COLUMBIA, S.C.--(BUSINESS WIRE)--
SCBT Financial Corporation (NASDAQ:SCBT), the holding company for SCBT,
National Association, today released its unaudited results of operations
and other financial information for the three-month period and year
ended December 31, 2008. The Company produced solid operating results
due primarily to our net interest margin, continued sound asset quality
and good loan growth for the fourth quarter. In addition, during the
fourth quarter, the Company sold its position in Freddie Mac preferred
stock of $10.25 million, original cost basis. Along with the $9.76
million impairment charge recorded in the third quarter, the company
recorded an additional loss on this sale of $383,000 on a pre-tax basis,
during the fourth quarter. During October, and as previously released,
the Company issued 1.01 million shares of common stock in a private
placement offering which provided $26.8 million, net of issuance cost,
of additional Tier 1 regulatory capital that will enhance our capital
structure and support the future growth of SCBT.
Quarterly Cash Dividend
The Board of Directors of SCBT declared today a quarterly cash dividend
of $0.17 per share payable on its common stock. This per share amount is
equal to the dividend paid in the immediately preceding quarter and will
be payable on February 20, 2009 to shareholders of record as of February
6, 2009.
Fourth Quarter 2008 Results of Operations
Please refer to the accompanying tables for detailed comparative data
on results of operations and financial results. Throughout this
news release the Company refers to "operating earnings" as a measure of
its results of operations that differs from its net income under
Generally Accepted Accounting Principles in the United States ("GAAP").
Refer to the accompanying tables for a reconciliation of "operating
earnings" to GAAP net income.
On an operating basis for the three months ended December 31, 2008 and
2007, net operating earnings were $0.39 per diluted share, down 33.9%,
in 2008, from $0.59 per diluted share, in 2007. Net operating earnings
were down $1.4 million or 24.0%, in 2008, excluding an OTTI charge
related to other equities of $124,000, and a loss on bank owned life
insurance (BOLI) policies of $260,000, the realized loss on Freddie Mac
preferred securities of $383,000 and merger costs related to moving to a
single charter of $405,000, over the prior year comparable period. For
the year ended December 31, 2008, net operating earnings were up
$794,000, or 3.6%, excluding the OTTI charge, the loss on BOLI, the
realized loss on Freddie Mac preferred securities of $10.14 million, and
merger costs related to moving to a single charter over the December 31,
2007 results. Net operating earnings per diluted share were $2.20 for
the year ended December 31, 2008 compared to $2.37 for the year ended
December 31, 2007, a decrease of 7.2%.
The Company reported consolidated net income of $3.5 million, or $0.32
per diluted share for the three months ended December 31, 2008 compared
to consolidated net income of $5.1 million, or $0.54 per diluted share
for the fourth quarter of 2007, a $1.6 million or 31.0% decrease. For
the year ended December 31, 2008 and 2007, the Company reported net
income of $15.8 million compared to $21.6 million, respectively, a
decrease of $5.8 million, or 26.8%. This resulted in diluted earnings
per share of $1.52 and $2.32 for the year ended December 31, 2008 and
2007, respectively.
"SCBT experienced very positive operating results in 2008. While overall
earnings declined, we were one of the best performing banks in the
country last year," said Robert R. Hill, Jr. "Our stock price increased
9%, which reflected our performance. We were one of the few banks that
had an increase in stock price in 2008. We have experienced pressures
from the deteriorating economy and do expect this to continue for the
foreseeable future. In spite of this, our credit quality continues to be
very good, and we further strengthened our balance sheet by building our
reserves for loan losses during the fourth quarter. We feel we are very
well prepared for the future due to our strong capital position, asset
quality, good liquidity, and customer base. Our current market presents
challenges, but it also presents many opportunities for strong banks."
During the fourth quarter of 2008, the Company's average total assets
(including a full quarter's impact of the acquired assets from TSB
Financial Corporation) increased by $389.3 million, a 16.4% increase
over the fourth quarter of 2007. The growth in average total assets was
supported by growth in average total deposits of $305.9 million, an
increase of 16.7% over the total in the fourth quarter of 2007. Average
earning assets for the quarter increased by $347.6 million, or 15.7%,
compared to the fourth quarter of 2007. The increase in average earning
assets also includes a 5.8% decrease in average investment securities to
$232.4 million, which includes the $9.8 million OTTI charge on Freddie
Mac preferred stock impact for all of the fourth quarter.
The Company's annualized operating return on average assets (ROAA) for
the fourth quarter decreased to 0.62% compared to 0.94% for the fourth
quarter of 2007, and decreased from 0.93% for the third quarter of 2008.
The operating returns on average assets, equity and tangible equity
exclude the effect of the after-tax impact of the OTTI charges, the loss
on BOLI, the realized loss on Freddie Mac preferred securities and the
merger cost related to moving to a single charter. Total year-to-date
average shareholders' equity at December 31, 2008 was $239.8 million, an
increase of 26.5% from December 31, 2007. This increase is due primarily
to the issuance of 1,010,000 shares of common stock in October.
Annualized operating return on average equity (ROAE) for the quarter was
7.14%, down from 11.86% for the fourth quarter of 2007. Annualized
operating return on average tangible equity (ROATE) for the fourth
quarter decreased to 10.20% from 15.98% for the comparable period in the
prior year, and decreased from 16.88% in the third quarter of 2008. On a
GAAP basis for December 31, 2008, the ROAA equaled 0.51%; the ROAE was
5.89%, and the ROATE was 8.46% compared to December 31, 2007, ROAA was
0.86%, ROAE was 10.76%, and ROATE was 14.53%.
Asset Quality
Annualized net charge-offs decreased to 0.35% from 0.41% experienced in
the third quarter of 2008; but increased from 0.15% experienced in the
fourth quarter of 2007. During the fourth quarter, non-performing assets
(NPAs) as a percentage of loans and repossessed assets increased to
0.91% compared to 0.33% one year ago and 0.66% for the third quarter of
2008. NPAs to total assets at December 31, 2008 were 0.76% compared to
0.27% at the end of 2007 and 0.54% at the end of the third quarter 2008.
The increase in NPAs continues to reflect the pressure within the real
estate market and within the economy as a whole. Compared to the banking
industry, our asset quality remains manageable. During the fourth
quarter, the Company's other real estate owned ("OREO") increased $3.6
million from the end of the third quarter. Nonaccrual loans increased
$3.1 million from the third quarter of 2008, and by $9.3 million from
the end of 2007.
At December 31, 2008, nonperforming loans totaled $14.9 million,
representing 0.64% of period-end loans. Other real estate owned at the
end of the fourth quarter was $6.1 million, an increase from $2.5
million at the end of the third quarter 2008 and from $490,000 at the
end of 2007. The allowance for loan losses at December 31, 2008 was
$31.5 million and represented 1.36% of total period-end loans. The
current allowance for loan losses provides 2.11 times coverage of
period-end nonperforming loans. In the fourth quarter, net charge-offs
were $2.0 million, or an annualized 0.35% of average loans compared to
$728,000, or 0.15% in the same period of 2008 and $2.3 million, or 0.41%
in the linked quarter. The provision for loan losses was $4.4 million
for the fourth quarter of 2008 compared to $1.6 million for the
comparable quarter one year ago, and $2.8 million in the third quarter
of 2008.
Loans and Deposits
The Company increased total loans 11.2% since the fourth quarter of
2007, driven by continued growth in commercial real estate loans and
home equity loans. Total loans outstanding were $2.3 billion at December
31, 2008 compared to $2.1 billion for the year ended December 31, 2007.
The balance of mortgage loans held for sale increased $4.3 million from
the third quarter of 2008 to $15.7 million at December 31, 2008, and was
lower than the balance at December 31, 2007 of $17.4 million reflective
of the overall slow down within the mortgage banking industry and the
tightening of credit.
Deposits increased in most categories except for demand deposits and
money market accounts. Deposits increased by a total of $14.5 million,
or 2.7% annualized, from the end of the third quarter of 2008, with the
largest growth occurring in small denomination (less than $100,000)
certificates of deposit and NOW accounts. The Company continues to
reduce rates paid on the various deposits in order to manage its net
interest margin within acceptable levels. The Company continued to
increase slightly the use of brokered deposits during the fourth quarter
over the third quarter of 2008. This increase totaled $3.8 million. With
the modest increase in overall deposits and the additional capital
raised in October of the fourth quarter, the Company was able to fund
all of its loan growth as well as reduce its balance of federal funds
purchased during the fourth quarter. Total deposits outstanding at the
end of the fourth quarter of 2008 were $2.2 billion, an increase of
$225.4 million, or 11.7%, compared to the end of 2007.
Net Interest Income and Margin
Non-taxable equivalent net interest income (before provision for loan
losses) was $24.6 million for the fourth quarter of 2008, up 14.1% from
$21.6 million in the comparable period last year. Tax-equivalent net
interest margin decreased 5 basis points from the fourth quarter of 2007
to 3.86%. Compared to the linked third quarter of 2008, tax-equivalent
net interest margin remained unchanged. With the decline in interest
rates by the Federal Reserve, the Company has continued to aggressively
manage deposit pricing and funding sources during the fourth quarter of
2008 and limited the amount of margin compression. The increase in
non-performing assets continued to pressure the margin, and we have
reduced the net interest margin for these assets in these difficult
economic conditions. With the efforts of raising new capital and
aggressively managing our deposits and funding sources, the net interest
margin decreased 5 basis points compared to the fourth quarter of 2007.
On a year-to-date basis, the margin has declined 2 basis points from
3.85% in 2007 to 3.83% in 2008.
The Company's average yield on interest-earning assets decreased 111
basis points while the average rate on interest-bearing liabilities
decreased 131 basis points from the fourth quarter of 2007. During the
fourth quarter of 2008, the Company's average total assets increased to
$2.77 billion, a 16.4% increase over the fourth quarter of 2007. The
increase reflected a $373.9 million increase in average total loans to
$2.3 billion from the fourth quarter of 2007, the result of the strong
loan growth during 2008. The increase in volume of loans at lower
current market rates combined with variable rate loan resets resulted in
the average yield on loans falling by 128 basis points compared to the
fourth quarter of 2007. Average investment securities were $232.4
million at December 31, 2008, or 5.8% lower than the balance in 2007.
The growth in average total assets was supported by growth in average
total deposits of $305.9 million, an increase of 16.7% from the fourth
quarter of 2007.
Noninterest Income and Expense
Operating noninterest income was $6.9 million for the fourth quarter of
2008 compared to $6.6 million for the fourth quarter of 2007, up by
$305,000, or 4.6% from the prior year. Mortgage banking income increased
by $47,000, or 7.4%, reflecting the reduction in interest rates and the
government's attempt to loosen credit. The other increases are as
follows: an increase in bankcard services income of $83,000, or 7.8%;
and a $59,000, or 9.9%, increase in trust and investment services
income. The increases listed above were more than offset by the
following items during the fourth quarter of 2008: an additional loss
recorded on the sale of its Freddie Mac preferred stock of $383,000, an
OTTI charge of $124,000 related to certain equity investments held at
the holding company, and a loss on BOLI policies of $260,000. Compared
to the third quarter of 2008, operating noninterest income was down by
$190,000, driven by a decline in all components of noninterest income,
except for mortgage banking income which was up $171,000, or 33.7%.
Noninterest expense was $20.9 million in the fourth quarter of 2008, up
$2.0 million or 10.5%, from $18.9 million in the comparable period in
2007. During the fourth quarter, the Company incurred numerous charges
including the cost related to moving to a single bank charter of
$405,000; severance pay of $130,000; marketing cost of $378,000; OREO
expenses were higher by $506,000; FDIC assessments were higher by
$254,000; property tax increased by $174,000; and cost related to
collection of loans increased $97,000. The full quarter impact of the
five TSB offices is reflected in each line item of noninterest expense
compared to 2007 when there was only one month of charges. The Company's
quarterly efficiency ratio increased to 66.34% compared to 65.42% one
year ago, and compared to 59.82% in the third quarter of 2008.
"Operating earnings for the Company increased in 2008 by 3.6%," said
John C. Pollok, CFO. "With the continued difficult operating
environment, we are pleased to have increased our operating earnings on
a year-over-year basis. We feel we have substantially improved our
operating model by improving our efficiency ratio during 2008 to 63.49%
compared to 65.31% in 2007. We saw our mortgage banking income increase
by $171,000 during the fourth quarter, as rates have declined due to the
Federal Reserve's action, and borrowers are refinancing to lower
mortgage rates."
During the first quarter of 2008, the Company reclassified mortgage loan
commission costs paid to originators previously recorded as compensation
expenses into mortgage banking income to net the two amounts. The result
of these reclassifications for the first and second quarters of 2008 and
prior periods was to decrease both noninterest revenue and noninterest
expense. The reclassification resulted in an improved (decreased)
efficiency ratio ranging from 0.50% to 0.87% for the previous four
quarters of 2007, and had no impact on net income or equity in any of
the reported periods.
SCBT Financial Corporation, Columbia, South Carolina is a registered
bank holding company incorporated under the laws of South Carolina. The
Company consists of SCBT, N.A., the third largest bank headquartered in
South Carolina, and NCBT, a Division of SCBT, N.A. Providing financial
services for 75 years, SCBT Financial Corporation operates 50 financial
centers in 16 South Carolina counties and Mecklenburg County in North
Carolina. SCBT Financial Corporation has assets of approximately $2.8
billion and its stock is traded under the symbol SCBT on the NASDAQ
Global Select Market. More information can be found at www.SCBTonline.com.
For additional information, please visit our website at www.SCBTonline.com.
Statements included in this press release which are not historical in
nature are intended to be, and are hereby identified as, forward looking
statements for purposes of the safe harbor provided by Section 21E of
the Securities and Exchange Act of 1934, as amended. SCBT Financial
Corporation cautions readers that forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to
differ materially from forecasted results. Such risks and uncertainties,
include, among others, the following possibilities: (1) credit risk
associated with an obligor's failure to meet the terms of any contract
with the bank or otherwise fail to perform as agreed; (2) interest
risk involving the effect of a change in interest rates on both the
bank's earnings and the market value of the portfolio equity; (3) liquidity
risk affecting the bank's ability to meet its obligations when they
come due; (4) price risk focusing on changes in market factors
that may affect the value of traded instruments in "mark-to-market"
portfolios; (5) transaction risk arising from problems with
service or product delivery; (6) compliance risk involving risk
to earnings or capital resulting from violations of or nonconformance
with laws, rules, regulations, prescribed practices, or ethical
standards; (7) strategic risk resulting from adverse business
decisions or improper implementation of business decisions; (8) reputation
risk that adversely affects earnings or capital arising from
negative public opinion; (9) terrorist activities risk that
results in loss of consumer confidence and economic disruptions; and
(10) potential deposit attrition, higher than expected costs, customer
loss and business disruption associated with the integration of The
Scottish Bank, including, without limitation, potential difficulties in
maintaining relationships with key personnel and other integration
related-matters.
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
EARNINGS SUMMARY % %
(non tax 2008 2007 2008 2007
equivalent) Change Change
Interest income $ 38,094 $ 39,205 -2.8 % $ 156,075 $ 149,199 4.6 %
Interest expense 13,450 17,613 -23.6 % 60,298 68,522 -12.0 %
Net interest 24,644 21,592 14.1 % 95,777 80,677 18.7 %
income
Provision for 4,374 1,641 166.5 % 10,736 4,384 144.9 %
loan losses (1)
Operating
noninterest 6,877 6,572 4.6 % 29,576 27,359 8.1 %
income (2)
Operating
noninterest 20,471 18,088 13.2 % 79,391 70,591 12.5 %
expense (2)
Operating
earnings before 6,676 8,435 -20.9 % 35,226 33,061 6.5 %
income taxes (2)
Provision for 2,371 2,768 -14.3 % 12,342 10,971 12.5 %
income taxes
Net operating 4,305 5,667 -24.0 % 22,884 22,090 3.6 %
earnings (2)
Realized loss on
sale of FRE
preferred (247 ) -- (6,590 ) --
securities, net
of tax (2)
Merger expense, (261 ) (525 ) -50.3 % (261 ) (525 ) -50.3 %
net of tax (2)
Loss on BOLI and
OTTI on other (248 ) -- (248 ) --
equities, net of
tax (2)
Net income $ 3,549 $ 5,142 -31.0 % $ 15,785 $ 21,565 -26.8 %
Basic
weighted-average 10,846,219 9,527,166 13.8 % 10,301,430 9,274,647 11.1 %
shares
Diluted
weighted-average 10,949,411 9,535,938 14.8 % 10,393,717 9,304,716 11.7 %
shares
Earnings per $ 0.33 $ 0.54 -38.9 % $ 1.53 $ 2.33 -34.3 %
share - Basic
Earnings per $ 0.32 $ 0.54 -40.7 % $ 1.52 $ 2.32 -34.5 %
share - Diluted
Operating
earnings per $ 0.40 $ 0.59 -32.2 % $ 2.22 $ 2.38 -6.7 %
share - Basic
(2)
Operating
earnings per $ 0.39 $ 0.59 -33.9 % $ 2.20 $ 2.37 -7.2 %
share - Diluted
(2)
Cash dividends
declared per $ 0.17 $ 0.17 0.0 % $ 0.68 $ 0.68 0.0 %
common share
Dividend payout 1550.42 % 27.75 % 5487.1 % 40.93 % 29.17 % 40.3 %
ratio
(2) Operating measures exclude the effect of a realized loss on sale of Freddie Mac (FRE)
preferred securities of $383,000 and $10.1 million, respectively, for the three and twelve
months ended December 31, 2008; and a loss on Bank Owned Life Insurance ("BOLI") of $260,000 and
other-than-temporary impairment ("OTTI") on other equities of $124,000 for the three and twelve
months ended December 31, 2008. Excludes the effect of merger expense of $405,000 and $811,000
recorded for the three and twelve months ended December 31, 2008 and 2007, respectively, related
to collapsing the banks into one charter and the acquisition of TSB Financial Corporporation
("TSB"). Management believes that these non-GAAP operating measures provide additional useful
information, particularly since the sale of FRE preferred securities previously recognized as
OTTI, loss on BOLI and OTTI on other equities, and merger expenses are unusual and infrequent to
the operations of SCBT. The sections titled "Reconciliation of Non-GAAP to GAAP" provide tables
that reconcile non-GAAP measures to GAAP.
Three Months Ended Twelve Months Ended
December 31, December 31,
RECONCILIATION OF NON-GAAP TO GAAP 2008 2007 2008 2007
Realized Loss on Sale of FRE
Preferred Securities, Net of Tax
Realized loss on sale of FRE $ (383) $ -- $ (10,143) $ --
preferred securities
Income tax effect 136 -- 3,553 --
After-tax effect of realized loss on $ (247) $ -- $ (6,590) $ --
sale of FRE preferred securities
Merger Expense, Net of Tax
Merger expense $ (405) $ (811) $ (405) $ (811)
Income tax effect 144 286 144 286
After-tax effect of merger expense $ (261) $ (525) $ (261) $ (525)
Loss on BOLI and OTTI on Other
Equities, Net of Tax
Loss on BOLI and OTTI on other (384) $ -- (384) $ --
equities
Income tax effect 136 -- 136 --
After-tax effect of loss on BOLI and $ (248) $ -- $ (248) $ --
OTTI on other equities
Noninterest Income Reconciliation
Operating noninterest income $ 6,877 $ 6,572 $ 29,576 $ 27,359
Realized loss on sale of FRE (383) -- (10,143) --
preferred securities
Loss on BOLI and OTTI on other (384) -- (384) --
equities
Noninterest Income (GAAP) $ 6,110 $ 6,572 $ 19,049 $ 27,359
Noninterest Expense Reconciliation
Operating noninterest expense $ 20,471 $ 18,088 $ 79,391 $ 70,591
Merger expense 405 811 405 811
Noninterest Expense (GAAP) $ 20,876 $ 18,899 $ 79,796 $ 71,402
Net Income Reconciliation
Net operating earnings $ 4,305 $ 5,667 $ 22,884 $ 22,090
After-tax effect of realized loss on (247) -- (6,590) --
sale of FRE preferred securities
After-tax effect of merger expense (261) (525) (261) (525)
After-tax effect of loss on BOLI and (248) -- (248) --
OTTI on other equities
Net income (GAAP) $ 3,549 $ 5,142 $ 15,785 $ 21,565
Basic Earnings Per Share
Reconciliation
Basic operating earnings per share $ 0.40 $ 0.59 $ 2.22 $ 2.38
Per share effect of realized loss on (0.02) -- (0.64) --
sale of FRE preferred securities
Per share effect of merger expense (0.03) (0.05) (0.03) (0.05)
Per share effect of loss on BOLI and (0.02) -- (0.02) --
OTTI on other equities
Basic earnings per share (GAAP) $ 0.33 $ 0.54 $ 1.53 $ 2.33
Diluted Earnings Per Share
Reconciliation
Diluted operating earnings per share $ 0.39 $ 0.59 $ 2.20 $ 2.37
Per share effect of realized loss on (0.02) -- (0.63) --
sale of FRE preferred securities
Per share effect of merger expense (0.02) (0.05) (0.03) (0.05)
Per share effect of loss on BOLI and (0.03) -- (0.02) --
OTTI on other equities
Diluted earnings per share (GAAP) $ 0.32 $ 0.54 $ 1.52 $ 2.32
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
AVERAGE for Quarter Ended
December September June 30, March 31, December
31, 30, 31,
BALANCE SHEET 2008 2008 2008 2008 2007
HIGHLIGHTS
Mortgage loans held $ 10,684 $ 10,543 $ 23,126 $ 23,875 $ 13,799
for sale
Total loans (1) 2,304,911 2,265,606 2,188,036 2,121,814 1,930,938
Total investment 232,446 250,395 247,759 258,510 246,731
securities
Intangible assets 66,268 66,413 65,779 65,536 45,501
Earning assets 2,560,387 2,563,344 2,514,456 2,457,341 2,212,749
Total assets 2,768,864 2,767,853 2,710,273 2,655,897 2,379,592
Noninterest-bearing 315,841 326,298 313,860 304,537 305,467
deposits
Interest-bearing 1,825,501 1,749,742 1,696,778 1,650,044 1,529,957
deposits
Total deposits 2,141,342 2,076,040 2,010,638 1,954,581 1,835,424
Federal funds
purchased and 190,409 295,137 289,382 310,269 240,897
repurchase
agreements
Other borrowings 183,159 160,789 172,245 158,315 96,610
Shareholders' 239,769 221,995 222,274 217,780 189,506
equity
AVERAGE for Twelve Months
December 31, December 31, %
BALANCE SHEET HIGHLIGHTS 2008 2007 Change
Mortgage loans held for sale $ 17,022 $ 21,747 -21.7%
Total loans (1) 2,220,448 1,823,196 21.8%
Total investment securities 247,196 230,285 7.3%
Intangible assets 66,001 38,056 73.4%
Earning assets 2,524,040 2,113,688 19.4%
Total assets 2,725,955 2,272,413 20.0%
Noninterest-bearing deposits 315,167 284,766 10.7%
Interest-bearing deposits 1,730,828 1,477,545 17.1%
Total deposits 2,045,995 1,762,311 16.1%
Federal funds purchased and repurchase 271,143 208,516 30.0%
agreements
Other borrowings 168,645 109,566 53.9%
Shareholders' equity 225,484 173,679 29.8%
ENDING Balance
December 31, September 30, June 30, March 31, December 31,
BALANCE SHEET 2008 2008 2008 2008 2007
HIGHLIGHTS
Mortgage loans held $ 15,742 $ 11,419 $ 19,015 $ 28,060 $ 17,351
for sale
Total loans (1) 2,316,076 2,279,726 2,246,353 2,144,940 2,083,047
Total investment 222,227 238,961 256,391 249,848 258,309
securities
Intangible assets 66,221 66,363 66,507 65,486 65,618
Allowance for loan (31,525 ) (29,199 ) (28,760 ) (27,335 ) (26,570 )
losses (1)
Premises and 66,392 64,056 57,698 55,966 55,454
equipment
Total assets 2,766,710 2,766,745 2,774,387 2,678,248 2,597,183
Noninterest-bearing 303,689 313,700 322,209 315,621 315,791
deposits
Interest-bearing 1,849,585 1,825,027 1,734,637 1,700,608 1,612,098
deposits
Total deposits 2,153,274 2,138,727 2,056,846 2,016,229 1,927,889
Federal funds
purchased and 172,393 224,328 322,682 252,178 296,186
repurchase
agreements
Other borrowings 177,477 172,738 160,249 173,340 143,860
Total liabilities 2,521,782 2,547,158 2,552,924 2,458,218 2,382,118
Shareholders' 244,928 219,587 221,463 220,030 215,065
equity
Common shares
issued and 11,250,603 10,225,776 10,203,497 10,185,915 10,160,432
outstanding
December 31, September 30, June 30, March 31, December 31,
NONPERFORMING
ASSETS (ENDING 2008 2008 2008 2008 2007
balance)
Nonaccrual $ 14,624 $ 11,564 $ 6,897 $ 5,215 $ 5,353
loans
Other real 6,126 2,508 1,140 651 490
estate owned
Accruing loans
past due 90 293 796 497 1,692 985
days or more
Other
nonperforming 84 172 181 63 82
assets
Total
nonperforming $ 21,127 $ 15,040 $ 8,715 $ 7,621 $ 6,910
assets
Total
nonperforming
assets as a
percentage of
total loans and 0.91 % 0.66 % 0.39 % 0.36 % 0.33 %
OREO (1)
Total
nonperforming
assets as a
percentage
of total assets 0.76 % 0.54 % 0.31 % 0.28 % 0.27 %
NPLs as a
percentage of 0.64 % 0.54 % 0.33 % 0.32 % 0.30 %
period end
loans
Quarter Ended
December 31, September 30, June 30, March 31, December 31,
ALLOWANCE FOR
LOAN LOSSES 2008 2008 2008 2008 2007
(1)
Balance at
beginning of $ 29,199 $ 28,760 $ 27,335 $ 26,570 $ 23,822
period
Allowance
from -- -- -- -- 1,835
acquisition
Loans charged (1,980 ) (2,356 ) (913 ) (472 ) (623 )
off
Overdrafts (299 ) (234 ) (240 ) (259 ) (377 )
charged off
Loan 121 182 176 113 181
recoveries
Overdraft 110 62 70 138 91
recoveries
Net
(charge-offs) (2,048 ) (2,346 ) (907 ) (480 ) (728 )
recoveries
Provision for 4,374 2,785 2,332 1,245 1,641
loan losses
Balance at $ 31,525 $ 29,199 $ 28,760 $ 27,335 $ 26,570
end of period
Allowance for
loan losses
as a
percentage of
total loans 1.36 % 1.28 % 1.28 % 1.27 % 1.28 %
(1)
Allowance for
loan losses
as a
percentage of
nonperforming 211.34 % 236.23 % 388.96 % 395.75 % 419.22 %
loans
Net
charge-offs
as a
percentage of
average loans
(annualized) 0.35 % 0.41 % 0.17 % 0.09 % 0.15 %
(1)
Provision for
loan losses
as a
percentage
of average
total loans 0.75 % 0.49 % 0.43 % 0.24 % 0.34 %
(annualized)
(1)
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
December 31, December 31,
LOAN PORTFOLIO (ENDING 2008 % of Total 2007 % of Total
balance) (1)
Construction/land development $ 535,638 23.1 % $ 550,683 26.4 %
Commercial non-owner occupied 330,792 14.3 % 254,584 12.2 %
Total commercial real estate 866,430 37.4 % 805,267 38.7 %
Consumer owner occupied 293,521 12.7 % 272,663 13.1 %
Home equity loans 222,025 9.6 % 164,104 7.9 %
Total consumer real estate 515,546 22.3 % 436,767 21.0 %
Commercial owner occupied 423,345 18.3 % 308,864 14.8 %
Commercial & industrial 251,929 10.9 % 257,170 12.3 %
Other income producing 141,516 6.1 % 123,659 5.9 %
property
Consumer non real estate 95,098 4.1 % 118,756 5.7 %
Other 22,212 1.0 % 32,564 1.6 %
Total loans (net of unearned $ 2,316,076 100.0 % $ 2,083,047 100.0 %
income) (1)
Mortage loans held for sale $ 15,742 $ 17,351
Quarter Ended
December 31, September 30, June 30, March 31, December 31,
SELECTED RATIOS 2008 2008 2008 2008 2007
Return on average
assets 0.51 % 0.02 % 0.91 % 0.90 % 0.86 %
(annualized)
Return on average
equity 5.89 % 0.22 % 11.13 % 11.01 % 10.76 %
(annualized)
Return on average
tangible equity 8.46 % 0.69 % 16.18 % 16.13 % 14.53 %
(annualized)
Net interest
margin (tax 3.86 % 3.86 % 3.81 % 3.79 % 3.91 %
equivalent)
Efficiency ratio 65.05 % 59.82 % 62.27 % 65.66 % 65.42 %
(tax equivalent)
End of period book
value per common $ 21.77 $ 21.47 $ 21.70 $ 21.60 $ 21.17
share
End of period
tangible book $ 15.88 $ 14.98 $ 15.19 $ 15.17 $ 14.71
value per common
share
End of period
common shares 11,250,603 10,225,776 10,203,497 10,185,915 10,160,432
issued and
outstanding
End of period 8.85 % 7.94 % 7.98 % 8.22 % 8.28 %
Equity-to-Assets
End of period
Tangible 6.62 % 5.67 % 5.72 % 5.91 % 5.90 %
Equity-to-Tangible
Assets
Twelve Months Ended
December 31, December 31,
2008 2007
SELECTED RATIOS
Return on average assets (annualized) 0.58 % 0.95 %
Return on average equity (annualized) 7.00 % 12.42 %
Return on average tangible equity (annualized) 10.26 % 16.28 %
Net interest margin (tax equivalent) 3.83 % 3.85 %
Efficiency ratio (tax equivalent) 63.17 % 65.31 %
Three Months Ended Twelve Months Ended
December 31, December 31,
RECONCILIATION OF NON-GAAP TO GAAP 2008 2007 2008 2007
Operating Return on Average Assets
(annualized)
Operating return on average assets 0.62% 0.94% 0.84% 0.97%
(non-GAAP) (2)
Effect of operating adjustments -0.11% -0.08% -0.26% -0.02%
Return on average assets (GAAP) 0.51% 0.86% 0.58% 0.95%
Operating Return on Average Equity
(annualized)
Operating return on average equity 7.14% 11.86% 10.15% 12.72%
(non-GAAP) (2)
Effect of operating adjustments -1.25% -1.10% -3.15% -0.30%
Return on average equity (GAAP) 5.89% 10.76% 7.00% 12.42%
Operating Return on Average Tangible
Equity (annualized)
Operating return on average tangible 10.20% 15.98% 14.71% 16.66%
equity (non-GAAP) (2)
Effect of operating adjustments -1.74% -1.45% -4.45% -0.38%
Return on average tangible equity 8.46% 14.53% 10.26% 16.28%
(GAAP)
(2) Operating measures exclude the effect of a realized loss on sale of
Freddie Mac (FRE) preferred securities of $383,000 and $10.1 million,
respectively, for the three and twelve months ended December 31, 2008; and a
loss on Bank Owned Life Insurance ("BOLI") of $260,000 and
other-than-temporary impairment ("OTTI") on other equities of $124,000 for the
three and twelve months ended December 31, 2008. Excludes the effect of merger
expense of $405,000 and $811,000 recorded for the three and twelve months
ended December 31, 2008 and 2007, respectively, related to collapsing the
banks into one charter and the acquisition of TSB Financial Corporporation
("TSB"). Management believes that these non-GAAP operating measures provide
additional useful information, particularly since the sale of FRE preferred
securities previously recognized as OTTI, loss on BOLI and OTTI on other
equities, and merger expenses are unusual and infrequent to the operations of
SCBT. The sections titled "Reconciliation of Non-GAAP to GAAP" provide tables
that reconcile non-GAAP measures to GAAP.
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
Three Months Ended
December 31, 2008 December 31, 2007
Average Interest Average Average Interest Average
YIELD ANALYSIS Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
Interest-Earning
Assets:
Federal funds sold,
reverse repo, and $ 12,346 $ 24 0.77 % 21,281 $ 241 4.49 %
time deposits
Investment
securities 200,917 2,709 5.36 % 218,083 2,834 5.16 %
(taxable)
Investment
securities 31,529 259 3.27 % 28,648 351 4.86 %
(tax-exempt)
Mortgage loans held 10,684 151 5.62 % 13,799 187 5.38 %
for sale
Loans (1) 2,304,911 34,951 6.03 % 1,930,938 35,592 7.31 %
Total
Interest-earning 2,560,387 38,094 5.92 % 2,212,749 39,205 7.03 %
assets
Noninterest-Earning
Assets:
Cash and due from 50,336 47,300
banks
Other assets 187,431 144,120
Allowance for loan (29,290 ) (24,577 )
losses
Total
noninterest-earning 208,477 166,843
assets
Total Assets $ 2,768,864 $ 2,379,592
Interest-Bearing
Liabilities:
Transaction and
money market $ 558,835 $ 1,065 0.76 % $ 550,778 $ 2,779 2.00 %
accounts
Savings deposits 146,920 310 0.84 % 135,652 786 2.30 %
Certificates and 1,119,746 9,742 3.46 % 843,527 10,180 4.79 %
other time deposits
Federal funds
purchased and 190,409 358 0.75 % 240,897 2,503 4.12 %
repurchase
agreements
Other borrowings 183,159 1,975 4.29 % 96,610 1,365 5.61 %
Total
interest-bearing 2,199,069 13,450 2.43 % 1,867,464 17,613 3.74 %
liabilities
Noninterest-Bearing
Liabilities:
Demand deposits 315,841 305,467
Other liabilities 14,185 17,155
Total
noninterest-bearing 330,026 322,622
liabilities
("Non-IBL")
Shareholders' 239,769 189,506
equity
Total Non-IBL and
shareholders' 569,795 512,128
equity
Total liabilities
and shareholders' $ 2,768,864 $ 2,379,592
equity
Net interest income
and margin (NON-TAX $ 24,644 3.83 % $ 21,592 3.87 %
EQUIV.)
Net interest margin 3.86 % 3.91 %
(TAX EQUIVALENT)
Twelve Months Ended
December 31, 2008 December 31, 2007
Average Interest Average Average Interest Average
YIELD ANALYSIS Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
Interest-Earning
Assets:
Federal funds sold,
reverse repo, and $ 39,374 $ 909 2.31 % $ 38,460 $ 1,973 5.13 %
time deposits
Investment
securities 210,436 11,065 5.26 % 203,899 10,316 5.06 %
(taxable)
Investment
securities 36,760 1,471 4.00 % 26,386 1,302 4.93 %
(tax-exempt)
Mortgage loans held 17,022 967 5.68 % 21,747 1,253 5.76 %
for sale
Loans (1) 2,220,448 141,663 6.38 % 1,823,196 134,355 7.37 %
Total
Interest-earning 2,524,040 156,075 6.18 % 2,113,688 149,199 7.06 %
assets
Noninterest-Earning
Assets:
Cash and due from 51,747 48,094
banks
Other assets 178,357 134,031
Allowance for loan (28,189 ) (23,400 )
losses
Total
noninterest-earning 201,915 158,725
assets
Total Assets $ 2,725,955 $ 2,272,413
Interest-Bearing
Liabilities:
Transaction and
money market $ 565,815 $ 6,030 1.07 % $ 558,467 $ 11,838 2.12 %
accounts
Savings deposits 145,579 1,706 1.17 % 111,484 2,166 1.94 %
Certificates and 1,019,434 39,908 3.91 % 807,594 39,153 4.85 %
other time deposits
Federal funds
purchased and 271,143 5,427 2.00 % 208,516 9,180 4.40 %
repurchase
agreements
Other borrowings 168,645 7,227 4.29 % 109,566 6,185 5.64 %
Total
interest-bearing 2,170,616 60,298 2.78 % 1,795,627 68,522 3.82 %
liabilities
Noninterest-Bearing
Liabilities:
Demand deposits 315,167 284,766
Other liabilities 14,688 18,341
Total
noninterest-bearing 329,855 303,107
liabilities
("Non-IBL")
Shareholders' 225,484 173,679
equity
Total Non-IBL and
shareholders' 555,339 476,786
equity
Total liabilities
and shareholders' $ 2,725,955 $ 2,272,413
equity
Net interest income
and margin (NON-TAX $ 95,777 3.79 % $ 80,677 3.82 %
EQUIV.)
Net interest margin 3.83 % 3.85 %
(TAX EQUIVALENT)
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, % December 31, %
NONINTEREST INCOME & 2008 2007 Change 2008 2007 Change
EXPENSE
Noninterest income:
Service charges on $ 4,123 $ 4,162 -0.9% $ 16,117 $ 15,114 6.6%
deposit accounts
Mortgage banking income 678 631 7.4% 3,455 3,596 -3.9%
Bankcard services 1,153 1,070 7.8% 4,832 4,136 16.8%
income
Trust and investment 654 595 9.9% 2,756 2,566 7.4%
services income
Securities gains (507) (502) 1.0% (9,927) (460) 2058.0%
(losses), net
Other 9 616 -98.5% 1,816 2,407 -24.6%
Total noninterest 6,110 6,572 -7.0% 19,049 27,359 -30.4%
income (GAAP)
Adjustments:
Realized loss on sale
of FRE preferred 383 -- 10,143 --
securities
Loss on BOLI and OTTI 384 -- 384 --
on other equities
Total operating
noninterest income $ 6,877 $ 6,572 4.6% $ 29,576 $ 27,359 8.1%
(NON-GAAP)
Noninterest expense:
Salaries and employee $ 10,306 $ 10,331 -0.2% $ 42,554 $ 39,312 8.2%
benefits
Furniture and equipment 1,579 1,531 3.1% 6,246 5,758 8.5%
expense
Net occupancy expense 1,583 1,365 16.0% 6,103 4,950 23.3%
Information services 1,309 1,101 18.9% 4,878 4,265 14.4%
expense
Advertising and 1,088 710 53.2% 3,870 3,143 23.1%
marketing
Business development 600 491 22.2% 2,184 2,097 4.1%
and staff related
Professional fees 605 550 10.0% 2,243 2,072 8.3%
Amortization of 142 132 7.6% 575 509 13.0%
intangibles
Merger expense 405 811 -50.1% 405 811 -50.1%
Other 3,259 1,877 73.6% 10,738 8,485 26.6%
Total noninterest 20,876 18,899 10.5% 79,796 71,402 11.8%
expense (GAAP)
Adjustments:
Merger expense 405 811 -50.1% 405 811 -50.1%
Total operating
noninterest expense $ 20,471 $ 18,088 13.2% $ 79,391 $ 70,591 12.5%
(NON-GAAP)
Notes:
(1) Loan data excludes mortgage loans held for sale.
(2) Operating measures exclude the effect of a realized loss on sale of Freddie
Mac (FRE) preferred securities of $383,000 and $10.1 million, respectively, for
the three and twelve months ended December 31, 2008; and a loss on Bank Owned
Life Insurance ("BOLI") of $260,000 and other-than-temporary impairment ("OTTI")
on other equities of $124,000 for the three and twelve months ended December 31,
2008. Excludes the effect of merger expense of $405,000 and $811,000 recorded
for the three and twelve months ended December 31, 2008 and 2007, respectively,
related to collapsing the banks into one charter and the acquisition of TSB
Financial Corporporation ("TSB"). Management believes that these non-GAAP
operating measures provide additional useful information, particularly since the
sale of FRE preferred securities previously recognized as OTTI, loss on BOLI and
OTTI on other equities, and merger expenses are unusual and infrequent to the
operations of SCBT. The sections titled "Reconciliation of Non-GAAP to GAAP"
provide tables that reconcile non-GAAP measures to GAAP.
Source: SCBT Financial Corporation
Contact: SCBT Financial Corporation
John C. Pollok, Senior Executive Vice President
and Chief Financial Officer, 803-765-4628
Fax: 803-765-1966