EX-99.1 2 a09-19862_1ex99d1.htm EX-99.1

Exhibit 99.1

 

News Release

 

Contact: Media:

 

Robert E. “Chip” Coffee, Jr., President and Chief Executive Officer 843 388-8433

 

 

Alan W. Jackson, Executive Vice President and Chief Financial Officer 843 388-8433

Website: www.tidelandsbank.com

 

FOR IMMEDIATE RELEASE

 

Tidelands Bancshares Announces Second Quarter Results

 

Mt. Pleasant, SC, July 27, 2009 -Tidelands Bancshares, Inc. (NASDAQ: TDBK), holding company for Tidelands Bank, reported a net loss available to common shareholders of $3.7 million, or $(0.92) per diluted share, for the quarter ended June 30, 2009 compared to a net loss of $231,000 for the quarter ended June 30, 2008.  The net loss was the result of credit provisions taken to fortify the balance sheet in this difficult economic environment.

 

The second quarter results reflect the following items:

 

·                  FDIC deposit premiums of $515,000, of which $378,000 represents our portion of the one-time special assessment levied against all banks

 

·                  A 1.6% increase in interest income quarter over quarter

 

·                  A 2.9% decrease in interest expense quarter over quarter

 

·                  An expansion of our net interest income of 8.0% quarter over quarter

 

·                  An increase of 111.4% in noninterest income quarter over quarter

 

·                  A reduction in salaries and employee benefits expense of 10.6% quarter over quarter

 

·                  A 9.8% increase in total noninterest expense reflective of the increased deposit insurance premiums and costs associated with our expanded branch franchise quarter over quarter

 

·                  Preferred stock dividends of $183,000 for the quarter-to-date

 

·                  Credit provisions of $5.5 million for the quarter to date period

 

The year to date results for the second quarter reflects the following items:

 

·                  FDIC deposit premiums of $755,000, of which $378,000 represents our portion of the one-time special assessment levied against all banks

 

·                  A 5.3% increase in interest income year over year

 

·                  A 5.4% decrease in interest expense year over year

 

·                  An expansion of our net interest income of 21.5% year over year

 

·                  An increase of 80.0% in noninterest income year over year

 

·                  A reduction in salaries and employee benefits expense of 8.8% year over year

 

·                  A 8.2% increase in total noninterest expense reflective of the increased deposit insurance premiums and costs associated with our expanded branch franchise year over year

 

·                  Preferred stock dividends of $363,000 for the year to date period

 

·                  Credit provisions of $7.6 million for the year to date period

 

“In the current economic environment, we measure successes everyday as we continue to work with our customers to provide them with the financial resources necessary to endure these most difficult times,” 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 $8.9 million decline from $12.4 million, or 2.69% of total loans, at December 31, 2008, to $3.5 million, or 0.74% of total loans, at June 30, 2009.  Similarly, nonaccrual loans have been reduced from $16.9 million at March 31, 2009 to $11.6 million at June 30, 2009. Other real estate owned has increased marginally from $4.0 million at March 31, 2009 to $5.6 million at June 30, 2009.

 

In consideration of the many factors affecting all financial institutions, we have elected to grow our reserve balance for credit losses above our historical levels. At June 30, 2008, our reserves for credit losses were $4.8 million, or 1.10% of total loans. At December 31, 2008, our reserves totaled $7.6 million, or 1.65% of total loans. During the first half of the year, we continued to grow our reserves to $8.7 million, or 1.86% of total loans at March 31, 2009, and $9.6 million, or 2.04% of total loans, at June 30, 2009. It is our strategy to remain prudent during these uncertain economic times and maintain higher reserves for credit losses until economic conditions begin to improve and stabilize.

 

As a result of the deteriorating credit, real estate and job markets, which continue to affect our customers and communities, we experienced a decrease in earnings in comparison to previous periods, which was primarily driven by the addition to our provision for loan losses of $7.6 million for the six months ended June 30, 2009. We increased interest income to $17.5 million for the six months ending June 30, 2009 compared to $16.6 million through June 30, 2008, while reducing interest expense to $9.4 million for the six months ending June 30, 2009 from $10.0 million through June 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 $1.4 million. In addition, non-interest income for the six months ending June 30, 2009 increased to $1.3 million compared to $745,000 from the year earlier period, largely due to gains on sales of callable securities from our investment portfolio.  Due to an overall decline in the interest rate environment over the last 18 months, our net interest margin declined from 2.54% at June 30, 2008 to 2.20% at June 30, 2009. This decrease in our net interest margin is also reflective of the investment yield on our mortgage-backed securities decreasing from 5.89% at December 31, 2008 to 5.04% at June 30, 2009, which is a result of an unprecedented high level of pre-payments on these types of investments and an increase in nonaccrual loans.

 

During the six-month period ending June 30, 2009, loans grew by $9.3 million to $471.3 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 June 30, 2009, customer time deposits and IRA accounts have grown to $185.9 million compared to $182.0 million at December 31, 2008. In addition, total retail savings accounts have increased to $34.4 million at June 30, 2009 compared to $350,000 at December 31, 2008. Tidelands Bank remains “well-capitalized,” which is the highest bank capital classification defined by bank regulators. The Company’s total shareholders’ equity was $47.6 million with a book value of $7.73 per common share at June 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 June 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)

 

 

 

Six Months Ended

 

Three Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

12,486,519

 

$

13,783,616

 

$

6,349,290

 

$

6,677,908

 

Securities available for sale, taxable

 

4,901,260

 

2,481,591

 

1,924,218

 

1,314,734

 

Securities available for sale, non-taxable

 

95,657

 

149,486

 

45,091

 

70,679

 

Federal funds sold

 

4,129

 

187,876

 

602

 

125,499

 

Other interest income

 

2,056

 

1,914

 

1,333

 

576

 

Total interest income

 

17,489,621

 

16,604,483

 

8,320,534

 

8,189,396

 

Interest expense:

 

 

 

 

 

 

 

 

 

Time deposits $100,000 and over

 

1,785,937

 

951,913

 

901,774

 

546,163

 

Other deposits

 

5,494,381

 

7,526,942

 

2,639,427

 

3,591,487

 

Other borrowings

 

2,165,968

 

1,503,883

 

1,122,102

 

666,278

 

Total interest expense

 

9,446,286

 

9,982,738

 

4,663,303

 

4,803,928

 

Net interest income

 

8,043,335

 

6,621,745

 

3,657,231

 

3,385,468

 

Provision for loan losses

 

7,605,000

 

777,000

 

5,470,000

 

314,000

 

Net interest income after provision for loan losses

 

438,335

 

5,844,745

 

(1,812,769

)

3,071,468

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

20,283

 

18,312

 

10,706

 

8,755

 

Residential mortgage origination income

 

261,408

 

280,128

 

185,107

 

139,814

 

Gain on sale of securities available for sale

 

590,683

 

32,154

 

283,679

 

—

 

Other service fees and commissions

 

270,310

 

149,935

 

136,793

 

86,616

 

Bank owned life insurance

 

252,619

 

226,229

 

127,939

 

129,229

 

Impairment on nonmarketable equity securities

 

(76,640

)

—

 

(1,640

)

—

 

Other

 

22,188

 

38,137

 

54,146

 

12,413

 

Total noninterest income

 

1,340,851

 

744,895

 

796,730

 

376,827

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

4,016,672

 

4,404,340

 

2,045,568

 

2,289,191

 

Net occupancy

 

780,994

 

659,784

 

396,445

 

334,427

 

Furniture and equipment

 

428,923

 

334,099

 

213,325

 

176,574

 

Other operating

 

2,785,419

 

2,006,696

 

1,597,831

 

1,075,063

 

Total noninterest expense

 

8,012,008

 

7,404,919

 

4,253,169

 

3,875,255

 

Loss before income taxes

 

(6,232,822

)

(815,279

)

(5,269,208

)

(426,960

)

Income tax benefit

 

(2,127,000

)

(350,480

)

(1,793,000

)

(195,480

)

Net loss

 

$

(4,105,822

)

$

(464,799

)

$

(3,476,208

)

$

(231,480

)

Accretion of preferred stock to redemption value

 

96,954

 

—

 

48,477

 

—

 

Preferred dividends accrued

 

363,207

 

—

 

182,607

 

—

 

Net loss available to common shareholders

 

$

(4,565,983

)

$

(464,799

)

$

(3,707,292

)

$

(231,480

)

Loss per common share

 

 

 

 

 

 

 

 

 

Basic loss per share

 

$

(1.13

)

$

(0.12

)

$

(0.92

)

$

(0.06

)

Diluted loss per share

 

$

(1.13

)

$

(0.12

)

$

(0.92

)

$

(0.06

)

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

4,044,186

 

4,056,416

 

4,044,186

 

4,044,186

 

Diluted

 

4,044,186

 

4,056,416

 

4,044,186

 

4,044,186

 

 


 

Tidelands Bancshares, Inc. and Subsidiary

Consolidated Balance Sheets

 

 

 

June 30,

 

December 31,

 

 

 

2009

 

2008

 

 

 

(Unaudited)

 

(Audited)

 

Assets:

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

Cash and due from banks

 

$

18,401,911

 

$

2,471,797

 

Federal funds sold

 

—

 

40,375,000

 

Total cash and cash equivalents

 

18,401,911

 

42,846,797

 

Securities available-for-sale

 

287,837,131

 

171,769,851

 

Nonmarketable equity securities

 

5,938,900

 

3,807,140

 

Total securities

 

293,776,031

 

175,576,991

 

Mortgage loans held for sale

 

1,831,581

 

241,500

 

Loans receivable

 

471,308,448

 

461,967,217

 

Less allowance for loan losses

 

9,605,982

 

7,635,173

 

Loans, net

 

461,702,466

 

454,332,044

 

Premises, furniture and equipment, net

 

19,000,984

 

19,411,592

 

Accrued interest receivable

 

3,149,011

 

3,337,660

 

Bank owned life insurance

 

13,587,788

 

13,335,170

 

Other assets

 

12,246,957

 

6,101,069

 

Total assets

 

$

823,696,729

 

$

715,182,823

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing transaction accounts

 

$

13,812,902

 

$

12,133,098

 

Interest-bearing transaction accounts

 

45,149,759

 

46,987,209

 

Savings and money market

 

209,751,339

 

182,856,286

 

Time deposits $100,000 and over

 

99,084,184

 

92,825,486

 

Other time deposits

 

214,312,341

 

226,423,397

 

Total deposits

 

582,110,525

 

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

 

2,450,000

 

2,600,000

 

Other borrowings

 

—

 

615,837

 

Accrued interest payable

 

2,165,846

 

2,841,473

 

Other liabilities

 

1,630,027

 

706,605

 

Total liabilities

 

776,090,398

 

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 June 30, 2009 and December 31, 2008

 

13,432,706

 

13,335,752

 

Common stock, $.01 par value, 10,000,000 shares authorized; 4,277,176 shares issued and outstanding at June 30, 2009 and December 31, 2008

 

42,772

 

42,772

 

Common stock-warrants, 571,821 shares outstanding at June 30, 2009 and December 31, 2008

 

1,112,248

 

1,112,248

 

Unearned ESOP shares

 

(2,363,032

)

(2,522,860

)

Capital surplus

 

43,505,292

 

43,364,255

 

Retained deficit

 

(9,401,168

)

(4,905,419

)

Accumulated other comprehensive income

 

1,277,513

 

1,532,684

 

Total shareholders’ equity

 

47,606,331

 

51,959,432

 

Total liabilities and shareholders’ equity

 

$

823,696,729

 

$

715,182,823

 

 


 

Tidelands Bancshares, Inc. and Subsidiary

 

 

 

Six Months Ended
June 30,

 

Three Months Ended
June 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

Per Share Data:

 

 

 

 

 

 

 

 

 

Net income (loss), basic

 

$

(1.13

)

$

(0.12

)

$

(0.92

)

$

(0.06

)

Net income (loss), diluted

 

$

(1.13

)

$

(0.12

)

$

(0.92

)

$

(0.06

)

Book value

 

$

7.73

 

$

9.25

 

$

7.73

 

$

9.25

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

4,044,186

 

4,056,416

 

4,044,186

 

4,044,186

 

Diluted

 

4,044,186

 

4,056,416

 

4,044,186

 

4,044,186

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

(1.05

)%

(0.17

)%

(1.71

)%

(0.16

)%

Return on average equity (1)

 

(16.63

)%

(2.30

)%

(29.03

)%

(2.30

)%

Net interest margin (1)

 

2.20

%

2.54

%

1.94

%

2.49

%

 

 

 

At June 30,

 

 

 

2009

 

2008

 

Credit Summary:

 

 

 

 

 

Nonaccrual loans

 

$

11,611,355

 

$

2,901,061

 

Loans 90 days or more past due and still accruing interest

 

—

 

—

 

Loans restructured or otherwise impaired(4)

 

—

 

—

 

Total impaired loans

 

11,611,355

 

2,901,061

 

Other real estate owned

 

5,565,821

 

—

 

Total nonperforming assets

 

$

17,177,176

 

$

2,901,061

 

 

 

 

 

 

 

Loan charge-offs year to date, net recoveries

 

$

5,634,191

 

$

172,159

 

Loans past due, 30-89 days

 

$

3,478,445

 

$

2,523,158

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

2.46

%

0.67

%

Nonperforming assets to total assets(3)

 

2.09

%

0.48

%

Net charge-offs year to date to average total loans(2)

 

1.21

%

0.04

%

Allowance for loan losses to nonperforming loans

 

82.73

%

164.19

%

Allowance for loan losses to total loans (2)

 

2.04

%

1.10

%

 

 

 

At June 30,

 

 

 

2009

 

2008

 

Capital Ratios:

 

 

 

 

 

Period end tangible equity to tangible assets

 

5.78

%

6.57

%

Leverage ratio

 

7.47

%

7.92

%

Tier 1 risk-based capital ratio

 

12.72

%

9.81

%

Total risk-based capital ratio

 

14.00

%

11.44

%

 

 

 

 

 

 

Growth Ratios and Other Data:

 

 

 

 

 

Percentage change in assets(1)

 

30.60

%

35.12

%

Percentage change in loans(1) (2)

 

4.08

%

21.40

%

Percentage change in deposits(1)

 

7.50

%

51.13

%

Loans to deposit ratio (2)

 

80.97

%

88.93

%

 

(1) — Annualized for the six 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.