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 $339.86 million; its shares were traded at around $26.75 with a P/E ratio of 26.23 and P/S ratio of 1.83. The dividend yield of Scbt Financial Corp. stocks is 2.54%. 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; current legislation returns to the $100,000 limit on January 1, 2014;
Results of Operations We reported consolidated net income available to common shareholders of $2.2 million, or diluted earnings per share (EPS) of $0.17, for the third quarter of 2009 as compared to consolidated net income of $124,000, or diluted EPS of $0.01, in the comparable period of 2008. The increase comparing the three months ended September 30, 2009 to the same quarter of 2008 was primarily the result of a strong net interest margin that led to higher net interest income and a decrease of $7.6 million in the amount of OTTI from the comparable quarter in 2008. The increase was offset by an increase in the provision for loan losses, an increase in FDIC assessments expense, and an increase in other real estate owned (OREO) expense and loan-related costs.
For the nine months ended September 30, 2009, we reported consolidated net income available to common shareholders of $7.4 million, or diluted EPS of $0.62, as compared to $12.2 million, or diluted EPS of $1.19, in the comparable period of 2008. The decrease reflects a higher provision for loan losses and an accelerated deemed dividend on the repurchase of preferred shares during the second quarter of 2009. On May 20, 2009, we repurchased 64,779 shares of preferred stock 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. 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.
We continue to hold four assets (related to Silverton Bank) which were acquired in a purchase business combination in 2007. Two of these assets are loan participations for which we charged-off approximately $1.8 million during the third quarter of 2009, and had a combined book value of $611,000 at September 30, 2009. At September 30, 2009 they were valued at approximately 20 cents on the dollar. The other two assets are in OREO which have been written down an additional $810,000 during the three months ended September 30, 2009, and had a combined book value of $433,000 at September 30, 2009. The FDIC was named receiver of Silverton Bank on May 1, 2009 (See Silverton Bank Loan Participations in MD&A).
· Consolidated net income available to common shareholders increased to $2.2 million in the third quarter of 2009 from $124,000 in the third quarter of 2008. Consolidated net income available to common shareholders decreased 39.5% to $7.4 million for the nine months ended September 30, 2009, as compared to $12.2 million in the comparative period in 2008.
· Diluted EPS increased to $0.17 for the third quarter of 2009 as compared to $0.01 for the comparable period in 2008. EPS in the prior year reflects an OTTI charge on Freddie Mac preferred securities which led to lower consolidated net income for the third quarter of 2008. Diluted EPS for the nine months ended September 30, 2009 decreased to $0.62 as compared to $1.19 for the comparable period in 2008. The decrease reflects the accelerated deemed dividend on the preferred shares during the second quarter of 2009.
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