CHARLOTTE, NC--(Marketwire - Jul 28, 2011) - Park Sterling Corporation (
Second Quarter Highlights:
- Nonperforming loans decreased $7.7 million, or 22%, compared to the first quarter of 2011 to $27.6 million, or 7.25% of total loans
- Nonperforming assets decreased $4.2 million, or 11%, compared to the first quarter of 2011 to $32.6 million, or 5.34% of total assets
- Provision for loan losses decreased $1.2 million, or 27%, to $3.2 million compared to the first quarter of 2011
- Net charge-offs decreased $1.4 million, or 27%, to $3.7 million, or 3.93% of average loans (annualized), compared to $5.1 million, or 5.27% of average loans (annualized), in the first quarter of 2011
- Net interest income decreased slightly to $3.8 million compared to $4.0 million in the first quarter of 2011
- Capital levels remain strong as tangible common equity as a percentage of tangible assets increased slightly to 28.43% from 27.81% in the first quarter of 2011
- Net loss of $3.1 million, or $0.11 per diluted share, compared to a net loss of $2.9 million, or $0.10 per diluted share, in the first quarter of 2011 and net income of $173,000, or $0.03 per diluted share, in the second quarter of 2010
- Excluding pre-tax, merger-related expenses of $632,000 in the second quarter of 2011 and $75,000 in the first quarter of 2011, the net loss narrowed to $2.7 million, or approximately $0.10 per diluted share, compared to $2.8 million, or approximately $0.10 per diluted share in the first quarter of 2011
Business Highlights:
- Opened loan production offices in the Upstate region of South Carolina and in the Research Triangle region of North Carolina, adding in-market, veteran bankers to develop opportunities in these attractive growth markets
- Received regulatory approval and opened de novo branch in Charleston, South Carolina, adding in-market, veteran bankers and customer service personnel
- Established newly formed Asset Based Lending (ABL) business through hiring of experienced team, which represents an attractive growth and business line diversification opportunity
- Continued to prepare for consummation and integration of the Community Capital Corporation ("Community Capital") merger, which is expected to close in the third quarter
"The second quarter was marked by significant progress in advancing our growth strategy and working through our problem assets," said Jim Cherry, Chief Executive Officer. "Park Sterling's organic growth initiatives accelerated during the second quarter with the addition of veteran, in-market bankers in the dynamic markets of Charleston, South Carolina, Upstate region of South Carolina and Research Triangle region of North Carolina. Each of these markets is home to a multitude of operating companies and commercially oriented businesses. In addition, our newly formed ABL business, which will operate out of Greenville, South Carolina, will help drive growth and further diversify our loan portfolio across the franchise. As a result of these actions and the strong business development pipeline we are already seeing, we anticipate accelerated loan growth during the second half of 2011.
Park Sterling's credit quality continues to improve as non-performing assets, the provision for loan losses, and net charge-offs decreased on a sequential basis, as expected. While some unevenness in the level of nonperforming loans is possible during the second half of this year, we are optimistic that we are on track for continued improvement in our asset quality as well as a reduction in credit-related expenses during the remainder of 2011.
We have made significant investments in our franchise during the first half of 2011, and expect the pace of those investments to slow during the second half of 2011. Accordingly, we believe that our normalized operating expenses, excluding merger-related items, will plateau near current levels over the next two quarters. We also anticipate lower net charge-offs and provision for loan losses over the second half of the year compared to the first six months.
Our near-term focus on the mergers and acquisitions front continues to be the successful consummation and integration of our partnership with Community Capital. Nevertheless, we believe there are many prospects across Virginia and the Carolinas, driven in part by the continuing uncertain regulatory and economic environment, and we remain active in seeking attractive opportunities for Park Sterling."
Second Quarter 2011 Financial Highlights
Asset Quality
Nonperforming loans, which included $1.6 million in loans under contract for sale and $2.0 million in successfully remediated troubled debt restructurings (TDRs), decreased $7.7 million, or 22%, to $27.6 million, or 7.25% of total loans, compared to $35.2 million, or 9.07% of total loans, as of March 31, 2011. Nonperforming assets decreased $4.2 million, or 11%, to $32.6 million, or 5.34% of total assets, down from $36.8 million, or 5.85% of total assets, as of March 31, 2011.
The provision for loan losses decreased $1.2 million, or 27%, to $3.2 million, compared to the first quarter of 2011. Net charge-offs decreased $1.4 million, or 27%, to $3.7 million, representing 3.93% of average loans on an annualized basis, compared to $5.1 million, or 5.27% of average loans (annualized) in the prior quarter. The allowance for loan losses was $11.3 million, or 2.96% of total loans at June 30, 2011, a decrease of $491,000 from $11.8 million, or 3.03% of total loans, at March 31, 2011. This decrease in the allowance resulted from positive credit quality trends in the loan portfolio. The allowance represented 40.91% of nonperforming loans (including TDRs) at June 30, 2011 up from 33.41% at March 31, 2011.
Net Interest Income and Net Interest Margin
Net interest income decreased slightly to $3.8 million compared to $4.0 million in the first quarter of 2011, and the net interest margin decreased 7 basis points during the same time period to 2.60%. The decrease in the net interest margin related in part to a 3% decrease in average loan balances, resulting from the resolution of problem credits and a managed decrease in construction and development exposure to improve the loan mix. It was also impacted by a $170 thousand decrease in swap income from a matured portfolio hedge and a negative $88 thousand mark from a forward-starting swap (the then prevailing mark on which will reverse out when the associated loan closes and is marked at fair value in the fourth quarter of 2011). These negative factors were partially offset by a 16 basis point improvement in funding costs as a result of improved deposit mix and pricing.
Compared to the second quarter of 2010, net interest income increased slightly to $3.8 million from $3.7 million, and the net interest margin decreased 65 basis points during the same time period. Partially offsetting the decrease in the net interest margin was the $89.3 million increase in average taxable investment securities, resulting from the utilization of net proceeds of $140.2 million from the common stock offering completed during the third quarter of 2010.
Noninterest Income
Noninterest income, which remains modest, decreased $28,000 compared to the first quarter of 2011 and increased $20,000 compared to the second quarter of 2010. The sequential decline in noninterest income primarily related to the absence of gains on the sale of automobiles recorded in the first quarter of 2011. The year over year increase in noninterest income was primarily due to higher NSF fees and deposit service charges.
Noninterest Expense
Noninterest expense increased $1.2 million, or 29%, to $5.5 million compared to $4.2 million in the first quarter of 2011. This increase in noninterest expense included $557,000 in incremental merger related expenses and $68,000 in incremental costs associated with becoming a new public company, both of which related primarily to legal and professional fees. The increase also included $334,000 in incremental costs associated with the new de novo offices and ABL capabilities, related primarily to personnel and occupancy costs. Positive items included a $96,000 decrease in FDIC insurance premiums and a $142,000 decrease in OREO-related expenses.
Compared to the second quarter of 2010, expenses increased $3.0 million, primarily due to increased salaries and employee benefits related to the management expansion that occurred during the second half of 2010 and the addition of new employees during the first half of 2011. Also impacting the increase in noninterest expense were higher costs related to being a newly public company, merger related expenses resulting from the Community Capital acquisition, and an increase in OREO-related expenses due to the addition of nonperforming assets resulting from the deterioration in our loan portfolio that began during the second half of 2010.
Balance Sheet and Capital
Total assets decreased $17.7 million, or 3%, compared to the first quarter of 2011, primarily due to a $7.8 million reduction in loan balances. Compared to the second quarter of 2010, total assets grew $122.3 million, or 25%, resulting from an increase in the securities portfolio as proceeds from the initial public offering were invested during the third and fourth quarters of 2010.
Compared to the first quarter of 2011, total loans decreased $7.8 million, or 2%, to $380.4 million, primarily due to a 2% reduction in income-producing commercial real estate loans and a 15% decrease in construction and development loans (both commercial and residential). These declines were partially offset by a 6% increase in combined commercial and industrial and owner-occupied loans and a 5% increase in home equity lines of credit. Compared to the second quarter of 2010, total loans decreased $19.0 million, or 5%, resulting from a 43% decrease in construction and development loans. Partially offsetting this decrease was a 7% increase in income producing commercial real estate loans, a 9% increase in combined commercial and industrial and owner-occupied loans, a 4% increase in residential mortgages and a 3% increase in home equity lines of credit. Total exposure to construction and development loans decreased to 19% of gross loans, down from 21% in the first quarter of 2011 and 31% in the second quarter of 2010.
Total deposits decreased $17.6 million, or 4%, compared to the first quarter of 2011. This decrease in deposits was primarily due to a managed 10% decrease in time deposits, as management both allowed higher-priced special rates to roll-off and reduced brokered deposits. The decrease was offset by a 3% increase in money market, NOW and savings deposits, and a 14% increase in demand deposits. Compared to the second quarter of 2010, total deposits decreased $7.9 million, or 2%, resulting from a 22% decrease in time deposits, offset by a 77% increase in money market, NOW and savings deposits, and a 54% increase in demand deposits. Core deposits, which excludes brokered deposits, as a percentage of total deposits were 76%, compared to 78% in the first quarter of 2011 and 68% in the second quarter of 2010.
Shareholders' equity decreased $1.2 million to $173.6 million compared to $174.8 million at March 31, 2011, primarily resulting from the second quarter 2011 net loss of $3.1 million. Shareholders' equity increased $126.9 million compared to the second quarter of 2010 as a result of the August 2010 common stock offering. Tangible common equity as a percentage of tangible assets was 28.43%, a slight increase from 27.81% at March 31, 2011, and an increase compared to 9.56% at June 30, 2010. Tier 1 leverage ratio was 27.07%, a slight decrease from 28.36% at March 31, 2011.
During the first quarter, and as contemplated in the equity offering, 568,260 shares of restricted stock were issued, but will not vest until the Company's share price achieves certain performance thresholds above the equity offering price (these restricted stock awards vest one-third each at $8.125, $9.10 and $10.40 per share, respectively). Accordingly, these additional shares have been excluded from earnings and tangible book value per share calculations.
Conference Call
A conference call will be held at 8:30 a.m., ET this morning (July 28, 2011). The conference call can be accessed by dialing (877) 317-6789 and requesting the Park Sterling Corporation earnings call. Listeners should dial in 10 minutes prior to the start of the call. The live webcast and presentation slides will be available on www.parksterlingbank.com under Investor Relations, "Investor Presentations."
A replay of the webcast will be available on www.parksterlingbank.com under Investor Relations, "Investor Presentations" shortly following the call. A replay of the conference call can be accessed one hour after the call through May 13, 2011, by dialing (877) 344-7529, conference number 450459.
About Park Sterling Corporation
Park Sterling Corporation is the holding company for Park Sterling Bank, headquartered in Charlotte, North Carolina. The Bank's primary focus is to provide banking services to small and mid-sized businesses, owner-occupied and income producing real estate owners, professionals and consumers doing business or residing within its target markets. Park Sterling Bank is committed to building a banking franchise across the Carolinas and Virginia that is noted for sound risk management, superior customer service and exceptional client relationships. For more information, visit www.parksterlingbank.com. Park Sterling's shares are traded on NASDAQ under the symbol PSTB.
Non-GAAP Measures
Tangible assets, tangible common equity, tangible book value and related ratios, as used throughout this release, are non-GAAP financial measures. For additional information, see "Reconciliation of Non-GAAP Measures" in the accompanying tables.
Cautionary Statement Regarding Forward Looking Statements
This news release contains, and Park Sterling and its management may make, certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words such as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," "goal," "target" and similar expressions. These forward-looking statements express management's current expectations, plans or forecasts of future events, results and condition, including expectations regarding the proposed merger with Community Capital Corporation ("Community Capital"), the general business strategy of engaging in bank mergers, organic growth and anticipated asset size, anticipated loan growth, refinement of the loan loss allowance methodology, recruiting of key leadership positions, decreases in construction and development loans and other changes in loan mix, changes in deposit mix, capital and liquidity levels, emerging regulatory expectations and measures, net interest income, credit trends and conditions, including loan losses, allowance, charge-offs, delinquency trends and nonperforming loan and asset levels, residential sales activity and other similar matters. These statements are not guarantees of future results or performance and by their nature involve certain risks and uncertainties that are based on management's beliefs and assumptions and on the information available to management at the time that these disclosures were prepared. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed in any of Park Sterling's filings with the SEC: failure of Community Capital's shareholders to approve the merger; failure to realize synergies and other financial benefits from the proposed merger within the expected time frame; increases in expected costs or difficulties related to integration of the Community Capital merger; inability to identify and successfully negotiate and complete additional combinations with potential merger partners or to successfully integrate such businesses into Park Sterling, including the company's ability to realize the benefits and cost savings from and limit any unexpected liabilities acquired as a result of any such business combination; the effects of negative economic conditions, including stress in the commercial real estate markets or delay or failure of recovery in the residential real estate markets; changes in consumer and investor confidence and the related impact on financial markets and institutions; changes in interest rates; failure of assumptions underlying the establishment of our allowance; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in our investment securities portfolio; legal and regulatory developments; increased competition from both banks and nonbanks; changes in accounting standards, rules and interpretations, inaccurate estimates or assumptions in accounting and the impact on Park Sterling's financial statements; Park Sterling's ability to attract new employees; and management's ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk.
Forward-looking statements speak only as of the date they are made, and Park Sterling undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
Additional Information About The Merger And Where You Can Find It
In connection with the proposed merger between Park Sterling and Community Capital Corporation ("Community Capital"), Park Sterling has filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 that includes a preliminary Proxy Statement of Community Capital that also constitutes a Prospectus of Park Sterling, as well as other relevant documents concerning the proposed transaction. Once the Registration Statement is declared effective by the SEC, Community Capital will mail a definitive Proxy Statement/Prospectus to its shareholders. Shareholders are strongly urged to read the Registration Statement including the preliminary Proxy Statement/Prospectus regarding the proposed merger filed with the SEC, and other relevant documents that will be filed with the SEC, as well as any amendments or supplements to those documents (including the definitive Proxy Statement/Prospectus) as they become available, because they will contain important information regarding the proposed merger.
A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Park Sterling and Community Capital, may be obtained after their filing at the SEC's Internet site (http://www.sec.gov). In addition, free copies of documents filed with the SEC may be obtained on the respective websites of Park Sterling and Community Capital at www.parksterlingbank.com and www.capitalbanksc.com.
This communication does not constitute an offer to buy, or a solicitation to sell, shares of any security or the solicitation of any proxies from the shareholders of Park Sterling or Community Capital.
Participants in the Solicitation
Park Sterling and Community Capital and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Community Capital's shareholders in connection with the proposed merger. Information about the directors and executive officers of Park Sterling and Community Capital and information about other persons who may be deemed participants in this solicitation will be included in the Proxy Statement/Prospectus. Information about Park Sterling's executive officers and directors can be found in Park Sterling's definitive proxy statement in connection with its 2011 Annual Meeting of Shareholders filed with the SEC on April 12, 2011. Information about Community Capital's executive officers and directors can be found in Community Capital's Amendment No.1 to its Annual Report on Form 10-K/A filed with the SEC on April 26, 2011.
| PARK STERLING CORPORATION | ||||||||||||||||
| CONDENSED INCOME STATEMENT | ||||||||||||||||
| THREE MONTH RESULTS | ||||||||||||||||
| ($ in thousands, except per share amounts) | ||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||
| 2011 | 2011 | 2010 * | 2010 | 2010 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 4,450 | $ | 4,758 | $ | 4,984 | $ | 4,963 | $ | 5,169 | ||||||
| Federal funds sold | 33 | 30 | 46 | 42 | 9 | |||||||||||
| Taxable investment securities | 684 | 681 | 587 | 370 | 285 | |||||||||||
| Tax-exempt investment securities | 181 | 171 | 160 | 161 | 160 | |||||||||||
| Interest on deposits at banks | 11 | 14 | 16 | 23 | 15 | |||||||||||
| Total interest income | 5,359 | 5,654 | 5,793 | 5,559 | 5,638 | |||||||||||
| Interest expense | ||||||||||||||||
| Money market, NOW and savings deposits | 176 | 141 | 132 | 104 | 89 | |||||||||||
| Time deposits | 1,080 | 1,226 | 1,435 | 1,490 | 1,460 | |||||||||||
| Short-term borrowings | 1 | - | 1 | 1 | 3 | |||||||||||
| Long-term borrowings | 141 | 141 | 140 | 144 | 141 | |||||||||||
| Subordinated debt | 189 | 190 | 188 | 190 | 189 | |||||||||||
| Total interest expense | 1,587 | 1,698 | 1,896 | 1,929 | 1,882 | |||||||||||
| Net interest income | 3,772 | 3,956 | 3,897 | 3,630 | 3,756 | |||||||||||
| Provision for loan losses | 3,245 | 4,462 | 8,237 | 6,143 | 1,094 | |||||||||||
| Net interest income (loss) after provision | 527 | (506 | ) | (4,340 | ) | (2,513 | ) | 2,662 | ||||||||
| Total noninterest income | 44 | 72 | 43 | 26 | 24 | |||||||||||
| Noninterest expenses | ||||||||||||||||
| Salaries and employee benefits | 2,975 | 2,507 | 2,114 | 1,777 | 1,299 | |||||||||||
| Occupancy and equipment | 301 | 256 | 250 | 236 | 224 | |||||||||||
| Advertising and promotion | 87 | 38 | 50 | 84 | 96 | |||||||||||
| Legal and professional fees | 1,205 | 307 | 208 | 78 | 83 | |||||||||||
| Deposit charges and FDIC insurance | 196 | 287 | 185 | 184 | 182 | |||||||||||
| Data processing and outside service fees | 128 | 123 | 109 | 109 | 100 | |||||||||||
| Directors fees | 45 | 41 | 182 | 164 | 47 | |||||||||||
| Net cost of operation of other real estate | 93 | 235 | 16 | 120 | 239 | |||||||||||
| Other noninterest expense | 444 | 440 | 434 | 238 | 207 | |||||||||||
| Total noninterest expenses | 5,474 | 4,234 | 3,548 | 2,990 | 2,477 | |||||||||||
| Income (loss) before income taxes | (4,903 | ) | (4,668 | ) | (7,845 | ) | (5,477 | ) | 209 | |||||||
| Income tax expense (benefit) | (1,789 | ) | (1,781 | ) | (3,324 | ) | (1,809 | ) | 36 | |||||||
| Net income (loss) | $ | (3,114 | ) | $ | (2,887 | ) | $ | (4,521 | ) | $ | (3,668 | ) | $ | 173 | ||
| Earnings (loss) per share, fully diluted | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.16 | ) | $ | (0.23 | ) | $ | 0.03 | ||
| Weighted average diluted shares | 28,051,098 | 28,051,098 | 28,051,098 | 15,998,924 | 4,951,098 | |||||||||||
| * Derived from audited financial statements. | ||||||||||||||||
| PARK STERLING CORPORATION | |||||||
| CONDENSED INCOME STATEMENT | |||||||
| SIX MONTH RESULTS | |||||||
| ($ in thousands, expect per share amounts) | |||||||
| June 30, | June 30, | ||||||
| 2011 | 2010 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Interest income | |||||||
| Loans, including fees | $ | 9,208 | $ | 10,312 | |||
| Federal funds sold | 63 | 18 | |||||
| Taxable investment securities | 1,365 | 611 | |||||
| Tax-exempt investment securities | 352 | 320 | |||||
| Interest on deposits at banks | 25 | 28 | |||||
| Total interest income | 11,013 | 11,289 | |||||
| Interest expense | |||||||
| Money market, NOW and savings deposits | 317 | 172 | |||||
| Time deposits | 2,306 | 2,944 | |||||
| Short-term borrowings | 1 | 8 | |||||
| FHLB advances | 282 | 279 | |||||
| Subordinated debt | 379 | 379 | |||||
| Total interest expense | 3,285 | 3,782 | |||||
| Net interest income | 7,728 | 7,507 | |||||
| Provision for loan losses | 7,707 | 2,625 | |||||
| Net interest income (loss) after provision | 21 | 4,882 | |||||
| Total noninterest income | 116 | 62 | |||||
| Noninterest expenses | |||||||
| Salaries and employee benefits | 5,482 | 2,551 | |||||
| Occupancy and equipment | 557 | 430 | |||||
| Advertising and promotion | 125 | 153 | |||||
| Legal and professional fees | 1,512 | 159 | |||||
| Deposit charges and FDIC insurance | 483 | 358 | |||||
| Data processing and outside service fees | 251 | 193 | |||||
| Directors fees | 86 | 47 | |||||
| Net cost of operation of other real estate | 328 | 275 | |||||
| Other noninterest expense | 884 | 353 | |||||
| Total noninterest expenses | 9,708 | 4,519 | |||||
| Income (loss) before income taxes | (9,571 | ) | 425 | ||||
| Income tax expense (benefit) | (3,570 | ) | 95 | ||||
| Net income (loss) | $ | (6,001 | ) | $ | 330 | ||
| Earnings (loss) per share, fully diluted | $ | (0.21 | ) | $ | 0.07 | ||
| Weighted average diluted shares | 28,051,098 | 4,951,098 | |||||
| * Derived from audited financial statements. | |||||||
| PARK STERLING CORPORATION | ||||||||||||||||
| CONDENSED BALANCE SHEETS | ||||||||||||||||
| ($ in thousands) | ||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||
| 2011 | 2011 | 2010 * | 2010 | 2010 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 14,349 | $ | 54,192 | $ | 2,433 | $ | 11,591 | $ | 7,785 | ||||||
| Interest earning balances at banks | 8,571 | 3,796 | 5,040 | 5,859 | 2,290 | |||||||||||
| Investment securities available-for-sale | 146,734 | 112,273 | 140,590 | 115,357 | 40,289 | |||||||||||
| Federal funds sold | 44,060 | 57,525 | 57,905 | 96,560 | 30,860 | |||||||||||
| Loans held for sale | 1,600 | - | - | - | - | |||||||||||
| Loans | 380,365 | 388,187 | 399,829 | 397,658 | 399,376 | |||||||||||
| Allowance for loan losses | (11,277 | ) | (11,768 | ) | (12,424 | ) | (13,150 | ) | (8,974 | ) | ||||||
| Net loans | 369,088 | 376,419 | 387,405 | 384,508 | 390,402 | |||||||||||
| Other real estate owned | 3,470 | 1,565 | 1,246 | 1,441 | 534 | |||||||||||
| Other assets | 22,796 | 22,646 | 21,489 | 17,314 | 16,201 | |||||||||||
| Total assets | $ | 610,668 | $ | 628,416 | $ | 616,108 | $ | 632,630 | $ | 488,361 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||||||||
| Deposits: | ||||||||||||||||
| Demand noninterest-bearing | $ | 42,156 | $ | 37,098 | $ | 36,333 | $ | 30,468 | $ | 27,316 | ||||||
| Money market, NOW and savings | 110,874 | 107,186 | 71,666 | 72,639 | 62,568 | |||||||||||
| Time deposits | 250,876 | 277,228 | 299,821 | 314,042 | 321,899 | |||||||||||
| Total deposits | 403,906 | 421,512 | 407,820 | 417,149 | 411,783 | |||||||||||
| Short-term borrowings | 1,661 | 1,213 | 874 | 1,100 | 1,762 | |||||||||||
| FHLB advances | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | |||||||||||
| Subordinated debt | 6,895 | 6,895 | 6,895 | 6,895 | 6,895 | |||||||||||
| Accrued expenses and other liabilities | 4,622 | 4,026 | 3,418 | 3,639 | 1,231 | |||||||||||
| Total liabilities | 437,084 | 453,646 | 439,007 | 448,783 | 441,671 | |||||||||||
| Stockholders' equity: | ||||||||||||||||
| Common stock | 28,619 | 28,619 | 130,438 | 130,438 | 23,023 | |||||||||||
| Additional paid-in capital | 159,890 | 159,367 | 57,102 | 56,778 | 23,687 | |||||||||||
| Accumulated deficit | (15,502 | ) | (12,388 | ) | (9,501 | ) | (4,981 | ) | (1,313 | ) | ||||||
| Accumulated other comprehensive income | 577 | (828 | ) | (938 | ) | 1,612 | 1,293 | |||||||||
| Total stockholders' equity | 173,584 | 174,770 | 177,101 | 183,847 | 46,690 | |||||||||||
| Total liabilities and stockholders' equity | $ | 610,668 | $ | 628,416 | $ | 616,108 | $ | 632,630 | $ | 488,361 | ||||||
| Common shares issued and outstanding | 28,619,358 | 28,619,358 | 28,051,098 | 28,051,098 | 4,951,098 | |||||||||||
| * Derived from audited financial statements. | ||||||||||||||||
| PARK STERLING CORPORATION | ||||||||||||||||||
| SUMMARY OF LOAN PORTFOLIO | ||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||
| 2011 | 2011 | 2010 * | 2010 | 2010 | ||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Commercial: | ||||||||||||||||||
| Commercial and industrial | $ | 45,056 | $ | 48,107 | $ | 48,401 | $ | 47,166 | $ | 45,461 | ||||||||
| Commercial real estate - owner-occupied | 61,878 | 52,764 | 55,089 | 51,779 | 52,347 | |||||||||||||
| Commercial real estate - investor income producing | 111,349 | 113,612 | 110,407 | 101,359 | 103,766 | |||||||||||||
| Acquisition, construction and development | 64,662 | 75,977 | 87,846 | 100,522 | 106,513 | |||||||||||||
| Other commercial | 6,840 | 5,232 | 3,225 | 2,866 | 585 | |||||||||||||
| Total commercial loans | 289,785 | 295,692 | 304,968 | 303,692 | 308,672 | |||||||||||||
| Consumer: | ||||||||||||||||||
| Residential mortgage | 21,767 | 25,034 | 21,716 | 20,920 | 20,910 | |||||||||||||
| Home equity lines of credit | 56,481 | 53,725 | 56,968 | 58,115 | 54,982 | |||||||||||||
| Residential construction | 6,048 | 7,018 | 9,051 | 8,616 | 8,562 | |||||||||||||
| Other loans to individuals | 6,494 | 6,811 | 7,245 | 6,413 | 6,350 | |||||||||||||
| Total consumer loans | 90,790 | 92,588 | 94,980 | 94,064 | 90,804 | |||||||||||||
| Total loans | 380,575 | 388,280 | 399,948 | 397,756 | 399,476 | |||||||||||||
| Deferred fees | (210 | ) | (93 | ) | (119 | ) | (98 | ) | (100 | ) | ||||||||
| Total loans, net of deferred fees | $ | 380,365 | $ | 388,187 | $ | 399,829 | $ | 397,658 | $ | 399,376 | ||||||||
| * Derived from audited financial statements. | ||||||||||||||||||
| PARK STERLING CORPORATION | ||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||
| THREE MONTH RESULTS | ||||||||||||||||
| ($ in thousands) | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2011 | 2011 | 2010 * | 2010 | 2010 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Beginning of period allowance | $ | 11,768 | $ | 12,424 | $ | 13,150 | $ | 8,974 | $ | 8,380 | ||||||
| Provision for loan losses | 3,245 | 4,462 | 8,237 | 6,143 | 1,094 | |||||||||||
| Loans charged-off | 4,096 | 5,581 | 9,000 | 1,986 | 502 | |||||||||||
| Recoveries of loans charged-off | 360 | 463 | 37 | 19 | 2 | |||||||||||
| End of period allowance | 11,277 | 11,768 | 12,424 | 13,150 | 8,974 | |||||||||||
| Net loans charged-off | $ | 3,736 | $ | 5,118 | $ | 8,963 | $ | 1,967 | $ | 500 | ||||||
| Annualized net charge-offs | 3.93 | % | 5.27 | % | 8.97 | % | 1.98 | % | 0.50 | % | ||||||
| PARK STERLING CORPORATION | ||||||||||||||||||||
| AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS | ||||||||||||||||||||
| THREE MONTHS | ||||||||||||||||||||
| June 30, 2011 | June 30, 2010 | |||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||
| Assets | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans with fees (1) | $ | 385,893 | $ | 4,450 | 4.63 | % | $ | 400,076 | $ | 5,169 | 5.18 | % | ||||||||
| Fed funds sold | 56,611 | 33 | 0.23 | % | 16,813 | 9 | 0.21 | % | ||||||||||||
| Taxable investment securities | 117,414 | 684 | 2.33 | % | 28,093 | 285 | 4.06 | % | ||||||||||||
| Tax-exempt investment securities | 15,988 | 181 | 4.53 | % | 14,253 | 160 | 4.49 | % | ||||||||||||
| Other interest-earning assets | 6,248 | 11 | 0.71 | % | 4,932 | 15 | 1.22 | % | ||||||||||||
| Total interest-earning assets | 582,154 | 5,359 | 3.69 | % | 464,167 | 5,638 | 4.87 | % | ||||||||||||
| Allowance for loan losses | (11,684 | ) | (8,463 | ) | ||||||||||||||||
| Cash and due from banks | 29,415 | 8,014 | ||||||||||||||||||
| Premises and equipment | 4,705 | 4,621 | ||||||||||||||||||
| Other assets | 17,689 | 9,917 | ||||||||||||||||||
| Total assets | $ | 622,279 | $ | 478,256 | ||||||||||||||||
| Liabilities and stockholders' equity | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing demand | $ | 11,968 | $ | 4 | 0.13 | % | $ | 11,113 | $ | 2 | 0.07 | % | ||||||||
| Savings and money market | 95,548 | 172 | 0.72 | % | 45,053 | 87 | 0.77 | % | ||||||||||||
| Time deposits - core | 169,072 | 644 | 1.53 | % | 181,574 | 874 | 1.93 | % | ||||||||||||
| Time deposits - brokered | 99,553 | 436 | 1.76 | % | 132,394 | 586 | 1.78 | % | ||||||||||||
| Total interest-bearing deposits | 376,141 | 1,256 | 1.34 | % | 370,134 | 1,549 | 1.68 | % | ||||||||||||
| Federal Home Loan Bank advances | 20,000 | 141 | 2.83 | % | 20,000 | 141 | 2.83 | % | ||||||||||||
| Other borrowings | 8,376 | 190 | 9.10 | % | 12,166 | 192 | 6.33 | % | ||||||||||||
| Total borrowed funds | 28,376 | 331 | 4.68 | % | 32,166 | 333 | 4.15 | % | ||||||||||||
| Total interest-bearing liabilities | 404,517 | 1,587 | 1.57 | % | 402,300 | 1,882 | 1.88 | % | ||||||||||||
| Net interest rate spread | 3,772 | 2.12 | % | 3,756 | 3.00 | % | ||||||||||||||
| Noninterest-bearing demand deposits | 39,711 | 28,939 | ||||||||||||||||||
| Other liabilities | 2,985 | 255 | ||||||||||||||||||
| Stockholders' equity | 175,066 | 46,762 | ||||||||||||||||||
| Total liabilities and equity | $ | 622,279 | $ | 478,256 | ||||||||||||||||
| Net interest margin | 2.60 | % | 3.25 | % | ||||||||||||||||
| (1) Average loan balances include nonaccrual loans. | ||||||||||||||||||||
| PARK STERLING CORPORATION | ||||||||||||||||
| SELECTED RATIOS | ||||||||||||||||
| ($ in thousands, except per share amounts) | ||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||
| 2011 | 2011 | 2010 * | 2010 | 2010 | ||||||||||||
| Unaudited | Unaudited | (Unaudited) | (Unaudited) | |||||||||||||
| ASSET QUALITY | ||||||||||||||||
| Nonaccrual loans | $ | 25,565 | $ | 34,027 | $ | 40,911 | $ | 10,043 | $ | 6,534 | ||||||
| Troubled debt restructuring | 2,002 | 1,198 | 1,198 | 3,314 | 2,271 | |||||||||||
| Nonperforming loans | 27,566 | 35,225 | 42,109 | 13,357 | 8,805 | |||||||||||
| OREO | 3,470 | 1,565 | 1,246 | 1,441 | 534 | |||||||||||
| Loans held for sale | 1,600 | - | - | - | - | |||||||||||
| Nonperforming assets | 32,637 | 36,790 | 43,356 | 14,797 | 9,339 | |||||||||||
| Past due 30-59 days (and still accruing) | - | 3,469 | - | 6,599 | 343 | |||||||||||
| Past due 60-89 days (and still accruing) | - | - | - | 660 | 1,778 | |||||||||||
| Past due 90 days plus (and still accruing) | - | - | - | - | - | |||||||||||
| Nonperforming loans to total loans | 7.25 | % | 9.07 | % | 10.53 | % | 3.36 | % | 2.20 | % | ||||||
| Nonperforming assets to total assets | 5.34 | % | 5.85 | % | 7.04 | % | 2.34 | % | 1.91 | % | ||||||
| Allowance to total loans | 2.96 | % | 3.03 | % | 3.11 | % | 3.31 | % | 2.25 | % | ||||||
| Allowance to nonperforming loans | 40.91 | % | 33.41 | % | 29.50 | % | 98.45 | % | 101.92 | % | ||||||
| Allowance to nonperforming assets | 34.55 | % | 31.99 | % | 28.66 | % | 88.87 | % | 96.09 | % | ||||||
| CAPITAL | ||||||||||||||||
| Book value per share | $ | 6.19 | $ | 6.23 | $ | 6.31 | $ | 6.55 | $ | 9.43 | ||||||
| Tangible book value per share | $ | 6.19 | $ | 6.23 | $ | 6.31 | $ | 6.55 | $ | 9.43 | ||||||
| Common shares outstanding | 28,619,358 | 28,619,358 | 28,051,098 | 28,051,098 | 4,951,098 | |||||||||||
| Dilutive common shares outstanding | 28,051,098 | 28,051,098 | 28,051,098 | 28,051,098 | 4,951,098 | |||||||||||
| Tier 1 capital | $ | 166,762 | $ | 170,956 | $ | 173,395 | $ | 182,234 | $ | 44,262 | ||||||
| Tier 2 capital | 12,143 | 12,035 | 12,373 | 12,280 | 12,167 | |||||||||||
| Total risk based capital | 178,905 | 182,991 | 185,768 | 194,514 | 56,429 | |||||||||||
| Tier 1 ratio | 40.30 | % | 42.25 | % | 40.20 | % | 43.09 | % | 10.59 | % | ||||||
| Total risk based capital ratio | 43.23 | % | 45.23 | % | 43.07 | % | 45.99 | % | 13.50 | % | ||||||
| Tier 1 leverage ratio | 27.07 | % | 28.36 | % | 27.39 | % | 32.80 | % | 9.26 | % | ||||||
| Tangible common equity to tangible assets | 28.43 | % | 27.81 | % | 28.75 | % | 29.06 | % | 9.56 | % | ||||||
| LIQUIDITY | ||||||||||||||||
| Net loans to total deposits | 91.38 | % | 89.30 | % | 94.99 | % | 92.18 | % | 94.81 | % | ||||||
| Liquidity ratio | 53.09 | % | 53.99 | % | 50.48 | % | 54.99 | % | 19.56 | % | ||||||
| Equity to Total Assets | 28.43 | % | 27.81 | % | 28.75 | % | 29.06 | % | 9.56 | % | ||||||
| INCOME STATEMENT (THREE MONTH RESULTS; ANNUALIZED) | ||||||||||||||||
| Return on Average Assets | -2.00 | % | -1.93 | % | -2.81 | % | -2.64 | % | 0.14 | % | ||||||
| Return on Average Equity | -7.12 | % | -6.60 | % | -9.75 | % | -12.80 | % | 1.48 | % | ||||||
| Net interest margin (tax equivalent) | 2.60 | % | 2.76 | % | 2.52 | % | 2.74 | % | 3.25 | % | ||||||
| INCOME STATEMENT (ANNUAL RESULTS) | ||||||||||||||||
| Return on Average Assets | n/a | n/a | -1.46 | % | n/a | n/a | ||||||||||
| Return on Average Equity | n/a | n/a | -8.00 | % | n/a | n/a | ||||||||||
| Net interest margin (tax equivalent) | n/a | n/a | 2.95 | % | n/a | n/a | ||||||||||
| * Derived from audited financial statements. | ||||||||||||||||
| PARK STERLING CORPORATION | |||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||
| ($ in thousands) | |||||||||||||||||
| June | March | December | September 30, | June 30, | |||||||||||||
| 2011 | 2011 | 2010 * | 2010 | 2010 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Tangible assets | |||||||||||||||||
| Total assets | $ | 610,668 | $ | 628,416 | $ | 616,108 | $ | 632,630 | $ | 488,361 | |||||||
| Less: intangible assets | - | - | - | - | - | ||||||||||||
| Tangible assets | $ | 610,668 | $ | 628,416 | $ | 616,108 | $ | 632,630 | $ | 488,361 | |||||||
| Tangible common equity | |||||||||||||||||
| Total common equity | $ | 173,584 | $ | 174,770 | $ | 177,101 | $ | 183,847 | $ | 46,690 | |||||||
| Less: intangible assets | - | - | - | - | - | ||||||||||||
| Tangible common equity | $ | 173,584 | $ | 174,770 | $ | 177,101 | $ | 183,847 | $ | 46,690 | |||||||
| Tangible book value per share | |||||||||||||||||
| Issued and outstanding shares | 28,619,358 | 28,619,358 | 28,051,098 | 28,051,098 | 4,951,098 | ||||||||||||
| Add: dilutive stock options | - | - | - | - | - | ||||||||||||
| Deduct: nondilutive restricted awards | 568,260 | 568,260 | - | - | - | ||||||||||||
| Period end dilutive shares | 28,051,098 | 28,051,098 | 28,051,098 | 28,051,098 | 4,951,098 | ||||||||||||
| Tangible common equity | $ | 173,584 | $ | 174,770 | $ | 177,101 | $ | 183,847 | $ | 46,690 | |||||||
| Divided by: period end outstanding shares | 28,051,098 | 28,051,098 | 28,051,098 | 28,051,098 | 4,951,098 | ||||||||||||
| Tangible common book value per share | $ | 6.19 | $ | 6.23 | $ | 6.31 | $ | 6.55 | $ | 9.43 | |||||||
| * Derived from audited financial statements. | |||||||||||||||||