Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE 

For More Information Contact:

July 22, 2015

Roy D. Jones, Chief Financial Officer and Treasurer

 

(864) 240-5104 or rjones@palmettobank.com

 

      

The Palmetto Bank Reports Second Quarter Net Income of $2.0 Million

Net Income of $4.8 Million for the Six Months Ended June 30, 2015

 

Greenville, S.C.Palmetto Bancshares, Inc. (NASDAQ: PLMT) (the “Company”) reported second quarter 2015 net income of $2.0 million ($0.16 per diluted common share) compared to first quarter 2015 net income of $2.7 million ($0.21 per diluted common share). Results for the second quarter 2015 and the six months ended June 30, 2015 include pre-tax merger-related expenses of $1.4 million related to the Company’s proposed merger with United Community Banks, Inc. (“United”) as previously announced on April 22, 2015. Income before provision for income taxes and merger-related expenses was $5.0 million in the second quarter 2015 ($4.2 million in the first quarter 2015) and $9.2 million for the six months ended June 30, 2015 ($6.4 million for the six months ended June 30, 2014). The Company also declared a quarterly cash dividend of $0.08 per common share payable on August 17, 2015 to shareholders of record on August 3, 2015.

 

“Our financial results for the second quarter and the first half of 2015 continue to reflect the fundamental strength of our franchise as evidenced by increased loan production, strong growth in core deposits, and increased earnings before merger-related expenses,” said Samuel L. Erwin, Chairman and Chief Executive Officer. “We experienced another strong quarter of organic loan production which continued a positive trend that began in late 2014. Organic loan production for the first six months of 2015 was $175 million, which compared favorably to organic loan production of $110 million and $143 million during the first six months of 2014 and 2013, respectively. While organic loan production has been strong, we experienced higher levels of unscheduled loan payoffs in the second quarter 2015 as borrowers used improving cash flows to pay off loans, or sold the underlying properties and used the cash proceeds to pay off loans. As a result, total loans declined this quarter notwithstanding our steadily improving loan production. To fund the increasing loan production, we are very pleased that our core deposits also showed steady growth over the past three quarters and year-over-year.”

 

Highlights for the second quarter 2015 are summarized as follows, and the discussion of the Company’s results of operations and financial condition, including a reconciliation of non-GAAP performance measures to GAAP performance measures, is supplemented by the accompanying financial tables.

Net income was $2.0 million, a decrease of $692 thousand from the first quarter 2015.

 

o

The decrease from the prior quarter was driven primarily by higher merger-related expenses, credit-related expenses due to a writedown on a foreclosed real estate property, and the provision for unfunded commitments, offset by a negative provision for loan losses. The Company’s effective income tax rate increased to 44% during the second quarter 2015 as a result of a portion of the merger-related expenses which are not deductible for income tax purposes.

Net interest income increased $260 thousand from the first quarter 2015.

 

o

The increase in net interest income resulted from an increase in average loans outstanding of $15.7 million, higher loan fees from an elevated level of loan prepayments and one additional day in the second quarter 2015 as compared to the first quarter 2015. Net interest margin decreased 6 basis points from the first quarter 2015 to 3.66% due to a decline in yields on loans and investment securities. The overall yield on the loan portfolio continued to decline as higher-yielding loans matured and were replaced with new loan originations at lower rates in the current low interest rate and competitive banking environment.

 

o

The overall cost of deposits, including noninterest bearing deposits, of 0.05% during the second quarter 2015 continues to reflect the Company’s strong core deposit franchise. Core deposits, defined as total deposits less time deposits $100 thousand and over, represent 94% of total deposits at June 30, 2015.

  

 
 

The following information was filed by Palmetto Bancshares Inc (PLMT) on Wednesday, July 22, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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