EVANSVILLE, Ind., March 2, 2009 (GLOBE NEWSWIRE) -- Integra Bank Corporation (Nasdaq:IBNK) today reported financial results for 2008.
The net loss for 2008 was $110.9 million, or $5.39 per share, compared to net income of $30.7 million or $1.55 per share in 2007. The 2008 results include goodwill impairment of $122.8 million, a provision for loan losses of $65.8 million, other than temporary securities impairment ("OTTI") of $10.6 million and a state income tax valuation allowance of $3.2 million. Results for 2007 included a provision for loan losses of $4.2 million, OTTI of $2.7 million and no goodwill impairment or state tax valuation allowance. The net interest margin for 2008 was 3.18% for 2008, compared to 3.46% in 2007. Non-performing assets totaled $170.3 million at December 31, 2008, up from $25.6 million at December 31, 2007. The net charge-off ratio for all of 2008 was 1.19%.
The net loss for the fourth quarter of 2008 was $81.6 million, or $(3.97) per diluted share, while the pre-tax loss was $110.5 million. The pre-tax loss for the fourth quarter of 2008 was largely attributable to the goodwill impairment charges of $74.8 million and the provision for loan losses of $38.2 million.
The increased provision was primarily allocated to commercial real estate and construction land and development loans which represented 81% of total non-performing loans. The provision for loan losses exceeded net charge-offs by $22.7 million for the fourth quarter of 2008.
The allowance to total loans increased 89 basis points during the fourth quarter to 2.59% at December 31, 2008, while annualized net charge-offs increased 117 basis points to 2.48%. Non-performing loans increased to $150.9 million, or 6.06% of total loans, compared to 3.46% at September 30, 2008, while the allowance to non-performing loans decreased from 49% to 43% for the same dates. Non-performing assets increased to $170.3 million, compared to $92.4 million at September 30, 2008.
"The past year has been a difficult one for the industry, including Integra Bank Corporation," stated Mike Vea, Chairman, President and CEO. "We have suffered from the challenges in the real estate market, especially residential construction in Chicago, which significantly contributed to our unsatisfactory results for 2008. As the real estate market continued to weaken we addressed these issues head on by aggressively recognizing non-accrual loans and building reserve levels. We will continue to take decisive actions with respect to building reserves and capital, improving credit quality and reducing risk and returning to profitability", Vea added.
In February 2009, the Company was approved to participate in the U.S. Department of Treasury's TARP Capital Purchase Program and received funding of $83.6 million for an investment in the form of senior preferred stock and related warrants to purchase common stock on the standard terms and conditions of the program. The senior preferred stock bears a five percent dividend for each of the first five years of the investment, and nine percent thereafter, unless the shares are redeemed. The shares are callable at par at any time subject to prior consultation with the Company's federal banking regulator. The Treasury Department also received a 10-year warrant to purchase 7,418,876 shares of common stock.
Net interest income was $21.4 million for the fourth quarter of 2008, compared to $23.9 million for the third quarter of 2008, while the net interest margin declined 36 basis points to 2.86%. Approximately 18 basis points of the 36 basis point decline in the margin was due to the increased level of nonaccrual loans.
Low cost deposits, which include non-interest checking, NOW and savings deposits, increased $8.4 million, or 3.9% annualized. Retail certificates of deposit increased $22.9 million, or 10.0% annualized, brokered certificates of deposit increased $70.1 million, or 127% annualized and money market balances declined $36.0 million, or 39.0% annualized. Integra funded the majority of its loan growth by using longer-term brokered deposits, retail certificates and Term Auction Facility borrowings. The use of longer-term funding extended maturities, thereby improving Integra's liquidity position, but had a negative impact on the net interest margin.
Commercial loan average balances increased $60.7 million in the fourth quarter of 2008, or 13.6% on an annualized basis. This included growth in commercial real estate of $56.1 million, or 18.0% annualized, and commercial and industrial of $4.6 million, or 3.4% annualized. The growth in commercial real estate came primarily from commitments made prior to the fourth quarter of 2008.
Non-interest income was $5.8 million for the fourth quarter of 2008 and included a $4.3 million other than temporary impairment charge on three trust preferred investment securities.
Non-interest expense for the fourth quarter of 2008 was $99.6 million, including $74.8 million of goodwill impairment. Although goodwill impairment reduces earnings, it is a non-cash charge and has no impact on regulatory capital levels.
The income tax benefit for the fourth quarter of 2008 was $28.9 million. The tax benefit was a result of lower than projected 2008 net and taxable income, coupled with the fourth quarter loss, the impact of low income housing tax credits and tax free loan, municipal security and bank-owned life insurance income, partially offset by a $3.2 million state income tax valuation allowance.
Integra Bank's ratios remain above the regulatory minimum for well capitalized status. Integra's capital ratios remain within the regulatory requirements for being adequately capitalized and are within internal policy guidelines.
Conference Call
Integra executive management will hold a conference call to discuss the contents of this news release, business highlights and its financial outlook on, Monday, March 2, 2009, at 8:00 a.m. CT. The telephone number for the conference call is (877) 741-4249, confirmation code 4313310. The conference call will also be available by webcast at http://www.integrabank.com.
About Integra
Headquartered in Evansville, Indiana, Integra Bank Corporation is the parent of Integra Bank N.A. As of December 31, 2008, Integra has $3.4 billion in total assets and operates 80 banking centers and 136 ATMs at locations in Indiana, Kentucky, Illinois and Ohio. Integra Bank Corporation's common stock is listed on the Nasdaq Global Market under the symbol IBNK. Additional information may be found at Integra's web site, www.integrabank.com.
The Integra Bank Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3858
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 the actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) the adverse effects of the current recession in the markets in which Integra does business; (2) changes in the interest rate environment that reduce the net interest margin; (3) unanticipated additional charge-offs and loan loss provisions; (4) the ability of Integra to maintain required capital levels and adequate sources of funding and liquidity; (5) the impact of problems affecting issuers of investment securities Integra holds (6) changes and trends in capital markets; (7) competitive pressures among depository institutions that increase significantly; (8) effects of critical accounting policies and judgments; (9) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; (10) legislative or regulatory changes or actions, or significant litigation that adversely affect Integra or the business in which Integra is engaged; (11) ability to attract and retain key personnel; (12) ability to secure confidential information through the use of computer systems and telecommunications network; and (13) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity, and other factors described in our periodic reports filed 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.
Summary Operating Results Data
Here is a summary of Integra's fourth quarter 2008 operating results:
Net income (loss) of $(81.6) million for fourth quarter 2008
* Compared with $(33.3) million for the third quarter 2008
* Compared with $5.8 million for fourth quarter 2007
Diluted net income (loss) per share of $(3.97) for fourth quarter
2008
* Compared with $(1.62) for the third quarter 2008
* Compared with $0.28 for fourth quarter 2007
Return on assets of (9.57)% for fourth quarter 2008
* Compared with (3.93)% for third quarter 2008
* Compared with 0.69% for fourth quarter 2007
Return on equity of (119.82)% for fourth quarter 2008
* Compared with (41.36)% for third quarter 2008
* Compared with 6.99% for fourth quarter 2007
Net interest margin of 2.86% for fourth quarter 2008
* Compared with 3.22% for third quarter 2008
* Compared with 3.42% for fourth quarter 2007
Allowance for loan losses of $64.4 million or 2.59% of loans at
December 31, 2008
* Compared with $41.8 million or 1.70% at September 30, 2008
* Compared with $27.3 million or 1.18% at December 31, 2007
* Equaled 42.7% of non-performing loans at December 31, 2008,
compared with 49.0% at September 30, 2008 and 120.3% at December
31, 2007
Non-performing loans of $150.9 million or 6.06% of loans at December
31, 2008
* Compared with $85.2 million or 3.46% of loans at September 30,
2008
* Compared with $22.7 million or 0.98% at December 31, 2007
Annualized net charge-off rate of 2.48% for fourth quarter 2008
* Compared with 1.31% for third quarter 2008
* Compared with 0.25% for fourth quarter 2007
INTEGRA BANK CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
ASSETS 2008 2007
---------------------------------------------------------------------
Cash and due from banks $ 62,354 $ 72,360
Federal funds sold and other short-term
investments 419 3,630
Loans held for sale (at lower of cost or
market value) 5,776 5,928
Securities available for sale 561,739 582,954
Securities held for trading -- 53,782
Regulatory stock 29,155 29,179
Loans:
Commercial loans 1,850,043 1,604,785
Consumer loans 432,183 423,481
Mortgage loans 208,017 283,112
Less: Allowance for loan losses (64,437) (27,261)
---------------------------------------------------------------------
Net loans 2,425,806 2,284,117
Premises and equipment 48,500 50,552
Goodwill -- 123,050
Other intangible assets 9,928 11,652
Other assets 213,423 132,922
---------------------------------------------------------------------
TOTAL ASSETS $ 3,357,100 $ 3,350,126
=====================================================================
LIABILITIES
Deposits:
Non-interest-bearing demand $ 284,032 $ 265,554
Savings & interest checking 600,374 516,925
Money market 301,411 401,098
Certificates of deposit and other time
deposits 1,154,375 1,156,560
---------------------------------------------------------------------
Total deposits 2,340,192 2,340,137
Short-term borrowings 415,006 272,270
Long-term borrowings 360,917 376,707
Other liabilities 36,194 33,208
---------------------------------------------------------------------
TOTAL LIABILITIES 3,152,309 3,022,322
SHAREHOLDERS' EQUITY
Preferred stock - 1,000 shares authorized -
None outstanding
Common stock - $1.00 stated value - 29,000
shares authorized 20,749 20,650
Additional paid-in capital 208,732 206,991
Retained earnings (15,754) 104,913
Accumulated other comprehensive income
(loss) (8,936) (4,750)
---------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 204,791 327,804
---------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,357,100 $ 3,350,126
=====================================================================
INTEGRA BANK CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share data)
Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2008 2008 2008 2007
---------------------------------------------------------------------
INTEREST INCOME
Interest and
fees on
loans and
leases $ 33,235 $ 35,201 $ 35,777 $ 38,782 $ 43,217
Interest and
dividends on
securities
available for
sale 6,811 6,605 6,909 7,267 7,313
Interest on
securities
held for
trading -- -- 45 525 364
Dividends on
regulatory
stock 103 385 409 376 345
Interest on
loans held
for sale 85 88 90 103 85
Interest on
federal funds
sold and
other
investments 10 26 30 38 60
---------------------------------------------------------------------
Total interest
income 40,244 42,305 43,260 47,091 51,384
INTEREST
EXPENSE
Interest on
deposits 13,532 12,888 12,851 16,392 19,251
Interest on
short-term
borrowings 1,447 1,995 1,955 2,166 2,501
Interest on
long-term
borrowings 3,828 3,562 3,288 5,015 4,977
---------------------------------------------------------------------
Total interest
expense 18,807 18,445 18,094 23,573 26,729
---------------------------------------------------------------------
NET INTEREST
INCOME 21,437 23,860 25,166 23,518 24,655
Provision for
loan losses 38,169 17,978 6,003 3,634 2,280
---------------------------------------------------------------------
Net interest
income after
provision for
loan losses (16,732) 5,882 19,163 19,884 22,375
NON-INTEREST
INCOME
---------------------------------------------------------------------
Service
charges on
deposit
accounts 5,436 5,884 5,059 4,699 5,283
Trust income 470 573 554 559 587
Debit card
income-
interchange 1,281 1,358 1,376 1,243 1,284
Other service
charges and
fees 1,142 1,103 1,315 1,579 1,039
Securities
gains
(losses) (4,309) 13 (6,299) 24 (2,718)
Gain (Loss) on
sale of other
assets (3) (47) (12) -- 48
Other 1,742 1,300 1,019 2,630 2,015
---------------------------------------------------------------------
Total non-
interest
income 5,759 10,184 3,012 10,734 7,538
NON-INTEREST
EXPENSE
---------------------------------------------------------------------
Salaries and
employee
benefits 11,442 12,125 12,446 12,394 12,104
Occupancy 2,657 2,621 2,541 2,560 2,461
Equipment 875 974 955 928 965
Professional
fees 1,816 1,390 1,317 1,218 1,743
Communication
and
transportation 1,248 1,223 1,371 1,222 1,232
Goodwill
impairment 74,824 48,000 -- -- --
Other 6,706 5,854 5,547 5,799 4,866
---------------------------------------------------------------------
Total non-
interest
expense 99,568 72,187 24,177 24,121 23,371
---------------------------------------------------------------------
Income (Loss)
before
income taxes (110,541) (56,121) (2,002) 6,497 6,542
Income taxes
expense
(benefit) (28,919) (22,794) (1,103) 1,524 727
---------------------------------------------------------------------
NET INCOME
(LOSS) $ (81,622) $ (33,327) $ (899) $ 4,973 $ 5,815
---------------------------------------------------------------------
Earnings (Loss)
per share:
Basic $ (3.97) $ (1.62) $ (0.04) $ 0.24 $ 0.28
Diluted (3.97) (1.62) (0.04) 0.24 0.28
Weighted
average shares
outstanding:
Basic 20,569 20,567 20,554 20,537 20,535
Diluted 20,569 20,567 20,554 20,544 20,542
INTEGRA BANK CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------------------
2008 2007 2008 2007
--------------------------------------------------------------------
INTEREST INCOME
Interest and fees on
loans and leases $ 33,235 $ 43,217 $ 142,995 $ 160,419
Interest and dividends on
securities available
for sale 6,811 7,313 27,592 29,391
Interest on securities
held for trading -- 364 570 364
Dividends on regulatory
stock 103 345 1,273 1,286
Interest on loans held for
sale 85 85 366 235
Interest on federal funds
sold and other investments 10 60 104 225
--------------------------------------------------------------------
Total interest income 40,244 51,384 172,900 191,920
INTEREST EXPENSE
Interest on deposits 13,532 19,251 55,663 73,742
Interest on short-term
borrowings 1,447 2,501 7,563 9,431
Interest on long-term
borrowings 3,828 4,977 15,693 15,498
--------------------------------------------------------------------
Total interest expense 18,807 26,729 78,919 98,671
--------------------------------------------------------------------
NET INTEREST INCOME 21,437 24,655 93,981 93,249
Provision for loan losses 38,169 2,280 65,784 4,193
--------------------------------------------------------------------
Net interest income after
provision for loan losses (16,732) 22,375 28,197 89,056
NON-INTEREST INCOME
--------------------------------------------------------------------
Service charges on
deposit accounts 5,436 5,283 21,078 20,317
Trust income 470 587 2,156 2,391
Debit card
income-interchange 1,281 1,284 5,258 4,379
Other service charges and
fees 1,142 1,039 5,139 4,662
Securities gains (losses) (4,309) (2,718) (10,571) (2,277)
Gain (Loss) on sale of
other assets (3) 48 (62) 642
Other 1,742 2,015 6,691 6,957
--------------------------------------------------------------------
Total non-interest income 5,759 7,538 29,689 37,071
NON-INTEREST EXPENSE
--------------------------------------------------------------------
Salaries and employee
benefits 11,442 12,104 48,407 45,881
Occupancy 2,657 2,461 10,379 9,430
Equipment 875 965 3,732 3,443
Professional fees 1,816 1,743 5,741 5,520
Communication and
transportation 1,248 1,232 5,064 4,522
Goodwill impairment 74,824 -- 122,824 --
Other 6,706 4,866 23,906 18,854
--------------------------------------------------------------------
Total non-interest expense 99,568 23,371 220,053 87,650
--------------------------------------------------------------------
Income (Loss) before
income taxes (110,541) 6,542 (162,167) 38,477
Income taxes expense
(benefit) (28,919) 727 (51,292) 7,767
--------------------------------------------------------------------
NET INCOME (LOSS) $ (81,622) $ 5,815 $(110,875) $ 30,710
--------------------------------------------------------------------
Earnings (Loss) per share:
Basic $ (3.97) $ 0.28 $ (5.39) $ 1.55
Diluted (3.97) 0.28 (5.39) 1.55
Weighted average shares
outstanding:
Basic 20,569 20,535 20,557 19,778
Diluted 20,569 20,542 20,557 19,812
INTEGRA BANK CORPORATION
SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except for per share data)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2008 2008 2008 2007
---------- ---------- ---------- ---------- ----------
EARNINGS DATA
Net Interest
Income (tax-
equivalent) $ 22,111 $ 24,513 $ 25,821 $ 24,268 $ 25,436
Net Income
(Loss) (81,622) (33,327) (899) 4,973 5,815
Basic Earnings
Per Share (3.97) (1.62) (0.04) 0.24 0.28
Diluted
Earnings
Per Share (3.97) (1.62) (0.04) 0.24 0.28
Dividends
Declared 0.01 0.01 0.18 0.18 0.18
Book Value 9.87 13.33 15.39 16.03 15.87
Tangible Book
Value 9.39 9.22 8.95 9.54 9.35
PERFORMANCE
RATIOS
Return on
Assets (9.57)% (3.93)% (0.11)% 0.59% 0.69%
Return on
Equity (119.82) (41.36) (1.09) 6.01 6.99
Net Interest
Margin (tax-
equivalent) 2.86 3.22 3.43 3.23 3.42
Tier 1 Risk-
Based
Capital 7.68 9.05 9.13 9.37 9.34
Total Risk-
Based Capital 9.75 11.03 11.13 11.51 11.52
Tangible
Equity to
Tangible
Assets 5.82 5.85 5.69 6.03 6.01
Efficiency
Ratio 75.55 68.49 67.59 67.73 64.20
AT PERIOD END
Assets $3,357,100 $3,356,842 $3,401,210 $3,400,610 $3,350,126
Interest-
Earning
Assets 3,087,332 3,026,227 3,019,211 3,013,161 2,986,851
Commercial
Loans 1,850,043 1,808,343 1,744,943 1,660,472 1,604,785
Consumer
Loans 432,183 431,106 427,952 419,577 423,481
Mortgage
Loans 208,017 221,361 237,102 260,701 283,112
Total Loans 2,490,243 2,460,810 2,409,997 2,340,750 2,311,378
Deposits 2,340,192 2,385,794 2,323,648 2,308,123 2,340,137
Low Cost
Deposits(1) 884,406 834,853 868,402 851,786 782,479
Interest-
Bearing
Liabilities 2,832,083 2,773,566 2,749,603 2,739,957 2,723,560
Shareholders'
Equity 204,791 276,588 319,464 331,150 327,804
Unrealized
Gains
(Losses)
on Market
Securities
(FASB 115) (8,509) (17,515) (7,737) (334) (3,600)
AVERAGE
BALANCES
Assets $3,393,237 $3,377,261 $3,371,944 $3,373,865 $3,320,443
Interest-
Earning
Assets(2) 3,087,179 3,038,943 3,022,425 3,017,241 2,964,101
Commercial
Loans 1,836,979 1,776,275 1,704,492 1,640,194 1,576,840
Consumer
Loans 432,380 429,042 422,804 420,365 423,197
Mortgage
Loans 215,343 228,747 250,449 272,500 295,186
Total Loans 2,484,702 2,434,064 2,377,745 2,333,059 2,295,223
Deposits 2,410,344 2,345,027 2,307,609 2,328,697 2,375,759
Low Cost
Deposits(1) 858,521 850,095 850,448 808,935 780,531
Interest-
Bearing
Liabilities 2,806,089 2,746,792 2,728,433 2,734,006 2,683,304
Shareholders'
Equity 270,998 320,522 330,587 333,085 330,136
Basic Shares 20,569 20,567 20,554 20,537 20,535
Diluted Shares 20,569 20,567 20,554 20,544 20,542
(1) Defined as interest checking, demand deposit and savings accounts.
(2) Includes securities available for sale and held for trading at
amortized cost.
INTEGRA BANK CORPORATION
SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA-con't
(In thousands, except ratios and yields)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2008 2008 2008 2007
--------- --------- --------- --------- ---------
ASSET QUALITY
Non-Performing
Assets:
Non Accrual
Loans $ 150,002 $ 79,672 $ 50,162 $ 27,517 $ 18,549
Loans 90+ Days
Past Due 897 5,514 312 2,544 4,118
--------- --------- --------- --------- ---------
Non-Performing
Loans 150,899 85,186 50,474 30,061 22,667
Other Real
Estate Owned 19,396 7,252 5,940 3,267 2,923
--------- --------- --------- --------- ---------
Non-Performing
Assets $ 170,295 $ 92,438 $ 56,414 $ 33,328 $ 25,590
========= ========= ========= ========= =========
Allowance for
Loan Losses:
Beginning
Balance $ 41,766 $ 31,780 $ 28,590 $ 27,261 $ 26,401
Provision for
Loan Losses 38,169 17,978 6,003 3,634 2,280
Recoveries 377 464 315 448 236
Loans Charged
Off (15,875) (8,456) (3,128) (2,753) (1,656)
--------- --------- --------- --------- ---------
Ending
Balance $ 64,437 $ 41,766 $ 31,780 $ 28,590 $ 27,261
========= ========= ========= ========= =========
Ratios:
Allowance
for Loan
Losses to
Loans 2.59% 1.70% 1.32% 1.22% 1.18%
Allowance
for Loan
Losses to
Average Loans 2.59 1.72 1.34 1.23 1.19
Allowance to
Non-performing
Loans 42.70 49.03 62.96 95.11 120.27
Non-performing
Loans to Loans 6.06 3.46 2.09 1.28 0.98
Non-performing
Assets to
Loans and
Other Real
Estate Owned 6.79 3.75 2.34 1.42 1.11
Net Charge-Off
Ratio 2.48 1.31 0.48 0.40 0.25
NET INTEREST
MARGIN
Yields
(tax-equivalent)
Loans 5.28% 5.70% 5.99% 6.61% 7.41%
Securities 5.21 5.12 5.01 5.28 5.34
Regulatory
Stock 1.42 5.27 5.61 5.15 4.73
Other Earning
Assets 5.74 3.25 3.89 4.93 5.59
--------- --------- --------- --------- ---------
Total
Earning
Assets 5.28 5.63 5.84 6.37 7.00
Cost of Funds
Interest Bearing
Deposits 2.53 2.49 2.56 3.21 3.63
Other Interest
Bearing
Liabilities 3.04 3.18 2.95 4.19 5.06
Total
Interest
Bearing
Liabilities 2.67 2.67 2.67 3.47 3.95
--------- --------- --------- --------- ---------
Total
Interest
Expense to
Earning
Assets 2.42 2.41 2.41 3.14 3.58
--------- --------- --------- --------- ---------
Net Interest
Margin 2.86% 3.22% 3.43% 3.23% 3.42%
========= ========= ========= ========= =========