BOCA RATON, Fla., April 18, 2008 (PRIME NEWSWIRE) -- Sun American Bancorp ("Sun American") (Nasdaq:SAMB), the bank holding company for Sun American Bank, today reported net income of $5,000 or $0.00 per diluted share, in the first quarter of 2008, compared to $96,000, or $0.01 per diluted share, in the first quarter of 2007. First quarter 2008 results included recognition of stock based compensation expense of approximately $291,000.
The relatively flat results for the three months ended March 31, 2008, compared to the three months ended March 31, 2007, are attributed to various factors including net interest margin ("NIM") compression, higher occupancy costs due to opening new branches, and expenses related to non-performing loans and Other Real Estate Owned ("OREO") expenses. Our NIM was at 3.74% for the first quarter of 2008 compared to 4.58% for the first quarter in 2007. OREO expenses amounted to approximately $72,000 in the first quarter of 2008 compared to zero for the same period a year ago. OREO expenses were incurred mostly to pay for property taxes, legal costs, and for other property maintenance expenses of the properties while under bank ownership. Interest income of $70,000 was reversed in the first quarter of 2008 related to loans where the collection of interest income became doubtful.
Sun American President and Chief Executive Officer Michael Golden said, "Our core financials continue to remain strong, particularly our capital position. In light of the economic and competitive pressures affecting our market place today, I still feel very confident that when the cycle turns up that we will be well positioned to take advantage of it financially. Our pipe line of new loans has grown significantly and I believe this will continue to build and give us better financial results in the near future."
Mr. Golden further reported that, "We continue to undertake a number of initiatives to improve the performance of our common stock including re-purchase of 263,000 shares of common stock in the first quarter of 2008 at prices below our tangible book value per share. We will continue to seek innovative ways to manage our business to improve our shareholder return."
Sun American ended the quarter with assets of $622 million at March 31, 2008, up 2% from $609 million at March 31, 2007 and up $43 million or 8% compared to December 31, 2007. Net loans were $456 million at March 31, 2008, an increase of 3% from $444 million at March 31, 2007.
First Quarter 2008 Highlights (compared to first quarter 2007 unless otherwise indicated) included:
* Revenues advanced 6% to $9.8 million. * Nonperforming assets represented 1.22% of total assets. (This compares to 1.26% at the end of 2007). * Net interest margin for the first quarter of 2008 was 3.74% compared to 4.58%. (Full year 2007 NIM was 4.06%). * Loans increased 3% to $456 million. * Assets increased 2% to $622 million. * Repurchased 263,000 shares of the Company's common stock during the first quarter of 2008. * Closed the Coral Way branch in Miami on March 31, 2008. (We have two other branches within a 2 mile radius.)
Operating Results
Sun American's quarterly net interest income was relatively flat -- $4.8 million compared to $4.9 million in the first quarter a year ago due to NIM compression -- something all banks face in the current environment. Overall average loan portfolio yield decreased from 8.96% at March 31, 2007 to 7.45% at March 31, 2008. Comparatively, average overall cost of funds decreased from 4.83% at March 31, 2007 to 4.13% at March 31, 2008. The (NIM) for the first quarter of 2008 was 3.74%, compared to 4.06% for the full year of 2007, and 4.58% for the first quarter of 2007.
Interest and fees on loans increased 8% to $8.2 million in the first quarter of 2008. Non-interest income was $569,000 in the first quarter of 2008 compared to $483,000 in the first quarter a year ago. The fee revenue increase primarily resulted from an increase in service charges on deposit accounts, an increase in the number of accounts as a result of the Independent Community Bank merger.
Non-interest expenses were $5.3 million in the first quarter of 2008, an increase of 2% from $5.2 million in the first quarter a year ago. Salaries and benefits were essentially the same and reflect cost reduction initiatives undertaken during the second half of 2007. Occupancy includes the cost for two additional branches compared to the first quarter of 2007. Amortization of intangibles increased due to the increased intangible assets acquired in the Independent Community Bank transaction. Other expenses include about $72,000 of OREO expenses in the first quarter of 2008 compared to zero in 2007. Data and item processing and professional fees were lower than the same period of 2007 because 2007 included non-recurring items for conversion costs for the Beach Bank acquisition of $147,000 and a charge of $77,000 to settle a litigation claim.
Provision for loan loss was a recovery of $48,000 in 2008. The comparative provision for loan loss for the three months ended March 31, 2007 was zero. The 2008 negative provision was derived despite the increase in the loan portfolio as the portion of our loan loss provision that is determined by historic loss performance has improved and more than offset the provision required for the net increase in loans. The historical loss performance factor includes an analysis of loss and recovery experience in the various portfolio segments over the last three fiscal years. Charge-offs are indeed higher during the last three years but constitute a smaller percentage over a much larger loan portfolio resulting from organic growth and two acquisitions over that same period.
Robert Nichols, Chief Financial Officer noted, "We are pleased with the success of our cost containment initiatives in 2008 during a difficult economic environment. We intend to maintain our core operating costs at levels below those incurred in 2007, despite the larger size of our business."
Balance Sheet Activity
Assets increased 2% to $622 million at March 31, 2008, compared to $609 million a year earlier. Net loans increased 3%, to $456 million at March 31, 2008, compared to $444 million at March 31, 2007.
At March 31, 2008, non-performing assets ("NPAs") totaled $7.6 million, representing 1.22% of total assets. This compares to $7.3 million at December 31, 2007 or 1.26%. NPAs were $2.3 million, representing 0.37% at March 31, 2007.
The allowance for loan losses at March 31, 2008 was $5.2 million and represented 1.12% of total loans. In the first quarter of 2008, charge-offs amounted to $1.3 million. The charge-offs were related to two loans financing the development and construction of residential property.
Robert Garrett, Chief Lending Officer, noted "Our NPAs remained stable through the first quarter compared to the fourth quarter of 2007, which we attribute to a lot of hard work by our expert staff, headed up by Senior Vice President, Felipe Lozano. We did manage to reduce certain NPAs in the first quarter while adding others. We believe this will be the pattern for the remainder of the year. We are working aggressively to resolve issues related to clients who are, or who may in future, experience loan performance issues. Initiatives include work outs, loan sales and, when required, foreclosures. Our policy is to monitor borrower activity closely and to identify potential issues before they amplify. We want to work with our borrowers to provide solutions that work in the best interests of both the borrower and the Bank. However, we recognize that during this period of real estate challenges, these types of problems do not go away over night and more than likely we will have to continue to deal with them throughout 2008."
Stockholders' equity decreased 9% to $97 million compared to $107 million at March 31 2007. The $10 million decrease in equity was due to a net loss of $3.0 million taken in the fourth quarter of 2007. In addition, the Company bought back 566,000 shares of common stock in the period at a cost of $3.1 million and bought back stock purchase warrants at a cost of $1.6 million, both of which resulted in a reduction of shareholder equity. In addition, the Company booked a reduction adjustment to the purchase price of Beach Bank of approximately $3.0 million.
About Sun American Bancorp
Based in Boca Raton, Florida, Sun American Bancorp is the single-bank holding company of Sun American Bank, a state-chartered, federal member bank engaged in a general commercial and consumer banking business. Sun American Bank operates 14 offices in Miami, Broward, Palm Beach and Martin Counties in Southeast Florida. For additional information, please visit our website at www.sunamericanbank.com.
The Sun American Bancorp logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3685
Except for historical information containing herein, the matters set forth in this news release are "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Although Sun American Bancorp believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions; there can be no assurance that its expectations will be realized. Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from Sun American Bancorp's expectations. Factors that could contribute to such differences include those identified in Sun American Bancorp's Form 10-K for the year-ended December 31, 2007, and those described from time to time in Sun American's other filings with the Securities and Exchange Commission, news releases and other communications.
SUN AMERICAN BANCORP
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
Cash and due from financial
institutions $ 9,872,762 $ 8,109,917
Federal funds sold 7,976,000 --
------------ ------------
Total cash and cash equivalents 17,848,762 8,109,917
Securities available for sale 5,653,119 5,778,655
Securities held to maturity (fair value
2008 - $69,973,635, 2007 - $50,940,402) 68,394,810 50,306,758
Loans, net of allowance for loan losses
of $5,150,559 and $6,503,508 456,282,710 439,961,953
Federal Reserve Bank stock 3,180,900 3,180,900
Federal Home Loan Bank stock 4,820,600 4,658,500
Accrued interest receivable 2,371,152 2,698,469
Premises and equipment, net 10,907,752 11,211,441
Goodwill 42,420,347 42,362,255
Intangibles 2,492,057 2,719,538
Other assets 7,346,285 6,884,053
------------ ------------
$621,718,494 $577,872,439
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing $ 54,290,026 $ 50,098,536
Interest bearing 344,425,053 330,608,180
------------ ------------
Total deposits 398,715,079 380,706,716
Securities sold under agreements
to repurchase 34,168,146 14,983,655
Federal Home Loan Bank advances 84,000,000 78,000,000
Notes payable 4,128,871 2,703,155
Accrued expenses and other liabilities 3,756,538 3,660,365
------------ ------------
Total liabilities 524,768,634 480,053,891
Minority interest 27,435 27,359
Shareholders' equity
Common stock, $.025 par value;
20,000,000 shares authorized;
10,369,036 shares outstanding at
3/31/2008, 10,632,434 shares
outstanding at 12/31/2007 273,374 273,374
Additional paid-in capital 106,015,053 105,728,957
Accumulated deficit (6,020,389) (6,025,754)
Treasury stock, 565,908 shares at
3/31/2008, 302,510 shares
at 12/31/2007 (3,072,454) (1,990,641)
Accumulated other comprehensive loss (273,159) (194,747)
------------ ------------
Total shareholders' equity 96,922,425 97,791,189
------------ ------------
$621,718,494 $577,872,439
============ ============
SUN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
--------------------------
2008 2007
----------- -----------
(unaudited) (unaudited)
Interest and dividend income:
Loans, including fees $ 8,196,907 $ 7,621,630
Securities 941,181 773,012
Federal funds sold and other 62,806 362,948
----------- -----------
9,200,894 8,757,590
Interest expense:
Deposits 3,612,994 3,710,288
FHLB advances 704,204 121,506
Other 126,923 24,043
----------- -----------
4,444,121 3,855,837
----------- -----------
Net interest income before provision
for loan losses 4,756,773 4,901,753
Provision for loan losses (48,400) --
----------- -----------
Net interest income after provision
for loan losses 4,805,173 4,901,753
Non-interest income:
Service charges on deposit accounts 416,111 355,926
Other income 153,015 127,242
----------- -----------
569,126 483,168
Non-interest expenses:
Salaries and employee benefits 2,458,759 2,480,822
Occupancy and equipment 1,360,755 1,200,112
Data and item processing 227,888 365,170
Professional fees 239,684 303,709
Insurance 157,450 141,375
Advertising 34,084 17,616
Amortization of intangible assets 218,314 104,882
Other 575,156 538,662
----------- -----------
5,272,090 5,152,348
----------- -----------
Income before income taxes
and minority interest 102,209 232,573
Minority interest in net income
of subsidiary (97) (13,453)
----------- -----------
Income before provision for income taxes 102,112 219,120
----------- -----------
Income tax expense - deferred 96,747 122,696
----------- -----------
Net income $ 5,365 $ 96,424
=========== ===========
Basic earnings per share $ 0.00 $ 0.01
=========== ===========
Diluted earnings per share $ 0.00 $ 0.01
=========== ===========
Weighted average number of common
shares, basic 10,462,434 9,259,365
=========== ===========
Weighted average number of common
shares, diluted 10,538,272 10,627,455
=========== ===========
SUN AMERICAN BANCORP
AVERAGE BALANCE SHEET
(Dollars in thousands)
For the
Three month period ended
March 31,
----------------------------
2008
----------------------------
Average
Average Inte- Yield/
Balance rest(4) Rate(3)
-------- -------- ----
Assets:
Interest-earning assets:
Investments (1) $ 61,577 $ 941 6.13%
Federal funds sold and other 7,775 63 3.24
Loans:
Commercial loans (2) 31,900 602 7.57
Commercial mortgage loans (2) 301,276 5,632 7.50
Consumer loans (2) 4,879 90 7.36
Residential mortgage loans (2) 71,811 1,341 7.49
Home equity and other loans (2) 31,217 532 6.84
-------- -------- ----
Total loans 441,083 8,197 7.45
-------- --------
Total interest earning assets 510,435 9,201 7.23
Non-interest earning assets 74,150
--------
Total $584,585
========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 74,520 570 3.07
Money Market accounts 58,079 555 3.83
Savings accounts 25,193 228 3.63
Certificates of deposit 185,729 2,260 4.88
-------- --------
Total interest-bearing deposits 343,521 3,613 4.22
Federal funds purchased and securities
sold under repurchase agreement 7,351 75 4.10
Federal Home Loan Bank advances 76,824 704 3.68
Notes payable 3,463 52 5.99
-------- --------
Total interest bearing liabilities 431,159 4,444 4.13
-------- --------
Non-interest bearing liabilities 56,027
Stockholders' equity 97,399
--------
Total $584,585
========
Net Interest income and yield on net
interest-earning assets $ 4,757 3.74%
======== ====
----------------------------
2007
----------------------------
Average
Average Inte- Yield/
Balance rest(4) Rate(3)
-------- -------- ----
Assets:
Interest-earning assets:
Investments (1) $ 60,674 $ 776 5.19%
Federal funds sold and other 28,153 360 5.18
Loans:
Commercial loans (2) 32,010 725 9.19
Commercial mortgage loans (2) 205,538 4,542 8.96
Consumer loans (2) 3,635 84 9.41
Residential mortgage loans (2) 90,067 2,018 9.08
Home equity and other loans (2) 13,712 253 7.47
-------- -------- ----
Total loans 344,961 7,622 8.96
-------- --------
Total interest earning assets 433,788 8,758 8.19
Non-interest earning assets 38,925
--------
Total $472,713
========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $110,613 1,187 4.35
Money Market accounts 19,235 132 2.78
Savings accounts 8,559 66 3.14
Certificates of deposit 172,440 2,325 5.47
-------- --------
Total interest-bearing deposits 310,846 3,710 4.84
Federal funds purchased and securities
sold under repurchase agreement 1,971 24 4.95
Federal Home Loan Bank advances 10,962 122 4.50
Notes payable -- -- --
-------- --------
Total interest bearing liabilities 323,779 3,856 4.83
-------- --------
Non-interest bearing liabilities 64,096
Stockholders' equity 84,838
--------
Total $472,713
========
Net Interest income and yield on net
interest-earning assets $ 4,902 4.58%
======== ====
(1) Includes investment securities, Federal Reserve Bank stock
and Federal Home Loan Bank stock.
(2) Includes loans for which the accrual of interest has been
suspended.
(3) Yields and rates are annualized.
(4) Includes Fee Income on Loans.