Integra Bank Corporation Comments On Third Quarter 2010 Call Report, Provides Update On Capital Plan

EVANSVILLE, Ind., Nov. 1, 2010 (GLOBE NEWSWIRE) -- Integra Bank Corporation (Nasdaq:IBNK), the parent company of Integra Bank N.A. ("Integra Bank"), commented today on the financial results for the third quarter of 2010 reflected in Integra Bank's Call Report that was filed with the FDIC on Friday, October 29. The third quarter 2010 financial results for the parent company have not yet been finalized. Accordingly, the discussion below relates solely to the Company's wholly-owned subsidiary, Integra Bank.  Final results for the Company are anticipated to be reported no later than mid-November, when the Company will issue its Quarterly Report on Form 10-Q for the third quarter of 2010 and also conduct its quarterly earnings conference call. 

Integra Bank reported a net loss for the third quarter of 2010 of $15.2 million. The major negative factors contributing to the loss for the third quarter of 2010 include:

• a provision for loan losses of $26.2 million;
• net charge-offs of $26.9 million, or 6.42% of total loans on an annualized basis;
• loan and other real estate owned expense of $5.8 million primarily resulting from a writedown of $3.5 million on two specific real estate parcels following updated appraisals; and
• legal and investment banking fees of $2.1 million arising from the branch sales completed during the quarter.

Positive developments impacting the third quarter of 2010 included:

• the completion of three multi-branch and loan sale transactions, which generated deposit premiums of approximately $11.2 million, after consideration of a write-off of $3.0 million of core deposit intangible assets. These transactions helped improve Integra Bank's total risk-based capital ratio by 101 basis points to 9.34% from 8.33% at June 30, 2010;
• a gain on sale of divested loans of $10.5 million arising primarily from the amount of allowance for loan losses allocated to the loans sold with the branch divestitures offset by $1.1 million of net deferred origination fees and expenses related to those loans;  
• a 6.6% decline in total non-performing assets from June 30, 2010 – the first decline reported since the third quarter of 2006; and
• continued reduction of Integra Bank's concentration in commercial real estate loans, including construction and land development, which declined $139.6 million or 16.8% from the prior quarter end.

"The results for the third quarter were negatively impacted by the increased deterioration of valuations of commercial real estate, particularly for unimproved land held as other real estate owned ("OREO")", said John Key, Executive Vice President & Chief Credit and Risk Officer. "As we regularly update appraisals on our non-performing assets, we adjust the carrying value of these assets, increasing our loan and OREO expense and loan loss reserves. We continue to pursue aggressive disposition strategies for all of these assets which further contributed to our significant loan loss provision and increased level of net charge-offs during the quarter," added Key.