BancTrust Financial Group, Inc. Reports Third Quarter Results

  BancTrust Financial Group, Inc. Reports Third Quarter Results

Business Wire

MOBILE, Ala. -- October 29, 2012

BancTrust Financial Group, Inc. (BancTrust) (NASDAQ:BTFG) today reported its
financial results for the third quarter and nine months ended September 30,
2012. The Company reported a net lossto common shareholders of $10.3 million,
or $0.57 per fully diluted share, for the third quarter of 2012 compared with
a net loss tocommon shareholders of $743,000, or $0.04 per diluted share, for
the third quarter of 2011. For the nine-month period ended September30,2012,
BancTrust reported a net loss to common shareholders of $23.2 million, or
$1.29 per share, compared with a net lossto common shareholders of $457,000,
or $0.03 per share,forthe first nine months of 2011.

Merger with Trustmark Corporation

On May 29, 2012, BancTrust and Trustmark Corporation (Trustmark) announced the
signing of a definitive agreement pursuant to which BancTrust will merge into
Trustmark.

Under the terms of the definitive agreement, which was approved by BancTrust
shareholders at a special shareholders’ meeting on September 26, 2012, holders
of BancTrust common stock will receive 0.125 of a share of Trustmark common
stock for each share of BancTrust common stock in a tax-free exchange.

On October 9, 2012, BancTrust and Trustmark announced that the definitive
agreement dated May 28, 2012, pursuant towhich BancTrust will merge into
Trustmark, has been amended to accommodate the closing of the merger in early
2013. As such, the latest possible closing date for the merger has been
extended from December 31, 2012, to February28, 2013. This extension provides
additional time to receive regulatory approval and to ensure a smooth
transition and operational conversion to Trustmark systems in early 2013. All
other material aspects of the definitive agreement remain unchanged.

Commenting on the status of the pending merger with Trustmark, W. Bibb Lamar,
Jr., President and Chief Executive Officer of BancTrust, stated, “Our
shareholders’ overwhelming approval of the merger with Trustmark at our
shareholders’ meeting on September 26, 2012, affirms that we are on the right
path. The recent amendment of the merger agreement to extend the deadline for
completion of the merger is aimed at minimizing potential customer disruptions
during the holiday season and will allow more time to ensure seamless
integration of our systems with those of Trustmark. Our associates are working
diligently with Trustmark personnel to prepare for the merger and remain
committed to providing our customers with superior service during and after
this transition. We expect regulatory approval of the merger late in 2012 or
early in 2013, and we anticipate closing the merger in early 2013.”

Third Quarter Results

Net interest revenue was $13.2 million in the third quarter of 2012 compared
with $15.8 million in the thirdquarter of 2011. The decrease in net interest
revenue was due primarily to a decrease in average earning assets and net
interest margin compared with the third quarter of last year. BancTrust’snet
interest margin (tax equivalent) was 2.91% in the third quarter of 2012
compared with 3.28% in the third quarter of 2011.

Total loans were $1.2 billion at September 30, 2012, compared with $1.3
billion at September 30,2011. The decrease in loans since last year was due
to soft loan demand in certain markets, the transfer of loans to other real
estate and loan charge-offs.

The results for the third quarter of 2012 included a $9.5 million provision
for loan losses, compared with a $6.0million provision for the corresponding
period in 2011. The increase in the provision for loan losses was due
primarily to increases in specific allowances for impaired loans, especially
for certain land and land development loans in the panhandle of Florida, made
in response to recent appraisals and independent appraisal reviews.

The allowance for loan losses was strengthened to 4.85% oftotal loans at
September30,2012, compared with 3.30%in the thirdquarter of 2011. Net
charge-offs for the third quarter of 2012 were $4.6 million compared
with$3.2million inthe third quarter of2011.

Deposits were $1.78 billion at September 30, 2012, compared with $1.84billion
at September 30, 2011. Liquidity at our subsidiary bank remained strong at
September 30, 2012, as evidenced by $269.3 million in average overnight funds
and short-term investments. Short-term investments include investment
securities with little price volatility that we can sell as needed for
liquidity purposes. At the end of the third quarter, the bank had no brokered
deposits.

Total non-interest revenue was $5.1 million in the third quarter of 2012
compared with $5.3 million in the third quarter of 2011. The decrease in
non-interest revenue was due to lower trust revenue, service charges on
deposits and other non-interest revenue, offset partially by higher securities
gains compared with the third quarter of last year.

Non-interest expense was $18.3 million in the third quarter of 2012 compared
with $15.2 million in the thirdquarter of 2011. The increase in non-interest
expense was due primarily to higher losses on other real estate and other
non-interest expense compared with the prior year’s third quarter. Net losses
on other real estate rose to $3.5 million in the third quarter of 2012
compared with $1.5 million in the third quarter of 2011.

BancTrust’s pre-tax loss was $9.5 million in the third quarter of 2012
compared with a pre-tax loss of $86,000 in the third quarter of 2011. Net loss
available to common shareholders was $10.3 million, or $0.57 per share, for
the thirdquarter of 2012comparedwith a net loss tocommon shareholders of
$743,000, or $0.04 per share, in the third quarter of 2011.

Nine Months Results

For the first nine months of 2012, net loss to common shareholders was $23.2
million compared with a net loss to common shareholders of $457,000 for
thesame period in 2011. Net loss to common shareholders per diluted sharewas
$1.29 for the first nine months of 2012 compared with a net loss to common
shareholders per diluted shareof $0.03 for the same period in 2011.

Net interest revenue was $42.7 million in the first nine months of 2012
compared with $46.7 million in the first nine months of 2011. The decrease in
net interest revenue was due primarily to a decrease in average earning assets
and net interest margin compared with last year. Average earning assets,
primarily loans, were down 5.9% to $1.8 billion compared with average earning
assets of $1.9 billion in the first nine months of 2011. Net interest margin
for the first nine months of 2012 was 3.12% compared with 3.22% in the same
period of 2011.

The provision for loan losses rose to $26.8 million in the 2012 period
compared with $14.5 million in the 2011 period. At September 30, 2012,
non-performing assets were $197.6 million compared with $154.2 million at
December 31, 2011, as collateral dependent real estate loans continued to
underperform.

Non-interest revenue rose to $15.24 million in the first nine months of 2012
compared with $15.20 million in the first nine months of 2011. The increase
was due to an increase in securities gains for the first nine months of 2012
compared with the same period in 2011. Securities gains rose to $3.1 million
in the first nine months of 2012 compared with $2.4million in the first nine
months of 2011.

Non-interest expense increased to $52.6 million in the first nine months of
2012 compared with $45.3 million in the firstnine months of 2011. The
increase was due primarily to an increase in loss on other real estate, loss
on repossessed assets, capital raise costs, and a $3.5 million settlement
expense. The 2012 results include $2.4 million in capital raise costs
associated with the Company’s abandoned capital raise and pending merger, and
$3.5 million in settlement expenses which the bank paid to Countrywide Home
Loans to settle any and all claims and disputes related to mortgage loans sold
by the bank or its predecessors to Countrywide Home Loans prior to July 2,
2012. There were no comparable capital raise or settlement expenses in the
first nine months of 2011.

BancTrust was classified as well-capitalized at the end of the third quarter
of 2012. Total risk-based capital was 11.09% for the holding company and
12.85% for the bank, compared with a regulatory requirement of 10.0% for a
well-capitalized institution and a minimum regulatory requirement of 8.0%.
Tier 1 risk-based capital was 9.66% for the holding company and 11.56% for the
bank, both measures significantly above the requirement of 6.0% for a
well-capitalized institution and minimum regulatory requirement of 4.0%.

About BancTrust Financial Group, Inc.

BancTrust Financial Group, Inc. is a registered bank holding company
headquartered in Mobile, Alabama. The Company provides an array of traditional
financial services through 40 bank offices in the southern two thirds
ofAlabama and ninebank offices in northwest Florida. BancTrust’s common
stock is listed on the NASDAQ Global SelectMarket under the symbol BTFG.

Additional information concerning BancTrust Financial Group can be accessed at
www.banktrustonline.com by following the link to investor relations.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning and
subject to the protection of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements
canbeidentified by the use of words such as “expect,” “may,” “could,”
“intend,” “project,” “hope,” “schedule,” “outlook,” “estimate,” “anticipate,”
“should,” “will,” “plan,” “believe,” “continue,” “predict,” “contemplate” and
similarexpressions. Our ability to accurately project results or predict the
future effects of our plans and strategies is inherently limited. Although we
believe that the expectations reflected in our forward-looking statements are
based onreasonable assumptions, actual results and performance could differ
materially from those set forth in the forwardlooking statements. Our
forward-looking statements are based on information presently available to
management and are subjectto various risks and uncertainties, in addition to
the inherent uncertainty of predictions, including, without limitation, the
risk that indications of an improving economy may prove to be premature; the
risks presented by the recent economic recession and the slow recovery of the
economy, which could continue to adversely affect credit quality, collateral
values, including the value of real estate collateral and other real estate
owned, investment values, liquidity and loan originations, reserves for loan
losses, charge-offs of loans and loan portfolio delinquency rates; if we do
not complete the merger with Trustmark, we may be compelled to seek additional
capital to augment capital levels or ratios or improve liquidity, but capital
or liquidity may not be available when needed or on favorable terms; existing
regulatory requirements, changes in regulatory requirements, including
accounting standards and legislation, and our inability to meet those
requirements, including capital requirements, and increases in our deposit
insurance premiums, could adversely affect the businesses in which we are
engaged, our results of operations and financial condition; risks that
competitive pressures among depository and other financial institutions may
increase significantly; changes in the interest rate environment may reduce
margins; and competitors may have greater financial resources and
developproducts that enable these competitors to compete more successfully
than BancTrust can compete. These risks, specifically with respect to the
pending Trustmark merger also include the risk that BancTrust or Trustmark may
be unable to obtain governmental and regulatory approvals required for the
merger, or required governmental and regulatory approvals may delay the merger
or result in the imposition of conditions that could cause the parties to
abandon the merger; the risk that a condition to closing of the merger may not
be satisfied; the timing to consummate the proposed merger; the risk that the
businesses will not be integrated successfully; the risk that the cost savings
and any other synergies from the transaction may not be fully realized or may
take longer to realize than expected; disruption from the transaction making
it more difficult to maintain relationships with customers, employees or
suppliers; the diversion of management time on merger-related issues; general
worldwide economic conditions and related uncertainties; and the effect of
changes in governmental regulations. We also refer you to the other risks
described in BancTrust’s reports andfilings under “Cautionary Note Concerning
Forward-Looking Statements” and “Risk Factors,” which are applicable as well.
You should not placeundue reliance on forward-looking statements, since the
statements speak only as of the date that they are made. BancTrust has no
obligation and does not undertake to publicly update, revise or correct any of
its forward-looking statements after the date of this press release, or after
the respective dates on which such statements otherwise are made, whether as a
result of new information, future events or otherwise.

                                                                                              
BANCTRUST FINANCIAL GROUP, INC.
(BTFG)
Financial Highlights (Unaudited)
(In thousands, except per share amounts)
                                                                                                             
                   Quarter Ended                                                              Nine Months Ended
                   September      June 30,       March 31,      December       September      September      September
                   30,                                          31,            30,            30,            30,
                   2012           2012           2012           2011           2011           2012           2011
                                                                                                             
EARNINGS:
Interest           $16,234        $17,722        $18,461        $19,305        $20,213        $52,417        $61,215
revenue
Interest           2,988          3,370          3,388          3,835          4,406          9,746          14,476
expense
                                                                                                             
Net interest       13,246         14,352         15,073         15,470         15,807         42,671         46,739
revenue
                                                                                                             
Provision for      9,500          13,700         3,600          17,600         6,000          26,800         14,500
loan losses
                                                                                                             
Trust revenue      873            945            924            522            945            2,742          3,035
Service
charges on         1,449          1,417          1,494          1,620          1,581          4,360          4,606
deposit
accounts
Securities         1,117          664            1,302          1,433          1,086          3,083          2,449
gains
Other than
temporary          0              0              0              (150)          (50)           0              -50
impairment
loss
Other income,
charges and        1,640          1,693          1,720          1,800          1,711          5,053          5,159
fees
Total
non-interest       5,079          4,719          5,440          5,225          5,273          15,238         15,199
revenue
                                                                                                             
Salaries,
pensions and       6,630          6,604          6,884          7,035          6,806          20,118         20,908
other employee
benefits
Net occupancy,
furniture and      2,564          2,651          2,266          2,553          2,429          7,481          7,115
equipment
expense
Intangible         226            225            226            237            292            677            876
amortization
Loss on other
real estate,       3,464          0              0              30,211         1,461          3,464          2,187
net
Loss (gain) on
repossessed        199            (8)            21             (89)           (1)            212            (158)
and other
assets
Merger and
capital raise      17             402            1,965          1,219          0              2,384          0
costs
Mortgage
recourse           0              3,520          0              0              0              3,520          0
settlement
FDIC insurance     675            661            683            678            356            2,019          2,528
assessment
Other real
estate             536            395            658            457            438            1,589          1,399
carrying cost
Other
non-interest       4,016          3,590          3,546          3,394          3,385          11,152         10,463
expense
Total
non-interest       18,327         18,040         16,249         45,695         15,166         52,616         45,318
expense
Income (loss)
before income      (9,502)        (12,669)       664            (42,600)       (86)           (21,507)       2,120
taxes
Income tax
expense            0              (700)          28             7,103          (117)          (672)          263
(benefit)
Net income         (9,502)        (11,969)       636            (49,703)       31             (20,835)       1,857
(loss)
                                                                                                             
Effective
preferred          792            781            778            776            774            2,351          2,314
stock dividend
                                                                                                             
Net loss to
common             ($10,294)      ($12,750)      ($142)         ($50,479)      ($743)         ($23,186)      ($457)
shareholders
                                                                                                             
Loss per
common share:
                                                                                                             
Basic              ($0.57)        ($0.71)        ($0.01)        ($2.81)        ($0.04)        ($1.29)        ($0.03)
Diluted            (0.57)         (0.71)         (0.01)         (2.81)         (0.04)         (1.29)         (0.03)
                                                                                                             
Cash dividends
declared per       $0.00          $0.00          $0.00          $0.00          $0.00          $0.00          $0.00
common share
                                                                                                             
Book value per     $2.47          $3.03          $3.55          $3.65          $6.76          $2.47          $6.76
common share
                                                                                                             
Common shares      17,961         17,961         17,954         17,954         17,954         17,961         17,954
outstanding
Basic average
common shares      17,961         17,958         17,954         17,954         17,953         17,958         17,886
outstanding
Diluted
average common     17,961         17,958         17,954         17,954         17,953         17,958         17,886
shares
outstanding
                                                                                                             
                                                                                                             
STATEMENT OF       09/30/12       06/30/12       03/31/12       12/31/11       09/30/11       09/30/12       09/30/11
CONDITION:
Cash and cash      $160,757       $122,123       $135,472       $99,853        $126,761       $160,757       $126,761
equivalents
Securities
available for      497,606        521,100        479,497        517,213        508,160        497,606        508,160
sale
Loans and
loans held for     1,184,441      1,218,649      1,256,490      1,277,049      1,307,376      1,184,441      1,307,376
sale
Allowance for      (57,435)       (52,553)       (43,085)       (42,156)       (43,117)       (57,435)       (43,117)
loan losses
Other
intangible         2,841          3,067          3,293          3,519          3,755          2,841          3,755
assets
Other real         53,750         59,141         60,765         57,387         89,883         53,750         89,883
estate owned
Other assets       112,562        115,189        116,335        119,012        126,195        112,562        126,195
Total assets       $1,954,522     $1,986,716     $2,008,767     $2,031,877     $2,119,013     $1,954,522     $2,119,013
                                                                                                             
Deposits           $1,780,495     $1,799,634     $1,791,456     $1,811,673     $1,842,843     $1,780,495     $1,842,843
Short-term         20,000         20,000         20,000         20,000         20,000         20,000         20,000
borrowings
FHLB
borrowings and     45,326         45,391         70,476         70,539         70,597         45,326         70,597
long-term debt
Other              15,226         18,206         14,202         15,383         15,702         15,226         15,702
liabilities
Preferred          49,198         49,039         48,884         48,730         48,579         49,198         48,579
stock
Common
shareholders'      44,277         54,446         63,749         65,552         121,292        44,277         121,292
equity
Total
liabilities
and                $1,954,522     $1,986,716     $2,008,767     $2,031,877     $2,119,013     $1,954,522     $2,119,013
shareholders'
equity
                                                                                                             
                                                                                                             
                   Quarter Ended                                                              Nine Months Ended
                   09/30/12       06/30/12       03/31/12       12/31/11       09/30/11       09/30/12       09/30/11
AVERAGE
BALANCES:
Total assets       $1,967,124     $2,004,636     $2,010,407     $2,096,048     $2,123,774     $1,993,959     $2,154,405
Earning assets     1,811,984      1,836,997      1,840,200      1,891,021      1,912,651      1,829,662      1,944,210
Loans              1,203,775      1,244,122      1,272,431      1,299,330      1,318,652      1,239,977      1,344,446
Deposits           1,784,107      1,791,044      1,790,017      1,822,445      1,848,136      1,788,374      1,866,838
Common
shareholders'      52,929         63,573         66,215         119,811        120,934        60,877         118,390
equity
                                                                                                             
PERFORMANCE
RATIOS:
                                                                                                             
Return on          -1.92%         -2.40%         0.13%          -9.41%         0.01%          -1.40%         0.12%
average assets
Return on
average common     -77.37%        -80.66%        -0.86%         -167.15%       -2.44%         -50.87%        -0.52%
shareholders'
equity
Net interest
margin (tax        2.91%          3.14%          3.30%          3.25%          3.28%          3.12%          3.22%
equivalent)
                                                                                                             
                                                                                                             
ASSET QUALITY:
                                                                                                             
Ratio of
non-performing     10.11%         8.39%          8.04%          7.59%          9.28%          10.11%         9.28%
assets to
total assets
Ratio of
allowance for
loan losses to
total loans,       4.85%          4.31%          3.43%          3.30%          3.30%          4.85%          3.30%
net of
unearned
income
Net loans
charged-off to     1.53%          1.37%          0.84%          5.67%          0.95%          1.24%          1.92%
average loans
(annualized)
Ratio of
ending
allowance to       39.92%         48.85%         42.80%         43.53%         40.42%         39.92%         40.42%
total
non-performing
loans
                                                                                                             
CAPITAL
RATIOS:
                                                                                                             
Average common
shareholders'
equity to          2.69%          3.17%          3.29%          5.72%          5.69%          3.05%          5.50%
average total
assets
Dividend           N/A            N/A            N/A            N/A            N/A            N/A            N/A
payout ratio

Contact:

BancTrust Financial Group, Inc.
F. Michael Johnson, 251-431-7813
Chief Financial Officer
 
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