BancTrust Financial Group, Inc. Reports Improved Fourth Quarter Results
Reports Increase in Net Interest Income, Margins and Net Income
MOBILE, Ala., Jan. 29 /PRNewswire-FirstCall/ -- BancTrust Financial Group, Inc. (Nasdaq: BTFG) today reported its financial results for the fourth quarter and year ended December 31, 2009. The Company reported that fourth quarter 2009 net income, before the preferred dividend, rose to $1.1 million compared with a net loss of $3.5 million in the fourth quarter or 2008. Net income available to common shareholders rose to $349,000, or $0.02 per diluted share, in the fourth quarter of 2009 compared with a net loss available to common shareholders of $3.6 million, or $0.21 per share, in the fourth quarter of 2008. The fourth quarter net income (loss) available to common shareholders included a preferred stock dividend of $764,000 in 2009 and $111,000 in 2008.
"BancTrust's fourth quarter results highlight the progress we have made in growing our net interest income, expanding our net interest margin and improving credit quality this year," stated W. Bibb Lamar, Jr., President and Chief Executive Officer of BancTrust Financial Group, Inc. "Our fourth quarter marked our highest levels of net interest income, net interest margin and net income in 2009, even though average loan volume was down slightly."
"We enter 2010 with a more positive outlook based on recent credit trends and additional signs that the economy is beginning to stabilize in our markets. We remain focused on reducing the level of non-performing assets and believe this will be a key part of our strategy to build our earnings in future quarters," continued Mr. Lamar.
Fourth Quarter Results
Net interest revenue increased 11.9% to $15.1 million in the fourth quarter of 2009 compared with $13.5 million in the fourth quarter of 2008. The increase was largely due to the continued increase in net interest margin since last year. Net interest margin rose to 3.32% in the fourth quarter of 2009, up 40 basis points from the third quarter 2009 margin of 2.92% and a 24 basis point improvement from 3.08% reported in the fourth quarter of 2008. The fourth quarter of 2009 marked the second consecutive quarterly increase in BancTrust's net interest margin.
Total loans were $1.5 billion at December 31, 2009. Loans were down $65.2 million at year-end 2009 compared with year-end 2008 as result of the weak economy's effect on loan demand and the transfer of some loans to OREO through the foreclosure process.
"Our non-performing assets have stabilized since mid-year and have been a primary factor in our reduced provision for loan losses compared with the first half of 2009," noted Mr. Lamar. Loans that were 30 days past due and accruing interest declined to 1.18% of total loans compared with 1.35% at September 30, 2009. Non-performing assets were $177.6 million at year-end 2009. Renegotiated loans, all of which were accruing interest, accounted for 6.0% of this amount.
The provision for loan losses was reduced to $2.5 million in the fourth quarter of 2009 compared with $8.1 million in the fourth quarter of 2008 and was up from $1.7 million in the linked third quarter of 2009. Net charge-offs were $4.5 million for the fourth quarter of 2009 compared with $2.5 million in the fourth quarter of 2008. The allowance for loan losses grew to 3.13% of total loans at December 31, 2009, compared with 2.00% at year-end 2008.
"BancTrust increased its reserves during the first half of 2009 to account for the higher level of non-performing loans earlier in the year," stated Mr. Lamar. "Later in the year we utilized a portion of our reserves by charging off some loans previously provided for in our allowance."
Total non-interest revenue was $5.3 million in the fourth quarter of 2009 compared with $5.5 million in the fourth quarter of 2008. The decrease was primarily due to lower trust revenue and service charges on deposit accounts, offset partially by higher security gains and other non-interest income.
Total non-interest expense declined 1.3% to $16.4 million in the fourth quarter of 2009 compared with $16.6 million in fourth quarter of 2008. Costs declined in every major expense category except FDIC insurance premiums, which more than doubled from $404,000 in the fourth quarter of 2008 to $1,103,000 in the fourth quarter of 2009, and other real estate carrying costs, which increased from $405,000 in the 2008 period to $670,000 in the fourth quarter of 2009.
"We have remained focused on improving our operating efficiency and are pleased to report that our total noninterest expenses are down from last year, despite substantial increases in costs related to FDIC insurance premiums and additional special FDIC assessments charged to all banks in mid-2009 and higher carrying costs for OREO," stated Mr. Lamar. "We have consolidated certain operations and employed new hardware and software to leverage our operating efficiency. As a result, we reduced our overhead costs since last year, including lower personnel expenses, occupancy expense, and furniture and equipment costs."
BancTrust's pre-tax income rose to $1.5 million in the fourth quarter of 2009 compared with a pre-tax loss of $5.7 million in the fourth quarter of 2008. Net income for the fourth quarter of 2009 was $1.1 million compared with a net loss of $3.5 million in the fourth quarter of 2008.
BancTrust was classified as 'well-capitalized' at the end of the fourth quarter 2009. Total risk-based capital was 13.1% for the holding company and 14.4% 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 11.8% for the holding company and 13.1% for the bank, both measures significantly above the requirement of 6.0% for a well-capitalized institution and minimum regulatory requirement of 4.0%. Mr. Lamar said, "We remain focused on protecting our strong capital base as a buffer to any prolonged weakness in the economy."
2009 Results
BancTrust reported a net loss available to common shareholders in 2009 of $124.3 million, or $7.06 per diluted common share, compared with net income available to common shareholders of $1.1 million, or $0.06 per diluted common share, for 2008. The 2009 results include a $97.4 million ($5.53 per diluted share) non-cash write-off of goodwill. The earnings were reduced by preferred stock dividends of $3,026,000, or $0.17 per diluted share, in 2009 and $111,000, or $0.01 per share, in 2008.
Net interest income declined 11.6% to $53.9 million in 2009 compared with $60.9 million in 2008. The decline in interest income was due primarily to a 47 basis point decrease in the net interest margin to 2.93% in 2009 compared with 3.40% in 2008. BancTrust's increase in non-performing assets over the past year also contributed to the decline in net interest income and net interest margin. "We began rebuilding the margin in the second half of 2009, resulting in an increase of 67 basis points since mid-year," continued Mr. Lamar.
The 2009 provision for loan losses was $37.4 million compared with $15.3 million in the 2008 period. The increase in the provision since last year was due primarily to increased charge-offs and a higher level of nonperforming loans related to our coastal markets. Net charge-offs were $22.2 million in 2009 compared with $8.0 million in 2008. Non-performing assets totaled $177.6 million at December 31, 2009, compared with $123.4 million at December 31, 2008.
Non-interest income was flat at $22.9 million for 2009 and 2008. The 2009 results included a $3.3 million increase in security gains offset partially by decreased trust department revenue and service charges. The 2008 results included a $1.1 million gain on the sale of an interest rate floor contract.
Non-interest expense, excluding the $97.4 million charge for goodwill impairment, increased to $78.4 million in 2009 compared with $67.6 million in 2008. The increase was due to a $9.8 million increase in loss/write down on OREO, a $3.7 million increase in FDIC insurance costs and special assessment, and a $2.0 million increase in carrying costs related to OREO compared with 2008.
BancTrust's Board of Directors did not declare a dividend for the first quarter of 2010. "Our Board of Directors remains focused on preserving our strong capital base. We will continue to evaluate the payment of cash dividends in the future based on our earnings outlook and the state of the economy," concluded Mr. Lamar.
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 42 bank offices in the southern two-thirds of Alabama and 9 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 recently enacted Emergency Economic Stabilization Act of 2008, American Recovery and Reinvestment Act of 2009 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
-------------------------------------
December 31, September 30, June 30,
2009 2009 2009
------- ------- -------
EARNINGS:
Interest revenue $21,562 $21,399 $21,066
Interest expense 6,440 7,817 8,669
------- ------- -------
Net interest revenue 15,122 13,582 12,397
Provision for loan losses 2,500 1,725 22,050
Trust revenue 829 866 926
Service charges on deposit accounts 2,245 2,379 2,312
Securities gains 527 667 4
Gain on sale of interest rate floor 0 0 0
Other income, charges and fees 1,690 1,807 1,716
------- ------- -------
Total non-interest revenue 5,291 5,719 4,958
------- ------- -------
Salaries, pensions and other
employee benefits 7,323 6,915 7,449
Net occupancy, furniture and
equipment expense 2,645 2,757 2,599
Intangible amortization 588 687 688
Goodwill impairment 0 0 97,367
Loss (gain) on other real estate,
net 143 663 9,340
FDIC insurance assessment 1,103 778 2,290
Other real estate carrying cost 670 685 1,505
Other non-interest expense 3,958 4,226 4,200
------- ------- -------
Total non-interest expense 16,430 16,711 125,438
------- ------- -------
Income (loss) before income taxes 1,483 865 (130,133)
Income tax expense (benefit) 370 79 (12,217)
------- ------- -------
Net income (loss) 1,113 786 (117,916)
------- ------- -------
Effective preferred stock dividend 764 756 761
------- ------- -------
Net income (loss) to common
shareholders $349 $30 ($118,677)
------- ------- -------
Earnings (loss) per common share:
Total
Basic $0.02 $0.00 -$6.74
Diluted 0.02 0.00 -6.74
Cash dividends declared
per common share $0.00 $0.00 $0.01
Book value per common share $6.59 $6.61 $6.55
Common shares outstanding 17,634 17,634 17,629
Basic average common shares
outstanding 17,634 17,634 17,613
Diluted average common shares
outstanding 17,765 17,634 17,613
Quarter Ended
----------------------------
March 31, December 31,
2009 2008
------- -------
EARNINGS:
Interest revenue $21,911 $24,210
Interest expense 9,149 10,697
------- -------
Net interest revenue 12,762 13,513
Provision for loan losses 11,100 8,086
Trust revenue 926 1,138
Service charges on deposit accounts 2,271 2,697
Securities gains 2,299 135
Gain on sale of interest rate floor 0 0
Other income, charges and fees 1,456 1,503
------- -------
Total non-interest revenue 6,952 5,473
------- -------
Salaries, pensions and other employee
benefits 7,356 7,598
Net occupancy, furniture and equipment
expense 2,676 2,954
Intangible amortization 687 780
Goodwill impairment 0 0
Loss (gain) on other real estate, net 1,643 301
FDIC insurance assessment 389 404
Other real estate carrying cost 528 405
Other non-interest expense 3,874 4,199
------- -------
Total non-interest expense 17,153 16,641
------- -------
Income (loss) before income taxes (8,539) (5,741)
Income tax expense (benefit) (3,261) (2,249)
------- -------
Net income (loss) (5,278) (3,492)
------- -------
Effective preferred stock dividend 745 111
------- -------
Net income (loss) to common
shareholders ($6,023) ($3,603)
------- -------
Earnings (loss) per common share:
Total
Basic -$0.34 -$0.21
Diluted -0.34 -0.21
Cash dividends declared
per common share $0.025 $0.13
Book value per common share $13.32 $13.80
Common shares outstanding 17,594 17,555
Basic average common shares
outstanding 17,588 17,555
Diluted average common shares
outstanding 17,588 17,712
BANCTRUST FINANCIAL GROUP, INC.
(BTFG)
Financial Highlights (Unaudited)
(In thousands, except per share amounts)
Year Ended
-------------------------
December 31,
2009 2008
------- -------
EARNINGS:
Interest revenue $85,938 $108,092
Interest expense 32,075 47,188
------- -------
Net interest revenue 53,863 60,904
Provision for loan losses 37,375 15,260
Trust revenue 3,547 4,156
Service charges on deposit accounts 9,207 11,069
Securities gains 3,497 186
Gain on sale of interest rate floor 0 1,115
Other income, charges and fees 6,669 6,429
------- -------
Total non-interest revenue 22,920 22,955
------- -------
Salaries, pensions and other employee
benefits 29,043 31,273
Net occupancy, furniture and equipment
expense 10,677 12,091
Intangible amortization 2,650 3,501
Goodwill impairment 97,367 0
Loss (gain) on other real estate, net 11,789 1,979
FDIC insurance assessment 4,561 881
Other real estate carrying cost 3,389 1,371
Other non-interest expense 16,256 16,542
------- -------
Total non-interest expense 175,732 67,638
------- -------
Income (loss) before income taxes (136,324) 961
Income tax expense (benefit) (15,029) (295)
------- -------
Net income (loss) (121,295) 1,256
------- -------
Effective preferred stock dividend 3,026 111
------- -------
Net income (loss) to common
shareholders ($124,321) $1,145
------- -------
Earnings (loss) per common share:
Total
Basic -$7.06 $0.07
Diluted -7.06 0.06
Cash dividends declared
per common share $0.035 $0.52
Book value per common share $6.59 $13.80
Common shares outstanding 17,634 17,555
Basic average common shares
outstanding 17,617 17,540
Diluted average common shares
outstanding 17,617 17,695
STATEMENT OF CONDITION: 12/31/09 09/30/09 06/30/09
---------- ---------- ----------
Cash and cash equivalents $59,676 $94,724 $159,619
Securities available for sale 261,834 304,461 270,771
Loans and loans held for sale 1,468,588 1,496,258 1,498,336
Allowance for loan losses (45,905) (47,903) (49,008)
Goodwill 0 0 0
Other intangible assets 6,827 7,415 8,102
Other assets 195,699 181,114 186,834
---------- ---------- ----------
Total assets $1,946,719 $2,036,069 $2,074,654
---------- ---------- ----------
Deposits $1,653,435 $1,738,430 $1,777,471
Short term borrowings 20,000 20,000 20,000
FHLB borrowings and long term debt 93,037 93,087 93,125
Other liabilities 16,449 20,510 21,264
Preferred stock 47,587 47,454 47,323
Common shareholders' equity 116,211 116,588 115,471
---------- ---------- ----------
Total liabilities and shareholders'
equity $1,946,719 $2,036,069 $2,074,654
---------- ---------- ----------
STATEMENT OF CONDITION: 03/31/09 12/31/08
---------- -----------
Cash and cash equivalents $201,967 $85,069
Securities available for sale 208,655 221,879
Loans and loans held for sale 1,532,003 1,533,806
Allowance for loan losses (37,872) (30,683)
Goodwill 97,367 97,367
Other intangible assets 8,790 9,477
Other assets 174,750 171,262
---------- -----------
Total assets $2,185,660 $2,088,177
---------- -----------
Deposits $1,770,933 $1,662,477
Short term borrowings 20,000 20,000
FHLB borrowings and long term debt 93,209 93,398
Other liabilities 19,954 22,914
Preferred stock 47,194 47,085
Common shareholders' equity 234,370 242,303
---------- -----------
Total liabilities and shareholders'
equity $2,185,660 $2,088,177
---------- -----------
STATEMENT OF CONDITION: 12/31/09 12/31/08
---------- -----------
Cash and cash equivalents $59,676 $85,069
Securities available for sale 261,834 221,879
Loans and loans held for sale 1,468,588 1,533,806
Allowance for loan losses (45,905) (30,683)
Goodwill 0 97,367
Other intangible assets 6,827 9,477
Other assets 195,699 171,262
---------- -----------
Total assets $1,946,719 $2,088,177
---------- -----------
Deposits $1,653,435 $1,662,477
Short term borrowings 20,000 20,000
FHLB borrowings and long term debt 93,037 93,398
Other liabilities 16,449 22,914
Preferred stock 47,587 47,085
Common shareholders' equity 116,211 242,303
---------- -----------
Total liabilities and shareholders'
equity $1,946,719 $2,088,177
---------- -----------
Quarter Ended
---------------------------------
12/31/09 09/30/09 06/30/09
---------- ---------- ----------
AVERAGE BALANCES:
Total assets $1,984,163 $2,049,546 $2,163,702
Earning assets 1,809,428 1,865,263 1,889,139
Loans 1,481,905 1,491,762 1,525,170
Deposits 1,686,494 1,752,623 1,753,792
Common shareholders' equity 117,313 116,001 231,964
PERFORMANCE RATIOS:
Return on average assets 0.22% 0.15% -21.86%
Return on average common shareholders'
equity 1.18% 0.10% -205.21%
Net interest margin (tax equivalent) 3.32% 2.92% 2.65%
ASSET QUALITY:
Ratio of non-performing assets to
total assets 9.13% 8.33% 8.56%
Ratio of allowance for loan losses to
total loans, net of unearned income 3.13% 3.20% 3.27%
Net loans charged-off to average loans
(annualized) 1.20% 0.75% 2.87%
Ratio of ending allowance to total
non-performing loans 36.59% 40.02% 39.00%
CAPITAL RATIOS:
Average common shareholders' equity to
average total assets 5.91% 5.66% 10.72%
Dividend payout ratio N/A N/A N/A
Quarter Ended
----------------------------
03/31/09 12/31/08
---------- -----------
AVERAGE BALANCES:
Total assets $2,139,138 $2,072,075
Earning assets 1,848,420 1,766,228
Loans 1,533,361 1,521,737
Deposits 1,710,054 1,670,043
Common shareholders' equity 242,563 246,079
PERFORMANCE RATIOS:
Return on average assets -1.00% -0.67%
Return on average common shareholders'
equity -10.07% -5.82%
Net interest margin (tax equivalent) 2.83% 3.08%
ASSET QUALITY:
Ratio of non-performing assets to
total assets 7.23% 5.91%
Ratio of allowance for loan losses to
total loans, net of unearned income 2.47% 2.00%
Net loans charged-off to average loans
(annualized) 1.03% 0.66%
Ratio of ending allowance to total
non-performing loans 35.07% 42.32%
CAPITAL RATIOS:
Average common shareholders' equity to
average total assets 11.34% 11.88%
Dividend payout ratio N/A N/A
Year Ended
----------------------------
12/31/09 12/31/08
---------- -----------
AVERAGE BALANCES:
Total assets $2,083,618 $2,116,424
Earning assets 1,852,989 1,812,114
Loans 1,507,864 1,560,017
Deposits 1,725,750 1,705,628
Common shareholders' equity 176,450 248,051
PERFORMANCE RATIOS:
Return on average assets -5.82% 0.06%
Return on average common shareholders'
equity -70.46% 0.46%
Net interest margin (tax equivalent) 2.93% 3.40%
ASSET QUALITY:
Ratio of non-performing assets to
total assets 9.13% 5.91%
Ratio of allowance for loan losses to
total loans, net of unearned income 3.13% 2.00%
Net loans charged-off to average loans
(annualized) 1.47% 0.51%
Ratio of ending allowance to total
non-performing loans 36.59% 42.32%
CAPITAL RATIOS:
Average common shareholders' equity to
average total assets 8.47% 11.72%
Dividend payout ratio N/A 742.86%
For additional information contact: F. Michael Johnson (251) 431-7813.
SOURCE BancTrust Financial Group, Inc.
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