BOCA RATON, Fla., Oct. 23, 2008 (GLOBE NEWSWIRE) -- Sun American Bancorp ("Sun American") (Nasdaq:SAMB), the bank holding company for Sun American Bank, today reported a net loss of $1.3 million or $0.13 per diluted share, in the third quarter of 2008, compared to net loss of $467,000, or $0.04 per diluted share, in the third quarter of 2007. For the nine months ended September 30, 2008, the net loss was $3.8 million or $0.37 per diluted share, compared to net loss of $251,000 or $0.02 per diluted share for the nine months ended September 30, 2007.
Michael Golden, Chairman of Sun American Bank, stated, "Pre-tax income for the third quarter, excluding provision for loan losses, stock option expense, and OREO expenses, was $488,000, compared to a loss of $49,000 in the third quarter of 2007. Pre-tax income for the nine months of 2008, excluding provision for loan losses, stock option expense, and OREO expenses, was $1.5 million, compared to $766,000 for the same period in 2007, an improvement of 96% in core operating earnings. We believe this is an indication that our core operating performance remains sound despite the toxic real estate market."
2008 Balance Sheet Highlights -
-- Total assets grew $78 million or 13% from year end.
-- Net loans grew $49 million or 11% from year end.
-- Total deposits grew $76 million or 20% from year end.
-- Core customer deposits increased by $47 million or 17% from
year end.
-- Over $14 million of troubled loans have been managed out of
the Bank in the last twelve months.
-- Book Value $ 9.07, Tangible Book Value $ 4.70
2008 Income Statement Highlights -
-- Net interest margin ("NIM") was 3.64% compared to 3.67%
in Q2 2008 and compared to 3.74% in Q1 2008
-- Net interest income in Q3 2008 decreased by 4% compared to
Q2 2008.
-- Pre-tax earnings before credit costs and stock option
expenses were $488,000 in Q3 compared to $533,000 in Q2 2008
and compared to $418,000 in Q1 2008.
-- Average cost of funds decreased to 3.13% at September 30,
2008 compared to 4.07% at year end, December 30, 2008
-- Operating expenses decreased by $1.1 million or 7% in first
nine months of 2008 compared to 2007.
Operating Results
Sun American's quarterly net interest income was $4.8 million compared to $4.9 million in the third quarter a year ago. The slight decrease was due to interest reversals on non-accruing loans which totaled $113,000 in the third quarter of 2008. Overall the average loan portfolio yield decreased from 8.55% at September 30, 2007 to 7.02% at September 30, 2008. Comparatively, average overall cost of funds decreased from 4.75% for the nine months ended September 30, 2007 to 3.59% for the nine months ended September 30, 2008.
The NIM for the nine months ended September 30, 2008 was 3.64% compared to 3.67 for the second quarter of 2008 and 3.74% in the first quarter of 2008.
Interest and fees on loans decreased 10% to $7.9 million in the third quarter of 2008 compared to the third quarter of 2007 due to the lower yields earned on loans.
For the third quarter of 2008, Sun American recorded $2.2 million in provision for loan losses in response to higher levels of non-performing assets associated with collateral dependent commercial real estate loans. The comparative provision for loan loss for the three months ended June 30, 2008 was $4.0 million and for September 30, 2007 was $354,000. Interest income of $111,000 was reversed in the third quarter of 2008 due to loans where the collection of interest income became doubtful. Operating expenses decreased to $5.0 million for the third quarter of 2008, from $5.7 million in the third quarter of 2007. The reduction in expenses is attributed to savings associated with staff reduction initiatives, lower incentive compensation costs and reduced premises costs due to closure of two branches in 2008.
For the nine months ended September 30, 2008, Sun American recorded $6.2 million in provision for loan losses again in response to rising non-performing assets associated with collateral dependent commercial real estate loans, compared to a provision of $156,000 for the same period in 2007. The NIM was at 3.64% for the nine months of 2008 compared to 4.19% for the same nine months in 2007. Interest income of $320,000 was reversed during the first nine months of 2008 related to loans where the collection of interest income became doubtful. Net interest income totaled $14.6 million for the nine months ended September 30, 2008, compared to $15.2 million for the same period in 2007. Operating expenses decreased to $15.6 million for the nine months of 2008, from $16.7 million for the same period in 2007. The reduction in expenses is attributed to savings associated with staff reduction initiatives, lower incentive compensation costs and reduced occupancy costs.
Non-interest expenses were $5.0 million in the third quarter of 2008, a decrease of 12% from $5.7 million in the third quarter a year ago. Mr. Golden stated that "salaries and benefits reflect cost reduction initiatives undertaken in the past twelve months. The number of full time equivalent staff has reduced by 13% from levels of one year ago."
Third quarter 2008 results included recognition of stock based compensation expense of approximately $268,000 before tax compared to $254,000 in the third quarter of 2007.
Balance Sheet Activity
Sun American ended the quarter with assets of $655.8 million at September 30, 2008, up $67 million or 11% from $588.5 million at September 30, 2007 and up $71 million or 13% compared to December 31, 2007.
Net loans were $488 million at September 30, 2008, an increase of 12% from $435 million at September 30, 2007, and up $48 million or 11% compared to December 31, 2007.
Total non-performing assets were $19.4 million at September 30, 2008, compared to $7.3 million at December 31, 2007, and $9.5 million at September 30, 2007. The ratio of non-performing assets as a percentage of total assets increased to 2.96% at September 30, 2008, from 1.26% at December 31, 2007, and 1.62% at September 30, 2007.
The total allowance for loan losses was $7.6 million at September 30, 2008 after taking charge offs of $3.6 million in the quarter. This compared to $6.5 million at December 31, 2007 after charge offs of $2 million, and $4.1 million at September 30, 2007 after charge offs of $4 thousand. The allowance for loan losses as a percentage of the total loan portfolio was 1.53% at September 30, 2008, compared to 1.46% at December 31, 2007, and 0.94% at September 30, 2007.
Total deposits of $456.7 million at September 30, 2008 had increased by $76 million or 20% from year end including a $47 million or 17% increase in core customer deposits. Total deposits were $14 million or 3% higher than the September 30, 2007 levels.
Stockholders' equity decreased 12% to $93 million compared to $106 million at September 30 2007. The $13 million decrease in equity was due to net losses of $6.6 million incurred since September 30, 2007. In addition, Sun American bought back 704,000 shares of common stock in the period at a cost of $3.6 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, Sun American booked a capital reduction adjustment to the purchase price of Beach Bank of approximately $2 million.
Mr. Golden further commented that "capital preservation is a primary focus of the Bank during this period and that we are, and intend to remain, well capitalized despite higher loan loss provisions. We continue to have challenging times and more than likely the challenges will remain with us in South Florida into 2009. We feel the actions the U.S. Treasury has taken will eventually kick in and our region which has always been one of the strongest will rebound and perform above average as it has in the past. It is a matter of remaining focused and staying strong with our convictions that we have the right business model. This too shall pass and Sun American will be a stronger and better Community Bank in the South Florida Market."
The Sun American Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3685
SUN AMERICAN BANCORP
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2008 2007
--------------- --------------
(Unaudited)
ASSETS
Cash and due from financial
institutions $ 8,846,635 $ 8,109,917
Federal funds sold 10,975,000 --
--------------- --------------
Total cash and cash equivalents 19,821,635 8,109,917
Securities available for sale 210,399 5,778,655
Securities held to maturity (fair
value 2008 - $75,772,304, 2007 -
$50,940,402) 76,034,238 50,306,758
Loans, net of allowance for loan
losses of $7,603,311 and $6,503,508 488,470,212 439,961,953
Federal Reserve Bank stock 3,018,150 3,180,900
Federal Home Loan Bank stock 3,740,600 4,658,500
Accrued interest receivable 2,546,951 2,698,469
Premises and equipment, net 10,330,583 11,211,441
Goodwill 42,270,885 42,362,255
Intangibles 2,085,911 2,719,538
Other assets 7,298,487 6,884,053
--------------- --------------
$ 655,828,051 $ 577,872,439
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 52,259,750 $ 50,098,536
Interest bearing 404,436,925 330,608,180
--------------- --------------
Total deposits 456,696,675 380,706,716
Securities sold under agreements to
repurchase 34,841,687 14,983,655
Federal Home Loan Bank advances 60,000,000 78,000,000
Notes payable 7,528,871 2,703,155
Accrued expenses and other
liabilities 3,491,224 3,660,365
--------------- --------------
Total liabilities 562,558,457 480,053,891
Minority interest 26,566 27,359
Stockholders' equity
Preferred Stock, $0.01 par value;
5,000,000 shares authorized:
Series A - 93,750 issued and
outstanding at September 30, 2008
None issued and outstanding at
December 31, 2007 375,000 --
Common stock, $.025 par value;
20,000,000 shares authorized;
10,934,944 issued and 10,230,466
shares outstanding at September
30, 2008, 10,934,944 issued and
10,632,434 shares outstanding at
December 31, 2007 273,374 273,374
Additional paid-in capital 106,576,319 105,728,957
Accumulated deficit (9,808,825) (6,025,754)
Treasury stock, 704,478 shares at
September 30, 2008, 302,510
shares at December 31, 2007 (3,574,046) (1,990,641)
Accumulated other comprehensive
loss (598,794) (194,747)
--------------- --------------
Total stockholders' equity 93,243,028 97,791,189
--------------- --------------
$ 655,828,051 $ 577,872,439
=============== ==============
SUN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended
----------------------------
September 30, September 30,
2008 2007
------------- -------------
(Unaudited) (Unaudited)
Interest and dividend income:
Loans, including fees $ 23,913,370 $ 25,498,880
Securities 3,189,767 2,642,216
Federal funds sold and other 109,826 711,630
------------- -------------
27,212,963 28,852,726
Interest expense:
Deposits 10,223,451 12,647,249
Federal Home Loan Bank advances 1,521,421 721,973
Other 857,146 251,102
------------- -------------
12,602,018 13,620,324
------------- -------------
Net interest income before provision for
loan losses 14,610,945 15,232,402
Provision for loan losses 6,199,439 155,694
------------- -------------
Net interest income after provision for
loan losses 8,411,506 15,076,708
Non-interest income:
Service charges on deposit accounts 1,236,931 1,229,347
Other income 164,226 239,768
Net losses on sales of securities -- (11,540)
------------- -------------
1,401,157 1,457,575
Non-interest expenses:
Salaries and employee benefits 7,242,598 7,840,514
Occupancy and equipment 4,052,099 4,300,746
Data and item processing 666,841 919,278
Professional fees 755,147 979,218
Insurance 443,795 426,654
Advertising 92,025 75,161
Amortization of intangible assets 606,127 564,591
Other 1,689,421 1,585,065
------------- -------------
15,548,053 16,691,226
------------- -------------
Loss before income taxes and minority
interest (5,735,390) (156,943)
Minority interest in net loss of
subsidiary 690 (15,975)
------------- -------------
Loss before (benefit from) provision
for income taxes (5,734,700) (172,918)
(Benefit from) provision for income taxes (1,951,628) 78,403
------------- -------------
Net loss $ (3,783,072) $ (251,321)
============= =============
Basic net loss per share $ (0.37) $ (0.02)
============= =============
Diluted net loss per share $ (0.37) $ (0.02)
============= =============
Weighted average shares outstanding,
basic 10,310,616 10,754,472
============= =============
Weighted average shares outstanding,
diluted 10,310,616 10,754,472
============= =============
SUN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
----------------------------
September 30, September 30,
2008 2007
------------- -------------
(Unaudited) (Unaudited)
Interest and dividend income:
Loans, including fees $ 7,851,286 $ 8,697,131
Securities 1,127,918 935,507
Federal funds sold and other 11,085 242,668
------------- -------------
8,990,289 9,875,306
Interest expense:
Deposits 3,413,080 4,755,384
Federal Home Loan Bank advances 362,331 203,887
Other 390,871 37,546
------------- -------------
4,166,282 4,996,817
------------- -------------
Net interest income before provision for
loan losses 4,824,007 4,878,489
Provision for loan losses 2,200,235 353,694
------------- -------------
Net interest income after provision for
loan losses 2,623,772 4,524,795
Non-interest income:
Service charges on deposit accounts 402,276 419,341
Other income 3,084 76,026
Net losses on sales of securities -- (10,603)
------------- -------------
405,360 484,764
Non-interest expenses:
Salaries and employee benefits 2,352,855 2,701,654
Occupancy and equipment 1,341,266 1,453,027
Data and item processing 180,623 271,373
Professional fees 260,876 339,846
Insurance 139,555 161,572
Advertising 31,977 21,618
Amortization of intangible assets 193,907 229,855
Other 497,906 502,241
------------- -------------
4,998,965 5,681,185
------------- -------------
Loss before income taxes and minority
interest (1,969,833) (671,626)
Minority interest in net loss of
subsidiary 247 (2,440)
------------- -------------
Loss before benefit from income taxes (1,969,586) (674,066)
Benefit from income taxes (646,694) (206,976)
------------- -------------
Net loss $ (1,322,892) $ (467,090)
============= =============
Basic net loss per share $ (0.13) $ (0.04)
============= =============
Diluted net loss per share $ (0.13) $ (0.04)
============= =============
Weighted average shares outstanding,
basic 10,194,303 10,855,621
============= =============
Weighted average shares outstanding,
diluted 10,194,303 10,855,621
============= =============
SUN AMERICAN BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET
For the nine months ended September 30,
------------------------------------------------------
2008 2007
--------------------------- ---------------------------
Avg. Interest Avg.Yield Avg. Interest Avg.Yield
Balance (4) /Rate(3) Balance (4) /Rate(3)
-------- -------- --------- -------- -------- ---------
(Dollars in
thousands)
Assets:
Interest-
earning
assets:
Invest-
ments (1) $ 74,827 $ 3,190 5.68% $ 68,433 $ 2,642 5.16%
Federal funds
sold and other 5,763 110 2.54 18,287 711 5.20
Loans:
Commercial
loans (2) 35,320 1,711 6.45 33,594 2,325 9.25
Commercial
mortgage
loans (2) 302,221 16,331 7.20 259,411 16,696 8.60
Consumer
loans (2) 4,869 260 7.10 4,654 297 8.54
Residential
mortgage
loans (2) 79,757 4,090 6.83 78,941 5,021 8.50
Home equity
and other
loans (2) 31,313 1,521 6.47 22,160 1,160 7.00
-------- -------- --------- -------- -------- ---------
Total loans 453,480 23,913 7.02 398,760 25,499 8.55
-------- -------- -------- --------
Total interest
earning assets 534,070 27,213 6.79 485,480 28,852 7.95
Non-interest
earning assets 84,704 65,530
-------- --------
Total $618,774 $551,010
======== ========
Liabilities and
Stockholders'
Equity:
Interest-
bearing
liabilities:
Deposits:
NOW accounts $ 61,151 1,100 2.40 $ 90,273 2,733 4.05
Money Market
accounts 49,885 1,144 3.06 62,242 2,088 4.49
Savings
accounts 28,733 641 2.97 14,869 398 3.58
Certificates
of deposit 229,686 7,339 4.26 189,480 7,428 5.24
-------- -------- -------- --------
Total
interest-
bearing
deposits 369,455 10,224 3.69 356,864 12,647 4.74
Federal funds
purchased and
securities
sold under
repurchase
agreement 27,944 680 3.24 3,886 119 4.09
Federal Home
Loan Bank
advances 64,748 1,521 4.60 22,737 854 5.02
Notes payable 5,116 177 3.13 -- -- --
-------- -------- -------- --------
Total interest
bearing
liabilities 467,263 12,602 3.59 383,487 13,620 4.75
-------- -------- -------- --------
Non-interest
bearing
liabilities 55,615 68,277
Stockholders'
equity 95,896 99,246
-------- --------
Total $618,774 $551,010
======== ========
Net Interest
income and
yield on net
interest-
earning assets $ 14,611 3.64% $ 15,232 4.19%
======== ========= ======== =========
--------------
(1) Includes investment securities, Federal Reserve Bank stock and
Federal Home Loan Bank stock.
(2) Excludes loans for which the accrual of interest has been
suspended.
(3) Yields and rates are annualized.
(4) Includes fee income on loans.