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First Banks, Inc. (the “Company”) (NYSE:FBSPRA), the holding company of First Bank, today announced earnings of $3.4 million for the three months ended December 31, 2012 as compared to a net loss of $15.9 million for the three months ended December 31, 2011. For the year ended December 31, 2012, the Company recorded earnings of $26.3 million as compared to a net loss of $41.2 million for the year ended December 31, 2011. First Bank recorded earnings of $7.4 million and $41.7 million for the three months and year ended December 31, 2012, respectively, as compared to net losses of $12.3 million and $28.3 million for the three months and year ended December 31, 2011, respectively.
Terrance M. McCarthy, President and Chief Executive Officer of the Company, said, “We are very pleased to report our fourth consecutive quarter of earnings in addition to a full year of profitability. The quarterly and annual earnings performance is a direct result of our ability to significantly improve asset quality in the fourth quarter and over the course of 2012. We expect to continue to improve earnings, asset quality and capital levels in 2013.”
Key Points for the Quarter:
The Company did not record a provision for loan losses for the fourth quarter of 2012, primarily as a result of the decrease in nonaccrual and potential problem loans. The Company reduced its overall level of nonperforming assets by $40.1 million, or 16.6%, during the fourth quarter of 2012 and $148.3 million, or 42.3%, during the year. During the fourth quarter of 2012, the Company sold $47.7 million of special mention, potential problem and nonaccrual loans resulting in a net charge-off of $13.3 million. As a result of this loan sale and other actions, the Company has reduced its ratio of nonaccrual loans to total loans to 3.75% at December 31, 2012 from 6.71% at December 31, 2011 while maintaining an allowance for loan losses to nonaccrual loans and total loans at 83.37% and 3.13%, respectively. Certain asset quality metrics as of or for the quarterly periods are summarized in the following table:
(dollars expressed in thousands)
Provision for loan losses
Performing troubled debt restructurings
Other real estate and repossessed assets
Potential problem loans
Net loan charge-offs
Nonaccrual loans to loans
Nonperforming assets to total assets
Allowance for loan losses to loans
Allowance for loan losses to nonaccrual loans
The Company executed a Purchase and Assumption Agreement to sell eight branches in the Tampa and St. Petersburg, Florida market area to HomeBanc National Association, headquartered in Lake Mary, Florida. This transaction is expected to be completed in the second quarter of 2013. The Company also announced plans to close three other branch offices in Florida and consolidate two branch locations in Illinois and two branch locations in California. The Company believes these transactions have the potential to improve core earnings performance during 2013 and future years.
Increased First Bank’s regulatory capital ratios, reflecting continued and consistent improvement in each of the regulatory capital ratios, including an increase in First Bank’s Total Capital Ratio to 17.18% at December 31, 2012, from 16.40% at September 30, 2012 and 14.98% at December 31, 2011. Regulatory capital ratios for First Bank and First Banks, Inc. are summarized in the following table:
Total Capital Ratio
Tier 1 Ratio
First Banks, Inc.:
Total Capital Ratio
Tier 1 Ratio
Net Interest Income:
Net interest income was $41.1 million for the fourth quarter of 2012, in comparison to $43.0 million for the third quarter of 2012 and $45.9 million for the fourth quarter of 2011.