exv99w1
Exhibit 99.1
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Blue Valley Ban Corp.
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NEWS RELEASE |
11935 Riley |
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Overland Park, Kansas 66225-6128
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Contact:
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Mark A. Fortino |
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Chief Financial Officer |
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(913) 338-1000 |
For
Immediate Release Tuesday, August 9, 2011
Blue Valley Ban Corp. Reports Second Quarter 2011 Results
Overland Park, Kansas, August 9, 2011 — Blue Valley Ban Corp. (OTCBB: BVBC) (the “Company”) today
announced a net loss for the three months ended June 30, 2011 of $2.1 million, compared to net loss
of $1.2 million for the three months ended June 30, 2010. The fully-diluted loss per share was
$0.86 for the three months ended June 30, 2011, compared to fully-diluted loss per share of $0.54
in the same period of 2010. Net loss for the six months ended June 30, 2011 was $2.6 million, or
fully-diluted loss per share of $1.11, compared to a net loss of $2.1 million or fully-diluted loss
per share of $0.95 for the same period of 2010.
The Company continues to show improvement in many areas of operation. We experienced improvement
in asset quality with a reduction in non-performing loans by $18.2 million, or 60.1%, since
December 31, 2010 and $27.3 million, or 69.2%, since June 30, 2010. In addition, our net interest
margin has continued to expand. The Company’s subsidiary, Bank of Blue Valley, continues to
maintain $19.0 million, or 34.6%, of capital in excess of the regulatory requirement for a well
capitalized institution, as well as maintain a strong liquidity position. “Improvement in asset
quality while maintaining a solid capital base and strong liquidity is a testament to the strength
of our institution. We continue to develop new customer relationships and are looking for good
lending opportunities and expansion of our Wealth Management Services,” said Robert D. Regnier,
Chairman and CEO of Blue Valley Ban Corp.
Operating Results
During the second quarter of 2011, net interest income increased 10.9% to $4.2 million compared to
$3.8 million for the same period in the prior year, primarily due to a decline in the interest
expense. Interest expense decreased $1.5 million, or 38.4%, from the same period in 2010 as a
result of a decrease in rates paid on deposits. As market rates have declined, the rates on
deposits have also declined. During 2010, the Company had funds from several time deposit
promotions mature, and as those higher rate time deposits matured they were renewed at lower market
rates. This increase in net interest income was partially offset by the decline in interest income
by $1.1 million, or 14.1%, as compared to the same period in 2010. The lower interest income was
primarily a result of a decline in the average outstanding loan balances by $56.0 million, or
10.7%, for the
three month period ended June 30, 2011, as compared to the prior year period, as a result of loan
payoffs, lower loan origination volume due to the current economic environment, and loan
foreclosures.
The provision for loan losses for the three month period ended June 30, 2011 was $2.0 million,
compared to $1.2 million for the same period in the prior year. The provision for this period was
primarily the result of a decline in appraised value on one commercial real estate property and an
increase in general reserves for commercial real estate loans. While the Company recorded an
increase in the provision for the loan losses for the quarter for commercial real estate loans, the
Company has experienced improvement within the loan portfolio with a reduction in non-performing
loans by $18.2 million, or 60.1%, since December 31, 2010 and $27.3 million, or 69.2%, since June
30, 2010, as management continues to work on improving the credit quality of the loan portfolio.
Non-interest income decreased $281,000, or 16.3%, for the three month period ended June 30,
2011, as compared to the same period in 2010. The decrease primarily the result of lower loans
held for sale fee income during the second quarter of 2011 of $379,000, or 57.2%, as compared with
the second quarter of 2010. The decrease in loans held for sale fee income was a result of a
decline in residential mortgage loan origination and refinancing volume as a result of the mortgage
rate environment as compared to the prior
year period. There were no realized gains on the sale of
available-for-sale securities in 2011 compared to $95,000 in the same period in 2010. These
decreases were partially offset by increases in service fees of $43,000, or 5.4%, and other income
of $150,000, or 87.2%.
Non-interest expense declined $344,000, or 5.5%, for the three month period ended June 30, 2011, as
compared to the same period in the prior year. The decrease in non-interest expense was attributed
to lower salaries and employee benefits of $144,000, or 5.0%. Salaries and employee benefits have
decreased as a result of lower commissions paid due to the decline in the volume of mortgage loan
originations and refinancing for the three months ended June 30, 2011, as compared to the same
period in the prior year. Other operating expenses have declined $150,000, or 5.6% for the three
month period ended June 30, 2011, as compared to the same period in the prior year, as a result of
a decline in Federal Deposit Insurance Corporation (“FDIC”) deposit insurance assessment as a
result of a decrease in the Company’s assessment base, and a decrease in other real estate owned
expenses. In addition, net occupancy expense decreased by $50,000, or 7.5%, compared to the same
period in 2010.
For the six month period ended June 30, 2011, net interest income increased 11.9% to $8.3
million compared to $7.4 million for the same period in 2010, due to a decline in interest expense,
which decreased $3.0 million, or 37.5%, from the same period in 2010 as a result of a decrease in
rates paid on deposits. As market rates have declined, the rates on deposits have also declined.
In 2010 the Company had funds from various time deposit promotions mature, and as those higher rate
time deposits matured they were renewed at lower market rates. The increase in net interest income
was partially offset by the decline in interest income by $2.1 million, or 13.6%, as compared to
the same period in 2010. The lower interest income was primarily a result of a decline in the
average outstanding loan balances by $56.9 million, or 10.7%, for the six month period ended June
30, 2011, as compared to the prior year period, as a result of loan payoffs, lower loan origination
volume due to the current economic environment, and loan foreclosures. Interest income has also
declined as a result of a decline in the average balance of available-for-sale securities by $23.8
million. Available-for-sale securities were sold during 2010 to reduce the long-term maturity risk
within the portfolio.
The provision for loan losses for the six months ended June 30, 2011 was $2.0 million compared to
$1.5 million in the same period in 2010, an increase of $550,000, or 37.9%. The provision was
deemed necessary based on the decline in collateral value on one commercial real estate property as
of June 30, 2011 and an increase in the general reserves for commercial real estate loans. While
the Company recorded an increase in the provision for the loan losses for the quarter for
commercial real estate loans, the Company has experienced a reduction in non-performing loans as
management continues to work on improving credit quality of the loan portfolio.
Non-interest income declined by $450,000, or 13.6%, for the six month period ended June 30,
2011. This was the result of a decrease in loans held for sale fee income of $546,000, or 39.5%,
due to a decline in residential mortgage loan origination and refinancing volume as a result of the
mortgage rate environment as compared to the prior year period. There were no realized gains on
the sale of available-for-sale securities in 2011 compared to $95,000 in 2010. These decreases
were partially offset by increases in service fees of $29,000, or 1.9%, and other income of
$162,000, or 56.5%. Other income has increased primarily due to the increased gains realized on
the sale of other real estate owned as compared to the same period in the prior year.
Non-interest expense decreased $509,000, or 4.1%, for the six month period ended June 30, 2011, as
compared to the same period in 2010. The decrease was attributed to a decline in salaries and
employee benefits by $296,000, or 5.1%, as a result of lower commissions paid during the period on
mortgage loans originated and sold in the secondary market as a result of decreased origination
volume. In addition, occupancy expense decreased $119,000, or 8.5%, as a result of lower repairs
and maintenance expense and lower depreciation as a result of fewer fixed asset purchases and
improvements. Other operating expenses declined $94,000, or 1.8%, as compared to the same period
in 2010. Other operating expenses declined due to a decrease in FDIC deposit insurance assessment
as a result of a decline in the Company’s
assessment base, as well as a decrease in repossessed
asset, other real estate owned and data processing expenses.
Total assets, loans and deposits at June 30, 2011 were $691.6 million, $457.5 million and
$512.1 million, respectively, compared to $818.3 million, $516.9 million and $632.5 million one
year earlier, respectively, decreases of 15.5%, 11.5% and 19.0% for assets, loans and deposits,
respectively. As of June 30, 2011, the Company’s subsidiary, Bank of Blue Valley, maintained
capital levels in excess of regulatory requirements for a well capitalized institution.
About Blue Valley Ban Corp.
Blue Valley Ban Corp. is a bank holding company that, through its subsidiaries, provides banking
services to closely-held businesses, their owners, professionals and individuals in Johnson County,
Kansas. In addition, the Company originates residential mortgages locally and nationwide through
its InternetMortgage.com website.
This release contains forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements
to be covered by the safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and is including this statement for purposes of those
safe harbor provisions. Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies and expectations of the Company, can generally be identified by
use of the words “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these
terms or other comparable terminology. The Company is unable to predict the actual results of its
future plans or strategies with certainty. Factors which could have a material adverse effect on
the operations and future prospects of the Company include, but are not limited to, fluctuations in
market rates of interest and loan and deposit pricing; inability to maintain or increase deposit
base and secure adequate funding; a continued deterioration of general economic conditions or the
demand for housing in the Company’s market areas; deterioration in the demand for mortgage
financing; legislative or regulatory changes; regulatory action; continued adverse developments in
the Company’s loan or investment portfolio; any inability to obtain funding on favorable terms; the
Company’s non-payment on TARP funds or Trust Preferred Securities; the loss of key personnel;
significant increases in competition; potential unfavorable actions from rating agencies; potential
unfavorable results of litigation to which the Company may become a party, and the possible
dilutive effect of potential acquisitions or expansions. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should not be placed on such
statements. We operate in a very competitive and rapidly changing environment. New risks emerge
from time to time, and it is not possible for us to predict all risk factors. Nor can we address
the impact of all factors on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in any forward-looking
statements.
BLUE VALLEY BAN CORP.
SECOND QUARTER 2011
FINANCIAL RESULTS
(In thousands, except per share data)
(unaudited)
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2011 |
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2010 |
Three Months Ended June 30 |
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Net interest income |
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$ |
4,221 |
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$ |
3,808 |
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Provision for loan losses |
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2,000 |
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1,200 |
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Non-interest income |
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1,445 |
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1,726 |
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Non-interest expense |
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5,882 |
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6,226 |
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Net loss |
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(2,147 |
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(1,212 |
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Net loss available to common shareholder |
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(2,419 |
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(1,484 |
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Net loss per share — Basic |
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(0.86 |
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(0.54 |
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Net loss per share — Diluted |
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(0.86 |
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(0.54 |
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Return on average assets |
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(1.40 |
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(0.59 |
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Return on average equity |
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(28.29 |
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(15.90 |
)% |
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Six Months Ended June 30 |
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Net interest income |
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$ |
8,332 |
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7,449 |
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Provision for loan losses |
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2,000 |
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1,450 |
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Non-interest income |
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2,849 |
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3,299 |
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Non-interest expense |
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12,070 |
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12,579 |
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Net loss |
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(2,576 |
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(2,085 |
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Net loss available to common shareholder |
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(3,120 |
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(2,629 |
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Net loss per share — Basic |
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(1.11 |
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(0.95 |
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Net loss per share — Diluted |
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(1.11 |
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(0.95 |
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Return on average assets |
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(0.75 |
)% |
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(0.51 |
)% |
Return on average equity |
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(18.17 |
)% |
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(13.95 |
)% |
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At June 30 |
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Assets |
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$ |
691,580 |
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818,275 |
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Loans |
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457,474 |
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516,928 |
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Deposits |
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512,065 |
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632,458 |
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Stockholders’ Equity |
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54,310 |
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58,786 |
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