EXHIBIT 99.1
Provident Community Bancshares, Inc. Announces Second Quarter Earnings
UNION, S.C.--(BUSINESS WIRE)--July 19, 2006--Provident Community
Bancshares, Inc. (NASDAQ: PCBS) reported operating results for the
second quarter and six months ended June 30, 2006. Net income for the
three months ended June 30, 2006 was $639,000 compared to $549,000 for
the second quarter of 2005, a 16.4% increase. Earnings per share were
$0.33 per share (diluted) for the second quarter of 2006, versus $0.28
per share (diluted) for the second quarter of 2005. Net income for the
six months ended June 30, 2006, was $1.3 million, or $0.70 per share
(diluted), a 23.0% increase over the $1.1 million, or $0.55 per share
(diluted), for the same period in 2005.
Net interest income before the loan loss provision for the second
quarter increased $181,000, or 7.2%, to $2.7 million compared to $2.5
million for the same period in the previous year. The increase was due
primarily to higher average loan balances over the previous year along
with an increase in the yield on loans that resulted from a higher
concentration of consumer and commercial loans. The increase in
interest income was partially offset by higher deposit costs as a
result of an increase in balances and rising rates. The provision for
loan losses for the second quarter totaled $135,000 compared to
$341,000 for the same period in the previous year. The decrease in
provision for loan losses was due to a $2.6 million reduction in
non-performing loans to $1.4 million compared to $4.0 million for the
same period in the previous year, offset by a 16.8% increase in net
loans over the previous year and a higher concentration of commercial
loans in the portfolio which carry a higher risk of default.
Non-interest income for the second quarter increased $54,000, or
8.0%, to $727,000 compared to $673,000 for the same period in the
previous year. The increase was due to higher fees for financial
services that resulted from an increase in transaction accounts.
Non-interest expense for the second quarter increased $283,000, or
13.5%, to $2.4 million compared to $2.1 million for the same period in
the previous year. The increase was due primarily to higher
compensation and benefits costs for normal merit salary increases and
costs associated with the opening of a new banking center in
Simpsonville, South Carolina in March 2006.
At June 30, 2006, assets totaled $379.5 million, a 2.3% increase
from $371.0 million at December 31, 2005. Net loans receivable
increased $21.7 million, or 11.3%, during the period to $214.3 million
at June 30, 2006, compared to $192.6 million at December 31, 2005. The
net growth in loans was driven by a 19.7% increase in the
consumer/commercial loan portfolio as the Company continued to focus
on these lending segments with specialized loan officers and products.
Growth in lower cost transaction accounts resulted in deposits
increasing 6.4% to $254.8 million at June 30, 2006 compared to $239.6
million at December 31, 2005. Reductions in lower yielding investments
and mortgage-backed securities of $14.1 million and the increase in
deposits funded the increase in loans and a reduction in borrowings of
$6.3 million. Shareholders' equity decreased $1,156,000, or 4.56%, to
$24,177,000 at June 30, 2006 from $25,333,000 at December 31, 2005 due
to the repurchase of 44,573 shares at a cost of $792,000, dividend
payments of $0.21 per share at a cost of $399,000 and a $1,377,000
increase in unrealized losses on securities available for sale, offset
by net income of $1,338,000.
Commenting on the results, Dwight V. Neese, President and Chief
Executive Officer, stated: "We are pleased to report our earnings
performance improvement over the comparable periods in the previous
year. Loan and deposit growth continued to be strong and asset quality
trends are improving. These positive trends are all reflected in our
23% increase in net income over the previous year period with earnings
per share increasing 27%. We will continue to focus on core operations
over the coming quarters with the goal of continuing to build
long-term value for our shareholders."
The Company also declared a quarterly cash dividend of $0.11 per
share payable on August 15, 2006 to shareholders of record on July 28,
2006. Provident Community Bancshares, Inc. has a dividend reinvestment
plan and information about the plan can be obtained from Registrar and
Transfer Company at 800-368-5948.
Provident Community Bancshares is the holding company for
Provident Community Bank, N.A., which operates nine banking locations
in the upstate of South Carolina. At June 30, 2006, Provident
Community Bancshares had $379.5 million in total assets and total
stockholders' equity of $24.2 million. Please visit our website at
www.providentonline.com or contact Wanda J. Wells, SVP/Shareholder
Relations Officer at wwells@providentonline.com or Richard H. Flake,
EVP/CFO at rflake@providentonline.com..
Certain matters set forth in this news release may contain
forward-looking statements that are provided to assist in the
understanding of anticipated future financial performance. However,
such performance involves risks and uncertainties that may cause
actual results to differ materially from those in such statements. For
a discussion of certain factors that may cause such forward-looking
statements to differ materially from the Corporation's actual results,
see the Corporation's Quarterly Reports on Form 10-Q for the quarter
ended March 31, 2006, and the Corporation's Annual Report in Form 10-K
for the year ended December 31, 2005.
- ------------------------------------------------------------------
Provident Community Bancshares, Inc.
Second Quarter - Year Ending December 31, 2006
- ----------------------------------------------------------------------
Financial Highlights
(Unaudited) ($ in thousands, except share data)
At At
Balance Sheet 6/30/06 12/31/05 $ Change % Change
- ---------------- ---------- ---------- ---------- ----------
Total assets $ 379,504 $ 371,042 $ 8,462 2.28%
Cash and due from banks 8,661 8,380 281 3.35%
Investments & mortgage-
backed securities 132,194 146,283 -14,089 -9.63%
Loans receivable (net) 214,303 192,577 21,726 11.28%
Goodwill and intangible
assets 3,259 3,576 -317 -8.86%
Deposits 254,843 239,603 15,240 6.36%
Advances and other
borrowings 89,400 95,715 -6,315 -6.60%
Stockholders' equity 24,177 25,333 -1,156 -4.56%
Outstanding shares 1,866,731 1,905,897 -39,166 -2.05%
Book value per share $ 12.95 $ 13.29 -$0.34 -2.56%
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------
Income Statement 2006 2005 2006 2005
- -------------------------- ---------- ---------- ---------- ----------
Net interest income $ 2,681 $ 2,500 $ 5,335 $ 4,949
Provision for loan
losses 135 341 310 548
---------- ---------- ---------- ----------
Net interest income
after loan loss
provision 2,546 2,159 5,025 4,401
Non-interest income 727 673 1,413 1,250
Non-interest expense 2,373 2,090 4,560 4,192
Income tax 261 193 540 371
---------- ---------- ---------- ----------
Net income $ 639 $ 549 $ 1,338 $ 1,088
========== ========== ========== ==========
Earnings per share:
basic $ 0.34 $ 0.29 $ 0.71 $ 0.57
========== ========== ========== ==========
Earnings per share:
diluted $ 0.33 $ 0.28 $ 0.70 $ 0.55
========== ========== ========== ==========
Weighted Average Number
of Common Shares
Outstanding
Basic 1,887,582 1,907,551 1,891,873 1,918,190
Diluted 1,911,663 1,970,142 1,914,748 1,981,012
Six Months Ended
June 30,
---------------------
Key Financial Ratios 2006 2005
-------------------- ---------- ----------
Return on average
assets 0.72% 0.60%
Return on average
stockholders'
equity 10.72% 8.63%
Operating expense
to average assets 2.27% 2.13%
Capital to average
assets 8.62% 9.34%
CONTACT: Provident Community Bancshares, Inc.
Wanda J. Wells, 864-429-1861
wwells@providentonline.com