Market Overview

First Financial Service Corporation Reports Net Income of $1.2 million or $0.25 per share

Share:

Net interest margin increases for the sixth consecutive quarter

ELIZABETHTOWN, Ky., Nov. 12, 2013 /PRNewswire/ -- First Financial Service Corporation (the Company, NASDAQ: FFKY) today reported net income to common stockholders of $1.2 million for the quarter ended September 30, 2013, an improvement from the net loss to common stockholders of $1.0 million for the same quarter in 2012. Net income per diluted common share was $0.25 for the quarter ended September 30, 2013, compared to a net loss per diluted common share of $0.21 for the same quarter in 2012.

First Financial also reported a net loss of $328,000 for the nine months ended September 30, 2013, an improvement from the net loss to common stockholders of $6.0 million for the same nine-month period in 2012.  The net loss per diluted common share was $0.07 for the nine months ended September 30, 2013, compared to a net loss per diluted common share of $1.25 for the nine months ended September 30, 2013.

"We continue to execute on improving the overall profitability and risk profile of the Company," said President, Greg Schreacke.  "Non-performing assets improved for the sixth consecutive quarter, net interest margin trends remain favorable, and capital ratios continue to improve with the net income posted for the quarter.  More importantly, serving our customers remains at the heart of everything we do.  New loan production for portfolio loans exceeded $30 million for the third consecutive quarter, though net loan growth declined 3.0% for the quarter.  Retail and commercial checking continue to grow with a 5% increase in deposits for the year."

THIRD QUARTER 2013 HIGHLIGHTS

  • Net interest margin improved to 2.96% for the quarter ended September 30, 2013, up from 2.87% last quarter and 2.54% for the quarter ended September 30, 2012.
  • Non-performing assets, excluding restructured loans that are accruing and paying as agreed, declined by $1.7 million or 5.0%, to $30.4 million from June 30, 2013 and $30.0 million or 49.7% from September 30, 2012.  This represents the sixth consecutive quarterly reduction in non-performing assets, excluding restructured loans that are accruing and paying as agreed.
  • Other real estate owned has decreased $13.4 million or 60.2% to $8.9 million for the quarter ended September 30, 2013 compared to $22.3 for the quarter ended December 31, 2012.  Related expenses have declined 61.7% for the nine months ended September 30, 2013 to $1.3 million when compared to $3.3 million for the same period last year.  Also, a gain of $1.5 million was realized during the quarter on a piece of commercial real estate property that was sold.  
  • Regulatory capital ratios continue to improve at the bank level.  The tier I leverage ratio was 7.80%, the tier I risk-based ratio was 11.83% and the total risk-based ratio was 13.09% for the quarter ended September 30, 2013 compared to 6.50%, 10.61%, and 11.88% respectively for the quarter ended September 30, 2012.

"Third quarter 2013 noninterest expenses were relatively flat with a slight increase of approximately $41,000 over the second quarter. Noninterest income in the second quarter of 2013 improved by $1.9 million and included a $1.5 million gain on the sale of one other real estate owned property," said Chief Financial Officer, Frank Perez. "Noninterest income also benefited from increased overdraft and mortgage fee income."

First Financial Service Corporation is the parent bank holding company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923. The Bank serves the needs and caters to the economic strengths of the local communities in which it operates and strives to provide a high level of personal and professional customer service. The Bank offers a variety of financial services to its retail and commercial banking customers. These services include personal and corporate banking services, and personal investment financial counseling services. Currently, the Bank serves six contiguous counties in central Kentucky through its 17 full-service banking centers.

This release includes forward-looking statements. The words "expect," "anticipate," "goal," "objective," "intend," "plan," "believe," "should," "seek," "estimate" and similar expressions identify forward-looking statements, but other statements not limited to historical information may also be considered forward-looking. All forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results to differ materially from any results expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, (i) events or conditions that adversely affect the financial condition of borrowers; (ii) continuation of the current historically low short-term interest rate environment; (iii) our ability to attract performing loans; (iv) changes in loan underwriting, credit review or loss reserve policies resulting from economic conditions, regulatory oversight or regulatory developments; (v) the effectiveness of our efforts to improve, resolve or liquidate lower-quality assets; (vi) increased competition from other financial institutions; (vii) greater than anticipated adverse conditions in the national or local economies, particularly in commercial and residential real estate markets; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix)  events that would cause us to conclude that there was impairment of any asset, including intangible assets; (x) events that further reduce the value of, or increase expenses associated with, other real estate owned; (xi) our ability to comply with regulatory capital requirements; and (xiii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A more detailed description of these and other risks and uncertainties is contained in our most recent annual report on Form 10-K and our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Many of the risks and uncertainties described above are beyond our ability to control or predict, and therefore readers are cautioned not to put undue reliance on the forward-looking statements made in this release. First Financial Service Corporation disclaims any obligation to update or revise any forward-looking statements made in this release, whether as a result of new information, future events or otherwise, unless required by law.

 



FIRST FINANCIAL SERVICE CORPORATION 




                     Consolidated Balance Sheets



(Unaudited)
















 September 30,


December 31,

(Dollars in thousands, except per share data)


2013


2012










ASSETS:






Cash and due from banks




$     13,441


$     12,598

Interest bearing deposits




18,076


50,505

    Total cash and cash equivalents



31,517


63,103










Securities available-for-sale




290,183


354,131

Loans held for sale





1,068


3,887










Loans, net of unearned fees




476,031


524,835

Allowance for loan losses




(12,224)


(17,265)

      Net loans 





463,807


507,570










Federal Home Loan Bank stock




4,430


4,805

Cash surrender value of life insurance



10,336


10,060

Premises and equipment, net




25,907


27,048

Real estate owned:








  Acquired through foreclosure, net of valuation 





     allowance of $721 Sept (2013) and $500 Dec (2012)

8,859


22,286

Other repossessed assets




16


34

Accrued interest receivable




2,283


2,690

Accrued income taxes




2,907


2,928

Low-income housing investments



7,039


7,061

Other assets





1,804


1,459











TOTAL ASSETS



$   850,156


$ 1,007,062











LIABILITIES AND STOCKHOLDERS' EQUITY




LIABILITIES:








Deposits:









  Non-interest bearing




$     80,308


$     75,842

  Interest bearing





666,570


846,778

      Total deposits





746,878


922,620










Advances from Federal Home Loan Bank



38,424


12,596

Subordinated debentures




18,000


18,000

Accrued interest payable




4,137


3,121

Accrued senior preferred dividend



3,219


2,469

Accounts payable and other liabilities



4,977


3,884











TOTAL LIABILITIES




815,635


962,690










Commitments and contingent liabilities 















STOCKHOLDERS' EQUITY:







 Senior preferred stock, $1 par value per share;





    authorized 5,000,000 shares; issued and 





    outstanding, 20,000 shares with a liquidation





    preference of $23.2 million Sept (2013), and 





    $22.5 million Dec (2012)




19,984


19,943

Common stock, $1 par value per share;






   authorized 35,000,000 shares; issued and





   outstanding, 4,861,523 shares Sept (2013), and 4,775,114




   shares Dec (2012) 





4,861


4,775

Additional paid-in capital




36,137


35,782

Accumulated deficit





(17,726)


(17,398)

Accumulated other comprehensive income 



(8,735)


1,270











TOTAL STOCKHOLDERS' EQUITY


34,521


44,372


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