BancTrust Financial Group, Inc. (NASDAQ: BTFG) today reported
its financial results for the second quarter and six months ended
June 30, 2012. The Company reported a net loss to common
shareholders of $12.8 million, or $0.71 per fully diluted share,
for the second quarter of 2012 compared with net income available
to common shareholders of $35,000, or $0.00 per fully diluted
share, for the second quarter of 2011. The second quarter 2012 loss
included a $13.7 million provision for loan losses compared with
a $5.0 million provision for loan losses in the second quarter
of 2011. For the six-month period ended June 30, 2012,
BancTrust reported a net loss to common shareholders of $12.9
million, compared with net income available to common
shareholders of $286,000 for the first six months of
2011.
BancTrust previously announced the signing of a definitive
agreement on May 28, 2012, with Trustmark Corporation (NASDAQ:
TRMK) (“Trustmark”) pursuant to which BancTrust will merge into
Trustmark. This pending merger is subject to regulatory approval,
BancTrust shareholder approval and other customary closing
conditions.
Second Quarter Results
Net interest revenue was $14.4 million in the second quarter of
2012 compared with $15.8 million in the second quarter of 2011. The
decrease in net interest revenue was due primarily to a decrease in
average earning assets compared with the second quarter of last
year. BancTrust’s net interest margin (tax equivalent) was 3.14% in
the second quarter of 2012 compared with 3.23% in the second
quarter of 2011.
Total loans were $1.2 billion at June 30, 2012, compared with
$1.3 billion at June 30, 2011. The decrease in loans since last
year was due to soft loan demand in certain markets, the transfer
of loans to other real estate and loan charge-offs.
The results for the second quarter of 2012 included a $13.7
million provision for loan losses, compared with a
$5.0 million provision for the corresponding period in 2011.
Recent appraisals, and independent appraisal reviews, have shown
that increases in specific allowances for impaired loans,
especially land and land development loans, were warranted as
BancTrust continues to experience weak economic conditions in its
market areas and increases in non-performing loans.
The allowance for loan losses rose to 4.31% of total loans at
June 30, 2012, compared with 3.04% at June 30, 2011. Net
charge-offs for the second quarter of 2012 were $4.2 million
compared with $10.4 million in the second quarter
of 2011.
Deposits were $1.8 billion at June 30, 2012, compared with $1.9
billion at June 30, 2011. Liquidity at the subsidiary
bank remained strong at June 30, 2012, as evidenced by $254.7
million in average overnight funds and short-term investments.
Short-term investments include investment securities with little
price volatility that can be sold as needed for liquidity
purposes. The bank used the excess liquidity to pay off
approximately $25 million in Federal Home Loan Bank borrowings
in the second quarter of 2012.
Total non-interest revenue was $4.7 million in the second
quarter of 2012 compared with $5.1 million in the second quarter of
2011. The decrease in non-interest revenue was caused by lower
trust revenue, service charges on deposits and securities gains,
offset partially by higher other non-interest revenue.
Non-interest expense was $18.0 million in the second quarter of
2012 compared with $14.7 million in the second quarter of
2011. The increase in non-interest expense was due primarily to a
full and final settlement agreement with Countrywide Home Loans,
Inc. pursuant to which the bank paid Countrywide Home Loans
$3.5 million to settle any and all claims and disputes related
to mortgage loans sold by the bank or its predecessors to
Countrywide Home Loans prior to July 2, 2012. There was no
comparable settlement expense in 2011.
BancTrust’s pre-tax loss was $12.7 million in the second quarter
of 2012 compared with pre-tax income of $1.1 million in the
second quarter of 2011. Net loss to common shareholders was $12.8
million for the second quarter of 2012 compared with net income
available to common shareholders of $35,000 in the second quarter
of 2011.
Six Months Results
For the first six months of 2012, net loss to common
shareholders was $12.9 million compared with net income
available to common shareholders $286,000 for the
first six months of 2011. Net loss per diluted common share
was $0.72 for the first six months of 2012 compared
with net income of $0.02 per diluted common share for the same
period in 2011.
Net interest revenue was $29.4 million in the first six months
of 2012 compared with $30.9 million in the first six months of
2011. The decrease in net interest revenue was due primarily to a
decrease in average earning assets and net interest margin compared
with last year.
The provision for loan losses rose to $17.3 million in the first
six months of 2012 compared with $8.5 million in the 2011 period.
At June 30, 2012, non-performing assets were $166.7 million
compared with $152.2 million at December 31, 2011. Part of the
increase in non-performing assets resulted from $10.7 million of
loans moving to non-accrual status, as collateral dependent real
estate loans continued to underperform.
Non-interest revenue was $10.2 million for the first six months
of 2012 compared with $9.9 million for the first six months of
2011. The increase in non-interest revenue was caused primarily by
higher securities gains in 2012 compared with 2011.
Non-interest expense increased to $34.3 million in the first six
months of 2012 compared with $30.2 million in the first
six months of 2011. The increase was due primarily to the
previously mentioned $3.5 million settlement with Countrywide and
$2.4 million in expenses associated with BancTrust’s abandoned
capital raise and pending merger during the first six months of
2012. No similar costs or settlement expenses were incurred in the
first six months of 2011.
BancTrust was classified as well-capitalized at the end of the
second quarter of 2012. Total risk-based capital was 11.42% for the
holding company and 13.06% 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 10.14% for the holding company and 11.77% for the bank, both
measures significantly above the requirement of 6.0% for a
well-capitalized institution and minimum regulatory requirement of
4.0%.
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,
the risk that indications of an improving economy may prove to be
premature; the risks presented by the recent economic recession and
the slow recovery of the economy, which could continue to adversely
affect credit quality, collateral values, including the value of
real estate collateral and other real estate owned, investment
values, liquidity and loan originations, reserves for loan losses,
charge-offs of loans and loan portfolio delinquency rates; if we do
not complete the merger with Trustmark, we may be compelled to seek
additional capital to augment capital levels or ratios or improve
liquidity, but capital or liquidity may not be available when
needed or on favorable terms; existing regulatory requirements,
changes in regulatory requirements, including accounting standards
and legislation, and our inability to meet those requirements,
including capital requirements, and increases in our deposit
insurance premiums, could adversely affect the businesses in which
we are engaged, our results of operations and financial condition;
risks that competitive pressures among depository and other
financial institutions may increase significantly; changes in the
interest rate environment may reduce margins; and competitors may
have greater financial resources and develop products that
enable these competitors to compete more successfully than
BancTrust can compete. These risks, specifically with respect to
the pending Trustmark merger also include risks and uncertainties
relating to the ability to obtain the requisite BancTrust
shareholder approval; the risk that BancTrust or Trustmark may be
unable to obtain governmental and regulatory approvals required for
the merger, or required governmental and regulatory approvals may
delay the merger or result in the imposition of conditions that
could cause the parties to abandon the merger; the risk that a
condition to closing of the merger may not be satisfied; the timing
to consummate the proposed merger; the risk that the businesses
will not be integrated successfully; the risk that the cost savings
and any other synergies from the transaction may not be fully
realized or may take longer to realize than expected; disruption
from the transaction making it more difficult to maintain
relationships with customers, employees or suppliers; the diversion
of management time on merger-related issues; general worldwide
economic conditions and related uncertainties; and the effect of
changes in governmental regulations. We also refer you to the other
risks described in BancTrust’s reports and filings under
“Cautionary Note Concerning Forward-Looking Statements” and “Risk
Factors,” which are applicable as well. 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 Year Ended June
30, March 31, December 31, September 30,
June 30, June 30, June 30, 2012
2012 2011 2011 2011 2012
2011 EARNINGS: Interest revenue $ 17,722 $
18,461 $ 19,305 $ 20,213 $ 20,640 $ 36,183 $ 41,002 Interest
expense 3,370 3,388 3,835
4,406 4,874 6,758
10,070 Net interest revenue 14,352 15,073 15,470
15,807 15,766 29,425 30,932 Provision for loan losses 13,700
3,600 17,600 6,000 5,000 17,300 8,500 Trust revenue 945 924
522 945 1,045 1,869 2,090 Service charges on deposit accounts 1,417
1,494 1,620 1,581 1,486 2,911 3,025 Securities gains 664 1,302
1,433 1,086 879 1,966 1,363 Other than temporary impairment loss 0
0 (150 ) (50 ) 0 0 0 Other income, charges and fees 1,693
1,720 1,800 1,711
1,679 3,413 3,448 Total
non-interest revenue 4,719 5,440
5,225 5,273 5,089 10,159
9,926 Salaries, pensions and other
employee benefits 6,604 6,884 7,035 6,806 6,905 13,486 14,102 Net
occupancy, furniture and equipment expense 2,651 2,266 2,553 2,429
2,288 4,917 4,686 Intangible amortization 225 226 237 292 292 451
584 Loss on other real estate, net 0 0 30,211 1,461 553 0 726 Loss
(gain) on repossessed and other assets (8 ) 21 (89 ) (1 ) (154 ) 13
(157 ) Capital raise costs 402 1,965 1,219 0 0 2,367 0 Countrywide
Home Loans Settlement 3,520 0 0 0 0 3,520 0 FDIC insurance
assessment 661 683 678 356 1,029 1,344 2,172 Other real estate
carrying cost 395 658 457 438 407 1,053 961 Other non-interest
expense 3,590 3,546 3,394
3,385 3,402 7,138
7,078 Total non-interest expense 18,040
16,249 45,695 15,166
14,722 34,289 30,152 Income
(loss) before income taxes (12,669 ) 664 (42,600 ) (86 ) 1,133
(12,005 ) 2,206 Income tax expense (benefit) (700 )
28 7,103 (117 ) 327
(672 ) 380 Net income (loss) (11,969 )
636 (49,703 ) 31 806
(11,333 ) 1,826 Effective
preferred stock dividend 781 778
776 774 771 1,559
1,540 Net (loss) income to common shareholders
($12,750 )
($142 ) ($50,479
) ($743 )
$ 35 ($12,892
) $ 286 (Loss)
earnings per common share: Basic ($0.71 ) ($0.01 ) ($2.81 )
($0.04 ) $ 0.00 -$0.72 $ 0.02 Diluted (0.71 ) (0.01 ) (2.81 ) (0.04
) 0.00 -0.72 0.02
Cash dividends declared per common
share
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Book value
per common share $ 3.03 $ 3.55 $ 3.65 $ 6.76 $ 6.71 $ 3.03 $ 6.71
Common shares outstanding 17,961 17,954 17,954 17,954 17,953
17,961 17,953 Basic average common shares outstanding 17,958 17,954
17,954 17,953 17,949 17,956 17,852 Diluted average common shares
outstanding 17,958 17,954 17,954 17,953 18,005 17,956 17,919
STATEMENT OF CONDITION:
06/30/12 03/31/12
12/31/11 09/30/11
06/30/11 06/30/12
06/30/11 Cash and cash equivalents $ 122,123 $
135,472 $ 99,853 $ 126,761 $ 101,676 $ 122,123 $ 101,676 Securities
available for sale 521,100 479,497 517,213 508,160 553,391 521,100
553,391 Loans and loans held for sale 1,218,649 1,256,490 1,277,049
1,307,376 1,323,149 1,218,649 1,323,149 Allowance for loan losses
(52,553 ) (43,085 ) (42,156 ) (43,117 ) (40,279 ) (52,553 ) (40,279
) Other intangible assets 3,067 3,293 3,519 3,755 4,048 3,067 4,048
Other real estate owned 59,141 60,765 57,387 89,883 87,539 59,141
87,539 Other assets
115,189
116,335 119,012
126,195 128,295
115,189
128,295 Total assets
$
1,986,716 $ 2,008,767
$ 2,031,877 $
2,119,013 $ 2,157,819
$ 1,986,716 $
2,157,819 Deposits $ 1,799,634 $
1,791,456 $ 1,811,673 $ 1,842,843 $ 1,882,132 $ 1,799,634 $
1,882,132 Short-term borrowings 20,000 20,000 20,000 20,000 20,000
20,000 20,000 FHLB borrowings and long-term debt 45,391 70,476
70,539 70,597 70,686 45,391 70,686 Other liabilities 18,206 14,202
15,383 15,702 16,115 18,206 16,115 Preferred stock 49,039 48,884
48,730 48,579 48,430 49,039 48,430 Common shareholders' equity
54,446 63,749
65,552 121,292
120,456
54,446 120,456 Total
liabilities and shareholders' equity
$
1,986,716 $ 2,008,767
$ 2,031,877 $
2,119,013 $ 2,157,819
$ 1,986,716 $
2,157,819 Quarter
Ended Year Ended 06/30/12
03/31/12 12/31/11
09/30/11 06/30/11
06/30/12 06/30/11
AVERAGE BALANCES: Total assets $ 2,004,636 $ 2,010,407 $
2,096,048 $ 2,123,774 $ 2,170,993 $ 2,007,522 $ 2,169,975 Earning
assets 1,836,997 1,840,200 1,891,021 1,912,651 1,962,263 1,838,598
1,960,250 Loans 1,244,122 1,272,431 1,299,330 1,318,652 1,346,735
1,258,276 1,357,557 Deposits 1,791,044 1,790,017 1,822,445
1,848,136 1,876,819 1,790,531 1,876,343 Common shareholders' equity
63,573 66,215 119,811 120,934 118,592 64,894 117,097
PERFORMANCE RATIOS: Return on average assets -2.40 %
0.13 % -9.41 % 0.01 % 0.15 % -1.14 % 0.17 % Return on average
common shareholders' equity -80.66 % -0.86 % -167.15 % -2.44 % 0.12
% -39.95 % 0.49 % Net interest margin (tax equivalent) 3.14 % 3.30
% 3.25 % 3.28 % 3.23 % 3.22 % 3.18 %
ASSET
QUALITY: Ratio of non-performing assets to total assets
8.39 % 8.04 % 7.59 % 9.28 % 9.04 % 8.39 % 9.04 %
Ratio of allowance for loan losses to
total loans, net of unearned income
4.31 % 3.43 % 3.30 % 3.30 % 3.04 % 4.31 % 3.04 % Net loans
charged-off to average loans (annualized) 1.37 % 0.84 % 5.67 % 0.95
% 3.11 % 1.10 % 2.40 % Ratio of ending allowance to total
non-performing loans 48.85 % 42.80 % 43.53 % 40.42 % 37.46 % 48.85
% 37.46 %
CAPITAL RATIOS:
Average common shareholders' equity to
average total assets
3.17 % 3.29 % 5.72 % 5.69 % 5.46 % 3.23 % 5.40 % Dividend payout
ratio N/A N/A N/A N/A N/A N/A N/A
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