Bermer reports third quarter 2012 earnings | BrainerdDispatch.com | Brainerd, Minnesota

Bermer reports third quarter 2012 earnings

Posted: October 29, 2012 - 8:31pm

Bremer Financial Corporation reported net income of $21.4 million for the three months ending Sept. 30, 2012, an increase of $1.4 million or 7.2 percent from the $20 million earned for the three months ended Sept. 30, 2011.

For the nine months ending Sept. 30, 2012, net income was $70.2 million compared to $57.0 million earned in the first nine months of 2011, an increase of 23.1 percent.

The increase in 2012 earnings compared to 2011 was driven largely by a lower provision for loan losses. Return on average equity for the third quarter of 2012 was 10.2 percent compared to 10 percent for the third quarter of 2011, while return on average assets was 1.03 percent in the third quarter of 2012 compared to 1 percent in the third quarter of 2011.

For the nine months ended Sept. 30, return on average equity was 11.4 percent in 2012 compared to 9.8 percent in 2011, while the return on average assets increased to 1.15 percent in 2012 from 0.96 percent in 2011.

Net interest income for the third quarter of 2012 was $72.1 million, an increase of $1.7 million or 2.5 percent from the $70.4 million reported for the same period a year ago. Net interest margin was 3.87 percent for the quarter ended Sept. 30, compared to 3.91 percent for the quarter ended Sept. 30, 2011. For the first nine months of 2012, the bank’s net interest margin was 3.91 percent compared to 3.87 percent a year earlier.

“I’m pleased to report that Bremer had another solid quarter, led by our mortgage team and growing momentum in the commercial lending area,” said CEO Pat Donovan in a news release. “This success can be directly attributed to our staff and their continued dedication and focus on meeting the needs of our clients.”

Noninterest income was $25.5 million in the third quarter of 2012 compared to $21.9 million in the third quarter of 2011. On a year-to-date basis, noninterest income was $79.8 million, a 17.7 percent or $12.0 million increase from the first nine months of 2011, due primarily to a $6.4 million increase in the gain on sale of loans and a $3.7 million increase in securities gains.

Noninterest expense of $62.3 million in the third quarter of 2012 represented a 6.6 percent increase from the $58.4 million of noninterest expense that was recorded in the third quarter of 2011. On a year-to-date basis, when comparing 2012 to 2011, noninterest expense increased by $10.7 million or 6.2 percent as increases in personnel costs were offset in part by reductions in FDIC insurance premiums and expenses related to other real estate owned (OREO).

Nonperforming assets were $84 million at Sept. 30, 2012, compared to $108.7 million at Dec. 31, 2011, and $105.5 million at Sept. 30, 2011. The ratio of nonperforming assets to total loans, leases and OREO was 1.42 percent at Sept. 30, 2012, compared to 1.94 percent at Dec. 31, 2011 and 1.90 percent at Sept. 30, 2011.

Net charge-offs in the third quarter of 2012 were $2.8 million, compared to $2.4 million in the second quarter of 2012 and $6.1 million in the third quarter of 2011. A provision for loan losses of $4.4 million in the third quarter of 2012 was recorded, compared to a credit to the provision for loan losses of about $745,000 in the second quarter of 2012 and a provision of $5.1 million in the quarter ended Sept. 30, 2011. The ratio of allowance for loan losses to total loans and leases was 1.47 percent at Sept. 30, 2012, 1.58 percent at Dec. 31, 2011 and 1.63 percent at Sept. 30, 2011.

Bremer Financial Corporation is a privately-held, $8.3 billion regional financial services company jointly owned by its employees and the Otto Bremer Foundation (OBF). Founded in 1943 by Otto Bremer, the company is headquartered in St. Paul and provides a comprehensive range of banking, investment, trust and insurance products and services to nearly 100 locations in Minnesota, North Dakota and Wisconsin. OBF uses its share of dividends to distribute charitable grants to Bremer bank communities.