EVANSVILLE, Ind., April 30, 2009 (GLOBE NEWSWIRE) -- Integra Bank Corporation (Nasdaq:IBNK) today reported financial results for the first quarter of 2009.
The net loss available to common shareholders for the first quarter of 2009 was $28.5 million, or $1.37 per diluted share. The provision for loan losses was $31.4 million, down from $38.2 million during the fourth quarter of 2008, while net-charge-offs totaled $17.3 million, or 2.86% of total loans on an annualized basis. The high level of provision was due to continued weakness in the residential construction loan portfolio. The net interest margin for the first quarter of 2009 was 2.39%.
In February 2009, the U.S. Department of Treasury invested $83.6 million in the Company in the form of senior preferred stock and a related warrant to purchase common stock on the standard terms and conditions of the TARP Capital Purchase Program. The senior preferred stock bears a five percent dividend for each of the first five years of the investment and nine percent thereafter. The shares are callable by the Company at par at any time subject to prior consultation with the Company's federal banking regulator. The Treasury Department also received a warrant to purchase 7,418,876 shares of common stock at $1.69 per share for a ten year period.
"Our first quarter results reflect continued deterioration in our residential construction portfolios and our concurrent actions to build our loan loss reserve, which is now 3.24% of total loans," stated Mike Vea, Chairman, President and CEO. "We are starting to see some positive signs with lower delinquencies and an increase in pending residential unit sales. While not robust, it is an indication that the housing sector may be approaching bottom. Our levels of non-performing loans in the next few quarters will be largely dependent upon the housing sector and our regional economy. We continue to monitor and manage our real estate exposure closely, given the current economic environment. Our consumer and business banking areas continue to perform well," Vea added.
The net loss for the first quarter of 2009 includes $0.4 million of preferred stock dividends and discount accretion related to the Treasury warrant. It also includes a $4.7 million non-tax deductible mark to market adjustment for the warrant that reduced earnings. The warrant was reflected as a liability because it was not fully exercisable at the time of issuance. In April 2009, the Company's shareholders approved an increase in the authorized shares of common stock and the issuance of the common stock upon exercise of the warrant, at which point the Company began accounting for the warrant as equity. This reclassification improved the Company's capital ratios in April 2009, but did not affect those of Integra Bank N.A. The net loss also included a $5.0 million valuation allowance against the Company's deferred tax asset.
The allowance to total loans increased 65 basis points during the first quarter of 2009, to 3.24% at March 31, 2009, while the allowance to non-performing loans decreased from 43% to 42%. Non-performing loans increased to $189.2 million, or 7.80% of total loans, compared to $150.9 million, or 6.06% of total loans at December 31, 2008. The increase in non-performing loans came primarily within residential construction and development loans, which comprise approximately 67% of total non-performing loans. Other real estate owned increased $0.5 million during the first quarter of 2009, bringing total non-performing assets to $209.1 million at March 31, 2009.
Net interest income was $17.5 million for the first quarter of 2009, compared to $21.4 million for the fourth quarter of 2008, while the net interest margin was 2.39%, compared to 2.86% for the fourth quarter of 2008. A 51 basis point decline in liability costs during the first quarter was outpaced by an 81 basis point decline in earning asset yields. The decline in earning asset yields was driven by the increase in non-accrual loans, actions taken to improve liquidity, and the impact of the yield curve.
Total assets increased $198.4 million during the first quarter of 2009, driven by an increase in cash and due from banks of $291.4 million. The increase in short-term liquid funds was funded by the $83.6 million Treasury Department investment, an increase in time deposits of $128.3 million, increases in low cost deposits, which include non-interest checking, NOW and savings deposits of $72.9 million and decreases in loans and securities totaling $84.8 million. The increase in short-term liquid funds improved liquidity, but had a negative impact on the net interest margin. During the quarter, Integra Bank issued a $50 million, 2.625% senior unsecured note due in 2012 on a pooled basis as part of the Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program.
Commercial loan average balances increased $3.5 million in the first quarter of 2009, or 0.8% on an annualized basis. This included growth in commercial real estate of $10.8 million, or 3.4% annualized, and a decline in commercial and industrial of $7.3 million, or 5.5% annualized. The growth in commercial real estate came primarily from fundings of previously committed construction loans.
Non-interest income was $5.5 million for the first quarter of 2009, compared to $5.8 million for the fourth quarter of 2008 and included $2.5 million of branch sale gains, other-than-temporary securities impairment of $1.2 million and the $4.7 million non-tax deductible mark to market adjustment for the Treasury warrant that reduced non-interest income. The fourth quarter of 2008 included other-than-temporary securities impairment of $4.3 million. Deposit service charges, which are typically lower during the first quarter of each year, declined $1.0 million from the fourth quarter of 2008 and $0.3 million from the first quarter of 2008.
Non-interest expense for the first quarter of 2009 was $29.5 million, compared to $99.6 million for the fourth quarter of 2008, which included $74.8 million of goodwill impairment. Loan and other real estate owned expenses increased $4.4 million from the fourth quarter of 2008.
The income tax benefit for the first quarter of 2009 was $9.8 million. The tax benefit was a result of the net 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 $5.0 million federal and state income tax valuation allowance.
Integra Bank's ratios remain above the regulatory minimum for well capitalized status.
On April 9, 2009, the Financial Accounting Standards Board issued three Final Staff Positions (FSPs) that provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities. Integra did not elect to early adopt these standards and will adopt them during the second quarter of 2009.
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, Thursday, April 30, 2009, at 10:00 a.m. CT. The telephone number for the conference call is 877-675-4752, confirmation code 1545186. 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 March 31, 2009, Integra has $3.6 billion in total assets and operates 75 banking centers and 125 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.
Safe Harbor
Certain statements made in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this release, the words "may," "will," "should," "would," "anticipate," "expect," "plan," "believe," "intend," and similar expressions identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) the effects of the current recession in the markets in which we primarily do business; (2) changes in the interest rate environment that reduce our net interest margin; (3) unanticipated additional charge-offs and loan loss provisions; (4) our ability to maintain required capital levels and adequate sources of funding and liquidity; (5) additional declines in value of our investment securities portfolio, including adverse developments affecting the issuers of trust preferred securities we hold; (6) changes and trends in capital markets; (7) competitive pressures from other depository institutions that increase our funding costs; (8) unanticipated effects or changes in critical accounting policies and judgments; (9) legislative or regulatory changes or actions, or significant litigation that adversely affect us or the banking industry; (10) our ability to attract and retain key personnel; (11) our ability to fully utilize our deferred tax asset; (12) our ability to maintain security for confidential information in our computer systems and telecommunications network; (13) the effects of our participation in the Capital Purchase Program and possible changes to that program; (14) increases in insurance premiums we pay to the Federal Deposit Insurance Corporation and (15) damage to our reputation as a result of the foregoing, including our ability to retain customers and attract new ones, our cost of funding and our level of liquidity as well as other factors we describe 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 first quarter 2009 operating results:
Net income (loss) available to common shareholders of $(28.5) million
for first quarter 2009
* Compared with $(81.6) million for fourth quarter 2008
* Compared with $5.0 million for first quarter 2008
Diluted net income (loss) per common share of $(1.37) for first
quarter 2009
* Compared with $(3.97) for fourth quarter 2008
* Compared with $0.24 for first quarter 2008
Return on assets of (3.25)% for first quarter 2009
* Compared with (9.57)% for fourth quarter 2008
* Compared with 0.59% for first quarter 2008
Return on common equity of (56.62)% for first quarter 2009
* Compared with (119.82)% for fourth quarter 2008
* Compared with 6.01% for first quarter 2008
Net interest margin of 2.39% for first quarter 2009
* Compared with 2.86% for fourth quarter 2008
* Compared with 3.23% for first quarter 2008
Allowance for loan losses of $78.5 million or 3.24% of loans at
March 31, 2009
* Compared with $64.4 million or 2.59% at December 31, 2008
* Compared with $28.6 million or 1.22% at March 31, 2008
* Equaled 41.5% of non-performing loans at March 31, 2009, compared
with 42.7% at December 31, 2008 and 95.11% at March 31, 2008
Non-performing loans of $189.2 million or 7.80% of loans at
March 31, 2009
* Compared with $150.9 million or 6.06% of loans at December 31, 2008
* Compared with $30.1 million or 1.28% at March 31, 2008
Annualized net charge-off rate of 2.86% for first quarter 2009
* Compared with 2.48% for fourth quarter 2008
* Compared with 0.40% for first quarter 2008
INTEGRA BANK CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, December 31, March 31,
ASSETS 2009 2008 2008
---------------------------------------------------------------------
Cash and due from banks $ 353,743 $ 62,354 $ 81,156
Federal funds sold and other
short-term investments 514 419 3,992
Loans held for sale (at lower
of cost or market value) 7,956 5,776 6,480
Securities available for sale 541,883 561,739 632,758
Regulatory stock 29,137 29,155 29,181
Loans:
Commercial loans 1,828,731 1,850,043 1,660,472
Consumer loans 409,255 432,183 419,577
Mortgage loans 188,013 208,017 260,701
Less: Allowance for loan losses (78,525) (64,437) (28,590)
---------------------------------------------------------------------
Net loans 2,347,474 2,425,806 2,312,160
Premises and equipment 46,834 48,500 50,228
Goodwill -- -- 122,824
Other intangible assets 9,507 9,928 11,221
Other assets 218,485 213,423 150,610
---------------------------------------------------------------------
TOTAL ASSETS $ 3,555,533 $ 3,357,100 $ 3,400,610
=====================================================================
LIABILITIES
Deposits:
Non-interest-bearing demand $ 299,454 $ 284,032 $ 295,942
Savings & interest checking 657,826 600,374 555,844
Money market 340,084 301,411 390,610
Certificates of deposit and
other time deposits 1,282,679 1,154,375 1,065,727
---------------------------------------------------------------------
Total deposits 2,580,043 2,340,192 2,308,123
Short-term borrowings 277,040 415,006 367,022
Long-term borrowings 392,562 360,917 360,754
Other liabilities 44,386 36,194 33,561
---------------------------------------------------------------------
TOTAL LIABILITIES 3,294,031 3,152,309 3,069,460
SHAREHOLDERS' EQUITY
Preferred stock - $1,000 par
value - 1,000,000 shares
authorized 81,761 -- --
Common stock - $1.00 stated
value - 29,000,000 shares
authorized 20,745 20,749 20,657
Additional paid-in capital 209,168 208,732 207,332
Retained earnings (44,435) (15,754) 104,247
Accumulated other comprehensive
income (loss) (5,737) (8,936) (1,086)
---------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 261,502 204,791 331,150
---------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 3,555,533 $ 3,357,100 $ 3,400,610
=====================================================================
INTEGRA BANK CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share data)
Three Months Ended
March 31, Dec. 31, Sept. 30, June 30, March 31,
2009 2008 2008 2008 2008
---------------------------------------------------------------------
INTEREST INCOME
Interest and fees on
loans and leases $ 25,952 $ 33,235 $ 35,201 $ 35,777 $ 38,782
Interest and
dividends on
securities available
for sale 6,474 6,811 6,605 6,909 7,267
Interest on
securities held for
trading -- -- -- 45 525
Dividends on
regulatory stock 521 103 385 409 376
Interest on loans
held for sale 103 85 88 90 103
Interest on federal
funds sold and
other investments 93 10 26 30 38
---------------------------------------------------------------------
Total interest income 33,143 40,244 42,305 43,260 47,091
INTEREST EXPENSE
Interest on deposits 12,187 13,532 12,888 12,851 16,392
Interest on
short-term
borrowings 763 1,447 1,995 1,955 2,166
Interest on long-term
borrowings 2,710 3,828 3,562 3,288 5,015
---------------------------------------------------------------------
Total interest
expense 15,660 18,807 18,445 18,094 23,573
---------------------------------------------------------------------
NET INTEREST INCOME 17,483 21,437 23,860 25,166 23,518
Provision for loan
losses 31,394 38,169 17,978 6,003 3,634
---------------------------------------------------------------------
Net interest income
after provision for
loan losses (13,911) (16,732) 5,882 19,163 19,884
NON-INTEREST INCOME
---------------------------------------------------------------------
Service charges on
deposit accounts 4,413 5,436 5,884 5,059 4,699
Trust income 459 470 573 554 559
Debit card
income-interchange 1,257 1,281 1,358 1,376 1,243
Other service charges
and fees 1,093 1,142 1,103 1,315 1,579
Securities gains
(losses) (1,170) (4,309) 13 (6,299) 24
Gain (Loss) on sale
of other assets 2,496 (3) (47) (12) --
Warrant fair value
adjustment (4,738) -- -- -- --
Other 1,682 1,742 1,300 1,019 2,630
---------------------------------------------------------------------
Total non-interest
income 5,492 5,759 10,184 3,012 10,734
NON-INTEREST EXPENSE
---------------------------------------------------------------------
Salaries and employee
benefits 12,075 11,442 12,125 12,446 12,394
Occupancy 2,581 2,657 2,621 2,541 2,560
Equipment 849 875 974 955 928
Professional fees 1,730 1,816 1,390 1,317 1,218
Communication and
transportation 1,161 1,248 1,223 1,371 1,222
Loan and OREO expense 5,448 1,028 870 430 452
Goodwill impairment -- 74,824 48,000 -- --
Other 5,629 5,678 4,984 5,117 5,347
---------------------------------------------------------------------
Total non-interest
expense 29,473 99,568 72,187 24,177 24,121
---------------------------------------------------------------------
Income (Loss) before
income taxes (37,892) (110,541) (56,121) (2,002) 6,497
Income taxes expense
(benefit) (9,831) (28,919) (22,794) (1,103) 1,524
---------------------------------------------------------------------
Net Income (loss) (28,061) (81,622) (33,327) (899) 4,973
Preferred stock
dividends and
discount accretion 413 -- -- -- --
---------------------------------------------------------------------
Net income (loss)
available to common
shareholders $(28,474) $(81,622) $(33,327) $ (899) $ 4,973
---------------------------------------------------------------------
Earnings (Loss) per
common share:
Basic $ (1.37) $ (3.97) $ (1.62) $ (0.04) $ 0.24
Diluted (1.37) (3.97) (1.62) (0.04) 0.24
Weighted average
common shares
outstanding:
Basic 20,732 20,569 20,567 20,554 20,537
Diluted 20,732 20,569 20,567 20,554 20,544
INTEGRA BANK CORPORATION
SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except for per share data)
March 31, Dec. 31, Sept. 30, June 30, March 31,
2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
EARNINGS
DATA
Net
Interest
Income
(tax-
equiva-
lent) $ 18,135 $ 22,111 $ 24,513 $ 25,821 $ 24,268
Net
Income
(Loss) (28,061) (81,622) (33,327) (899) 4,973
COMMON
SHARE DATA
Net Income
(Loss) (28,474) (81,622) (33,327) (899) 4,973
Basic
Earnings
Per Share (1.37) (3.97) (1.62) (0.04) 0.24
Diluted
Earnings
Per Share (1.37) (3.97) (1.62) (0.04) 0.24
Dividends
Declared 0.01 0.01 0.01 0.18 0.18
Tangible
Book
Value 8.21 9.39 9.22 8.95 9.54
PERFORMANCE
RATIOS
Return on
Assets (3.25)% (9.57)% (3.93)% (0.11)% 0.59%
Return on
Common
Equity (56.62) (119.82) (41.36) (1.09) 6.01
Net
Interest
Margin
(tax-
equivalent) 2.39 2.86 3.22 3.43 3.23
Tier 1
Risk-
Based
Capital 10.01 7.68 9.05 9.13 9.37
Total
Risk-Based
Capital 11.73 9.75 11.03 11.13 11.51
Tangible
Common
Equity to
Tangible
Assets 4.80 5.82 5.85 5.69 6.03
Efficiency
Ratio 107.66 75.55 68.49 67.59 67.73
AT PERIOD
END
Assets $3,555,533 $3,357,100 $3,356,842 $3,401,210 $3,400,610
Interest-
Earning
Assets 3,005,489 3,087,332 3,026,227 3,019,211 3,013,161
Commercial
Loans 1,828,731 1,850,043 1,808,343 1,744,943 1,660,472
Consumer
Loans 409,255 432,183 431,106 427,952 419,577
Mortgage
Loans 188,013 208,017 221,361 237,102 260,701
Total
Loans 2,425,999 2,490,243 2,460,810 2,409,997 2,340,750
Deposits 2,580,043 2,340,192 2,385,794 2,323,648 2,308,123
Low Cost
Deposits
(1) 957,280 884,406 834,853 868,402 851,786
Interest-
Bearing
Liabili-
ties 2,950,191 2,832,083 2,773,566 2,749,603 2,739,957
Share-
holders'
Equity 261,502 204,791 276,588 319,464 331,150
Unrealized
Gains
(Losses)
on Market
Securities
(FASB 115) (5,150) (8,509) (17,515) (7,737) (334)
AVERAGE
BALANCES
Assets $3,500,401 $3,393,237 $3,377,261 $3,371,944 $3,373,865
Interest-
Earning
Assets(2) 3,053,716 3,087,179 3,038,943 3,022,425 3,017,241
Commercial
Loans 1,840,457 1,836,979 1,776,275 1,704,492 1,640,194
Consumer
Loans 418,640 432,380 429,042 422,804 420,365
Mortgage
Loans 197,016 215,343 228,747 250,449 272,500
Total
Loans 2,456,113 2,484,702 2,434,064 2,377,745 2,333,059
Deposits 2,513,377 2,410,344 2,345,027 2,307,609 2,328,697
Low Cost
Deposits
(1) 912,326 858,521 850,095 850,448 808,935
Interest-
Bearing
Liabili-
ties 2,936,850 2,806,089 2,746,792 2,728,433 2,734,006
Share-
holders'
Equity 233,951 270,998 320,522 330,587 333,085
Basic
Common
Shares 20,732 20,569 20,567 20,554 20,537
Diluted
Common
Shares 20,732 20,569 20,567 20,554 20,544
(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)
March 31, Dec. 31, Sept. 30, June 30, March 31,
2009 2008 2008 2008 2008
--------- --------- --------- --------- ---------
ASSET QUALITY
Non-Performing
Assets:
Non Accrual
Loans $ 186,770 $ 150,002 $ 79,672 $ 50,162 $ 27,517
Loans 90+
Days Past Due 2,444 897 5,514 312 2,544
--------- --------- --------- --------- ---------
Non-Performing
Loans 189,214 150,899 85,186 50,474 30,061
Other Real
Estate Owned 19,848 19,396 7,252 5,940 3,267
--------- --------- --------- --------- ---------
Non-Performing
Assets $ 209,062 $ 170,295 $ 92,438 $ 56,414 $ 33,328
========= ========= ========= ========= =========
Allowance for
Loan Losses:
Beginning
Balance $ 64,437 $ 41,766 $ 31,780 $ 28,590 $ 27,261
Provision for
Loan Losses 31,394 38,169 17,978 6,003 3,634
Recoveries 330 377 464 315 448
Loans Charged
Off (17,636) (15,875) (8,456) (3,128) (2,753)
--------- --------- --------- --------- ---------
Ending
Balance $ 78,525 $ 64,437 $ 41,766 $ 31,780 $ 28,590
========= ========= ========= ========= =========
Ratios:
Allowance for
Loan Losses
to Loans 3.24% 2.59% 1.70% 1.32% 1.22%
Allowance for
Loan Losses
to Average
Loans 3.20 2.59 1.72 1.34 1.23
Allowance to
Non-performing
Loans 41.50 42.70 49.03 62.96 95.11
Non-performing
Loans to
Loans 7.80 6.06 3.46 2.09 1.28
Non-performing
Assets to
Loans and
Other Real
Estate Owned 8.55 6.79 3.75 2.34 1.42
Net Charge-Off
Ratio 2.86 2.48 1.31 0.48 0.40
NET INTEREST
MARGIN
Yields (tax-
equivalent)
Loans 4.26% 5.28% 5.70% 5.99% 6.61%
Securities 5.02 5.21 5.12 5.01 5.28
Regulatory
Stock 7.14 1.42 5.27 5.61 5.15
Other Earning
Assets 8.85 5.74 3.25 3.89 4.93
--------- --------- --------- --------- ---------
Total Earning
Assets 4.47 5.28 5.63 5.84 6.37
Cost of Funds
Interest
Bearing
Deposits 2.23 2.53 2.49 2.56 3.21
Other Interest
Bearing
Liabilities 1.94 3.04 3.18 2.95 4.19
Total
Interest
Bearing
Liabilities 2.16 2.67 2.67 2.67 3.47
--------- --------- --------- --------- ---------
Total
Interest
Expense to
Earning
Assets 2.08 2.42 2.41 2.41 3.14
--------- --------- --------- --------- ---------
Net Interest
Margin 2.39% 2.86% 3.22% 3.43% 3.23%
========= ========= ========= ========= =========