Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Tennessee Commerce Bancorp, Inc. | a11-28954_18k.htm |
Exhibit 99.1
|
Contact: |
Frank Perez |
|
|
Chief Financial Officer |
|
|
615-599-2274 |
TENNESSEE COMMERCE BANCORP REPORTS
THIRD QUARTER 2011 RESULTS
FRANKLIN, Tenn. — (November 1, 2011) — Tennessee Commerce Bancorp, Inc. (NASDAQ: TNCC), the bank holding company of Tennessee Commerce Bank (the “Bank”), today reported financial results for the nine months ended September 30, 2011. The Company reported a net loss of $120.0 million for the nine months ended September 30, 2011 or $9.83 per diluted common share.
The net loss for the nine months ended September 30, 2011 was primarily driven by a $92.6 million charge to provision expense during the third quarter. The increased provision expense is in large part due to preliminary loan losses of $76.3 million combined with $12.1 million of specific reserves on classified loans identified by examiners from the Federal Deposit Insurance Corporation (the “FDIC” and the Tennessee Department of Financial Institutions during their regulatory joint examination started on September 26, 2011, and which is still in progress. The provision charges made in the third quarter relate to events that occurred in the second quarter. As a result, we will be restating our second quarter results and amending our second quarter form 10-Q and Bank Call Report to reflect these charges and until such restatement is complete, such second quarter financial statements should not be relied upon.
Total assets decreased $262.3 million or 18.0% compared to the quarter ended December 31, 2011. The decrease in assets was mainly attributable to decreases of $215.6 million or 17.5% in loans, $33.7 million in securities available-for-sale, $16.1 million or 52.6% in repossessed assets offset by increases in cash and cash equivalents of $10.7 million or 51.4% and $12.9 million or 81.7% in other real estate owned.
Total deposits decreased $149.8 million or 11.5% compared to the fourth quarter of 2010. The decrease in deposits was mainly due to savings accounts which decreased $143.3 million or 46.05% while non-interest bearing accounts increased $16.3 million or 63.8%.
As it relates to the debt previously contracted transaction on two banks that we disclosed last quarter, we initially disclosed the valuations from both banks to be $30 million as of March 31, 2011. Since then credit quality at both banks has deteriorated and another independent third party valuation resulted in a lower valuation of $7.8 million as of September 9, 2011 for 100% of both banks. The Bank currently has a 46.0% interest in Farmers Bancorp, Inc., the parent of Farmers Bank of Lynchburg and a 27.1% interest in Commerce Bancshares, Inc. the parent of Peoples State Bank of Commerce.
As previously disclosed and as a result of the Bank entering into a written agreement with the FDIC during the second quarter, the Bank has to achieve and maintain a tier 1 leverage capital ratio of 8.50%, a tier 1 risk based capital ratio of 10.00% and a total risk based capital ratio of 11.50% by no later than December 31, 2011. As a result of the reported net loss through the nine months ended September 30, 2011 the Bank has a tier 1 leverage ratio of 0.95%, a tier 1 risk based capital ratio of 1.17% and a total risk based capital ratio of 2.34%. The holding company had a tier 1 leverage ratio of 0.42%, a tier 1 risk based capital ratio of 0.52% and a total risk based capital ratio of 1.04%. For purposes of the Prompt Corrective Action “PCA” provisions of the Federal Deposit Insurance Act (the “FDIA”), the Bank will be classified as critically undercapitalized upon the filing of the September 30, 2011 Call Report. Critically undercapitalized is the lowest category under the PCA spectrum resulting in mandatory actions by the regulators and mandatory restrictions on the Bank’s operations. Under the FDIA, depository institutions that are “critically undercapitalized” can be placed into conservatorship or receivership within 90 days of becoming critically undercapitalized, unless they raise sufficient capital, merge with another financial institution, or the FDIC determines and documents that “other action” would better achieve the purposes of the PCA capital requirements (12 U.S.C. § 1831o).
The Bank remains a member of the FDIC, and deposits at the Bank remain insured by the FDIC up to the legal maximum insurance limit – currently $250,000 per depositor, per deposit category. Our customer service staff can help depositors with any questions about the mechanics of FDIC deposit insurance.
Due to the results of the third quarter, the Corporation is retaining Macquarie Capital (U.S.A.) Inc. to assist in evaluating all possible strategic alternatives. FIG Partners will also participate with Macquarie Capital in assisting in the Company’s strategic transactions. The management team of Tennessee Commerce Bancorp, Inc. will host a conference call today at 1:00 PM CT to discuss the results for the quarter.
Third Quarter Conference Call
Schedule this webcast into MS-Outlook calendar (click open when prompted):
http://apps.shareholder.com/PNWOutlook/t.aspx?m=50552&k=748DE86A
Toll-free: 877-312-8781
Conference ID: 24461851
Listen via Internet: http://investor.shareholder.com/media/eventdetail.cfm?eventid=105022&CompanyID=ABEA-2G5D9Z&e=1&mediaKey=B8DF282067CD208270C595F65354F2C4
Conference ID number: 24461851
Tennessee Commerce will provide an online, real-time webcast and rebroadcast of its third quarter earnings conference call to be held at 2:00 p.m. Eastern on November 1, 2011. The live broadcast will be available online at http://www.tncommercebank.com under the Investor Relations tab.
An audio replay of the conference call will be available approximately two hours after the call’s completion on our website at http://www.tncommercebank.com under the Investor Relations tab or by dialing one of the following Dial-In Numbers and the Conference ID shown below:
Encore Dial In #: (855) 859-2056 Encore Dial In #: (404) 537-3406
The recording will be available from: 11/01/2011 17:00 to 11/07/2011 23:59 Conference ID number: 24461851
About Tennessee Commerce Bancorp, Inc.
Tennessee Commerce Bancorp, Inc. is the parent company of Tennessee Commerce Bank. The Bank provides a wide range of banking services and is primarily focused on business accounts. Its corporate and banking office is located in Franklin, Tennessee. Tennessee Commerce Bancorp’s stock is traded on the NASDAQ Global Market under the symbol TNCC.
Additional information concerning Tennessee Commerce can be accessed at www.tncommercebank.com.
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about our regional economy and non-GAAP financial measures. Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “outlook,” “estimate,” “continue,” “predict,” “project”, “intend,” “could” and “should,” and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties and there are a number of factors that could cause actual results to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to, the resolution of our recent regulatory examination, the effects of future economic, business and market conditions and changes, domestic and foreign, that may affect general economic conditions, governmental monetary and fiscal policies, negative developments in the financial services industry and U.S. and global credit markets, fluctuations in interest rates, changes in accounting policies, rules and practices, other matters discussed in this press release and other factors identified in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission.
These forward-looking statements are made only as of the date of this press release, and Tennessee Commerce undertakes no obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this release. Tennessee Commerce is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.
TENNESSEE COMMERCE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(UNAUDITED)
|
|
|
Nine Months Ended |
| ||||
|
|
|
September 30, |
|
September 30, |
| ||
|
(Dollars in thousands, except per share data) |
|
2011 |
|
2010 |
| ||
|
Interest income |
|
|
|
|
| ||
|
Loans, including fees |
|
$ |
45,296 |
|
$ |
58,102 |
|
|
Securities |
|
3,934 |
|
2,492 |
| ||
|
Federal funds sold |
|
135 |
|
37 |
| ||
|
Total interest income |
|
49,365 |
|
60,631 |
| ||
|
|
|
|
|
|
| ||
|
Interest expense |
|
|
|
|
| ||
|
Deposits |
|
18,893 |
|
20,306 |
| ||
|
Other |
|
899 |
|
1,400 |
| ||
|
Total interest expense |
|
19,792 |
|
21,706 |
| ||
|
|
|
|
|
|
| ||
|
Net interest income |
|
29,573 |
|
38,925 |
| ||
|
|
|
|
|
|
| ||
|
Provision for loan losses |
|
111,517 |
|
16,243 |
| ||
|
|
|
|
|
|
| ||
|
Net interest income after provision for loan losses |
|
(81,944 |
) |
22,682 |
| ||
|
|
|
|
|
|
| ||
|
Non-interest income |
|
|
|
|
| ||
|
Service charges on deposit accounts |
|
43 |
|
90 |
| ||
|
Securities (loss) gains |
|
(10,579 |
) |
734 |
| ||
|
Gain on sale of loans |
|
63 |
|
475 |
| ||
|
Loss on repossession |
|
(13,778 |
) |
(3,998 |
) | ||
|
Other |
|
778 |
|
5,575 |
| ||
|
Total non-interest (loss) income |
|
(23,473 |
) |
2,876 |
| ||
|
|
|
|
|
|
| ||
|
Non-interest expense |
|
|
|
|
| ||
|
Salaries and employee benefits |
|
6,320 |
|
8,235 |
| ||
|
Occupancy and equipment |
|
1,412 |
|
1,474 |
| ||
|
Data processing fees |
|
1,740 |
|
1,529 |
| ||
|
FDIC expense |
|
2,696 |
|
2,349 |
| ||
|
Professional fees |
|
2,215 |
|
2,286 |
| ||
|
Other |
|
6,195 |
|
5,666 |
| ||
|
Total non-interest expense |
|
20,578 |
|
21,539 |
| ||
|
|
|
|
|
|
| ||
|
(Loss) income before income taxes |
|
(125,995 |
) |
4,019 |
| ||
|
|
|
|
|
|
| ||
|
Income tax (benefit) expense |
|
(7,153 |
) |
1,503 |
| ||
|
Net (loss) income |
|
(118,842 |
) |
2,516 |
| ||
|
Preferred dividends |
|
(1,131 |
) |
(1,125 |
) | ||
|
|
|
|
|
|
| ||
|
Net (loss) income available to common shareholders |
|
$ |
(119,973 |
) |
$ |
1,391 |
|
|
|
|
|
|
|
| ||
|
Earnings (loss) per share (EPS): |
|
|
|
|
| ||
|
Basic EPS |
|
$ |
(9.83 |
) |
$ |
0.20 |
|
|
Diluted EPS |
|
(9.83 |
) |
0.20 |
| ||
|
|
|
|
|
|
| ||
|
Weighted average shares outstanding: |
|
|
|
|
| ||
|
Basic |
|
12,203,855 |
|
6,871,025 |
| ||
|
Diluted |
|
12,203,855 |
|
6,871,025 |
| ||
TENNESSEE COMMERCE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2011 AND 2010 (UNAUDITED) AND DECEMBER 31, 2010
|
|
|
September 30, |
|
December 31, |
|
September 30 |
| |||
|
(Dollars in thousands, except per share data) |
|
2011 |
|
2010 |
|
2010 |
| |||
|
ASSETS |
|
|
|
|
|
|
| |||
|
Cash and due from banks |
|
$ |
7,069 |
|
$ |
6,521 |
|
$ |
17,693 |
|
|
Federal funds sold |
|
24,328 |
|
14,214 |
|
8,005 |
| |||
|
Cash and cash equivalents |
|
31,397 |
|
20,735 |
|
25,698 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Securities available for sale |
|
93,964 |
|
127,650 |
|
79,242 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Loans |
|
1,014,188 |
|
1,229,811 |
|
1,241,669 |
| |||
|
Allowance for loan losses |
|
(35,696 |
) |
(21,463 |
) |
(21,742 |
) | |||
|
Net loans |
|
978,492 |
|
1,208,348 |
|
1,219,927 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Premises and equipment, net |
|
2,029 |
|
2,335 |
|
2,397 |
| |||
|
Accrued interest receivable |
|
4,105 |
|
8,746 |
|
8,395 |
| |||
|
Restricted equity securities |
|
2,459 |
|
2,459 |
|
2,169 |
| |||
|
Income tax receivable |
|
271 |
|
418 |
|
— |
| |||
|
Bank-owned life insurance |
|
28,477 |
|
27,969 |
|
27,775 |
| |||
|
Invesment in Peoples State Bank of Commerce |
|
1,100 |
|
— |
|
— |
| |||
|
Investment in Farmers Bank |
|
1,720 |
|
— |
|
— |
| |||
|
Other real estate owned |
|
15,759 |
|
2,888 |
|
1,975 |
| |||
|
Repossessions |
|
14,531 |
|
30,635 |
|
32,747 |
| |||
|
Other assets |
|
16,593 |
|
20,983 |
|
19,745 |
| |||
|
Total assets |
|
$ |
1,190,897 |
|
$ |
1,453,166 |
|
$ |
1,420,070 |
|
|
|
|
|
|
|
|
|
| |||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
| |||
|
Liabilities |
|
|
|
|
|
|
| |||
|
Deposits |
|
|
|
|
|
|
| |||
|
Non-interest-bearing |
|
$ |
41,755 |
|
$ |
25,486 |
|
$ |
25,942 |
|
|
Interest-bearing |
|
1,107,492 |
|
1,273,565 |
|
1,235,063 |
| |||
|
Total deposits |
|
1,149,247 |
|
1,299,051 |
|
1,261,005 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Accrued interest payable |
|
1,869 |
|
1,408 |
|
1,562 |
| |||
|
Accrued dividend payable |
|
944 |
|
187 |
|
188 |
| |||
|
Short-term borrowings |
|
1,571 |
|
— |
|
— |
| |||
|
Other liabilities |
|
10,597 |
|
7,762 |
|
7,856 |
| |||
|
Long-term subordinated debt and other borrowings |
|
23,198 |
|
25,421 |
|
25,621 |
| |||
|
Total liabilities |
|
1,187,426 |
|
1,333,829 |
|
1,296,232 |
| |||
|
Shareholders’ equity |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
|
Preferred stock, 1,000,000 shares authorized; 30,000 shares of $0.50 par value Fixed Rate Cumulative Perpetual, Series A issued and outstanding at September 30, 2011, December 31, 2010 and September 30, 2010 |
|
15,000 |
|
15,000 |
|
15,000 |
| |||
|
Common stock, $0.50 par value; 20,000,000 shares authorized at September 30, 2011, December 31, 2010 and September 30, 2010; 12,224,578, 12,194,884 and 12,194,884 shares issued and outstanding at September 30, 2011, December 31, 2010 and September 30, 2010, respectively |
|
6,107 |
|
6,097 |
|
6,097 |
| |||
|
Common stock warrant |
|
453 |
|
453 |
|
453 |
| |||
|
Additional paid-in capital |
|
84,949 |
|
84,391 |
|
84,388 |
| |||
|
Retained earnings |
|
(101,972 |
) |
18,000 |
|
17,447 |
| |||
|
Accumulated other comprehensive loss |
|
(1,066 |
) |
(4,604 |
) |
453 |
| |||
|
Total shareholders’ equity |
|
3,471 |
|
119,337 |
|
123,838 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Total liabilities and shareholders’ equity |
|
$ |
1,190,897 |
|
$ |
1,453,166 |
|
$ |
1,420,070 |
|
TENNESSEE COMMERCE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
ASSET QUALITY INFORMATION
FOR THE PERIOD ENDED SEPTEMBER 30, 2011 AND YEARS ENDED DECEMBER 31, 2010, 2009 & 2008
|
|
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
| ||||
|
(Dollars in thousands, except ratios) |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
| ||||
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
| ||||
|
Allowance for loan loss beginning of the period |
|
$ |
21,463 |
|
$ |
19,913 |
|
$ |
13,454 |
|
$ |
10,321 |
|
|
Charge-offs |
|
97,973 |
|
18,868 |
|
26,085 |
|
6,099 |
| ||||
|
Recoveries |
|
689 |
|
407 |
|
1,505 |
|
121 |
| ||||
|
Net charge-offs |
|
97,284 |
|
18,461 |
|
24,580 |
|
5,978 |
| ||||
|
Provision for loan losses |
|
111,517 |
|
20,011 |
|
31,039 |
|
9,111 |
| ||||
|
Allowance for loan losses, end of period |
|
$ |
35,696 |
|
$ |
21,463 |
|
$ |
19,913 |
|
$ |
13,454 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
General Reserve Trends: |
|
|
|
|
|
|
|
|
| ||||
|
Allowance for loan losses, end of period |
|
$ |
35,696 |
|
$ |
21,463 |
|
$ |
19,913 |
|
$ |
13,454 |
|
|
Specific reserves |
|
12,112 |
|
9,610 |
|
6,580 |
|
11,603 |
| ||||
|
General reserves |
|
$ |
23,584 |
|
$ |
11,853 |
|
$ |
13,333 |
|
$ |
1,851 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total loans |
|
$ |
1,014,188 |
|
$ |
1,229,811 |
|
$ |
1,171,301 |
|
$ |
1,036,725 |
|
|
Impaired commercial loans |
|
97,004 |
|
45,552 |
|
28,547 |
|
10,789 |
| ||||
|
Impaired real estate loans |
|
|
|
|
|
|
|
|
| ||||
|
Construction |
|
10,168 |
|
4,096 |
|
11,367 |
|
— |
| ||||
|
1-4 Family |
|
4,413 |
|
5,581 |
|
671 |
|
20 |
| ||||
|
Other |
|
56,899 |
|
32,474 |
|
508 |
|
783 |
| ||||
|
Consumer |
|
— |
|
— |
|
— |
|
11 |
| ||||
|
Total impaired loans |
|
168,484 |
|
87,703 |
|
41,093 |
|
11,603 |
| ||||
|
Non impaired loans |
|
$ |
845,704 |
|
$ |
1,142,108 |
|
$ |
1,130,208 |
|
$ |
1,025,122 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
| ||||
|
Net charge-offs as a % of total assets (year-to-date) |
|
8.17 |
% |
1.25 |
% |
1.96 |
% |
0.57 |
% | ||||
|
Allowance for loan losses as a % of period end loans |
|
3.52 |
% |
1.75 |
% |
1.70 |
% |
1.30 |
% | ||||
|
General reserves as a % of non-impaired loans |
|
2.79 |
% |
1.04 |
% |
1.18 |
% |
0.18 |
% | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non-performing assets: |
|
|
|
|
|
|
|
|
| ||||
|
Nonaccrual loans |
|
106,124 |
|
52,315 |
|
19,151 |
|
11,603 |
| ||||
|
Troubled debt |
|
6,105 |
|
1,705 |
|
109 |
|
668 |
| ||||
|
Total non-performing loans (1) |
|
112,229 |
|
54,020 |
|
19,260 |
|
12,271 |
| ||||
|
Loans past due 90 days or more |
|
7,502 |
|
3,608 |
|
1,328 |
|
18,788 |
| ||||
|
Repossessions |
|
14,531 |
|
30,635 |
|
24,440 |
|
15,395 |
| ||||
|
Other real estate owned |
|
15,759 |
|
2,888 |
|
814 |
|
5,764 |
| ||||
|
Total non-performing assets (2) |
|
150,021 |
|
91,151 |
|
45,842 |
|
52,218 |
| ||||
|
Percentage of non-performing loans to period end loans |
|
11.07 |
% |
4.39 |
% |
1.64 |
% |
1.18 |
% | ||||
|
Percentage of non-performing assets to period end loans |
|
14.79 |
% |
7.41 |
% |
3.91 |
% |
5.04 |
% | ||||
|
Percentage of non-performing assets to period end assets |
|
12.60 |
% |
6.27 |
% |
3.31 |
% |
4.29 |
% | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Impaired Commercial Loan Portfolio Information |
|
|
|
|
|
|
|
|
| ||||
|
Remaining principal balance |
|
$ |
97,004 |
|
$ |
45,552 |
|
$ |
28,547 |
|
$ |
10,789 |
|
|
Specific reserve |
|
2,857 |
|
8,160 |
|
5,080 |
|
2,978 |
| ||||
|
Book value, after specific reserve |
|
$ |
94,147 |
|
$ |
37,392 |
|
$ |
23,467 |
|
$ |
7,811 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Impaired Real Estate loans - Construction |
|
|
|
|
|
|
|
|
| ||||
|
Remaining principal balance |
|
$ |
10,168 |
|
$ |
4,096 |
|
$ |
11,367 |
|
$ |
— |
|
|
Specific reserve |
|
4,092 |
|
950 |
|
400 |
|
— |
| ||||
|
Book value, after specific reserve |
|
$ |
6,076 |
|
$ |
3,146 |
|
$ |
10,967 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Impaired Real Estate loans - 1 - 4 Family |
|
|
|
|
|
|
|
|
| ||||
|
Remaining principal balance |
|
$ |
4,413 |
|
$ |
5,581 |
|
$ |
671 |
|
$ |
20 |
|
|
Specific reserve |
|
470 |
|
500 |
|
— |
|
6 |
| ||||
|
Book value, after specific reserve |
|
$ |
3,943 |
|
$ |
5,081 |
|
$ |
671 |
|
$ |
14 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Impaired Real Estate loans - Other |
|
|
|
|
|
|
|
|
| ||||
|
Remaining principal balance |
|
$ |
56,899 |
|
$ |
32,474 |
|
$ |
508 |
|
$ |
783 |
|
|
Specific reserve |
|
4,693 |
|
— |
|
100 |
|
216 |
| ||||
|
Book value, after specific reserve |
|
$ |
52,206 |
|
$ |
32,474 |
|
$ |
408 |
|
$ |
567 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Impaired Consumer loans |
|
|
|
|
|
|
|
|
| ||||
|
Remaining principal balance |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
11 |
|
|
Specific reserve |
|
|
|
— |
|
— |
|
3 |
| ||||
|
Book value, after specific reserve |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
8 |
|
(1) Non-Performing loans are comprised of Nonaccrual Loans and Troubled Debt
(2) Non-Performing Assets are comprised of Nonaccruals, 90 + Days Past Due and ORE