Jefferson Bancshares, Inc. Announces Earnings for the Quarter and Fiscal Year Ended June 30, 2013

Jefferson Bancshares, Inc. Announces Earnings for the Quarter and Fiscal Year Ended June 30, 2013

MORRISTOWN, Tenn.--(BUSINESS WIRE)-- Jefferson Bancshares, Inc. (NAS: JFBI) , the holding company for Jefferson Federal Bank (the "Bank"), announced net income for the quarter ended June 30, 2013 of $565,000, or $0.09 per diluted share, compared to net income of $291,000, or $0.05 per diluted share, for the quarter ended June 30, 2012. The improvement in net income reflects a reduction in the provision for loan losses more than offsetting a decrease in net interest income.

For the fiscal year ended June 30, 2013, the Company reported net income of $1.6 million, or $0.25 per diluted share, compared to a net loss of $4.0 million, or $0.64 per diluted share, for the fiscal year ended June 30, 2012. The provision for loan losses was $800,000 for the fiscal year ended June 30, 2013 compared to $9.9 million for the prior fiscal year.


Anderson L. Smith, President and Chief Executive Officer, commented, "We are pleased with the steady progress our organization has made over the last twelve months, despite the challenging economic and interest rate environment. We were profitable for the sixth consecutive quarter, with net earnings of $565,000 for the three months ended June 30, 2013 compared to $291,000 for the prior year period. Asset quality continues to improve as charge-offs, nonperforming assets, and delinquencies have decreased. Our loan portfolio experienced growth during the quarter and we are cautiously optimistic that loan demand will continue to increase as we begin a new fiscal year."

Net interest income decreased $220,000, or 5.1%, to $4.1 million for the quarter ended June 30, 2013 compared to $4.3 million for the same period in 2012. The decrease in net interest income is primarily due to lower average balances and lower yields on loans, partially offset by lower average balances and lower rates on deposits. The net interest margin was 3.67% for the quarter ended June 30, 2013 compared to 3.68% for the same period in 2012. For the fiscal year ended June 30, 2013, net interest income decreased $1.5 million, or 8.3%, to $16.4 million compared to $17.9 million for the fiscal year ended June 30, 2012, while the net interest margin decreased 8 basis points to 3.64% compared to 3.72% for the prior fiscal year.

Noninterest income remained relatively unchanged at $494,000 for the quarter ended June 30, 2013 compared to $491,000 for the same period in 2012. For the fiscal year ended June 30, 2013, noninterest income decreased $67,000, or 3.1%, to $2.1 million compared to $2.2 million for the prior fiscal year. The decrease was primarily the result of a decline in service charges and fees totaling $70,000 and an increase in net losses on sale of other real estate owned ("OREO") totaling $97,000 more than offsetting an increase in mortgage origination fee income totaling $139,000.

Noninterest expense remained stable at $3.8 million for the quarter ended June 30, 2013 and decreased $1.1 million, or 6.9%, to $15.5 million for the fiscal year ended June 30, 2013 compared to the same periods in 2012. Valuation adjustments and expenses on OREO decreased $105,000 and $1.6 million, respectively, for the three and twelve month periods ended June 30, 2013 compared to the same periods in 2012. Compensation expense increased $18,000 and $552,000, respectively, for the three and twelve month periods ended June 30, 2013 due to increases in commissions, salary expense, and health insurance costs.

At June 30, 2013, total assets were $503.0 million compared to $522.9 million at June 30, 2012. Net loans decreased slightly to $321.3 million at June 30, 2013, compared to $322.5 million at June 30, 2012. Total deposits decreased $24.2 million, or 5.7%, to $399.6 million at June 30, 2013 compared to $423.9 million at June 30, 2012 primarily due to the planned runoff of higher cost certificates of deposit. Certificates of deposit comprised 37.1% of total deposits at June 30, 2013 compared to 40.2% of total deposits at June 30, 2012. The average cost of interest-bearing deposits for the three-month period ended June 30, 2013 was 0.40% compared to 0.58% for the corresponding period in 2012.

The Bank continues to be well-capitalized under regulatory requirements. At June 30, 2013, the Bank's total risk-based, Tier 1 risk-based, and Tier 1 leverage capital ratios were 14.18%, 12.93%, and 9.21%, respectively, compared to 13.42%, 12.17%, and 8.23%, respectively, at June 30, 2012. At June 30, 2013, the Company had 6,601,091 common shares outstanding with a book value of $8.03 per common share.

Nonperforming assets totaled $19.2 million, or 3.81% of total assets, at June 30, 2013, compared to $25.2 million, or 4.82% of total assets, at June 30, 2012. Nonaccrual loans totaled $12.8 million at June 30, 2013 compared to $18.6 million at June 30, 2012. Nonaccrual loans with a current payment status represented approximately 71% of total nonaccrual loans at June 30, 2013. Foreclosed real estate totaled $5.4 million at June 30, 2013 compared to $6.1 million at June 30, 2012. Net charge-offs for the three months ended June 30, 2013 were $10,000, or 0.01% of average loans annualized, compared to $1.6 million, or 1.84% of average loans annualized, for the quarter ended June 30, 2012. The allowance for loan losses was $5.7 million, or 1.73% of total loans, at June 30, 2013 compared to $5.9 million, or 1.78% of total loans, at June 30, 2012. There was no provision for loan losses recorded for the quarter ended June 30, 2013, compared to $600,000 for the quarter ended June 30, 2012. The decrease in the provision for loan losses is the result of improvements in asset quality.

Jefferson Bancshares, Inc. is the holding company for Jefferson Federal Bank, a Tennessee-chartered savings bank headquartered in Morristown, Tennessee. Jefferson Federal Bank is a community oriented financial institution offering traditional financial services with offices in Hamblen, Knox, Washington and Sullivan Counties, Tennessee. The Company's stock is listed on the NASDAQ Global Market under the symbol "JFBI." More information about Jefferson Bancshares and Jefferson Federal Bank can be found at its website: www.jeffersonfederal.com.

This press release, as well as other written communications made from time to time by the Company and its subsidiaries and oral communications made from time to time by authorized officers of the Company, may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

The Company cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and geopolitical conditions; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services and other factors that may be described in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

JEFFERSON BANCSHARES, INC.

At

At

June 30, 2013

June 30, 2012

(Dollars in thousands)

Financial Condition Data:

Total assets

$

503,028

$

522,930

Loans receivable, net

321,299

322,499

Cash and cash equivalents, and interest-bearing deposits

24,514

56,693

Investment securities

96,024

83,483

Deposits

399,642

423,882

Repurchase agreements

551

398

FHLB advances

37,626

37,863

Subordinated debentures

7,358

7,245

Stockholders' equity

$

53,025

$

52,629

Three Months Ended June 30,

Year Ended June 30,

2013

2012

2013

2012

(Dollars in thousands, except per share data)

(Dollars in thousands, except per share data)

Operating Data:

Interest income

$

4,820

$

5,235

$

19,501

$

22,432

Interest expense

744

939

3,130

4,570

Net interest income

4,076

4,296

16,371

17,862

Provision for loan losses

-

600

800

9,873

Net interest income after provision for loan losses

4,076

3,696

15,571

7,989

Noninterest income

494

491

2,113

2,180

Noninterest expense

3,806

3,806

15,546

16,693

Earnings before income taxes

764

381

2,138

(6,524

)

Total income taxes

199

90

544

(2,524

)

Net earnings

$

565

$

291

$

1,594

($4,000

)

Share Data:

Earnings per share, basic

$

0.09

$

0.05

$

0.25

($0.64

)

Earnings per share, diluted

$

0.09

$

0.05

$

0.25

($0.64

)

Book value per common share

$

8.03

$

7.94

$

8.03

$

7.94

Weighted average shares:

Basic

6,275,519

6,261,914

6,270,523

6,243,347

Diluted

6,275,519

6,261,914

6,270,523

6,243,347

Three Months Ended June 30,

Year Ended June 30,

2013

2012

2013

2012

(Dollars in thousands)

(Dollars in thousands)

Allowance for Loan Losses:

Allowance at beginning of period

$

5,670

$

6,807

$

5,852

$

8,181

Provision for loan losses

-

600

800

9,873

Recoveries

12

677

439

934

Charge-offs

(22

)

(2,232

)

(1,431

)

(13,136

)

Net Charge-offs

(10

)

(1,555

)

(992

)

(12,202

)

Allowance at end of period

$

5,660

$

5,852

$

5,660

$

5,852

Net charge-offs to average outstanding loans during the period, annualized

0.01

%

1.84

%

0.31

%

3.36

%

At

At

June 30, 2013

June 30, 2012

(Dollars in thousands)

Nonperforming Assets:

Nonperforming loans

$

12,796

$

18,562

Nonperforming investments

942

207

Real estate owned

5,433

6,075

Other nonperforming assets

-

348

Total nonperforming assets

$

19,171

$

25,192

Year Ended

Year Ended

June 30, 2013

June 30, 2012

Performance Ratios:

Return on average assets

0.31

%

(0.74

%)

Return on average equity

2.97

%

(7.37

%)

Interest rate spread

3.55

%

3.60

%

Net interest margin

3.64

%

3.72

%

Efficiency ratio

84.16

%

83.38

%

Average interest-earning assets to average interest-bearing liabilities

112.76

%

111.99

%

Asset Quality Ratios:

Allowance for loan losses as a percent of total loans

1.73

%

1.78

%

Allowance for loan losses as a percent of nonperforming loans

44.23

%

31.53

%

Nonperforming loans as a percent of total loans

3.91

%

5.65

%

Nonperforming assets as a percent of total assets

3.81

%

4.82

%



Jefferson Bancshares, Inc.
Anderson L. Smith, 423-586-8421
President and Chief Executive Officer
or
Jane P. Hutton, 423-586-8421
Chief Financial Officer

KEYWORDS: United States North America Tennessee

INDUSTRY KEYWORDS:

The article Jefferson Bancshares, Inc. Announces Earnings for the Quarter and Fiscal Year Ended June 30, 2013 originally appeared on Fool.com.

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