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Community Bank Shares of Indiana, Inc. Reports 2nd Quarter Net Income Available to Common Shareholders of $2.0 Million, or $0.59

  Community Bank Shares of Indiana, Inc. Reports 2nd Quarter Net Income   Available to Common Shareholders of $2.0 Million, or $0.59 Per Diluted   Common Share  Business Wire  NEW ALBANY, Ind. -- July 30, 2014  Community Bank Shares of Indiana, Inc. reported second quarter net income available to common shareholders of $2.0 million and earnings per diluted common share of $0.59, an increase of 6.4% and 3.5% from the same periods in 2013, respectively. Net income available to common shareholders for the six months ended June 30, 2014 was $4.0 million, a 12.2% increase from $3.6 million in 2013 while earnings per diluted common share increased to $1.17 from $1.06, a 10.4% increase.  “Our second quarter results reflect the strong core earnings of the Company, as we generated an annualized return on average assets of 1.00% and an annualized return on average equity of 9.25%. During the quarter, we were able to increase our loan portfolio by $27 million from the end of 2013 which drove the increase in our net interest income. While loan growth remains challenging given the intense competition for quality loans, we are encouraged by our success in cultivating new lending relationships,” stated James Rickard, President and Chief Executive Officer.  The following points summarize significant financial information for the second quarter of 2014:    *Net income available to common shareholders was $2.0 million.   *Tangible book value per common share of $18.99 as of June 30, 2014.   *Fully tax equivalent net interest margin was 4.19%, a decrease from 4.23%     for the same period in 2013; net interest income increased to $7.9 million     from $7.8 million.   *Provision for loan losses was $190,000, a decrease from $2.5 million for     the same quarter in 2013. The decrease was due to a $2.0 provision     recorded for one commercial land development relationship in 2013 that was     not repeated in 2014. During the fourth quarter of 2013, the Company     charged off the $2.0 million allocated allowance for the credit. As of     June 30, 2014, the loan had a remaining balance of $814,000 and was     included in the Company’s non-accrual loans as of the same date.     Currently, the Company does not have an allowance allocated for this     credit but continues to monitor the value of the underlying collateral     while seeking a resolution.   *Non-interest income decreased to $1.5 million for the second quarter of     2014 compared to $4.0 million in 2013. The Company recorded a bargain     purchase gain of $1.9 million in the second quarter of 2013 from its FDIC     assisted acquisition of First Federal Bank in Lexington, Kentucky on April     19, 2013. As a result of the transaction, the Company’s subsidiary, Your     Community Bank, acquired assets of $93.6 million including loans of $63.6     million. The Company also assumed deposits of $87.0 million and FHLB     advances of $4.4 million. More information about the First Federal     acquisition can be found in the Company’s 8-K/A filed on July 3, 2013 with     the U.S. Securities and Exchange Commission. Also contributing to the     decline in non-interest income was a reduction in net gains on sales of     securities to $1,000 in 2014 from $509,000 in 2013.   *Non-interest expense decreased to $6.5 million in the second quarter of     2014 from $6.7 million in 2013. The reduction was due to a decline in     expenses for foreclosed assets (including losses on disposition) of     $189,000 from 2013. During the second quarter of 2014, the Company     recognized $323,000 of expense associated with its pending acquisition of     First Financial Service Corporation and its subsidiary bank, First Federal     Savings Bank of Elizabethtown.  The following points summarize significant financial information for the six months ended June 30, 2014:    *Net income available to common shareholders was $4.0 million, or $1.17 per     diluted common share, as compared to $3.6 million and $1.06 for 2013.   *Fully tax equivalent net interest margin was 4.14% for both 2014 and 2013;     net interest income increased to $15.5 million from $14.9 million over the     same period.   *Provision for loan losses was $472,000 as compared to $2.7 million in     2013. As previously noted, the provision in 2013 was substantially     impacted by a $2.0 million allocation for one relationship in the second     quarter of 2013.   *Non-interest income declined to $3.2 million for the first six months of     2014 from $5.4 million in 2013. As previously discussed, the Company     recorded a bargain purchase gain of $1.9 million in the second quarter of     2013 that was not repeated in 2014. Additionally, net gains on sales of     available for sale securities decreased to $296,000 in 2014 from $515,000     in 2013.   *Non-interest expenses increased in 2014 to $13.1 million from $12.8     million primarily due to an increase in occupancy expenses of $165,000     associated with three new branches from the Company’s acquisition of First     Federal Bank of Lexington, Kentucky. For the six months ended June 30,     2014, the Company incurred $370,000 of expense associated with its pending     acquisition of First Financial Service Corporation.  The Company’s unaudited consolidated condensed statements of income and credit quality metrics are as follows:                                                                                  Three Months Ended                                          June 30,                   March 31,                                          2014           2013        2014                                          (In thousands, except per share data) Interest income                          $  8,410        $ 8,375     $ 8,001 Interest expense                           473          539       476    Net interest income                         7,937          7,836       7,525 Provision for loan losses                   190            2,470       282 Non-interest income                         1,540          3,969       1,677 Non-interest expense                       6,529        6,711     6,551  Income before income taxes                  2,758          2,624       2,369 Income tax expense                         610          420       257    Net income                               $  2,148        $ 2,204     $ 2,112 Preferred stock dividends                  (109   )      (288  )    (110  ) Net income available to common           $  2,039       $ 1,916    $ 2,002  shareholders Basic earnings per common share          $  0.59         $ 0.57      $ 0.59 Diluted earnings per common share        $  0.59         $ 0.57      $ 0.58                                                                                                                                                        Six Months Ended                                          June 30,                                          2014                2013                                          (In thousands, except per share data) Interest income                          $   16,411           $   16,099 Interest expense                            949                1,177     Net interest income                          15,462               14,922 Provision for loan losses                    472                  2,717 Non-interest income                          3,217                5,393 Non-interest expense                        13,080             12,797    Income before income taxes                   5,127                4,801 Income tax expense                          867                690       Net income                               $   4,260            $   4,111 Preferred stock dividends                   (219     )          (509     ) Net income available to common           $   4,041           $   3,602     shareholders Basic earnings per common share          $   1.18             $   1.06 Diluted earnings per common share        $   1.17             $   1.06                                                                 Credit quality metrics are as follows (in thousands):                                                               As of                                 June 30, 2014  March 31, 2014  December 31,                                                                  2013                                                                   Loans on non-accrual status     $  9,589        $   9,638        $  7,787 Loans past due 90 days or          -                -               - more and still accruing Foreclosed and repossessed        6,029          6,334         5,988    assets Total non-performing assets     $  15,618      $   15,972      $  13,775                                                                     Non-performing assets to           1.78    %        1.89    %       1.62    % total assets Allowance for Loan Losses          1.44             1.46            1.43 to Total Loans                                                                    The Company’s unaudited condensed consolidated balance sheets are as follows:                                                                                                                    June 30,      December 31,                                                     2014          2013                                                     (In thousands) ASSETS Cash and due from financial institutions            $ 19,350      $   15,393 Interest-bearing deposits in other financial          18,727          10,896 institutions Securities available for sale                         199,071         195,327 Loans held for sale                                   246             68 Loans, net of allowance for loan losses of            579,679         552,926 $8,480 and $8,009 Federal Home Loan Bank and Federal Reserve            5,964           5,955 stock Accrued interest receivable                           3,144           3,149 Premises and equipment, net                           18,204          18,557 Cash surrender value of life insurance                21,718          21,386 Other intangible assets                               839             1,004 Foreclosed and repossessed assets                     6,029           5,988 Other assets                                         2,946          16,086 Total Assets                                        $ 875,917     $   846,735                                                                    LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Non interest-bearing                                $ 201,259     $   187,207 Interest-bearing                                     482,356        456,418 Total deposits                                        683,615         643,625 Other borrowings                                      37,459          45,722 Federal Home Loan Bank advances                       40,000          50,000 Subordinated debentures                               17,000          17,000 Accrued interest payable                              87              106 Other liabilities                                    3,567          1,943 Total liabilities                                     781,728         758,396                                                                    STOCKHOLDERS’ EQUITY Total stockholders’ equity                           94,189         88,339 Total Liabilities and Stockholders’ Equity          $ 875,917     $   846,735                                                                     About Community Bank Shares of Indiana, Inc. 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 2013 Form 10-K and subsequent 10-Q filed with the Securities and Exchange Commission.  Contact:  Community Bank Shares of Indiana, Inc. Paul Chrisco, CFO, 812-981-7375  
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