MT. PLEASANT, S.C., Feb. 26, 2010 (GLOBE NEWSWIRE) -- Tidelands Bancshares, Inc. (Nasdaq:TDBK), holding company for Tidelands Bank, announces its results for the year ended December 31, 2009. "In these turbulent times, Tidelands Bank maintained its well capitalized status despite a year plagued with challenges in our market and industry," said Robert E. "Chip" Coffee, President and CEO of Tidelands Bancshares. "Despite our financial performance being overshadowed by an increase in provisions for loan losses for the year, we are pleased with the performance of our core operations as we continued to increase our retail funding through strategic deposit gathering initiatives and improved our quarterly net interest margin."
The Consolidated Statement of Operations for the year ended December 31, 2009 compared to the year ended December 31, 2008 reflect the following items:
- interest income increased 2.5% to $35.6 million from $34.8 million;
- interest expense decreased 13.7% to $17.6 million from $20.3 million;
- net interest income increased 25.2% to $18.1 million from $14.4 million;
- credit related provisions increased to $14.7 million from $4.7 million;
- salary and employee benefit expense decreased 6.2%;
- FDIC insurance premiums increased $957,000 to $1.4 million from $484,000, which includes the special assessment paid in the third quarter;
- loan related expenses increased $1.1 million, which includes legal, repossession and collection expense;
- established a valuation allowance against our deferred tax assets of $5.6 million which resulted in $3.4 million tax expense;
- recognized gains from the investment portfolio increased to $4.9 million from $509,000;
- net loss available to common shareholders amounted to $11.2 million; and
- net interest margin increased over the course of the year to 2.77% in the fourth quarter of 2009 from 2.36% in the fourth quarter of 2008 and 2.63% in the third quarter of 2009.
The Consolidated Balance Sheet results at December 31, 2009 compared to December 31, 2008 reflect the following items:
- retail deposits increased 45.0%, or $124.5 million, to $401.6 million from $277.1 million;
- wholesale deposits decreased 33.2%, or $94.2 million, to $189.9 million from $284.1 million;
- total loans increased 5.1% to $485.6 million from $462.0 million;
- allowance for loan and lease losses as a percentage of total loans increased to 2.07% from 1.65%;
- nonaccrual loans and other real estate owned increased to $21.3 million and $6.9 million, respectively; and
- non-performing loans as a percentage of total loans and net charge off ratio increased to 4.39% and 2.61%, respectively.
We remain focused on increasing our retail deposits and reducing our dependency on wholesale or brokered funds. We have also taken advantage of low rates on short term borrowings to enhance our net interest margin and maintain sufficient liquidity sources to shift the balance sheet upon a change in the interest rate environment.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as a downturn in the economy, greater than expected noninterest expenses, volatile credit and financial markets, potential deterioration in real estate values, regulatory changes and excessive loan losses, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.
Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
SUMMARY CONSOLIDATED FINANCIAL DATA
Our summary consolidated financial data as of and for the year ended December 31, 2009 are unaudited but, in the opinion of our management, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our financial position and results of operations for such periods in accordance with generally accepted accounting principles.
| Tidelands Bancshares, Inc. and Subsidiary | |||
| Consolidated Statements of Operations | |||
| For the years ended December 31, 2009, 2008 and 2007 | |||
| Interest income: | 2009 | 2008 | 2007 |
| Loans, including fees | $25,512,610 | $27,378,906 | $27,805,332 |
| Securities available-for-sale, taxable | 9,922,547 | 6,805,459 | 2,462,876 |
| Securities available-for-sale, non-taxable | 148,437 | 286,844 | 439,719 |
| Federal funds sold | 25,803 | 280,973 | 701,701 |
| Other interest income | 2,741 | 5,116 | 16,211 |
| Total interest income | 35,612,138 | 34,757,298 | 31,425,839 |
| Interest expense: | |||
| Time deposits $100,000 and over | 3,245,973 | 2,634,756 | 562,024 |
| Other deposits | 10,100,461 | 14,153,141 | 16,256,750 |
| Other borrowings | 4,212,222 | 3,554,669 | 2,415,800 |
| Total interest expense | 17,558,656 | 20,342,566 | 19,234,574 |
| Net interest income | 18,053,482 | 14,414,732 | 12,191,265 |
| Provision for loan losses | 14,745,000 | 4,665,000 | 1,025,000 |
|
Net interest income after provision for loan losses |
3,308,482 | 9,749,732 | 11,166,265 |
| Noninterest income (loss): | |||
| Service charges on deposit accounts | 41,605 | 36,340 | 35,476 |
| Residential mortgage origination income | 404,855 | 383,341 | 764,130 |
| Gain on sale of securities available-for-sale | 4,857,395 | 509,373 | 37,637 |
| Gain (loss) on sale of real estate | (91,038) | 12,865 | 9,488 |
| Other service fees and commissions | 522,289 | 362,029 | 192,697 |
| Bank owned life insurance | 520,995 | 484,352 | 290,032 |
| Impairment on securities | (122,890) | (4,596,200) | — |
| Other | 48,180 | 32,352 | 25,407 |
| Total noninterest income (loss) | 6,181,391 | (2,775,548) | 1,354,867 |
| Noninterest expense: | |||
| Salaries and employee benefits | 7,805,821 | 8,322,117 | 6,918,015 |
| Net occupancy | 1,574,366 | 1,423,198 | 1,029,784 |
| Furniture and equipment | 855,324 | 734,497 | 484,146 |
| Other operating | 6,131,682 | 4,147,955 | 3,400,883 |
| Total noninterest expense | 16,367,193 | 14,627,767 | 11,832,828 |
| Earnings (loss) before income taxes | (6,877,320) | (7,653,583) | 688,304 |
| Income tax expense (benefit) | 3,379,655 | (2,699,000) | 275,000 |
| Net income (loss) | $(10,256,975) | $(4,954,583) | $413,304 |
| Accretion of preferred stock to redemption value | 193,908 | — | — |
| Preferred dividends accrued | 732,433 | — | — |
| Net income (loss) available to common shareholders | $(11,183,316) | $(4,954,583) | $413,304 |
| Earnings (loss) per common share | |||
| Basic earnings (loss) per share | $(2.75) | $(1.22) | $0.10 |
| Diluted earnings (loss) per share | $(2.75) | $(1.22) | $0.10 |
| Weighted average common shares outstanding | |||
| Basic | 4,071,313 | 4,050,301 | 4,214,910 |
| Diluted | 4,071,313 | 4,050,301 | 4,270,005 |
| Tidelands Bancshares, Inc. and Subsidiary | ||
| Consolidated Balance Sheets | ||
| Assets: |
December 31, 2009 |
December 31, 2008 |
| Cash and cash equivalents: | ||
| Cash and due from banks | $2,493,227 | $2,471,797 |
| Federal funds sold | 12,500,000 | 40,375,000 |
| Total cash and cash equivalents | 14,993,227 | 42,846,797 |
| Securities available-for-sale | 229,786,787 | 171,769,851 |
| Nonmarketable equity securities | 5,892,650 | 3,807,140 |
| Total securities | 235,679,437 | 175,576,991 |
| Mortgage loans held for sale | 617,000 | 241,500 |
| Loans receivable | 485,555,288 | 461,967,217 |
| Less allowance for loan losses | 10,048,015 | 7,635,173 |
| Loans, net | 475,507,273 | 454,332,044 |
| Premises, furniture and equipment, net | 18,802,701 | 19,411,592 |
| Accrued interest receivable | 3,283,931 | 3,337,660 |
| Bank owned life insurance | 13,856,165 | 13,335,170 |
| Other real estate owned | 6,865,461 | 1,800,604 |
| Other assets | 6,324,714 | 4,300,465 |
| Total assets | $775,929,909 | $715,182,823 |
| Liabilities: | ||
| Deposits: | ||
| Noninterest-bearing transaction accounts | $16,971,128 | $12,133,098 |
| Interest-bearing transaction accounts | 29,688,124 | 46,987,209 |
| Savings and money market | 237,589,561 | 182,856,286 |
| Time deposits $100,000 and over | 105,975,461 | 92,825,486 |
| Other time deposits | 201,324,905 | 226,423,397 |
| Total deposits | 591,549,179 | 561,225,476 |
| Securities sold under agreements to repurchase | 60,000,000 | 20,000,000 |
| Junior subordinated debentures | 14,434,000 | 14,434,000 |
| Advances from Federal Home Loan Bank | 65,000,000 | 60,800,000 |
| ESOP borrowings | 2,300,000 | 2,600,000 |
| Other borrowings | — | 615,837 |
| Accrued interest payable | 1,359,861 | 2,841,473 |
| Other liabilities | 2,362,125 | 706,605 |
| Total liabilities | 737,005,165 | 663,223,391 |
| Commitments and contingencies | ||
| Shareholders' equity: | ||
|
Preferred stock, $.01 par value and liquidation value per share of $1,000, 10,000,000 shares authorized, 14,448 issued and outstanding at December 31, 2009 and 2008 |
13,529,660 | 13,335,752 |
|
Common stock, $.01 par value, 10,000,000 shares authorized; 4,277,176 shares issued and outstanding at December 31, 2009 and 2008 |
42,772 | 42,772 |
|
Common stock-warrants, 571,821 outstanding at December 31, 2009 and 2008 |
1,112,248 | 1,112,248 |
| Unearned ESOP shares | (2,204,073) | (2,522,860) |
| Capital surplus | 43,584,958 | 43,364,255 |
| Retained deficit | (16,010,476) | (4,905,419) |
| Accumulated other comprehensive income (loss) | (1,130,345) | 1,532,684 |
| Total shareholders' equity | 38,924,744 | 51,959,432 |
| Total liabilities and shareholders' equity | $775,929,909 | $715,182,823 |
| Tidelands Bancshares, Inc. and Subsidiary | |||
|
Per Share Data: |
Year Ended December 31, |
||
| 2009 | 2008 | 2007 | |
| Net income (loss), basic | $(2.75) | $(1.22) | $0.10 |
| Net income (loss), diluted | $(2.75) | $(1.22) | $0.10 |
| Book value | $5.68 | $8.77 | $9.58 |
| Weighted average number of shares outstanding: | |||
| Basic | 4,071,313 | 4,050,301 | 4,214,910 |
| Diluted | 4,071,313 | 4,050,301 | 4,270,005 |
| Performance Ratios: | |||
| Return on average assets | (1.30)% | (0.81)% | 0.10% |
| Return on average equity | (20.85)% | (12.40)% | 1.00% |
| Net interest margin | 2.45% | 2.50% | 2.99% |
| At December 31, | |||
| Asset Quality Data: | 2009 | 2008 | |
| Loans 90 days or more past due and still accruing interest | $ — | $ — | |
| Loans restructured or otherwise impaired(1) | — | — | |
| Nonaccrual loans | 21,294,897 | 11,481,559 | |
| Loan charge-offs, net recoveries | 12,332,158 | 1,188,151 | |
| Other real estate owned | 6,865,461 | 1,800,604 | |
| Nonperforming loans to total loans (2) | 4.39% | 2.88% | |
| Nonperforming assets to total assets(2) | 3.63% | 1.85% | |
| Net charge-offs to average total loans(3) | 2.61% | 0.27% | |
| Allowance for loan losses to nonperforming loans | 47.18% | 66.50% | |
| Allowance for loan losses to total loans (3) | 2.07% | 1.65% | |
| At December 31, | |||
| Capital Ratios: | 2009 | 2008 | |
| Period end tangible equity to tangible assets | 5.02% | 7.26% | |
| Leverage ratio | 6.83% | 9.03% | |
| Tier 1 risk-based capital ratio | 10.21% | 12.93% | |
| Total risk-based capital ratio | 11.67% | 14.18% | |
| Growth Ratios and Other Data: | |||
| Percentage change in assets | 8.49% | 39.79% | |
| Percentage change in loans (3) | 5.11% | 18.04% | |
| Percentage change in deposits | 5.40% | 44.58% | |
| Loans to deposit ratio (3) | 82.08% | 82.31% | |
| ______________ | |||
| 1 – Loans restructured or otherwise impaired do not include nonaccrual loans. | |||
| 2 – Nonperforming assets include nonaccrual loans, loans 90 days or more past due and still accruing interest, loans restructured or otherwise impaired, and other real estate owned | |||
| 3 – Includes nonperforming loans. | |||