DALLAS, Aug. 7 /PRNewswire-FirstCall/ -- PMC Commercial Trust (NYSE
Amex: PCC) announced second quarter and year-to-date results today.
Second Quarter Results Income from continuing operations decreased
to $1,544,000 ($0.15 per share) during the three months ended June
30, 2009 from $3,105,000 ($0.29 per share) during the three months
ended June 30, 2008. Significant changes when comparing the periods
included: -- a decrease in interest income of $734,000 and interest
expense of $187,000 due primarily to decreases in variable interest
rates; -- a decrease in income from retained interests in
transferred assets ("Retained Interests") of $1,496,000 primarily
due to a reduction in our weighted average Retained Interests and
prepayment fees; and -- a reduction in overhead (salaries and
related benefits and general and administrative expenses) of
$473,000 due primarily to our 2008 cost reduction initiatives. For
the three months ended June 30, 2009, net income decreased to
$1,564,000, or $0.15 per share, compared to $3,529,000, or $0.33
per share, for the three months ended June 30, 2008. In addition to
the changes described above, discontinued operations during the
quarter ended June 30, 2008 included net gains on sales of real
estate of $424,000. Year-to-Date Results Income from continuing
operations decreased to $3,140,000 ($0.30 per share) during the six
months ended June 30, 2009 from $6,150,000 ($0.57 per share) during
the six months ended June 30, 2008. Significant changes when
comparing the periods included: -- a decrease in interest income of
$1,649,000 and interest expense of $614,000 due primarily to
decreases in variable interest rates; -- a decrease in income from
Retained Interests of $2,499,000 due primarily to a reduction in
our weighted average Retained Interests and prepayment fees; -- a
decrease in other income of $625,000 due primarily to decreased
prepayment fees; and -- a reduction in overhead (salaries and
related benefits and general and administrative expenses) of
$817,000 due primarily to our 2008 cost reduction initiatives. For
the six months ended June 30, 2009, net income decreased to
$3,190,000, or $0.30 per share, compared to $6,912,000, or $0.64
per share, for the six months ended June 30, 2008. In addition to
the changes described above, discontinued operations during the six
months ended June 30, 2008 included net gains on sales of real
estate of $762,000. Interest Rate Sensitivity -- Approximately 72%
of our retained loans at June 30, 2009 were based on LIBOR or the
prime rate. -- We have $116.3 million of loans based on LIBOR and
$27.1 million of debt based on LIBOR. On the net difference of
$89.2 million, reductions in LIBOR will have a negative impact on
future earnings. Effective July 1, 2009, we experienced a reduction
in the LIBOR base rate charged on our loans (a decrease of 60 basis
points) which will cause a reduction in our net interest income,
assuming no change in our LIBOR based loans or debt, of
approximately $535,000 on an annual basis. Financial Position --
Total assets were relatively unchanged at $225.4 million at June
30, 2009 compared to $227.5 million at December 31, 2008 and $236.9
million at June 30, 2008. -- Total serviced loan portfolio was
$270.3 million at June 30, 2009 down from $275.5 million at
December 31, 2008 and down from $298.4 million as of June 30, 2008.
-- Outstanding retained loan portfolio was $185.5 million at June
30, 2009 compared to $180.6 million at December 31, 2008 and $193.5
million as of June 30, 2008. -- In accordance with generally
accepted accounting principles, commencing in January 2009, we
consolidated one of our special purpose entities. As a result, at
June 30, 2009, approximately $11.3 million of loans previously
included within our securitized portfolio are now included in our
retained portfolio. Originations -- During the first half of 2009,
we originated $7.8 million of loans. -- We anticipate that 2009
aggregate loan originations will be between $20 million to $30
million. Liquidity -- Our $45 million revolving credit facility,
which matures December 31, 2009, had $23.8 million outstanding at
June 30, 2009. We are currently negotiating to extend the maturity
on our revolving credit facility to December 31, 2010; however, we
anticipate that the aggregate availability under our revolving
credit facility will be reduced and its costs will increase.
Dividends -- A regular quarterly dividend on our common shares of
$0.225 per share was paid on April 13, 2009 to shareholders of
record on March 31, 2009. -- A regular quarterly dividend on our
common shares of $0.16 per share was paid on July 13, 2009 to
shareholders of record on June 30, 2009. Lance B. Rosemore,
Chairman of the Board, stated, "We have positioned our company to
operate profitably in the troubled economic environment. We have
taken the necessary steps to reduce overhead and have maintained a
conservative debt-to-equity ratio. As always, we will continue with
our proven disciplined approach to lending which produced a
relatively stable portfolio in a turbulent environment. Our loan
losses have continued to be minimal. 'Our strategy has been to
focus almost exclusively on marketing SBA 7(a) loans until the
liquidity markets improve and are able to restart our other lending
programs. We estimate that our redirected efforts will result in
originations in excess of $20 million of SBA 7(a) loans this year
compared to $11 million in 2008. 'Since approximately 72% of our
loan portfolio is floating rate, our earnings for the quarter were
significantly impacted by the historically low LIBOR rate
environment. To the extent that LIBOR remains at these low levels,
our future earnings will continue to be impacted." The following
tables contain comparative selected financial data: FINANCIAL
POSITION INFORMATION (In thousands, except per share information)
June 30, December 31, June 30, 2009 2008 2008 -------- ---------
-------- Loans receivable, net $184,415 $179,807 $193,004 Retained
interests in transferred assets $25,399 $33,248 $33,463 Total
assets $225,443 $227,524 $236,854 Debt $66,245 $61,814 $68,862
Total beneficiaries' equity $152,649 $154,362 $158,737 Shares
outstanding 10,548 10,695 10,782 Net asset value per share $14.47
$14.43 $14.72 RESULTS OF OPERATIONS (Dollars in thousands, except
per share information) Six Months Ended June 30, Three Months Ended
June 30, -------------------------- -----------------------------
2009 2008 Dec % 2009 2008 Inc (Dec)% ---- ---- ----- ---- ----
---------- Income: Interest income $5,636 $7,285 (23%) $2,785
$3,519 (21%) Income from retained interests in transferred assets
1,697 4,196 (60%) 781 2,277 (66%) Other income 530 1,155 (54%) 306
418 (27%) ------ ------ ------ ------ ------ ------ Total income
7,863 12,636 (38%) 3,872 6,214 (38%) ------ ------ ------ ------
------ ------ Expenses: Interest 1,596 2,210 (28%) 790 977 (19%)
Salaries and Related benefits 1,920 2,591 (26%) 999 1,352 (26%)
General and administrative 977 1,123 (13%) 534 654 (18%)
Impairments and provisions 280 389 (28%) 73 35 109% ------ ------
------ ------ ------ ------ Total expenses 4,773 6,313 (24%) 2,396
3,018 (21%) ------ ------ ------ ------ ------ ------ Income before
income tax benefit (provision) and discontinued operations 3,090
6,323 (51%) 1,476 3,196 (54%) Income tax benefit (provision) 50
(173) (129%) 68 (91) (175%) ------ ------ ------ ------ ------
------ Income from continuing operations 3,140 6,150 (49%) 1,544
3,105 (50%) Discontinued operations 50 762 (93%) 20 424 (95%)
------ ------ ------ ------ ------ ------ Net income $3,190 $6,912
(54%) $1,564 $3,529 (56%) ====== ====== ====== ====== ====== ======
Basic weighted average shares outstanding 10,599 10,766 10,548
10,767 ====== ====== ====== ====== Basic and diluted earnings per
share: Income from continuing operations $0.30 $0.57 $0.15 $0.29
Discontinued operations - 0.07 - 0.04 ------ ------ ------ ------
Net income $0.30 $0.64 $0.15 $0.33 ====== ====== ====== ====== 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 (loss): Six Months Ended Three Months Ended
June 30, June 30, -------------------- -------------------- 2009
2008 2009 2008 ---- ---- ---- ---- (In thousands) Net income $3,190
$6,912 $1,564 $3,529 Book/tax difference on depreciation (28) (30)
(14) (15) Book/tax difference on deferred gains from property sales
(50) (762) (20) (424) Book/tax difference on Retained Interests,
net (411) 148 (238) (204) Severance payments (1,429) - (1,407) -
Dividend distribution from taxable REIT subsidiary - 2,000 - 2,000
Book/tax difference on amortization and accretion (63) (140) (31)
(93) Asset valuation 154 16 62 (54) Other book/tax differences, net
(58) 45 (74) (23) ------ ------ ------ ------ Subtotal 1,305 8,189
(158) 4,716 Less: taxable REIT subsidiaries net income (loss), net
of tax 140 (278) 154 (146) ------ ------ ------ ------ REIT taxable
income (loss) $1,445 $7,911 $(4) $4,570 ====== ====== ====== ======
Distributions declared $4,069 $4,579 $1,687 $2,426 ====== ======
====== ====== Weighted average common shares outstanding 10,599
10,766 10,548 10,767 ====== ====== ====== ====== 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:
PMC Commercial Trust Investor Relations, +1-972-349-3235
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