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Community Bank Shares of Indiana, Inc. reports a 1st quarter net loss attributable to common shareholders of $1.0 million, or $0.19 per diluted common share
New Albany, Ind. (May 8, 2015) Community Bank Shares of Indiana, Inc. reported first quarter net loss attributable to common shareholders of $1.0 million and loss per diluted common share of $0.19. Excluding merger and integration expenses resulting from the acquisition of First Financial Service Corporation of Elizabethtown, Kentucky (FFKY), net income available to common shareholders for the quarter would have been $1.4 million, or $0.27 per share, compared to $2.0 million, or $0.59 per share, for the same period in 2014 (for a reconciliation of non-GAAP financial information, see Regulation G Disclosure below).
We expected a net loss in the first quarter because of the merger and integration charges associated with the acquisition of First Financial Service Corporation of Elizabethtown, Kentucky. The merger closed on January 1, 2015 and we completed our customer data conversion during the first quarter and now all of our customers are on the same data platforms, stated James Rickard, President and Chief Executive Officer. We can now fully pursue the cultural integration and balance sheet restructuring that will be necessary to improve the combined Companys net interest margin and profitability. Based on our progress to date we remain confident that we can achieve our expected level of cost savings and earnings growth communicated at the announcement of the acquisition.
We recently applied to close one of our transaction-oriented branches on July 17, 2015, Mr. Rickard continued. We expect that this step will save the Company approximately $250,000 per year. While we dont have any specific plans to close additional branch locations, we understand that more and more transactions are migrating out of branches and that to remain competitive a community bank will have to look at the efficiency and profitability of all of its operations.
The following points summarize significant financial information for the first quarter of 2015:
· The Company completed its acquisition of FFKY and its subsidiary bank, First Federal Savings Bank, on January 1, 2015. FFKY had total assets on the date of acquisition of $773.7 million based on the Companys preliminary determination of their fair value. As part of the transaction, the Company issued 792,392 of its common shares to shareholders of First Financial and paid option holders $423,000. Based on the Companys stock price at December 31, 2014, the total amount of consideration paid was $21.9 million and $7.5 million was allocated to goodwill.
· Immediately after the acquisition, the Company purchased the outstanding preferred shares of FFKY plus accrued and unpaid dividends. The preferred shares were purchased for $12.3 million while the accrued and unpaid dividends totaled $5.7 million. Of the 20,000 preferred shares purchased, the holder of 3,309 shares converted their shares, plus accrued and unpaid dividends, into the Companys common stock while the remaining 16,691 shares were paid in cash. Commensurate with the transaction, the Company completed its private placement of common shares with institutional and accredited investors. The Company issued 1,120,950 of its common shares including the shares converted from the holder of 3,309 preferred shares described above. The total amount of common equity raised in the private placement, net of issuance costs, was $23.8 million.
· In total, the Company issued 1,913,342 of its common shares in conjunction with its acquisition of FFKY, including the associated private placement.
· Net loss for the first quarter of 2015 was $936,000 while net loss attributable to common shareholders was $1.0 million. Excluding merger and integration expenses of $3.8 million ($2.5 million, net of tax), net income would have been $1.6 million.
· Tangible book value per common share was $19.30 as of March 31, 2015 as compared to $20.55 at 12/31/2014 and $18.03 at 3/31/2014.
The following information was filed by Your Community Bankshares, Inc. (YCB) on Friday, May 8, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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