Exhibit 99.1
Provident Community Bancshares, Inc. Announces Third Quarter Earnings
UNION, S.C.--(BUSINESS WIRE)--Oct. 18, 2006--Provident Community
Bancshares, Inc. (NASDAQ: PCBS) reported operating results for the third quarter
and nine months ended September 30, 2006. Net income for the three months ended
September 30, 2006 was $651,000 compared to $638,000 for the third quarter of
2005. Earnings per share were $0.35 per share (diluted) for the third quarter of
2006, versus $0.33 per share (diluted) for the third quarter of 2005. Net income
for the nine months ended September 30, 2006, was $2.0 million, or $1.05 per
share (diluted), a 15.2% increase over the $1.7 million, or $0.88 per share
(diluted), for the same period in 2005.
Net interest income before the loan loss provision for the third quarter
remained at $2.6 million reflecting higher funding costs over the previous year
period as a result of an increase in balances and rising rates offset by higher
average loan balances along with an increase in the yield on loans that resulted
from a higher concentration of consumer and commercial loans. On July 21, 2006,
the Corporation completed a private placement of $4.0 million in trust preferred
securities. The trust preferred securities will bear a rate equal to 7.393% for
the first five years following the offering. After the first five years, the
securities will bear a rate equal to 174 basis points over the three-month
LIBOR. The provision for loan losses for the third quarter totaled $45,000
compared to $220,000 for the same period in the previous year. The decrease in
provision for loan losses was due to a reduction in classified loans from the
previous year, offset by a 19.8% 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 third quarter increased $28,000, or 4.0%, to
$720,000 compared to $692,000 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 third quarter
increased $124,000, or 5.7%, to $2.3 million compared to $2.2 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 September 30, 2006, assets totaled $372.2 million, a 0.3% increase from
$371.0 million at December 31, 2005. Net loans receivable increased $24.9
million, or 12.9%, during the period to $217.4 million at September 30, 2006,
compared to $192.6 million at December 31, 2005. The net growth in loans was
driven by a 22.1% increase in the commercial loan portfolio as the Company
continued to focus on this lending segment with specialized loan officers and
products. Reductions in lower yielding investments and mortgage-backed
securities of $26.0 million funded the increase in loans. Shareholders' equity
increased $76,000, or 0.30%, to $25.4 million at September 30, 2006 from $25.3
million at December 31, 2005 due to net income of $2.0 million offset by the
repurchase of 74,058 shares at a cost of $1.3 million, dividend payments of
$0.32 per share at a cost of $604,000 and a $105,000 increase in unrealized
losses on securities available for sale.
The Company also declared a quarterly cash dividend of $0.11 per share
payable on November 15, 2006 to shareholders of record on October 30, 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 September 30, 2006, Provident Community Bancshares had $372.2
million in total assets and total stockholders' equity of $25.4 million. Please
visit our website at www.providentonline.com or contact Wanda J. Wells,
SVP/Shareholder Relations Officer at wwells@providentonline.com or Richard H.
Flake, EVP/CFO at rflake@providentonline.com.
Certain matters set forth in this news release may contain forward-looking
statements that are provided to assist in the understanding of anticipated
future financial performance. However, such performance involves risks and
uncertainties that may cause actual results to differ materially from those in
such statements. For a discussion of certain factors that may cause such
forward-looking statements to differ materially from the Corporation's actual
results, see the Corporation's Quarterly Reports on Form 10-Q for the quarter
ended June 30, 2006, and the Corporation's Annual Report in Form 10-K for the
year ended December 31, 2005.
Provident Community Bancshares, Inc.
Third Quarter - Year Ending December 31, 2006
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Financial Highlights
(Unaudited) ($ in thousands, except share data)
At At
Balance Sheet 9/30/06 12/31/05 $Change % Change
- ----------------------------- ----------------------------------------
Total assets $372,235 $371,042 $1,193 0.32%
Cash and due from banks 10,804 8,380 2,424 28.93%
Investments & mortgage-
backed securities 120,278 146,283 (26,005) -17.78%
Loans receivable (net) 217,429 192,577 24,852 12.90%
Goodwill and intangible
assets 3,100 3,576 (476) -13.31%
Deposits 240,007 239,603 404 0.17%
Advances and other
borrowings 91,900 95,715 (3,815) -3.99%
Stockholders' equity 25,409 25,333 76 0.30%
Outstanding shares 1,838,906 1,905,897 (66,991) -3.51%
Book value per share $13.82 $13.29 $0.53 3.95%
Three Months Ended Nine Months Ended
September 30, September 30,
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Income Statement 2006 2005 2006 2005
- ----------------------------- ----------------------------------------
Net interest income $2,551 $2,578 $7,887 $7,528
Provision for loan losses 45 220 355 768
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Net interest income after
loan loss provision 2,506 2,358 7,532 6,760
Non-interest income 720 692 2,133 1,942
Non-interest expense 2,294 2,170 6,854 6,363
Income tax 281 242 822 613
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Net income $651 $638 $1,989 $1,726
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Earnings per share: basic $0.35 $0.33 $1.06 $0.90
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Earnings per share: diluted $0.35 $0.33 $1.05 $0.88
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Weighted Average Number of
Common Shares Outstanding
Basic 1,846,643 1,906,555 1,876,630 1,914,269
Diluted 1,876,417 1,952,840 1,901,830 1,971,592
Nine Months Ended
September 30,
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Key Financial Ratios 2006 2005
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Return on average assets 0.71% 0.63%
Return on average stockholders' equity 10.68% 9.04%
Operating expense to average assets 2.28% 2.16%
Capital to average assets 9.17% 9.23%
CONTACT: Provident Community Bancshares, Inc.
Wanda J. Wells, SVP/Shareholder Relations
Officer, 864/429-1861; wwells@providentonline.com
or
Richard H. Flake, EVP/CFO, 864/429-1864;
rflake@providentonline.com