PMC Commercial Trust Announces Fourth Quarter and Year-End Financial Results

 PMC Commercial Trust Announces Fourth Quarter and Year-End Financial Results  PR Newswire  DALLAS, March 15, 2013  DALLAS, March 15, 2013 /PRNewswire/ -- PMC Commercial Trust (NYSE MKT: PCC) announced fourth quarter and year-end financial results today.  Year End Overview:    oWe had a loss from continuing operations of $1,356,000 ($0.13 loss per     share) and a net loss of $2,179,000 ($0.21 loss per share) for the year     ended December 31, 2012.   oThe primary reasons for the loss in 2012 were costs of $3,870,000 related     to the evaluation of strategic alternatives and an expense of $2,114,000     for severance and related benefits related to the departure of our former     Chief Executive Officer.   oOur operating income and net income (before strategic alternative and     severance costs) were $4,628,000 and $3,805,000, respectively, during the     year ended 2012.   oDuring 2011, our income from continuing operations was $4,692,000 ($0.44     per share) and our net income was $3,647,000 ($0.34 per share).   oAdjusting for strategic alternative costs of $778,000 incurred in 2011,     our operating income and net income during 2011 were $5,470,000 and     $4,425,000, respectively.    oThe primary reason for the $842,000 decrease in our operating income and     $620,000 decrease in net income (before strategic alternative costs and     severance costs) was an increase in our provision for loan losses which     increased by $1,474,000 to $1,934,000 during 2012 from $460,000 in 2011.   oPartially offsetting the increase in provision for loan losses were (1) an     increase in premium income recognized of $439,000 and (2) decreased losses     from discontinued operations, net of tax, of $222,000.  Fourth Quarter Overview:    oWe had a loss from continuing operations of $1,902,000 ($0.18 loss per     share) and a net loss of $2,082,000 ($0.20 per share) for the quarter     ended December 31, 2012.   oDuring the quarter ended December 31, 2012, our loss from continuing     operations and net loss included $247,000 of expenses related to the     evaluation of strategic alternatives and $2,114,000 of severance and     related benefits expense. The special committee formed to evaluate     strategic alternatives was disbanded in the fourth quarter of 2012.   oBefore the impact of strategic alternative and severance costs, our income     from continuing operations was $459,000 during the fourth quarter of 2012     compared to $1,818,000 during the fourth quarter of 2011.   oThe primary reason for the reduction in operating income and net income     was an increase in our provision for loan losses that increased by     $1,190,000 to $1,288,000 during the fourth quarter of 2012 from $98,000     during the fourth quarter of 2011.  Portfolio Overview:    oTotal serviced loan portfolio increased to $313.5 million at December 31,     2012 up from $311.2 million at September 30, 2012 and $297.5 million at     December 31, 2011   oDuring the fourth quarter of 2012 we originated $7.2 million of SBA 7(a)     loans compared to $9.5 million in the third quarter of 2012 and $12.3     million during the fourth quarter of 2011   oDuring the year ended December 31, 2012, we originated $34.8 million of     SBA 7(a) loans compared to $33.7 million during 2011  Management Remarks  Jan F. Salit, Chairman of the Board of Trust Managers, stated, "As previously released, the special committee and its advisors, after extensive discussions and due diligence, concluded that it was necessary to terminate its discussions with a potential strategic partner. The costs associated with this evaluation and process had a significant negative impact on our bottom line.  "In 2012, we continued to focus on SBA 7(a) originations primarily to the hospitality industry. This program provides PMC with the most efficient utilization of funds as we sell the government guaranteed portion of each loan into the secondary market. During 2012, we funded approximately $35 million of SBA 7(a) loans and anticipate our fundings to increase to between $40 million and $50 million in 2013. We anticipate total loan fundings to be between $55 million and $65 million in 2013 with the sources of the non-7(a) fundings being SBIC debentures and selective use of our revolving credit facility.  "Although recent performance and the outlook of the hospitality industry appears strong, certain regional markets continue to be affected negatively in this economy. As a result, during the year-end loan valuation review, we increased loan loss reserves primarily as a result of the deterioration of the performance of a few problem loans."  Financial Results  Fourth Quarter of 2012 vs. Fourth Quarter of 2011  The Operating Loss for the fourth quarter of 2012 was $1,902,000 (a loss of $0.18 per share) compared to Operating Income of $1,101,000 ($0.10 per share) during the fourth quarter of 2011. Our Net Loss was $2,082,000, (a loss of $0.20 per share) during the fourth quarter of 2012 compared to Net Income of $659,000 ($0.06 per share), for the fourth quarter of 2011.  The primary reason for the reduction in Operating Income (Loss) and Net Income (Loss) of $3,003,000 and $2,741,000, respectively, were severance and related benefits expense of $2,114,000 incurred during the fourth quarter of 2012 and an increase in provision for loan losses of $1,190,000 from $98,000 during the fourth quarter of 2011 to $1,288,000 during the fourth quarter of 2012.  Partially offsetting these reductions in earnings was a decrease in strategic alternative costs of $470,000 from $717,000 during the fourth quarter of 2011 to $247,000 during the fourth quarter of 2012. In addition, we had a reduction in losses from our discontinued operations, net of tax, of $262,000 during the fourth quarter of 2012 compared to the fourth quarter of 2011 as a result of reduced impairment charges and a deferred tax benefit during 2012 on our real estate owned ("REO").  Fourth Quarter of 2012 vs. Third Quarter of 2012  Our Operating Income (Loss) decreased by $2,547,000 to ($1,902,000) (($0.18) per share) during the fourth quarter of 2012 from $645,000 ($0.06 per share) during the third quarter of 2012. Our Net Income (loss) decreased by $2,555,000 to ($2,082,000), or ($0.20) per share, during the fourth quarter of 2012 compared to $473,000, or $0.04 per share, for the third quarter of 2012. While costs associated with evaluation of strategic alternatives decreased by $1,174,000, the benefit was offset by severance and related benefits expense of $2,114,000 and an increase of $1,235,000 in provision for loan losses.  Interest Rate Sensitivity    oApproximately 83% of our retained loans at December 31, 2012 had variable     interest rates.   oApproximately 53% of our retained loans at December 31, 2012 had interest     rates based on LIBOR.   oThe base LIBOR charged to our borrowers during the fourth quarter of 2012     was 0.36% compared to 0.46% during the third quarter of 2012 and 0.37%     during the fourth quarter of 2011.   oThe base LIBOR for the first quarter of 2013 has been set at 0.31%.   oThe average base LIBOR charged to our borrowers during 2012 was 0.47%     compared to 0.31% during 2011.  Financial Position    oOur total assets decreased to $247.7 million at December 31, 2012 compared     to $254.3 million at September 30, 2012 and $251.2 million at December 31,     2011.   oOur total serviced loan portfolio increased to $313.5 million at December     31, 2012 up from $311.2 million at September 30, 2012 and $297.5 million     at December 31, 2011.   oOur outstanding retained loan portfolio decreased to $242.1 million at     December 31, 2012 from $243.7 million at September 30, 2012 and up from     $236.1 million at December 31, 2011.  Originations    oDuring the fourth quarter of 2012 we originated $7.2 million of SBA 7(a)     loans compared to $9.5 million in the third quarter of 2012 and $12.3     million during the fourth quarter of 2011.   oDuring the year ended December 31, 2012, we originated $34.8 million of     SBA 7(a) loans compared to $33.7 million during 2011.   oDuring the years ended December 31, 2012 and 2011, our total loan     originations were $54.2 million and $38.4 million, respectively.   oOur pipeline of outstanding loan commitments was $19.5 million at December     31, 2012 compared to $14.3 million at December 31, 2011.   oWe anticipate our 2013 SBA 7(a) loan fundings to be between $40 million     and $50 million and total fundings between $55 million and $65 million.  Liquidity    oOur unsecured revolving credit facility (the "Revolver") matures June 30,     2014. The interest rate is prime less 50 basis points or the 30-day LIBOR     plus 2%, at our option. The amount available under the Revolver increased     as scheduled from $35 million to $40 million on January 1, 2013.   oWe had $11.9 million and $17.8 million outstanding on our Revolver at     December 31, 2012 and 2011, respectively.  Dividends    oDividends on our common shares of $0.60 were declared during 2012 which     includes the quarterly dividend declared in December 2012 of $0.12 per     share that was paid on January 7, 2013 to shareholders of record on     December 31, 2012.   oOur 2012 distributions were 100% return of capital from an income tax     perspective.   oWe declared a first quarter 2013 dividend of $0.125 per share payable on     April 8, 2013 to shareholders of record on March 29, 2013.   oSince our inception in 1993, we have paid approximately $184.2 million in     dividends or $24.40 per common share.    Financial Position Information                            December  September  June 30,   March 31,  December                            31,       30,                              31,                            2012      2012       2012       2012       2011                            (In thousands, except per share information) Loans receivable, net      $       $ 241,914  $ 243,759  $         $                             238,991                        235,744   234,427 Total assets               $       $ 254,344  $ 254,853  $         $                             247,707                        247,298   251,247 Debt                       $      $ 100,544  $ 101,470  $        $                              97,168                         93,799    95,861 Total beneficiaries'       $       $ 141,658  $ 142,879  $         $  equity                     138,326                        144,982   146,836 Total equity               $       $ 142,558  $ 143,779  $         $                             139,226                        145,882   147,736 Shares outstanding         10,590    10,590     10,590     10,585     10,575 Net asset value per share  $13.15    $13.46     $13.58     $13.78     $13.97    PMC Commercial Trust and Subsidiaries Comparative Results of Operations                    Years Ended December 31,       Three Months Ended December                                                   31,                    2012       2011       Inc      2012       2011      Inc                                          (Dec) %                       (Dec) %                    (Dollars in thousands, except per share information) Income: Interest income    $ 13,896   $ 13,571   2%       $ 3,504    $ 3,473   1% Premium income       1,889      1,450    30%        702        649     8% Other income         1,280      1,055    21%        244        242     1%  Total revenues    17,065     16,076   6%         4,450      4,364   2% Expenses: Interest             3,538      3,693    (4%)       892        822     9% Salaries and         4,273      4,329    (1%)       923        1,066   (13%) related benefits General and          2,127      2,010    6%         634        408     55% administrative Strategic            3,870      778      397%       247        717     (66%) alternatives Severance and        2,114      -        -          2,114      -       - related benefits Provision for        1,934      460      320%       1,288      98      1,214% loan losses, net  Total expenses    17,856     11,270   58%        6,098      3,111   96% Income (loss) before income tax provisionand        (791)      4,806    (116%)     (1,648)    1,253   (232%) discontinued operations, net of tax Income tax           (565)      (114)    396%       (254)      (152)   67% provision Income (loss) from continuing      (1,356)    4,692    (129%)     (1,902)    1,101   (273%) operations Discontinued operations, net      (823)      (1,045)  (21%)      (180)      (442)   (59%) of tax Net income (loss)  $ (2,179)  $ 3,647    (160%)   $ (2,082)  $ 659     (416%) Basic weighted average shares       10,585     10,570              10,590     10,575 outstanding Basic and diluted earnings (loss) per share:  Income (loss) from continuing    $ (0.13)   $ 0.44              $ (0.18)   $ 0.10 operations  Discontinued operations, net      (0.08)     (0.10)              (0.02)     (0.04) of tax  Net income       $ (0.21)   $ 0.34              $ (0.20)   $ 0.06 (loss)    PMC Commercial Trust and Subsidiaries Quarterly Operating Results                         Three Months Ended                         Dec. 31,  Sept. 30,  June 30,  March 31,  Dec. 31,                         2012        2012       2012      2012       2011                         (In thousands) Revenues:  Interest income       $  3,504    $  3,561   $  3,433  $  3,398   $   3,473  Premium income           702         796        278       113         649  Other income             244         507        253       276         242 Total revenues             4,450       4,864      3,964     3,787       4,364 Expenses:  Interest                 892         887        876       883         822  Salaries and related     923         1,091      1,115     1,144       1,066 benefits  General and              634         495        538       460         408 administrative  Strategic                247         1,421      1,352     850         717 alternatives  Severance and related    2,114       -          -         -           - benefits  Provision for loan       1,288       53         118       475         98 losses, net Total expenses             6,098       3,947      3,999     3,812       3,111 Income (loss) before income tax benefit (provision) and            (1,648)     917        (35)      (25)        1,253 discontinued operations, net of tax Income tax benefit         (254)       (272)      (58)      19          (152) (provision) Income (loss) from         (1,902)     645        (93)      (6)         1,101 continuing operations Discontinued               (180)       (172)      (322)     (149)       (442) operations, net of tax Net income (loss)       $  (2,082)  $  473     $  (415)  $  (155)   $   659    Real Estate Investment Trust ("REIT") Taxable Income (Loss)  REIT taxable income (loss) 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 in determining the level of dividends to be paid to our shareholders.  The following reconciles net income (loss) to REIT taxable income (loss):                                                             Three Months Ended                             Years Ended December 31,       December 31,                             2012       2011      2010      2012       2011                               (In thousands) Net income (loss)           $ (2,179)  $ 3,647   $ 4,297   $ (2,082)  $ 659  Book/tax differences:  Gains related to real     -          (235)     387       -          - estate  Strategic alternatives    (678)      678       -         (4,134)    678  Severance accrual         1,777      (100)     (33)      1,800      (35) (payments)  Impairment losses         300        804       317       133        200  Amortization and          (188)      (68)      (102)     (9)        (18) accretion  Loan valuation            1,403      184       (241)     1,004      160  Other, net                157        8         (174)     (41)       (7)                               592        4,918     4,451     (3,329)    1,637 Adjustment for TRS net loss   (840)      (131)     340       (250)      (271) (income), net of tax Dividend distribution from    -          1,000     300       -          1,000 TRS REIT taxable income (loss)  $ (248)    $ 5,787   $ 5,091   $ (3,579)  $ 2,366 Distributions declared      $ 6,353    $ 6,767   $ 6,757   $ 1,270    $ 1,692 Basic weighted average        10,585     10,570    10,554    10,590     10,575 common shares outstanding    Forward Looking Statements  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.  SOURCE PMC Commercial Trust  Website: http://www.pmctrust.com Contact: Investor Relations, +1-972-349-3235  
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