PMC Commercial Trust Announces Second Quarter and Year-to-Date Results

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, [phone]

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