Additionally, the Company announced that its Board of Directors has authorized a new stock repurchase program in connection with the restricted shares issued under the 2011 equity incentive plan. Under the new program, the Company may purchase during the coming year up to 163,852 shares, or approximately 2% of its currently outstanding publicly held shares of common stock. The repurchases will be made from time to time in open-market or negotiated transactions as deemed appropriate by the Company and will depend on market conditions. The new program will expire in July 2012 unless completed sooner or otherwise extended.
Results of Operations
The Company reported a net loss of $481,000 or $0.06 per diluted share for the three months ended June 30, 2011, compared with net income of $128,000 or $0.02 per diluted share for the three months ended June 30, 2010. This $609,000 change in earnings was primarily the result of the following items:
- Increased non-interest expense of $4.0 million, reflecting $2.0 million in additional employee salaries and benefits directly linked to the hiring of 101 full-time equivalent employees in connection with the Company's recent expansion by acquisition;
- Higher write-downs for other real estate owned (OREO) of $647,000, excluding OREO acquired in FDIC-assisted acquisitions;
- Increased provision expense of $50,000, driven by growth in the non-FDIC-assisted loan portfolio, offset by:
- Improved net interest income of $1.7 million due to growth in interest-earning assets; and
- Improved non-interest income of $1.6 million, reflecting increases in service charges and mortgage-related fees of $240,000 and $553,000, respectively, coupled with an increase in gains on the sale of investment securities of $445,000.
The Company's results for the second quarter ended June 30, 2011, included acquisition-related expenses of $474,000 and a reduction in the pre-tax bargain purchase gain of $117,000. This reduction reflected the availability of updated information at June 30, 2011, concerning the intangible value of Citizens' core deposits acquired on February 18, 2011. Excluding the acquisition-related expenses and adjustment to the bargain purchase gain net of tax, the Company would have incurred a net loss of $96,000 or $0.01 per diluted share for the first quarter of 2011 (see reconciliation of non-GAAP items).