SHELBYVILLE, Ind., Nov. 4, 2010 /PRNewswire-FirstCall/ -- Blue River Bancshares, Inc. (BULLETIN BOARD: BRBI) today announced that a quarterly dividend of $.01 per share was declared by the Board of Directors, payable December 1, 2010, to the shareholders of record as of the close of business on November 15, 2010.
In addition, Blue River reported a consolidated net loss of $144,000 for the quarter ended September 30, 2010 and a net loss to common shareholders of $228,000. This net loss compares to a consolidated net loss to common shareholders of $431,000 for the same period of 2009. Fully diluted loss per share was ($.08) for the quarter ended September 30, 2010 and ($.14) for the same period in 2009. Weighted average outstanding shares (fully diluted) were 2,999,149, for both quarters ended September 30, 2010 and September 30, 2009.
The net loss to common shareholders of $228,000 for the quarter ended September 30, 2010 was primarily the result of continued high provision for loan losses. The provision was the result of the Company's prudent decision to strengthen the allowance for loan losses due to impaired loans charged off or charged down and to strengthen additional reserves for specific loans.
Net interest income before loan loss provision for the three months ended September 30, 2010 was $1,817,000 as compared to $1,648,000 for the same period of 2009. During the current quarter, SCB Bank had approximately $37,000 of increase in its cost of funds resulting from the early call by SCB Bank of CDs which had been issued at higher interest rates. This refinancing of approximately $2,700,000 of CDs will save SCB Bank close to $214,000 over the next two years.
The loan loss provision was $489,000 for the three months ended September 30, 2010, versus $786,000 for the quarter ended September 30, 2009. As reflected in the table which follows, during the third quarter 2010, the Company's non-performing assets, which include other real estate owned properties, increased by approximately $664,000 from second quarter 2010 levels.
Quarter Quarter Quarter Quarter Ended Ended Ended Ended 9/30/2010 6/30/2010 12/31/2009 9/30/2009 --------- --------- ---------- --------- Non- Performing Assets Non- performing loans 90+ days (excludes TDR's) $5,887,728 $6,812,422 $1,003,926 $3,912,675 Non- accrual loans 8,861,525 7,530,617 7,284,341 7,220,888 less specific reserves for non- accrual loans (458,439) (711,642) (681,978) (343,481) Troubled Debt Restructured 2,619,260 2,744,665 3,051,560 2,766,485 less specific reserves for TDR's (142,516) (146,926) (102,543) (23,512) Other real estate 1,902,461 1,778,514 1,436,857 1,598,748 Other repossessed assets 9,700 8,400 11,400 14,400 ----- ----- ------ ------ $18,679,719 $18,016,050 $12,003,563 $15,146,203 =========== =========== =========== ===========
For the quarter ended September 30, 2010, non-interest income was $437,000 as compared to $21,000 for the quarter ended September 30, 2009. This quarter was positively impacted by an increase of our secondary market mortgage fees of $466,000 as a result of the Bank's hiring the employees of a mortgage broker, W.R. Clouse and Associates ("Clouse and Associates") during the fourth quarter of 2009. The increase in secondary market mortgage fees was offset by $137,000 in net losses on sales and write downs of ORE. Net losses and write downs on ORE for the quarter ended September 30, 2009 were $101,000. During the quarter ended September 30, 2010, the Company did not recognize any OTTI (other than temporary impairment) on investments compared to an OTTI charge of $20,000 during the quarter ended September 30, 2009.
Non-interest expense increased by $554,000 from the third quarter of 2009 to the third quarter of 2010. This increase was primarily the result of increases in salaries and benefits and loan costs associated with the addition of Clouse and Associates. Additionally, there was an increase of $129,000 in professional fees and ORE expense, most of which are related to legal expense for credit issues.
For the nine months ended September 30, 2010, Blue River reported a $172,000 net loss or ($.06) per share, before preferred stock dividends and discount accretion of $248,000. This compares to $315,000 of net loss or ($.11) per share, before preferred stock dividends and discount accretion of $188,000, for the nine months ended 2009.
Russell Breeden, III, Chairman, CEO and President of Blue River made the following comments. "Our credit quality, at the end of the current quarter, has remained stable as compared to the prior quarter end. A $2,100,000 participation loan that originated in Kentucky remains past due. The loan has matured, however, one of the other participant banks has a legal lending limit issue which must be addressed prior to renewing the loan. Once the credit is renewed, we anticipate receiving interest income retroactive to the original maturity date at a higher interest rate. Additionally, we have approximately $3,400,000 of real estate secured loans in the 90 day past due category. This borrower will be coming out of bankruptcy proceedings and we anticipate their payments will become current. These two relationships make up the majority of the loans past due over 90 days. We also have approximately $2,300,000 in outstanding non-accrual loans to one borrower. These loans are guaranteed by three different pieces of collateral. During the first quarter of 2011, we believe we may receive at least $1,500,000 from a scheduled sale of one of these pieces of collateral. Finally, we have a commercial property in bank owned real estate which we have agreed to sell for an amount exceeding $500,000. This sale should close in the fourth quarter of 2010. The total of these four loan relationships is approximately $8,300,000 out of the total $18,700,000 in non-performing assets."
Mr. Breeden also indicated, "The operating environment did not change dramatically during the third quarter. We continue to work with borrowers to match their debt repayment to current economic reality. Since we dedicated an individual to working on early stage HELOC issues, we have been able to slow the pace and volume of new delinquent HELOC loans."
In addition, Mr. Breeden indicated, "The capital ratio at the Bank is very strong. Tier I Capital is 8.23% and Risk Based Capital is 11.18%. We are very disappointed that various independent rating sources have given our bank less than satisfactory ratings on our CDs, primarily because of the classification of our private label mortgage backed securities portfolio. This portfolio has provided significant income to the bank over the last two years and is projected by all of our independent analysts to continue to provide yields which would be hard to replace in the current interest rate environment. The issue is that approximately $20,000,000 of principal has been downgraded by one of the three primary securities rating agencies, Moody's, Standard and Poors and Fitch, to below investment grade or BBB/BAA. These downgrades cause us to categorize these assets as "classified" for regulatory reporting purposes, even though the securities rating agencies state that we should expect "full principal and interest payment" for any rating of "B" or better. Again, by all current independent analysis, we believe we will receive interest and repayment of principal in an amount which will provide a very attractive return on investment."
Finally, Mr. Breeden stated, "As you will note our normalized net income before credit costs and other expenses remains very high and our mortgage origination business is booming with the current level of mortgage refinancing. We are very excited about our long term prospect as a premier community bank, primarily serving Shelby County. We have recently added a premier senior lender, Tom Kabrich, who spent the last twelve years at National City Bank and who lives and works in the Shelby County market. Tom has been a banker for 40 years and has been focused on the agricultural market in Indiana. The demise of one local institution and the renaming of another in our market offer us a real opportunity to increase our already high market share and we are determined to take advantage of this opportunity."
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 and originates mortgages under the name W.R. Clouse and Associates.
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) QUARTERS ENDED SEPTEMBER 30, 2010 2009 GROSS LOANS $174,420,000 $173,374,000 TOTAL ASSETS $257,791,000 $260,868,000 DEPOSITS $216,412,000 $209,813,000 SHAREHOLDERS' EQUITY $11,721,000 $11,872,000 BOOK VALUE PER SHARE $3.91 $3.96 NET INTEREST INCOME $1,817,000 $1,648,000 PROVISION FOR LOAN LOSS $489,000 $786,000 NON INTEREST INCOME $437,000 $21,000 NON INTEREST EXPENSE $2,045,000 $1,491,000 INCOME TAX (BENEFIT) $(136,000) $(252,000) NET (LOSS) $(144,000) $( 356,000) NET (LOSS) TO COMMON SHAREHOLDERS $(228,000) $(431,000) BASIC & DILUTIVE (LOSS) PER SHARE $(.08) $( .14)
Blue River Bancshares, Inc.
CONTACT: Russell Breeden, III, +1-317-681-1233
Web Site: http://www.blueriverbancshares.com/
