BankTrust parent company posts small profit

BancTrust Financial Group Inc. moved back into the black in the third quarter, recording a $30,000 profit as set-asides for loan losses fell sharply.

The $2 billion bank, the largest based in Mobile, had lost $128 million in the preceding nine months, as real estate loans in its Florida Panhandle market rapidly soured. The firm, whose offices operate as BankTrust, took a series of charges and noncash write-downs leading to a $118.7 million loss in the second quarter alone.

"No red ink for a change," said Chairman and Chief Executive W. Bibb Lamar Jr. "It's really exciting after what we've been through, particularly in the second quarter."

BancTrust's tiny profit registered as nothing per share, but the result beats the losses forecast by the two analysts who follow the stock — 29 cents per share and $1.10 per share, respectively, according to Thomson Reuters.

In the July-September period of 2008, the bank made $223,000, or 1 cent per share.

This quarter's profit would have been $786,000, but BancTrust had to pay $756,000 in preferred stock dividends to the federal government, in exchange for the

$50 million it received from the U.S. Treasury in December as part of the bank bailout program. The bank is not now paying a dividend to common shareholders.

Lamar said he'd like to repay the $50 million, but "realistically" that's unlikely to happen in the next year.

BancTrust filed a document last fall allowing it to sell up to 30 million new shares of stock at any time. Many banks have sold stock to the private market to increase capital and pay back the federal money. Lamar said selling new shares is "something that all banks are looking at right now."

Bank officials credited a number of factors for improving profit. The spread between interest paid on deposits and interest charged to borrowers rose 9.6 percent from the second quarter to

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