MT. PLEASANT, S.C., May 2, 2008 (PRIME NEWSWIRE) -- Tidelands Bancshares, Inc. (Nasdaq:TDBK), holding company for Tidelands Bank, announced today results for the first quarter ended March 31, 2008. "As a result of four successful branch openings in 2007, our new locations in Myrtle Beach, Summerville, West Ashley and Park West contributed to annualized loan growth of 23.9% in the first quarter, which led to a corresponding increase in interest income of 23.1% compared to March 31, 2007," said President and Chief Executive Officer, Robert E. Coffee, Jr. "This economic environment has presented us with many challenges that we continue to address but it also provides us with many unique opportunities to excel in our normal course of operations. We believe we are strategically positioned to capitalize on these opportunities and competitively attract new customer relationships and that our capital base and sound credit culture will allow us to focus on growth and expansion within our geographic footprint."
During the quarter ended March 31, 2008, loans grew $23.4 million to $414.7 million with assets increasing $52.2 million to reach $564.5 million at quarter end. Our provision for loan losses for the first quarter totaled $463,000, reflecting the loan growth experienced year-to-date. At March 31, 2008, the allowance for loan losses amounted to 1.10% of total loans. Total shareholders' equity was $41.1 million with both the Company and Bank considered well-capitalized institutions as of March 31, 2008. The Company's book value was $9.60 per share at quarter end.
While national media attention has brought to light significant problems in the mortgage and credit markets, our portfolio does not have a material exposure to these higher risk credits as we focus on providing credit and deposit products for proven customer relationships. Although our credit-related issues increased slightly in comparison to previous periods, we believe the magnitude is not significant in comparison to what other financial institutions are experiencing. For the three months ended March 31, 2008, non-accrual and charged-off loans amounted to $1.6 million, and $59,000, respectively. The entire balance of other real estate owned at the end of the quarter, approximately $90,000, has satisfactorily been resolved subsequent to March 31st without any additional loss.
Recent actions by the Federal Reserve Board to reduce the federal funds rate from 6.25% a year ago to 2.50% at the end of March 31, 2008 have resulted in tightened margins in the financial market. For the period ended March 31, 2008, our net interest margin was 2.67% compared to 3.43% at March 31, 2007. Primarily as a result of the decrease in the net margin, the Company recorded a net loss of $233,320 for the three months ended March 31, 2008 as compared to a net profit of $175,680 for the period ended March 31, 2007. On a per share basis, our March 31, 2008 loss amounted to $0.06 on both a basic and diluted basis, compared to basic and diluted earnings of $0.04 per share, for the first fiscal quarter ended March 31, 2007.
During the first quarter, Tidelands generated significant increases in retail deposits through its six full-service branch locations. Non-interest bearing transaction accounts and customer time deposits continue to benefit from our branch expansion as evidenced by an increase of $2.8 million and $10.8 million, respectively, since December 31, 2007. We foresee this trend continuing throughout the year as we anticipate our expansion into the Hilton Head/Bluffton and Murrells Inlet markets. Simultaneously, we have reduced our overall dependence on other borrowings, which will allow us to lower our cost of funds and increase core deposits. Specifically, securities sold under repurchase agreements and advances from the Federal Home Loan Bank decreased by a combined $15.0 million since December 31, 2007.
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, 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 first fiscal quarter ended March 31, 2008 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)
Three Months Ended
March 31,
2008 2007
---------- ----------
Interest income:
Loans, including fees $7,105,708 $6,160,173
Securities available for sale,
taxable 1,166,857 468,809
Securities available for sale,
non-taxable 78,807 56,576
Federal funds sold 62,377 151,358
Other interest income 1,338 1,208
---------- ----------
Total interest income 8,415,087 6,838,124
---------- ----------
Interest expense:
Time deposits $100,000 and over 405,751 96,000
Other deposits 3,820,072 3,270,489
Other borrowings 837,604 568,591
---------- ----------
Total interest expense 5,063,427 3,935,080
---------- ----------
Net interest income 3,351,660 2,903,044
Provision for loan losses 463,000 515,000
---------- ----------
Net interest income after
provision for loan losses 2,888,660 2,388,044
---------- ----------
Noninterest income:
Service charges on deposit accounts 9,557 7,806
Residential mortgage origination
income 140,313 241,829
Gain on sale of securities
available for sale 32,154 2,864
Gain on sale of real estate 20,520 --
Other service fees and commissions 63,320 41,033
Bank owned life insurance 97,000 69,945
Other 5,204 4,692
---------- ----------
Total noninterest income 368,068 368,169
---------- ----------
Noninterest expense:
Salaries and employee benefits 2,115,149 1,509,370
Net occupancy 325,357 175,182
Furniture and equipment 157,525 82,424
Other operating 1,047,017 706,557
---------- ----------
Total noninterest expense 3,645,048 2,473,533
---------- ----------
Income (loss) before income taxes (388,320) 282,680
Income tax expense (benefit) (155,000) 107,000
---------- ----------
Net income (loss) $(233,320) $ 175,680
========== ==========
Earnings (loss) per common share:
Basic earnings (loss) per share $ (0.06) $ 0.04
========== ==========
Diluted earnings (loss) per share $ (0.06) $ 0.04
========== ==========
Weighted average common shares
outstanding:
Basic 4,068,512 4,272,443
========== ==========
Diluted 4,088,159 4,278,413
========== ==========
Tidelands Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
March 31, December 31,
2008 2007
------------ ------------
Assets: (Unaudited) (Audited)
Cash and cash equivalents:
Cash and due from banks $ 2,644,229 $ 724,957
Federal funds sold 21,565,000 1,945,000
------------ ------------
Total cash and cash equivalents 24,209,229 2,669,957
------------ ------------
Securities available for sale 90,473,971 88,036,109
Nonmarketable equity securities 2,196,140 2,060,940
------------ ------------
Total securities 92,670,111 90,097,049
------------ ------------
Mortgage loans held for sale 1,045,801 1,426,800
Loans receivable 414,749,354 391,349,869
Less allowance for loan losses 4,562,346 4,158,324
------------ ------------
Loans, net 410,187,008 387,191,545
------------ ------------
Premises, furniture and equipment, net 18,589,393 17,759,388
Accrued interest receivable 2,444,657 3,164,124
Bank owned life insurance 12,947,818 7,849,156
Other assets 2,395,477 2,111,572
------------ ------------
Total assets $564,489,494 $512,269,591
============ ============
Liabilities:
Deposits:
Noninterest-bearing transaction
accounts $ 12,965,754 $ 10,191,152
Interest-bearing transaction
accounts 8,371,382 8,460,166
Savings and money market 187,545,704 199,833,835
Time deposits $100,000 and over 37,223,632 29,876,086
Other time deposits 208,790,532 139,808,202
------------ ------------
Total deposits 454,897,004 388,169,441
------------ ------------
Securities sold under agreements
to repurchase 30,000,000 41,040,000
Junior subordinated debentures 8,248,000 8,248,000
Advances from Federal Home Loan
Bank 25,000,000 29,000,000
ESOP borrowings 2,825,000 2,427,500
Accrued interest payable 1,398,179 1,341,161
Other liabilities 1,054,616 1,088,319
------------ ------------
Total liabilities 523,422,799 471,314,421
------------ ------------
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized,
none issued -- --
Common stock, $.01 par value,
10,000,000 shares authorized;
4,277,176 and 4,277,176 shares
issued and outstanding at March
31, 2008 and December 31, 2007,
respectively 42,772 42,772
Unearned ESOP shares (2,800,264) (2,427,500)
Capital surplus 42,960,560 42,788,666
Retained earnings (deficit) (184,156) 49,164
Accumulated other comprehensive
income 1,047,783 502,068
------------ ------------
Total shareholders' equity 41,066,695 40,955,170
------------ ------------
Total liabilities and
shareholders' equity $564,489,494 $512,269,591
============ ============
Tidelands Bancshares, Inc. and Subsidiary
Three Months Ended
March 31,
---------------------
2008 2007
Per Share Data: ------- -------
Net income (loss), basic $(0.06) $0.04
Net income (loss), diluted $(0.06) $0.04
Book value $9.60 $9.87
Weighted average number of shares
outstanding:
Basic 4,068,512 4,272,443
Diluted 4,088,159 4,278,413
Performance Ratios:
Return on average assets (1) (0.17%) 0.19%
Return on average equity (1) (2.27%) 1.70%
Net interest margin (1) 2.67% 3.43%
Efficiency ratio (2) 97.99% 75.62%
Asset Quality Data:
Loans 90 days or more past due
and still accruing interest $ -- $ --
Loans restructured or otherwise
impaired(5) -- --
Nonaccrual loans 1,617,617 --
Loan charge-offs year to date,
net recoveries 58,978 115,760
Other real estate owned 90,001 --
Nonperforming assets to total
loans (4) 0.41% --%
Nonperforming assets to total
assets(4) 0.30% --%
Net charge-offs year to date to
average total loans(3) 0.01% 0.04%
Allowance for loan losses to
nonperforming loans 282.04% N/A
Allowance for loan losses to
total loans (3) 1.10% 1.25%
Capital Ratios:
Period end tangible equity to
tangible assets 7.28% 10.46%
Leverage ratio 8.75% 13.01%
Tier 1 risk-based capital ratio 10.48% 13.79%
Total risk-based capital ratio 11.49% 14.86%
Growth Ratios and Other Data:
Percentage change in assets(1) 40.55% 79.41%
Percentage change in loans(1) (3) 23.79% 52.70%
Percentage change in deposits(1) 68.39% 93.56%
Percentage change in equity(1) 1.09% 3.39%
Loans to deposit ratio (3) 91.17% 96.72%
1 - Annualized for the three month periods.
2 - Computed by dividing non-interest expense by the sum of net
interest income and non-interest income.
3 - Includes nonperforming loans, if any.
4 - 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
5 - Loans restructure or otherwise impaired do not include nonaccrual
loans.