Pilot Bank Second Quarter Results 2011

TAMPA, Fla., Sept. 19, 2011 /PRNewswire/ -- The primary objectives established jointly by the Board of Directors and the Executive Management Team of Pilot Bancshares, Inc. for fiscal year 2011 included a robust initiative to enhance internal operating efficiencies and an aggressive plan to identify and appropriately reserve for remaining impairments in the loan portfolio.  These objectives were agreed upon in order to position Pilot Bank and in turn, Pilot Bancshares, Inc. to profitability during the second half of 2011.

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Pilot Bank has made significant strides in terms of enhancing our capabilities in such key areas as Loan Operations, Credit Administration and Portfolio Risk Management.  In addition, the aggressive steps taken to address remaining credit impairments have significantly enhanced the Bank's outlook relative to returning to core operational profitability.  Importantly, key credit quality trends including loans 30 or more days past due, troubled debt restructures and total non-performing assets, have evidenced tangible improvement.  While Pilot Bank continues to face challenges from a local and macro-economic perspective, the near term outlook for key credit quality measures and core profitability have improved markedly.  

Second Quarter Results:

Total assets declined by $7.3 million or 3.4% during the second quarter of fiscal year 2011.  The major contributing factor to this reduction in asset size was the continued decline in total loans outstanding.  As many industries are deleveraging in this economy, the bank has realized multiple principal pay-downs on loans as well as overall weak loan demand.  This, combined with the movement of non-accruing loans into "other real estate owned" through the foreclosure process, has contributed to the decline in loans for the quarter.  Total outstanding loans as of June 30, 2011, approximated $145.7 million.  

As previously referenced, management has been intent on identifying, and to the extent possible, mitigating any remaining loan impairments with the objective of reducing the probability of significant additional credit deterioration and associated losses.  The improvement in credit quality can be evidenced by the fact that total non-performing assets have declined by 6.9% since their peak in April, troubled debt restructures declined by $5.6 million since January and presently stand at zero, and 30 days or greater past dues decreased to approximately $1.3 million, down from a peak of $5.9 million in February.  These significant improvements in overall credit quality follow the recognition of an additional $7.9 million of non-accrual loans during the quarter.

Given the contraction noted in the loan portfolio, Bank Management allowed higher cost certificates of deposit to run-off as they matured resulting in a contraction of $2.4 million for the period.  Demand deposits showed a decline of $2.8 million at period end. However, the decline represented normal balance fluctuations and not a loss of core relationship accounts.

Pilot Bancshares, Inc. recorded a $2.7 million pre-tax loss for the period primarily associated with recognizing remaining impairments in the loan portfolio and recording an associated loan loss provision of $2.2 million.  The additional losses incurred for the period were related to the reduction in interest income from the continued identification and transition of loans to non-accruing status as well as incurred expenses and write-downs of "other real estate owned".

Finally, it should be stressed that Pilot Bank continues to remain well-capitalized in all three capital ratio measurements.  

SOURCE Pilot Bancshares, Inc.