BancTrust Financial Group, Inc. (NASDAQ: BTFG) today reported
its financial results for the first quarter ended March 31, 2012.
The Company reported first quarter 2012 net income, before
preferred dividends, of $636,000 compared with net income, before
preferred dividends, of $1.0 million in the first quarter of
2011. Net loss to common shareholders was $142,000, or
$0.01 per fully diluted share, for the first quarter of 2012,
compared with net income available to common shareholders of
$251,000, or $0.01 per fully diluted share, for the first quarter
of 2011. The first quarter 2012 results included capital raise
expenses of $2.0 million, or $0.11 per diluted share. There were no
similar costs incurred in the first quarter of 2011.
“BancTrust’s first quarter results should be viewed in the
context of some significant recent events,” stated W. Bibb
Lamar, Jr., President and Chief Executive Officer of BancTrust
Financial Group, Inc. “Over the last two months we announced
several important developments. First, we abandoned our efforts to
recapitalize the Company through an equity offering to private
investors. We incurred a $50 million loss in the fourth quarter of
2011, largely as the result of write-downs in our loan portfolio
and our other real estate owned caused primarily by eroding real
estate values. We negotiated an extension of the $20 million debt
obligation secured by the stock of our subsidiary bank. We also
elected to defer interest payments on our trust preferred
securities and to cease paying dividends on our preferred stock
because of a lack of liquidity at the holding company. Most
significantly, however, we engaged Keefe, Bruyette and Woods, Inc.
to assist us in finding a strategic merger partner to enable us to
further strengthen our capital base, deal with problem assets and
expand our services and our customer base.”
With that background, our first quarter results showed continued
improvement in our net interest margin and good expense controls.
Our net interest margin rose to 3.30%, the highest percentage in
seven quarters. Although our non-performing assets are down 17.3%
since the first quarter of last year, largely because of our 2011
write-downs, they remain at unacceptably high levels, and further
work is needed to reduce our level of non-performing assets. Our
ability to sell foreclosed assets has been hampered by the
soft real estate market, but we are beginning to see signs of
recovery in some markets that should have a positive impact on real
estate sales and improve loan demand.
“We are fortunate that BancTrust maintained its well-capitalized
status through the recession,” continued Mr. Lamar. “We remain
focused on asset quality, but our primary aim at this time is to
identify a strong strategic merger partner. We view a business
combination with a well-positioned financial institution as the
best course of action for enhancement of our shareholder
value.”
First Quarter Results
Net interest revenue was $15.1 million in the first quarter of
2012 compared with $15.2 million in the first quarter of 2011. The
slight decrease in net interest revenue was due to a 6.0% decrease
in average earning assets, primarily loans, offset by improvement
in net interest margin to 3.30% in the first quarter of 2012
compared with 3.14% reported in the first quarter of 2011.
Total loans were $1.26 billion at March 31, 2012, compared with
$1.36 billion at March 31, 2011. The decrease in loans was due to
soft loan demand in certain markets, loan pay downs, the transfer
of loans to other real estate and loan charge-offs.
We increased the provision for loan losses to $3.6 million in
the first quarter of 2012, compared with $3.5 million in the
first quarter of 2011; but, the provision this quarter was
significantly lower than the $17.6 million provision in the
fourth quarter of 2011. Net charge-offs declined 53% to $2.7
million in the first quarter of 2012, compared with
$5.7 million in the first quarter of 2011, and they were down
substantially from $18.6 million in net charge-offs reported
in the fourth quarter of 2011. The allowance for loan losses was
strengthened to 3.43% of total loans at
March 31, 2012, compared with 3.37% at March
31, 2011, and 3.30% at December 31, 2011.
Deposits were $1.8 billion at March 31, 2012, compared with $1.9
billion at March 31, 2011. BancTrust’s liquidity at the bank level
remains strong as evidenced by $75.2 million in average overnight
funds. Deposits were lower in the most recent quarter compared with
the prior year due to the bank’s drive to reduce its exposure to
large certificates of deposit and to improve its net interest
margin.
Non-performing loans increased 4.0% to $100.7 million at
March 31, 2012, compared with $96.8 million at December 31,
2011; however, non-performing loans decreased 8.4% from $109.9
million at March 31, 2011. Total non-performing assets increased
4.7% to $161.4 million at March 31, 2012, compared with
$154.2 million at December 31, 2011, but total non-performing
assets decreased 17.3% from $195.2 million at March 31, 2011. The
$7.2 million increase in non-performing assets from year-end
resulted primarily from the move of two loans to non-accrual status
and one loan to other real estate owned. The changes in
non-performing loans and non-performing assets from a year ago
resulted primarily from significant write-downs taken during 2011
as collateral values continued to decline.
Total non-interest revenue increased to $5.4 million in the
first quarter of 2012, compared with $4.8 million in the first
quarter of 2011, primarily as a result of an increase in securities
gains from $484,000 in the first quarter of 2011 to $1.3 million in
securities gains in 2012. The increase in securities gains was
partially offset by lower service charges on deposit accounts
and lower trust revenue compared with the first quarter of
2011.
Total non-interest expense rose 5.3% to $16.2 million in the
first quarter of 2012 compared with $15.4 million in the prior
year first quarter. The increase was due primarily to a $2.0
million expense for capital raise costs included in the first
quarter of 2012.
“We continued to demonstrate good expense control as highlighted
by decreases in all operating expense categories compared with last
year,” stated Mr. Lamar. “Salary expense was down 4.3% and net
occupancy expense declined 5.5% from the first quarter of last
year. This was our first full quarter of operations in our new
headquarters in Mobile, and we are pleased with the synergies we
achieved with this move.”
BancTrust was classified as “well-capitalized” at the end of the
first quarter 2012. Total risk-based capital was 11.94% for
the holding company and 13.53% for the bank, compared with a
regulatory requirement of 10.0% for a well-capitalized institution
and a minimum regulatory requirement of 8.0%. Tier 1 risk-based
capital was 10.67% for the holding company and 12.26% for the
bank, both measures significantly above the requirement of
6.0% for a well-capitalized institution and minimum regulatory
requirement of 4.0%.
BancTrust did not declare a dividend on its common stock for the
first quarter of 2012. BancTrust has postponed scheduling its 2012
annual meeting of shareholders while it seeks a strategic merger
partner. While no date has yet been set, we expect that the annual
meeting will be more than 30 days after the date of our 2011 annual
meeting of shareholders, which was held on May 26. Because of the
postponement of the 2012 annual meeting, the previously published
December 13, 2011 deadline for submitting shareholder proposals for
inclusion in the Company’s proxy statement and form of proxy for
the 2012 Annual Meeting of Shareholders, and the February 26, 2012
deadline for submitting written shareholder proposals, are no
longer applicable. Once the Board of Directors sets the date of the
2012 annual meeting, the Company will notify shareholders of the
new meeting date and the new deadlines for shareholder proposal
submissions.
About BancTrust Financial Group, Inc.
BancTrust Financial Group, Inc. is a registered bank holding
company headquartered in Mobile, Alabama. The Company provides an
array of traditional financial services through 40 bank offices in
the southern two thirds of Alabama and nine bank offices
in northwest Florida. BancTrust’s common stock is listed on the
NASDAQ Global Select Market under the symbol BTFG.
Additional information concerning BancTrust Financial Group can
be accessed at www.banktrustonline.com by following the link to
investor relations.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning and subject to the protection of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These statements can be identified by the use of
words such as “expect,” “may,” “could,” “intend,” “project,”
“hope,” “schedule,” “outlook,” “estimate,” “anticipate,” “should,”
“will,” “plan,” “believe,” “continue,” “predict,” “contemplate” and
similar expressions. Our ability to accurately project results
or predict the future effects of our plans and strategies is
inherently limited. Although we believe that the expectations
reflected in our forward-looking statements are based
on reasonable assumptions, actual results and performance
could differ materially from those set forth in the
forward looking statements. Our forward-looking statements are
based on information presently available to management and are
subject to various risks and uncertainties, in addition to the
inherent uncertainty of predictions, including, without limitation,
risks that competitive pressures among depository and other
financial institutions may increase significantly; changes in the
interest rate environment may reduce margins; general economic
conditions may be less favorable than expected, resulting in,
among other things, a further deterioration in credit quality
and/or a reduction in demand for credit; legislative or
regulatory changes, including changes in accounting standards and
changes resulting from the Emergency Economic Stabilization Act of
2008, American Recovery and Reinvestment Act of 2009, Dodd-Frank
Wall Street Reform and Consumer Protection Act and programs enacted
by the U. S. Treasury and BancTrust’s regulators to address capital
and liquidity concerns in the financial system, may adversely
affect the business in which BancTrust is engaged; BancTrust
may be unable to obtain required shareholder or regulatory
approval or financing for any proposed acquisition or
other strategic or capital raising transactions; costs or
difficulties related to the integration of BancTrust’s
businesses may be greater than expected; deposit attrition,
customer loss or revenue loss following acquisitions may be
greater than expected; competitors may have greater financial
resources and develop products that enable these competitors
to compete more successfully than BancTrust can compete; and the
other risks described in BancTrust’s SEC reports and filings
under “Cautionary Note Concerning Forward-Looking Statements” and
“Risk Factors.” You should not place undue reliance on
forward-looking statements, since the statements speak only as of
the date that they are made. BancTrust has no obligation and does
not undertake to publicly update, revise or correct any of its
forward-looking statements after the date of this press release, or
after the respective dates on which such statements otherwise are
made, whether as a result of new information, future events or
otherwise.
BANCTRUST FINANCIAL GROUP,
INC. (BTFG) Financial Highlights (Unaudited)
(In thousands, except per share amounts)
Quarter Ended March 31, December 31,
September 30, June 30, March 31, 2012
2011 2011 2011 2011
EARNINGS: Interest revenue $ 18,461 $ 19,305 $ 20,213 $
20,640 $ 20,362 Interest expense 3,388 3,835
4,406 4,874 5,196
Net interest revenue 15,073 15,470 15,807 15,766 15,166
Provision for loan losses 3,600 17,600 6,000 5,000 3,500
Trust revenue 924 522 945 1,045 1,045 Service charges on
deposit accounts 1,494 1,620 1,581 1,486 1,539 Securities gains
1,302 1,433 1,086 879 484 Other than temporary impairment loss 0
(150 ) (50 ) 0 0 Other income, charges and fees 1,720
1,800 1,711 1,679
1,769 Total non-interest revenue 5,440
5,225 5,273 5,089 4,837
Salaries, pensions and other employee benefits 6,884
7,035 6,806 6,905 7,197 Net occupancy, furniture and equipment
expense 2,266 2,553 2,429 2,288 2,398 Intangible amortization 226
237 292 292 292 Loss on other real estate, net 0 30,211 1,461 553
173 Loss (gain) on repossessed and other assets 21 (89 ) (1 ) (154
) (3 ) Capital raise costs 1,965 1,219 FDIC insurance assessment
683 678 356 1,029 1,143 Other real estate carrying cost 658 457 438
407 554 Other non-interest expense 3,546 3,394
3,385 3,402 3,676
Total non-interest expense 16,249 45,695
15,166 14,722 15,430
Income (loss) before income taxes 664 (42,600 ) (86 ) 1,133
1,073 Income tax expense (benefit) 28 7,103
(117 ) 327 53 Net income
(loss) 636 (49,703 ) 31
806 1,020 Effective preferred stock
dividend 778 776 774
771 769 Net (loss) income to
common shareholders
($142 )
($50,479 ) ($743
) $ 35 $
251 (Loss) earnings per common share:
Basic ($0.01 ) ($2.81 ) ($0.04 ) $ 0.00 $ 0.01 Diluted (0.01
) (2.81 ) (0.04 ) 0.00 0.01
Cash dividends declared per common
share
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Book value per common
share $ 3.55 $ 3.65 $ 6.76 $ 6.71 $ 6.49 Common shares
outstanding 17,954 17,954 17,954 17,953 17,936 Basic average common
shares outstanding 17,954 17,954 17,953 17,949 17,754 Diluted
average common shares outstanding 17,954 17,954 17,953 18,005
17,831
STATEMENT OF CONDITION:
03/31/12 12/31/11
09/30/11 06/30/11
03/31/11 Cash and cash equivalents $ 135,472 $
99,853 $ 126,761 $ 101,676 $ 127,610 Securities available for sale
479,497 517,213 508,160 553,391 523,475 Loans and loans held for
sale 1,256,490 1,277,049 1,307,376 1,323,149 1,356,284 Allowance
for loan losses (43,085 ) (42,156 ) (43,117 ) (40,279 ) (45,711 )
Other intangible assets 3,293 3,519 3,755 4,048 4,340 Other real
estate owned 60,765 57,387 89,883 87,539 85,293 Other assets
116,335 119,012
126,195 128,295
133,469 Total assets
$ 2,008,767 $
2,031,877 $ 2,119,013
$ 2,157,819 $
2,184,760 Deposits $ 1,791,456 $
1,811,673 $ 1,842,843 $ 1,882,132 $ 1,891,068 Short-term borrowings
20,000 20,000 20,000 20,000 20,000 FHLB borrowings and long-term
debt 70,476 70,539 70,597 70,686 92,742 Other liabilities 14,202
15,383 15,702 16,115 16,301 Preferred stock 48,884 48,730 48,579
48,430 48,284 Common shareholders' equity
63,749 65,552
121,292 120,456
116,365 Total liabilities and
shareholders' equity
$ 2,008,767
$ 2,031,877 $
2,119,013 $ 2,157,819
$ 2,184,760
Quarter Ended 03/31/12
12/31/11 09/30/11
06/30/11 03/31/11
AVERAGE BALANCES: Total assets $ 2,010,407 $ 2,096,048 $
2,123,774 $ 2,170,993 $ 2,168,945 Earning assets 1,840,200
1,891,021 1,912,651 1,962,263 1,958,215 Loans 1,272,431 1,299,330
1,318,652 1,346,735 1,368,498 Deposits 1,790,017 1,822,445
1,848,136 1,876,819 1,875,862 Common shareholders' equity 66,215
119,811 120,934 118,592 115,586
PERFORMANCE RATIOS:
Return on average assets 0.13 % -9.41 % 0.01 % 0.15 % 0.19 %
Return on average common shareholders' equity -0.86 % -167.15 %
-2.44 % 0.12 % 0.88 % Net interest margin (tax equivalent) 3.30 %
3.25 % 3.28 % 3.23 % 3.14 %
ASSET QUALITY:
Ratio of non-performing assets to total assets 8.04 % 7.59 %
9.28 % 9.04 % 8.93 % Ratio of allowance for loan losses to total
loans, net of unearned income 3.43 % 3.30 % 3.30 % 3.04 % 3.37 %
Net loans charged-off to average loans (annualized) 0.84 % 5.67 %
0.95 % 3.11 % 1.70 % Ratio of ending allowance to total
non-performing loans 42.80 % 43.53 % 40.42 % 37.46 % 41.59 %
CAPITAL RATIOS:
Average common shareholders' equity to
average total assets
3.29 % 5.72 % 5.69 % 5.46 % 5.33 % Dividend payout ratio N/A N/A
N/A N/A N/A
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