Jefferson Bancshares, Inc. (NASDAQ: JFBI), the holding company
for Jefferson Federal Bank (the “Bank”), announced net income for
the quarter ended December 31, 2013 of $444,000, or $0.07 per
diluted share, compared to net income of $348,000, or $0.05 per
diluted share, for the quarter ended December 31, 2012. For the six
months ended December 31, 2013, the Company reported net income of
$942,000, or $0.15 per diluted share, compared to net income of
$643,000, or $0.10 per diluted share, for the six months ended
December 31, 2012. The improvement in net income is largely the
result of a lower provision for loan losses and lower noninterest
expense which more than offset a decrease in net interest income
and noninterest income during the quarter and six months ended
December 31, 2013.
Anderson L. Smith, President and Chief Executive Officer,
commented, “We are pleased to report another profitable quarter and
continued improvements in asset quality. Non-performing assets as a
percent of total assets decreased to 2.61% at December 31, 2013
compared to 3.81% at June 30, 2013 and 4.26% at December 31, 2012.
We are encouraged by the gradual improvement in loan demand that
has contributed to an increase in net loans during the three months
ended December 31, 2013.”
Net interest income decreased $70,000, or 1.7%, to $4.1 million
for the quarter ended December 31, 2013 compared to $4.1 million
for the same period in 2012. The decrease in net interest income is
primarily due to lower yields on loans, partially offset by lower
rates on interest-bearing liabilities. The net interest margin was
3.67% for the quarter ended December 31, 2013 compared to 3.69% for
the same period in 2012. For the six months ended December 31,
2013, net interest income decreased $237,000, or 2.9%, to $8.0
million compared to $8.3 million for the six months ended December
31, 2012, while the net interest margin decreased to 3.62% compared
to 3.63% for the same period in 2012.
Noninterest income decreased $98,000 or 16.9% to $483,000 for
the quarter ended December 31, 2013 compared to $581,000 the same
period in 2012. The decrease was primarily the result of a
decrease in mortgage origination fee income totaling $99,000. For
the six months ended December 31, 2013, noninterest income
decreased $60,000, or 5.8% to $977,000 compared to $1.0 million for
the same period in 2012. The decrease was primarily the result of a
$197,000 decrease in mortgage origination fee income partially
offset by a $145,000 decrease in loss on sale of foreclosed real
estate. The decrease in mortgage origination fee income for the
three and six month periods is due to a decline in refinance
originations.
Noninterest expense decreased $43,000, or 1.1%, to $3.9 million
for the quarter ended December 31, 2013 and decreased $227,000, or
2.9%, to $7.6 million for the six months ended December 31, 2013
compared to the same periods in 2012. Valuation adjustments and
expenses on OREO decreased $99,000 and $246,000, respectively, for
the three and six month periods ended December 31, 2013 compared to
the same periods in 2012.
At December 31, 2013, total assets were $497.8 million compared
to $503.0 million at June 30, 2013. Net loans increased $8.9
million, or 2.8%, to $330.2 million at December 31, 2013, compared
to $321.3 million at June 30, 2013 due to an increase in loan
demand. Total deposits decreased $11.6 million to $388.0 million at
December 31, 2013 compared to $399.6 million at June 30, 2013.
Certificates of deposit comprised 36.4% of total deposits at
December 31, 2013 compared to 37.1% of total deposits at June 30,
2013. The average cost of interest-bearing deposits for the
three-month period ended December 31, 2013 was 0.38% compared to
0.44% for the corresponding period in 2012.
The Bank continues to be well-capitalized under regulatory
requirements. At December 31, 2013, the Bank's total risk-based,
Tier 1 risk-based, and Tier 1 leverage capital ratios were 14.45%,
13.32%, and 9.65%, respectively, compared to 14.18%, 12.93%, and
9.21%, respectively, at June 30, 2013. At December 31, 2013, the
Company had 6,595,301 common shares outstanding with a book value
of $8.12 per common share.
Nonperforming assets totaled $13.0 million, or 2.61% of total
assets, at December 31, 2013, compared to $19.2 million, or 3.81%
of total assets, at June 30, 2013. Nonaccrual loans totaled $6.7
million at December 31, 2013 compared to $12.8 million at June 30,
2013. Nonaccrual loans with a current payment status represented
approximately 49% of total nonaccrual loans at December 31, 2013.
Foreclosed real estate remained relatively unchanged at $5.4
million at December 31, 2013 compared to June 30, 2013. Net
charge-offs for the three months ended December 31, 2013 were $1.0
million, or 1.25% of average loans annualized, compared to
$359,000, or 0.45% of average loans annualized, for the quarter
ended December 31, 2012. The allowance for loan losses was $4.0
million, or 1.19% of total loans, at December 31, 2013 compared to
$5.7 million, or 1.73% of total loans, at June 30, 2013. There was
no provision for loan losses recorded for the quarter ended
December 31, 2013, compared to a $300,000 provision for the quarter
ended December 31, 2012. The decrease in the provision for loan
losses is the result of continued improvement in asset quality.
Jefferson Bancshares, Inc. is the holding company for Jefferson
Federal Bank, a Tennessee-chartered savings bank headquartered in
Morristown, Tennessee. Jefferson Federal Bank is a community
oriented financial institution offering traditional financial
services with offices in Hamblen, Knox, Washington and Sullivan
Counties, Tennessee. The Company’s stock is listed on the NASDAQ
Global Market under the symbol “JFBI.” More information about
Jefferson Bancshares and Jefferson Federal Bank can be found at its
website: www.jeffersonfederal.com.
This press release, as well as other written communications made
from time to time by the Company and its subsidiaries and oral
communications made from time to time by authorized officers of the
Company, may contain statements relating to the future results of
the Company (including certain projections and business trends)
that are considered “forward-looking statements” as defined in the
Private Securities Litigation Reform Act of 1995 (the “PSLRA”).
Such forward-looking statements may be identified by the use of
such words as “believe,” “expect,” “anticipate,” “should,”
“planned,” “estimated,” “intend” and “potential.” For these
statements, the Company claims the protection of the safe harbor
for forward-looking statements contained in the PSLRA.
The Company cautions you that a number of important factors
could cause actual results to differ materially from those
currently anticipated in any forward-looking statement. Such
factors include, but are not limited to: prevailing economic and
geopolitical conditions; changes in interest rates, loan demand,
real estate values and competition; changes in accounting
principles, policies and guidelines; changes in any applicable law,
rule, regulation or practice with respect to tax or legal issues;
and other economic, competitive, governmental, regulatory and
technological factors affecting the Company’s operations, pricing,
products and services and other factors that may be described in
the Company’s annual report on Form 10-K and quarterly reports on
Form 10-Q as filed with the Securities and Exchange Commission. The
forward-looking statements are made as of the date of this release,
and, except as may be required by applicable law or regulation, the
Company assumes no obligation to update the forward-looking
statements or to update the reasons why actual results could differ
from those projected in the forward-looking statements.
JEFFERSON BANCSHARES, INC.
At At December 31, 2013 June 30,
2013 (Dollars in thousands)
Financial Condition
Data: Total assets $ 497,812 $ 503,028 Loans receivable, net
330,207 321,299
Cash and cash equivalents, and
interest-bearing deposits
16,701 24,514 Investment securities 93,472 96,024 Deposits 388,020
399,642 Repurchase agreements 837 551 FHLB advances 46,909 37,626
Subordinated debentures 7,414 7,358 Stockholders' equity $ 53,544 $
53,025
Three Months Ended December 31, Six
Months Ended December 31, 2013 2012 2013
2012 (Dollars in thousands, except per share data) (Dollars
in thousands, except per share data)
Operating Data:
Interest income $ 4,737 $ 4,931 $ 9,338 $ 9,900 Interest expense
665 789 1,310 1,635 Net interest income 4,072 4,142 8,028 8,265
Provision for loan losses - 300 - 600
Net interest income after provision for
loan losses
4,072 3,842 8,028 7,665 Noninterest income 483 581 977 1,037
Noninterest expense 3,918 3,961 7,640 7,867 Earnings before income
taxes 637 462 1,365 835 Total income taxes 193 114 423 192 Net
earnings $ 444 $ 348 $ 942 $ 643
Share Data:
Earnings per share, basic $ 0.07 $ 0.05 $ 0.15 $ 0.10 Earnings per
share, diluted $ 0.07 $ 0.05 $ 0.15 $ 0.10 Book value per common
share $ 8.12 $ 8.06 $ 8.12 $ 8.06 Weighted average shares: Basic
6,269,831 6,260,122 6,271,395 6,260,677 Diluted 6,269,831 6,260,122
6,271,395 6,260,677
Three Months Ended December
31, Six Months Ended December 31, 2013
2012 2013 2012 (Dollars in thousands) (Dollars
in thousands)
Allowance for Loan Losses: Allowance at
beginning of period $ 4,993 $ 5,761 $ 5,660 $ 5,852 Provision for
loan losses - 300
-
600 Recoveries 102 8 200 400 Charge-offs (1,122 )
(367 ) (1,887 ) (1,150 ) Net Charge-offs
(1,020 ) (359 ) (1,687 ) (750 ) Allowance at
end of period $ 3,973 $ 5,702 $ 3,973 $ 5,702
Net charge-offs to average outstanding
loans during the period, annualized
1.25 % 0.45 % 1.04 % 0.46 %
At At At
December 31, 2013 June 30, 2013 December 31,
2012 (Dollars in thousands)
Nonperforming Assets:
Nonperforming loans $ 6,688 $ 12,796 $ 14,416 Nonperforming
investments 904 942 721 Real estate owned 5,417 5,433 7,018
Other nonperforming assets
-
-
19
Total nonperforming assets $ 13,009 $ 19,171
$ 22,174
Six Months Ended
Year Ended Six Months Ended December 31, 2013
June 30, 2013 December 31, 2012 Performance
Ratios: Return on average assets 0.38 % 0.31 % 0.25 % Return on
average equity 3.52 % 2.97 % 2.41 % Interest rate spread 3.54 %
3.55 % 3.54 % Net interest margin 3.62 % 3.64 % 3.63 % Efficiency
ratio 84.85 % 84.16 % 84.69 %
Average interest-earning assets to average
interest-bearing liabilities
113.18 % 112.76 % 112.52 %
Asset Quality Ratios:
Allowance for loan losses as a percent of
total loans
1.19 % 1.73 % 1.77 %
Allowance for loan losses as a percent of
nonperforming loans
59.40 % 44.23 % 39.55 %
Nonperforming loans as a percent of total
loans
2.00 % 3.91 % 4.48 %
Nonperforming assets as a percent of total
assets
2.61 % 3.81 % 4.26 %
Jefferson Bancshares, Inc.Anderson L. Smith,
423-586-8421President and Chief Executive OfficerorJane P. Hutton,
423-586-8421Chief Financial Officer
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