Results Also Include Loan Growth of $10.6 Million and Net Interest Margin Expansion of 15 Basis Points
GREENVILLE, S.C.– Palmetto Bancshares, Inc. (NASDAQ: PLMT) (the “Company”) reported second quarter 2013 net income of $1.5 million ($0.12 per diluted share) compared to first quarter 2013 net income of $2.2 million ($0.17 per diluted share). For the six months ended June 30, 2013, net income was $3.7 million ($0.29 per diluted share) compared to a net loss of $7.7 million for the six months ended June 30, 2012.
Highlights for the second quarter 2013 are summarized as follows:
- Net income was $1.5 million which declined from the first quarter 2013 due to a $1.9 million increase in credit-related expenses, primarily due to a writedown on one problem asset.
- Net interest margin increased 15 basis points to 3.92%, reflecting further strategic reductions in funding cost related to time deposits and an improved funding mix.
- Excluding a net gain on the sale of investment securities of $331 thousand, noninterest income increased $161 thousand from the first quarter primarily as a result of higher Trust income.
- Non-credit expenses include $347 thousand of one-time expenses related to the revised Trust business model announced in April 2013 and other headcount reductions. Non-credit expenses also reflect a reduction in the provision for unfunded loan commitments of $557 thousand.
- Credit-related expenses increased to $2.9 million in the second quarter 2013 from $1.0 million in the first quarter 2013. The second quarter 2013 includes a $1.7 million writedown related to a single real estate development included in foreclosed real estate.
- Period end loans held for investment increased $10.6 million from March 31, 2013 reflecting stronger loan originations, funding of existing loan commitments and retaining a portion of Small Business Administration (“SBA”) and residential mortgage loan production on the balance sheet.
- The allowance for loan losses coverage ratio declined to 2.32% of gross loans from 2.39% at March 31, 2013.
- In April, the Company announced its go forward Wealth Management strategy related to Trust and Brokerage, including the hiring by Palmetto Trust of three additional Trust professionals, followed by the announcement in June of the hiring of a seasoned Private Banker.
- In May, the Company was recognized by Retail Banker International for the Best IT Innovation of 2013.
- On June 28, the Company’s common stock was added to the Russell 2000 index in connection with the annual reconstitution of the index.