BancTrust Financial Group, Inc. (BancTrust) (NASDAQ:BTFG) today
reported its financial results for the third quarter and nine
months ended September 30, 2012. The Company reported a net
loss to common shareholders of $10.3 million, or $0.57 per
fully diluted share, for the third quarter of 2012 compared with a
net loss to common shareholders of $743,000, or $0.04 per
diluted share, for the third quarter of 2011. For the nine-month
period ended September 30, 2012, BancTrust reported a net
loss to common shareholders of $23.2 million, or $1.29 per share,
compared with a net loss to common shareholders of $457,000,
or $0.03 per share, for the first nine months of
2011.
Merger with Trustmark Corporation
On May 29, 2012, BancTrust and Trustmark Corporation (Trustmark)
announced the signing of a definitive agreement pursuant to which
BancTrust will merge into Trustmark.
Under the terms of the definitive agreement, which was approved
by BancTrust shareholders at a special shareholders’ meeting on
September 26, 2012, holders of BancTrust common stock will receive
0.125 of a share of Trustmark common stock for each share of
BancTrust common stock in a tax-free exchange.
On October 9, 2012, BancTrust and Trustmark announced that the
definitive agreement dated May 28, 2012, pursuant to which
BancTrust will merge into Trustmark, has been amended to
accommodate the closing of the merger in early 2013. As such, the
latest possible closing date for the merger has been extended from
December 31, 2012, to February 28, 2013. This extension
provides additional time to receive regulatory approval and to
ensure a smooth transition and operational conversion to Trustmark
systems in early 2013. All other material aspects of the definitive
agreement remain unchanged.
Commenting on the status of the pending merger with Trustmark,
W. Bibb Lamar, Jr., President and Chief Executive Officer of
BancTrust, stated, “Our shareholders’ overwhelming approval of the
merger with Trustmark at our shareholders’ meeting on September 26,
2012, affirms that we are on the right path. The recent amendment
of the merger agreement to extend the deadline for completion of
the merger is aimed at minimizing potential customer disruptions
during the holiday season and will allow more time to ensure
seamless integration of our systems with those of Trustmark. Our
associates are working diligently with Trustmark personnel to
prepare for the merger and remain committed to providing our
customers with superior service during and after this transition.
We expect regulatory approval of the merger late in 2012 or early
in 2013, and we anticipate closing the merger in early 2013.”
Third Quarter Results
Net interest revenue was $13.2 million in the third quarter of
2012 compared with $15.8 million in the third quarter of 2011.
The decrease in net interest revenue was due primarily to a
decrease in average earning assets and net interest margin compared
with the third quarter of last year. BancTrust’s net interest
margin (tax equivalent) was 2.91% in the third quarter of 2012
compared with 3.28% in the third quarter of 2011.
Total loans were $1.2 billion at September 30, 2012, compared
with $1.3 billion at September 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 third quarter of 2012 included a $9.5
million provision for loan losses, compared with a
$6.0 million provision for the corresponding period in 2011.
The increase in the provision for loan losses was due primarily to
increases in specific allowances for impaired loans, especially for
certain land and land development loans in the panhandle of
Florida, made in response to recent appraisals and independent
appraisal reviews.
The allowance for loan losses was strengthened to 4.85%
of total loans at September 30, 2012, compared with
3.30% in the third quarter of 2011. Net charge-offs for
the third quarter of 2012 were $4.6 million compared
with $3.2 million in the third quarter
of 2011.
Deposits were $1.78 billion at September 30, 2012, compared with
$1.84 billion at September 30, 2011. Liquidity at our
subsidiary bank remained strong at September 30, 2012, as evidenced
by $269.3 million in average overnight funds and short-term
investments. Short-term investments include investment securities
with little price volatility that we can sell as needed for
liquidity purposes. At the end of the third quarter, the bank had
no brokered deposits.
Total non-interest revenue was $5.1 million in the third quarter
of 2012 compared with $5.3 million in the third quarter of 2011.
The decrease in non-interest revenue was due to lower trust
revenue, service charges on deposits and other non-interest
revenue, offset partially by higher securities gains compared with
the third quarter of last year.
Non-interest expense was $18.3 million in the third quarter of
2012 compared with $15.2 million in the third quarter of 2011.
The increase in non-interest expense was due primarily to higher
losses on other real estate and other non-interest expense compared
with the prior year’s third quarter. Net losses on other real
estate rose to $3.5 million in the third quarter of 2012 compared
with $1.5 million in the third quarter of 2011.
BancTrust’s pre-tax loss was $9.5 million in the third quarter
of 2012 compared with a pre-tax loss of $86,000 in the third
quarter of 2011. Net loss available to common shareholders was
$10.3 million, or $0.57 per share, for the third quarter of
2012 compared with a net loss to common shareholders
of $743,000, or $0.04 per share, in the third quarter of 2011.
Nine Months Results
For the first nine months of 2012, net loss to common
shareholders was $23.2 million compared with a net loss to common
shareholders of $457,000 for the same period in 2011. Net loss
to common shareholders per diluted share was $1.29 for the
first nine months of 2012 compared with a net loss to common
shareholders per diluted share of $0.03 for the same period in
2011.
Net interest revenue was $42.7 million in the first nine months
of 2012 compared with $46.7 million in the first nine 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. Average earning assets, primarily loans, were down
5.9% to $1.8 billion compared with average earning assets of $1.9
billion in the first nine months of 2011. Net interest margin for
the first nine months of 2012 was 3.12% compared with 3.22% in the
same period of 2011.
The provision for loan losses rose to $26.8 million in the 2012
period compared with $14.5 million in the 2011 period. At September
30, 2012, non-performing assets were $197.6 million compared with
$154.2 million at December 31, 2011, as collateral dependent real
estate loans continued to underperform.
Non-interest revenue rose to $15.24 million in the first nine
months of 2012 compared with $15.20 million in the first nine
months of 2011. The increase was due to an increase in securities
gains for the first nine months of 2012 compared with the same
period in 2011. Securities gains rose to $3.1 million in the first
nine months of 2012 compared with $2.4 million in the first
nine months of 2011.
Non-interest expense increased to $52.6 million in the first
nine months of 2012 compared with $45.3 million in the
first nine months of 2011. The increase was due primarily to
an increase in loss on other real estate, loss on repossessed
assets, capital raise costs, and a $3.5 million settlement expense.
The 2012 results include $2.4 million in capital raise costs
associated with the Company’s abandoned capital raise and pending
merger, and $3.5 million in settlement expenses which the bank paid
to Countrywide Home Loans 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 were no
comparable capital raise or settlement expenses in the first nine
months of 2011.
BancTrust was classified as well-capitalized at the end of the
third quarter of 2012. Total risk-based capital was 11.09% for the
holding company and 12.85% 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 9.66% for the holding company and 11.56% 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 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 Nine Months Ended September 30, June
30, March 31, December 31, September 30,
September 30, September 30, 2012 2012
2012 2011 2011 2012 2011
EARNINGS: Interest revenue $16,234 $17,722 $18,461 $19,305
$20,213 $52,417 $61,215 Interest expense 2,988 3,370 3,388 3,835
4,406 9,746 14,476 Net interest revenue 13,246 14,352 15,073
15,470 15,807 42,671 46,739 Provision for loan losses 9,500
13,700 3,600 17,600 6,000 26,800 14,500 Trust revenue 873
945 924 522 945 2,742 3,035 Service charges on deposit accounts
1,449 1,417 1,494 1,620 1,581 4,360 4,606 Securities gains 1,117
664 1,302 1,433 1,086 3,083 2,449 Other than temporary impairment
loss 0 0 0 (150) (50) 0 -50 Other income, charges and fees 1,640
1,693 1,720 1,800 1,711 5,053 5,159 Total non-interest revenue
5,079 4,719 5,440 5,225 5,273 15,238 15,199 Salaries,
pensions and other employee benefits 6,630 6,604 6,884 7,035 6,806
20,118 20,908 Net occupancy, furniture and equipment expense 2,564
2,651 2,266 2,553 2,429 7,481 7,115 Intangible amortization 226 225
226 237 292 677 876 Loss on other real estate, net 3,464 0 0 30,211
1,461 3,464 2,187 Loss (gain) on repossessed and other assets 199
(8) 21 (89) (1) 212 (158) Merger and capital raise costs 17 402
1,965 1,219 0 2,384 0 Mortgage recourse settlement 0 3,520 0 0 0
3,520 0 FDIC insurance assessment 675 661 683 678 356 2,019 2,528
Other real estate carrying cost 536 395 658 457 438 1,589 1,399
Other non-interest expense 4,016 3,590 3,546 3,394 3,385 11,152
10,463 Total non-interest expense 18,327 18,040 16,249 45,695
15,166 52,616 45,318 Income (loss) before income taxes (9,502)
(12,669) 664 (42,600) (86) (21,507) 2,120 Income tax expense
(benefit) 0 (700) 28 7,103 (117) (672) 263 Net income (loss)
(9,502) (11,969) 636 (49,703) 31 (20,835) 1,857 Effective
preferred stock dividend 792 781 778 776 774 2,351 2,314 Net
loss to common shareholders
($10,294)
($12,750) ($142) ($50,479)
($743) ($23,186) ($457)
Loss per common share: Basic ($0.57) ($0.71) ($0.01)
($2.81) ($0.04) ($1.29) ($0.03) Diluted (0.57) (0.71) (0.01) (2.81)
(0.04) (1.29) (0.03)
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 $2.47 $3.03 $3.55 $3.65 $6.76 $2.47 $6.76
Common shares outstanding 17,961 17,961 17,954 17,954 17,954 17,961
17,954 Basic average common shares outstanding 17,961 17,958 17,954
17,954 17,953 17,958 17,886 Diluted average common shares
outstanding 17,961 17,958 17,954 17,954 17,953 17,958 17,886
STATEMENT OF CONDITION: 09/30/12
06/30/12 03/31/12
12/31/11 09/30/11
09/30/12 09/30/11 Cash and
cash equivalents $160,757 $122,123 $135,472 $99,853 $126,761
$160,757 $126,761 Securities available for sale 497,606 521,100
479,497 517,213 508,160 497,606 508,160 Loans and loans held for
sale 1,184,441 1,218,649 1,256,490 1,277,049 1,307,376 1,184,441
1,307,376 Allowance for loan losses (57,435) (52,553) (43,085)
(42,156) (43,117) (57,435) (43,117) Other intangible assets 2,841
3,067 3,293 3,519 3,755 2,841 3,755 Other real estate owned 53,750
59,141 60,765 57,387 89,883 53,750 89,883 Other assets
112,562 115,189 116,335
119,012 126,195 112,562
126,195 Total assets
$1,954,522
$1,986,716 $2,008,767
$2,031,877 $2,119,013
$1,954,522 $2,119,013 Deposits
$1,780,495 $1,799,634 $1,791,456 $1,811,673 $1,842,843 $1,780,495
$1,842,843 Short-term borrowings 20,000 20,000 20,000 20,000 20,000
20,000 20,000 FHLB borrowings and long-term debt 45,326 45,391
70,476 70,539 70,597 45,326 70,597 Other liabilities 15,226 18,206
14,202 15,383 15,702 15,226 15,702 Preferred stock 49,198 49,039
48,884 48,730 48,579 49,198 48,579 Common shareholders' equity
44,277 54,446 63,749
65,552 121,292 44,277
121,292 Total liabilities and shareholders' equity
$1,954,522 $1,986,716
$2,008,767 $2,031,877
$2,119,013 $1,954,522
$2,119,013 Quarter Ended Nine
Months Ended 09/30/12
06/30/12 03/31/12
12/31/11 09/30/11
09/30/12 09/30/11
AVERAGE BALANCES: Total assets $1,967,124 $2,004,636
$2,010,407 $2,096,048 $2,123,774 $1,993,959 $2,154,405 Earning
assets 1,811,984 1,836,997 1,840,200 1,891,021 1,912,651 1,829,662
1,944,210 Loans 1,203,775 1,244,122 1,272,431 1,299,330 1,318,652
1,239,977 1,344,446 Deposits 1,784,107 1,791,044 1,790,017
1,822,445 1,848,136 1,788,374 1,866,838 Common shareholders' equity
52,929 63,573 66,215 119,811 120,934 60,877 118,390
PERFORMANCE RATIOS: Return on average assets -1.92%
-2.40% 0.13% -9.41% 0.01% -1.40% 0.12% Return on average common
shareholders' equity -77.37% -80.66% -0.86% -167.15% -2.44% -50.87%
-0.52% Net interest margin (tax equivalent) 2.91% 3.14% 3.30% 3.25%
3.28% 3.12% 3.22%
ASSET QUALITY: Ratio
of non-performing assets to total assets 10.11% 8.39% 8.04% 7.59%
9.28% 10.11% 9.28%
Ratio of allowance for loan losses to
total loans, net of unearned income
4.85% 4.31% 3.43% 3.30% 3.30% 4.85% 3.30% Net loans charged-off to
average loans (annualized) 1.53% 1.37% 0.84% 5.67% 0.95% 1.24%
1.92% Ratio of ending allowance to total non-performing loans
39.92% 48.85% 42.80% 43.53% 40.42% 39.92% 40.42%
CAPITAL
RATIOS:
Average common shareholders' equity to
average total assets
2.69% 3.17% 3.29% 5.72% 5.69% 3.05% 5.50% Dividend payout ratio N/A
N/A N/A N/A N/A N/A N/A
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