SCBT Financial Corp. Reports Operating Results (10-Q)
SCBT Financial Corporation offers a full range of retail and commercial banking services mortgage lending services trust and investment services and consumer finance loans. SCBT Financial Corp. has a market cap of $342.82 million; its shares were traded at around $27.12 with a P/E ratio of 18.32 and P/S ratio of 1.85. The dividend yield of SCBT Financial Corp. stocks is 2.51%. SCBT Financial Corp. had an annual average earning growth of 9.6% over the past 10 years. GuruFocus rated SCBT Financial Corp. the business predictability rank of 3-star. Highlight of Business Operations: · The Emergency Economic Stabilization Act of 2008 (EESA), approved by Congress and signed by President Bush on October 3, 2008, which, among other provisions, allowed the U.S. Treasury to purchase up to $700 billion of mortgages, mortgage-backed securities and certain other financial instruments from financial institutions for the purpose of stabilizing and providing liquidity to the U.S. financial markets. EESA also temporarily raised the basic limit of FDIC deposit insurance from $100,000 to $250,000; the legislation contemplated a return to the $100,000 limit on December 31, 2013;
Results of Operations We reported net income available to common shareholders of $1.5 million, or $0.13 diluted earnings per share (EPS), during the second quarter of 2009 despite an accelerated deemed dividend on the repurchase of preferred shares, an increase in the provision for loan losses, a special FDIC assessment and continued costs associated with collection of loans and other real estate owned. Our net income available to common shareholders was impacted by the repurchase of all 64,779 shares of preferred shares issued to the U.S. Treasury. As a result, we recorded a $3.3 million accelerated deemed dividend on the preferred stock to account for the difference between the original purchase price for the preferred stock and its redemption price. These factors caused net income available to common shareholders to decrease by 58.9% from the first quarter of 2009 and 75.2% from the comparable quarter in 2008. During the second quarter of 2009, we paid the U.S. Treasury $1.4 million to repurchase the warrant to purchase 303,083 shares of our common stock. We have repurchased all securities issued to the Treasury under the Capital Purchase Program.
Consolidated net income for the second quarter of 2009 was $5.4 million, a 12.4% decrease from the same quarter in 2008; however, a 19.2% increase from the first quarter of 2009. An increase in the provision for loan losses during the second quarter of 2009 from the comparable quarter in 2008 was offset by an increase in our net interest income to $26.0 million as compared to $23.6 million in the comparable period of 2008. Our net income was also positively affected by the increase in noninterest income which was almost entirely driven by mortgage banking income as mortgage rates declined. While our net income was down on a year-over-year comparison, we were able to increase net income from the first quarter of 2009.
Compared to the second quarter of 2008, our loan portfolio has decreased 0.5% to $2.2 billion driven by a reduction in construction and land development loans of $68.6 million and reduction in commercial and industrial loans of $35.2 million. Loan growth has continued primarily in consumer owner occupied loans, home equity loans and commercial owner occupied loans to offset the reductions. However, compared to the first quarter of 2009 we have experienced a 2.5% decline in the loan portfolio. For the three months ended June 30, 2009, we originated approximately $270.5 million mortgage loans in the secondary market reflective of the low interest rate environment and an increase in refinancing activity by our customers.
· Consolidated net income decreased 12.4% to $5.4 million in the second quarter of 2009, as compared to $6.1 million in the second quarter of 2008. Consolidated net income available to common shareholders decreased 75.2% to $1.5 million in the second quarter of 2009. Consolidated net income is reduced by the preferred stock dividends and accretion on preferred stock discount to arrive at net income available to common shareholders.
· Average earning assets increased 2.9% to $2.6 billion in the second quarter of 2009 compared to the same period last year due to an increase in the loan portfolio which increased average earning assets by $80.3 million for the second quarter of 2009.
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