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| 8-K - CURRENT REPORT - NB&T FINANCIAL GROUP INC | d568291d8k.htm |
Exhibit 99.1
NB&T Financial Reports Earnings for Second Quarter 2013
July 16, 2013
NB&T Financial Group, Inc. (Nasdaq: NBTF), parent company of The National Bank and Trust Company (“NB&T”), Wilmington, Ohio, announced net income for the second quarter of 2013 of $1.1 million, or $.33 per share, compared to net income of $1.2 million, or $.33 per share, for the second quarter of 2012. Net income declined primarily due to an approximately $1.0 million increase in the loan loss provision and continued margin compression, partially offset by gains on security sales of $817,000 and gain on extinguishment of long-term debt of approximately $300,000. Net income for the first six months of 2013 was $2.2 million, or $.63 per share, compared to $1.5 million, or $.44 per share, for the same period in 2012.
Comparing the first half of 2013 to 2012, President & CEO, John Limbert, commented, “The low interest rate environment is continuing to negatively impact our margin. In addition, we continue to invest considerable time and talent resolving loans with certain clients experiencing financial problems. While our non-performing loans have decreased by over 25% year over year, based on our ongoing analysis of those loans, we recorded additional loan loss provisions this quarter. At June 30, 2013, the total allowance for loan losses is $5.8 million, representing 1.4% of total loans.”
Net interest income was $5.1 million for the second quarter of 2013, compared to $5.4 million for the second quarter of 2012. Net interest margin decreased to 3.34% for the second quarter of 2013, compared to 3.38% for the same quarter last year. The net interest margin decreased primarily due to continued repricing of new and variable-rate assets to lower rates. Net interest income for the first half of 2013 was $10.5 million, compared to $10.9 million for the first half of 2012.
The provision for loan losses for the second quarter of 2013 was $1.3 million, compared to $332,000 in the same quarter last year. Net charge-offs were $167,000 in the second quarter of 2013, compared to $397,000 in the second quarter of 2012. Year to date net charge-offs for 2013 were $397,000, compared to $1.8 million for the first six months of 2012. The provision for loan losses for the six months ended June 30, 2013 was increased to add specific loan reserves of approximately $1.2 million for one commercial loan, bringing the total specific reserve on this loan to $2.0 million. The borrower’s financial condition has weakened, and the reserve is based on the estimated value of the accounts receivable not pledged to third parties and inventory securing the loan. Non-performing loans were $9.1 million at June 30, 2013, compared to $12.1 million at June 30, 2012.
Total non-interest income was $3.3 million for the second quarter of 2013, compared to $2.3 million for the second quarter of 2012. The increase is primarily due to a gain of $300,000 realized on the extinguishment of $1.0 million in trust preferred debt at a market discount in June 2013. In addition, in the second quarter of 2013, the Company also realized approximately $817,000 in securities sale gains, compared to $161,000 in securities sale gains in the second quarter of last year. In June 2013, the Company sold approximately $20.0 million in agency, mortgage-backed and taxable municipal securities to take advantage of current market pricing. Non-interest income for the first six months of 2013 was $5.2 million, compared to $4.4 million for the same period last year.
Total non-interest expense was $5.6 million for the second quarter of 2013, compared to $5.8 million for the second quarter of 2012. The decline in expense is due to continued focus on expense reduction primarily in the areas of personnel and processing efficiency. In addition, net costs associated with the operation of other real estate have declined approximately 44%, or $101,000, compared to the same quarter last year, due to a decline in other real estate owned balances from $3.0 million at June 30, 2012 to $1.9 million at June 30, 2013.
On June 18, 2013, the Board of Directors declared a dividend of $0.30 per share, payable July 22, 2013 to shareholders of record on June 28, 2013.
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(Unaudited)
| Three Months Ending | Six Months Ending | |||||||||||||||||||||||||||
| 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 6/30/2013 | 6/30/2012 | ||||||||||||||||||||||
| Statements of Income |
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| Interest income |
$ | 5,586 | $ | 5,896 | $ | 6,277 | $ | 6,197 | $ | 6,278 | $ | 11,482 | $ | 12,805 | ||||||||||||||
| Interest expense |
473 | 519 | 560 | 749 | 896 | 992 | 1,860 | |||||||||||||||||||||
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| Net interest income |
5,113 | 5,377 | 5,717 | 5,448 | 5,382 | 10,490 | 10,945 | |||||||||||||||||||||
| Provision for loan losses |
1,300 | 140 | 682 | 1,973 | 332 | 1,440 | 1,632 | |||||||||||||||||||||
| Other non-interest income |
2,450 | 1,986 | 2,133 | 2,977 | 2,176 | 4,436 | 4,292 | |||||||||||||||||||||
| Other-than-temporary impairment charge |
— | — | — | — | (35 | ) | — | (35 | ) | |||||||||||||||||||
| Net gains (losses) on sales of securities |
817 | (36 | ) | — | 1,013 | 161 | 781 | 161 | ||||||||||||||||||||
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| Total non-interest income |
3,267 | 1,950 | 2,133 | 3,990 | 2,302 | 5,217 | 4,418 | |||||||||||||||||||||
| Total non-interest expenses |
5,605 | 5,886 | 5,745 | 5,934 | 5,801 | 11,491 | 11,815 | |||||||||||||||||||||
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| Income before income taxes |
1,475 | 1,301 | 1,423 | 1,531 | 1,551 | 2,776 | 1,916 | |||||||||||||||||||||
| Income taxes |
336 | 282 | 336 | 257 | 396 | 618 | 400 | |||||||||||||||||||||
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| Net income |
$ | 1,139 | $ | 1,019 | $ | 1,087 | $ | 1,274 | $ | 1,155 | $ | 2,158 | $ | 1,516 | ||||||||||||||
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| Per Share Data |
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| Basic earnings per share |
$ | 0.33 | $ | 0.30 | $ | 0.32 | $ | 0.37 | $ | 0.33 | $ | 0.63 | $ | 0.44 | ||||||||||||||
| Diluted earnings per share |
0.33 | 0.30 | 0.32 | 0.37 | 0.33 | 0.63 | 0.44 | |||||||||||||||||||||
| Dividends per share |
0.30 | 0.30 | 0.30 | 0.30 | 0.30 | 0.60 | 0.60 | |||||||||||||||||||||
| Book value at quarter end |
19.83 | 20.58 | 20.70 | 20.79 | 20.72 | 19.83 | 20.72 | |||||||||||||||||||||
| Average basic shares outstanding |
3,415 | 3,420 | 3,422 | 3,424 | 3,425 | 3,418 | 3,425 | |||||||||||||||||||||
| Average diluted shares outstanding |
3,426 | 3,427 | 3,426 | 3,432 | 3,431 | 3,426 | 3,433 | |||||||||||||||||||||
| Balance Sheet Items (Quarter End) |
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| Total assets |
$ | 659,827 | $ | 673,729 | $ | 651,075 | $ | 669,838 | $ | 687,226 | $ | 659,827 | $ | 687,226 | ||||||||||||||
| Securities |
134,154 | 144,156 | 133,020 | 137,998 | 156,161 | 134,154 | 156,161 | |||||||||||||||||||||
| Loans, including loans held for sale |
410,202 | 407,818 | 402,184 | 400,036 | 396,500 | 410,202 | 396,500 | |||||||||||||||||||||
| Allowance for loan losses |
5,803 | 4,670 | 4,760 | 6,135 | 4,508 | 5,803 | 4,508 | |||||||||||||||||||||
| Deposits |
572,926 | 577,349 | 559,568 | 576,348 | 592,979 | 572,926 | 592,979 | |||||||||||||||||||||
| Borrowings |
14,310 | 15,310 | 15,310 | 15,310 | 15,310 | 14,310 | 15,310 | |||||||||||||||||||||
| Total shareholders’ equity |
67,682 | 70,290 | 70,820 | 71,153 | 70,955 | 67,682 | 70,955 | |||||||||||||||||||||
| Assets Under Management |
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| Total assets |
$ | 659,827 | $ | 673,729 | $ | 651,075 | $ | 669,838 | $ | 687,226 | $ | 659,827 | $ | 687,226 | ||||||||||||||
| Cash management sweep accounts |
38,019 | 40,799 | 28,471 | 37,477 | 40,739 | 38,019 | 40,739 | |||||||||||||||||||||
| Market value of trust assets |
237,884 | 238,532 | 216,914 | 215,743 | 193,906 | 237,884 | 193,906 | |||||||||||||||||||||
| Market value of brokerage assets |
76,668 | 77,707 | 73,178 | 71,417 | 67,082 | 76,668 | 67,082 | |||||||||||||||||||||
| Loans serviced for others |
42,496 | 43,626 | 47,735 | 48,984 | 53,419 | 42,496 | 53,419 | |||||||||||||||||||||
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| Total assets under management |
$ | 1,054,894 | $ | 1,074,393 | $ | 1,017,373 | $ | 1,043,459 | $ | 1,042,372 | $ | 1,054,894 | $ | 1,042,372 | ||||||||||||||
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| Selected Financial Ratios |
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| Return on average assets (annualized) |
0.69 | % | 0.61 | % | 0.65 | % | 0.74 | % | 0.67 | % | 0.65 | % | 0.44 | % | ||||||||||||||
| Return on average equity (annualized) |
6.48 | 5.81 | 6.06 | 7.10 | 6.30 | 6.15 | 4.30 | |||||||||||||||||||||
| Dividend payout ratio |
90.91 | 100.00 | 93.75 | 81.08 | 90.91 | 95.24 | 136.36 | |||||||||||||||||||||
| Net interest margin |
3.34 | 3.50 | 3.67 | 3.42 | 3.38 | 3.42 | 3.42 | |||||||||||||||||||||
| Non-interest expense to total revenue |
66.89 | 80.33 | 73.18 | 62.87 | 75.49 | 73.16 | 76.91 | |||||||||||||||||||||
| Average loans to average total assets |
61.10 | 59.42 | 59.82 | 57.80 | 56.87 | 60.27 | 56.57 | |||||||||||||||||||||
| Asset Quality |
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| Nonaccrual loans |
$ | 9,006 | $ | 9,097 | $ | 9,815 | $ | 12,179 | $ | 11,962 | $ | 9,006 | $ | 11,962 | ||||||||||||||
| Accruing and 90 or more days past due |
73 | 1,285 | 778 | 247 | 165 | 73 | 165 | |||||||||||||||||||||
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| Total nonperforming loans |
$ | 9,079 | $ | 10,382 | $ | 10,593 | $ | 12,426 | $ | 12,127 | $ | 9,079 | $ | 12,127 | ||||||||||||||
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| Other real estate owned |
1,894 | 1,868 | 1,327 | 2,196 | 3,032 | 1,894 | 3,032 | |||||||||||||||||||||
| Net charge-offs |
167 | 230 | 2,057 | 346 | 397 | 397 | 1,792 | |||||||||||||||||||||
| Non-performing loans to total loans |
2.21 | % | 2.55 | % | 2.63 | % | 3.11 | % | 3.06 | % | 2.21 | % | 3.06 | % | ||||||||||||||
| Loan loss allowance to total loans |
1.42 | 1.15 | 1.18 | 1.53 | 1.14 | 1.42 | 1.14 | |||||||||||||||||||||
| Loan loss allowance to non-performing loans |
63.92 | 44.98 | 44.94 | 49.37 | 37.17 | 63.92 | 37.17 | |||||||||||||||||||||
| Accruing loans 30+ days past due to total loans |
0.57 | 0.59 | 0.46 | 0.64 | 0.36 | 0.57 | 0.36 | |||||||||||||||||||||
| Net charge-offs to average loans |
0.16 | 0.23 | 2.04 | 0.35 | 0.41 | 0.20 | 0.91 | |||||||||||||||||||||
| Capital |
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| Average equity to average total assets |
10.60 | % | 10.54 | % | 10.64 | % | 10.38 | % | 10.66 | % | 10.60 | % | 10.66 | % | ||||||||||||||
| Tier 1 leverage ratio** |
11.19 | 11.20 | 11.27 | 10.97 | 10.80 | 11.19 | 10.80 | |||||||||||||||||||||
| Total risk-based capital ratio** |
18.95 | 19.08 | 19.51 | 19.51 | 19.20 | 18.95 | 19.20 | |||||||||||||||||||||
| ** | Estimated for current quarter end |