JEFFERSON BANCSHARES, INC. ANNOUNCES EARNINGS FOR THE
QUARTER AND YEAR ENDED JUNE 30, 2009
Morristown, Tennessee -- (July 31, 2009) - Jefferson Bancshares, Inc. (NASDAQ:
JFBI), the holding company for Jefferson Federal Bank, announced net earnings
for the quarter ended June 30, 2009 of $683,000, or $0.11 per diluted share,
compared to net earnings of $494,000, or $0.09 per diluted share, for the
quarter ended June 30, 2008. For the year ended June 30, 2009, net earnings were
$2.6 million, or $0.43 per diluted share, compared to $1.2 million, or $0.22 per
diluted share, for fiscal 2008. The 2009 results reflect the Company's
acquisition of State of Franklin Bancshares, Inc., the parent company of State
of Franklin Bank, a Tennessee chartered savings bank headquartered in Johnson
City, Tennessee, (collectively, "State of Franklin") on October 31, 2008. Also
included in 2009 results is the Company's share of the FDIC's industry-wide
special assessment, which was approximately $309,000.
Financial results for the year ended June 30, 2008 include a $667,000 non-cash
charge to deferred income tax expense to establish a valuation allowance against
deferred tax assets related to the charitable contribution carryforward directly
attributable to the company's contribution to the Jefferson Federal Charitable
Foundation in July 2003. Excluding this tax charge, core net earnings were $1.9
million, or $0.33 per diluted share, for the year ended June 30, 2008. For a
reconciliation of core net earnings and net earnings on a GAAP basis, see the
table below.
Anderson L. Smith, President and Chief Executive Officer, commented, "Given the
significant increase in FDIC premiums and the special assessment, we are pleased
to report solid financial results for the quarter and fiscal year. We have
strengthened our allowance for loan losses in response to economic conditions
and we continue to monitor asset quality diligently. Although non-performing
assets increased during fiscal 2009, the Company's asset quality continues to
compare favorably with industry peers."
At June 30, 2009, total assets were $662.7 million compared to $330.3 million at
June 30, 2008. Net loans increased $215.6 million to $498.1 million at June 30,
2009, compared to $282.5 million at June 30, 2008, reflecting the State of
Franklin acquisition. Deposits increased $258.6 million to $482.2 million at
June 30, 2009, primarily due to deposits assumed in connection with the State of
Franklin acquisition. Total stockholders' equity was $79.5 million at June 30,
2009 compared to $72.8 million at June 30, 2008. The increase in stockholders'
equity is primarily due to the issuance of 736,000 shares of common stock
related to the State of Franklin acquisition.
Nonperforming assets increased to 1.43% of total assets at June 30, 2009,
compared to 0.23% of total assets at June 30, 2008, primarily due to an increase
in nonaccrual real estate loans and repossessed assets. The increase in
nonperforming loans is due in part to the addition of nonperforming loans from
the State of Franklin acquisition, as well as the current economic environment.
Net charge-offs for the year ended June 30, 2009 were $601,000, or 0.14% of
average loans, compared to $570,000, or 0.20% of average loans for fiscal 2008.
The allowance for loan losses was $4.7 million, or 0.94% of total gross loans,
at June 30, 2009 compared to $1.8 million, or 0.65% of total gross loans, at
June 30, 2008. The provision for loan losses totaled $910,000 for the year ended
June 30, 2009, compared to $451,000 for the year ended June 30, 2008. The
allowance for loan losses increased $2.9 million during the year ended June 30,
2009 due primarily to the addition of the State of Franklin allowance for loan
losses. The increase in the provision for loan losses was primarily the result
of the increase in nonaccrual real estate loans.
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.
RECONCILIATION OF GAAP AND CORE NET EARNINGS
(Unaudited)
(1) While core net earnings is not a measure of performance calculated in
accordance with GAAP, the Company believes that this measure is important for
the year ended June 30, 2008 to convey to investors the Company's earnings for
this period absent the $667,000 non-cash charge to deferred income tax expense
to establish a valuation allowance against deferred tax assets during the year
ended June 30, 2008. The valuation allowance was related to the charitable
contribution carryforward directly attributable to the Company's contribution to
the Jefferson Federal Charitable Foundation in July 2003. The Company calculated
its core net earnings for the year ended June 30, 2008 by subtracting this
$667,000 non-cash charge from net income for the period. Core net earnings
should not be considered in isolation or as a substitute for net income, cash
flows from operating activities or other income or cash flow statement data
calculated in accordance with GAAP. Moreover, the manner in which the Company
calculates core net earnings may differ from that of other companies reporting
measures with similar names. Reconciliation of the Company's GAAP and core net
earnings for the year ended June 30, 2008 follows.
Year Ended
June 30,
2009 2008
---- ----
(Dollars in thousands,
except per share data)
GAAP net earnings (loss) $2,630 $1,247
Plus: non-cash charge to deferred income tax expense $ 0 $ 667
------ ------
Core net earnings $2,630 $1,914
====== ======
GAAP earnings (loss) per diluted share $ 0.43 $ 0.22
Plus: non-cash charge to deferred income tax expense $ 0.00 $ 0.11
------ ------
Core net earnings per diluted share $ 0.43 $ 0.33
====== ======
JEFFERSON BANCSHARES, INC.
At At
June 30, 2009 June 30, 2008
------------------- ------------------
(Dollars in thousands)
Financial Condition Data:
Total assets $662,655 $330,265
Loans receivable, net 498,107 282,483
Cash and cash equivalents, and
interest-bearing deposits 44,108 17,616
Investment securities 36,544 3,478
Deposits 482,167 223,552
Borrowings 90,309 33,000
Stockholders' equity $79,505 $72,777
Three Months Ended Year Ended
June 30, June 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
(Dollars in thousands, except per share data)
Operating Data:
Interest income $ 8,207 $ 4,746 $ 28,161 $ 20,846
Interest expense 3,381 1,910 11,619 9,248
Net interest income 4,826 2,836 16,542 11,598
Provision for loan losses 300 80 910 451
Net interest income after
provision for loan losses 4,526 2,756 15,632 11,147
Noninterest income 1,530 383 3,198 1,520
Noninterest expense 4,771 2,492 14,683 9,889
Earnings before income taxes 1,285 647 4,147 2,778
Total income taxes 602 153 1,517 1,531
Net earnings $ 683 $ 494 $ 2,630 $ 1,247
Share Data:
Earnings per share, basic $ 0.11 $ 0.09 $ 0.43 $ 0.22
Earnings per share, diluted $ 0.11 $ 0.09 $ 0.43 $ 0.22
Dividends per share $ 0.06 $ 0.06 $ 0.24 $ 0.24
Book value per common share $ 11.85 $ 11.72 $ 11.85 $ 11.72
Weighted average shares:
Basic 6,216,744 5,645,304 6,058,580 5,717,375
Diluted 6,216,744 5,645,304 6,058,580 5,717,375
Year Ended June 30,
2009 2008
-------------- -------------
(Dollars in thousands)
Allowance for Loan Losses:
Allowance at beginning of period $1,836 $1,955
Allowance of acquired bank $2,577 -
Provision for loan losses 910 451
Recoveries 114 114
Charge-offs (715) (684)
----------- ------------
Net Charge-offs (601) (570)
----------- ------------
Allowance at end of period $4,722 $ 1,836
=========== ============
Net charge-offs to average outstanding
loans during the period, annualized 0.14% 0.20%
At At
June 30, 2009 June 30, 2008
------------------------ --------------------
(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans:
Real estate $ 2,565 $ 139
Commercial 3,411 162
Consumer 55 -
----------- ------------
Total 6,031 301
----------- ------------
Real estate owned 3,328 462
Other nonperforming assets 106 5
----------- ------------
Total nonperforming assets $ 9,465 $ 768
============ =============
Year Ended Year Ended
June 30, 2009 June 30, 2008
------------------------ --------------------
Performance Ratios:
Return on average assets 0.48% 0.37%
Return on average equity 3.40% 1.69%
Interest rate spread 3.35% 3.00%
Net interest margin 3.65% 3.73%
Efficiency ratio 76.57% 75.38%
Average interest-earning assets to
average interest-bearing liabilities 111.64% 124.75%
Asset Quality Ratios:
Allowance for loan losses as a
percent of total gross loans 0.94% 0.65%
Allowance for loan losses as a
percent of nonperforming loans 78.30% 609.97%
Nonperforming loans as a percent
of total loans 1.20% 0.11%
Nonperforming assets as a percent
of total assets 1.43% 0.23%
Contacts:
Jefferson Bancshares, Inc.
Anderson L. Smith, President and Chief Executive Officer
423-586-8421
Jane P. Hutton, Chief Financial Officer
423-586-8421