MT. PLEASANT, S.C., April 24, 2009 (GLOBE NEWSWIRE) -- Tidelands Bancshares, Inc. (Nasdaq:TDBK), holding company for Tidelands Bank, announces results for the period ended March 31, 2009. "Primarily driven by the deteriorating credit markets and growing unemployment, the economic environment has continued to provide us with many unique and difficult challenges," said President and Chief Executive Officer, Robert E. Coffee, Jr. "The first quarter of 2009 did not provide any relief. Despite these uncertain conditions in the financial markets, we continue to accomplish our strategic goals successfully and remain diligent in our day to day activities."
For the quarter ending March 31, 2009, the company increased interest income by 9.0% from the year earlier period while reducing interest expense by 7.6%. The successful management of these two components of our earnings resulted in an overall increase in net interest income before provision expense of 35.5%. In addition, non-interest income for the quarter ending March 31, 2009 increased by 47.8% from the year earlier period largely from taking some opportune gains on sales of callable securities from the investment portfolio. We recorded a net loss of $630,000 for the quarter ended March 31, 2009 as compared to a net loss of $233,000 for the quarter ended March 31, 2008. In comparison to our previous year's results, the decrease in first quarter earnings was primarily driven by the addition to our provision for loan losses of $2.1 million during the period. This provision for loan losses is reflective of the deteriorating credit, real estate and job markets which continue to affect our customers and communities. Our net loss per common share amounted to $0.21 on both a basic and diluted basis for the quarter ended March 31, 2009. Our net interest margin declined from 2.57% at March 31, 2008 to 2.48% at March 31, 2009 due to an overall decline of 200 basis points in the interest rate environment over the last 18 months.
As part of the Capital Purchase Program established by the U.S. Department of the Treasury under the Emergency Economic Stabilization Act of 2008 and as a precaution against the worst economic environment in over 75 years, Tidelands Bancshares, Inc. issued 14,448 preferred shares, in return for approximately $14.4 million in cash, on December 19, 2008, to the U.S. Department of the Treasury. Having satisfied the strict criteria for this program, Tidelands Bancshares, Inc. will utilize the additional capital to lend money to local businesses and provide additional financial resources to our customers in order for them to weather this financial crisis. Tidelands Bank remains "well-capitalized," which is the highest bank capital classification defined by bank regulators. The Company's total shareholders' equity was $52.0 million with book value at $8.76 per common share at March 31, 2009.
During the three month period ending March 31, 2009, loans grew by $4.4 million to $466.3 million. At March 31, 2009, non-accrual loans amounted to $16.9 million, or 3.62% of total gross loans, and other real estate owned was approximately $4.0 million. Despite the troubles in the mortgage and credit markets, we continue to resolve credit-related issues through the first quarter of 2009 as evidenced by our loans past due 30-89 days which declined to $3.3 million at quarter end from $12.4 million at December 31, 2008. At March 31, 2009, our ratio of nonperforming assets to total assets of 2.60% continues to compare favorably to many of our industry peers. Consistent with these circumstances, economic conditions and our analysis of our portfolio at March 31, 2009, we have increased the allowance for loan losses to 1.86% of total loans.
During the quarter ended March 31, 2009, we continued to reduce our dependence on wholesale deposits and continued to generate new local market deposit relationships through seven full-service branch locations. As a result, our ratio of wholesale deposits to total deposits has decreased from 64.2% at March 31, 2008 to 49.5% at March 31, 2009. We anticipate this trend will continue with momentum from our retail banking offices. As evidence of our growing local market business, at March 31, 2009, customer time deposits have grown to $185.1 million compared to $60.3 million at March 31, 2008 and interest checking deposits increased to $45.1 million compared to $8.4 million at March 31, 2008.
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 March 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
(Unaudited)
Three Months Ended
March 31,
------------------------------
2009 2008
-------------- --------------
Interest income:
Loans, including fees $ 6,137,229 $ 7,105,708
Securities available for sale,
taxable 2,977,042 1,166,857
Securities available for sale,
non-taxable 50,566 78,807
Federal funds sold 3,527 62,377
Other interest income 723 1,338
-------------- --------------
Total interest income 9,169,087 8,415,087
-------------- --------------
Interest expense:
Time deposits $100,000 and over 884,163 405,751
Other deposits 2,854,954 3,935,455
Other borrowings 1,043,866 837,604
-------------- --------------
Total interest expense 4,782,983 5,178,810
-------------- --------------
Net interest income 4,386,104 3,236,277
Provision for loan losses 2,135,000 463,000
-------------- --------------
Net interest income after provision
for loan losses 2,251,104 2,773,277
-------------- --------------
Noninterest income:
Service charges on deposit
accounts 9,577 9,557
Residential mortgage origination
income 76,302 140,313
Gain on sale of securities
available for sale 307,004 32,154
Gain (loss) on sale of real estate (3,963) 20,520
Loss on sale of other real estate
owned and repossessed assets (35,741) --
Other service fees and commissions 133,516 63,320
Bank owned life insurance 124,680 97,000
Impairment on nonmarketable
equity securities (75,000) --
Other 7,746 5,204
-------------- --------------
Total noninterest income 544,121 368,068
-------------- --------------
Noninterest expense:
Salaries and employee benefits 1,971,104 2,115,149
Net occupancy 384,549 325,357
Furniture and equipment 215,598 157,525
Other operating 1,187,588 931,634
-------------- --------------
Total noninterest expense 3,758,839 3,529,665
-------------- --------------
Loss before income taxes (963,614) (388,320)
Income tax benefit (334,000) (155,000)
-------------- --------------
Net loss $ (629,614) $ (233,320)
Accretion of preferred stock to
redemption value 48,477 --
Preferred dividends accrued 180,600 --
-------------- --------------
Net loss available to common
shareholders $ (858,691) $ (233,320)
============== ==============
Loss per common share
Basic loss per share $ (0.21) $ (0.06)
============== ==============
Diluted loss per share $ (0.21) $ (0.06)
============== ==============
Weighted average common shares
outstanding
Basic 4,044,186 4,068,512
============== ==============
Diluted 4,044,186 4,068,512
============== ==============
Tidelands Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
March 31, December 31,
2009 2008
(Unaudited) (Audited)
-------------- --------------
Assets:
Cash and cash equivalents:
Cash and due from banks $ 13,724,944 $ 2,471,797
Federal funds sold -- 40,375,000
-------------- --------------
Total cash and cash equivalents 13,724,944 42,846,797
-------------- --------------
Securities available-for-sale 279,204,610 171,769,851
Nonmarketable equity securities 5,985,540 3,807,140
-------------- --------------
Total securities 285,190,150 175,576,991
-------------- --------------
Mortgage loans held for sale 1,016,703 241,500
Loans receivable 466,337,867 461,967,217
Less allowance for loan losses 8,656,043 7,635,173
-------------- --------------
Loans, net 457,681,824 454,332,044
-------------- --------------
Premises, furniture and equipment,
net 19,228,302 19,411,592
Accrued interest receivable 3,266,047 3,337,660
Bank owned life insurance 13,459,685 13,335,170
Other assets 7,850,593 6,101,069
-------------- --------------
Total assets $ 801,418,248 $ 715,182,823
============== ==============
Liabilities:
Deposits:
Noninterest-bearing transaction
accounts $ 11,373,865 $ 12,133,098
Interest-bearing transaction
accounts 45,106,865 46,987,209
Savings and money market 184,337,097 182,856,286
Time deposits $100,000 and over 95,074,003 92,825,486
Other time deposits 218,988,287 226,423,397
-------------- --------------
Total deposits 554,880,117 561,225,476
-------------- --------------
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 100,800,000 60,800,000
ESOP borrowings 2,525,000 2,600,000
Other borrowings -- 615,837
Accrued interest payable 3,602,288 2,841,473
Other liabilities 696,565 706,605
-------------- --------------
Total liabilities 749,437,970 663,223,391
-------------- --------------
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, $1,000 par value,
10,000,000 shares authorized,
14,448 issued and outstanding at
March 31, 2009 13,384,229 13,335,752
Common stock, $.01 par value,
10,000,000 shares authorized;
4,277,176 and 4,277,176 shares
issued and outstanding at March
31, 2009 and December 31, 2008,
respectively 42,772 42,772
Common stock-warrants, 571,821
shares outstanding at March 31,
2009 and December 31, 2008,
respectively 1,112,248 1,112,248
Unearned ESOP shares (2,441,304) (2,522,860)
Capital surplus 43,323,285 43,364,255
Retained deficit (5,583,510) (4,905,419)
Accumulated other comprehensive
income 2,142,558 1,532,684
-------------- --------------
Total shareholders' equity 51,980,278 51,959,432
-------------- --------------
Total liabilities and
shareholders' equity $ 801,418,248 $ 715,182,823
============== ==============
Tidelands Bancshares, Inc. and Subsidiary
Three Months Ended
March 31,
------------------------------
2009 2008
-------------- --------------
Per Share Data:
Net income (loss), basic $ (0.21) $ (0.06)
Net income (loss), diluted $ (0.21) $ (0.06)
Book value $ 8.76 $ 9.60
Weighted average number of shares
outstanding:
Basic 4,044,186 4,068,512
Diluted 4,044,186 4,068,512
Performance Ratios:
Return on average assets (1) (0.33%) (0.17%)
Return on average equity (1) (4.90%) (2.27%)
Net interest margin (1) 2.48% 2.57%
At March 31,
------------------------------
2009 2008
-------------- --------------
Credit Summary:
Nonaccrual loans $ 16,883,692 $ 1,617,617
Loans 90 days or more past due and
still accruing interest -- --
Loans restructured or otherwise
impaired(4) -- --
------------- -------------
Total impaired loans 16,883,692 1,617,617
Other real estate owned 3,957,571 90,001
------------- -------------
Total nonperforming assets $ 20,841,263 $ 1,707,618
============== ==============
Loan charge-offs year to date, net
recoveries $ 1,114,130 $ 58,978
Loans past due, 30-89 days $ 3,285,633 $ 3,830,573
Nonperforming loans to total loans 3.62% 0.39%
Nonperforming assets to total
assets(3) 2.60% 0.30%
Net charge-offs year to date to
average total loans(2) 0.24% 0.01%
Allowance for loan losses to
nonperforming loans 51.27% 282.04%
Allowance for loan losses to total
loans (2) 1.86% 1.10%
At March 31,
------------------------------
2009 2008
-------------- --------------
Capital Ratios:
Period end tangible equity to
tangible assets 6.49% 7.28%
Leverage ratio 8.06% 8.75%
Tier 1 risk-based capital ratio 12.91% 10.47%
Total risk-based capital ratio 14.15% 11.49%
Growth Ratios and Other Data:
Percentage change in assets(1) 48.90% 40.55%
Percentage change in loans(1) (2) 3.84% 23.79%
Percentage change in deposits(1) (4.59%) 68.39%
Loans to deposit ratio (2) 84.04% 91.17%
(1) Annualized for the three month periods.
(2) Includes nonperforming loans, if any.
(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 restructure or otherwise impaired do not include nonaccrual
loans.