BancTrust Financial Group, Inc. today reported its financial results for the third quarter and nine months ended September 30, 2009. The Company reported net income available to common shareholders of $30,000, or $0.00 per fully diluted share, for the third quarter of 2009 compared with net income of $223,000, or $0.01 per fully diluted share, for the third quarter of 2008. Net income before the preferred stock dividend was $786,000 in the third quarter of 2009 compared to $223,000 for the same period in 2008. For the first nine months of 2009, BancTrust reported a net loss of $124.7 million, or $7.08 per diluted share, compared with net income of $4.7 million, or $0.27 per diluted share, in the first nine months of 2008. The 2009 nine month results include a $97.4 million ($5.53 per diluted share) non-cash write-off of goodwill. The 2009 earnings per share were also diminished by preferred stock dividends of $756,000, or $0.04 per diluted share, for the third quarter and $2.3 million, or $0.13 per share, for the first nine months. No comparable preferred dividends were paid in 2008.
"BancTrust''s results in the third quarter compared to the prior two quarters benefitted from growth in our net interest margin," stated W. Bibb Lamar, Jr., President and Chief Executive Officer of BancTrust. "We''ve made further progress in stabilizing our loan portfolio since mid-year, and our improved credit metrics highlight our success. Our non-performing loans were down almost 5% since June 30, 2009.
"Our outlook for the fourth quarter is positive based on our current credit trends and the recovery we are experiencing in certain key markets, including Mobile," continued Mr. Lamar. "We remain focused on reducing our non-performing assets through workouts on non-performing loans and sales of other real estate. We believe these steps are key to building our profitability in future quarters."
Third Quarter Results
Net interest revenue increased to $13.6 million in the third quarter of 2009 compared with $12.4 million in the linked second quarter of 2009. The increase was enhanced by a 27 basis point improvement in the net interest margin to 2.92% compared with 2.65% in the second quarter of 2009.
For the third quarter of 2008, net interest revenue was $14.4 million and our net interest margin was 3.25%. The net interest margin has declined 33 basis points since the third quarter of last year as a result of numerous interest rate cuts by the Federal Reserve and the negative impact of reduced interest income associated with the increase in nonperforming assets over the past year. Approximately 50.7% of BancTrust''s loan portfolio is tied to variable interest rates.
Total loans have declined 1.7% since September 30, 2008, because of a slowdown in economic activity in our coastal markets and an increase in other real estate owned (OREO). Total loans were down $25.4 million to $1.5 billion at September 30, 2009, compared with the same time in 2008.
"Our focus has been on credit quality throughout our franchise and particularly in our Florida market, and we are pleased with the results that occurred during the quarter," stated Mr. Lamar. Non-performing loans declined 4.8% to $119.7 million in the third quarter of 2009 compared with the linked second quarter total of $125.7 million. Renegotiated loans, all of which are accruing interest, account for 10.5% of non-performing loans at September 30, 2009. Other real estate owned also declined in the latest quarter to $49.9 million at September 30, 2009 compared with $51.8 million at June 30, 2009. BancTrust had $69.9 million in non-performing loans and $46.7 million of OREO at September 30, 2008. For the second consecutive quarter, loans that were 30 days past due and accruing interest were approximately 1.35% of total loans.
BancTrust recorded a provision for loan losses of $1.7 million in the third quarter of 2009, a substantial reduction from the second quarter 2009 provision of $22.1 million and a slight reduction from the $1.9 million provision in the third quarter of 2008. Net charge-offs also declined in the third quarter of 2009 to $2.8 million compared with $10.9 million in the second quarter of 2009 and compared to $1.0 million in the third quarter of 2008. The allowance for loan losses was 3.20% of total loans at September 30, 2009, compared with 3.27% in the second quarter of 2009 and 1.65% in the third quarter of 2008.
"We strengthened our allowance for loan losses over the past year to account for the deterioration in the economy, particularly the soft real estate conditions in our Florida market," continued Mr. Lamar. "We utilized some of our reserves in the third quarter to account for write-offs previously reserved for. We expect to further utilize our reserves in coming quarters as problem loans are moved through our system. We remain diligent in protecting our strong capital base to buffer BancTrust from any prolonged weakness in the economy."
Total non-interest revenue increased 2.4% to $5.7 million in the third quarter of 2009 compared with $5.6 million in the third quarter of 2008. Some of the increase was due to securities gains and higher other income, offset partially by lower trust department income and service charges.
We are pleased to report total non-interest expense was down 6.7% to $16.7 million in the third quarter of 2009 compared with $17.9 million in the third quarter of 2008. BancTrust''s cost-cutting initiatives are continuing. These initiatives contributed to lower expenses for salaries and employee benefits, lower furniture and equipment expenses and lower net occupancy expenses in the third quarter of 2009 compared with the same quarter last year. Other expenses rose because of increased FDIC insurance costs ($580,000) and higher carrying costs for other real estate ($425,000), partially offset by a $1,046,000 decrease in loss on OREO compared with the third quarter of 2008.
BancTrust was classified as well-capitalized at the end of the third quarter of 2009. Total risk-based capital was 12.9% for the holding company and 14.0% 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 11.6% for the holding company and 12.7% for the bank, both measures significantly above the requirement of 6.0% for a wellcapitalized institution and minimum regulatory requirement of 4.0%.
Nine Months Results
Net loss available to common shareholders for the first nine months of 2009 was $124.7 million compared with net income of $4.7 million for the first nine months of 2008. Net loss available to common shareholders per diluted share was $7.08 for the first nine months of 2009 compared with net income of $0.27 for the same period in 2008. The 2009 results included a $97.4 million ($5.53 per diluted share) non-cash write-off of goodwill and $2.3 million, or $0.13 per diluted share, in preferred stock dividends.
Net interest income was $38.7 million in the first nine months of 2009 compared with $47.4 million in the first nine months of 2008. The decline in interest income was due primarily to a 69 basis point decrease in the net interest margin compared with the first nine months of 2008. We are pleased that trend was reversed in the third quarter. BancTrust''s increase in non-performing assets over the past year also contributed to the decline in net interest income and net interest margin, a trend that was also reversed in the third quarter.
The provision for loan losses rose to $34.9 million in the 2009 period compared with $7.2 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 non-performing loans. At September 30, 2009, non-performing assets totaled $169.6 million compared with $116.6 million at September 30, 2008.
Non-interest income increased 0.7% to $17.6 million in the first nine months of 2009 compared with $17.5 million in the first nine months of 2008. The 2009 results included a $2.9 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 $61.9 million in the first nine months of 2009 compared with $51.0 million in the first nine months of 2008. The increase was due primarily to a $9.9 million loss/write down on OREO, increased FDIC insurance costs and higher carrying costs related to OREO compared with 2008.
BancTrust''s Board of Directors did not declare a dividend for the fourth quarter of 2009. "Our Board of Directors will continue to evaluate the advisability of future cash dividends, keeping in mind our goals of maintaining a strong capital base and building long-term shareholder value," stated 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 http://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 ------------- September June March December September 30, 2009 30, 2009 31, 2009 31, 2008 30, 2008 -------- -------- -------- -------- -------- EARNINGS: Interest revenue $21,399 $21,066 $21,911 $24,210 $25,266 Interest expense 7,817 8,669 9,149 10,697 10,898 ----- ----- ----- ------ ------ Net interest revenue 13,582 12,397 12,762 13,513 14,368 Provision for loan losses 1,725 22,050 11,100 8,086 1,863 Trust revenue 866 926 926 1,138 1,018 Service charges on deposit accounts 2,379 2,312 2,271 2,697 2,802 Securities gains 667 4 2,299 135 3 Gain on sale of interest rate floor 0 0 0 0 0 Other income, charges and fees 1,807 1,716 1,456 1,503 1,764 ----- ----- ----- ----- ----- Total non-interest revenue 5,719 4,958 6,952 5,473 5,587 ----- ----- ----- ----- ----- Salaries, pensions and other employee benefits 6,915 7,449 7,356 7,598 7,626 Net occupancy, furniture and equipment expense 2,757 2,599 2,676 2,954 2,998 Intangible amortization 687 688 687 780 949 Goodwill Impairment 0 97,367 0 0 0 Loss (gain) on other real estate, net 663 9,340 1,643 301 1,709 FDIC insurance assessment 778 2,290 389 404 198 Other real estate carrying cost 685 1,505 528 405 260 Other non-interest expense 4,226 4,200 3,874 4,199 4,166 ----- ----- ----- ----- ----- Total non-interest expense 16,711 125,438 17,153 16,641 17,906 ------ ------- ------ ------ ------ (Loss) income before income taxes 865 (130,133) (8,539) (5,741) 186 Income tax expense (benefit) 79 (12,217) (3,261) (2,249) (37) -- ------- ------ ------ --- Net income (loss) 786 (117,916) (5,278) (3,492) 223 --- -------- ------ ------ --- Effective preferred stock dividend 756 761 745 111 0 --- --- --- --- --- Net (loss) income to common shareholders $30 ($118,677) ($6,023) ($3,603) $223 === ========= ======= ======= ==== (Loss) earnings per common share: Total Basic 0.00 (6.74) (0.34) (0.21) $0.01 Diluted 0.00 (6.74) (0.34) (0.21) 0.01 Cash dividends declared per common share $0.00 $0.01 $0.025 $0.13 $0.13 Book value per common share $6.61 $6.55 $13.32 $13.80 $14.00 Common shares outstanding 17,634 17,629 17,594 17,555 17,548 Basic average common shares outstanding 17,634 17,613 17,588 17,555 17,548 Diluted average common shares outstanding 17,634 17,613 17,715 17,712 17,721 STATEMENT OF CONDITION: 09/30/09 06/30/09 03/31/09 12/31/08 09/30/08 -------- -------- -------- -------- -------- Cash and cash equivalents $94,724 $159,619 $201,967 $85,069 $99,638 Securities available for sale 304,461 270,771 208,655 221,879 215,126 Loans and loans held for sale 1,496,258 1,498,336 1,532,003 1,533,806 1,521,704 Allowance for loan losses (47,903) (49,008) (37,872) (30,683) (25,116) Goodwill 0 0 97,367 97,367 97,506 Other intangible assets 7,415 8,102 8,790 9,477 10,256 Other assets 181,114 186,834 174,750 171,262 169,774 ------- ------- ------- ------- ------- Total assets $2,036,069 $2,074,654 $2,185,660 $2,088,177 $2,088,888 ========== ========== ========== ========== ========== Deposits $1,738,430 $1,777,471 $1,770,933 $1,662,477 $1,687,116 Short term borrowings 20,000 20,000 20,000 20,000 959 FHLB borrowings and long term debt 93,087 93,125 93,209 93,398 134,473 Other liabilities 20,510 21,264 19,954 22,914 20,677 Preferred stock 47,454 47,323 47,194 47,085 0 Common shareholders'' equity 116,588 115,471 234,370 242,303 245,663 ------- ------- ------- ------- ------- Total liabilities and shareholders'' equity $2,036,069 $2,074,654 $2,185,660 $2,088,177 $2,088,888 ========== ========== ========== ========== ========== Quarter Ended --------- -------- -------- -------- -------- 09/30/09 06/30/09 03/31/09 12/31/08 09/30/08 -------- -------- -------- -------- -------- AVERAGE BALANCES: Total assets $2,049,546 $2,163,702 $2,139,138 $2,072,075 $2,088,019 Earning assets 1,865,263 1,889,139 1,848,420 1,766,228 1,774,193 Loans 1,491,762 1,525,170 1,533,361 1,521,737 1,542,183 Deposits 1,752,623 1,753,792 1,710,054 1,670,043 1,677,430 Common shareholders'' equity 116,001 231,964 242,563 246,079 247,008 PERFORMANCE RATIOS: Return on average assets 0.15% -21.86% -1.00% -0.67% 0.04% Return on average common shareholders'' equity 0.10% -205.21% -10.07% -5.82% 0.36% Net interest margin (tax equivalent) 2.92% 2.65% 2.83% 3.08% 3.25% ASSET QUALITY: Ratio of non-performing assets to total assets 8.33% 8.56% 7.23% 5.91% 5.58% Ratio of allowance for loan losses to total loans, net of unearned income 3.20% 3.27% 2.47% 2.00% 1.65% Net loans charged-off to average loans (annualized) 0.75% 2.87% 1.03% 0.66% 0.27% Ratio of ending allowance to total non-performing loans 40.02% 39.00% 35.07% 42.32% 35.94% CAPITAL RATIOS: Average common shareholders'' equity to average total assets 5.66% 10.72% 11.34% 11.88% 11.83% Dividend payout ratio N/A N/A N/A N/A 1300.00% Nine Months Ended ----------------- September 30, 2009 2008 ---- ---- EARNINGS: Interest revenue $64,376 $83,882 Interest expense 25,635 36,491 ------ ------ Net interest revenue 38,741 47,391 Provision for loan losses 34,875 7,174 Trust revenue 2,718 3,018 Service charges on deposit accounts 6,962 8,372 Securities gains 2,970 51 Gain on sale of interest rate floor 0 1,115 Other income, charges and fees 4,979 4,957 ----- ----- Total non-interest revenue 17,629 17,513 ------ ------ Salaries, pensions and other employee benefits 21,720 23,675 Net occupancy, furniture and equipment expense 8,032 9,137 Intangible amortization 2,062 2,721 Goodwill Impairment 97,367 0 Loss (gain) on other real estate, net 11,646 1,709 FDIC insurance assessment 3,457 477 Other real estate carrying cost 2,718 902 Other non-interest expense 12,300 12,407 ------ ------ Total non-interest expense 159,302 51,028 ------- ------ (Loss) income before income taxes (137,807) 6,702 Income tax expense (benefit) (15,399) 1,954 ------- ----- Net income (loss) (122,408) 4,748 -------- ----- Effective preferred stock dividend 2,262 0 ----- - Net (loss) income to common shareholders ($124,670) $4,748 ========= ====== (Loss) earnings per common share: Total Basic -$7.08 $0.27 Diluted -7.08 0.27 Cash dividends declared per common share $0.035 $0.39 Book value per common share $6.61 $14.00 Common shares outstanding 17,634 17,548 Basic average common shares outstanding 17,612 17,535 Diluted average common shares outstanding 17,612 17,689 STATEMENT OF CONDITION: 09/30/09 09/30/08 -------- -------- Cash and cash equivalents $94,724 $99,638 Securities available for sale 304,461 215,126 Loans and loans held for sale 1,496,258 1,521,704 Allowance for loan losses (47,903) (25,116) Goodwill 0 97,506 Other intangible assets 7,415 10,256 Other assets 181,114 169,774 ------- ------- Total assets $2,036,069 $2,088,888 ========== ========== Deposits $1,738,430 $1,687,116 Short term borrowings 20,000 959 FHLB borrowings and long term debt 93,087 134,473 Other liabilities 20,510 20,677 Preferred stock 47,454 0 Common shareholders'' equity 116,588 245,663 ------- ------- Total liabilities and shareholders'' equity $2,036,069 $2,088,888 ========== ========== Nine Months Ended ----------------- -------- 09/30/09 09/30/08 -------- -------- AVERAGE BALANCES: Total assets $2,117,134 $2,131,315 Earning assets 1,867,669 1,827,521 Loans 1,516,612 1,572,870 Deposits 1,738,979 1,717,575 Common shareholders'' equity 196,379 248,713 PERFORMANCE RATIOS: Return on average assets -7.73% 0.30% Return on average common shareholders'' equity -84.88% 2.55% Net interest margin (tax equivalent) 2.80% 3.49% ASSET QUALITY: Ratio of non- performing assets to total assets 8.33% 5.58% Ratio of allowance for loan losses to total loans, net of unearned income 3.20% 1.65% Net loans charged- off to average loans (annualized) 1.56% 0.47% Ratio of ending allowance to total non-performing loans 40.02% 35.94% CAPITAL RATIOS: Average common shareholders'' equity to average total assets 9.28% 11.67% Dividend payout ratio N/A 144.44%
BancTrust Financial Group, Inc.
CONTACT: F. Michael Johnson, Chief Financial Officer, +1-251-431-7813
Web Site: http://www.banktrustonline.com/
