Tennessee Commerce Bancorp, Inc. (Nasdaq:TNCC), the bank holding
company of Tennessee Commerce Bank (the "Bank"), today reported
financial results for the nine months ended September 30, 2011. The
Company reported a net loss of $120.0 million for the nine months
ended September 30, 2011 or $9.83 per diluted common share.
The net loss for the nine months ended September 30, 2011 was
primarily driven by a $92.6 million charge to provision expense
during the third quarter. The increased provision expense is
in large part due to preliminary loan losses of $76.3 million
combined with $12.1 million of specific reserves on classified
loans identified by examiners from the Federal Deposit Insurance
Corporation (the "FDIC") and the Tennessee Department of Financial
Institutions during their regulatory joint examination started on
September 26, 2011, which is still in progress. The provision
charges made in the third quarter relate to events that occurred in
the second quarter. As a result, we will be restating our
second quarter results and amending our second quarter form 10-Q
and Bank Call Report to reflect these charges and until such
restatement is complete, such second quarter financial statements
should not be relied upon.
Total assets decreased $262.3 million or 18.0% compared to the
quarter ended December 31, 2011. The decrease in assets was
mainly attributable to decreases of $215.6 million or 17.5% in
loans, $33.7 million in securities available-for-sale, $16.1
million or 52.6% in repossessed assets offset by increases in cash
and cash equivalents of $10.7 million or 51.4% and $12.9 million or
81.7% in other real estate owned.
Total deposits decreased $149.8 million or 11.5% compared to the
fourth quarter of 2010. The decrease in deposits was mainly
due to savings accounts which decreased $143.3 million or 46.05%
while non-interest bearing accounts increased $16.3 million or
63.8%.
As it relates to the debt previously contracted transaction on
two banks that we disclosed last quarter, we initially disclosed
the valuations from both banks to be $30 million as of March 31,
2011. Since then credit quality at both banks has deteriorated
and another independent third party valuation resulted in a lower
valuation of $7.8 million as of September 9, 2011 for 100% of both
banks. The Bank currently has a 46.0% interest in Farmers Bancorp,
Inc., the parent of Farmers Bank of Lynchburg and a 27.1% interest
in Commerce Bancshares, Inc. the parent of Peoples State Bank of
Commerce.
As previously disclosed and as a result of the Bank entering
into a written agreement with the FDIC during the second quarter,
the Bank has to achieve and maintain a tier 1 leverage capital
ratio of 8.50%, a tier 1 risk based capital ratio of 10.00% and a
total risk based capital ratio of 11.50% by no later than December
31, 2011. As a result of the reported net loss through the
nine months ended September 30, 2011 the Bank has a tier 1 leverage
ratio of 0.95%, a tier 1 risk based capital ratio of 1.17% and a
total risk based capital ratio of 2.34%. The holding company
had a tier 1 leverage ratio of 0.42%, a tier 1 risk based capital
ratio of 0.52% and a total risk based ratio of 1.04%. For
purposes of the Prompt Corrective Action ("PCA") provisions of the
Federal Deposit Insurance Act (the "FDIA"), the Bank will be
classified as critically undercapitalized upon the filing of the
September 30, 2011 Call Report. Critically undercapitalized is the
lowest category under the PCA spectrum resulting in mandatory
actions by the regulators and mandatory restrictions on the Bank's
operations. Under the FDIA, depository institutions that are
"critically undercapitalized" can be placed into conservatorship or
receivership within 90 days of becoming critically
undercapitalized, unless they raise sufficient capital, merge with
another financial institution or the FDIC determines and documents
that "other action" would better achieve the purposes of the PCA
capital requirements (12 U.S.C. Section 1831o).
The Bank remains a member of the FDIC, and deposits at the Bank
remain insured by the FDIC up to the legal maximum insurance limit
– currently $250,000 per depositor, per deposit category. Our
customer service staff can help depositors with any questions about
the mechanics of FDIC deposit insurance.
Due to the results of the third quarter, the Corporation is
retaining Macquarie Capital (U.S.A.), Inc. assist in evaluating all
possible strategic alternatives. FIG Partners will also participate
with Macquarie Capital in assisting in the Company's strategic
transactions. The management team of Tennessee Commerce
Bancorp, Inc. will host a conference call today at 1:00PM CT to
discuss the results for the quarter.
Third Quarter Conference Call
Schedule this webcast into MS-Outlook calendar (click open when
prompted):
http://apps.shareholder.com/PNWOutlook/t.aspx?m=50552&k=748DE86A
Toll-free: 877-312-8781
Conference ID: 24461851
Listen via Internet:
http://investor.shareholder.com/media/eventdetail.cfm?eventid=105022&CompanyID=ABEA-2G5D9Z&e=1&mediaKey=B8DF282067CD208270C595F65354F2C4
Conference ID number: 24461851
Tennessee Commerce will provide an online, real-time webcast and
rebroadcast of its third quarter earnings conference call to
be held at 2:00 p.m. Eastern on November 1, 2011.
The live broadcast will be available online at
http://www.tncommercebank.com under the Investor Relations tab.
An audio replay of the conference call will be available
approximately two hours after the call's completion on our website
at http://www.tncommercebank.com under the Investor Relations tab
or by dialing one of the following Dial-In Numbers and the
Conference ID shown below:
Encore Dial In #: (855) 859-2056 Encore Dial In #: (404)
537-3406
The recording will be available from: 11/01/2011 17:00 to
11/07/2011 23:59 Conference ID number: 24461851
About Tennessee Commerce Bancorp, Inc.
Tennessee Commerce Bancorp, Inc. is the parent company of
Tennessee Commerce Bank. The Bank provides a wide range of
banking services and is primarily focused on business
accounts. Its corporate and banking office is located in
Franklin, Tennessee. Tennessee Commerce Bancorp's stock
is traded on the NASDAQ Global Market under the symbol TNCC.
Additional information concerning Tennessee Commerce can be
accessed at www.tncommercebank.com.
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements include, but are not limited to,
statements about our regional economy and non-GAAP financial
measures. Forward-looking statements can be identified by the use
of the words "anticipate," "believe," "expect," "outlook,"
"estimate," "continue," "predict," "project", "intend,"
"could" and "should," and other words of similar meaning. These
forward-looking statements express management's current
expectations or forecasts of future events and, by their nature,
are subject to risks and uncertainties and there are a number of
factors that could cause actual results to differ materially from
those in such statements. Factors that might cause such a
difference include, but are not limited to, the resolution of our
recent regulatory examination, the effects of future economic,
business and market conditions and changes, domestic and foreign,
that may affect general economic conditions, governmental monetary
and fiscal policies, negative developments in the financial
services industry and U.S. and global credit markets, fluctuations
in interest rates, changes in accounting policies, rules and
practices, other matters discussed in this press release and
other factors identified in the Company's Annual Report on
Form 10-K and other periodic filings with the Securities and
Exchange Commission.
These forward-looking statements are made only as of the date of
this press release, and Tennessee Commerce undertakes no obligation
to release revisions to these forward-looking statements to reflect
events or conditions after the date of this release. Tennessee
Commerce is not responsible for updating the information contained
in this press release beyond the published date, or for changes
made to this document by wire services or Internet services.
TENNESSEE COMMERCE BANCORP,
INC. |
CONSOLIDATED STATEMENTS OF
INCOME |
NINE MONTHS ENDED SEPTEMBER 30,
2011 AND 2010 |
(UNAUDITED) |
|
|
|
|
Nine Months Ended |
|
September 30, |
September 30, |
(Dollars in thousands, except per share
data) |
2011 |
2010 |
Interest income |
|
|
Loans, including fees |
$45,296 |
$58,102 |
Securities |
3,934 |
2,492 |
Federal funds sold |
135 |
37 |
Total interest income |
49,365 |
60,631 |
|
|
|
Interest expense |
|
|
Deposits |
18,893 |
20,306 |
Other |
899 |
1,400 |
Total interest expense |
19,792 |
21,706 |
|
|
|
Net interest income |
29,573 |
38,925 |
|
|
|
Provision for loan losses |
111,517 |
16,243 |
|
|
|
Net interest income after provision for loan
losses |
(81,944) |
22,682 |
|
|
|
Non-interest income |
|
|
Service charges on deposit accounts |
43 |
90 |
Securities (loss) gains |
(10,579) |
734 |
Gain on sale of loans |
63 |
475 |
Loss on repossession |
(13,778) |
(3,998) |
Other |
778 |
5,575 |
Total non-interest (loss)
income |
(23,473) |
2,876 |
|
|
|
Non-interest expense |
|
|
Salaries and employee benefits |
6,320 |
8,235 |
Occupancy and equipment |
1,412 |
1,474 |
Data processing fees |
1,740 |
1,529 |
FDIC expense |
2,696 |
2,349 |
Professional fees |
2,215 |
2,286 |
Other |
6,195 |
5,666 |
Total non-interest
expense |
20,578 |
21,539 |
|
|
|
(Loss) income before income taxes |
(125,995) |
4,019 |
|
|
|
Income tax (benefit) expense |
(7,153) |
1,503 |
Net (loss) income |
(118,842) |
2,516 |
Preferred dividends |
(1,131) |
(1,125) |
|
|
|
Net (loss) income available to common
shareholders |
$(119,973) |
$1,391 |
|
|
|
Earnings (loss) per share (EPS): |
|
|
Basic EPS |
$(9.83) |
$0.20 |
Diluted EPS |
(9.83) |
0.20 |
|
|
|
Weighted average shares outstanding: |
|
|
Basic |
12,203,855 |
6,871,025 |
Diluted |
12,203,855 |
6,871,025 |
|
TENNESSEE COMMERCE BANCORP,
INC. |
CONSOLIDATED BALANCE
SHEETS |
SEPTEMBER 30, 2011 AND 2010
(UNAUDITED) AND DECEMBER 31, 2010 |
|
|
|
|
|
September 30, |
December 31, |
September 30, |
(Dollars in thousands, except per share
data) |
2011 |
2010 |
2010 |
ASSETS |
|
|
|
Cash and due from banks |
$7,069 |
$6,521 |
$17,693 |
Federal funds sold |
24,328 |
14,214 |
8,005 |
Cash and cash equivalents |
31,397 |
20,735 |
25,698 |
|
|
|
|
Securities available for sale |
93,964 |
127,650 |
79,242 |
|
|
|
|
Loans |
1,014,188 |
1,229,811 |
1,241,669 |
Allowance for loan losses |
(35,696) |
(21,463) |
(21,742) |
Net loans |
978,492 |
1,208,348 |
1,219,927 |
|
|
|
|
Premises and equipment, net |
2,029 |
2,335 |
2,397 |
Accrued interest receivable |
4,105 |
8,746 |
8,395 |
Restricted equity securities |
2,459 |
2,459 |
2,169 |
Income tax receivable |
271 |
418 |
-- |
Bank-owned life insurance |
28,477 |
27,969 |
27,775 |
Investment in Peoples State Bank of
Commerce |
1,100 |
-- |
-- |
Investment in Farmers Bank |
1,720 |
-- |
-- |
Other real estate owned |
15,759 |
2,888 |
1,975 |
Repossessions |
14,531 |
30,635 |
32,747 |
Other assets |
16,593 |
20,983 |
19,745 |
Total assets |
$1,190,897 |
$1,453,166 |
$1,420,070 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
Liabilities |
|
|
|
Deposits |
|
|
|
Non-interest-bearing |
$41,755 |
$25,486 |
$25,942 |
Interest-bearing |
1,107,492 |
1,273,565 |
1,235,063 |
Total deposits |
1,149,247 |
1,299,051 |
1,261,005 |
|
|
|
|
Accrued interest payable |
1,869 |
1,408 |
1,562 |
Accrued dividend payable |
944 |
187 |
188 |
Short-term borrowings |
1,571 |
-- |
-- |
Other liabilities |
10,597 |
7,762 |
7,856 |
Long-term subordinated debt and other
borrowings |
23,198 |
25,421 |
25,621 |
Total liabilities |
1,187,426 |
1,333,829 |
1,296,232 |
Shareholders' equity |
|
|
|
Preferred stock, 1,000,000 shares
authorized; 30,000 shares of $0.50 par value Fixed Rate Cumulative
Perpetual, Series A issued and outstanding at September 30, 2011,
December 31, 2010 and September 30, 2010 |
15,000 |
15,000 |
15,000 |
Common stock, $0.50 par value; 20,000,000
shares authorized at September 30, 2011, December 31, 2010 and
September 30, 2010; 12,224,578, 12,194,884 and 12,194,884 shares
issued and outstanding at September 30, 2011, December 31, 2010 and
September 30, 2010, respectively |
6,107 |
6,097 |
6,097 |
Common stock warrant |
453 |
453 |
453 |
Additional paid-in capital |
84,949 |
84,391 |
84,388 |
Retained earnings |
(101,972) |
18,000 |
17,447 |
Accumulated other comprehensive loss |
(1,066) |
(4,604) |
453 |
Total shareholders'
equity |
3,471 |
119,337 |
123,838 |
|
|
|
|
Total liabilities and
shareholders' equity |
$1,190,897 |
$1,453,166 |
$1,420,070 |
|
TENNESSEE COMMERCE BANCORP,
INC. |
CONSOLIDATED STATEMENTS OF
INCOME |
ASSET QUALITY INFORMATION |
FOR THE PERIOD ENDED SEPTEMBER
30, 2011 AND YEARS ENDED DECEMBER 31, 2010, 2009 & 2008 |
|
|
|
|
|
|
September 30, |
December 31, |
December 31, |
December 31, |
(Dollars in thousands, except
ratios) |
2011 |
2010 |
2009 |
2008 |
Allowance for loan losses: |
|
|
|
|
Allowance for loan loss beginning of the
period |
$21,463 |
$19,913 |
$13,454 |
$10,321 |
Charge-offs |
97,973 |
18,868 |
26,085 |
6,099 |
Recoveries |
689 |
407 |
1,505 |
121 |
Net charge-offs |
97,284 |
18,461 |
24,580 |
5,978 |
Provision for loan losses |
111,517 |
20,011 |
31,039 |
9,111 |
Allowance for loan losses, end of period |
$35,696 |
$21,463 |
$19,913 |
$13,454 |
|
|
|
|
|
General Reserve Trends: |
|
|
|
|
Allowance for loan losses, end of period |
$35,696 |
$21,463 |
$19,913 |
$13,454 |
Specific reserves |
12,112 |
9,610 |
6,580 |
11,603 |
General reserves |
$23,584 |
$11,853 |
$13,333 |
$1,851 |
|
|
|
|
|
Total loans |
$1,014,188 |
$1,229,811 |
$1,171,301 |
$1,036,725 |
Impaired commercial loans |
97,004 |
45,552 |
28,547 |
10,789 |
Impaired real estate loans |
|
|
|
|
Construction |
10,168 |
4,096 |
11,367 |
-- |
1-4 Family |
4,413 |
5,581 |
671 |
20 |
Other |
56,899 |
32,474 |
508 |
783 |
Consumer |
-- |
-- |
-- |
11 |
Total impaired loans |
168,484 |
87,703 |
41,093 |
11,603 |
Non impaired loans |
$845,704 |
$1,142,108 |
$1,130,208 |
$1,025,122 |
|
|
|
|
|
Asset Quality Ratios: |
|
|
|
|
Net charge-offs as a % of total assets
(year-to-date) |
8.17% |
1.25% |
1.96% |
0.57% |
Allowance for loan losses as a % of
period end loans |
3.52% |
1.75% |
1.70% |
1.30% |
General reserves as a % of non-impaired
loans |
2.79% |
1.04% |
1.18% |
0.18% |
|
|
|
|
|
Non-performing assets: |
|
|
|
|
Nonaccrual loans |
106,124 |
52,315 |
19,151 |
11,603 |
Troubled debt |
6,105 |
1,705 |
109 |
668 |
Total non-performing loans (1) |
112,229 |
54,020 |
19,260 |
12,271 |
Loans past due 90 days or more |
7,502 |
3,608 |
1,328 |
18,788 |
Repossessions |
14,531 |
30,635 |
24,440 |
15,395 |
Other real estate owned |
15,759 |
2,888 |
814 |
5,764 |
Total non-performing assets (2) |
150,021 |
91,151 |
45,842 |
52,218 |
Percentage of non-performing loans to period
end loans |
11.07% |
4.39% |
1.64% |
1.18% |
Percentage of non-performing assets to period
end loans |
14.79% |
7.41% |
3.91% |
5.04% |
Percentage of non-performing assets to period
end assets |
12.60% |
6.27% |
3.31% |
4.29% |
|
|
|
|
|
Impaired Commercial Loan Portfolio
Information |
|
|
|
|
Remaining principal balance |
$97,004 |
$45,552 |
$28,547 |
$10,789 |
Specific reserve |
2,857 |
8,160 |
5,080 |
2,978 |
Book value, after specific reserve |
$94,147 |
$37,392 |
$23,467 |
$7,811 |
|
|
|
|
|
Impaired Real Estate loans -
Construction |
|
|
|
|
Remaining principal balance |
$10,168 |
$4,096 |
$11,367 |
$ -- |
Specific reserve |
4,092 |
950 |
400 |
-- |
Book value, after specific reserve |
$6,076 |
$3,146 |
$10,967 |
$ -- |
|
|
|
|
|
Impaired Real Estate loans - 1 - 4
Family |
|
|
|
|
Remaining principal balance |
$4,413 |
$5,581 |
$671 |
$20 |
Specific reserve |
470 |
500 |
-- |
6 |
Book value, after specific reserve |
$3,943 |
$5,081 |
$671 |
$14 |
|
|
|
|
|
Impaired Real Estate loans - Other |
|
|
|
|
Remaining principal balance |
$56,899 |
$32,474 |
$508 |
$783 |
Specific reserve |
4,693 |
-- |
100 |
216 |
Book value, after specific reserve |
$52,206 |
$32,474 |
$408 |
$567 |
|
|
|
|
|
Impaired Consumer loans |
|
|
|
|
Remaining principal balance |
$ -- |
$ -- |
$ -- |
$11 |
Specific reserve |
|
-- |
-- |
3 |
Book value, after specific reserve |
$ -- |
$ -- |
$ -- |
$8 |
|
|
|
|
|
(1) Non-Performing loans are
comprised of Nonaccrual Loans and Troubled Debt |
(2) Non-Performing Assets are
comprised of Nonaccruals, 90 + Days Past Due and ORE |
CONTACT: Frank Perez
Chief Financial Officer
615-599-2274
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