DALLAS, Nov. 9 /PRNewswire-FirstCall/ -- PMC Commercial Trust (NYSE
Amex: PCC) announced third quarter financial results today.
Compared to Third Quarter 2008 Income from continuing operations
for the third quarter of 2009 increased to $1,469,000 ($0.14 per
share) from $587,000 ($0.06 per share) during the third quarter of
2008. Net income increased to $1,895,000, or $0.18 per share,
during the third quarter of 2009 compared to $603,000, or $0.06 per
share, for the third quarter of 2008. Our income from continuing
operations and net income were significantly impacted during the
three months ended September 30, 2008 for a one-time charge of
$1,573,000 related to cost reduction initiatives. Excluding this
one-time charge, net income for the third quarter of 2008 was
$2,176,000 or $0.20 per share. Compared to Second Quarter 2009 Our
income from continuing operations decreased $75,000 to $1,469,000
($0.14 per share) during the third quarter of 2009 from $1,544,000
($0.15 per share) during the second quarter of 2009. Net income
increased by $331,000 to $1,895,000, or $0.18 per share, during the
third quarter of 2009 compared to $1,564,000, or $0.15 per share,
for the second quarter of 2009. Management Remarks Lance B.
Rosemore, Chairman of the Board of Trust Managers, stated; "I
continue to be proud of our employees and their commitment to
maintain profitability during these challenging economic times. As
a result of the lack of liquidity in the marketplace, we are
increasing the utilization of our SBA 7(a) license. LIBOR continues
to keep current yield levels on our loan portfolio at all-time lows
with the impact during 2009 estimated to be close to $3.0 million.
In a more normalized interest rate environment, our 2009
profitability would have been more comparable to that of 2008.
"While our portfolio continues to perform well, we have seen the
weakened economy impact some of our borrowers and we have taken
possession of two properties through foreclosure. We anticipate the
weakness to continue for at least several quarters. Our loans are
typically real estate secured and, in most cases, the value of the
underlying collateral should cover our principal exposure. However,
during 2009 we have increased our reserves for loan losses in
response to the current economic conditions. "We currently have a
$45 million short-term credit facility and have had a maximum
outstanding of just under $30 million during 2009. Since the
facility is scheduled to mature at the end of 2009, we are
negotiating with our lender to extend our facility through 2010. We
anticipate that the facility will be extended with a reduction in
borrowing availability during 2010 while providing liquidity for us
to continue funding loans using our SBA 7(a) platform. We
anticipate SBA 7(a) loan originations during 2010 will range
between $30 million and $40 million." Financial Results Third
Quarter of 2009 vs. Third Quarter of 2008 In addition to the
one-time charge during the third quarter of 2008 described above,
other significant changes included: -- We recorded non-cash gains
on sales of real estate (included in discontinued operations) of
$592,000 during the third quarter of 2009 due to income recognition
on previously deferred gains; -- Our overhead (salaries and related
benefits and general and administrative) decreased $485,000 due
primarily to our 2008 cost reduction initiatives and a reduction in
legal fees; -- Our interest income, net of interest expense,
decreased $462,000 due primarily to the decline in LIBOR; -- During
the third quarter of 2009 we recorded permanent impairments on our
retained interests in transferred assets ("Retained Interests") of
$438,000 while there were no impairments recorded in the third
quarter of 2008; -- Income from Retained Interests decreased
$375,000 due primarily to a reduction in our weighted average
Retained Interests of 28% partially offset by an increase in
unanticipated prepayment fees of $106,000; -- Other income
increased $303,000 due primarily to premium income recognized on
the sale of the guaranteed portion of our SBA 7(a) loans; and --
Provision for loan losses, net, increased $291,000 due to current
market conditions. Third Quarter of 2009 vs. Second Quarter of 2009
Significant changes included: -- Our other income increased
$429,000 due primarily to premium income recognized on the sale of
the guaranteed portion of our SBA 7(a) loans; -- During the third
quarter of 2009 we recorded permanent impairments on our Retained
Interests of $438,000 compared to $17,000 of impairments recorded
in the second quarter of 2009; and -- Provision for loan losses,
net, increased $337,000 due to increases in both our specific and
general reserves due primarily to devaluations of real estate
collateral underlying our limited service hospitality loans. Nine
Months Ended September 30, 2009 vs. Nine Months Ended September 30,
2008 In addition to the one-time charge during the third quarter of
2008 described above, other significant changes included: -- For
the nine months ended September 30, 2009 our income from continuing
operations decreased to $4,609,000 ($0.44 per share) from
$6,737,000 ($0.63 per share) during the nine months ended September
30, 2008; and -- For the nine months ended September 30, 2009, net
income decreased to $5,805,000, or $0.48 per share, compared to
$7,515,000, or $0.70 per share, for the nine months ended September
30, 2008. Excluding the one-time charge, our net income for the
nine months ended September 30, 2008 was $9,088,000 or $0.84 per
share. Interest Rate Sensitivity -- Approximately 67% of our
retained loans at September 30, 2009 were based on LIBOR. -- The
base LIBOR charged to our borrowers during the third quarter of
2009 was 0.60% compared to 2.79% during the third quarter of 2008.
-- The base LIBOR for the fourth quarter of 2009 has been set at
0.29%. During the fourth quarter of 2008 the base LIBOR was 3.88%.
-- The average base LIBOR charged to our borrowers during the nine
months ended September 30, 2009 was 1.08% compared to 3.41% during
the nine months ended September 30, 2008. Financial Position -- Our
total assets were relatively unchanged at $229.4 million at
September 30, 2009 compared to $227.5 million at December 31, 2008
and $228.3 million at September 30, 2008. -- Our total serviced
loan portfolio was $267.9 million at September 30, 2009 down from
$275.5 million at December 31, 2008 and $287.3 million as of
September 30, 2008. -- Our outstanding retained loan portfolio was
$200.0 million at September 30, 2009 compared to $180.6 million at
December 31, 2008 and $186.7 million as of September 30, 2008.
Originations -- During the third quarter of 2009, we originated
$8.4 million of SBA 7(a) loans compared to $2.5 million in the
third quarter of 2008. -- During the first nine months of 2009, we
originated $16.2 million of SBA 7(a) loans compared to $7.0 million
during the first nine months of 2008. -- Our pipeline of
outstanding loan commitments has increased to $23.2 million at
September 30, 2009 from $10.0 million at December 31, 2008. -- We
increased our estimate of 2009 fundings by approximately $5 million
and now anticipate our 2009 fundings to be between $25 million and
$35 million. -- Depending on liquidity, we expect that fundings
during 2010 will be between $30 million and $40 million. Liquidity
-- Our $45 million uncollateralized revolving credit facility,
which matures December 31, 2009, had $23.9 million outstanding at
September 30, 2009. -- We are currently negotiating to extend the
maturity of our revolving credit facility to December 31, 2010. --
We anticipate that the aggregate amount available under our
revolving credit facility will decrease and the costs are expected
to increase. -- There can be no assurance that we will be able to
extend or replace our revolving credit facility. Dividends --
Regular quarterly dividends on our common shares of $0.545 have
been declared during 2009 which includes the regular quarterly
dividend declared in September 2009 of $0.16 per share that was
paid on October 13, 2009 to shareholders of record on September 30,
2009. -- It is presently anticipated that the dividend to be
declared in the fourth quarter will be consistent with the $0.16
per share dividend paid in October 2009. -- There has been no
guidance provided by the Board of Trust Managers for dividends to
be declared in 2010. -- Since our inception in 1993, we have paid
over $162.5 million in dividends or $22.36 per common share.
Financial Position Information September 30, June 30, March 31,
December 31, September 30, 2009 2009 2009 2008 2008 --------
-------- -------- -------- -------- (In thousands, except per share
information) Loans receivable, net $198,712 $184,415 $193,194
$179,807 $186,190 Retained interests in transferred assets $12,413
$25,399 $24,742 $33,248 $33,384 Total assets $229,367 $225,443
$233,558 $227,524 $228,314 Debt $69,693 $66,245 $71,574 $61,814
$60,585 Total beneficiaries' equity $152,756 $152,649 $153,023
$154,362 $156,793 Shares outstanding 10,548 10,548 10,587 10,695
10,782 Net asset value per share $14.48 $14.47 $14.45 $14.43 $14.54
PMC Commercial Trust and Subsidiaries Comparative Results of
Operations Nine Months Ended Three Months Ended September 30,
September 30, ------------------------- ---------------------- Inc
Inc 2009 2008 (Dec) % 2009 2008 (Dec) % ---- ---- -------- ----
---- -------- (Dollars in thousands, except per share information)
Income: Interest income $8,466 $10,886 (22%) $2,830 $3,601 (21%)
Income from retained interests in transferred assets 2,369 5,243
(55%) 672 1,047 (36%) Other income 1,265 1,587 (20%) 735 432 70%
------ ------ ---- ----- ----- ---- Total revenues 12,100 17,716
(32%) 4,237 5,080 (17%) ------ ------ ---- ----- ----- ----
Expenses: Interest 2,240 3,163 (29%) 644 953 (32%) Salaries and
related benefits 2,864 3,752 (24%) 944 1,161 (19%) General and
administrative 1,380 1,794 (23%) 403 671 (40%) Severance and
related benefits - 1,573 (100%) - 1,573 (100%) Impairments and
provisions 1,111 491 126% 831 102 715% ----- ------ ---- -----
----- ---- Total expenses 7,595 10,773 (29%) 2,822 4,460 (37%)
----- ------ ---- ----- ----- ---- Income before income tax benefit
(provision) and discontinued operations 4,505 6,943 (35%) 1,415 620
128% Income tax benefit (provision) 104 (206) (150%) 54 (33) (264%)
----- ------ ------ ---- ---- ----- Income from continuing
operations 4,609 6,737 (32%) 1,469 587 150% Discontinued operations
476 778 (39%) 426 16 2,563% ------ ------ ---- ------ ---- ------
Net income $5,085 $7,515 (32%) $1,895 $603 214% ====== ====== =====
====== ==== ====== Basic weighted average shares outstanding 10,582
10,771 10,548 10,782 ====== ====== ====== ====== Basic and diluted
earnings per share: Income from continuing operations $0.44 $0.63
$0.14 $0.06 Discontinued operations 0.04 0.07 0.04 - ----- -----
----- ----- Net income $0.48 $0.70 $0.18 $0.06 ===== ===== =====
===== PMC Commercial Trust and Subsidiaries Quarterly Operating
Results Three Months Ended
--------------------------------------------------- Sept. 30, June
30, March 31, Dec. 31, Sept. 30, 2009 2009 2009 2008 2008 --------
------- -------- -------- --------- (In thousands) Revenues:
Interest income $2,830 $2,785 $2,851 $3,654 $3,601 Income from
retained interests in transferred assets 672 781 916 1,122 1,047
Other income 735 306 224 625 432 ----- ----- ----- ----- -----
Total revenues 4,237 3,872 3,991 5,401 5,080 ----- ----- -----
----- ----- Expenses: Interest 644 790 806 836 953 Salaries and
related benefits 944 999 921 953 1,161 General and administrative
403 534 443 510 671 Severance and related benefits - - - 235 1,573
Impairments and provisions 831 73 207 469 102 ----- ----- -----
----- ----- Total expenses 2,822 2,396 2,377 3,003 4,460 -----
----- ----- ----- ----- Income before income tax benefit
(provision) and discontinued operations 1,415 1,476 1,614 2,398 620
Income tax benefit (provision) 54 68 (18) (113) (33) ----- -----
----- ----- --- Income from continuing operations 1,469 1,544 1,596
2,285 587 Discontinued operations 426 20 30 6 16 ------ ------
------ ------ ---- Net income $1,895 $1,564 $1,626 $2,291 $603
====== ====== ====== ====== ==== 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: Nine
Months Ended Three Months Ended September 30, September 30,
----------------- ------------------ 2009 2008 2009 2008 ---- ----
---- ---- (In thousands) Net income $5,085 $7,515 $1,895 $603
Book/tax difference on depreciation (42) (45) (14) (15) Book/tax
difference on deferred gains from property sales (642) (778) (592)
(16) Book/tax difference on Retained Interests, net (66) (3) 345
(151) Severance accrual (payments) (1,429) 1,573 - 1,573 Dividend
distribution from taxable REIT subsidiary - 2,000 - - Book/tax
difference on amortization and accretion (201) (172) (244) (32)
Loan valuation 239 106 85 90 Other book/tax differences, net (81)
(30) (23) (75) ----- ------ ----- ----- Subtotal 2,863 10,166 1,452
1,977 Less: taxable REIT subsidiaries net income (loss), net of tax
268 (392) 127 (114) ------ ------ ------ ------ REIT taxable income
$3,131 $9,774 $1,579 $1,863 ====== ====== ====== ======
Distributions declared $5,757 $7,004 $1,688 $2,425 ====== ======
====== ====== Weighted average common shares outstanding 10,582
10,771 10,548 10,782 ====== ====== ====== ====== Forward Looking
Statements 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. DATASOURCE: PMC Commercial
Trust CONTACT: Investor Relations of PMC Commercial Trust,
+1-972-349-3235 Web Site: http://www.pmctrust.com/
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