GAINESVILLE, Ga., July 19, 2005 (PRIMEZONE) -- GB&T Bancshares, Inc. (Nasdaq:GBTB), a fast-growing multi-bank holding company operating six community banks in markets surrounding Atlanta, Georgia, reported second quarter 2005 net income of $1.4 million compared with $2.2 million reported for the second quarter of 2004. As previously announced, an additional $2.9 million provision was made to the Company's loan loss reserves for the second quarter of 2005 due to the further impairment of an inherited single loan relationship originated through its wholly-owned subsidiary, Home Town Bank of Villa Rica ("HTB") prior to acquisition. Management views this additional charge as an isolated event and believes that the Company's business fundamentals remain strong. For the second quarter of 2005, loans increased 54.6 percent and core deposits increased 39.3 percent, resulting in 41.3 percent revenue growth compared with the prior-year quarter.
Diluted earnings per share for the second quarter of 2005 were $0.11 compared with $0.26 for the prior-year period. In addition to the $2.9 million provision mentioned above, the earnings per share comparison reflects a 48.0 percent increase in average diluted shares outstanding to 12,878,988 arising from shares issued in connection with three bank acquisitions over the past 12 months and a public offering of 1,651,680 shares of the Company's common stock completed in the fourth quarter of 2004.
For the first six months of 2005, the Company reported net income of $4.4 million compared with $4.5 million for the prior-year period. Current year-to-date results were negatively impacted by the loan loss provision mentioned above, which offset revenue growth of 36.5 percent. Diluted earnings per share for the first six months of 2005 were $0.35 versus $0.52 for the prior-year period. The per share comparison reflects the additional provision in addition to a 45.0 percent increase in average diluted shares outstanding to 12,570,769 arising from shares issued in connection with the three bank acquisitions and the public offering.
At a meeting held on July 18, 2005, the board of directors of GB&T Bancshares declared a third quarter cash dividend of $0.085 per share on the Company's common stock. The declared dividend is payable on August 10, 2005 to shareholders of record as of the close of business on July 29, 2005.
The annualized returns on average assets ("ROA") and average equity ("ROE") for the second quarter of 2005 were 0.37 percent and 2.76 percent, respectively, compared with 0.91 percent and 9.05 percent for the prior-year second quarter. Adjusted to exclude intangibles, the annualized return on average tangible assets ("ROTA") and average tangible equity ("ROTE") were 0.39 percent and 4.37 percent, respectively, for the second quarter of 2005 compared with 0.94 percent and 13.53 percent for the prior-year second quarter.
Richard A. Hunt, President and CEO, commented, "We believe we took the appropriate action this quarter to bolster our loan loss reserve to adjust for the deterioration in this inherited loan. Apart from the increased provision, we are extremely pleased with our operating results. Our three latest acquisitions combined with strong organic growth have generated outstanding revenue growth. Moreover, we achieved significant gains in operating efficiency, as evidenced by a 619 basis point improvement in our current quarter efficiency ratio compared with the prior-year period. We anticipate these positive trends continuing as we selectively expand our franchise into attractive, growing Georgia communities."
Total revenue, defined as net interest income plus non-interest income, was $17.0 million for the second quarter of 2005, an increase of 41.3 percent over the $12.1 million reported in the second quarter of 2004. Since the second quarter of 2004, net interest income increased 55.0 percent, to $14.1 million, reflecting a 49.3 percent growth in average earning assets and a 14 basis point increase in the net interest margin to 4.23 percent. Mr. Hunt noted, "Our margin is in line with our expectations and we are pleased with its improvement since the second quarter of 2004. We experienced a six basis point margin decline from the first quarter of 2005 primarily as a result of securing longer term funding. We expect this will be positive to our margin over time."
Non-interest income for the second quarter of 2005 was $2.9 million, virtually unchanged from the prior-year quarter. Excluding gains from the sale of investment securities in the second quarter of 2004, non-interest income increased 11.9 percent. Service charges on deposit accounts, up $165,000 or 11.1 percent, represented the largest dollar increase in fee income, followed by mortgage origination fees, up $147,000 or 28.8 percent.
Non-interest expense was well-controlled, and was outpaced by both asset growth and revenue growth. Non-interest expense was $11.3 million in the second quarter of 2005, an increase of 33.0 percent over the $8.5 million reported for the second quarter of 2004. Salaries and employee benefits expense, the largest component of non-interest expense, increased 32.9 percent; the number of full-time equivalent employees increased 20.6 percent, primarily as a result of the three recent acquisitions. GB&T Bancshares' efficiency ratio improved to 66.21 percent for the second quarter of 2005 from 72.40 percent for the prior-year second quarter.
Mr. Hunt commented that asset quality remains sound, despite the deterioration of the single inherited relationship mentioned above. Nonperforming assets decreased during the quarter due to foreclosure and charge-offs as the Company managed existing problem loans to resolution. No material nonperforming assets were added during the quarter. Nonperforming assets at June 30, 2005 were $9.9 million or 0.65 percent of assets compared with $12.0 million or 0.82 percent at March 31, 2005 and $5.0 million or 0.50 percent of assets at June 30, 2004. Annualized net charge-offs for the second quarter of 2005 were 0.61 percent of average loans compared with 0.14 percent for the first quarter of 2005 and 0.19 percent for the second quarter of 2004. Loan loss reserves at June 30, 2005 were 1.26 percent of total loans. Mr. Hunt continued, "As stated previously, we believe the deterioration in this HTB loan relationship is an isolated event, not representative of HTB's loan portfolio or our Company's loan portfolio as a whole."
Total assets were approximately $1.5 billion at June 30, 2005, an increase of $532.4 million, or 53.2 percent, from June 30, 2004. The FNBG Bancshares, Inc., Lumpkin County Bank and Southern Heritage Bancorp, Inc. acquisitions accounted for $349.3 million or 65.6 percent of the increase. Excluding these three acquisitions, organic growth during this same period was $183.1 million or 18.3 percent. Loans rose $407.3 million or 54.6 percent to $1.2 billion at June 30, 2005 compared with the prior-year second quarter. Exclusive of the three acquisitions, which accounted for $249.8 million of this increase, loans grew $157.5 million, or 21.1 percent. Total deposits increased to $1.2 billion, up $380.7 million or 48.9 percent from year-ago levels. Excluding the acquisitions, total deposits increased $106.9 million, or 13.7 percent.
Shareholders' equity at June 30, 2005 was $201.3 million, a twelve-month increase of $101.8 million, or 102.4 percent, reflecting the impact of the three bank acquisitions and public offering mentioned above . Shareholders' equity was 13.1 percent of period-end assets. The Company had 12,732,172 shares of common stock outstanding at June 30, 2005.
About GB&T Bancshares, Inc.
Based in Gainesville, Georgia, GB&T Bancshares, Inc. is a multi-bank holding company operating six community banks: Gainesville Bank & Trust, United Bank & Trust, Community Trust Bank, HomeTown Bank of Villa Rica, First National Bank of the South and First National Bank of Gwinnett. In addition, the Company owns a consumer finance company, Community Loan Company, with eight offices located in Northern Georgia. As of June 30, 2005, GB&T Bancshares had assets of $1.5 billion, with 26 branches located in 11 Georgia counties. GB&T Bancshares' common stock is listed on the Nasdaq National Market under the symbol "GBTB." Visit the Company's website www.gbtbancshares.com for additional information about GB&T.
Forward-Looking Statements
Some of the statements in this press release, including, without limitation, statements regarding projected growth , our efficiency, loan loss reserves, loan portfolio, net interest margin, revenue growth and other statements regarding our future results of operations are "forward-looking statements" within the meaning of the federal securities laws. In addition, when we use words like "anticipate", "believe", "intend", "expect", "estimate", "could", "should", "will", and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing. These forward-looking statements involve risks and uncertainties and are based on our current beliefs and assumptions. Factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among others, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) changes in the interest rate environment may reduce margins or the volumes or values of loans held or made by us; (3) general economic conditions may be less favorable than expected (both generally and in our markets), resulting in, among other things, a deterioration in credit quality and/or a reduction in demand for credit; (4) economic, governmental or other factors may prevent the projected population and commercial growth in the counties in which we operate; (5) legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which we are engaged; (6) costs or difficulties related to the integration of our businesses may be greater than expected; (7) deposit attrition, customer loss or revenue loss following the acquisitions may be greater than expected; (8) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than us; and (9) adverse changes may occur in the equity markets. Many of these factors are beyond our ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. We disclaim any obligation to update or revise any forward-looking statements contained in this release.
G B & T Bancshares Inc.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands except per share amounts)
------------------------------------------------------
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
2005 2005 2004 2004 2004
---------- --------- --------- --------- ---------
EARNINGS
Net interest
income $ 14,120 12,746 11,716 10,610 9,110
Provision for
loan loss $ 3,822 482 465 332 325
Other income $ 2,906 2,757 3,238 2,699 2,942
Other expense $ 11,273 10,595 9,901 9,456 8,475
Net income $ 1,388 3,011 2,975 2,400 2,233
Non-recurring
income/expense
(after-tax) $ 0 0 230 127 0
Operating
income $ 1,388 3,011 2,745 2,527 2,233
PER SHARE DATA
Basic earnings
per share $ 0.11 0.25 0.28 0.25 0.26
Diluted
earnings
per share $ 0.11 0.25 0.27 0.25 0.26
Operating
diluted
earnings
per share $ 0.11 0.25 0.25 0.26 0.26
Book value per
share $ 15.81 15.77 14.84 13.57 11.57
Tangible book
value per
share $ 9.97 9.90 10.19 8.11 7.75
Cash dividend
per share $ 0.085 0.076 0.076 0.076 0.076
PERFORMANCE
RATIOS
Return on
average
assets 0.37% 0.91% 0.95% 0.84% 0.91%
Return on
average
tangible
assets 0.39% 0.95% 0.99% 0.88% 0.94%
Return on
average
equity 2.76% 6.65% 7.74% 7.80% 9.05%
Return on
average
tangible
equity 4.37% 9.98% 12.06% 12.72% 13.53%
Net interest
margin 4.23% 4.29% 4.19% 4.15% 4.09%
Other expense/
Average assets 3.02% 3.19% 3.16% 3.33% 3.44%
Efficiency
Ratio 66.21% 68.35% 67.90% 69.51% 72.40%
Other income/
Total
operating
revenue 17.07% 17.78% 19.65% 20.28% 22.18%
MARKET DATA
Market value
per share --
Period end $ 23.76 21.66 24.12 22.06 23.90
Market as a
% of book 1.50 1.37 1.63 1.63 2.07
Cash dividend
yield 1.43% 1.40% 1.26% 1.38% 1.27%
Common stock
dividend
payout ratio 77.27% 30.40% 28.15% 30.40% 29.23%
Period-end
common shares
outstanding
(000) 12,732 12,641 11,772 10,052 8,593
Common stock
market
capitalization
($ Millions) $ 302.52 273.81 283.95 221.74 205.37
CAPITAL &
LIQUIDITY
Equity to
assets 13.13% 13.56% 13.71% 11.23% 9.94%
Period-end
tangible equity
to tangible
assets 8.70% 8.97% 9.84% 7.03% 6.88%
Total risk-
based capital not
ratio available 14.70% 16.27% 12.95% 11.66%
Average loans
to deposits 100.57% 101.38% 97.99% 96.09% 95.54%
ASSET QUALITY
Net charge-
offs $ 1,707 346 666 132 342
(Ann.) Net loan
charge-offs/
Average loans 0.607% 0.140% 0.285% 0.062% 0.186%
Non-performing
loans $ 6,811 10,213 10,059 4,905 2,511
OREOs $ 2,965 1,451 620 1,240 1,368
90-day past
dues $ 126 364 328 1,110 1,096
NPAs + 90-day
past due/
Total assets 0.65% 0.82% 0.86% 0.60% 0.50%
Allowance for
loan losses/
Total loans 1.26% 1.13% 1.16% 1.25% 1.21%
Allowance for
loan losses/
NPA's + 90
days past due 147.25% 103.64% 100.49% 155.23% 180.64%
END OF PERIOD
BALANCES
Total loans,
net of un-
earned fees $1,152,737 1,099,344 955,880 904,407 745,437
Total assets $1,532,935 1,470,574 1,274,136 1,215,373 1,000,519
Deposits $1,159,109 1,096,190 928,603 940,867 778,364
Stockholders'
equity $ 201,269 199,367 174,715 136,440 99,431
Full-time
equivalent
employees 463 457 453 440 384
AVERAGE BALANCES
Loans $1,128,442 1,004,588 928,935 840,569 738,092
Total earning
assets $1,338,276 1,204,489 1,111,717 1,016,482 896,534
Total assets $1,498,217 1,347,362 1,246,184 1,130,820 990,519
Deposits $1,122,061 990,944 947,975 874,783 772,587
Stockholders'
equity $ 201,727 183,586 152,932 122,336 99,254
The following table provides a detailed analysis of Non-GAAP measures.
Reconciliation Table
(Dollars in thousands)
---------- --------- --------- --------- ---------
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
2005 2005 2004 2004 2004
---------- --------- --------- --------- ---------
Book value
per share $ 15.81 15.77 14.84 13.57 11.57
Effect of
intangible
assets per
share $ (5.84) (5.87) (4.65) (5.46) (3.82)
Tangible book
value per
share $ 9.97 9.90 10.19 8.11 7.75
Return on
average assets 0.37% 0.91% 0.95% 0.84% 0.91%
Effect of
intangible
assets 0.02% 0.04% 0.04% 0.04% 0.03%
Return on
average
tangible
assets 0.39% 0.95% 0.99% 0.88% 0.94%
Return on
average equity 2.76% 6.65% 7.74% 7.80% 9.05%
Effect of
intangible
assets 1.61% 3.33% 4.32% 4.93% 4.48%
Return on
average
tangible
equity 4.37% 9.98% 12.06% 12.72% 13.53%
Equity to assets 13.13% 13.56% 13.71% 11.23% 9.94%
Effect of
intangible
assets -4.43% -4.59% -3.88% -4.20% -3.06%
Period-end
tangible equity
to tangible
assets 8.70% 8.97% 9.84% 7.03% 6.88%
GB&T Bancshares, Inc. and Subsidiaries
Consolidated Statements of Condition
6/30/2005 6/30/2004
Assets (in thousands): (Unaudited) (Unaudited)
Cash and due from banks $31,934 $19,090
Interest-bearing deposits
in banks 5,849 961
Federal funds sold 13,702 9,631
Securities available-for-sale 194,509 146,429
Restricted equity securities,
at cost 9,003 5,388
Loans, net of unearned income 1,152,737 745,437
Less allowance for loan losses 14,581 8,987
----------- -----------
Loans, net 1,138,156 736,450
----------- -----------
Premises and equipment, net 37,335 26,454
Goodwill and intangible assets 74,376 32,825
Other assets 28,071 23,291
----------- -----------
Total assets $1,532,935 $1,000,519
=========== ===========
Liabilities and Stockholders'
Equity (in thousands):
Deposits:
Non interest-bearing $156,486 $94,548
Interest-bearing 1,002,623 683,816
----------- -----------
Total deposits 1,159,109 778,364
Federal funds purchased and
securities sold under repurchase
agreements 28,664 17,259
Federal Home Loan Bank advances 101,787 77,458
Other borrowings 649 2,234
Other liabilities 11,559 10,309
Subordinated debt 29,898 15,464
----------- -----------
Total liabilities 1,331,666 901,088
----------- -----------
Stockholders' equity:
Capital stock 163,999 68,825
Retained earnings 37,976 31,594
Accumulated other comprehensive
income (loss) (706) (988)
----------- -----------
Total stockholders' equity 201,269 99,431
----------- -----------
Total liabilities and
stockholders' equity $1,532,935 $1,000,519
=========== ===========
GB&T BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
(Dollars in thousands,
except per share amounts)
Interest income:
Loans, including fees $20,024 $11,903 $36,983 $23,548
Taxable securities 1,777 1,040 3,476 2,025
Nontaxable securities 165 186 330 370
Federal funds sold 57 33 103 60
Interest-bearing deposits
in banks 6 7 16 8
------- ------- ------- -------
Total interest income 22,029 13,169 40,908 26,011
------- ------- ------- -------
Interest expense:
Deposits 6,268 3,005 10,899 5,908
Federal funds purchased and
securities sold under
repurchase agreements 153 45 308 93
Federal Home Loan Bank
advances 991 801 1,865 1,601
Other borrowings 497 208 970 413
------- ------- ------- -------
Total interest expense 7,909 4,059 14,042 8,015
------- ------- ------- -------
Net interest income 14,120 9,110 26,866 17,996
Provision for loan losses 3,822 325 4,304 609
------- ------- ------- -------
Net interest income
after provision for
loan losses 10,298 8,785 22,562 17,387
------- ------- ------- -------
Other income:
Service charges on
deposit accounts 1,652 1,487 3,164 2,881
Mortgage origination fees 658 511 1,123 971
Insurance commissions 146 157 293 301
Gain on sale of securities -- 346 1 609
Other operating income 450 441 1,082 1,079
------- ------- ------- -------
Total other income 2,906 2,942 5,663 5,841
------- ------- ------- -------
Other expense:
Salaries and employee
benefits 6,566 4,940 12,881 9,873
Occupancy and equipment
expenses, net 1,578 1,204 3,017 2,426
Other operating expenses 3,129 2,331 5,970 4,524
------- ------- ------- -------
Total other expense 11,273 8,475 21,868 16,823
------- ------- ------- -------
Income before income taxes 1,931 3,252 6,357 6,405
Income tax expense 543 1,019 1,958 1,942
------- ------- ------- -------
Net income $ 1,388 $ 2,233 $ 4,399 $ 4,463
======= ======= ======= =======
Earnings per share:
Basic $ 0.11 $ 0.26 $ 0.36 $ 0.52
======= ======= ======= =======
Diluted $ 0.11 $ 0.26 $ 0.35 $ 0.52
======= ======= ======= =======
Weighted average shares
Basic 12,687 8,556 12,380 8,533
======= ======= ======= =======
Diluted 12,879 8,700 12,571 8,667
======= ======= ======= =======
Cash dividends per
common share $ 0.085 $ 0.076 $ 0.161 $ 0.148
======= ======= ======= =======