-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PS9Ocx9ZGANr63T3uLP7a7Z4eVE/5ztCWB6LH4GTf7CypZlcRZ/EJAKH40XusI58 y48NvAlhVpq/hcLyCB4r3w== 0001019892-03-000101.txt : 20030807 0001019892-03-000101.hdr.sgml : 20030807 20030807165228 ACCESSION NUMBER: 0001019892-03-000101 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030731 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALMETTO BANCSHARES INC CENTRAL INDEX KEY: 0000706874 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 742235055 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26016 FILM NUMBER: 03829224 BUSINESS ADDRESS: STREET 1: 301 HILLCREST DR STREET 2: P O BOX 49 CITY: LAURENS STATE: SC ZIP: 29360 BUSINESS PHONE: 8649844551 8-K 1 form8k-08052003.txt DATE OF EVENT: JULY 31, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 31, 2003 Palmetto Bancshares, Inc. (Exact name of registrant as specified in charter) South Carolina 0-26016 74-2235055 - ----------------------- ------------ ------------------- State or other jurisdiction Commission File Number IRS Employer I.D. number of incorporation 301 Hillcrest Drive, Laurens, South Carolina 29360 - -------------------------------------------- ----- Address of principal executive offices Zip Code (864) 984-4551 -------------- Registrant's telephone number Item 12. Results of Operations and Financial Condition On July 31, 2003 Palmetto Bancshares, Inc. mailed to shareholders its quarterly shareholder earnings overview which discloses the results of operations and financial condition of the Company for the second quarter ended June 30, 2003. For more information regarding this matter, see the shareholder earnings overview attached hereto as Exhibit 99. Item 7. Financial Statements and Exhibits (c) Exhibits 99 Shareholder earnings overview mailed July 31, 2003 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PALMETTO BANCSHARES, INC. By: /s/ L. Leon Patterson ------------------------------------------ L. Leon Patterson Chairman and Chief Executive Officer /s/ Paul W. Stringer ------------------------------------------ Paul W. Stringer President and Chief Operating Officer (Chief Accounting Officer) Date: August 7, 2003 EX-99 3 shareholdercommunication.txt SHAREHOLDER COMMUNICATION To Our Shareholders: We are pleased to report our results for the three month and six month periods ended June 30, 2003. Presented against the backdrop of a still sluggish Upstate economy, the performance during the first six months of 2003 was outstanding with higher levels of both profitability and balance sheet growth being well achieved. Fiscal stimulus, through recently enacted tax cuts, as well as record low interest rates, are positioning the economy and especially the job market for a quick recovery. In Upstate South Carolina the housing finance market continues as the bright spot leading all economic indicators of a growing economy. Recent moves by the Federal Reserve to lower the benchmark overnight funds rate by 1/4 percent will no doubt further stimulate the demand for refinancing and purchases of single family housing, a market in which we continue to see excellent results for our company. All things considered, we are very fortunate to be well positioned to participate in a dynamic and growing Upstate economy. We hope the balance of 2003 will show support for efforts currently underway to stimulate the economy. Palmetto Bancshares, Inc. reported net income for the three month period ended June 30, 2003 of $2.7 million, a 9% increase from net income for the same quarter of 2002. Net income per diluted share for the second quarter was $.42, an 11% increase over the $.38 per diluted share reported for the second quarter of 2002. Likewise, operating results for the six month period ended June 30, 2003 also improved significantly. Net income for the six month period ended June 30, 2003 was $5.6 million, a 14% increase over $4.9 million reported for the same period in 2002. Per diluted share net income for the six month period ended June 30, 2003 was $.87, a 14% increase over the $.76 per diluted share reported for the same period of 2002. Increased net income for the six month period ended June 30, 2003 resulted from a continued growth of earning assets, 7% improvement in net interest income before provision for loan losses, and a 5% decline in the provision for loan losses, compared with the same six months period ended June 30, 2002. During the six month period ended June 30, 2003, $92.4 million in loans were originated by our mortgage lending department. This increase in originations over 2002 is due in part to the experience and training of our staff and their commitment to superior customer service. Increased income resulting from the growth in originations has been a contributor to increased earnings. The Company's emphasis on expense control also contributed to the increased earnings of the periods ended June 30, 2003 over those periods of 2002. Overhead costs incurred through the first six months of 2003, as measured by our operating efficiency ratio, improved from 60.2% for the six month period ended June 30, 2002 to 59.6% for the same period of 2003. Additionally, overhead as a percentage of average assets improved from 2.0% for the six month period ended June 30, 2002 to 1.9% for the same period of 2003. The Company reported return on average shareholders' equity of 16.09% at June 30, 2003, as compared with 16.12% reported at June 30, 2002. Return on average assets at June 30, 2003 was 1.35%, up from 1.32% reported at June 30, 2002. As a direct reflection of the Company's excellent financial condition and operating results of the last quarter, the Board of Directors approved a dividend payment for the quarter of $.12 per share. Total assets at June 30, 2003 were $860 million, an increase of 13% compared with June 30, 2002. Comparing the same periods, total loans, including mortgage loans held for sale, increased 18% to $680 million, while total deposits, including commercial paper and retail repurchase agreements, rose to $777 million, a 12% increase compared with June 30, 2002. The company reported total assets under management, which in addition to Company assets include mortgage loans serviced for others and trust and investment assets, of $1.5 billion at June 30, 2003, a 14% increase from the total reported at June 30, 2002. Growing our asset base with high quality loans is particularly important to bottom line results. We are pleased to report a strong 18% increase in loan volume with continued excellent loan quality. Though loan quality remained excellent, non-performing loans as a percentage of total assets at June 30, 2003 were .48%, a 13 basis point increase over June 30, 2002. Despite these issues, we saw a significant decline in net charge offs as a percentage of average loans excluding mortgage loans held for sale from .61% for the six month period ended June 30, 2002 to .37% for the same period of 2003. A strong margin of 4.63%, a decline of 23 basis points over the six month period ended June 30, 2002, was maintained for the six month period ended June 30, 2003, and we believe this positions the company should short-term interest rates continue to fluctuate. While we remain optimistic for the last half of 2003, we recognize excellent results will not come without significant challenges. Margins will continue to be under pressure requiring even greater pricing discipline and operating efficiency in managing overhead costs. In light of this, we continue to reinforce our aggressive business plan for the Upstate with better technology and the most talented and capable employees in our 97 year history. They are dedicated and strive to seek the best possible results for your company. Sincerely, L. Leon Patterson Chairman and Chief Executive Officer
Consolidated Balance Sheets (in thousands, except share data) June 30, 2003 2002 ---------- --------- (unaudited) Assets Cash and due from banks $ 28,387 32,939 Federal funds sold 1,880 21,316 Federal Home Loan Bank (FHLB) stock, at cost 1,868 1,733 Investment securities available for sale at fair market value 115,380 102,101 Mortgage loans held for sale 12,963 4,147 Loans 666,627 570,283 Less allowance for loan losses (7,022) (5,867) --------- --------- Loans, net 659,605 564,416 Premises and equipment, net 19,934 19,789 Accrued interest receivable 4,002 4,628 Other assets 15,937 12,505 --------- --------- Total assets $ 859,956 763,574 ========= ========= Liabilities and shareholders' equity Liabilities Deposits Noninterest-bearing $ 120,343 105,444 Interest-bearing 624,062 558,949 --------- --------- Total deposits 744,405 664,393 Retail repurchase agreements 12,750 17,306 Commercial paper (Master notes) 19,676 14,401 Federal funds purchased 5,900 - Other liabilities 5,119 3,853 --------- --------- Total liabilities 787,850 699,953 --------- --------- Shareholders' equity Common stock - par value $5.00 per share; authorized 10,000,000 shares; issued and outstanding 6,351,339 and 6,295,578 at June 30, 2003 and 2002, respectively. 31,757 31,478 Capital surplus 225 44 Retained earnings 38,260 30,941 Accumulated other comprehensive income, net of tax 1,864 1,158 --------- --------- Total shareholders' equity 72,106 63,621 --------- --------- Total liabilities and shareholders' equity $ 859,956 763,574 ========= =========
Consolidated Statements of Income (in thousands, except share data) For the three months For the six months ended June 30, ended June 30, 2003 2002 2003 2002 ------ ------ ------ ------ (unaudited) (unaudited) Interest income Interest and fees on loans $ 10,772 10,297 $ 21,494 20,825 Interest and dividends on investment securities available for sale 871 1,042 1,878 2,119 Interest on federal funds sold 28 153 63 211 Dividends on FHLB stock 20 24 42 50 -------- ------- -------- -------- Total interest income 11,691 11,516 23,477 23,205 Interest expense Interest on deposits, including retail repurchase agreements 2,688 3,035 5,492 6,343 Interest on federal funds purchased 8 - 12 1 Interest on commercial paper (Master notes) 29 37 52 71 -------- ------- -------- -------- Total interest expense 2,725 3,072 5,556 6,415 -------- ------- -------- -------- Net interest income 8,966 8,444 17,921 16,790 Provision for loan losses 900 1,000 1,800 1,900 -------- ------- -------- -------- Net interest income after provision for loan losses 8,066 7,444 16,121 14,890 Noninterest income Service charges on deposit accounts 2,217 1,982 4,221 3,807 Fees for trust and brokerage services 715 651 1,352 1,263 Gains on sales of mortgage loans 335 193 674 418 Gains on sales of investment securities 186 95 281 235 Other 337 634 736 1,203 -------- ------- -------- -------- Total noninterest income 3,790 3,555 7,264 6,926 Noninterest expense Salaries and other personnel 4,132 3,677 7,802 7,356 Net occupancy 541 561 1,108 1,109 Furniture and equipment 839 669 1,652 1,304 FDIC assessment 29 37 68 65 Postage and supplies 409 328 805 710 Marketing and advertising 253 276 437 530 Telephone 188 197 372 390 Cardholder processing 138 148 274 288 Sales finance losses 15 41 26 66 Other 1,316 1,375 2,545 2,664 -------- ------- -------- -------- Total noninterest expense 7,860 7,309 15,089 14,482 -------- ------- -------- -------- Income before income taxes 3,996 3,690 8,296 7,334 Income tax provision 1,288 1,205 2,686 2,394 -------- ------- -------- -------- Net income $ 2,708 2,485 $ 5,610 4,940 ======== ======= ======== ======== Share Data Net income - Basic $ 0.43 0.39 $ 0.89 0.79 Net income - Diluted 0.42 0.38 0.87 0.76 Cash dividends 0.12 0.11 0.24 0.22 Book value 11.35 10.11 11.35 10.11 Highest trading price during period 29.00 28.00 29.00 28.00 Weighted average common shares outstanding - Basic 6,346,105 6,293,765 6,336,455 6,290,529 Weighted average common shares outstanding - Diluted 6,498,919 6,465,218 6,483,582 6,461,727
Selected Financial Ratios For the six months ended June 30, 2003 2002 ------ ------ (unaudited) Significant Operating Ratios Based on Earnings Return on average assets 1.35 % 1.32 Return on average equity 16.09 16.12 Net interest margin 4.63 4.86 Efficiency ratio 59.63 60.15 - ------------------------------------------------------------------------- Significant Capital Ratios Average equity to average assets 8.37 % 8.19 Equity to assets at year end 8.38 8.33 Tier 1 risk based capital 9.53 10.14 Total risk based capital 10.55 11.16 Tier 1 leverage ratio 7.78 7.72 - -------------------------------------------------------------------------- Significant Credit Quality Ratios Nonaccrual loans to total assets 0.48 % 0.35 Net charge-offs to average loans less mortgage loans held for sale 0.37 0.61 - -------------------------------------------------------------------------- BANK NOTES - -The Palmetto Bank is committed to the communities in which we are located, sponsoring many different charitable organizations and functions. Every year, the Laurens County bank employees work very hard to raise funds for the American Cancer Society's Relay for Life walk held at Presbyterian College. On June 28th, an "Extravaganza" was held in the Corporate Center parking lot in Laurens, featuring a yard sale, dunking booth, face painting, children's games, and a hot dog/ bake sale. Despite the continuous rainy weather that day, the Laurens employees raised over $2,400 toward their goal. - -Our bank has been contacted by several media sources as an industry expert to discuss various topics including the market, rates, mortgage refinancing, and tips on how to protect yourself from scams. Will Ferguson, vice president, mortgage loans was recently featured in an article in the Spartanburg Herald-Journal, while Matt Walter senior vice president, investment officer interviewed with Newsweek's Jane Bryant Quinn. Derrick Copeland, security officer and fraud investigator for the bank was recently included on WYFF channel 4 during Tim Waller's "Buyer Beware" report. - -Matthew I. (Matt) Walter, senior vice president, investment officer of The Palmetto Bank has been elected to serve on the Board of Directors of the South Carolina Association of Investment Professionals (SCAIP) for the 2003 - 2004 term. - -The Palmetto Bank recently won two awards for the production of its 2002 Annual Report. A Certificate of Excellence was awarded as a result of the Bank's annual report entry into the ABAMN (American Bankers Association Marketing Network) Advertising Awards competition. A "Silver Addy Award" from the Greenville Ad Club for the 2002 Annual Report was also awarded this year. The piece was created with the help of Gibbons/Peck, the agency with which The Palmetto Bank has produced its annual reports over the last four years. -----END PRIVACY-ENHANCED MESSAGE-----