DALLAS, March 12 /PRNewswire-FirstCall/ -- PMC Commercial Trust
(NYSE Alternext US: PCC) announced fourth quarter and year-end
results today. Net income for the fourth quarter of 2008 was
$2,291,000, or $0.21 per share, compared to $2,648,000, or $0.24
per share, for the fourth quarter of 2007. Income from continuing
operations for the fourth quarter of 2008 was $2,285,000, or $0.21
per share, compared to $2,167,000, or $0.20 per share, for the
fourth quarter of 2007. For the year ended December 31, 2008, net
income was $9,806,000, or $0.91 per share, compared to $13,135,000,
or $1.22 per share, during 2007. Income from continuing operations
in 2008 was $9,022,000, or $0.84 per share, compared to
$12,094,000, or $1.12 per share, during 2007. Quarterly Operating
Results -- Revenues decreased by $790,000 when comparing the fourth
quarter of 2008 to the fourth quarter of 2007 due primarily to a
reduction in (1) income from retained interests in transferred
assets ("Retained Interests") resulting from the reduced
outstanding balance of our Retained Interests and (2) interest
income resulting from decreases in variable interest rates. --
Expenses decreased by $997,000 during the fourth quarter of 2008
compared to the fourth quarter of 2007 due primarily to a reduction
in (1) interest expense resulting from decreases in variable
interest rates and (2) salaries and related benefits due to our
cost reduction initiatives and a decrease in bonus expense. -- In
addition to the changes in continuing operations described above,
net income during the fourth quarter of 2007 included recognition
of $443,000 in gains that had previously been deferred. -- In
October 2008, as a result of economic conditions, we announced cost
reduction initiatives. These initiatives included streamlining our
sales, credit and servicing, as well as outsourcing some functions.
The plan resulted in severance related charges of $235,000 during
the fourth quarter of 2008. Year-to-Date Operating Results -- Total
revenues during 2008 decreased $4,178,000 (15%) from 2007 primarily
due to reductions in income from Retained Interests and interest
income. -- Income from Retained Interests decreased $2,078,000
(25%) during 2008 due primarily to the continued run-off of the
underlying loans causing a reduction in our investment in Retained
Interests and a decrease in unanticipated prepayment fees. --
Interest income decreased $1,925,000 (12%) during 2008 due
primarily to decreases in variable interest rates. -- Our cost
reduction initiatives resulted in severance related charges of
$1,808,000 during 2008. Annual cost savings of $1.0 million are
anticipated as a result of these cost reduction initiatives.
Interest Rate Sensitivity -- Approximately 78% of our loans
receivable at December 31, 2008 were based on LIBOR or the prime
rate. -- The average 90-day LIBOR, on which we base the interest
rate we charge on our LIBOR-based loans, decreased to 3.5% during
2008 from 5.3% during 2007. The LIBOR base rate was 1.44%
commencing January 1, 2009. Financial Position -- Total assets were
approximately $227.5 million at December 31, 2008 compared to
approximately $231.4 million at December 31, 2007 and approximately
$228.3 million at September 30, 2008. -- Total serviced loan
portfolio was approximately $275.5 million at December 31, 2008
compared to approximately $326.4 million at December 31, 2007 and
approximately $287.3 million as of September 30, 2008. --
Outstanding retained loan portfolio was approximately $180.6
million at December 31, 2008 compared to approximately $166.4
million at December 31, 2007 and approximately $186.7 million as of
September 30, 2008. -- The structured notes payable of two special
purpose entities were repaid during 2008. As a result,
approximately $21.4 million of loans previously included within our
securitized portfolio were included in our retained portfolio.
Originations and Prepayments -- During 2008, we funded
approximately $34.6 million of loans. -- We anticipate that 2009
aggregate loan funding will range between $20 million to $30
million, and is anticipated to be almost exclusively through SBA
7(a) loan originations. -- Principal prepayments on our retained
portfolio were $27.9 million during 2008 compared to $26.5 million
during 2007. -- Prepayments of our serviced portfolio were $68.6
million during 2008 compared to $84.1 million during 2007. -- We
believe that the credit market disruptions have had a moderating
effect on our prepayment activity. As a result, we anticipate that
2009 loan prepayments will be significantly below the 2008 levels.
In 2009, we have not had any prepayments of our retained loans.
Liquidity -- We have not sold any SBA 7(a) loans into the secondary
market since the third quarter of 2008 when the market softened and
the prices were below what we felt were reasonable. As such, as of
December 31, 2008 and February 28, 2009, we have fully funded SBA
7(a) loans of $4.0 million and $5.7 million, respectively, of which
the guaranteed portion of $3.0 million and $4.3 million,
respectively, remain available to be sold. -- Our $45 million
revolving credit facility, which matures December 31, 2009, had
$22.7 million outstanding at December 31, 2008 and $27.8 million at
February 28, 2009. Lance B. Rosemore, Chairman of the Board of
Trust Managers, stated, "We have positioned the company to remain
profitable and to survive even in this challenging environment. As
you are aware, in 2008 we made some hard decisions to further
position us to react to the economic uncertainties, including our
cost cutting initiatives which streamlined operations and reduced
ongoing costs. Our conservative underwriting is reflected in our
continued positive portfolio performance. 'We continue to face
challenging economic conditions including the lack of reasonably
priced leverage which severely restricts our activities. We are
concentrating on SBA 7(a) lending and are starting to see better
market pricing for the guaranteed portion of our loans. The
government is rolling out programs to help secondary market
liquidity and we are hopeful that these programs will help the
economy recover. 'Until liquidity returns, we will continue to
maintain our conservative operating approach while continuing to
explore all strategic alternatives that may be available." The
following tables contain comparative selected financial data:
FINANCIAL POSITION INFORMATION (In thousands, except per share
data) December 31, September 30, December 31, 2008 2008 2007
------------ ------------- ------------ Loans receivable, net
$179,807 $186,190 $165,969 Retained interests in transferred assets
$33,248 $33,384 $48,616 Total assets $227,524 $228,314 $231,420
Debt $61,814 $60,585 $62,953 Total beneficiaries' equity $153,462
$155,893 $156,354 Shares outstanding 10,695 10,782 10,765 Net asset
value per share $14.35 $14.46 $14.52 RESULTS OF OPERATIONS COMPARED
TO PRIOR YEAR (Dollars in thousands, except per share information)
Years Ended December 31, ------------------------- 2008 2007
------- ------- Income: Interest income $14,540 $16,465 Income from
Retained Interests 6,365 8,443 Other income 2,212 2,387 -------
------- Total income 23,117 27,295 ------- ------- Expenses:
Interest 3,909 5,403 Salaries and related benefits 4,705 5,058
General and administrative 2,304 2,717 Severance and related
benefits 1,808 - Impairments and provisions 960 1,449 -------
------- Total expenses 13,686 14,627 ------- ------- Income before
income tax provision, minority interest, and discontinued
operations 9,431 12,668 Income tax provision (319) (484) Minority
interest (preferred stock dividend of subsidiary) (90) (90) -------
------- Income from continuing operations 9,022 12,094 Discontinued
operations 784 1,041 ------- ------- Net income $9,806 $13,135
======= ======= Basic weighted average shares outstanding 10,767
10,760 ======= ======= Basic and diluted earnings per share: Income
from continuing operations $0.84 $1.12 Discontinued operations 0.07
0.10 ------- ------- Net income $0.91 $1.22 ======= ======= RESULTS
OF OPERATIONS COMPARED TO PRIOR QUARTERS (Dollars in thousands,
except per share information) Three Months Ended
-------------------------------------------- December 31, September
30, December 31, 2008 2008 2007 ------------ -------------
------------ Income: Interest income $3,654 $3,601 $4,056 Income
from Retained Interests 1,122 1,047 1,789 Other income 625 432 346
------ ------ ------ Total income 5,401 5,080 6,191 ------ ------
------ Expenses: Interest 814 930 1,312 Salaries and related
benefits 953 1,161 1,484 General and administrative 510 671 838
Severance and related benefits 235 1,573 - Impairments and
provisions 469 102 344 ------ ------ ------ Total expenses 2,981
4,437 3,978 ------ ------ ------ Income before income tax
provision, minority interest, and discontinued operations 2,420 643
2,213 Income tax provision (113) (33) (23) Minority interest
(preferred stock dividend of subsidiary) (22) (23) (23) ------
------ ------ Income from continuing operations 2,285 587 2,167
Discontinued operations 6 16 481 ------ ------ ------ Net income
$2,291 $603 $2,648 ====== ====== ====== Basic weighted average
shares outstanding 10,754 10,782 10,765 ====== ====== ====== Basic
and diluted earnings per share: Income from continuing operations
$0.21 $0.06 $0.20 Discontinued operations - - 0.04 ------ ------
------ Net income $0.21 $0.06 $0.24 ------ ------ ------ REAL
ESTATE INVESTMENT TRUST ("REIT") TAXABLE INCOME REIT taxable income
is presented to assist investors in analyzing our performance and
is a measure that is presented quarterly in our consolidated
financial statements and is one of the factors utilized by our
Board of Trust Managers in determining the level of dividends to be
paid to our shareholders. The following reconciles net income to
REIT taxable income: Years Ended December 31,
------------------------------- 2008 2007 2006 ------ -------
-------- (In thousands) Net income $9,806 $13,135 $15,684 Book/tax
difference on depreciation (60) (65) (277) Book/tax difference on
property sales (784) 236 171 Book/tax difference on Retained
Interests, net 57 1,631 1,973 Severance accrual 1,596 - -
Impairment losses - 233 43 Book/tax difference on rent and related
receivables - (1,152) 925 Book/tax difference on amortization and
accretion (345) (239) (641) Asset valuation 430 (299) (890) Other
book/tax differences, net (177) 189 (59) ------- ------- -------
10,523 13,669 16,929 Less: taxable REIT subsidiaries net income,
net of tax (587) (852) (1,280) Dividend distribution from taxable
REIT subsidiary 2,000 - - ------- ------- ------- REIT taxable
income $11,936 $12,817 $15,649 ======= ======= =======
Distributions declared $10,908 $12,915 $13,975 ======= =======
======= Common shares outstanding 10,767 10,760 10,748 =======
======= ======= Certain matters discussed in this press release are
"forward-looking statements" intended to qualify for the safe
harbors from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
generally be identified as such because the context of the
statement will include words such as the Company "expects,"
"anticipates" or words of similar import. Similarly, statements
that describe the Company's future plans, objectives or goals are
also forward-looking statements. Such forward-looking statements
are subject to certain risks and uncertainties, including the
financial performance of the Company, real estate conditions and
market valuations of its sHARES, which could cause actual results
to differ materially from those currently anticipated. The
company's ability to meet targeted financial and operating results,
including loan originations, operating income, net income and
earnings per share depends on a variety of economic, competitive,
and governmental factors, including changes in real estate market
conditions, changes in interest rates and the company's ability to
access capital under its credit facility or otherwise, many of
which are beyond the company's control and which are described in
the company's filings with the securities and exchange commission.
Although the Company believes the expectations reflected in any
forward-looking statements are based on reasonable assumptions, the
Company can give no assurance that its expectations will be
attained. Shareholders, potential investors and other readers are
urged to consider these factors carefully in evaluating the
forward-looking statements. The forward-looking statements made
herein are only made as of the date of this press release and THE
COMPANY undertakes no obligation to publicly update such
forward-looking statements to reflect any changes in expectations,
subsequent events or circumstances. CONTACT: Investor Relations
972-349-3235 http://www.pmctrust.com/ DATASOURCE: PMC Commercial
Trust CONTACT: Investor Relations of PMC Commercial Trust,
+1-972-349-3235 Web Site: http://www.pmctrust.com/
Copyright
