreased primarily due to one loan being reclassified to commercial real estate nonaccrual loans and $28,000 of payments received related to another nonaccruing commercial land loan during the quarter. In addition, residential mortgage nonaccrual loans decreased $55,000 from June 30, 2015 due to one loan totaling $122,000 being transferred to accrual status as the borrower has been making payments in accordance with their agreement and one loan being transferred to other real estate owned during the quarter. The decreases in residential nonaccrual loans were offset by one loan totaling $148,000 being transferred to nonaccrual during the quarter. In addition, one home equity loan totaling $37,000 was transferred to nonaccrual status during the third quarter of 2015. Total nonperforming loans decreased $795,000 to $3.6 million at September 30, 2015 from $4.4 million at December 31, 2014. At September 30, 2015, our nonperforming loans to total loans ratio improved to 1.02% from 1.17% at June 30, 2015 and from 1.43% at December 31, 2014 as a result of the decrease in nonperforming loans and the increase in total loans outstanding at September 30, 2015.
Other real estate owned totaled $558,000 at September 30, 2015 and June 30, 2015 and decreased $91,000 from $649,000 at December 31, 2014. The decrease from the prior year end was primarily due to the sale of four properties totaling $217,000 and partially offset by the transfer of a $80,000 commercial and commercial real estate loan relationship and a $46,000 residential mortgage loan to other real estate owned during the nine months ended September 30, 2015.
The Company’s analysis for the allowance for loan losses for the third quarter of 2015 reflected continued improvement in several asset quality metrics and trends, including nonperforming loans, classified assets, troubled debt restructurings, delinquencies, and current economic conditions. However, primarily due to an increase in charge-offs, which were all specifically reserved for prior to the third quarter of 2015, and an increase in total loan balances at September 30, 2015, the Company recorded a provision for loan losses totaling $100,000 during the third quarter of 2015, compared to no provision during the prior year period. Net charge-offs for the three months ended September 30, 2015 increased to $153,000, primarily due to the $103,000 charge-off related to the consumer loan described above and a $30,000 charge-off related to a residential mortgage loan transferred to other real estate owned, compared to $15,000 in net charge-offs for the prior year period.
The allowance for loan losses totaled $3.7 million at September 30, 2015, $3.7 million at June 30, 2015, and $3.6 million at December 31, 2014. The allowance for loan losses to nonperforming loans ratio increased to 101.3% at September 30, 2015 compared to 95.9% at June 30, 2015 and 81.3% at December 31, 2014 primarily due to the decrease in the Company’s nonperforming loan balances during 2015. The allowance for loan losses to total loans ratio decreased to 1.03% at September 30, 2015 from 1.12% at June 30, 2015 and 1.16% at December 31, 2014 primarily due to the increase in total loans at September 30, 2015 from June 30, 2015 and December 31, 2014.
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Balance Sheet Highlights
Total assets at September 30, 2015 increased by $26.1 million, or 5.0%, to $544.7 million compared to $518.6 million at December 31, 2014, primarily due to increases in outstanding loan balances, investments in time deposits at other financial institutions, and federal funds sold balances. Sales of and principal paydowns on investment securities available-for-sale were utilized to fund the increased loan volume during 2015. As such, investment securities available-for-sale decreased $30.4 million, or 19.6%, to $124.9 million at September 30, 2015 from $155.2 million at December 31, 2014.
At September 30, 2015, loans totaled $356.3 million, a 15.0% increase from $309.7 million at December 31, 2014. The increase was primarily due to an increase totaling $33.4 million, or 28.2%, in commercial loans to $151.7 million at September 30, 2015 from $118.3 million at December 31, 2014. The increase was primarily due to new originations and purchased participations as well as fundings of commercial real estate, construction, and land loans during 2015. The Company originated $19.1 million in commercial real estate loans, of which $5.5 million was to one borrower. The Company also originated $4.6 million in commercial land loans and $20.3 million in commercial construction loans, of which $11.6 million were purchased participations. During the nine months ended September 30, 2015, the Company funded $8.7 million on commercial construction loans originated or purchased during 2015 as well as $2.0 million on previously originated commercial construction loans.
Mortgage warehouse loans increased $8.8 million, or 6.6%, to $141.4 million at September 30, 2015 from $132.6 million at December 31, 2014 primarily due to the increased number of mortgage warehouse lines. Total funding volume for mortgage warehouse has increased 66.3% during the nine months ended September 30, 2015 compared to the prior year period as we continue to add lines and diversify our portfolio geographically. We are able to add these lines and provide the availability to our customers due to the two mortgage warehouse loan participations that began during 2015 which funds additional warehouse activity when customer demand increases, primarily at month end, or when there are backlogs in the secondary markets. The participation program allows us to utilize our liquidity to fund commercial loan growth while retaining processing, servicing, and wire transfer fees related to the mortgage warehouse loans.
Total deposits at September 30, 2015 decreased slightly by $641,000, or 0.2%, to $340.1 million from $340.8 million at December 31, 2014 primarily due to a $14.5 million decrease in certificates of deposit and IRAs, which included $9.7 million of matured brokered deposits. Partially offsetting this decrease were increases of $7.6 million in non-interest bearing accounts, $5.0 million in interest bearing demand deposit accounts, and $3.5 million in savings accounts. The Company continues to focus on growing core deposits to provide additional liquidity and is in the process of implementing a new checking rewards program which will pay a higher rate of interest on limited balances within checking and related savings accounts should the customer qualify during each statement cycle. While the Company anticipates that its cost of deposits may increase as these balances grow, it also anticipates an increase in debit card income as one of the qualifications for customers will be to utilize their debit cards at least twelve times in the cycle.
Borrowings totaled $114.1 million at September 30, 2015, an increase of 26.6% from $90.1 million at December 31, 2014. The increase in borrowings was primarily due to the utilization of our short-term lines of credit to fund the increase in loan demand, primarily short-term mortgage warehouse loans at the end of the third quarter of 2015.
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Total shareholders’ equity increased $2.0 million, or 2.4%, to $84.4 million at September 30, 2015, compared to $82.4 million at December 31, 2014 due to net income totaling $3.3 million for the nine months ended September 30, 2015. Partially offsetting this increase was a $1.4 million decrease in additional paid-in capital as a result of the Company repurchasing 109,168 shares of its common stock during the nine months ended September 30, 2015 in accordance with its previously announced repurchase plans. During 2014, the Company announced its fourth repurchase plan for 5%, or approximately 280,800 shares, of its then outstanding common stock. At September 30, 2015, the Company had repurchased 181,881 shares under this plan. Cash dividends paid during the nine months ended September 30, 2015 totaled $673,000 and also reduced the Company’s shareholders’ equity from December 31, 2014. At September 30, 2015, the Bank continued to be well capitalized under its applicable regulatory capital requirements.
LaPorte Bancorp, Inc. is a Maryland-chartered stock holding company. The Company is headquartered at 710 Indiana Avenue, LaPorte, Indiana. Founded in 1871, The LaPorte Savings Bank is an Indiana-chartered savings bank that operates seven full service locations in the LaPorte and Porter County regions in Northwest Indiana and a mortgage loan production office in St. Joseph, Michigan. As a community-oriented savings bank, the Bank offers a variety of deposit and loan products to individuals and small businesses. Investors may obtain additional information about LaPorte Bancorp, Inc. and the Bank on the Internet at www.thelpsb.com under Investor Relations. All information at and for the periods ended September 30, 2015 and 2014 has been derived from unaudited financial information.
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LAPORTE BANCORP, INC.
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except per share data)
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Income Statement Data | |||||||||||||||||||
Loans, including fees | $ | 3,841 | $ | 3,936 | $ | 3,721 | $ | 11,378 | $ | 10,492 | |||||||||
Taxable securities | 292 | 349 | 452 | 1,051 | 1,500 | ||||||||||||||
Tax exempt securities | 384 | 389 | 411 | 1,181 | 1,239 | ||||||||||||||
Federal Home Loan Bank stock | 45 | 42 | 39 | 130 | 132 | ||||||||||||||
Other interest income | 42 | 20 | 21 | 81 | 63 | ||||||||||||||
Total Interest and dividend income | 4,604 | 4,736 | 4,644 | 13,821 | 13,426 | ||||||||||||||
Deposits | 312 | 326 | 433 | 932 | 1,371 | ||||||||||||||
Federal Home Loan Bank advances | 343 | 311 | 307 | 922 | 862 | ||||||||||||||
Subordinated debentures | 44 | 42 | 42 | 128 | 152 | ||||||||||||||
Other short-term borrowings | 1 | 1 | 1 | 3 | 3 | ||||||||||||||
Total interest expense | 700 | 680 | 783 | 1,985 | 2,388 | ||||||||||||||
Net interest income | 3,904 | 4,056 | 3,861 | 11,836 | 11,038 | ||||||||||||||
Provision for loan losses | 100 | 50 | — | 255 | — | ||||||||||||||
Net interest income after provision for loan losses | 3,804 | 4,006 | 3,861 | 11,581 | 11,038 | ||||||||||||||
Service charges on deposit accounts | 86 | 79 | 102 | 241 | 313 | ||||||||||||||
ATM and debit card fees | 114 | 115 | 111 | 332 | 325 | ||||||||||||||
Wire transfer fees | 102 | 91 | 71 | 271 | 175 | ||||||||||||||
Earnings on bank owned life insurance, net | 107 | 107 | 109 | 319 | 322 | ||||||||||||||
Net gains on mortgage banking activities | 235 | 274 | 204 | 639 | 558 | ||||||||||||||
Loan servicing fees, net | 49 | 48 | 37 | 110 | 93 | ||||||||||||||
Net gains on security sales | 18 | 31 | 8 | 99 | 108 | ||||||||||||||
Net gains (losses) on other assets | (21 | ) | 36 | (17 | ) | 25 | (101 | ) | |||||||||||
Other income | 9 | 33 | 62 | 79 | 152 | ||||||||||||||
Total noninterest income | 699 | 814 | 687 | 2,115 | 1,945 | ||||||||||||||
Salaries and employee benefits | 1,928 | 1,893 | 1,814 | 5,755 | 5,297 | ||||||||||||||
Occupancy and equipment | 411 | 435 | 407 | 1,314 | 1,312 | ||||||||||||||
Data processing | 161 | 154 | 137 | 468 | 444 | ||||||||||||||
Bank examination fees | 73 | 103 | 41 | 288 | 201 | ||||||||||||||
Advertising | 74 | 70 | 53 | 226 | 170 | ||||||||||||||
FDIC insurance | 69 | 62 | 76 | 201 | 236 | ||||||||||||||
Collection and other real estate owned | 95 | 65 | 52 | 191 | 179 | ||||||||||||||
Amortization of intangible assets | 13 | 13 | 18 | 40 | 54 | ||||||||||||||
Other expenses | 350 | 376 | 324 | 1,127 | 1,115 | ||||||||||||||
Total noninterest expense | 3,174 | 3,171 | 2,922 | 9,610 | 9,008 | ||||||||||||||
Income before income tax expense | 1,329 | 1,649 | 1,626 | 4,086 | 3,975 | ||||||||||||||
Income tax expense | 258 | 325 | 285 | 739 | 570 | ||||||||||||||
Net income | $ | 1,071 | $ | 1,324 | $ | 1,341 | $ | 3,347 | $ | 3,405 | |||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.21 | $ | 0.25 | $ | 0.25 | $ | 0.64 | $ | 0.63 | |||||||||
Diluted | 0.20 | 0.25 | 0.25 | 0.63 | 0.62 | ||||||||||||||
LaPorte Bancorp, Inc. - Page 10
LAPORTE BANCORP, INC.
Average Balance Sheets
(Unaudited)
(Dollars in thousands)
For the Three Months Ended September 30, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Average Outstanding Balance | Interest | Yield/Cost (1) | Average Outstanding Balance | Interest | Yield/Cost (1) | ||||||||||||||||
Assets: | |||||||||||||||||||||
Loans (2) | $ | 309,182 | $ | 3,841 | 4.97 | % | $ | 298,318 | $ | 3,721 | 4.99 | % | |||||||||
Taxable securities | 79,088 | 292 | 1.48 | 105,336 | 452 | 1.72 | |||||||||||||||
Tax exempt securities (3) | 49,585 | 384 | 3.10 | 52,537 | 411 | 3.13 | |||||||||||||||
Federal Home Loan Bank stock | 4,029 | 45 | 4.47 | 4,322 | 39 | 3.61 | |||||||||||||||
Fed funds sold and other interest-earning deposits | 32,158 | 42 | 0.52 | 16,387 | 21 | 0.51 | |||||||||||||||
Total interest-earning assets | 474,042 | 4,604 | 3.88 | 476,900 | 4,644 | 3.90 | |||||||||||||||
Noninterest-earning assets | 42,475 | 43,314 | |||||||||||||||||||
Total assets | $ | 516,517 | $ | 520,214 | |||||||||||||||||
Liabilities and equity: | |||||||||||||||||||||
Savings deposits | $ | 64,614 | $ | 8 | 0.05 | % | $ | 63,595 | $ | 9 | 0.06 | % | |||||||||
Money market accounts | 57,168 | 57 | 0.40 | 69,523 | 65 | 0.37 | |||||||||||||||
Interest-bearing checking | 74,727 | 43 | 0.23 | 56,387 | 31 | 0.22 | |||||||||||||||
Certificates of deposit and IRAs | 102,047 | 204 | 0.80 | 106,721 | 328 | 1.23 | |||||||||||||||
Total interest bearing deposits | 298,556 | 312 | 0.42 | 296,226 | 433 | 0.58 | |||||||||||||||
Federal Home Loan Bank advances | 61,697 | 343 | 2.22 | 75,603 | 307 | 1.62 | |||||||||||||||
Subordinated debentures | 5,155 | 44 | 3.41 | 5,155 | 42 | 3.26 | |||||||||||||||
Other short-term borrowings | 465 | 1 | 0.86 | 626 | 1 | 0.64 | |||||||||||||||
Total borrowings | 67,317 | 388 | 2.31 | 81,384 | 350 | 1.72 | |||||||||||||||
Total interest-bearing liabilities | 365,873 | 700 | 0.77 | 377,610 | 783 | 0.83 | |||||||||||||||
Noninterest-bearing demand deposits | 61,143 | 55,213 | |||||||||||||||||||
Other liabilities | 5,906 | 5,156 | |||||||||||||||||||
Total liabilities | 432,922 | 437,979 | |||||||||||||||||||
Equity | 83,595 | 82,235 | |||||||||||||||||||
Total liabilities and equity | $ | 516,517 | $ | 520,214 | |||||||||||||||||
Net interest income | $ | 3,904 | $ | 3,861 | |||||||||||||||||
Net interest rate spread | 3.11 | % | 3.07 | % | |||||||||||||||||
Net interest-earning assets | $ | 108,169 | $ | 99,290 | |||||||||||||||||
Net interest margin | 3.29 | % | 3.24 | % | |||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 129.56 | % | 126.29 | % | |||||||||||||||||
(1) | Annualized, as applicable. |
(2) The average balance of loans includes loans held for sale and nonperforming loans, interest on which is recognized on a cash basis.
(3) No tax-equivalent yield adjustments have been made.
LaPorte Bancorp, Inc. - Page 11
For the Nine Months Ended September 30, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Average Outstanding Balance | Interest | Yield/Cost (1) | Average Outstanding Balance | Interest | Yield/Cost (1) | ||||||||||||||||
Assets: | |||||||||||||||||||||
Loans (2) | $ | 308,769 | $ | 11,378 | 4.91 | % | $ | 280,589 | $ | 10,492 | 4.99 | % | |||||||||
Taxable securities | 86,937 | 1,051 | 1.61 | 113,082 | 1,500 | 1.77 | |||||||||||||||
Tax exempt securities (3) | 50,841 | 1,181 | 3.10 | 52,433 | 1,239 | 3.15 | |||||||||||||||
Federal Home Loan Bank stock | 4,162 | 130 | 4.16 | 4,357 | 132 | 4.04 | |||||||||||||||
Fed funds sold and other interest-earning deposits | 19,728 | 81 | 0.55 | 17,832 | 63 | 0.47 | |||||||||||||||
Total interest-earning assets | 470,437 | 13,821 | 3.92 | 468,293 | 13,426 | 3.82 | |||||||||||||||
Noninterest-earning assets | 42,523 | 43,675 | |||||||||||||||||||
Total assets | $ | 512,960 | $ | 511,968 | |||||||||||||||||
Liabilities and equity: | |||||||||||||||||||||
Savings deposits | $ | 64,423 | $ | 26 | 0.05 | % | $ | 63,610 | $ | 27 | 0.06 | % | |||||||||
Money market accounts | 57,711 | 167 | 0.39 | 68,243 | 189 | 0.37 | |||||||||||||||
Interest-bearing checking | 64,249 | 109 | 0.23 | 54,805 | 90 | 0.22 | |||||||||||||||
Certificates of deposit and IRAs | 104,354 | 630 | 0.80 | 107,863 | 1,065 | 1.32 | |||||||||||||||
Total interest bearing deposits | 290,737 | 932 | 0.43 | 294,521 | 1,371 | 0.62 | |||||||||||||||
Federal Home Loan Bank advances | 68,733 | 922 | 1.79 | 71,996 | 862 | 1.60 | |||||||||||||||
Subordinated debentures | 5,155 | 128 | 3.31 | 5,155 | 152 | 3.93 | |||||||||||||||
Other secured borrowings | 846 | 3 | 0.47 | 821 | 3 | 0.49 | |||||||||||||||
Total borrowings | 74,734 | 1,053 | 1.88 | 77,972 | 1,017 | 1.74 | |||||||||||||||
Total interest-bearing liabilities | 365,471 | 1,985 | 0.72 | 372,493 | 2,388 | 0.85 | |||||||||||||||
Noninterest-bearing demand deposits | 58,061 | 52,580 | |||||||||||||||||||
Other liabilities | 6,262 | 5,223 | |||||||||||||||||||
Total liabilities | 429,794 | 430,296 | |||||||||||||||||||
Equity | 83,166 | 81,672 | |||||||||||||||||||
Total liabilities and equity | $ | 512,960 | $ | 511,968 | |||||||||||||||||
Net interest income | $ | 11,836 | $ | 11,038 | |||||||||||||||||
Net interest rate spread | 3.20 | % | 2.97 | % | |||||||||||||||||
Net interest-earning assets | $ | 104,966 | $ | 95,800 | |||||||||||||||||
Net interest margin | 3.35 | % | 3.14 | % | |||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 128.72 | % | 125.72 | % | |||||||||||||||||
(1) | Annualized, as applicable. |
(2) The average balance of loans includes loans held for sale and nonperforming loans, interest on which is recognized on a cash basis.
(3) No tax-equivalent yield adjustments have been made.
LaPorte Bancorp, Inc. - Page 12
LAPORTE BANCORP, INC.
Balance Sheet Data and Financial Ratios
(Unaudited)
(Dollars in thousands)
September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | |||||||||||||||
Balance Sheet Data | |||||||||||||||||||
Total assets | $ | 544,692 | $ | 521,183 | $ | 527,189 | $ | 518,616 | $ | 510,597 | |||||||||
Cash and cash equivalents | 11,458 | 10,526 | 11,221 | 8,698 | 6,811 | ||||||||||||||
Interest-earning time deposits in other financial institutions | 13,356 | 6,125 | 5,635 | 6,615 | 6,385 | ||||||||||||||
Investment securities | 124,857 | 133,746 | 140,600 | 155,223 | 157,831 | ||||||||||||||
Loans held for sale, at fair value | 1,356 | 1,594 | 512 | 763 | 2,509 | ||||||||||||||
Loans | 356,327 | 331,606 | 331,920 | 309,726 | 299,440 | ||||||||||||||
Allowance for loan losses | 3,677 | 3,730 | 3,675 | 3,595 | 3,746 | ||||||||||||||
Federal Home Loan Bank stock | 4,029 | 4,029 | 4,275 | 4,275 | 4,275 | ||||||||||||||
Deposits | 340,127 | 351,598 | 352,704 | 340,768 | 343,054 | ||||||||||||||
Federal Home Loan Bank advances | 88,992 | 75,007 | 80,000 | 84,919 | 75,000 | ||||||||||||||
Other borrowings | 25,063 | 5,155 | 5,655 | 5,155 | 5,155 | ||||||||||||||
Shareholders’ equity | 84,352 | 83,344 | 83,053 | 82,388 | 82,158 | ||||||||||||||
Performance Ratios | |||||||||||||||||||
Book value per share | $ | 15.15 | $ | 14.91 | $ | 14.77 | $ | 14.52 | $ | 14.62 | |||||||||
Tangible book value per share | 13.61 | 13.37 | 13.24 | 13.00 | 13.08 | ||||||||||||||
Return on average assets (QTD annualized) | 0.83 | % | 1.02 | % | 0.76 | % | 0.79 | % | 1.03 | % | |||||||||
Return on average equity (QTD annualized) | 5.12 | 6.37 | 4.60 | 4.86 | 6.52 | ||||||||||||||
Net interest margin (QTD annualized) | 3.29 | 3.41 | 3.36 | 3.27 | 3.24 | ||||||||||||||
Efficiency ratio | 68.96 | 65.11 | 72.91 | 77.61 | 64.25 | ||||||||||||||
Credit Quality | |||||||||||||||||||
Total nonperforming assets | $ | 4,188 | $ | 4,446 | $ | 4,942 | $ | 5,072 | $ | 4,919 | |||||||||
Total nonperforming loans | 3,630 | 3,888 | 4,191 | 4,423 | 4,601 | ||||||||||||||
Asset Quality Ratios | |||||||||||||||||||
Nonperforming assets to total assets | 0.77 | % | 0.85 | % | 0.94 | % | 0.98 | % | 0.96 | % | |||||||||
Nonperforming loans to total loans | 1.02 | 1.17 | 1.26 | 1.43 | 1.54 | ||||||||||||||
Allowance for loan losses to nonperforming loans | 101.29 | 95.94 | 87.69 | 81.28 | 81.42 | ||||||||||||||
Allowance for loan losses to total loans | 1.03 | 1.12 | 1.11 | 1.16 | 1.25 | ||||||||||||||
Net charge-offs to average loans outstanding (QTD annualized) | 0.20 | — | 0.03 | — | 0.02 | ||||||||||||||
LaPorte Bancorp, Inc. - Page 13
LAPORTE BANCORP, INC.
Nonperforming Assets
(Unaudited)
(Dollars in thousands)
September 30, 2015 | December 31, 2014 | ||||||
Nonaccrual loans: | |||||||
Commercial: | |||||||
Real estate | $ | 1,186 | $ | 825 | |||
Land | 1,321 | 1,577 | |||||
Total commercial | 2,507 | 2,402 | |||||
Mortgage | 993 | 1,252 | |||||
Home equity | 62 | 7 | |||||
Total nonaccruing troubled debt restructured loans | 66 | 762 | |||||
Total nonaccrual loans | 3,628 | 4,423 | |||||
Loans greater than 90 days delinquent and still accruing: | |||||||
Home equity | 2 | — | |||||
Total nonperforming loans | 3,630 | 4,423 | |||||
Foreclosed assets: | |||||||
Commercial: | |||||||
Real estate | $ | — | $ | 67 | |||
Land | 512 | 512 | |||||
Total commercial | 512 | 579 | |||||
Mortgage | 46 | 25 | |||||
Residential construction – land | — | 45 | |||||
Total foreclosed assets | 558 | 649 | |||||
Total nonperforming assets | $ | 4,188 | $ | 5,072 | |||
This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, and market disruptions. LaPorte Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.