Bank Notes
PROMOTIONAL ANNOUNCEMENTS
The Palmetto Bank is proud to announce the following promotions:
H. E. (Tripp) Tuttle has been promoted to executive vice president, Palmetto Trust & Investment Group. Tuttle joined The Palmetto Bank in 1997 and is a graduate of Presbyterian College, CannonGraduate Trust School and currently serves on the board of the South Carolina Trust Committee.
Matthew I. Walter has been promoted to executive vice president, Investments. Walterjoined The Palmetto Bank in 1990 and has held various investment positions including senior vice president, investment officer. Walter received a Bachelor of Science in Finance and a Master of Business Administration from the University of South Carolina, and is a graduate of Stonier Graduate School of Banking and ABA Graduate School of Bank Investments and Financial Management.
Ana I. Miles has been promoted to senior vice president, marketing director. She is a graduate of Keiser College, the ABA School of Bank Marketing and has 21 years of bank marketing experience.
Lauren K. Slaughter, CPA has beenpromoted to senior vice president, finance and accounting. A Greenville native, she is a Clemson University graduate and has seven years experience in accounting and finance.
Lynn G.Young has been promoted to vice president, commercial lender, Greenwood. A native of Ninety-Six, Young is a graduate of the University of South Carolina, South Carolina Bankers School and ABA's National Commercial Lending School.
Haley H.Jeffcoat has been promoted to assistant vice president, branch manager and loan officer, Fountain Inn. She is a graduate of Clemson University and the South Carolina Bankers School.
James T. (Jimmy) Rambo,Jr. has been promoted to assistant vice president, commercial lender, Greenwood. A native of Laurens, Rambo received a Bachelor of Arts degree from Wofford College and a Masters of Business Administration from the University of South Carolina.
Elizabeth L. Robertson has been promoted to assistant vice president, branch manager and loan officer, Main. A Laurens native, Robertson is a graduate of the University of South Carolina, The Palmetto Bank's management training program, and the South Carolina Bankers School.
Dawn B. Wessonhas been promoted to assistant vice president, trust officer. A native of Clinton, Wesson is a graduate of Presbyterian College and Cannon Trust School.
NEW OFFICER APPOINTMENTS
Josephus J.Howard has been appointed assistant branch manager and loan officer, Clinton. Howard received a Bachelor of Science degree and a Masters of Business Administration from the University of South Carolina.
Cynthia J. Jamison has been appointed marketing officer. A graduate of Columbia College, Jamison manages The Palmetto Bank's public and media relations, as well as corporate communications.
Sara T. Loy has been appointed assistant branch manager and loan officer, Anderson Main. An Upstate native, Loy is a graduate of Clemson University and The Palmetto Bank's management training program.
Russell G. Swifthas been named commercial lender, Anderson. A native of Anderson, he received a Bachelor of Arts degree from Wofford College and a Masters of Business Administration from Clemson
FREDDIE MAC HONORS THE PALMETTO BANK FOR QUALITY SERVICING
The Palmetto Bank's Mortgage Servicing Department recently achieved Freddie Mac's prestigious 2005 Tier One performance ranking for excellence in investor reporting and default management for two or more quarters during the year. According to Freddie Mac, one of the nation's largest investors in residential mortgages, The Palmetto Bank was one of only 84 servicing companies nationwide to meet this standard. Nationally, approximately 1,500 lenders service Freddie-Mac owned loans.
To Our Shareholders:
We are pleased to report on the financial condition and operating results for Palmetto Bancshares, Inc. at the end of the first quarter in 2006. We have reached yet another significant milestone in our history by providing service to our Upstate community for over 100 years. It was only last year that Palmetto Bancshares reached a milestone by exceeding $1 billion in total assets. We continue to see strong growth in total assets over the last 12 month period with an 8% increase to $1.1 billion at March 31, 2006. Total assets under management, including bank assets, trust and investment assets, and mortgage loans serviced for others increased to $1.8 billion at March 31, an increase of $134.1 million from first quarter 2005.
We can also report improved operating results in net income and earnings per share. Net income increased by 7 percent to $3.65 million over $3.41 million in the first quarter of 2005. On a diluted basis, earnings per share were up 8 percent to $0.57 compared with $0.53 per share for the quarter ended March 31, 2005. Continued good operating earnings have led to a cash dividend payment of $0.18 per share for the first quarter 2006 and an increase of $0.02 per share over the same period for 2005. Recent trades in the $36.00 per share range continue to compare favorably with results with the broad indexes for equity investments in the first quarter of 2006.
Growth in deposits, including retail repurchase agreements and commercial paper, has been exceedingly strong in the first quarter 2006. Compared with first quarter end 2005, growth of $113.8 million or 13 percent brought total deposits to a record $984.9 million at March 31, 2006.
In support of deposit gathering The Palmetto Bank has invested in a number of new programs with the purchase of Connections, a marketing database system; a sales training support program, the implementation of a monthly incentives payment system and additional marketing efforts directed to the reintroduction of several existing deposit products. We are confident that the launch of these new programs and marketing initiatives in our 100th year will ensure continued growth in core deposits for years to come.
Loan growth slowed somewhat in the first quarter due primarily to continued increases in short term interest rates by the Federal Reserve. Further increases by the Federal Reserve will be measured against the overall rate of expansion in the economy and any perceived inflationary expectations. Economic activity in the Upstate continues sound and we can expect loan demand in the coming months to reflect continued growth of the local economy.
Credit quality continues to be sound and well managed. Charge-off experience has been excellent as well as delinquencies of loans in recent months. At March 31, 2006 net loans charged-off as a percentage of average loans was .11 percent compared with ..20 percent for the same period in 2005. Credit quality continues to reflect the necessity of a strong and positive credit culture to bottom line results.
As we celebrate the 100th year in our history and growth, we are mindful of the lessons and experiences of the past. Yet, we are comfortable in the knowledge that we have assembled a staff of dedicated employees who individually and collectively understand a responsibility to shareholders, to customers, to each fellow employee and to our communities. The exceptional performance of the first quarter is a direct result of the outstanding abilities and efforts of our employees and their desire to achieve superior long term shareholder value for the company. As shareholders, we are always mindful of your concerns, and we appreciate your loyal and continued support. It was a great occasion to see many of you at the recent annual meeting. There are many events planned in the celebration of this special year for the company. We hope you feel the spirit of this special time with us.
Sincerely,
L. Leon Patterson
Chairman and Chief Executive Officer
Consolidated Balance Sheets | |
(in thousands, except common share data) | |
| | | | March 31, | |
| | | | 2006 | | 2005 | |
| | | | (unaudited) | |
ASSETS | | | | |
| Cash and due from banks | $ | 46,762 | | 36,504 | |
Federal funds sold | 29,436 | | 1,394 | |
| Total cash and cash equivalents | 76,198 | | 37,898 | |
| | | | | | | |
Federal Home Loan Bank (FHLB) stock, at cost | 3,184 | | 4,331 | |
Investment securities available for sale, at fair market value | 124,920 | | 138,385 | |
Mortgage loans held for sale | 2,846 | | 5,335 | |
| | | | | | | |
Loans | | 860,958 | | 802,948 | |
| Less allowance for loan losses | (8,727) | | (7,838) | |
| | Loans, net | 852,231 | | 795,110 | |
| | | | | | | |
Premises and equipment, net | 23,103 | | 22,384 | |
Accrued interest receivable | 5,054 | | 4,452 | |
Other assets | 17,569 | | 14,709 | |
| | | Total assets | $ | 1,105,105 | | 1,022,604 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
Liabilities | | | | |
Deposits | | | | |
| Noninterest-bearing | $ | 137,060 | | 124,251 | |
| Interest-bearing | 812,000 | | 706,922 | |
| | Total deposits | 949,060 | | 831,173 | |
| | | | | | | |
Retail repurchase agreements | 17,725 | | 20,981 | |
Commercial paper (Master notes) | 18,146 | | 18,993 | |
Federal funds purchased | - | | 13,320 | |
FHLB borrowings | 23,000 | | 52,000 | |
Other liabilities | 5,615 | | 4,038 | |
| | Total liabilities | 1,013,546 | | 940,505 | |
| | | | | | | |
Shareholders' Equity | | | | |
Common stock - par value $5.00 per share; authorized 10,000,000 | | | | |
| shares; issued and outstanding 6,350,635 and 6,313,535 at | | | | |
| March 31, 2006 and 2005, respectively. | 31,753 | | 31,567 | |
Capital surplus | 877 | | 555 | |
Retained earnings | 60,039 | | 50,324 | |
Accumulated other comprehensive income (loss), net of tax | (1,110) | | (347) | |
| | Total shareholders' equity | 91,559 | | 82,099 | |
| | | | | | | |
| | | Total liabilities and shareholders' equity | $ | 1,105,105 | | 1,022,604 | |
| | | | | | | |
ASSETS UNDER MANAGEMENT | | | | |
| Palmetto Bancshares, Inc. less trust deposits | $ | 1,062,653 | | 1,009,623 | |
| Trust | 284,947 | | 252,732 | |
| Investment | 156,907 | | 145,929 | |
| Mortgage loans serviced for others | 309,968 | | 272,084 | |
| | Total assets under management | $ | 1,814,475 | | 1,680,368 | |
Consolidated Statements of Income |
(in thousands, except share data) |
| | | | | | | | |
| | | | | For the three months ended March 31, | |
| | | | | 2006 | | 2005 | |
| | | | | (unaudited) | |
Interest income | | | | |
| | Interest and fees on loans | $ | 16,453 | | 12,891 | |
| Interest and dividends on investment securities available for sale | 1,249 | | 1,334 | |
| Interest on federal funds sold | 189 | | 21 | |
| Dividends and interest on FHLB balances | 57 | | 43 | |
| | | Total interest income | 17,948 | | 14,289 | |
| | | | | | | | |
Interest expense | | | | |
| Interest on deposits including retail repurchase agreements | 5,408 | | 3,088 | |
| Interest on securities sold under agreements to repurchase and | | | | |
| | reverse repurchase agreements | - | | - | |
| Interest on federal funds purchased | 2 | | 25 | |
| Interest on FHLB advances | 305 | | 297 | |
| Interest on commercial paper (Master notes) | 138 | | 66 | |
| | | Total interest expense | 5,853 | | 3,476 | |
| | | | | | | | |
| | | | Net interest income | 12,095 | | 10,813 | |
| | | | | | | | |
Provision for loan losses | 525 | | 600 | |
| | | | | | | | |
| | | | Net interest income after provision for loan losses | 11,570 | | 10,213 | |
| | | | | | | | |
Noninterest income | | | | |
| Service charges on deposit accounts | 2,058 | | 1,847 | |
| Fees for trust and brokerage services | 781 | | 803 | |
| Mortgage banking income | 222 | | 282 | |
| Investment securities gains | 2 | | 54 | |
| Other | | 919 | | 779 | |
| | | Total noninterest income | 3,982 | | 3,765 | |
| | | | | | | | |
Noninterest expense | | | | |
| Salaries and other personnel | 5,775 | | 4,964 | |
| Occupancy | 692 | | 600 | |
| Furniture and equipment | 1,006 | | 885 | |
| Postage and supplies | 456 | | 262 | |
| Marketing and advertising | 389 | | 317 | |
| Telephone | 213 | | 183 | |
| Professional services | 221 | | 181 | |
| Other | | 1,393 | | 1,458 | |
| | | Total noninterest expense | 10,145 | | 8,850 | |
| | | | | | | | |
| | | | Net income before income taxes | 5,407 | | 5,128 | |
| | | | | | | | |
Provision for income taxes | 1,757 | | 1,717 | |
| | | | | | | | |
| | | | Net income | $ | 3,650 | | 3,411 | |
| | | | | | | | |
Share Data | | | | |
| Net income - basic | $ | 0.58 | | 0.54 | |
| Net income - diluted | 0.57 | | 0.53 | |
| Cash dividends | 0.18 | | 0.16 | |
| Book value | 14.42 | | 13.00 | |
| Weighted average common shares outstanding - basic | 6,343,247 | | 6,309,527 | |
| Weighted average common shares outstanding - diluted | 6,444,002 | | 6,407,359 | |
| | | | | | | | |
