The Palmetto Bank Reports Third Quarter Financial Results
November 3, 2010
GREEENVILLE, SC – October 29, 2010 – Palmetto Bancshares, Inc. reported a net loss for the third quarter 2010 of $13.8 million, compared to a second quarter 2010 net loss of $8.5 million. Similar to the previous quarter, the net loss in the third quarter was driven primarily by the elevated level of provision for loan losses and write downs on foreclosed assets to address the credit quality of the loan portfolio and related declines in commercial real estate values. The third quarter 2010 net loss also included a one time, noncash charge to write off $3.7 million of goodwill related to prior branch acquisitions. The charge had no effect on the liquidity, regulatory capital, or daily operations of the Company.
During the third quarter 2010, substantially all of the Company’s credit losses were concentrated in commercial real estate assets, with $12.3 million of credit losses related to ten individual commercial real estate assets. “Commercial real estate activity continues to be depressed resulting in a negative impact on appraised values. Not surprisingly, we recorded write downs on our problem assets based on updated appraisals that continue to come in at reduced values,” said Samuel L. Erwin, Chief Executive Officer. ”It is disappointing that we incurred another quarterly loss, but it is a natural part of the process of working our way through the current credit cycle. On a positive note, similar to the second quarter our problem assets declined resulting in the second consecutive quarterly decrease in our nonperforming assets. While the overall economic environment is still uncertain, we are hopeful that this declining trend in our problem assets will continue.”
As previously announced, on October 7, 2010 the Company consummated a $103 million private placement of its common stock with institutional investors, and contributed substantially all of the net proceeds as a capital contribution to The Palmetto Bank. The capital contribution to the Bank resulted in the Bank’s capital adequacy ratios exceeding the minimum capital levels required to be categorized as “well capitalized”. Erwin continued, “Raising additional capital was an important step to weather the ongoing impact of the extended recession of the past few years. Completing the private placement in this very challenging economic environment is a testament to our hard work and the value of The Palmetto Bank franchise.”
Headquartered in Greenville, South Carolina, The Palmetto Bank is a 104-year old independent state-chartered commercial bank and is the fifth-largest banking institution headquartered in South Carolina. The Palmetto Bank has assets of $1.4 billion and serves the Upstate through 29 banking locations in Abbeville, Anderson, Cherokee, Greenville, Greenwood, Laurens, Oconee, Pickens, Spartanburg and York counties. The Bank specializes in providing personalized community banking services to individuals and small to mid-size businesses including Retail and Commercial Banking, Mortgage, Trust, Brokerage, and Insurance. Additional information may be found at the company’s web site at www.palmettobank.com.
