Community Bank Shares of Indiana, Inc. Reports 3rd Quarter Net Income Available to Common Shareholders of $1.8 Million

  Community Bank Shares of Indiana, Inc. Reports 3rd Quarter Net Income
  Available to Common Shareholders of $1.8 Million

Business Wire

NEW ALBANY, Ind. -- October 24, 2012

Community Bank Shares of Indiana, Inc. reported third quarter net income
available to common shareholders of $1.8 million and earnings per diluted
common share of $0.53. Net income available to common shareholders for the
first nine months of 2012 was $5.1 million, an increase of 15.2% as compared
to the nine months ended September 30^th, 2011.

James Rickard, President and Chief Executive Officer, commented, “Our earnings
trend over the past several quarters has been very encouraging as we progress
through this slow growth economy. We have managed a stable net interest margin
through this extended period of historically low interest rates, but to
counter downward pressure on our margin we will need to reinvest cash flows
from our investment portfolio into higher yielding loans over the next few
years. We are aggressively prospecting for potential sales opportunities but
intend to be prudent in our underwriting decisions. In addition, we continue
to carefully monitor controllable expenses. Non-interest expenses are up just
2.2% for the first nine months of 2012 as compared to 2011, which is
encouraging given the uncertainty in the economy and high legal expenses
associated with credit resolution.”

Rickard continued, “We are making progress in resolving our non-performing
assets. While this process tends to take time, our management team has worked
diligently to move these assets toward resolution. This will continue to be a
strategic priority in the fourth quarter and into 2013.”

The following points summarize significant financial information for the third
quarter of 2012:

  *Net income available to common shareholders was $1.8 million.
  *Tangible book value per common share of $15.60 as of September 30, 2012.
  *Net interest margin, on a tax equivalent basis, of 3.96%, a decrease from
    4.06% for the same period in 2011.
  *Provision for loan losses was $851,000, a decrease of $120,000 from the
    same period in 2011.
  *Non-performing assets increased to $26.6 million at September 30, 2012
    from $20.9 million at June 30, 2012 due to the foreclosure of one credit
    relationship totaling $6.2 million. A charge-off of $2.5 million was
    recorded during the quarter for this credit, lowering the allowance for
    loan losses to total loans to 1.75% from 2.23% at June 30, 2012. The
    Company had fully provided for the charge-off in previous quarters and did
    not record additional provision for loan losses for this credit during the
    quarter.
  *Gains of $250,000 were realized on the sale of available for sale
    securities, a decrease of $302,000 from the quarter ended September 30,
    2011.

The following points summarize significant financial information for the first
nine months of 2012:

  *Net income available to common shareholders was $5.1 million, or $1.52 per
    diluted common share compared to $4.4 million and $1.29 for 2011.
  *Net interest margin, on a tax equivalent basis, of 4.10%, an increase from
    4.04% from 2011.
  *Provision for loan losses of $3.3 million, an increase of $609,000
    compared to 2011.
  *Gains on sales of securities available for sale of $1.4 million in 2012
    compared to $1.6 million in 2011.

The Company’s unaudited consolidated condensed statements of income and credit
quality metrics are as follows:

                                       
                                         Three Months Ended
                                         September 30,              June 30,
                                         2012           2011        2012
                                         (In thousands, except per share data)
Interest income                          $  8,144        $ 8,424     $ 8,370
Interest expense                           1,000        1,436     1,103 
Net interest income                         7,144          6,988       7,267
Provision for loan losses                   851            971         944
Non-interest income                         1,779          2,008       1,979
Non-interest expense                       5,677        5,620     5,977 
Income before income taxes                  2,395          2,405       2,325
Income tax expense                         454          528       371   
Net income                               $  1,941        $ 1,877     $ 1,954
Preferred stock dividends and discount     (163   )      (561  )    (244  )
accretion
Net income available to common           $  1,778       $ 1,316    $ 1,710 
shareholders
Basic earnings per common share          $  0.53         $ 0.40      $ 0.51
Diluted earnings per common share        $  0.53         $ 0.38      $ 0.51
                                                                     

                                       
                                         Nine Months Ended
                                         September 30,
                                         2012                2011
                                         (In thousands, except per share data)
Interest income                          $   24,937           $   25,753
Interest expense                            3,209              4,733    
Net interest income                          21,728               21,020
Provision for loan losses                    3,301                2,692
Non-interest income                          6,066                5,904
Non-interest expense                        17,536             17,154   
Income before income taxes                   6,957                7,078
Income tax expense                          1,227              1,558    
Net income                               $   5,730            $   5,520
Preferred stock dividends and discount      (633     )          (1,094   )
accretion
Net income available to common           $   5,097           $   4,426    
shareholders
Basic earnings per common share          $   1.52             $   1.34
Diluted earnings per common share        $   1.52             $   1.29
                                                                           

Credit quality metrics are as follows (in thousands):

                      
                         As of
                         September 30,    June 30, 2012    September 30,
                         20122                                   2011
                                                                 
Loans on non-accrual     $  15,509           $  15,548           $  16,849
status
Loans past due 90 days
or more and still           -                   -                   -
accruing
Foreclosed and             11,055            5,371             3,659   
repossessed assets
Total non-performing     $  26,564          $  20,919          $  20,508  
assets
                                                                 
Non-performing assets       3.27    %           2.53    %           2.62    %
to total assets
Allowance for Loan          1.75                2.23                1.81
Losses to Total Loans
                                                                 

The Company’s unaudited condensed consolidated balance sheets are as follows:

                                                              
                                                September 30,     December 31,
                                                2012              2011
                                                (In thousands)
ASSETS
Cash and due from financial institutions        $   12,030        $   15,166
Interest-bearing deposits in other financial        10,917            30,297
institutions
Securities available for sale                       250,057           198,746
Loans held for sale                                 1,926             1,154
Loans, net of allowance for loan losses of          464,295           489,740
$8,255 and $10,234
Federal Home Loan Bank and Federal Reserve          6,011             5,952
stock
Accrued interest receivable                         3,260             3,196
Premises and equipment, net                         13,816            13,780
Cash surrender value of life insurance              20,532            20,012
Other intangible assets                             693               865
Foreclosed and repossessed assets                   11,055            5,076
Other assets                                       16,757           8,687
Total Assets                                    $   811,349       $   792,671
                                                                  
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Non interest-bearing                            $   147,728       $   127,877
Interest-bearing                                   454,831          453,481
Total deposits                                      602,559           581,358
Other borrowings                                    52,112            50,879
Federal Home Loan Bank advances                     40,000            55,000
Subordinated debentures                             17,000            17,000
Accrued interest payable                            267               329
Other liabilities                                  13,491           8,510
Total liabilities                                   725,429           713,076
                                                                  
STOCKHOLDERS’ EQUITY
Total stockholders’ equity                         85,920           79,595
Total Liabilities and Stockholders’ Equity      $   811,349       $   792,671
                                                                      

About Community Bank Shares of Indiana, Inc.

Community Bank Shares of Indiana, Inc. was formed in 1991 as the nation’s
first ever mutual holding company. In 1995 the company went public under the
NASDAQ symbol CBIN. Today, Community Bank Shares of Indiana, Inc. is
Southeastern Indiana’s largest locally owned and headquartered bank holding
company and includes Your Community Bank and The Scott County State Bank. The
mission statement of Community Bank Shares of Indiana reflects its purpose:
“Achieving financial goals through exceptional people and exceptional
service.” Community Bank Shares of Indiana strives to help shareholders,
customers, employees, and our communities achieve their respective financial
goals by empowering talented individuals to provide a level of unmatched
customer service. To learn more about us, please visit
www.yourcommunitybank.com and www.scottcountystatebank.com.

Statements in this press release relating to the Company’s plans, objectives,
or future performance are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are based on
management's current expectations. The Company’s actual strategies and results
in future periods may differ materially from those currently expected due to
various risks and uncertainties, including those discussed in the Company’s
2011 Form 10-K and subsequent 10-Qs filed with the Securities and Exchange
Commission.

Contact:

Community Bank Shares of Indiana, Inc.
Paul Chrisco, CFO, 812-981-7375
 
Press spacebar to pause and continue. Press esc to stop.