SHELBYVILLE, Ind., Feb. 24 /PRNewswire-FirstCall/ -- Blue River Bancshares, Inc. (BULLETIN BOARD: BRBI) today reported consolidated net loss of $113,000 for the year ended December 31, 2008. This net loss compares to consolidated net income of $837,000 for the same period of 2007. Basic loss per share was ($.04) for the year ended December 31, 2008, compared to basic earnings per share of $0.24 for the year ended December 31, 2007. Weighted average outstanding shares (basic) for 2008 were 3,220,874 as compared to 3,459,701 for 2007.
The net loss for the year ended December 31, 2008, included a net loss of $443,000 on the sale of the Paramount branch of SCB Bank in Lexington, Kentucky. The sale included a premium of $5,000,000 less the associated tax expense on the sale of approximately $1,880,000. The net premium was offset by expenses net of tax related to the sale of approximately $142,000, and the complete write off expense of goodwill and the core deposit intangible of $3,343,000 for a total net loss on the sale of the Paramount branch of $365,000. This net loss from the sale was partially offset by net income through February 1, 2008 from the discontinued operations of the Paramount branch of $44,000. The primary reason for the loss is the non-deductibility, for tax purposes, of the goodwill and core deposit intangible. These two intangible assets were originated at the time of the purchase of Paramount in 2003 and were expensed, for book purposes, as a result of the branch sale. Excluding the net loss on the sale of Paramount, the net income for the year would have been $252,000 or $.08 per share.
Consolidated net income from continuing operations for the three month period ended December 31, 2008 was $19,000 or $0.01 per share, as compared to a net loss from continuing operations for the same three month period ended December 31, 2007, of $196,000 or ($0.06) per share. The weighted average outstanding shares were 3,064,071 for the three month period ended December 31, 2008 and 3,393,192 during the same three month period in 2007. During the fourth quarter of 2008, only modest earnings from continuing operations were realized due to a $399,000 provision to the allowance for loan loss. This is compared to a $312,000 provision to the allowance for loan loss from continuing operations for the same period of 2007. During the fourth quarter 2008, our net non-performing assets at SCB Bank, which includes other real estate owned properties, decreased by approximately $488,000 from third quarter 2008 levels. Please see the table below:
SCB BANK Quarter Ended Quarter Ended 12/31/2008 9/30/2008 ------------- -------------- Non-Performing Assets Non-performing loans 90+ days $1,198,706 $1,056,445 Non-accrual loans 2,586,481 3,533,866 Other Real Estate 408,738 91,902 -------------- -------------- $4,193,925 $4,682,213 ============== ==============
Net interest income before loan loss provision from continuing operations for the year ended December 31, 2008 was $6,625,000 as compared to $5,181,000 for the same period in 2007. The increase in net interest income is the result of management's decision in the first and second quarters of 2008 to increase the size of our investment portfolio and the growth of the loan portfolio at SCB Bank.
Non-interest income from continuing operations for the year ended December 31, 2008 was $293,000 as compared to $2,031,000 for the same period in 2007. The change is primarily the result of the sale of the Paramount charter for a gain of $1,688,000 in the third quarter of 2007.
The provision for loan losses from continuing operations for the year ended December 31, 2008, was $1,272,000 versus $427,000 for the year ended December 31, 2007. In addition to providing for an increase in outstanding loans from continued operations at SCB Bank, the specific reserves were increased by $763,000 related to three single family homes and a commercial loan, all located in Kentucky.
Non-interest expense from continuing operations, increased to $5,300,000 for the year ended December 31, 2008 from $4,992,000 for the same period of 2007. The increase in 2008 can be primarily attributed to increased FDIC insurance premiums and expenses related to the collection of loans.
Mr. Russell Breeden III, Chairman, CEO and President offered the following comment, "We are pleased to report a small profit for the 4th quarter of 2008. We achieved this result even with a $399,000 provision for loan losses and $79,000 for write downs of other real estate owned. We are pleased that our non-performing asset ratios did not increase from September 30, 2008 to December 31, 2008. We are pro-actively communicating with many of our loan clients, in order to avoid surprises and assist them when appropriate. In this environment, communication with and between all 5 of our key constituents (clients, employees, regulators, community and shareholders) is vital."
In addition, Mr. Breeden said, "As we discussed in last quarter's press release, our investment portfolio, as a result of mark to market accounting, creates a lot of volatility in our book value. These securities are increasing our profitability, as planned, but the actions of the rating agencies create the need to constantly monitor capital levels at SCB Bank. On December 31, 2008, Blue River Bancshares had incurred a reduction of approximately $1.67 in book value per share as a result of negative mark to market adjustments to our investment portfolio."
Mr. Breeden also indicated, "We are pleased that our application to the U.S. Treasury, to participate in their Capital Purchase Program, was preliminarily approved. Even though we are anxious about additional government oversight, we continue to believe this program will allow us to enhance long term shareholder value, serve our clients and communities and achieve the goals of the capital program."
Blue River Bancshares, Inc. is the holding company for SCB Bank which does business in the Shelbyville, Indiana market under the name of Shelby County Bank, a division of SCB Bank.
Certain matters in this news release constitute forward-looking statements. Forward-looking statements can be identified by the fact that they include words like "believe," "expect," "anticipate," "estimate," and "intend," or future or conditional verbs such as "will," "would," "should," "could," or "may". These forward-looking statements relate to, among other things, expectations of the business environment in which Blue River operates, projections of future performance, perceived opportunities in the market and potential future credit experience.
These forward-looking statements are based upon the current beliefs and expectations of Blue River's management and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are outside of Blue River's control. Blue River's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors, including, but not limited to, the general business environment, interest rates, the economy, competitive conditions between banks and non-bank financial services providers, regulatory changes, other factors that may be subject to circumstances beyond Blue River's control.
Blue River undertakes no obligation to revise these statements following the date of this press release.
CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED) YEARS ENDED DECEMBER 31 2008 2007 GROSS LOANS* $176,307,000 $219,548,000 TOTAL ASSETS $254,566,000 $253,920,000 DEPOSITS* $200,409,000 $207,080,000 SHAREHOLDERS' EQUITY $10,537,000 $ 17,837,000 BOOK VALUE PER SHARE $3.51 $5.31 NET INTEREST INCOME $6,625,000 $ 5,181,000 PROVISION FOR LOAN LOSSES $1,272,000 $427,000 NON INTEREST INCOME $293,000 $ 2,031,000 NON INTEREST EXPENSE $5,300,000 $ 4,992,000 INCOME TAX EXPENSE $138,000 $688,000 NET INCOME FROM CONTINUING OPERATIONS $208,000 $ 1,105,000 NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX OF $1,813,000 AND ($142,000) $(321,000) $(268,000) NET INCOME (LOSS) $(113,000) $837,000 BASIC & DILUTIVE EARNINGS PER SHARE CONTINUING OPERATIONS $.06 $.32 BASIC & DILUTIVE (LOSS) PER SHARE DISCONTINUED OPERATIONS $(.10) $(.08) BASIC & DILUTIVE EARNINGS (LOSS) PER SHARE $(.04) $.24
*Gross loans and deposits include $75,000,000 of loans and $75,800,000 of deposits from discontinued operations in 2007.
