Pilot Bank Third Quarter Results 2011

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Dec 06, 2011, 01:36 ET

TAMPA, Fla., Dec. 6, 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.

Third Quarter Results:

Total assets remained stable at $217 million during the third quarter of fiscal year 2011. The Bank maintains a rigorous loan review program throughout the year and is intent on identifying and mitigating loan impairment issues in a timely manner. On a more positive note the Bank is also recognizing increased interest in the sale of "other real estate owned" through the foreclosure process. Quarter three resulted in a modest increase in foreclosed real estate of $1.3 million. Total loans, net of allowance as of September 30, 2011, approximated $142.8 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 7.5% since last quarter and approximately 14% from the peak in April 2011. Loans 30 days or greater past due have decreased to approximately $1.9 million, down from a peak of $5.9 million in February. Management anticipates further credit quality improvements going forward with the sale of foreclosed properties and an increase in performing loans.

Bank Management continues to monitor higher cost deposits with a continued focus on relationships and core deposit growth. Total deposits showed an increase of $569 thousand at period end.

Pilot Bancshares, Inc. recorded a $122 thousand pre-tax loss compared to that of $2.7 million pre-tax loss for the prior period. This is a result of the Bank being proactive in recognizing impairments in the loan portfolio and recording the necessary loan loss provision to allow the Bank to move forward with an expectation of profitability in 2012. In addition, it should be noted that Pilot Bank posted a profit of $63 thousand in the third quarter.

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

Balance Sheet			Income Statement
(Unaudited)			(Unaudited)
($ in thousands, except per share amounts)			($ in thousands, except per share amounts)

	At September 30th,			Nine Months Ended Sept. 30th
	2011	2010		2011	2010
Assets			Interest income:
Cash and due from banks	$13,856	$11,136	Loan Income	$7,037	$8,433
Securities available for sale	24,612	22,990	Securities	459	528
Securities held to maturity	1,927	2,984	Other interest-earning assets	43	46
Loans, net of allowance for loan losses	142,798	164,415
of $4,759 in 2011 and $4,741 in 2010			Total interest income	7,539	9,007
Premises and equipment, net	12,840	13,305
Foreclosed Real Estate	7,069	4,356	Interest expense:
Federal Reserve Bank stock, at cost	612	584	Deposits	1,908	2,745
Federal Home Loan Bank stock, at cost	601	866	Junior subordinated debentures	305	305
Accrued interest receivable	610	767	Other borrowings	43	155
Cash surrender value of bank owned life insurance	5,082	4,911
Deferred income tax asset	4,794	4,113	Total interest expense	2,256	3,205
Other assets	2,400	2,148
			Net Interest Income	5,283	5,802
Total	$217,202	$232,575
			Provision for loan losses	2,798	1,215
Liabilities and Stockholders' equity
			Net interest income after provision for
Liabilities:			loan losses	2,485	4,587
Noninterest-bearing demand deposits	20,299	20,518
Savings, NOW and money-market deposits	86,242	88,385	Noninterest income:
Time Deposits	84,322	93,990	Fees and service charges	237	292
			Loan brokerage fees	270	256
Total Deposits	190,863	202,893	Bank owned life insurance	127	138
			Other-than-temporary impairment of securities		(103)
Federal Home Loan Bank advances		3,617	Other	265	385
Junior subordinated debentures	5,671	5,671
Other borrowings	3,081	1,548	Total noninterest income	899	968
Accrued interest payable	1,013	632
Other liabilities	2,245	2,513	Noninterest expenses:
			Salaries and employee benefits	2,585	2,671
Total Liabilities	202,873	216,874	Occupancy	1,220	1,337
			Data processing	345	383
Stockholders' equity:			Professional Fees	404	296
Common stock	287	261	Advertising and Promotion	70	38
Additional paid-in capital	23,815	23,093	Stationery and supplies	53	44
(Accumulated deficit) retained earnings	(9,798)	(7,560)	FDIC insurance	394	519
Accumulated other comprehensive loss	25	(93)	Foreclosed real estate	638	187
			Other	959	1,021
Total Stockholders' Equity	14,329	15,701
			Total noninterest expenses	6,669	6,496
Total	$217,202	$232,575
			Loss before income tax benefit	(3,285)	(941)
			Income tax benefit	(1,291)	(466)

			Net loss	(1,994)	(475)
			Income per share*	$ (0.66)	($0.17)

			* 2010 Income per share adjusted to reflect current shares issued and outstanding.