Intermountain Community Bancorp (Nasdaq:IMCB), the
holding company for Panhandle State Bank, reported $1.3 million, or
$0.19 per diluted share, in net income applicable to common
shareholders for the quarter ended June 30, 2014, as compared to
net income of $1.0 million, or $0.16 per diluted share, and $1.5
million, or $0.23 per diluted share, in the first quarter of 2014
and second quarter of 2013, respectively. Higher net interest
income, a lower loan loss provision and higher other income offset
higher operating expenses to produce the improvement over first
quarter 2014 results. Stabilizing net interest income and a lower
loan loss provision in the second quarter of 2014 were offset by
lower other income and a higher tax provision in the comparative
results from the same quarter last year. For the first six months
of 2014, the Company reported $2.3 million, or $0.34 per diluted
share, compared to $2.5 million, or $0.39 per diluted share for the
same period in 2013. For these comparative time periods, reductions
in interest and other income and a higher tax provision offset
lower interest and other operating expenses.
"After a period of declining net interest margins as a result of
low market interest rates, our net interest income appears to be
stabilizing and we continue to lower credit and operating costs,"
said Chief Executive Officer, Curt Hecker.
On July 23, 2014, Intermountain and Columbia Banking System,
Inc. (Nasdaq:COLB) ("Columbia") jointly announced the signing of a
definitive agreement to merge Intermountain with Columbia in a
stock and cash transaction valued at approximately $121.5 million
or approximately $18.22 per share based on Columbia's July 23, 2014
stock price. The press release dated July 23, 2014 announcing this
agreement contains additional details.
We're excited about our partnership with Columbia, and the
development of the Northwest's premier community bank. We believe
that the united institution will provide a host of new benefits and
opportunities for our shareholders, customers, employees and
communities," Mr. Hecker said.
Second Quarter 2014 Highlights (at or for the
period ended June 30, 2014, compared to March 31, 2014, and June
30, 2013)
- Interest income improved $426,000 over the first quarter, as
asset yields increased from 3.81% to 3.95%. While results were down
from a year ago, the recent trend reflects stabilization in the
Company's yield on earning assets.
- Interest expense continued to decrease, totaling $777,000 for
the second quarter of 2014, compared to $782,000 for the first
quarter of 2014 and $951,000 in the second quarter of 2013.
- $3,000 in loan loss provision was recovered during the second
quarter, compared to loan loss provision of $103,000 and $247,000
in the first quarter of 2014 and second quarter of 2013,
respectively.
- Net loans receivable increased by $13.3 million over the first
quarter 2014 balance and were stable with last year's total.
Assets and Loan Portfolio Summary
Assets totaled $920.2 million at June 30, 2014, compared to
$910.5 million at March 31, 2014 and $930.6 million at June 30,
2013, respectively. The increase from the March quarter reflects
growth in net loans receivable, while the reduction from last June
reflects the use of cash to redeem the Company's Capital Purchase
Program ("CPP") preferred stock in November 2013. Net loans
receivable increased by $13.3 million from March 31, 2014, led by
strong growth in commercial and agricultural balances. Loans
receivable were down $2.5 million from June of last year, as growth
in commercial and agricultural totals were offset by decreases in
commercial real estate loans.
"We're encouraged by the improvement in commercial and
agricultural balances as businesses gain more confidence, and our
lenders attract new customers," noted Hecker. "We've been cautious
on commercial real estate lending, however, as current market
conditions favor lower pricing and longer durations than we've been
comfortable with."
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) |
6/30/2014 |
% of total |
3/31/2014 |
% of total |
6/30/2013 |
% of total |
Commercial |
$118,353 |
22.4% |
$110,879 |
21.5% |
$113,699 |
21.4% |
Commercial real estate |
169,234 |
32.0 |
174,371 |
33.9 |
190,816 |
36.0 |
Commercial construction |
12,293 |
2.3 |
15,230 |
3.0 |
10,085 |
1.9 |
Land and land development |
34,216 |
6.5 |
30,695 |
6.0 |
30,895 |
5.8 |
Agriculture |
105,545 |
20.0 |
94,809 |
18.4 |
94,831 |
17.8 |
Multifamily |
13,310 |
2.5 |
14,529 |
2.8 |
15,271 |
2.9 |
Residential real estate |
57,914 |
11.0 |
58,333 |
11.3 |
58,309 |
11.0 |
Residential construction |
2,021 |
0.4 |
1,533 |
0.3 |
2,004 |
0.4 |
Consumer |
8,860 |
1.7 |
8,672 |
1.7 |
8,843 |
1.7 |
Municipal |
6,500 |
1.2 |
5,928 |
1.1 |
6,029 |
1.1 |
Total loans receivable |
$528,246 |
100.0% |
$514,979 |
100.0% |
$530,782 |
100.0% |
Allowance for loan losses |
(7,683) |
|
(7,779) |
|
(8,042) |
|
Net deferred origination fees |
(283) |
|
(200) |
|
— |
|
Loans receivable, net |
$520,280 |
|
$507,000 |
|
$522,740 |
|
LOAN
PORTFOLIO BY LOCATION |
June 30,
2014 |
|
|
(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 |
$80,344 |
$6,063 |
$9,583 |
$18,686 |
$3,677 |
$118,353 |
22.4% |
Commercial real estate |
118,130 |
9,004 |
9,373 |
16,312 |
16,415 |
169,234 |
32.0 |
Commercial construction |
12,293 |
— |
— |
— |
— |
12,293 |
2.3 |
Land and land development |
26,138 |
1,403 |
5,013 |
1,190 |
472 |
34,216 |
6.5 |
Agriculture |
1,879 |
3,717 |
26,078 |
70,355 |
3,516 |
105,545 |
20.0 |
Multifamily |
8,795 |
174 |
3,042 |
133 |
1,166 |
13,310 |
2.5 |
Residential real estate |
41,175 |
3,535 |
4,176 |
6,905 |
2,123 |
57,914 |
11.0 |
Residential construction |
2,021 |
— |
— |
— |
— |
2,021 |
0.4 |
Consumer |
5,181 |
1,132 |
644 |
1,607 |
296 |
8,860 |
1.7 |
Municipal |
5,203 |
1,297 |
— |
— |
— |
6,500 |
1.2 |
Total |
$301,159 |
$26,325 |
$57,909 |
$115,188 |
$27,665 |
$528,246 |
100.0% |
Percent of total loans in geographic
area |
57.0% |
5.0% |
11.0% |
22.0% |
5.0% |
100.0% |
|
Asset Quality
Nonperforming loans totaled $3.4 million at June 30, 2014, down
from $4.5 million at March 31, 2014 and $4.8 million at the
end of the same period last year. The allowance for loan loss
coverage of non-performing loans was 224.7% in the second quarter,
compared to 172.2% at March 31, 2014 and 167.6% at June 30, 2013,
respectively.
Nonperforming assets ("NPAs") were $7.1 million at quarter end,
compared to $8.3 million at March 31, 2014, and $9.3 million at
June 30, 2013. Outstanding troubled debt restructured loans
totaled $9.4 million, down from $9.9 million at March 31, 2014, and
$11.8 million at June 30, 2013.
The following table summarizes nonperforming assets by type and
provides trending information over the prior year.
NPA
BY CATEGORY |
(Dollars in thousands) |
6/30/2014 |
% of total |
3/31/2014 |
% of total |
6/30/2013 |
% of total |
Commercial |
$2,205 |
31.0% |
$2,966 |
35.6% |
$1,417 |
15.2% |
Commercial real estate |
75 |
1.1 |
163 |
2.0 |
2,728 |
29.3 |
Land and land development |
3,811 |
53.6 |
3,841 |
46.4 |
4,626 |
49.6 |
Agriculture |
206 |
2.9 |
611 |
7.4 |
276 |
3.0 |
Residential real estate |
804 |
11.3 |
702 |
8.5 |
173 |
1.9 |
Consumer |
3 |
0.1 |
3 |
0.1 |
91 |
1.0 |
Total NPA by Categories |
$7,104 |
100.0% |
$8,286 |
100.0% |
$9,311 |
100.0% |
Commercial real estate and land development NPAs continued to
decrease, reflecting ongoing loan resolution activity. Commercial
NPAs also declined from March 31 as several commercial SBA loans
were resolved during the quarter. Ag portfolio quality
continues to be strong, although the Company is taking additional
measures to mitigate moderately higher levels of stress in this
portfolio. Land and land development loans still comprise the
greatest proportion of NPA totals, primarily as a result of one
large OREO asset, which was sold on an installment sale
contract. The majority of NPAs are in the North Idaho/Eastern
Washington region, reflecting the Company's higher loan totals in
these areas.
Classified loans totaled $17.5 million at quarter end, down from
$19.6 million at March 31, 2014 and $26.3 million at June 30, 2013.
The reductions reflect both loan resolution efforts and customers'
improved financial strength. 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.
OREO balances totaled $3.7 million at June 30, 2014, compared to
$3.8 million at March 31, 2014 and $4.5 million at June 30,
2013. One small property was sold from the OREO portfolio
during the quarter. As noted above, the bulk of the OREO
balance is one development property, which is being sold in an
installment sales agreement over a five-year period.
Investment Portfolio, Deposit, Borrowings and Equity
Summary
At $261.2 million, investments available-for-sale were stable
during the quarter and up $4.6 million from June of last year, as
the market value of the portfolio increased moderately. Market
rates have been relatively stable over the past few months since
dropping at the beginning of the year and prepayments on the
Company's mortgage-backed securities have slowed significantly,
creating moderate improvements in the Company's investment
yield. "Still, finding reasonably priced new investments in
this market remains challenging as demand for all types of fixed
income securities is very high," said Chief Financial Officer Doug
Wright. "Given these conditions, we continue to approach the
markets cautiously, keeping our portfolio duration relatively
short," he added.
Deposits totaled $693.9 million at June 30, 2014, compared to
$710.6 million at March 31, 2014 and $699.5 million at the end of
the second quarter last year. The table below provides information
on both current composition and trends in the deposit
portfolio.
DEPOSITS |
(Dollars in thousands) |
6/30/2014 |
% of total |
3/31/2014 |
% of total |
6/30/2013 |
% of total |
Non-interest bearing demand accounts |
$234,869 |
33.8% |
$237,077 |
33.3% |
$224,472 |
32.0% |
Interest bearing demand accounts |
101,477 |
14.6 |
103,677 |
14.6 |
100,490 |
14.4 |
Money market accounts |
213,514 |
30.9 |
217,954 |
30.7 |
222,161 |
31.8 |
Savings & IRA accounts |
67,528 |
9.7 |
69,470 |
9.8 |
64,390 |
9.2 |
Certificates of deposit (CDs) |
30,785 |
4.4 |
33,563 |
4.7 |
37,495 |
5.4 |
Jumbo CDs |
45,715 |
6.6 |
48,809 |
6.9 |
50,362 |
7.2 |
CDARS CDs to local customers |
— |
— |
— |
— |
151 |
— |
Total Deposits |
$693,888 |
100.0% |
$710,550 |
100.0% |
$699,521 |
100.0% |
Demand deposit account balances were down moderately from March
31, 2014 as a result of tax payments and operating expenses
incurred by commercial clients during the quarter. These
balances increased by $11.4 million or 3.5% over the same time
period last year. They total a combined 48.4% of the deposit base
and represent a strong, low-cost funding base for the
Company. Money market account balances have decreased
modestly, offset by increases in savings account balances. The
Company continues to redeem or reprice higher cost CDs to reduce
interest expense and has no brokered or other wholesale CDs
outstanding.
Stockholders' equity totaled $99.0 million at June 30, 2014,
compared to $95.9 million at March 31, 2014 and $113.0 million at
June 30, 2013. The increase over last quarter reflects earnings
improvement and increases in the market value of the Company's
securities portfolio. The redemption of the Company's CPP preferred
stock offset earnings contributions, resulting in the decrease in
stockholders' equity from June 30, 2013. Tangible book value
per common share totaled $15.25 at June 30, 2014, $14.77 at March
31, 2014, and $13.38 at June 30, 2013, respectively.
Tangible stockholders' equity to tangible assets was 10.8%,
compared to 10.5% at March 31, 2014 and 12.1% at the end of June
last year. Tangible common equity to tangible assets was 10.8%,
compared to 10.5% at March 31, 2014 and 9.3% at June 30, 2013.
Income Statement Summary
Net income applicable to common shareholders for the second
quarter totaled $1.3 million, or $0.19 per common diluted share,
compared to net income applicable to common shareholders of $1.0
million, or $0.16 per common diluted share in the first quarter of
2014, and $1.5 million, or $0.23 per common diluted share in the
second quarter of 2013. For the six-month period ending June 30,
2014, net income applicable to common shareholders totaled $2.3
million, or $0.34 per diluted share, compared to $2.5 million, or
$0.39 per diluted share in the same time period last year.
Second quarter 2014 net interest income before provision totaled
$7.4 million, up from $7.0 million in the first quarter and down
from $7.6 million in second quarter of last year,
respectively. The increase from the first quarter reflects
higher loan interest income as both loan balances and loan yields
increased during the quarter. The decrease from the prior year
reflects lower loan interest income as loan yields were modestly
higher a year ago, offset by higher investment income and lower
interest expense in the current period. The net interest margin was
3.58% for the second quarter, compared to 3.43% in the first
quarter of 2014 and 3.59% in the second quarter of 2013. The yield
on interest earning assets was 3.95% for the second quarter of
2014, versus 3.81% and 4.04% in the first quarter of 2014 and
second quarter of 2013, respectively. The cost on
interest-bearing liabilities was 0.39% for the quarter ended June
30, 2014, stable with the 0.39% experienced in the first quarter of
2014, and down from 0.48% in the second quarter of 2013.
The Company recovered $3,000 in loan loss provision during the
second quarter, compared to loan loss provisions of $103,000 and
$247,000 in the first quarter of 2014 and second quarter of 2013,
respectively. The Company experienced net chargeoffs of $92,000
during the second quarter of 2014, compared to net chargeoffs of
$11,000 in the first quarter of 2014 and net recoveries of $117,000
in the second quarter of 2013.
The table below provides information on other income for the
current three- and six-month periods in comparison to prior
periods.
Three Months Ended |
6/30/14 |
% of Total |
3/31/14 |
% of Total |
6/30/13 |
% of Total |
|
(Dollars in
thousands) |
Fees and service charges |
$1,212 |
47% |
$1,122 |
57% |
$1,319 |
46% |
Commissions & fees from trust &
investment advisory services |
557 |
22 |
541 |
27 |
645 |
23 |
Loan related fee income |
403 |
16 |
305 |
15 |
586 |
21 |
Net gain on sale of securities |
168 |
6 |
5 |
— |
163 |
6 |
Net gain on sale of other assets |
4 |
— |
4 |
— |
2 |
— |
Other-than-temporary credit impairment on
investment securities |
— |
— |
— |
— |
(21) |
(1) |
BOLI income |
86 |
3 |
79 |
4 |
85 |
3 |
Hedge fair value adjustment |
— |
— |
— |
— |
80 |
3 |
Unexercised warrant liability fair value
adjustment |
123 |
5 |
(106) |
(5) |
(54) |
(2) |
Other income |
34 |
1 |
48 |
2 |
40 |
1 |
Total |
$2,587 |
100% |
$1,998 |
100% |
$2,845 |
100% |
Six Months Ended |
6/30/14 |
% of
Total |
6/30/13 |
% of
Total |
|
(Dollars in
thousands) |
Fees and service charges |
$2,333 |
51% |
$2,398 |
45% |
Commissions & fees from trust &
investment advisory services |
1,098 |
24 |
1,172 |
21 |
Loan related fee income |
707 |
15 |
1,197 |
22 |
Net gain on sale of securities |
174 |
4 |
203 |
4 |
Net gain on sale of other assets |
8 |
— |
6 |
— |
Other-than-temporary credit impairment on
investment securities |
— |
— |
(63) |
(1) |
BOLI income |
165 |
4 |
170 |
3 |
Hedge fair value adjustment |
— |
— |
146 |
3 |
Unexercised warrant liability fair value
adjustment |
17 |
— |
2 |
— |
Other income |
82 |
2 |
153 |
3 |
Total |
$4,584 |
100% |
$5,384 |
100% |
Other income in the second quarter of 2014 was $2.6 million, up
from $2.0 million in the first quarter of 2014 and down from $2.8
million in the second quarter of 2013. The improvement from first
quarter reflected increases in virtually all areas of non-interest
income, as business activity picked up, the Company sold securities
at a gain, and it experienced a positive fair value adjustment on
its warrant liability. The decrease from second quarter last year
primarily reflects reduced overdraft income and mortgage
origination fees. For the six-month period ending June 30, 2014,
other income totaled $4.6 million, down $800,000 from the same
period last year, as income from mortgage refinancing dropped
significantly. The table below provides information on operating
expenses for the current three- and six-month periods in comparison
to prior periods.
Three Months Ended |
6/30/14 |
% of Total |
3/31/14 |
% of Total |
6/30/13 |
% of
Total |
|
(Dollars in
thousands) |
Salaries and employee benefits |
$4,505 |
54% |
$3,876 |
53% |
$4,283 |
53% |
Occupancy expense |
1,145 |
14 |
1,181 |
16 |
1,174 |
14 |
Technology |
874 |
11 |
822 |
11 |
925 |
11 |
Advertising |
136 |
2 |
149 |
2 |
180 |
2 |
Fees and service charges |
109 |
1 |
90 |
1 |
85 |
1 |
Printing, postage and supplies |
151 |
2 |
175 |
2 |
173 |
2 |
Legal and accounting |
422 |
5 |
403 |
5 |
484 |
6 |
FDIC assessment |
146 |
2 |
146 |
2 |
165 |
2 |
OREO operations |
39 |
— |
(63) |
(1) |
32 |
— |
Other expense |
707 |
9 |
656 |
9 |
719 |
9 |
Total |
$8,234 |
100% |
$7,435 |
100% |
$8,220 |
100% |
Six Months Ended |
6/30/14 |
% of Total |
6/30/13 |
% of Total |
|
(Dollars in
thousands) |
Salaries and employee benefits |
$8,381 |
53% |
$8,458 |
52% |
Occupancy expense |
2,326 |
15 |
2,359 |
14 |
Technology |
1,696 |
11 |
1,801 |
11 |
Advertising |
285 |
2 |
294 |
2 |
Fees and service charges |
200 |
1 |
179 |
1 |
Printing, postage and supplies |
326 |
2 |
390 |
2 |
Legal and accounting |
825 |
5 |
812 |
5 |
FDIC assessment |
292 |
2 |
351 |
2 |
OREO operations |
(24) |
— |
143 |
1 |
Other expense |
1,363 |
9 |
1,611 |
10 |
Total |
$15,670 |
100% |
$16,398 |
100% |
Operating expenses totaled $8.2 million in the second quarter of
2014, compared to $7.4 million in the first quarter of 2014 and
$8.2 million in the second quarter of 2013, respectively. The
increase from the prior quarter primarily reflects increases in
compensation expense, as lower loan origination cost offsets and
higher employee stock and cash incentive plan accruals negatively
impacted the comparative total. For the six-month period
ending June 30, 2014, operating expense totaled $15.7 million, down
$728,000 or 4.4% from the prior period. The decrease reflected
reductions in virtually all categories of expense, as the Company
continued to pursue cost-cutting initiatives.
The Company recorded income tax provision of $499,000 during the
second quarter, compared to $400,000 provision in the first quarter
of 2014 and no provision in the second quarter of 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, 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, 2013: 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.
Additional Information about the Merger and Where to
Find It
In connection with the Merger, Intermountain will file with the
SEC a Proxy Statement, and Columbia will file with the SEC a
Registration Statement on Form S-4 that will include the Proxy
Statement and a Prospectus of Columbia, as well as other relevant
documents concerning the proposed transaction. Shareholders of
Intermountain and Columbia are urged to read the Proxy Statement
and Registration Statement regarding the transaction when they
become available and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information. The Proxy
Statement and Prospectus and other relevant material (when they
become available) filed with the SEC may be obtained free of charge
at the SEC's Website at http://www.sec.gov. INTERMOUNTAIN
SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER
RELEVANT MATERIALS BEFORE VOTING ON THE MERGER.
Investors will also be able to obtain these documents, free of
charge, from Intermountain by accessing Intermountain's Website at
www.intermountainbank.com under the link to "About Us" and then the
link to "Investor Relations" or from Columbia at
www.columbiabank.com under the tab "About Us" and then under the
heading "Investor Relations." Copies can also be obtained,
free of charge, by directing a written request to Intermountain
Community Bancorp, 414 Church Street, P.O. Box 967, Sandpoint,
Idaho 83864 or to Columbia Banking System, Inc., Attention:
Corporate Secretary, 1301 A Street, Suite 800, Tacoma, Washington
98401-2156.
Participants in Solicitation
Intermountain and Columbia and certain of their directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Intermountain in
connection with the Merger. Information about the directors
and executive officers of Intermountain and their ownership of
Intermountain common stock is set forth in the proxy statement for
Intermountain's 2014 annual meeting of shareholders, as filed with
the SEC on a Schedule 14A on March 12, 2014. Information about
the directors and executive officers of Columbia and their
ownership of Columbia common stock is set forth in the proxy
statement for Columbia's 2014 annual meeting of shareholders, as
filed with the SEC on a Schedule 14A on March 21,
2014. Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction may be obtained by reading the Proxy Statement and
Prospectus regarding the Merger when they become
available. Free copies of these documents may be obtained as
described in the preceding paragraph.
INTERMOUNTAIN COMMUNITY
BANCORP |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
|
6/30/2014 |
3/31/2014 |
6/30/2013 |
|
(Dollars in thousands,
except per share amounts) |
ASSETS |
|
|
|
Cash and cash equivalents: |
|
|
|
Interest-bearing |
$14,257 |
$16,712 |
$33,474 |
Non-interest bearing and
vault |
8,020 |
10,122 |
7,003 |
Total cash and cash
equivalents |
22,277 |
26,834 |
40,477 |
Restricted cash |
10,866 |
10,747 |
12,464 |
Available-for-sale securities, at
fair value |
261,190 |
261,097 |
256,616 |
Held-to-maturity securities, at
amortized cost |
26,109 |
26,174 |
22,991 |
Federal Home Loan Bank of Seattle
stock, at cost |
2,146 |
2,167 |
2,228 |
Loans held for sale |
2,038 |
628 |
1,081 |
Loans receivable, net of
allowance for losses on loans of $7,682, $7,779 and $8,042 as of
June 30, 2014, March 31, 2014 and June 30, 2013, respectively |
520,280 |
507,000 |
522,740 |
Accrued interest receivable |
4,657 |
4,028 |
4,463 |
Office properties and equipment,
net |
34,113 |
34,232 |
35,333 |
Deferred tax asset, net |
19,649 |
20,963 |
15,058 |
Bank-owned life insurance |
9,962 |
9,876 |
9,642 |
Other real estate owned
("OREO") |
3,684 |
3,768 |
4,512 |
Prepaid expenses and other
assets |
3,191 |
2,936 |
2,953 |
Total assets |
$920,162 |
$910,450 |
$930,558 |
|
|
|
|
LIABILITIES |
|
|
|
Deposits: |
|
|
|
Interest bearing
deposits |
$459,019 |
$473,473 |
$475,049 |
Noninterest bearing
deposits |
234,869 |
237,077 |
224,472 |
Total deposits |
693,888 |
710,550 |
699,521 |
Securities sold subject to
repurchase agreements |
77,847 |
64,720 |
85,605 |
Advances from Federal Home Loan
Bank |
14,000 |
4,000 |
4,000 |
Unexercised stock warrant
liability |
925 |
1,048 |
826 |
Cashier checks issued and
payable |
3,265 |
2,959 |
2,278 |
Accrued interest payable |
200 |
219 |
316 |
Other borrowings |
23,060 |
23,235 |
16,527 |
Accrued expenses and other
liabilities |
7,978 |
7,828 |
8,440 |
Total liabilities |
821,163 |
814,559 |
817,513 |
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
Common stock - voting shares |
97,320 |
97,180 |
96,358 |
Common stock - non-voting
shares |
31,941 |
31,941 |
31,941 |
Preferred stock, Series A |
— |
— |
26,770 |
Accumulated other comprehensive
(loss) income (1) |
1,276 |
(431) |
(641) |
Accumulated deficit |
(31,538) |
(32,799) |
(41,383) |
Total stockholders' equity |
98,999 |
95,891 |
113,045 |
Total liabilities and
stockholders' equity |
$920,162 |
$910,450 |
$930,558 |
|
|
|
|
Book value per common share,
excluding preferred stock |
$15.25 |
$14.77 |
$13.39 |
Tangible book value per common
share, excluding preferred stock (2) |
$15.25 |
$14.77 |
$13.38 |
Shares outstanding at end of
period |
6,490,902 |
6,490,902 |
6,443,294 |
Stockholders' Equity to Total
Assets |
10.76% |
10.53% |
12.15% |
Tangible Common Equity to
Tangible Assets |
10.76% |
10.53% |
9.27% |
|
|
|
(1) Net of
deferred income taxes. |
|
|
(2) Amount
represents common stockholders' equity less other intangible assets
divided by total common shares outstanding. |
|
|
|
|
INTERMOUNTAIN
COMMUNITY BANCORP |
CONSOLIDATED STATEMENTS
OF INCOME |
(Unaudited) |
|
Three months
ended |
|
6/30/2014 |
3/31/2014 |
6/30/2013 |
|
(Dollars in thousands,
except per share amounts) |
Interest income: |
|
|
|
Loans |
$6,536 |
$6,114 |
$6,934 |
Investments and cash equivalents |
1,646 |
1,642 |
1,580 |
Total interest income |
8,182 |
7,756 |
8,514 |
Interest expense: |
|
|
|
Deposits |
390 |
424 |
510 |
Other borrowings |
387 |
358 |
441 |
Total interest expense |
777 |
782 |
951 |
Net interest income |
7,405 |
6,974 |
7,563 |
Recovery of (provision for) loan loss |
3 |
(103) |
(247) |
Net interest income after provision for loan
losses |
7,408 |
6,871 |
7,316 |
Other income: |
|
|
|
Fees and service charges |
1,212 |
1,122 |
1,319 |
Commissions & fees from trust &
investment advisory services |
557 |
541 |
645 |
Loan related fee income |
403 |
305 |
586 |
Net gain on sale of securities |
168 |
5 |
163 |
Net gain on sale of other assets |
4 |
4 |
2 |
Other-than-temporary impairment ("OTTI")
losses on investments |
— |
— |
(21) |
Bank-owned life insurance |
86 |
79 |
85 |
Fair value adjustment on cash flow
hedge |
— |
— |
80 |
Unexercised warrant liability fair value
adjustment |
123 |
(106) |
(54) |
Other |
34 |
48 |
40 |
Total other income |
2,587 |
1,998 |
2,845 |
Operating expenses: |
|
|
|
Salaries and employee benefits |
4,505 |
3,876 |
4,283 |
Occupancy |
1,145 |
1,181 |
1,174 |
Technology |
874 |
822 |
925 |
Advertising |
136 |
149 |
180 |
Fees and service charges |
109 |
90 |
85 |
Printing, postage and supplies |
151 |
175 |
173 |
Legal and accounting |
422 |
403 |
484 |
FDIC assessment |
146 |
146 |
165 |
OREO operations |
39 |
(63) |
32 |
Other expenses |
707 |
656 |
719 |
Total operating expenses |
8,234 |
7,435 |
8,220 |
Net income before income taxes |
1,761 |
1,434 |
1,941 |
Income tax expense |
(499) |
(400) |
— |
Net income |
1,262 |
1,034 |
1,941 |
Preferred stock dividend |
— |
— |
460 |
Net income applicable to common
stockholders |
$1,262 |
$1,034 |
$1,481 |
Earnings per share — basic |
$0.19 |
$0.16 |
$0.23 |
Earnings per share — diluted |
$0.19 |
$0.16 |
$0.23 |
Weighted average common shares outstanding —
basic |
6,697,386 |
6,540,902 |
6,443,294 |
Weighted average common shares outstanding —
diluted |
6,765,908 |
6,606,489 |
6,484,762 |
INTERMOUNTAIN COMMUNITY
BANCORP |
CONSOLIDATED STATEMENTS
OF INCOME |
(Unaudited) |
|
Six months
ended |
|
6/30/2014 |
6/30/2013 |
Interest income: |
|
|
Loans |
$12,650 |
$13,670 |
Investments and cash equivalents |
3,289 |
3,172 |
Total interest income |
15,939 |
16,842 |
Interest expense: |
|
|
Deposits |
814 |
1,070 |
Other borrowings |
746 |
866 |
Total interest expense |
1,560 |
1,936 |
Net interest income |
14,379 |
14,906 |
Recovery of (provision for) loan loss |
(99) |
(426) |
Net interest income after provision for loan
losses |
14,280 |
14,480 |
Other income: |
|
|
Fees and service charges |
2,333 |
2,398 |
Commissions & fees from trust &
investment advisory services |
1,098 |
1,172 |
Loan related fee income |
707 |
1,197 |
Net gain on sale of securities |
174 |
203 |
Net gain on sale of other assets |
8 |
6 |
Other-than-temporary impairment ("OTTI")
losses on investments |
— |
(63) |
Bank-owned life insurance |
165 |
170 |
Fair value adjustment on cash flow
hedge |
— |
146 |
Unexercised warrant liability fair value
adjustment |
17 |
2 |
Other |
82 |
153 |
Total other income |
4,584 |
5,384 |
Operating expenses: |
|
|
Salaries and employee benefits |
8,381 |
8,458 |
Occupancy |
2,326 |
2,359 |
Technology |
1,696 |
1,801 |
Advertising |
285 |
294 |
Fees and service charges |
200 |
179 |
Printing, postage and supplies |
326 |
390 |
Legal and accounting |
825 |
812 |
FDIC assessment |
292 |
351 |
OREO operations |
(24) |
143 |
Other expenses |
1,363 |
1,611 |
Total operating expenses |
15,670 |
16,398 |
Net income before income taxes |
3,194 |
3,466 |
Income tax expense |
(898) |
— |
Net income |
2,296 |
3,466 |
Preferred stock dividend |
— |
918 |
Net income applicable to common
stockholders |
$2,296 |
$2,548 |
Earnings per share — basic |
$0.35 |
$0.40 |
Earnings per share — diluted |
$0.34 |
$0.39 |
Weighted average common shares outstanding —
basic |
6,619,576 |
6,443,142 |
Weighted average common shares outstanding —
diluted |
6,686,675 |
6,482,376 |
|
INTERMOUNTAIN COMMUNITY
BANCORP |
KEY PERFORMANCE
RATIOS |
|
|
Three Months
Ended |
Six Months
Ended |
|
6/30/2014 |
3/31/2014 |
6/30/2013 |
6/30/2014 |
6/30/2013 |
Net Interest Spread: |
|
Yield on Loan Portfolio |
4.98% |
4.81% |
5.29% |
4.90% |
5.27% |
Yield on Investments & Cash |
2.17% |
2.15% |
2.00% |
2.14% |
1.93% |
Yield on Interest-Earning Assets |
3.95% |
3.81% |
4.04% |
3.87% |
3.97% |
|
|
|
|
|
|
Cost of Deposits |
0.22% |
0.24% |
0.29% |
0.23% |
0.30% |
Cost of Advances |
0.84% |
3.14% |
1.99% |
1.22% |
2.42% |
Cost of Borrowings |
1.53% |
1.24% |
1.89% |
1.37% |
1.79% |
Cost of Interest-Bearing Liabilities |
0.39% |
0.39% |
0.48% |
0.39% |
0.48% |
Net Interest Spread |
3.57% |
3.42% |
3.56% |
3.48% |
3.48% |
|
|
|
|
|
|
Net Interest Margin |
3.58% |
3.43% |
3.59% |
3.49% |
3.51% |
|
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
Return on Average Assets |
0.55% |
0.45% |
0.84% |
0.50% |
0.74% |
Return on Average Common Stockholders'
Equity |
5.19% |
4.42% |
6.77% |
4.81% |
5.85% |
Return on Average Common Tangible Equity
(1) |
5.19% |
4.42% |
6.77% |
4.81% |
5.85% |
Operating Efficiency |
82.41% |
82.87% |
78.98% |
82.63% |
80.82% |
Noninterest Expense to Average Assets |
3.65% |
3.26% |
3.54% |
3.42% |
3.50% |
|
|
(1) Average
common tangible equity is average common stockholders' equity less
average other intangible assets. |
INTERMOUNTAIN COMMUNITY
BANCORP |
LOAN AND REGULATORY
CAPITAL DATA |
|
|
6/30/2014 |
3/31/2014 |
6/30/2013 |
|
(Dollars in
thousands) |
Loan Data |
|
Net Charge-Offs to Average Net Loans (QTD
Annualized) |
0.07% |
0.01% |
(0.09)% |
Loan Loss Allowance to Total Loans |
1.46% |
1.51% |
1.52% |
|
|
|
|
Nonperforming Assets: |
|
|
|
Accruing Loans-90 Days Past Due |
$— |
$— |
$— |
Nonaccrual Loans |
3,420 |
4,518 |
4,799 |
Total Nonperforming Loans |
3,420 |
4,518 |
4,799 |
OREO |
3,684 |
3,768 |
4,512 |
Total Nonperforming Assets ("NPA") |
$7,104 |
$8,286 |
$9,311 |
|
|
|
|
Outstanding Troubled Debt Restructured
Loans |
$9,365 |
|
$9,866 |
$11,791 |
NPA to Total Assets |
0.77% |
0.91% |
1.00% |
NPA to Net Loans Receivable |
1.37% |
1.63% |
1.78% |
NPA to Estimated Risk Based Capital |
6.86% |
8.23% |
7.46% |
NPA to Tangible Equity + Allowance for Loan
Loss |
6.66% |
7.99% |
7.69% |
Loan Delinquency Ratio (30 days and
over) |
0.17% |
0.17% |
0.22% |
|
|
|
6/30/2014 |
3/31/2014 |
6/30/2013 |
Allowance for Loan Loss by Loan
Type |
(Dollars in
thousands) |
Commercial loans |
$1,817 |
$1,838 |
$1,900 |
Commercial real estate loans |
2,336 |
2,370 |
2,736 |
Commercial construction loans |
257 |
340 |
231 |
Land and land development loans |
941 |
888 |
956 |
Agriculture loans |
819 |
754 |
692 |
Multifamily loans |
24 |
31 |
54 |
Residential real estate loans |
1,306 |
1,402 |
1,195 |
Residential construction loans |
44 |
34 |
44 |
Consumer loans |
114 |
98 |
203 |
Municipal loans |
25 |
24 |
31 |
Totals |
$7,683 |
$7,779 |
$8,042 |
|
|
|
|
|
|
|
|
Regulatory Capital |
Estimated |
Actual |
Actual |
Total capital (to risk-weighted assets): |
6/30/2014 |
3/31/2014 |
6/30/2013 |
The Company |
17.28% |
17.28% |
20.93% |
Panhandle State Bank |
17.33% |
17.33% |
19.72% |
Tier 1 capital (to risk-weighted
assets): |
|
|
|
The Company |
16.03% |
16.03% |
19.67% |
Panhandle State Bank |
16.08% |
16.08% |
18.47% |
Tier 1 capital (to average assets): |
|
|
|
The Company |
10.68% |
10.36% |
12.90% |
Panhandle State Bank |
10.68% |
10.41% |
12.12% |
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
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