PBTC Peoples Banctrust (MM)

SELMA, Ala., April 24 /PRNewswire-FirstCall/ -- The Peoples BancTrust Company, Inc. (NASDAQ:PBTC) reported earnings and financial condition for the first quarter ended March 31, 2007, and the adoption of SFAS 159. Net income for the three months ended March 31, 2007 (the "2007 quarter") totaled $2.2 million, compared to $2.5 million for the same period in 2006 (the "2006 quarter"). Earnings per share were $0.37 for the 2007 quarter and $0.42 for the 2006 quarter. "We believe our first quarter results contain some encouraging information with regard to core earnings," stated Don J. Giardina, President and Chief Executive Officer. "Both net interest income and noninterest income increased over first quarter 2006, and while salaries and benefits expense increased; it was primarily the result of our continued expansion into higher growth markets. "Also, we absorbed a $785,000 increase in our provision for loan losses in the first quarter of 2007, compared to 2006. In the first quarter of 2006, we were in the unique position of reducing our allowance for loan losses and realized a negative loan loss provision of $541,000, which had a positive effect on net income. In the first quarter of 2007, we recorded loan loss provision of $244,000, which decreased net income. "Effective January 1, 2007, we elected early adoption of SFAS 159 and 157. We were able to restructure the majority of our investment securities portfolio to achieve significantly higher yields. As a result of adopting SFAS 159, we realized $602,000 of valuation gains in the first quarter. "We believe our adoption of SFAS 159 will have a positive impact on our ability to better monitor the balance sheet and the market and interest rate risks associated with certain financial instruments, while potentially benefiting the net interest margin, net interest income, net income and earnings per common share during the remainder of 2007 and beyond. We will carefully monitor the market value volatility of the selected assets carried under the fair value measurement option and we may employ interest rate derivative instruments as a management tool." SFAS 159 SFAS 159 was issued in February 2007 and generally permits the measurement of selected eligible financial instruments at fair value at specified election dates. Upon adoption of SFAS 159, PBTC selected the fair value measurement option for various pre-existing financial assets which consisted of investment securities available for sale with carrying values immediately prior to adoption totaling approximately $156 million. The initial fair value measurement of these items resulted in a $2.7 million one-time charge to retained earnings as of January 1, 2007 offset by a $2.7 million increase in accumulated other comprehensive loss, resulting in no change to total stockholders' equity upon adoption. Under SFAS 159, this one-time charge will not be recognized in current earnings. The adoption of this standard produced $602,000 of market valuation gains for those securities selected for fair value measurement, which were included in first quarter operating results. During April 2007, the securities initially selected for fair value measurement under SFAS 159 were sold under a restructuring strategy and reinvested in significantly higher yielding securities. The securities that were purchased as a result of the restructuring strategy will also be accounted for under the fair value measurement option as prescribed by SFAS 159 in future periods. First Quarter 2007 Net interest income in the 2007 quarter totaled $7.5 million, compared to $6.9 million in the 2006 quarter. Net interest margin in the 2007 quarter was 3.59%, compared to 3.76% in the 2006 quarter. Average earning assets in the 2007 quarter totaled $843.2 million, compared to $742.6 million in the 2006 quarter. Provision for loan losses in the 2007 quarter totaled $244,000, compared to a negative $541,000 in the 2006 quarter. Loan recoveries, net of loan charge offs, totaled 0.02% of average loans in the 2007 quarter and 0.08% in the 2006 quarter. Noninterest income in the 2007 quarter totaled $3.1 million, compared to $2.4 million in the 2006 quarter. This increase was primarily attributable to a $602,000 securities valuation gain that resulted from the early adoption of SFAS 159, as well as increases in fee income from trust, insurance and retail brokerage operations. Noninterest expense totaled $7.2 million in the 2007 quarter, compared to $6.1 million in the 2006 quarter. Increases in salaries and benefits expense associated with market expansion efforts was the primary contributing factor to the overall increase in noninterest expense. Outlook "We continue to focus heavily on expansion efforts," continued Mr. Giardina. "We believe opportunities exist both within the state and beyond to serve some very attractive and dynamic markets. Our business plan calls for growth, both internal and via strategic acquisitions, that will allow us to further leverage our infrastructure and increase operating efficiencies and economies of scale," Mr. Giardina concluded. About Peoples BancTrust Co., Inc. The Peoples BancTrust Co., Inc. is the parent company of The Peoples Bank and Trust Company, which has 25 offices located in ten Alabama counties (Autauga, Bibb, Butler, Dallas, Elmore, Jefferson, Lee, Montgomery, Shelby and Tuscaloosa). Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Peoples BancTrust's operating results, performance or financial condition are set forth in filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K. THE PEOPLES BANCTRUST COMPANY, INC. CONSOLIDATED BALANCE SHEETS (In Thousands) Assets March 31, 2007 December 31, 2006 (unaudited) Cash and due from banks $21,036 $21,384 Interest bearing deposits in banks 42,263 6,070 Federal funds sold - - Cash and cash equivalents 63,299 27,455 Available-for-sale securities 22,718 204,602 Trading Securities 156,291 - Loans, net of unearned income 636,248 631,800 Allowance for loan losses (6,675) (6,398) Loans, net 629,573 625,401 Bank premises and equipment 46,834 46,200 Less accumulated depreciation (21,402) (20,813) Bank premises and equipment, net 25,432 25,387 Other real estate, net 937 1,034 Interest receivable 4,697 4,947 Intangible assets acquired, net 6,380 6,428 Deferred income taxes 2,612 2,640 Other assets 12,855 12,811 Total assets $924,794 $910,705 Liabilities and Stockholders' Equity Liabilities: Deposits: Demand-noninterest bearing $86,815 $84,728 Demand-interest bearing 283,240 277,793 Savings 34,644 33,481 Time 375,445 372,699 Total deposits 780,144 768,701 Other borrowed funds 48,014 48,268 Interest payable 4,284 3,468 Income taxes payable 906 9 Other liabilities 2,933 3,465 Total liabilities 836,281 823,911 Stockholders' equity: Common stock 593 592 Additional paid-in capital 17,400 17,200 Accumulated other comprehensive loss, net of tax (1,404) (4,150) Deferred stock based compensation (92) (102) Retained earnings 72,016 73,254 Total stockholders' equity 88,513 86,794 Total liabilities and stockholders' equity $924,794 $910,705 THE PEOPLES BANCTRUST COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data) Three Months Ended March 31, 2007 2006 (unaudited) Interest income: Interest and fees on loans and bankers acceptances $12,211 $9,398 Interest and dividends on investment securities: U.S. Government agency securities 1,011 1,101 Other securities 886 1,025 Interest on federal funds sold and interest bearing deposits in banks 372 174 Total interest income 14,480 11,698 Interest expense: Interest on deposits 6,429 4,313 Interest on federal funds purchased and other borrowed funds 580 501 Total interest expense 7,009 4,814 Net interest income 7,471 6,884 Provision (credit) for loan losses 244 (541) Net interest income after provision (credit) for loan losses 7,227 7,426 Noninterest income: Trust department income 234 319 Service charges on deposit accounts 1,418 1,386 Net gains on AFS securities 0 1 Net gains on trading securities (SFAS 159) 602 0 Other noninterest income 880 696 Total noninterest income 3,134 2,403 Noninterest expense: Salaries and wages 3,166 2,760 Pensions and other employee benefits 884 585 Occupancy and equipment expenses 1,340 1,136 Other noninterest expenses 1,809 1,643 Total noninterest expense 7,199 6,124 Income before provision for income taxes 3,162 3,704 Provision for income taxes 953 1,213 Net income $2,209 $2,492 Earnings per share Basic net income per share $0.37 $0.42 Diluted net income per share $0.37 $0.42 Dividends per share $0.13 $0.12 Basic weighted average number of shares outstanding 5,922,989 5,898,286 Diluted weighted average number of shares outstanding 5,975,586 5,933,391 THE PEOPLES BANCTRUST COMPANY, INC. SELECTED FINANCIAL RATIOS As of and for the quarter ended March 31 2007 2006 (unaudited) Net loans to deposits 80.70% 77.35% Allowance for loan losses to loans 1.05% 1.16% Net charge offs (recoveries) to average loans (0.02%) (0.08%) Nonperforming assets to total assets 0.54% 0.26% Allowance for loan losses to nonaccrual loans 164.78% 1249.28% Return on average assets 0.97% 1.24% Return on average equity 10.22% 12.03% Yield on loans 7.84% 7.49% Net interest margin 3.59% 3.76% Noninterest income to average assets 1.38% 1.21% Noninterest expense to average assets 3.17% 3.08% Efficiency ratio 67.88% 65.94% DATASOURCE: The Peoples BancTrust Company, Inc. CONTACT: Thomas P. Wilbourne, Senior Vice President, Chief Financial Officer of The Peoples BancTrust Company, Inc., +1-334-875-1000 Web site: http://peoplesbt.com/

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