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 ended March
31, 2010. The Company produced record results due to the gain on the
FDIC-assisted acquisition of Community Bank & Trust ("CBT") of Cornelia,
GA which closed on January 29, 2010. Highlights of the first quarter
2010 include:
-- Net income of $49.0 million; diluted earnings per share of $3.86 for the
quarter
-- Core deposit growth --- excluding all CDs --- up $92.6 million; 29.9%
annualized increase, excluding CBT
-- Repositioned balance sheet --- paying off acquired (CBT) and legacy
(SCBT) FHLB advances --- $160.5 million
-- Allowance for loan losses: 1.90% of period end loans, excluding covered
loans; up from 1.70% at 4Q 2009
-- NPAs: 1.99% of total assets and 2.89% of loans and repossessed assets,
excluding covered assets;
-- Net charge-offs --- increased to 3.13% annualized for the quarter,
excluding CBT
First Quarter 2010 Results of Operations
Please refer to the accompanying tables for detailed comparative data
on results of operations and financial results.
The Company reported consolidated net income available to the common
shareholders of $49.0 million, or $3.86 per diluted share for the three
months ended March 31, 2010 compared to consolidated net income of $3.7
million, or $0.33 per diluted share for the first quarter of 2009, a
$45.3 million increase. This increase was primarily the net result of
the following items:
-- Pre-tax gain on acquisition of $98.1 million resulting from the
FDIC-assisted acquisition of CBT; offset by
-- Pre-tax provision for loan losses of $20.8 million due to an increase in
the amount of charge-offs taken during the quarter and estimates of the
probable losses in the legacy SCBT loan portfolio;
-- Pre-tax Other Than Temporary Impairment ("OTTI") charges related to
pooled trust preferred securities (TRUPs) of $5.6 million;
-- Pre-tax pre-payment fee for the early pay-off of legacy FHLB advances
totaling $3.2 million; and
-- Pre-tax merger related costs of $3.9 million.
"Our company experienced another very solid quarter with record earnings
and a transformational acquisition in Georgia," said Robert R. Hill,
Jr., President and CEO. "We have performed very well and have been
profitable every quarter in this downturn. We believe the addition of
Community Bank and Trust in Georgia, the new relationships we have
established in North Carolina and South Carolina, and the adjustments
within our balance sheet position us well for the future. We began to
see increased loan demand in the first quarter and continued to
experience strong core deposit growth. We are also expanding our team by
adding talented bankers in all three states. A tremendous job is being
done with the execution and integration of Community Bank and Trust, and
we are fortunate to have added a 100 plus year-old bank with a very
loyal customer and employee base. While credit is still a headwind, our
challenges are very manageable."
The Company recorded a gain on acquisition, after-tax of $62.5 million
or $4.92 per share and incurred $2.5 million of merger related expenses,
net of tax, or $0.20 per share. In addition, during the quarter, the
Company elected to pay off legacy Federal Home Loan Bank ("FHLB")
advances and the fee for the early pay off resulted in an after-tax
charge of $2.0 million, or $0.16 per share. The Company also recorded
additional OTTI on certain TRUPs of $3.6 million after-tax, or $0.28 per
share. On a net operating basis which excludes these items, SCBT would
report an operating loss of $0.43 per diluted share for the quarter
compared to net operating income per share of $0.33 per share for the
first quarter of 2009.
The Company's annualized return on average assets (ROAA) for the first
quarter increased to 5.71% compared to 0.64% for the first quarter of
2009, and increased from 0.22% for the fourth quarter of 2009. Total
average shareholders' equity at March 31, 2010 was $348.8 million, an
increase of $64.4 million, or 22.7% from December 31, 2009. This
increase is primarily the result of the gain on the FDIC-assisted
acquisition of $62.5 million, after-tax. Annualized return on average
equity (ROAE) for the quarter was 56.93%, up from 6.10% for the first
quarter of 2009. Annualized return on average tangible equity (ROATE)
for the first quarter increased to 70.44% from 8.05% for the comparable
period in the prior year, and increased from 2.92% in the fourth quarter
of 2009.
FDIC-Assisted Acquisition - CBT
During the first quarter of 2010, SCBT entered into a whole bank with
loss-share purchase and assumption agreement with the FDIC to purchase
certain assets and assume most of the deposits (excluding brokered
deposits) and certain liabilities of CBT. The Company acquired assets
with a fair value of approximately $1.0 billion, including $459.5
million of loans, $105.6 million of investment securities, $80.6 million
of cash and cash equivalents, excluding cash paid by the FDIC to
consummate the acquisition, $25.9 million of other real estate owned
("OREO"), $276.8 million related to the FDIC's indemnification of the
Company against certain future losses and $16.5 million of other assets.
Liabilities with a fair value of approximately $1.1 billion were also
assumed, including $1.0 billion of deposits, $82.6 million of FHLB
advances, and $42.8 million of other liabilities. The Company recorded
$8.5 million in core deposit intangibles. In addition, the Company
received cash from the FDIC totaling approximately $225.7 million and
recorded a $5.9 million receivable due from the FDIC as compensation for
the net liability that was assumed as a result of the acquisition. The
FHLB advances assumed were paid off in early February of 2010.
In connection with the CBT acquisition, SCBT also entered into loss
sharing agreements with the FDIC. Pursuant to the terms of these loss
sharing agreements, the FDIC's obligation to reimburse SCBT for losses
with respect to certain loans and foreclosed real estate purchased
("covered assets" or "covered loans"), begins with the first dollar of
loss incurred. The FDIC has agreed to reimburse SCBT for (1) 80% of the
losses incurred up to $233.0 million and (2) 95% of losses in excess of
$233.0 million. Gains and recoveries on covered assets will offset
losses, or be paid to the FDIC, at the applicable loss share percentage
at the time of recovery.
The assets acquired and liabilities assumed are recorded at estimated
fair value on the date of acquisition. These fair value estimates are
considered preliminary, and are subject to change for up to one year
after the closing date of the acquisition as additional information
relative to closing date fair values may become available. The Company
and the FDIC are engaged in on-going discussions that may impact which
assets and liabilities are ultimately acquired or assumed by the Company
and/or the purchase price.
Asset Quality
Annualized net charge-offs of the legacy SCBT increased to 3.13% from
1.26% experienced in the fourth quarter of 2009, and increased from
0.79% experienced in the first quarter of 2009. During the first
quarter, non-performing assets (NPAs) as a percentage of non-covered
loans and repossessed assets increased to 2.80% compared to 1.34% one
year ago and 2.40% for the fourth quarter of 2009. NPAs to total assets
at March 31, 2010 were 1.93%, excluding covered assets, compared to
1.09% at the end of the first quarter in 2009 and 1.96% at the end of
the fourth quarter 2009. The increase in NPAs continues to reflect the
pressure within the real estate market throughout all of the markets in
which we operate and within the economy as a whole. During the first
quarter, the Company's other real estate owned ("OREO") increased $6.2
million from the end of the fourth quarter, excluding covered OREO and
was slightly lower than the balance one year ago. Non-performing loans
(including accruing loans past due 90 days or more) increased $2.1
million from the fourth quarter of 2009, excluding covered loans and by
$30.5 million from the end of the first quarter in 2009, excluding
covered loans.
At March 31, 2010, nonperforming loans, excluding covered loans, totaled
$51.8 million, representing 2.38% of period-end loans. The allowance for
loan losses at March 31, 2010 was $41.4 million and represented 1.90% of
total period-end loans, excluding covered loans. The current allowance
for loan losses provides .80 times coverage of period-end nonperforming
loans, excluding covered loans, up slightly from the fourth quarter 2009
level of .75 times coverage. In the first quarter, net charge-offs were
$16.9 million, or an annualized 3.13% of average loans, excluding
covered loans, compared to $4.5 million, or 0.79% in the same period of
2009 and $7.0 million, or 1.26% in the linked quarter. The provision for
loan losses was $20.8 million for the first quarter of 2010 compared to
$5.0 million for the comparable quarter one year ago, and $10.2 million
in the fourth quarter of 2009.
During the first quarter, the Company partially charged-off one large
holding company loan in the amount of $5.7 million. There are no other
loans of this type within the loan portfolio. In addition, the Company
also charged-off $1.7 million of a $3.5 million commercial lot loan, and
charged off another commercial loan (1-4 family residential lots) by
$930,000 and moved the remaining $1.8 million balance to OREO. Both of
these loans are along the South Carolina coast (the Grand Strand).
Loans and Deposits
The Company increased total loans 14.0% since the first quarter of 2009,
driven by the FDIC-assisted acquisition and the addition of covered
loans during the quarter. Covered loans increased the loan balance by
$438.8 million during the quarter, but this increase was offset by
$117.4 million in net loan decreases from the legacy SCBT loan portfolio
compared to the first quarter of 2009. These reductions were in
construction and land development loans of $77.1 million, commercial and
industrial loans of $37.3 million, consumer non real estate loans of
$20.7 million, commercial non owner occupied loans of $31.0 million, and
consumer owner occupied loans of $10.7 million. Offsetting the loan
reductions has been loan growth in home equity loans of $18.4 million
and commercial owner occupied loans of $39.6 million. Total loans
outstanding were $2.2 billion at March 31, 2010 compared to $2.3 billion
at March 31, 2009, excluding covered loans. The balance of mortgage
loans held for sale decreased $27.7 million from March 31, 2009 to $15.9
million at March 31, 2010. During the first quarter of 2010, mortgage
loans held for sale decreased as refinancing activities have fallen off.
The balance of mortgage loans held for sale at March 31, 2010 has now
returned a more normalized level.
Total deposits increased in all categories compared to the first quarter
of 2009, due to the FDIC-assisted acquisition of CBT. Total deposits
increased by a total of $890.5 million, or 169.2% annualized, from the
end of the fourth quarter of 2009, and by $843.2 million, or 39.2% from
the first quarter of 2009. All categories of deposits increased
substantially during the quarter, when compared to the first quarter of
2009 and to the fourth quarter of 2009. Core deposits (excluding all
certificates of deposit) increased $419.4 million compared to the fourth
quarter of 2009 and by $547.7 million compared to the first quarter of
2009. On a legacy SCBT basis, deposits increased by $84.5 million or
16.1% annualized during the quarter with the largest increase occurring
in money market accounts which increased by $63.7 million or 60.6%
annualized. All other deposit categories increased except for CDs less
than $100,000 which declined by $11.5 million, or 10.9% annualized. Core
deposits (excluding all certificates of deposit) for legacy SCBT
continued to increase, as these balances grew by $92.6 million or 29.9%
annualized compared to the fourth quarter of 2009 and increased by
$220.9 million or 19.9%, compared to the first quarter of 2009. The
Company has continued to focus on collecting core deposits within all of
its markets. The Company continues to monitor and adjust rates paid on
all deposits in order to manage its net interest margin. The Company had
no brokered deposits at the end of the first quarter of 2010, and has
not used this funding source since the third quarter of 2009. Total
deposits outstanding at the end of the first quarter of 2010 were $3.0
billion, compared to $2.1 billion at the end of the fourth quarter 2009
and compared $2.2 billion at the end of the first quarter of 2009.
Net Interest Income and Margin
Non-taxable equivalent net interest income (before provision for loan
losses) was $28.6 million for the first quarter of 2010, up 14.5% from
$25.0 million in the comparable period last year. Taxable-equivalent net
interest margin increased 2 basis points from the first quarter of 2009
to 3.89%. Compared to the fourth quarter of 2009, taxable-equivalent net
interest margin decreased 40 basis points from 4.28%. Due to the
FDIC-assisted acquisition during the first quarter, the net interest
margin of SCBT has declined due to a significant increase in excess
liquidity which reduced the net interest margin by an estimated 20 basis
points during the quarter. Excluding this acquisition, legacy SCBT's net
interest margin remained strong at 4.09%. Interest rates have remained
at very low levels and the Company has continued to manage deposit
pricing and funding sources during the first quarter of 2010 to limit
the amount of margin compression. The increase in non-performing assets
continues to compress the net interest margin as well.
The Company's average yield on interest-earning assets decreased 61
basis points while the average rate on interest-bearing liabilities
decreased 79 basis points from the first quarter of 2009. During the
first quarter of 2010, the Company's average total assets increased by
$609.1 million to $3.5 billion, a 21.2% increase over the first quarter
of 2009. The increase reflected a $180.5 million increase in average
total loans to $2.5 billion from the first quarter of 2009, the result
of the FDIC-assisted acquisition during the quarter. The increase in
volume of loans at lower current market rates resulted in average yield
on loans falling by 28 basis points compared to the first quarter of
2009. Average investment securities were $281.9 million at March 31,
2010, or 31.8% higher than the balance at the end of the first quarter
of 2009 of $213.8 million, largely reflecting the impact of CBT. The
growth in average total assets was supported by growth in average total
deposits of $552.9 million, an increase of 25.3% from the first quarter
of 2009, which mostly came from the FDIC-assisted acquisition of CBT.
Noninterest Income and Expense
Operating noninterest income was $9.4 million (excluding the $98.1
million gain on acquisition and the OTTI of $5.6 million) for the first
quarter of 2010 compared to $7.1 million for the first quarter of 2009,
an increase of $2.3 million, or 32.7% from the comparable quarter. This
increase was driven primarily by the addition of CBT noninterest income
of $2.2 million. Bankcard services for legacy SCBT which were up 17.7%,
or $209,000, were partially offset by mortgage banking income decreases
of $93,000, or 7.4%.
Compared to the fourth quarter of 2009, operating noninterest income was
up by $1.4 million, driven by the addition of CBT noninterest income of
$2.2 million. Without the addition of CBT, noninterest income would have
declined by approximately $740,000 for the quarter for legacy SCBT, due
primarily to a decline in mortgage banking income of $538,000 and a
decline in service charges on deposit accounts of $491,000. These
decreases were only partially offset by increases of $98,000 in bankcard
services income and increases of $164,000 in trust and investment
services income.
Noninterest expense was $32.9 million in the first quarter of 2010, a
63.1% or $12.7 million increase compared to $20.2 million in the first
quarter of 2009. During the first quarter, the Company had increased
cost in all categories of expense due to the addition of CBT. These
costs related to the CBT franchise accounted for $5.1 million of the
increase. Without the addition of CBT and merger related costs,
noninterest expense increased by $3.7 million from first quarter of 2009
and in the following areas: (1) salaries and benefits by $1.3 million
and (2) FHLB Bank prepayment fee related to paying off legacy SCBT
advances of $3.2 million, and were offset by a decline in OREO expense
and loan related costs of $935,000 due primarily to a gain recognized on
the sale of an OREO property of $623,000. The Company's quarterly
efficiency ratio improved to 24.1% compared to 62.4% one year ago, and
compared to 58.1% in the fourth quarter of 2009. Adjusted for the gain
on acquisition, FHLB advances prepayment fee and merger related costs,
the efficiency ratio would have been 67.2%.
"Our adjusted efficiency ratio increased during the quarter to 67.2%
with the addition of the operating expenses of CBT and no meaningful
impact on non-interest income as we get our products and services in
place in our Georgia markets," said John C. Pollok, COO. "Additionally,
the operating results for just our Georgia franchise nearly broke even
during our first two months of operations, as we repositioned the
balance sheet and began implementing our processes."
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; NCBT, a Division of SCBT, N.A.; and Community Bank &
Trust, a Division of SCBT, N.A. Providing financial services for over 75
years, SCBT Financial Corporation operates 86 locations in 17 South
Carolina counties, 10 northeast Georgia counties, and Mecklenburg County
in North Carolina. SCBT Financial Corporation has assets of
approximately $3.6 billion and its stock is traded under the symbol SCBT
in the NASDAQ Global Select Market. More information can be found at www.SCBTonline.com.
Non-GAAP Measures
Statements included in this press release include non-GAAP measures and
should be read along with the accompanying tables which provide a
reconciliation of non-GAAP measures to GAAP measures. Management
believes that these non-GAAP measures provide additional useful
information. Non-GAAP measures should not be considered as an
alternative to any measure of performance or financial condition as
promulgated under GAAP, and investors should consider the company's
performance and financial condition as reported under GAAP and all other
relevant information when assessing the performance or financial
condition of the company. Non-GAAP measures have limitations as
analytical tools, and investors should not consider them in isolation or
as a substitute for analysis of the company's results or financial
condition as reported under GAAP.
Cautionary Statement Regarding Forward Looking Statements
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 Exchange Act of 1934. 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; (10) economic
downturn risk resulting in deterioration in the credit markets; (11)
greater than expected non-interest expenses; (12) excessive loan losses;
(13) potential deposit attrition, higher than expected costs, customer
loss and business disruption associated with the integration of CBT,
including, without limitation, potential difficulties in maintaining
relationships with key personnel and other integration related-matters;
and (14) other factors, which could cause actual results to differ
materially from future results expressed or implied by such
forward-looking statements.
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
First
Three Months Ended Quarter
March 31, December 31, September 30, June 30, March 31, 2010 -
2009
EARNINGS SUMMARY 2010 2009 2009 2009 2009 % Change
(non tax equivalent)
Interest income $ 37,204 $ 34,473 $ 35,020 $ 35,857 $ 36,448 2.1 %
Interest expense 8,573 7,281 8,639 9,838 11,450 -25.1 %
Net interest income 28,631 27,192 26,381 26,019 24,998 14.5 %
Provision for loan 20,778 10,158 6,990 4,521 5,043 312.0 %
losses (1)
Noninterest income 101,959 5,763 5,591 7,761 7,131 1329.8 %
Noninterest expense 32,918 20,624 21,797 21,038 20,187 63.1 %
Income before
provision for income 76,894 2,173 3,185 8,221 6,899 1014.6 %
taxes
Provision for income 27,933 654 1,014 2,836 2,379 1074.1 %
taxes
Net income 48,961 1,519 2,171 5,385 4,520 983.2 %
Preferred stock -- -- -- 450 665 -100.0 %
dividends
Accretion on
preferred stock -- -- -- 3,410 149 -100.0 %
discount
Net income available
to common $ 48,961 $ 1,519 $ 2,171 $ 1,525 $ 3,706 1221.1 %
shareholders (GAAP)
Basic
weighted-average 12,590,748 12,572,751 12,546,654 11,826,972 11,179,869 12.6 %
common shares
Diluted
weighted-average 12,695,655 12,633,484 12,604,762 11,870,522 11,226,078 13.1 %
common shares
Earnings per common $ 3.89 $ 0.12 $ 0.17 $ 0.13 $ 0.33 1078.8 %
share - Basic
Earnings per common 3.86 0.12 0.17 0.13 0.33 1069.7 %
share - Diluted
Cash dividends
declared per common $ 0.17 $ 0.17 $ 0.17 $ 0.17 $ 0.17 0.0 %
share
Dividend payout 142.65 % 99.67 % 141.59 % 52.02 % 54.24 % 163.0 %
ratio (2)
Operating Earnings
(non-GAAP) (3)
Net income available
to common $ 48,961 $ 1,519 $ 2,171 $ 1,525 $ 3,706 1221.1 %
shareholders (GAAP)
Gain on acquisition, (62,452 ) -- -- -- --
net of tax
Other-than-temporary
impairment (OTTI), 3,557 1,578 1,502 356 --
net of tax
Merger-related 2,488 -- -- -- --
expense, net of tax
FHLB advances
prepayment penalty, 2,031 -- -- -- --
net of tax
Net operating
earnings (loss) $ (5,415 ) $ 3,097 $ 3,673 $ 1,881 $ 3,706 -246.1 %
(non-GAAP)
Operating earnings
(loss) per common $ (0.43 ) $ 0.25 $ 0.29 $ 0.16 $ 0.33 -230.3 %
share - Basic
Operating earnings
(loss) per common (0.43 ) 0.25 0.29 0.16 0.33 -230.3 %
share - Diluted
AVERAGE for Quarter Ended Quarter
March 31, December 31, September 30, June 30, March 31, 2010 -
2009
BALANCE SHEET 2010 2009 2009 2009 2009 % Change
HIGHLIGHTS
Loans held for sale $ 12,050 $ 19,670 $ 20,763 $ 48,132 $ 36,484 -67.0 %
Covered loans 302,602 -- -- -- --
Non-covered loans 2,185,241 2,199,074 2,221,078 2,268,292 2,307,322 -5.3 %
Total loans (1) 2,487,843 2,199,074 2,221,078 2,268,292 2,307,322 7.8 %
FDIC receivable for
loss share 189,091 -- -- -- --
agreements
Total investment 281,921 215,609 202,692 199,293 213,849 31.8 %
securities
Intangible assets 71,313 65,740 65,871 66,002 66,134 7.8 %
Earning assets 3,019,322 2,549,507 2,617,386 2,587,286 2,642,908 14.2 %
Total assets 3,478,221 2,749,157 2,806,974 2,812,215 2,868,847 21.2 %
Noninterest-bearing 423,536 346,576 334,165 321,038 316,978 33.6 %
deposits
Interest-bearing 2,312,835 1,757,463 1,820,139 1,826,704 1,866,454 23.9 %
deposits
Total deposits 2,736,371 2,104,039 2,154,304 2,147,742 2,183,432 25.3 %
Federal funds
purchased and 230,256 203,197 229,806 197,636 203,391 13.2 %
repurchase
agreements
Other borrowings 146,735 143,786 144,180 149,570 164,546 -10.8 %
Shareholders' common
equity (excludes 348,773 284,335 282,953 265,793 249,429 39.8 %
preferred stock)
Shareholders' equity 348,773 284,335 282,953 298,849 300,497 16.1 %
ENDING Balance Quarter
March 31, December 31, September 30, June 30, March 31, 2010 -
2009
BALANCE SHEET 2010 2009 2009 2009 2009 % Change
HIGHLIGHTS
Loans held for sale $ 15,925 $ 17,563 $ 20,077 $ 53,853 $ 43,603 -63.5 %
Covered loans 438,807 -- -- -- --
Non-covered loans 2,175,242 2,203,238 2,209,403 2,236,162 2,292,654 -5.1 %
Total loans (1) 2,614,049 2,203,238 2,209,403 2,236,162 2,292,654 14.0 %
FDIC receivable for
loss share 277,158 -- -- -- --
agreements
Total investment 311,005 211,112 212,228 191,415 204,032 52.4 %
securities
Intangible assets 73,900 65,696 65,827 65,959 66,090 11.8 %
Allowance for loan (41,397 ) (37,488 ) (34,297 ) (32,431 ) (32,094 ) 29.0 %
losses (1)
Premises and 72,079 71,829 72,523 73,404 73,606 -2.1 %
equipment
Total assets 3,643,900 2,702,188 2,776,684 2,807,309 2,839,584 28.3 %
Noninterest-bearing 457,412 346,248 335,565 322,270 315,727 44.9 %
deposits
Interest-bearing 2,537,702 1,758,391 1,791,554 1,858,096 1,836,141 38.2 %
deposits
Total deposits 2,995,114 2,104,639 2,127,119 2,180,366 2,151,868 39.2 %
Federal funds
purchased and 237,669 162,515 211,606 187,677 205,985 15.4 %
repurchase
agreements
Other borrowings 62,929 143,624 144,048 144,430 152,799 -58.8 %
Total liabilities 3,309,134 2,419,369 2,494,901 2,527,557 2,528,404 30.9 %
Shareholders' common
equity (excludes 334,766 282,819 281,783 279,752 249,811 34.0 %
preferred stock)
Shareholders' equity 334,766 282,819 281,783 279,752 311,180 7.6 %
Common shares issued 12,750,774 12,739,533 12,712,476 12,696,849 11,319,644 12.6 %
and outstanding
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
Quarter
2010 -
December 2009
March 31, 31, September 30, June 30, March 31,
NONPERFORMING 2010 2009 2009 2009
ASSETS 2009 %
(ENDING Change
balance)
Not Covered
Under FDIC
Loss Share
Agreements
Nonaccrual
loans not
covered under
FDIC
loss share $ 53,730 $ 49,492 $ 36,605 $ 29,379 $ 20,730 159.2 %
agreements
Other real
estate owned
("OREO") not
covered under
FDIC loss
share 9,319 3,102 4,189 9,165 9,563 -2.6 %
agreements
Accruing
loans past 107 241 585 559 614 -82.6 %
due 90 days
or more
Other
nonperforming 19 31 13 -- 40 -52.5 %
assets
Restructured -- -- 1,974 1,951 --
loans
Total
nonperforming
assets not
covered under
FDIC loss
share 63,175 52,866 43,366 41,054 30,947 104.1 %
agreements
Covered Under
FDIC Loss
Share
Agreements
Nonaccrual
loans covered
under FDIC
loss share 268,145 -- -- -- --
agreements
OREO covered
under FDIC 32,076 -- -- -- --
loss share
agreements
Total
nonperforming
assets
covered under
FDIC loss
share 300,221 -- -- -- --
agreements
Total
nonperforming $ 363,396 $ 52,866 $ 43,366 $ 41,054 $ 30,947
assets
Excluding
Covered
Assets
Total
nonperforming
assets as a
percentage of
total 2.89 % 2.40 % 1.96 % 1.83 % 1.34 %
non-covered
loans and
repossessed
assets (1)
(4)
Total
nonperforming
assets as a 1.99 % 1.96 % 1.56 % 1.46 % 1.09 %
percentage of
total assets
NPLs as a
percentage of
period end 2.47 % 2.26 % 1.68 % 1.34 % 0.93 %
non-covered
loans
Including
Covered
Assets
Total
nonperforming
assets as a
percentage of
total loans 13.68 % 2.40 % 1.96 % 1.83 % 1.34 %
and
repossessed
assets (1)
(4)
Total
nonperforming
assets as a 9.97 % 1.96 % 1.56 % 1.46 % 1.09 %
percentage of
total assets
NPLs as a
percentage of 12.32 % 2.26 % 1.68 % 1.34 % 0.93 %
period end
loans
Quarter Ended Quarter
March 31, December September 30, June 30, March 31, 2010 -
31, 2009
ALLOWANCE FOR %
LOAN LOSSES 2010 2009 2009 2009 2009 Change
(1) (5)
Balance at
beginning of $ 37,488 $ 34,297 $ 32,431 $ 32,094 $ 31,525 18.9 %
period
Loans charged (17,110 ) (6,881 ) (5,103 ) (4,295 ) (4,779 ) 258.0 %
off
Overdrafts (260 ) (277 ) (271 ) (230 ) (214 ) 21.5 %
charged off
Loan 354 96 195 262 390 -9.2 %
recoveries
Overdraft 147 95 55 79 129 14.0 %
recoveries
Net (16,869 ) (6,967 ) (5,124 ) (4,184 ) (4,474 ) 277.0 %
charge-offs
Provision for 20,778 10,158 6,990 4,521 5,043 312.0 %
loan losses
Balance at $ 41,397 $ 37,488 $ 34,297 $ 32,431 $ 32,094 29.0 %
end of period
Allowance for
loan losses
as a 1.90 % 1.70 % 1.55 % 1.45 % 1.40 %
percentage of
total loans
(1)
Allowance for
loan losses
as a 76.89 % 75.38 % 92.22 % 108.33 % 150.37 %
percentage of
nonperforming
loans
Net
charge-offs
as a
percentage of 3.13 % 1.26 % 0.92 % 0.74 % 0.79 %
average loans
(annualized)
(1)
Provision for
loan losses
as a
percentage of 3.86 % 1.83 % 1.25 % 0.80 % 0.89 %
average total
loans
(annualized)
(1)
March 31, December 31, March 31,
LOAN
PORTFOLIO 2010 % of Total 2009 % of Total 2009 % of
(ENDING Total
balance) (1)
Loans covered
under loss $ 438,807 16.8 % $ -- 0.0 % $ -- 0.0 %
share
agreements
Loans not
covered under
loss share
agreements:
Commercial
non-owner
occupied real
estate:
Construction
and land 442,566 16.9 % 467,284 21.2 % 519,689 22.6 %
development
Commercial
non-owner 294,147 11.3 % 303,650 13.8 % 325,132 14.2 %
occupied
Total
commercial
non-owner 736,713 28.2 % 770,934 35.0 % 844,821 36.8 %
occupied real
estate
Consumer real
estate:
Consumer
owner 287,788 11.0 % 284,484 12.9 % 298,449 13.0 %
occupied
Home equity 250,651 9.6 % 248,639 11.3 % 232,202 10.1 %
loans
Total
consumer real 538,439 20.6 % 533,123 24.2 % 530,651 23.1 %
estate
Commercial
owner 483,450 18.5 % 469,101 21.3 % 443,804 19.4 %
occupied real
estate
Commercial
and 203,296 7.8 % 214,174 9.7 % 240,624 10.5 %
industrial
Other income
producing 133,949 5.1 % 137,736 6.3 % 136,703 6.0 %
property
Consumer non 66,259 2.5 % 68,770 3.1 % 86,942 3.8 %
real estate
Other 13,136 0.5 % 9,400 0.4 % 9,109 0.4 %
Total loans
not covered
under loss 2,175,242 83.2 % 2,203,238 100.0 % 2,292,654 100.0 %
share
agreements
Total loans
(net of $ 2,614,049 100.0 % $ 2,203,238 100.0 % $ 2,292,654 100.0 %
unearned
income) (1)
Loans held $ 15,925 $ 17,563 $ 43,603
for sale
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
Quarter Ended
March 31, December 31, September June 30, March 31,
30,
SELECTED RATIOS 2010 2009 2009 2009 2009
Return on average
assets 5.71% 0.22% 0.31% 0.77% 0.64%
(annualized)
Return on average
common equity 56.93% 2.12% 3.04% 2.30% 6.03%
(annualized)
Return on average
common tangible 71.89% 2.92% 4.13% 3.24% 8.49%
equity
(annualized)
Return on average
equity 56.93% 2.12% 3.04% 7.23% 6.10%
(annualized)
Return on average
tangible equity 71.89% 2.92% 4.13% 9.43% 8.05%
(annualized)
Net interest
margin (tax 3.89% 4.28% 4.04% 4.07% 3.87%
equivalent)
Efficiency ratio
(tax equivalent) 24.12% 58.10% 63.47% 60.88% 62.41%
(6)
Book value per $ 26.25 $ 22.20 $ 22.17 $ 22.03 $ 22.07
common share
Tangible book
value per common $ 20.46 $ 17.04 $ 16.99 $ 16.84 $ 16.23
share
Common shares
issued and 12,750,774 12,739,533 12,712,476 12,696,849 11,319,644
outstanding
Common 9.19% 10.47% 10.15% 9.97% 8.80%
equity-to-assets
Tangible common
equity-to-tangible 7.31% 8.24% 7.97% 7.80% 6.62%
assets
Equity-to-assets 9.19% 10.47% 10.15% 9.97% 10.96%
Tangible
equity-to-tangible 7.31% 8.24% 7.97% 7.80% 8.84%
assets
Quarter Ended
RECONCILIATION OF March 31, December 31, September June 30, March 31,
NON-GAAP TO GAAP 2010 2009 30, 2009
2009 2009
Return on Average
Common Tangible
Equity
Return on average
common tangible 71.89% 2.92% 4.13% 3.24% 8.49%
equity (non-GAAP)
Effect to adjust
for tangible -14.96% -0.80% -1.09% -0.94% -2.46%
assets
Return on average
common equity 56.93% 2.12% 3.04% 2.30% 6.03%
(GAAP)
Return on Average
Tangible Equity
Return on average
tangible equity 71.89% 2.92% 4.13% 9.43% 8.05%
(non-GAAP)
Effect to adjust
for tangible -14.96% -0.80% -1.09% -2.20% -1.95%
assets
Return on average 56.93% 2.12% 3.04% 7.23% 6.10%
equity (GAAP)
Tangible Book
Value Per Common
Share
Tangible book
value per common $ 20.46 $ 17.04 $ 16.99 $ 16.84 $ 16.23
share (non-GAAP)
Effect to adjust
for tangible 5.80 5.16 5.18 5.19 5.84
assets
Book value per
common share $ 26.25 $ 22.20 $ 22.17 $ 22.03 $ 22.07
(GAAP)
Tangible Common
Equity-to-Tangible
Assets
Tangible common
equity-to-tangible 7.31% 8.24% 7.97% 7.80% 6.62%
assets (non-GAAP)
Effect to adjust
for tangible 1.88% 2.23% 2.18% 2.17% 2.18%
assets
Common
equity-to-assets 9.19% 10.47% 10.15% 9.97% 8.80%
(GAAP)
Tangible
Equity-to-Tangible
Assets
Tangible
equity-to-tangible 7.31% 8.24% 7.97% 7.80% 8.84%
assets (non-GAAP)
Effect to adjust
for tangible 1.88% 2.23% 2.18% 2.17% 2.12%
assets
Equity-to-assets 9.19% 10.47% 10.15% 9.97% 10.96%
(GAAP)
Note: The tangible measures above are non-GAAP measures and exclude the effect of period
end or average balance of intangible assets. The tangible return on equity measures also
add back the after-tax amortization of intangibles to GAAP basis net income. Management
believes that these non-GAAP tangible measures provide additional useful information,
particularly since these measures are widely used by industry analysts for companies
with prior merger and acquisition activities. Non-GAAP measures should not be considered
as an alternative to any measure of performance or financial condition as promulgated
under GAAP, and investors should consider the company's performance and financial
condition as reported under GAAP and all other relevant information when assessing the
performance or financial condition of the company. Non-GAAP measures have limitations as
analytical tools, and investors should not consider them in isolation or as a substitute
for analysis of the company's results or financial condition as reported under GAAP. 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
March 31, 2010 March 31, 2009
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 $ 237,508 $ 252 0.43 % 85,253 $ 126 0.60 %
time deposits
Investment
securities 247,133 2,514 4.13 % 183,811 2,370 5.23 %
(taxable)
Investment
securities 34,788 265 3.09 % 30,038 235 3.17 %
(tax-exempt)
Loans held for sale 12,050 121 4.07 % 36,484 537 5.97 %
Loans (1) 2,487,843 34,052 5.55 % 2,307,322 33,180 5.83 %
Total
interest-earning 3,019,322 37,204 5.00 % 2,642,908 36,448 5.59 %
assets
Noninterest-Earning
Assets:
Cash and due from 55,582 59,714
banks
Other assets 440,342 197,795
Allowance for loan (37,025 ) (31,570 )
losses
Total
noninterest-earning 458,899 225,939
assets
Total Assets $ 3,478,221 $ 2,868,847
Interest-Bearing
Liabilities:
Transaction and
money market $ 878,700 $ 1,621 0.75 % $ 606,590 $ 977 0.65 %
accounts
Savings deposits 186,950 213 0.46 % 146,852 190 0.52 %
Certificates and 1,247,185 5,221 1.70 % 1,113,012 8,574 3.12 %
other time deposits
Federal funds
purchased and 230,256 165 0.29 % 203,391 125 0.25 %
repurchase
agreements
Other borrowings 146,735 1,353 3.74 % 164,546 1,584 3.90 %
Total
interest-bearing 2,689,826 8,573 1.29 % 2,234,391 11,450 2.08 %
liabilities
Noninterest-Bearing
Liabilities:
Demand deposits 423,536 316,978
Other liabilities 16,086 16,981
Total
noninterest-bearing 439,622 333,959
liabilities
("Non-IBL")
Shareholders' 348,773 300,497
equity
Total Non-IBL and
shareholders' 788,395 634,456
equity
Total liabilities
and shareholders' $ 3,478,221 $ 2,868,847
equity
Net interest income
and margin (NON-TAX $ 28,631 3.85 % $ 24,998 3.84 %
EQUIV.)
Net interest margin 3.89 % 3.87 %
(TAX EQUIVALENT)
Three Months Ended First
Quarter
March 31, December September June 30, March 31, 2010 -
NONINTEREST INCOME 31, 30, 2009
& EXPENSE 2010 2009 2009 2009 % Change
2009
Noninterest income:
Gain on acquisition $ 98,081 $ -- $ -- $ -- $ --
Service charges on 4,523 4,005 4,089 3,819 3,585 26.2 %
deposit accounts
Mortgage banking 1,182 1,706 1,451 2,134 1,261 -6.3 %
income
Bankcard services 1,799 1,293 1,278 1,290 1,182 52.2 %
income
Trust and
investment services 784 567 588 671 691 13.5 %
income
Securities gains (5,586 ) (2,257 ) (2,122 ) (544 ) --
(losses), net (7)
Other 1,176 449 307 391 412 185.4 %
Total noninterest $ 101,959 $ 5,763 $ 5,591 $ 7,761 $ 7,131 1329.8 %
income
Noninterest
expense:
Salaries and $ 14,091 $ 10,102 $ 10,649 $ 9,517 $ 10,519 34.0 %
employee benefits
Federal Home Loan
Bank advances 3,189 -- -- -- --
prepayment penalty
Net occupancy 2,373 1,668 1,582 1,559 1,583 49.9 %
expense
Furniture and 1,636 1,483 1,507 1,499 1,560 4.9 %
equipment expense
Information 2,371 1,448 1,381 1,286 1,442 64.4 %
services expense
FDIC assessment and
other regulatory 1,323 976 956 2,333 1,184 11.7 %
charges
OREO expense and (270 ) 1,103 2,497 1,367 674 -140.1 %
loan related
Advertising and 587 697 579 571 650 -9.7 %
marketing
Business
development and 807 690 367 449 441 83.0 %
staff related
Professional fees 557 415 376 557 434 28.3 %
Amortization of 349 132 131 132 131 166.4 %
intangibles
Merger-related 3,908 -- -- -- --
expense
Other 1,997 1,910 1,772 1,768 1,569 27.3 %
Total noninterest $ 32,918 $ 20,624 $ 21,797 $ 21,038 $ 20,187 63.1 %
expense
Notes:
(1) Loan data excludes mortgage loans held for
sale.
(2) The Company pays cash dividends on common shares out of earnings generated in the preceding
quarter; therefore, the dividend payout ratio is calculated by dividing total dividends paid
during the first quarter of 2010 by the total net income available to common shareholders reported
in the fourth quarter of 2009.
(3) Operating earnings is a non-GAAP measure and excludes the effect of the gain on acquisition,
OTTI, merger-related expense and the FHLB advances prepayment penalty. Management believes that
non-GAAP operating earnings provides additional useful information. Non-GAAP measures should not
be considered as an alternative to any measure of performance or financial condition as
promulgated under GAAP, and investors should consider the company's performance and financial
condition as reported under GAAP and all other relevant information when assessing the performance
or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and
investors should not consider them in isolation or as a substitute for analysis of the company's
results or financial condition as reported under GAAP. Operating earnings (non-GAAP) excludes the
following from net income available to common shareholders (GAAP) on an after-tax basis: (a)
pre-tax gain on acquisition of $98.1 million for the quarter ended March 31, 2010; (b) pre-tax
OTTI of $5.6 million, $2.2 million, $2.2 million and $544,000 for the quarters ended March 31,
2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (c) pre-tax
merger-related expense of $3.9 million for the quarter ended March 31, 2010; and (d) pre-tax FHLB
advances prepayment penalty of $3.2 million for the quarter ended March 31, 2010.
(4) Repossessed assets includes OREO and other nonperforming assets.
(5) Allowance for loan losses information excludes covered
loans.
(6) The efficiency ratio (tax equivalent) would be 67.21% if adjusted by subtracting the $98.1
million gain on acquisition from noninterest income and subtracting the FHLB advances prepayment
penalty of $3.2 million and merger-related expense of $3.9 million from noninterest expense.
(7) If other-than-temporary impairment charge recorded during the quarter, the amount
would be reflected in "securities gains (losses), net" line item.
Source: SCBT Financial Corporation
Contact: SCBT Financial Corporation
Media Contact: Donna Pullen, 803-765-4558
Analyst Contact: John C. Pollok, 803-765-4628