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| 8-K - 8-K - INTERMOUNTAIN COMMUNITY BANCORP | a8kq42012cover.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 Fourth Quarter Profit and Full Year 2012 Results
Sandpoint, Idaho, February 13, 2013 - Intermountain Community Bancorp (OTCBB - IMCB), the holding company for Panhandle State Bank, reported $910,000, or $0.14 per share in net income applicable to common shareholders for the fourth quarter 2012, as higher non interest income, lower interest expense and a lower loan loss provision offset lower interest income and higher operating expenses than reported in the third quarter. The fourth quarter 2012 results compare to net income applicable to common shareholders of $343,000 and $907,000, or $0.05 and $1.08 per share for the third quarter of 2012 and fourth quarter of 2011, respectively. All per share results have been adjusted for the impact of a 1-for-10 reverse stock split completed by the Company in the fourth quarter of 2012. 2012 results also reflect the issuance of new shares in two successful capital raises earlier in the year.
Net income applicable to common shareholders improved to $1.9 million, or $0.33 per share, for 2012, compared to a net loss of $1.8 million, or $2.15 per share, in the comparable 2011 period, as decreases in interest expense, operating expense and the provision for loan loss offset decreases in interest income.
“We are pleased with the consistent improvement in profit shown over the past couple years, and optimistic about our recent and future growth in loans and earnings" said Chief Executive Officer Curt Hecker. “The Company's strong financial position coupled with our excellent staff and local, community-focused development plans continue to build momentum in our markets."
Fourth Quarter 2012 Highlights (at or for the period ended December 31, 2012, compared to September 30, 2012, and December 31, 2011)
▪ | Net loans receivable increased to $520.8 million at year end 2012, up from $502.9 million and $502.2 million at September 30, 2012 and December 31, 2011, respectively, as commercial and commercial real estate production activity increased. |
▪ | Interest expense continued to drop, totaling $1.01 million for the fourth quarter, compared to $1.26 million in the third quarter of 2012 and $1.43 million in the fourth quarter of 2011. The Company's cost of interest bearing liabilities totaled 0.49% for the quarter, down from 0.59% in the third quarter and 0.67% in the fourth quarter of 2011. |
▪ | The provision for loan losses dropped to $619,000 from $1.2 million in the third quarter of 2012 and $706,000 in the fourth quarter of 2011, respectively, as the negative impact of problem loans continues to subside. |
▪ | Nonperforming assets (NPAs) totaled 1.18% of total assets at December 31, 2012 stable from 1.18% at September 30, 2012 and down from 1.71% at December 31, 2011. |
▪ | Loan delinquencies (30 days past due and over) continue to remain very low, at 0.13% of total loans compared to 0.21% in the third quarter and 0.28% in the fourth quarter of 2011. |
• | The Company's community-centric outreach initiative, “Powered by Community” continues to develop partnerships focused on economic advancement, education, job-readiness, and small business enhancement. The Bank remains deeply committed to assisting its communities through volunteerism, seed grants and sponsorship of far-reaching initiatives throughout its regional markets. |
Assets and Loan Portfolio Summary
Assets totaled $972.1 million at December 31, 2012, up from $953.2 million at September 30, 2012, and up from $934.2 million at December 31, 2011. The increase from the prior year reflected the additional capital raised in the Company's capital offerings earlier this year, offset by reductions in cash as the Company used funds available to reduce higher rate Federal Home Loan Bank advances, and brokered and retail certificates of deposit. Net loans receivable increased by $17.9 million during the quarter as increased commercial and commercial real estate loan production offset continued reductions in land development loans.
"Loan demand is picking up in our markets and our lending teams are working with many borrowers to grow present and future business," noted Hecker. "Although we anticipate a seasonal reduction in agricultural loans in the first quarter of 2013, we are encouraged that new loan production seems to be gaining steam overall," he added.
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) | 12/31/2012 | % of total | 9/30/2012 | % of total | 12/31/2011 | % of total | |||||||||||
Commercial loans | $ | 121,307 | 23.0 | % | $ | 115,203 | 22.5 | % | $ | 110,395 | 21.4 | % | |||||
Commercial real estate | 186,844 | 35.4 | % | 174,965 | 34.2 | % | 167,586 | 32.6 | % | ||||||||
Commercial construction | 3,832 | 0.7 | % | 2,573 | 0.5 | % | 6,335 | 1.2 | % | ||||||||
Land and land development | 31,278 | 5.9 | % | 33,814 | 6.6 | % | 38,499 | 7.5 | % | ||||||||
Agriculture | 85,967 | 16.3 | % | 87,851 | 17.2 | % | 81,316 | 15.8 | % | ||||||||
Multifamily | 16,544 | 3.1 | % | 17,849 | 3.5 | % | 26,038 | 5.1 | % | ||||||||
Residential real estate | 60,020 | 11.3 | % | 59,367 | 11.6 | % | 58,861 | 11.4 | % | ||||||||
Residential construction | 940 | 0.2 | % | 532 | 0.1 | % | 2,742 | 0.5 | % | ||||||||
Consumer | 9,626 | 1.8 | % | 9,724 | 1.9 | % | 11,847 | 2.3 | % | ||||||||
Municipal | 12,267 | 2.3 | % | 9,827 | 1.9 | % | 11,063 | 2.2 | % | ||||||||
Total loans receivable | $ | 528,625 | 100.0 | % | $ | 511,705 | 100.0 | % | $ | 514,682 | 100.0 | % | |||||
Allowance for loan losses | (7,943 | ) | (9,088 | ) | (12,690 | ) | |||||||||||
Net deferred origination costs | 86 | 235 | 260 | ||||||||||||||
Loans receivable, net | $ | 520,768 | $ | 502,852 | $ | 502,252 | |||||||||||
LOAN PORTFOLIO BY LOCATION December 31, 2012 | ||||||||||||||||||||
(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 | $ | 87,387 | $ | 4,606 | $ | 9,252 | $ | 13,852 | $ | 6,210 | $ | 121,307 | 23 | % | ||||||
Commercial real estate | 123,451 | 11,330 | 10,651 | 18,895 | 22,517 | 186,844 | 35.4 | % | ||||||||||||
Commercial construction | 503 | — | 2,819 | — | 510 | 3,832 | 0.7 | % | ||||||||||||
Land and land development | 20,710 | 1,748 | 6,298 | 1,500 | 1,022 | 31,278 | 5.9 | % | ||||||||||||
Agriculture | 1,670 | 3,269 | 16,886 | 60,479 | 3,663 | 85,967 | 16.3 | % | ||||||||||||
Multifamily | 10,396 | 151 | 5,947 | 30 | 20 | 16,544 | 3.1 | % | ||||||||||||
Residential real estate | 41,624 | 3,734 | 3,808 | 7,083 | 3,771 | 60,020 | 11.3 | % | ||||||||||||
Residential construction | 387 | — | 240 | 313 | — | 940 | 0.2 | % | ||||||||||||
Consumer | 5,716 | 1,026 | 517 | 2,053 | 314 | 9,626 | 1.8 | % | ||||||||||||
Municipal | 10,880 | 1,387 | — | — | — | 12,267 | 2.3 | % | ||||||||||||
Total | $ | 302,724 | $ | 27,251 | $ | 56,418 | $ | 104,205 | $ | 38,027 | $ | 528,625 | 100.0 | % | ||||||
Percent of total loans in geographic area | 57.3 | % | 5.2 | % | 10.7 | % | 19.7 | % | 7.2 | % | 100.0 | % | ||||||||
Asset Quality
Nonperforming loans totaled $6.5 million at December 31, 2012, a slight increase from $5.6 million at September 30, 2012, but down from $9.3 million at December 31, 2011. The allowance for loan loss coverage of non-performing loans totaled 121.7% as of December 31, 2012, down from 161.3% at September 30, 2012 and 136.6% at December 31, 2011, respectively, as the Company's allowance was reduced as resolved credits were charged against prior period reserves and the overall quality of the loan portfolio improved.
Total nonperforming assets (NPAs) were $11.5 million at quarter end, compared to $11.3 million at September 30, 2012, and $15.9 million at December 31, 2011. Troubled debt restructured loans totaled $6.7 million, up from $3.5 million at September 30, 2012, but down from $7.2 million at December 31, 2011, as the Company restructured one larger relationship during the fourth quarter.
Classified loans totaled $24.9 million at quarter end, a 23.9% decrease from September 30, 2012 and a 53.1% decrease from a year ago. 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.
"We achieved a substantial reduction in problem loans during the fourth quarter, as we successfully resolved a number of remaining work-out situations," said Hecker.
The following tables summarize nonperforming assets by type and geographic region, and provide trending information over the prior year.
NPA BY CATEGORY | ||||||||||||||||||||
(Dollars in thousands) | 12/31/2012 | % of total | 9/30/2012 | % of total | 12/31/2011 | % of total | ||||||||||||||
Commercial loans | $ | 4,042 | 35.2 | % | $ | 3,400 | 30.2 | % | $ | 3,686 | 23.0 | % | ||||||||
Commercial real estate | 1,716 | 14.9 | % | 1,021 | 9.1 | % | 2,786 | 17.5 | % | |||||||||||
Commercial construction | — | — | % | — | — | % | 44 | 0.3 | % | |||||||||||
Land and land development | 5,118 | 44.6 | % | 6,204 | 55.0 | % | 8,653 | 54.3 | % | |||||||||||
Agriculture | 98 | 0.9 | % | 26 | 0.2 | % | 187 | 1.2 | % | |||||||||||
Multifamily | — | — | % | — | — | % | — | — | % | |||||||||||
Residential real estate | 502 | 4.4 | % | 609 | 5.4 | % | 567 | 3.6 | % | |||||||||||
Residential construction | — | — | % | — | — | % | 2 | — | % | |||||||||||
Consumer | 4 | — | % | 12 | 0.1 | % | 17 | 0.1 | % | |||||||||||
Total NPA by Categories | $ | 11,480 | 100.0 | % | $ | 11,272 | 100.0 | % | $ | 15,942 | 100.0 | % | ||||||||
The modest increase in commercial and commercial real estate NPAs reflects the addition of one larger relationship, for which active restructuring efforts are underway. Exposure from land and land development loans continues to decline each quarter. Most of the remaining NPAs are in the North Idaho/Eastern Washington region, reflecting the Company's higher loan totals in these areas, and the presence of a couple of larger problem credits in this market area.
OREO balances totaled $5.0 million at December 31, 2012, compared to $5.6 million at September 30, 2012 and $6.7 million at December 31, 2011. The Company sold 6 properties totaling $764,000 in the fourth quarter, had net negative valuation adjustments of $191,000 and added 3 properties totaling $270,000. A total of 6 properties remained in the OREO portfolio at quarter end, consisting of $4.9 million in land and land development and $79,000 in residential real estate.
Investment Portfolio, Deposit, Borrowings and Equity Summary
Investments available for sale decreased by $10.1 million during the quarter, as the Company sold several longer-dated securities for gains and experienced more rapid prepayment speeds on its mortgage-backed securities. The $61.1 million increase from December 31, 2011 primarily reflects the investment of funds raised in the Company's 2012 capital offerings.
Deposits totaled $748.9 million at December 31, 2012, compared to $722.1 million at September 30, 2012 and $729.4 million at the end of 2011. The increase from the third quarter reflects increases in demand deposit account balances, which offset continued reductions in CDs. While demand deposits grew by $50.1 million during the fourth quarter, approximately $30.1 million of this growth resulted from temporary shifts in the Company's money market demand deposits and other customer investment funds used to pay taxes and dividends at year end. After adjusting for this temporary growth, demand deposits were still up approximately $20 million, or 6.6% during the quarter. Overall, low-cost transaction deposits now represent 75.8% of the deposit portfolio, up from 70.7% at December 31, 2011. During the fourth quarter, the Company redeemed $13.8 million in brokered CDs, which will save about $125,000 in future annual interest expense. The table below provides information on both current composition and trends in the deposit portfolio.
DEPOSITS | |||||||||||||||
(Dollars in thousands) | 12/31/2012 | % of total | 9/30/2012 | % of total | 12/31/2011 | % of total | |||||||||
Non-interest bearing demand accounts | $ | 254,979 | 34 | % | $ | 214,524 | 29.7 | % | $ | 190,074 | 26.1 | % | |||
Interest bearing demand accounts | 99,623 | 13.3 | % | 89,941 | 12.5 | % | — | — | % | ||||||
NOW | — | — | % | — | — | % | 107,476 | 14.7 | % | ||||||
Money market accounts | 213,155 | 28.5 | % | 216,767 | 30 | % | 201,237 | 27.6 | % | ||||||
Savings & IRA accounts | 75,788 | 10.1 | % | 74,315 | 10.3 | % | 73,493 | 10.1 | % | ||||||
Certificates of deposit (CDs) | 43,535 | 5.8 | % | 47,509 | 6.6 | % | 59,199 | 8.1 | % | ||||||
Jumbo CDs | 56,228 | 7.5 | % | 59,433 | 8.2 | % | 56,177 | 7.7 | % | ||||||
Brokered CDs | 5,200 | 0.7 | % | 18,994 | 2.6 | % | 37,000 | 5.1 | % | ||||||
CDARS CDs to local customers | 426 | 0.1 | % | 601 | 0.1 | % | 4,717 | 0.6 | % | ||||||
Total Deposits | $ | 748,934 | 100.0 | % | $ | 722,084 | 100.0 | % | $ | 729,373 | 100.0 | % | |||
The Company also paid off a $25 million advance from the Federal Home Loan Bank in October, 2012, reducing future annual interest expense by $515,000. Advances from the FHLB now total $4 million. Securities sold subject to repurchase agreements, which reflects investment activity by local municipalities in the Company's market areas, increased to $76.7 million from a seasonal low of $57.0 million at the end of September 2012, but was down from the December 2011 balance of $85.1 million.
Stockholders' equity totaled $114.4 million at December 31, 2012, compared to $113.6 million at September 30, 2012 and $61.6 million at December 31, 2011. The increase from the sequential quarter reflects earnings growth, offset by a slight decrease in the unrealized gain on the Company's securities portfolio. The increase over last year is a result of the Company's successful capital raises, earnings improvement, and larger unrealized gains on the securities portfolio. On a reverse-split adjusted basis, tangible book value per common share totaled $13.63 at year end 2012, compared to $13.51 at September 30, 2012 and $41.95 at December 31, 2011. The increase from the sequential quarter reflected higher capital levels, while the decrease from the prior year reflected the increased number of shares outstanding as a result of the Company's capital raises earlier this year. Tangible stockholders' equity to tangible assets was 11.8%, compared to 11.9% at September 30, 2012 and 6.6% at the end of December last year. Tangible common equity to tangible assets was 9.0%, compared to 9.1% at September 30, 2012 and 3.8% at the end of 2011.
Income Statement Summary
Net income applicable to common shareholders for the fourth quarter totaled $910,000, or $0.14 per common diluted share, compared to a net income applicable to common shareholders of $343,000, or $0.05 per common diluted share in the third quarter of 2012, and $907,000, or $1.08 per common diluted share in the fourth quarter of 2011. Net income applicable to common shareholders improved to $1.9 million or $0.32 per diluted common share for 2012, compared to a net loss of $1.8 million, or $2.15 per diluted common share in 2011. All per share results have been adjusted for the impact of the 1-for-10 reverse stock split, which became effective in October, 2012.
Fourth quarter 2012 net interest income before provision totaled $7.6 million, down slightly from $7.7 million in the third quarter 2012, and from $8.3 million in the fourth quarter last year. The decrease from the third quarter reflects continued pressure on the Company's loan and investment yields, as market rates, particularly for fixed income securities, continued to trend down, and prepayments in the investment portfolio accelerated. The $4.2 million decrease from last year is a result of lower loan and investment yields and higher premium amortization of mortgage-backed securities in the investment portfolio.
Net interest margin improved slightly to 3.53% from the sequential quarter, as the earning asset yield stabilized while the cost of interest-bearing liabilities continued to drop. Reflective of the factors noted above, net interest margin for the year 2012 declined 0.46% to 3.56% as the earning asset yield dropped from 4.81% to 4.15%, while the cost of interest-bearing liabilities declined 0.16% to 0.61%. “Asset yields are still under significant pressure as market conditions, governmental actions, and heavy mortgage refinancing continue to drive effective yields down," said Chief Financial Officer Doug Wright. "We've been able to offset some of this impact in recent quarters by redeploying cash into loans that have higher relative yields, while simultaneously lowering our liability interest costs. However, investing in the current market remains challenging, and the Company continues to approach investment opportunities cautiously to mitigate higher credit or interest rate risk exposure."
Intermountain recorded a $619,000 provision for loan losses in the fourth quarter, down from the $1.2 million expense recorded in the third quarter of 2012, and $706,000 million provision recorded in the comparable period last year. Net chargeoffs totaled $1.8 million during the quarter, compared to $2.3 million in the sequential quarter and $2.4 million in the fourth quarter of 2011. Net chargeoffs for the year totaled $9.1 million, compared to $7.1 million in 2011, as the company accelerated efforts to reduce problem assets further. “During 2012 we worked aggressively to resolve a significant portion of our remaining classified loans. While this resulted in a higher level of chargeoffs, we now hold a substantially lower level of problem assets than our industry peers," Hecker said.
The tables below provide information on other income for the current three-month and twelve-month period in comparison to prior periods.
Three Months Ended | 12/31/2012 | % of Total | 9/30/2012 | % of Total | 12/31/2011 | % of Total | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Fees and service charges | $ | 1,716 | 56 | % | $ | 1,702 | 66 | % | $ | 1,810 | 66 | % | ||||||||
Loan related fee income | 807 | 26 | % | 686 | 27 | % | 559 | 20 | % | |||||||||||
Net gain on sale of securities | 208 | 7 | % | — | — | % | 119 | 4 | % | |||||||||||
Net gain (loss) on sale of other assets | 4 | — | % | (7 | ) | — | % | 4 | — | % | ||||||||||
Other-than-temporary credit impairment on investment securities | — | — | % | (34 | ) | (1 | )% | (64 | ) | (2 | )% | |||||||||
BOLI income | 86 | 3 | % | 86 | 3 | % | 93 | 3 | % | |||||||||||
Hedge Fair Value Adjustment | (26 | ) | (1 | )% | (6 | ) | — | % | — | — | % | |||||||||
Unexercised Warrant Liability Fair Value | 71 | 2 | % | (49 | ) | (2 | )% | — | — | % | ||||||||||
Other income | 204 | 7 | % | 174 | 7 | % | 224 | 9 | % | |||||||||||
Total | $ | 3,070 | 100 | % | $ | 2,552 | 100 | % | $ | 2,745 | 100.0 | % | ||||||||
Twelve Months Ended | 12/31/2012 | % of Total | 12/31/2011 | % of Total | |||||||||
(Dollars in thousands) | |||||||||||||
Fees and service charges | $ | 6,662 | 62 | % | $ | 7,036 | 66 | % | |||||
Loan related fee income | 2,734 | 25 | % | 2,202 | 21 | % | |||||||
Net gain on sale of securities | 794 | 7 | % | 131 | 1 | % | |||||||
Net gain (loss) on sale of other assets | 19 | — | % | (40 | ) | — | % | ||||||
Other-than-temporary credit impairment on investment securities | (357 | ) | (3 | )% | (145 | ) | (1 | )% | |||||
BOLI income | 345 | 3 | % | 362 | 3 | % | |||||||
Hedge Fair Value Adjustment | (326 | ) | (3 | )% | — | — | % | ||||||
Unexercised Warrant Liability Fair Value | 180 | 2 | % | — | — | % | |||||||
Other income | 775 | 7 | % | 1,079 | 10 | % | |||||||
Total | $ | 10,826 | 100 | % | $ | 10,625 | 100 | % | |||||
Other income in the third quarter was $3.1 million, up from $2.6 million in the third quarter of 2012 and $2.7 million in the same period last year, respectively. Higher mortgage origination income and gains on the sale of securities produced the quarterly increases as fee and service charge income was relatively stable. For the year, other income totaled $10.8 million compared to $10.6 million in 2011, as higher mortgage fee income and gains on the sale of securities offset reductions in fees and service charges, secured savings contract income and fair value adjustments.
The tables below provide information operating expense for the current three-month and twelve-month period in comparison to prior periods.
Three Months Ended | 12/31/12 | % of Total | 9/30/12 | % of Total | 12/31/11 | % of Total | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Salaries and employee benefits | $ | 4,181 | 47 | % | $ | 4,103 | 49 | % | $ | 4,123 | 44 | % | ||||||||
Occupancy expense | 1,615 | 19 | % | 1,648 | 20 | % | 1,699 | 19 | % | |||||||||||
Advertising | 174 | 2 | % | 178 | 2 | % | 146 | 2 | % | |||||||||||
Fees and service charges | 620 | 7 | % | 590 | 7 | % | 674 | 7 | % | |||||||||||
Printing, postage and supplies | 208 | 2 | % | 178 | 2 | % | 260 | 3 | % | |||||||||||
Legal and accounting | 483 | 6 | % | 504 | 6 | % | 388 | 4 | % | |||||||||||
FDIC assessment | 97 | 1 | % | 306 | 4 | % | 301 | 3 | % | |||||||||||
OREO operations | 390 | 4 | % | 39 | 1 | % | 805 | 9 | % | |||||||||||
Other expense | 903 | 10 | % | 696 | 9 | % | 770 | 9 | % | |||||||||||
Total | $ | 8,671 | 100 | % | $ | 8,242 | 100 | % | $ | 9,166 | 100 | % | ||||||||
Twelve Months Ended | 12/31/2012 | % of Total | 12/31/2011 | % of Total | |||||||||
(Dollars in thousands) | |||||||||||||
Salaries and employee benefits | $ | 16,291 | 49 | % | $ | 18,736 | 49 | % | |||||
Occupancy expense | 6,570 | 20 | % | 6,879 | 18 | % | |||||||
Advertising | 633 | 2 | % | 677 | 2 | % | |||||||
Fees and service charges | 2,460 | 7 | % | 2,645 | 7 | % | |||||||
Printing, postage and supplies | 987 | 3 | % | 1,135 | 3 | % | |||||||
Legal and accounting | 1,733 | 5 | % | 1,521 | 4 | % | |||||||
FDIC assessment | 1,024 | 3 | % | 1,394 | 4 | % | |||||||
OREO operations | 653 | 2 | % | 2,166 | 6 | % | |||||||
Other expense | 3,082 | 9 | % | 3,177 | 7 | % | |||||||
Total | $ | 33,433 | 100 | % | $ | 38,330 | 100 | % | |||||
Operating expenses totaled $8.7 million in the fourth quarter of 2012, compared to $8.2 million in the sequential quarter and $9.2 million in the fourth quarter of last year, respectively. Increases in OREO, loan servicing and compliance-related expenses offset lower FDIC assessments from the sequential quarter. The reduction from the fourth quarter of last year primarily reflected reductions in FDIC assessments and OREO expenses. For the 12-month period, operating expenses totaled $33.4 million, a $4.9 million, or 12.8% reduction from 2011 as a result of decreases in employee compensation and benefits, occupancy expense, FDIC assessments and OREO expense. “While some expense categories have now stabilized after significant decreases in the past couple years, we are now implementing additional cost reduction plans in other areas, including data processing and occupancy expense," said Wright. "We expect that these new efforts will result in additional cost savings in future periods."
The Company recorded a small $8,000 tax benefit related to a delayed state tax refund during the fourth quarter. Given its current tax position, the Company did not record any other 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 an $8.5 million tax valuation allowance, resulting in a net deferred tax asset of $12.3 million.
Reverse Stock Split & NASDAQ filing
On August 31, 2012, the Company announced that it would implement, effective as of the close of business on October 5, 2012, a 1-for-10 reverse stock split of Intermountain's common stock (both voting and nonvoting) as approved by the shareholders at the Company's Annual Meeting on May 17, 2012.
As a result, the number of shares of outstanding voting and nonvoting common stock has been reduced from approximately 26.0 million and 38.4 million shares to approximately 2.6 million and 3.8 million shares, respectively. The reverse stock split also reduced the number of authorized shares of voting and nonvoting common stock from 300,000,000 and 100,000,000 shares to 30,000,000 and 10,000,000 shares, respectively. Proportional adjustments were also made to the conversion or exercise rights under the Company's outstanding warrants, stock options and other common stock-based equity grants outstanding immediately prior to the effectiveness of the reverse stock split.
The Company also received approval to list its voting common shares on the NASDAQ Capital Market Exchange, and formally listed those shares on January 9, 2013.
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 Capital Market Exchange, 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, 2011; 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) | |||||||||||
12/31/2012 | 9/30/2012 | 12/31/2011 | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents: | |||||||||||
Interest-bearing | $ | 53,403 | $ | 45,015 | $ | 82,242 | |||||
Non-interest bearing and vault | 13,536 | 6,016 | 24,958 | ||||||||
Restricted cash | 13,146 | 12,710 | 2,668 | ||||||||
Available-for-sale securities, at fair value | 280,169 | 290,311 | 219,039 | ||||||||
Held-to-maturity securities, at amortized cost | 14,826 | 14,843 | 16,143 | ||||||||
Federal Home Loan Bank of Seattle stock, at cost | 2,269 | 2,290 | 2,310 | ||||||||
Loans held for sale | 1,684 | 5,070 | 5,561 | ||||||||
Loans receivable, net | 520,768 | 502,852 | 502,252 | ||||||||
Accrued interest receivable | 4,320 | 4,542 | 4,100 | ||||||||
Office properties and equipment, net | 35,453 | 36,031 | 37,687 | ||||||||
Bank-owned life insurance | 9,472 | 9,387 | 9,127 | ||||||||
Other intangibles | 72 | 101 | 189 | ||||||||
Other real estate owned (“OREO”) | 4,951 | 5,636 | 6,650 | ||||||||
Prepaid expenses and other assets | 18,070 | 18,488 | 21,292 | ||||||||
Total assets | $ | 972,139 | $ | 953,292 | $ | 934,218 | |||||
LIABILITIES | |||||||||||
Deposits | $ | 748,934 | $ | 722,084 | $ | 729,373 | |||||
Securities sold subject to repurchase agreements | 76,738 | 56,989 | 85,104 | ||||||||
Advances from Federal Home Loan Bank | 4,000 | 29,000 | 29,000 | ||||||||
Unexercised stock warrant liability | 828 | 899 | — | ||||||||
Cashier checks issued and payable | 2,024 | 266 | 481 | ||||||||
Accrued interest payable | 1,185 | 2,124 | 1,676 | ||||||||
Other borrowings | 16,527 | 16,527 | 16,527 | ||||||||
Accrued expenses and other liabilities | 7,469 | 11,819 | 10,441 | ||||||||
Total liabilities | 857,705 | 839,708 | 872,602 | ||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Common stock - voting shares | 96,368 | 96,330 | 78,916 | ||||||||
Common stock - non-voting shares | 31,941 | 31,941 | — | ||||||||
Preferred stock, Series A | 26,527 | 26,430 | 26,149 | ||||||||
Accumulated other comprehensive income (1) | 3,529 | 3,724 | 2,370 | ||||||||
Accumulated deficit | (43,931 | ) | (44,841 | ) | (45,819 | ) | |||||
Total stockholders' equity | 114,434 | 113,584 | 61,616 | ||||||||
Total liabilities and stockholders' equity | $ | 972,139 | $ | 953,292 | $ | 934,218 | |||||
Book value per common share, excluding preferred stock | $ | 13.64 | $ | 13.53 | $ | 42.17 | |||||
Tangible book value per common share, excluding preferred stock (2) | $ | 13.63 | $ | 13.51 | $ | 41.95 | |||||
Shares outstanding at end of period | 6,442,820 | 6,441,986 | 840,984 | ||||||||
Stockholders' Equity to Total Assets | 11.77 | % | 11.91 | % | 6.6 | % | |||||
Tangible Stockholders' Equity to Tangible Assets (3) | 11.76 | % | 11.91 | % | 6.58 | % | |||||
Tangible Common Equity to Tangible Assets | 9.04 | % | 9.13 | % | 3.78 | % | |||||
(1) Net of deferred income taxes (2) Amount represents common stockholders' equity less net goodwill and other intangible assets divided by total common shares outstanding. (3) Amount represents stockholders' equity less net goodwill and other intangible assets divided by assets less net goodwill and other intangible assets. | |||||||||||
INTERMOUNTAIN COMMUNITY BANCORP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
12/31/2012 | 9/30/2012 | 12/31/2011 | ||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||
Interest income: | ||||||||||||
Loans | $ | 6,906 | $ | 7,031 | $ | 7,831 | ||||||
Investments | 1,689 | 1,896 | 1,939 | |||||||||
Total interest income | 8,595 | 8,927 | 9,770 | |||||||||
Interest expense: | ||||||||||||
Deposits | 700 | 736 | 868 | |||||||||
Borrowings | 312 | 522 | 560 | |||||||||
Total interest expense | 1,012 | 1,258 | 1,428 | |||||||||
Net interest income | 7,583 | 7,669 | 8,342 | |||||||||
Provision for losses on loans | (619 | ) | (1,154 | ) | (706 | ) | ||||||
Net interest income after provision for losses on loans | 6,964 | 6,515 | 7,636 | |||||||||
Other income (expense): | ||||||||||||
Fees and service charges | 1,716 | 1,702 | 1,810 | |||||||||
Loan related fee income | 807 | 686 | 559 | |||||||||
Net gain on sale of securities | 208 | — | 119 | |||||||||
Net gain (loss) on sale of other assets | 4 | (7 | ) | 4 | ||||||||
Other-than-temporary impairment on investments | — | (34 | ) | (64 | ) | |||||||
Bank-owned life insurance | 86 | 86 | 93 | |||||||||
Fair value adjustment on cash flow hedge | (26 | ) | (6 | ) | — | |||||||
Unexercised warrant liability fair value adjustment | 71 | (49 | ) | — | ||||||||
Other income | 204 | 174 | 224 | |||||||||
Total other income, net | 3,070 | 2,552 | 2,745 | |||||||||
Operating expenses: | ||||||||||||
Salaries and employee benefits | 4,181 | 4,103 | 4,123 | |||||||||
Occupancy expense | 1,615 | 1,648 | 1,699 | |||||||||
FDIC assessment | 97 | 306 | 301 | |||||||||
OREO operations | 390 | 39 | 805 | |||||||||
Other expenses | 2,388 | 2,146 | 2,238 | |||||||||
Total operating expenses | 8,671 | 8,242 | 9,166 | |||||||||
Income before income tax benefit | 1,363 | 825 | 1,215 | |||||||||
Income tax benefit | 8 | — | 152 | |||||||||
Net income | 1,371 | 825 | 1,367 | |||||||||
Preferred stock dividend | 461 | 482 | 460 | |||||||||
Net Income applicable to common stockholders | $ | 910 | $ | 343 | $ | 907 | ||||||
Income per share - basic | 0.14 | 0.05 | 1.08 | |||||||||
Income per share - diluted | 0.14 | 0.05 | 1.08 | |||||||||
Weighted-average common shares outstanding - basic (1) | 6,442,729 | 6,441,986 | 840,984 | |||||||||
Weighted-average common shares outstanding - diluted (2) | 6,470,944 | 6,458,227 | 842,733 | |||||||||
(1) Includes the weighted average number of non-voting common shares that were outstanding at December 31, 2012. | ||||||||||||
(2) Includes the weighted average number of non-voting common shares that would be outstanding if the 170,000 in warrants issued in the January 2012 private offering are exercised directly for non-voting common shares. | ||||||||||||
INTERMOUNTAIN COMMUNITY BANCORP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||
Twelve Months Ended | ||||||||
12/31/2012 | 12/31/2011 | |||||||
(Dollars in thousands, except per share amounts) | ||||||||
Interest income: | ||||||||
Loans | $ | 28,063 | $ | 32,821 | ||||
Investments | 7,704 | 8,836 | ||||||
Total interest income | 35,767 | 41,657 | ||||||
Interest expense: | ||||||||
Deposits | 3,002 | 4,408 | ||||||
Borrowings | 2,081 | 2,404 | ||||||
Total interest expense | 5,083 | 6,812 | ||||||
Net interest income | 30,684 | 34,845 | ||||||
Provision for losses on loans | (4,306 | ) | (7,289 | ) | ||||
Net interest income after provision for losses on loans | 26,378 | 27,556 | ||||||
Other income (expense): | ||||||||
Fees and service charges | 6,662 | 7,036 | ||||||
Loan related fee income | 2,734 | 2,202 | ||||||
Net gain on sale of securities | 794 | 131 | ||||||
Net gain (loss) on sale of other assets | 19 | (40 | ) | |||||
Other-than-temporary impairment on investments | (357 | ) | (145 | ) | ||||
Bank-owned life insurance | 345 | 362 | ||||||
Fair value adjustment on cash flow hedge | (326 | ) | — | |||||
Unexercised warrant liability fair value adjustment | 180 | — | ||||||
Other income | 775 | 1,079 | ||||||
Total other income, net | 10,826 | 10,625 | ||||||
Operating expenses: | ||||||||
Salaries and employee benefits | 16,291 | 18,736 | ||||||
Occupancy expense | 6,570 | 6,879 | ||||||
FDIC assessment | 1,024 | 1,394 | ||||||
OREO operations | 653 | 2,166 | ||||||
Other expenses | 8,895 | 9,155 | ||||||
Total operating expenses | 33,433 | 38,330 | ||||||
Income (loss) before income tax benefit | 3,771 | (149 | ) | |||||
Income tax (provision) benefit | 8 | 152 | ||||||
Net income | 3,779 | 3 | ||||||
Preferred stock dividend | 1,891 | 1,808 | ||||||
Net Income (loss) applicable to common stockholders | $ | 1,888 | $ | (1,805 | ) | |||
Income (loss) per share - basic | 0.33 | (2.15 | ) | |||||
Income (loss) per share - diluted | 0.32 | (2.15 | ) | |||||
Weighted-average common shares outstanding - basic (1) | 5,806,958 | 840,654 | ||||||
Weighted-average common shares outstanding - diluted (2) | 5,825,283 | 840,654 | ||||||
(1) Includes the weighted average number of non-voting common shares. | ||||||||
(2) Includes the weighted average number of non-voting common shares that would be outstanding if the 170,000 in warrants issued in the January 2012 private offering are exercised directly for non-voting common shares. | ||||||||
INTERMOUNTAIN COMMUNITY BANCORP KEY PERFORMANCE RATIOS | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
12/31/2012 | 9/30/2012 | 12/31/2011 | 12/31/2012 | 12/30/2011 | |||||||
Net Interest Spread: | |||||||||||
Yield on Loan Portfolio | 5.28 | % | 5.38 | % | 5.81 | % | 5.43 | % | 5.94 | % | |
Yield on Investments & Cash | 2.01 | % | 2.10 | % | 2.52 | % | 2.23 | % | 2.81 | % | |
Yield on Interest-Earning Assets | 4.00 | % | 4.04 | % | 4.62 | % | 4.15 | % | 4.81 | % | |
Cost of Deposits | 0.38 | % | 0.40 | % | 0.46 | % | 0.42 | % | 0.59 | % | |
Cost of Advances | 3.08 | % | 2.21 | % | 2.20 | % | 2.25 | % | 2.13 | % | |
Cost of Borrowings | 1.50 | % | 1.74 | % | 2.04 | % | 1.96 | % | 1.75 | % | |
Cost of Interest-Bearing Liabilities | 0.49 | % | 0.59 | % | 0.67 | % | 0.61 | % | 0.77 | % | |
Net Interest Spread | 3.50 | % | 3.45 | % | 3.95 | % | 3.53 | % | 4.03 | % | |
Net Interest Margin | 3.53 | % | 3.47 | % | 3.94 | % | 3.56 | % | 4.02 | % | |
Performance Ratios: | |||||||||||
Return on Average Assets | 0.57 | % | 0.34 | % | 0.58 | % | 0.39 | % | — | % | |
Return on Average Common Stockholders' Equity | 4.14 | % | 1.58 | % | 10.28 | % | 2.75 | % | -5.31 | % | |
Return on Average Common Tangible Equity (1) | 4.14 | % | 1.58 | % | 10.34 | % | 2.75 | % | -5.27 | % | |
Operating Efficiency | 81.39 | % | 80.64 | % | 82.67 | % | 80.54 | % | 84.30 | % | |
Noninterest Expense to Average Assets | 3.60 | % | 3.41 | % | 3.91 | % | 3.46 | % | 3.99 | % | |
(1) Average common tangible equity is average common stockholders' equity less average net goodwill and other intangible assets. | |||||||||||
INTERMOUNTAIN COMMUNITY BANCORP LOAN AND REGULATORY CAPITAL DATA | ||||||||||
12/31/2012 | 9/30/2012 | 12/31/2011 | ||||||||
(Dollars in thousands) | ||||||||||
Loan Data | ||||||||||
Net Charge-Offs to Average Net Loans (QTD Annualized) | 1.37 | % | 1.79 | % | 1.81 | % | ||||
Loan Loss Allowance to Total Loans | 1.50 | % | 1.78 | % | 2.46 | % | ||||
Nonperforming Assets: | ||||||||||
Accruing Loans-90 Days Past Due | $ | — | $ | — | $ | — | ||||
Nonaccrual Loans | 6,529 | 5,636 | 9,292 | |||||||
Total Nonperforming Loans | 6,529 | 5,636 | 9,292 | |||||||
OREO | 4,951 | 5,636 | 6,650 | |||||||
Total Nonperforming Assets (“NPA”) | $ | 11,480 | $ | 11,272 | $ | 15,942 | ||||
Troubled Debt Restructured Loans | 6,719 | 3,487 | 7,236 | |||||||
NPA to Total Assets | 1.18 | % | 1.18 | % | 1.71 | % | ||||
NPA to Net Loans Receivable | 2.20 | % | 2.24 | % | 3.17 | % | ||||
NPA to Estimated Risk Based Capital | 9.33 | % | 9.17 | % | 21.31 | % | ||||
NPA to Tangible Equity + Allowance for Loan Loss | 9.39 | % | 9.20 | % | 21.51 | % | ||||
Loan Delinquency Ratio (30 days and over) | 0.13 | % | 0.21 | % | 0.28 | % | ||||
12/31/2012 | 9/30/2012 | 12/31/2011 | ||||||||
Allowance for Loan Loss by Loan Type | (Dollars in thousands) | |||||||||
Commercial loans | $ | 2,156 | $ | 3,073 | $ | 2,817 | ||||
Commercial real estate loans | 2,762 | 2,728 | 4,880 | |||||||
Commercial construction loans | 101 | 67 | 500 | |||||||
Land and land development loans | 1,197 | 1,654 | 2,273 | |||||||
Agriculture loans | 228 | 187 | 172 | |||||||
Multifamily loans | 51 | 56 | 91 | |||||||
Residential real estate loans | 1,144 | 1,042 | 1,566 | |||||||
Residential construction loans | 24 | 13 | 59 | |||||||
Consumer loans | 202 | 198 | 295 | |||||||
Municipal loans | 78 | 70 | 37 | |||||||
Totals | $ | 7,943 | $ | 9,088 | $ | 12,690 | ||||
Regulatory Capital (Estimated for "The Company") | ||||||||||
Total capital (to risk-weighted assets): | ||||||||||
The Company | 20.51 | % | 20.86 | % | 12.58 | % | ||||
Panhandle State Bank | 19.07 | % | 19.28 | % | 13.74 | % | ||||
Tier 1 capital (to risk-weighted assets): | ||||||||||
The Company | 19.26 | % | 19.61 | % | 11.32 | % | ||||
Panhandle State Bank | 17.82 | % | 18.02 | % | 12.48 | % | ||||
Tier 1 capital (to average assets): | ||||||||||
The Company | 12.54 | % | 11.97 | % | 7.32 | % | ||||
Panhandle State Bank | 11.60 | % | 11.11 | % | 8.07 | % | ||||