Attached files
file | filename |
---|---|
8-K - INTEGRA BANK CORP | v209473_8-k.htm |
EXHIBIT 99(a)
News
Release
Integra
Bank Corporation Comments on Fourth Quarter 2010 Call Report
EVANSVILLE,
INDIANA – January 31, 2011 – Integra Bank Corporation (Nasdaq Capital Market:
IBNK), the parent company of Integra Bank N.A. (“Integra Bank”), commented today
on the financial results for the fourth quarter of 2010 reflected in Integra
Bank's Call Report that was filed with the FDIC on January 30,
2011. The fourth quarter 2010 financial results for the parent
company have not yet been finalized. Accordingly, the discussion
below relates solely to the preliminary results of Integra Bank, as reflected in
its call report. Final 2010 results for the Company are anticipated
to be reported on or before March 31, when it will issue its Annual Report on
Form 10-K for the year ended December 31, 2010.
Integra
Bank reported a net loss for the fourth quarter of 2010 of $35.4
million. Key elements of the quarter’s loss are as
follows:
|
·
|
Net
interest income declined $2.2 million from the third quarter of 2010 to
$10.1 million, primarily due to a lower volume of earning assets and lower
earning asset yields resulting from three multi-branch and loan sale
transactions closed in the third
quarter.
|
|
·
|
The
provision for loan losses increased $5.1 million to $31.4 million, while
net charge-offs increased $4.7 million to $31.6
million.
|
|
·
|
Non-interest
income declined $19.4 million from the third quarter of 2010 to $7.9
million and included $2.5 million of securities gains from sales,
primarily because the third quarter of 2010 included $20.7 million of
deposit premiums and loan sale gains resulting from the branch and loan
sales.
|
|
·
|
Non-interest
expense decreased $5.1 million from the third quarter of 2010 to $23.5
million in part due to lower branch related expenses following the third
quarter branch and loan sales. Loan expenses increased $1.7
million to $2.4 million, while real estate owned expenses declined $2.4
million to $2.7 million. Non-interest expense for the third
quarter also included $2.1 million of legal and investment banking fees
related to the loan and branch sale
transactions.
|
“Our core
community banking business continued to perform well, however, the persistent
weakness in commercial real estate markets continues to put intense pressure on
our recovery and has resulted in our current quarterly loss,” stated Mike Alley,
Chairman and CEO. “Our credit teams have made tremendous progress in
reducing our exposure to this industry segment but the prolonged weakness in the
economy and continued deterioration in real estate values have resulted in
greater charge-offs and increased reserves,” added Alley.
“We as a
new management team, have been transparent about our situation and are working
very hard to address our problems”, Alley added. “The most important
thing, and it is our first priority every day, is serving the more than 130,000
businesses and individuals who rely on Integra Bank for their banking
needs. Our community banking operation remains sound and
profitable. As we serve our customers, we are also continuing our
efforts to strengthen our capital levels and comply with the OCC’s Capital
Directive,” Alley concluded.
Non-performing
loans declined $19.5 million to $193.1 million, the lowest level reported since
the third quarter of 2009. Other real estate owned increased $14.4
million to $49.2 million, resulting in a net decline in non-performing assets of
$4.9 million, or 2.0%. The allowance for loan losses at December 31,
2010 was $95.1 million, or 7.03% of total loans, compared to $95.5 million or
6.56% of total loans at September 30, 2010. The allowance for loan
losses, as a percentage of non-performing loans, increased to 49.2%, up from
44.9% at September 30, 2010.
Integra
Bank’s concentration in commercial real estate loans, including construction and
land development loans, declined $80.4 million or 9.7% from the prior quarter
end. Total commercial real estate loan balances totaled $750.4
million at December 31, 2010, a decline of $413.6 million, or 35.5% from $1.164
billion at December 31, 2009.
Integra
Bank’s total risk-based capital ratio declined 168 basis points to 7.66% from
September 30, 2010, its tier 1 risk-based capital ratio decreased 168 basis
points to 6.34% and its tier 1 leverage ratio decreased 77 basis points to
3.54%. The decline in these ratios during the quarter means that
Integra Bank no longer meets the minimum capital levels to be considered
adequately capitalized.
As
previously announced, Integra Bank is not currently in compliance with a Capital
Directive issued by the Office of the Comptroller of the Currency
("OCC”). The Directive required Integra Bank to submit a capital plan
to achieve these capital levels; the OCC has since advised Integra Bank that its
plan was not accepted. As a result, additional actions by the OCC are
expected.
The 2010
loss and resulting decline in capital levels included in the Bank Call Report
will be reflected in the Company’s consolidated financial statements for
2010. The Company’s auditors have advised management that unless the
Company is able to obtain firm commitments for a substantial capital infusion
before the release date of their report on the Company’s 2010 consolidated
financial statements, that report will indicate that there is substantial doubt
concerning the Company’s ability to continue as a going concern.
The Bank
currently has $117.0 million of deposits from public fund entities based in the
State of Indiana, consisting of $81.6 million of transaction account and $35.4
million of time deposit balances. As previously disclosed, the Bank
is participating in the collateralization program prescribed by the Indiana
Board of Depositories, Public Deposit Insurance Fund (PDIF) and has pledged to
the PDIF marketable securities with a market value in excess of public fund
deposits not covered by FDIC insurance. Accordingly, 100% of the
Indiana public funds held at the Bank continue to be insured by either FDIC
deposit insurance or by the PDIF with their coverage being fully collateralized
by marketable securities pledged by the Bank. As the Bank is no
longer adequately capitalized, it expects notification that it will no longer be
eligible to accept new Indiana public fund deposits. Existing time
accounts may be held to maturity, while transaction accounts will be
transitioned to other eligible financial institutions.
About
Integra
Headquartered
in Evansville, Indiana, Integra Bank Corporation is the parent of Integra Bank
N.A. As of December 31, 2010, Integra Bank has $2.4 billion in total
assets. Integra Bank currently operates 52 banking centers and 100
ATMs at locations in Indiana, Kentucky, and Illinois. Integra Bank
Corporation's common stock is listed on the Nasdaq Capital Market under the
symbol IBNK. Additional information may be found at
www.integrabank.com.
Safe
Harbor
Certain
statements made in this release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. When
used in this release, the words "may," "will," "should," "would," "anticipate,"
"expect," "plan," "believe," "intend," and similar expressions identify
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from the
results, performance or achievements expressed or implied by such
forward-looking statements. There are a number of important factors that could
cause our future results to differ materially from historical performance and
these forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) the results of examinations of
us by regulatory authorities, including the possibility that any such regulatory
authorities may, among other things, institute additional formal or informal
enforcement actions against Integra Bank which could require us to increase our
reserve for loan losses, write-down assets, change our regulatory capital
position or affect our ability to borrow funds or maintain or increase deposits,
which could adversely affect our liquidity and earnings; (2) our non-compliance
with the Capital Directive; (3) our ability to improve the quality of our assets
and maintain an adequate allowance for loan losses; (4) the adverse impact that
Integra Bank’s capital ratios may have on the availability of funding sources;
(5) the risks presented by continued unfavorable economic conditions in our
market area, which could continue to adversely affect credit quality, collateral
values, including real estate collateral and OREO properties, investment values,
liquidity and loan originations, reserves for loan losses and charge offs of
loans and loan portfolio delinquency rates; (6) changes in the interest rate
environment that further reduce our net interest margin and negatively affect
funding sources; (7) the lack of availability of capital or liquidity, which
could impact our ability to continue as a going concern and could result in the
FDIC being appointed receiver of Integra Bank; (8) the impact of our suspension
of dividends on our outstanding preferred stock and deferral of payments on our
subordinated debentures relating to our outstanding trust preferred securities;
(9) our ability to regain compliance with the minimum bid requirement necessary
to retain the listing of our common stock on the Nasdaq Stock Market; (10)
competitive pressures among depository institutions; (11) effects of critical
accounting policies and judgments; (12) changes in accounting policies or
procedures as may be required by the financial institution regulatory agencies
or the Financial Accounting Standards Board; (13) legislative or regulatory
changes or actions, including financial reform legislation, or significant
litigation that adversely affects us or our business; (14) changes to the
regulatory capital treatment of our outstanding trust preferred securities; (15)
future legislative or regulatory changes in the United States Department of
Treasury’s Troubled Asset Relief Program Capital Purchase Program; (16) our
ability to attract and retain key personnel; (17) our ability to secure
confidential information through our computer systems and telecommunications
network; and; (18) other factors we describe in the periodic reports and other
documents we file with the SEC. We undertake no obligation to revise
or update these risks, uncertainties and other factors except as may be set
forth in our periodic reports.
Contacts:
Mike
Alley, Chairman and CEO - 812-461-5795
Mike
Carroll, Chief Financial Officer - 812-464-9673
Gretchen
Dunn, Shareholder Relations - 812-464-9677
Web
site:
We
routinely post important information for investors on our website,
http://www.integrabank.com, in the "Investor Relations" section under "Corporate
Information". We intend to use this website as a means of disclosing material,
non-public information and for complying with our disclosure obligations under
Regulation FD. Accordingly, investors in Integra Bank Corporation should monitor
the Investor Relations section of our website, in addition to following our
press releases, SEC filings, public conference calls, presentations and
webcasts. The information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part of, this
document.