SANFORD, Fla., Jan. 28 /PRNewswire-FirstCall/ -- Dennis T. Ward,
Chief Executive Officer and President of Federal Trust Corporation,
reported today that the Company's loss for the quarter ended
December 31, 2007, was $4.7 million or $.50 per basic and fully
diluted share, compared to earnings of $741,000 or $.08 per basic
and diluted share for the fourth quarter of 2006. For the full
year, the Company's loss was $14.2 million, compared to a $3.4
million profit for 2006. On a per share basis, the loss was $1.51
per basic and fully diluted per share, compared to earnings of $.38
per basic and $.37 per fully diluted share for 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/19990513/FDTRLOGO ) At December
31, 2007, Federal Trust's total assets were $690.3 million, a
decrease of $32.7 million, or 5% from December 31, 2006. The
allowance for loan losses at the end of 2007 was $13.9 million or
2.42% of total loans. Stockholders' equity at the end of 2007 was
$39.7 million, compared to $54.6 million at the end of 2006. The
book value per share decreased from $5.86 at December 31, 2006, to
$4.22 at December 31, 2007. CEO Ward stated that "2007 has been
extremely difficult and disappointing for financial institutions
including Federal Trust. Our losses were primarily driven by
weakness in the Florida real estate market." Total non-performing
assets at December 31, 2007, were $47.5 million, compared to $42.1
million at the end of the 2007 third quarter. Total non-accrual
loans at December 31, 2007, were $37.8 million, up slightly from
the $37.0 million at the end of September. Foreclosed properties
increased during the fourth quarter from $5.1 million at September
30, 2007, to $9.5 million at December 31, 2007. During the fourth
quarter, the Company acquired title to $6.5 million in real estate
properties and sold properties worth $2.1 million. Two unrelated
borrowers with loans on various commercial and residential
properties totaling $11.8 million were transferred to non-accrual
status during the quarter and one $4.5 million non-accrual loan to
an operating hotel was paid in full. The Company recognized
approximately $2.6 million in charge-offs during the quarter,
primarily relating to the loans transferred to foreclosed assets.
"Our team of experienced professionals focused significant efforts
during the quarter on our current non-performing assets, examining
the entire loan portfolio and identifying any other potential
problem assets. In addition to the activity noted above, we
identified $55.7 million in other real estate related loans which
are currently performing, but have increased risk due to the weak
real estate market. Each of these relationships was evaluated based
on current market conditions and is being actively monitored by our
lending staff. In fact, one of these loans with a balance of $7.4
million was paid in full subsequent to December 31, 2007. Of the
remaining loans we identified, $21.1 million was for unimproved
land, $11.6 million was for commercial real estate projects, $10.5
million was for developed residential lots, and $5.1 million was
for single family residences in various stages of construction.
Based on our evaluation of the loan portfolio, we added $6.0
million to the allowance for loan losses at the end of 2007, which
brought our total provision to $16.4 million for all of 2007. While
we believe that the allowance for loan losses at December 31, 2007,
was adequate in light of current market conditions, additional
provisions in 2008 may be required," explained CEO Ward. CEO Ward
further commented that, "despite the challenges the Company faced
in our loan portfolio during 2007, we made progress in several
areas of the Bank. We completed our near-term branch expansion
plans and opened two new offices in Seminole and Flagler counties.
We also relocated our New Smyrna Beach branch from a 1,500 square
foot end unit in a retail plaza, to a nearby free-standing branch
facility with drive-up lanes, which were not available at our
former location. We have also made significant progress in sales
training and development of our branch staff. Our goal for 2007 and
moving forward is to reduce our reliance on wholesale funding
sources such as advances from the Federal Home Loan Bank and
brokered certificates of deposit in favor of lower cost interest
checking accounts, which increased $28.7 million or 56% in 2007.
Our investments in the new branch offices and staff training have
set the framework for our enhanced sales culture. On the loan side,
we will focus first on the resolution of our problem assets and
other potential problem loans. We strengthened our credit
underwriting staff and procedures, and have focused our loan
origination efforts in our Central Florida branch footprint area.
With a local business lending focus, we will reduce our portfolio
of land acquisition and development and residential loans with the
ultimate goal of having a more traditional community bank asset and
liability mix," continued CEO Ward. "As a result of the additional
loan loss provisions we recorded during the year, the Bank's
capital position fell below the "well capitalized" designation for
regulatory purposes at December 31, 2007. As we move forward in
2008, we plan to reduce total assets by aggressively resolving
problem assets and reducing our residential loan portfolio. As
evidence of our efforts to shrink the balance sheet, during the
2007 fourth quarter we successfully reduced the Bank's total assets
by $35 million from $723 million at September 30, 2007, to $688
million at December 31, 2007. We have also hired an investment
banker to assist us in raising additional capital to provide a
foundation for future growth when market conditions improve,"
concluded CEO Ward. Federal Trust Corporation's common stock is
traded on the American Stock Exchange under the symbol "FDT." At
January 25, 2008, the closing price was $1.85 per share. Federal
Trust Corporation is a unitary thrift holding company and is the
parent company of Federal Trust Bank, a $688 million
federally-chartered, FDIC-insured savings bank, and Federal Trust
Mortgage Company, a Florida corporation, which originates fixed and
adjustable rate mortgage loans for sale in the secondary market.
Federal Trust Bank operates from eleven full- service offices in
Seminole, Orange, Volusia, Lake and Flagler Counties, Florida. The
Company's Executive and Administrative Offices and the headquarters
for Federal Trust Mortgage Company are located in Sanford, in
Seminole County, Florida. The following information is in thousands
except per share data. At Year End Dec. 31, 2007 Dec. 31, 2006
Total assets $690,264 $722,964 Investment securities 52,449 65,558
Loans 563,234 603,917 Deposits 481,729 472,794 Federal Home Loan
Bank advances 152,700 179,700 Shareholders' equity 39,686 54,620
Book value per share $4.22 $5.86 Non-performing assets 47,452
12,007 Allowance for loan losses 13,869 5,098 Allowance for loan
losses as a percent of total loans, net of LIP 2.42% 0.84% Three
Months Ended Dec. 31, 2007 Dec. 31, 2006 Interest income $10,371
$11,125 Interest expense 7,732 7,409 Net interest income 2,639
3,716 Provision for loan losses 6,002 345 Non-interest income (309)
455 Non-interest expense 4,001 2,893 Provision for income taxes
(2,973) 192 Net earnings (4,700) 741 Earnings per share - basic
(0.50) 0.08 Earnings per share - fully diluted (0.50) 0.08 Average
common shares Outstanding - basic 9,382 9,320 Average common shares
Outstanding - fully diluted 9,382 9,461 Return on average assets
(2.61%) 0.41% Return on average equity (35.61%) 5.59% Net interest
margin 1.58% 2.23% Twelve Months Ended Dec. 31, 2007 Dec. 31, 2006
Interest income $42,486 $43,842 Interest expense 30,797 28,114 Net
interest income 11,689 15,728 Provision for loan losses 16,412 639
Non-interest income 944 2,226 Non-interest expense 18,414 12,461
Other-than-temporary impairment on securities available for sale
749 0 Market value adjustment on loans held for sale 328 0
Provision for income taxes (9,107) 1,444 Net earnings (14,163)
3,410 Earnings per share - basic (1.51) 0.38 Earnings per share -
fully diluted (1.51) 0.37 Average common shares Outstanding - basic
9,363 8,995 Average common shares Outstanding - fully diluted 9,363
9,135 Return on average assets (1.97%) 0.46% Return on average
equity (26.83%) 6.70% Net interest margin 1.74% 2.33% Safe Harbor
Statement under the Private Securities Litigation Reform Act of
1995 Certain statements in this press release may contain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which statements
generally can be identified by the use of forward- looking
terminology, such as "may," "will," "expect," "estimate,"
"anticipate," "believe," "target," "plan," "project," or "continue"
or the negatives thereof or other variations thereon or similar
terminology, and are made on the basis of management's plans and
current analyses of Federal Trust Corporation, its business and the
industry as a whole. These forward-looking statements are subject
to risks and uncertainties, including, but not limited to, economic
conditions, competition, interest rate sensitivity and exposure to
regulatory and legislative changes. The above factors, in some
cases, have affected, and in the future could affect Federal Trust
Corporation's financial performance and could cause actual results
for fiscal 2008 and beyond to differ materially from those
expressed or implied in such forward-looking statements. Federal
Trust Corporation does not undertake to publicly update or revise
its forward-looking statements even if experience or future changes
make it clear that any projected results expressed or implied
therein will not be realized. For further information regarding
Federal Trust Corporation, please read the reports Federal Trust
Corporation files with the SEC and available at
http://www.sec.gov/. Press Releases and other information about
Federal Trust Corporation can be found on PR Newswire at
http://www.prnewswire.com/ or at Federal Trust's website at
http://www.federaltrust.com/. For more information, contact: Marcia
Zdanys, Corporate Secretary/Investor Relations (407) 323-1833
http://www.newscom.com/cgi-bin/prnh/19990513/FDTRLOGO
http://photoarchive.ap.org/ DATASOURCE: Federal Trust Corporation
CONTACT: Marcia Zdanys, Corporate Secretary & Investor
Relations, +1-407-323-1833, of Federal Trust Corporation Web site:
http://www.federaltrust.com/
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