MT. PLEASANT, S.C., Oct. 21, 2009 (GLOBE NEWSWIRE) -- Tidelands Bancshares, Inc. (Nasdaq:TDBK), holding company for Tidelands Bank, reported consolidated net income of $497,000 and net income available to common shareholders of $264,000, or $0.07 per diluted share, for the quarter ended September 30, 2009 compared to a net loss of $2.4 million for the quarter ended September 30, 2008.
The consolidated results for the three months ended September 30, 2009 compared to the same period in 2008 reflect the following items:
* An increase of our net interest income of 24.8% * A 19.3% decrease in interest expense * Preferred stock dividends accrued of $185,000 * Credit provisions of $705,000
The consolidated results for the nine months ended September 30, 2009 compared to the same period in 2008 reflect the following items:
* An increase of our net interest income of 22.7% * A 3.3% increase in interest income * A 10.1% decrease in interest expense * Preferred stock dividends accrued of $548,000 * Credit provisions of $8.3 million
Other consolidated results include the following:
* An increase in the quarter-to-date net interest margin from 1.94% at June 30, 2009 to 2.63% at September 30, 2009 * An increase in the year-to-date net interest margin from 2.20% at June 30, 2009 to 2.35% at September 30, 2009
"During this time of economic uncertainty, Tidelands has remained steadfast in our commitment to our community and our customers by providing a safe and sound financial institution. We could not be more pleased to announce an improvement in our earnings while also maintaining the credit reserves and capital resources sufficient to thrive within our geographic footprint," said Robert E. Coffee, Jr., President and Chief Executive Officer.
We have continued our efforts to improve loans 30-89 days past due as evidenced by the $7.4 million decline from $12.4 million, or 2.69% of total loans, at December 31, 2008, to $5.0 million, or 1.05% of total loans, at September 30, 2009. Nonaccrual loans at September 30, 2009 were $12.3 million with other real estate owned totaling $7.5 million at September 30, 2009. At September 30, 2009, our reserves for credit losses were $8.2 million, or 1.72% of total loans. At December 31, 2008, our reserves totaled $7.6 million, or 1.65% of total loans. It is our strategy to remain prudent during these uncertain economic times and maintain sufficient reserves for credit losses until economic conditions begin to improve and stabilize.
We recorded quarterly earnings of $497,000 primarily driven by the improving net interest margins and a reduction in credit related provisions. We increased interest income to $26.6 million for the nine months ending September 30, 2009 compared to $25.7 million through September 30, 2008, while reducing interest expense to $13.6 million for the nine months ending September 30, 2009 from $15.2 million through September 30, 2008. The successful management of these two components of our earnings resulted in an overall increase in net interest income before provision expense of $2.4 million. In addition, noninterest income for the nine months ending September 30, 2009 increased to $2.4 million compared to a loss of $3.0 million for the year earlier period, largely due to gains on sales of securities from our investment portfolio and a pre-tax impairment charge of $4.6 million related to the government placing the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship during the third quarter ending September 30, 2008. Our year-to-date net interest margin increased from 2.20% at June 30, 2009 to 2.35% at September 30, 2009.
During the nine-month period ending September 30, 2009, loans grew by $15.5 million to $477.5 million. In addition, Tidelands Bank generated significant increases in retail deposits through its seven full-service branch locations. As evidence of our growing local market business, at September 30, 2009, total retail savings accounts have increased to $98.4 million at September 30, 2009 compared to $350,000 at December 31, 2008. Simultaneously, we have reduced our overall dependence on wholesale funding, which should allow us to lower our dependence on non core funding. Specifically, advances from the Federal Home Loan Bank decreased by $15.0 million since June 30, 2009. In addition, we have reduced brokered money market and mutual fund deposits from $147.9 million at December 31, 2008 to $76.4 million at September 30, 2009. Tidelands Bank remains "well-capitalized," which is the highest bank capital classification defined by bank regulators. The company's total shareholders' equity was $48.5 million with a book value of $7.93 per common share at September 30, 2009.
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 quarter ended September 30, 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
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- --------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Interest
income:
Loans,
including
fees $ 19,056,283 $ 20,688,346 $ 6,569,765 $ 6,904,730
Securities
available
for sale,
taxable 7,366,988 4,551,700 2,465,727 2,070,109
Securities
available
for sale,
non-taxable 126,248 220,165 30,591 70,679
Federal funds
sold 15,006 246,339 10,877 58,463
Other interest
income 2,557 3,933 501 2,019
------------ ------------ ------------ ------------
Total
interest
income 26,567,082 25,710,483 9,077,461 9,106,000
------------ ------------ ------------ ------------
Interest
expense:
Time deposits
$100,000
and over 2,537,520 1,726,493 751,583 774,579
Other
deposits 7,841,867 10,848,328 2,347,486 3,321,386
Other
borrowings 3,248,653 2,592,080 1,082,685 1,088,197
------------ ------------ ------------ ------------
Total
interest
expense 13,628,040 15,166,901 4,181,754 5,184,162
------------ ------------ ------------ ------------
Net interest
income 12,939,042 10,543,582 4,895,707 3,921,838
Provision for
loan losses 8,310,000 1,473,000 705,000 696,000
------------ ------------ ------------ ------------
Net interest
income after
provision for
loan losses 4,629,042 9,070,582 4,190,707 3,225,838
------------ ------------ ------------ ------------
Noninterest
income (loss):
Service
charges on
deposit
accounts 30,790 26,917 10,506 8,605
Residential
mortgage
origination
income 333,937 361,896 72,528 81,768
Gain on sale
of securities
available
for sale 1,280,656 505,585 689,972 473,431
Other service
fees and
commissions 403,360 276,454 133,050 126,519
Bank owned
life
insurance 384,623 355,299 132,005 129,069
Impairment on
nonmarketable
equity
securities (76,640) (4,596,200) -- (4,596,200)
Other 12,026 34,336 (10,161) (3,801)
------------ ------------ ------------ ------------
Total non-
interest
income
(loss) 2,368,752 (3,035,713) 1,027,900 (3,780,609)
------------ ------------ ------------ ------------
Noninterest
expense:
Salaries and
employee
benefits 6,482,055 6,220,329 2,465,383 1,815,989
Net occupancy 1,194,949 1,033,430 413,955 373,646
Furniture and
equipment 644,891 526,868 215,968 192,769
Other
operating 4,211,479 2,960,642 1,426,060 953,946
------------ ------------ ------------ ------------
Total non-
interest
expense 12,533,374 10,741,269 4,521,366 3,336,350
------------ ------------ ------------ ------------
Earnings (loss)
before income
taxes (5,535,580) (4,706,400) 697,241 (3,891,121)
Income tax
expense
(benefit) (1,927,000) (1,803,708) 200,000 (1,453,228)
------------ ------------ ------------ ------------
Net income
(loss) (3,608,580) (2,902,692) 497,241 (2,437,893)
Accretion of
preferred
stock to
redemption
value 145,431 -- 48,477 --
Preferred
dividends
accrued 547,820 -- 184,613 --
------------ ------------ ------------ ------------
Net income
(loss)
available
to common
shareholders $ (4,301,831) $ (2,902,692) $ 264,151 $ (2,437,893)
============ ============ ============ ============
Earnings (loss)
per common
share
Basic earnings
(loss) per
share $ (1.06) $ (0.72) $ 0.07 $ (0.60)
============ ============ ============ ============
Diluted
earnings
(loss) per
share $ (1.06) $ (0.72) $ 0.07 $ (0.60)
============ ============ ============ ============
Weighted
average
common
shares
outstanding
Basic 4,044,186 4,052,354 4,044,186 4,044,186
============ ============ ============ ============
Diluted 4,044,186 4,052,354 4,044,186 4,044,186
============ ============ ============ ============
Tidelands Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
September 30, December 31,
2009 2008
------------ ------------
(Unaudited) (Audited)
Assets:
Cash and cash equivalents:
Cash and due from banks $ 6,863,281 $ 2,471,797
Federal funds sold 18,709,000 40,375,000
------------ ------------
Total cash and cash equivalents 25,572,281 42,846,797
------------ ------------
Securities available for sale 224,126,047 171,769,851
Nonmarketable equity securities 5,938,900 3,807,140
------------ ------------
Total securities 230,064,947 175,576,991
------------ ------------
Mortgage loans held for sale 465,000 241,500
Loans receivable 477,463,525 461,967,217
Less allowance for loan losses 8,205,675 7,635,173
------------ ------------
Loans, net 469,257,850 454,332,044
------------ ------------
Premises, furniture and equipment, net 18,787,574 19,411,592
Accrued interest receivable 3,285,275 3,337,660
Bank owned life insurance 13,719,793 13,335,170
Other real estate owned 7,506,855 1,800,604
Other assets 6,219,494 4,300,465
------------ ------------
Total assets $774,879,069 $715,182,823
============ ============
Liabilities:
Deposits:
Noninterest-bearing transaction accounts $ 12,545,638 $ 12,133,098
Interest-bearing transaction accounts 36,704,639 46,987,209
Savings and money market 198,248,903 182,856,286
Time deposits $100,000 and over 94,711,317 92,825,486
Other time deposits 205,202,220 226,423,397
------------ ------------
Total deposits 547,412,717 561,225,476
------------ ------------
Securities sold under agreements to
repurchase 72,500,000 20,000,000
Junior subordinated debentures 14,434,000 14,434,000
Advances from Federal Home Loan Bank 85,900,000 60,800,000
ESOP borrowings 2,375,000 2,600,000
Other borrowings -- 615,837
Accrued interest payable 1,592,383 2,841,473
Other liabilities 2,155,559 706,605
------------ ------------
Total liabilities 726,369,659 663,223,391
------------ ------------
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, $1,000 par value,
10,000,000 shares authorized, 14,448
issued and outstanding at September 30,
2009 and December 31, 2008 13,481,183 13,335,752
Common stock, $.01 par value, 10,000,000
shares authorized; 4,277,176 shares
issued and outstanding at September 30,
2009 and December 31, 2008 42,772 42,772
Common stock-warrants, 571,821 shares
outstanding at September 30, 2009 and
December 31, 2008 1,112,248 1,112,248
Unearned ESOP shares (2,284,760) (2,522,860)
Capital surplus 43,553,340 43,364,255
Retained deficit (9,133,004) (4,905,419)
Accumulated other comprehensive income 1,737,631 1,532,684
------------ ------------
Total shareholders' equity 48,509,410 51,959,432
------------ ------------
Total liabilities and shareholders'
equity $774,879,069 $715,182,823
============ ============
Tidelands Bancshares, Inc. and Subsidiary
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
---- ---- ---- ----
Per Share Data:
Net income (loss),
basic $(1.06) $(0.72) $0.07 $(0.60)
Net income (loss),
diluted $(1.06) $(0.72) $0.07 $(0.60)
Book value $ 7.93 $ 8.86 $ 7.93 $ 8.86
Weighted average number
of shares outstanding
Basic 4,044,186 4,052,354 4,044,186 4,044,186
Diluted 4,044,186 4,052,354 4,044,186 4,044,186
Performance Ratios:
Return on average
assets (1) (0.61%) (0.66%) 0.25% (1.49%)
Return on average
equity (1) (9.80%) (9.71%) 4.11% (25.21%)
Net interest margin (1) 2.35% 2.55% 2.63% 2.55%
At September 30,
--------------------------
2009 2008
------------ ------------
Credit Summary:
Nonaccrual loans $ 12,259,951 $ 4,580,548
Loans 90 days or more past due and
still accruing interest -- --
Loans restructured or otherwise
impaired(4) -- --
------------ ------------
Total impaired loans 12,259,951 4,580,548
Other real estate owned 7,506,855 965,049
------------ ------------
Total nonperforming assets $ 19,766,806 $ 5,545,597
============ ============
Loan charge-offs year to date, net
recoveries $ 7,739,498 $ 607,786
Loans past due, 30-89 days $ 5,006,242 $ 1,660,290
Nonperforming loans to total loans 2.57% 1.00%
Nonperforming assets to total assets(3) 2.55% 0.83%
Net charge-offs year to date to
average total loans(2) 1.65% 0.14%
Allowance for loan losses to
nonperforming loans 66.93% 109.67%
Allowance for loan losses to
total loans (2) 1.72% 1.10%
At September 30,
--------------------------
2009 2008
------------ ------------
Capital Ratios:
Period end tangible equity to
tangible assets 6.26% 5.67%
Leverage ratio 7.74% 6.47%
Tier 1 risk-based capital ratio 11.95% 8.66%
Total risk-based capital ratio 13.21% 10.53%
Growth Ratios and Other Data:
Percentage change in assets(1) 11.16% 40.64%
Percentage change in loans(1) (2) 4.49% 22.32%
Percentage change in deposits(1) (3.29%) 44.79%
Loans to deposit ratio (2) 87.22% 88.12%
--------------
1 - Annualized for the nine and three month periods, respectively.
2 - Includes nonperforming loans.
3 - 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
4 - Loans restructured or otherwise impaired do not include
nonaccrual loans.