Jefferson Bancshares, Inc. Announces Earnings For The Quarter And Year Ended June 30, 2010
Jefferson Bancshares, Inc. (NASDAQ: JFBI), the holding company for Jefferson Federal Bank, announced financial results for the quarter ended June 30, 2010, which included a $21.8 million non-cash goodwill impairment charge. This goodwill impairment charge was the primary factor that resulted in a net loss of $24.4 million, or $3.91 per diluted share, for the quarter ended June 30, 2010 compared to net income of $683,000, or $0.11 per diluted share, for the corresponding quarter in 2009. The impairment charge is an accounting adjustment to the Company’s financial statements that has no impact on regulatory capital ratios, liquidity, cash flows or operations of the Company. The Company determined that it was appropriate to reduce the level of goodwill recorded in connection with the 2008 acquisition of State of Franklin Bancshares, Inc., based on an annual review of goodwill performed by an independent third party. The goodwill impairment is primarily due to prolonged deterioration in the economy and the resulting impact on stock prices and valuations for the banking sector. The results for the quarter ended June 30, 2010 were also significantly impacted by a provision for loan losses totaling $5.5 million compared to $300,000 for the comparable period in 2009.
For the fiscal year ended June 30, 2010, the Company reported a net loss of $24.0 million, or $3.85 per diluted share, compared to net earnings of $2.6 million, or $0.43 per diluted share, for fiscal 2009. The loss for fiscal 2010 was primarily due to the previously discussed goodwill impairment and a provision for loan losses totaling $8.8 million. For fiscal 2009, the provision for loan losses totaled $910,000.
Anderson L. Smith, President and Chief Executive Officer, commented, “We are disappointed that our financial results were negatively impacted by the goodwill impairment charge; however, the charge does not impact the Company’s regulatory capital ratios, liquidity, cash flows or operations. We remain well capitalized for regulatory purposes and maintain a strong liquidity position. The banking industry continues to be negatively impacted by the prolonged economic downturn. Like many of our peers, our financial results reflect higher provision for loan losses, higher levels of nonperforming assets, and weak loan demand. We recorded a provision for loan losses totaling $5.5 million for the quarter ended June 30, 2010, which increased our allowance for loan losses to 2.17% of total loans compared to 0.94% of total loans at June 30, 2009. The decision to strengthen the allowance for loan losses was primarily based on our assessment of the effects of the economy as it relates to the loan portfolio. Improving asset quality will continue to be a top priority.”
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts