BANCTRUST FINANCIAL GROUP INC 
By Fourth Quarter Loss Due to Higher Provision for Loan Losses
"We are pleased that BancTrust reported a profit for 2008 in light of the recession's impact on the economy, particularly in our Gulf Coast markets that have been hard hit by falling real estate prices," stated
"We raised
"Our earnings for 2008 fell short of our expectations because of increased loan loss provisions, lower margins resulting from falling interest rates, and increased expenses associated with other real estate owned. During the fourth quarter we took significant steps to strengthen our allowance for loan losses with the addition of
2008 Results
Net interest income increased 13.2% to
Loans totaled
"We had modest loan growth in the last three months of 2008, primarily because of the solid economic fundamentals in our metropolitan
We increased our 2008 provision for loan losses to
Non-interest income increased 51.5% to
Fourth Quarter Results
"BancTrust's fourth quarter results were negatively impacted by the increase in our provision for loan losses, a decline in the net interest margin and higher costs associated with other real estate owned," noted Mr. Lamar. "The increase in our provision was due to a higher level of non-performing loans and higher charge-offs as we continued to be affected by a difficult economy. Our
Net interest revenue declined 22.7% to
The provision for loan losses increased 7.1% to
We increased our allowance for loan losses to
"We experienced a slowdown in the growth rate of non-performing assets and a reduction in past-due loans in the fourth quarter compared with the third quarter of 2008," stated Mr. Lamar. "Although these trends are positive, our level of non-performing assets and other real-estate owned are significantly higher in 2008 than 2007. We expect our focus to remain on improving credit quality until we see renewed strength in the economy in our markets. We believe it is an important part of our strategy to protect our capital base."
Total non-interest revenue was down 6.0% to
Total non-interest expense increased 4.3% to
The loss before taxes was
The 2008 fourth quarter results included
BancTrust was classified as 'well-capitalized' at the end of the fourth quarter. Total risk-based capital was 14.1% for the holding company and 13.2% for the bank, compared with a regulatory requirement of 10.0% for a well-capitalized institution and a minimum regulatory requirement of 8.0%. Tier 1 risk-based capital was 12.9% for the holding company and 12.0% for the bank, both measures significantly above the requirement of 6.0% for a wellcapitalized institution and minimum regulatory requirement of 4.0%.
In late
Book value per common share decreased to
BancTrust completed the sale of
In conjunction with the issuance of its senior preferred shares, BancTrust issued the U.S. Treasury a warrant to purchase up to 730,994 shares of the Company's common stock at
"The U.S. Treasury Department's Capital Purchase Program was designed to fund well-capitalized and well- managed banks to ensure the safety and soundness of the banking system during these tough economic times," stated Mr. Lamar. "BancTrust was rated a well-capitalized bank prior to participating in the program, and the additional capital significantly increases our capital base."
"We continue to gain market share by attracting customers from other banks, many of whom had long-term relationships with their former bank and have experienced reduced service levels caused by recent personnel changes. We remain focused on providing our customers with personal attention and services to support their financial requirements. We believe we are in an excellent position to take advantage of the changes in the banking markets by leveraging our strong capital base to fund future loan growth as the economy improves," concluded Mr. Lamar.
Accounting Treatment for Peoples BancTrust Acquisition
The acquisition of The Peoples BancTrust Company, Inc. was accounted for under the purchase accounting method as required by
Dividend on Common Shares
The Board of Directors declared a dividend of
"Our Board of Directors reduced the cash dividend as a result of the current economic conditions, our reduced earnings in the second half of 2008 and our desire to maintain our capital for a possible further deterioration in the economy," stated Mr. Lamar. "The reduced dividend will save BancTrust approximately
"Our Board remains committed to building long-term shareholder value and will continue to evaluate the cash dividend as part of this program. Future dividends will be consistent with maintaining our strong capital position," concluded Mr. Lamar.
About BancTrust Financial Group, Inc.
BancTrust Financial Group, Inc., is a registered bank holding company headquartered in
Additional information concerning BancTrust Financial Group can be accessed at www.banktrustonline.com by following the link to investor relations.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning and subject to the protection of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements can be identified by the use of words such as "expect," "may," "could," "intend," "project," "schedule," "estimate," "anticipate," "should," "will," "plan," "believe," "continue," "predict," "contemplate" and similar expressions. Such forward-looking statements are based on information presently available to BancTrust's management and are subject to various risks and uncertainties, including, without limitation, risks that competitive pressures among depository and other financial institutions may increase significantly; changes in the interest rate environment may reduce margins; general economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduction in demand for credit; legislative or regulatory changes, including changes in accounting standards and changes resulting from the recently enacted Emergency Economic Stabilization Act of 2008 and programs enacted by the U. S. Treasury and BancTrust's regulators to address capital and liquidity concerns in the financial system, may adversely affect the business in which BancTrust is engaged; BancTrust may be unable to obtain required shareholder or regulatory approval or financing for any proposed acquisition or other strategic or capital raising transactions; costs or difficulties related to the integration of BancTrust's businesses may be greater than expected; deposit attrition, customer loss or revenue loss following acquisitions may be greater than expected; competitors may have greater financial resources and develop products that enable these competitors to compete more successfully than BancTrust can compete; and the other risks described in BancTrust's SEC reports and filings under "Cautionary Note Concerning Forward-Looking Statements" and "Risk Factors." You should not place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made. BancTrust has no obligation and does not undertake to publicly update, revise or correct any of its forward-looking statements after the date of this press release, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise.
BANCTRUST FINANCIAL GROUP, INC.
(BTFG)
Financial Highlights (Unaudited)
(In thousands, except per share amounts)
Quarter Ended
----------------------------------------------------
December 31, September 30, June 30, December 31,
2008 2008 2008 2007
---- ---- ---- ----
EARNINGS:
Interest revenue $24,210 $25,266 $27,622 $33,513
Interest expense 10,698 10,898 11,458 16,044
------ ------ ------ ------
Net interest
revenue 13,512 14,368 16,164 17,469
Provision for loan
losses 8,086 1,863 2,382 7,549
Trust revenue 1,138 1,018 1,000 960
Service charges on
deposit accounts 2,697 2,802 2,753 2,807
Securities gains 135 3 41 3
Gain on sale of
interest rate floor 0 0 0 0
Other income,
charges and fees 1,472 1,764 1,417 2,017
----- ----- ----- -----
Total non-interest
revenue 5,442 5,587 5,211 5,787
----- ----- ----- -----
Salaries, pensions
and other employee
benefits 7,598 7,626 7,603 7,347
Net occupancy,
furniture and
equipment expense 2,954 2,998 3,148 2,975
Intangible
amortization 779 949 948 666
Loss (gain)
on other real
estate, net 270 1,709 (31) 574
Other non-interest
expense 5,008 4,624 4,712 4,363
----- ----- ----- -----
Total non-interest
expense 16,609 17,906 16,380 15,925
------ ------ ------ ------
Income before
income taxes (5,741) 186 2,613 (218)
Income tax
(benefit) expense (2,249) (37) 836 (338)
------ --- --- ----
Net income (3,492) 223 1,777 120
------ --- ----- ---
Effective
preferred
stock dividend 111 0 0 0
--- --- --- ---
Net income available
to common
shareholders ($3,603) $223 $1,777 $120
------- ---- ------ ----
Earnings per
common share:
Total
Basic (0.21) $0.01 $0.10 $0.01
Diluted (0.21) 0.01 0.10 0.01
Cash dividends
declared per
common share $0.13 $0.13 $0.13 $0.13
Book value per
common share $13.85 $14.05 $14.12 $14.26
Common shares
outstanding 17,555 17,548 17,535 17,497
Basic average
common shares
outstanding 17,555 17,548 17,535 16,471
Diluted average
common shares
outstanding 17,712 17,721 17,697 16,628
Year Ended
----------
December 31,
2008 2007
---- ----
EARNINGS:
Interest revenue $108,092 $104,025
Interest expense 47,189 50,245
------ ------
Net interest revenue 60,903 53,780
Provision for loan losses 15,260 12,435
Trust revenue 4,156 3,044
Service charges on deposit accounts 11,069 6,983
Securities gains 186 3
Gain on sale of interest rate floor 1,115 0
Other income, charges and fees 6,429 5,126
----- -----
Total non-interest revenue 22,955 15,156
------ ------
Salaries, pensions and other employee
benefits 31,273 24,164
Net occupancy, furniture and
equipment expense 12,091 8,219
Intangible amortization 3,500 1,227
Loss (gain) on other real estate, net 1,979 535
Other non-interest expense 18,794 14,163
------ ------
Total non-interest expense 67,637 48,308
------ ------
Income before income taxes 961 8,193
Income tax (benefit) expense (295) 2,007
---- -----
Net income 1,256 6,186
----- -----
Effective preferred stock dividend 111 0
--- ---
Net income available to common
shareholders $1,145 $6,186
------ ------
Earnings per common share:
Total
Basic $0.07 $0.49
Diluted 0.06 0.49
Cash dividends declared per common share $0.52 $0.52
Book value per common share $13.85 $14.26
Common shares outstanding 17,555 17,497
Basic average common shares outstanding 17,540 12,521
Diluted average common shares
outstanding 17,695 12,704
STATEMENT OF
CONDITION: 12/31/08 09/30/08 06/30/08 03/31/08 12/31/07
-------- -------- -------- -------- --------
Cash and cash
equivalents $85,069 $99,638 $77,124 $121,118 $128,781
Securities
available for
sale 221,879 215,126 222,082 225,775 245,877
Loans and
loans held
for sale 1,533,806 1,521,704 1,558,967 1,576,894 1,632,676
Allowance for
loan losses (30,683) (25,116) (24,642) (23,888) (23,775)
Goodwill 97,484 97,506 98,463 96,543 95,643
Other intangible
assets 9,477 10,256 11,205 12,153 12,978
Other assets 171,145 169,774 179,630 171,261 147,914
------- ------- ------- ------- -------
Total assets $2,088,177 $2,088,888 $2,122,829 $2,179,856 $2,240,094
========== ========== ========== ========== ==========
Deposits $1,662,477 $1,687,116 $1,703,332 $1,767,481 $1,827,927
Short term
borrowings 0 959 8,042 548 4,198
FHLB borrowings
and long term
debt 113,398 134,473 142,807 134,960 137,341
Other liabilities 22,085 19,848 20,994 25,815 21,108
Preferred stock 47,085 0 0 0 0
Common
shareholders'
equity 243,132 246,492 247,654 251,052 249,520
------- ------- ------- ------- -------
Total liabilities
and
shareholders'
equity $2,088,177 $2,088,888 $2,122,829 $2,179,856 $2,240,094
========== ========== ========== ========== ==========
Quarter Ended
-------------------------------------------------
12/31/08 09/30/08 06/30/08 03/31/08
-------- -------- -------- --------
AVERAGE BALANCES:
Total assets $2,072,075 $2,088,019 $2,127,484 $2,178,918
Earning assets 1,766,228 1,774,193 1,819,174 1,889,782
Loans 1,521,737 1,542,183 1,570,840 1,605,924
Deposits 1,670,043 1,677,430 1,710,582 1,765,154
Common
shareholders'
equity 246,079 247,008 249,270 249,880
PERFORMANCE RATIOS:
Return on
average assets -0.67% 0.04% 0.34% 0.51%
Return on average
common shareholders'
equity -5.82% 0.36% 2.87% 4.42%
Net interest margin
(tax equivalent) 3.08% 3.25% 3.60% 3.62%
Efficiency ratio 87.79% 85.90% 75.81% 70.43%
ASSET QUALITY:
Ratio of non-performing
assets to
total assets 5.91% 5.58% 3.97% 3.88%
Ratio of allowance for
loan losses to total
loans, net of
unearned income 2.00% 1.65% 1.58% 1.51%
Net loans
charged-off
to average
loans (annualized) 0.66% 0.27% 0.42% 0.71%
Ratio of ending
allowance to total
non-performing
loans 42.32% 35.94% 71.86% 54.85%
CAPITAL RATIOS:
Average common
shareholders' equity
to average total
assets 11.88% 11.83% 11.72% 11.47%
Dividend payout
ratio N/A 1300.00% 130.00% 81.25%
Year Ended
-----------------------
12/31/08 12/31/07
-------- --------
AVERAGE BALANCES:
Total assets $2,116,424 $1,558,040
Earning assets 1,812,114 1,381,358
Loans 1,560,017 1,147,714
Deposits 1,705,627 1,227,597
Common shareholders' equity 248,051 163,121
PERFORMANCE RATIOS:
Return on average assets 0.06% 0.40%
Return on average common shareholders'
equity 0.46% 3.79%
Net interest margin (tax equivalent) 3.40% 3.95%
Efficiency ratio 80.02% 69.06%
ASSET QUALITY:
Ratio of non-performing assets to
total assets 5.91% 2.26%
Ratio of allowance for loan losses
to total loans, net of unearned income 2.00% 1.46%
Net loans charged-off to average
loans (annualized) 0.51% 1.02%
Ratio of ending allowance to total
non-performing loans 42.32% 65.99%
CAPITAL RATIOS:
Average common shareholders' equity to
average total assets 11.72% 10.47%
Dividend payout ratio 742.86% 106.12%
SOURCE BancTrust Financial Group, Inc.
