SANTA ROSA, Calif., April 29, 2013 (GLOBE NEWSWIRE) -- Summit State Bank (Nasdaq:SSBI) today reported net income for the quarter ended March 31, 2013 of $1,002,000, a 64% increase over the quarter ended March 31, 2012. A quarterly dividend of $0.11 per share was declared for common shareholders.
Dividend
The Board of Directors today declared an $0.11 quarterly dividend to be paid on May 23, 2013 to shareholders of record on May 15, 2013. This represents a $0.02 increase in the Bank's regular quarterly dividend.
Net Income and Results of Operations
The Bank had net income of $1,002,000 and net income available for common stockholders of $862,000, or $0.18 per diluted share, for the quarter ended March 31, 2013 compared to net income of $613,000 and net income available for common stockholders of $441,000, or $0.09 per diluted share, for the quarter ended March 31, 2012.
"Our profitability increase continues to be driven by the quality of the Summit team's care and expertise in building and supporting growth opportunities for our clients. This has resulted in increasing profitability of many of our clients resulting in increasing profitability of the bank. Our client's success, drives our success," said Tom Duryea, President & CEO
Net interest income increased 2% at $4,115,000 for the first quarter of 2013 compared to $4,023,000 for the same quarter in 2012. Increase in average earning assets between the quarters was 14%, which offset the net interest margin compression experienced in the current low interest rate environment. Net interest margin was 3.93% for the first quarter of 2013 compared to 4.34% in the first quarter of 2012.
Noninterest income was $363,000 in the first quarter of 2013 compared to $1,070,000 in the first quarter of 2012. The first quarter of 2012 benefitted from gains on securities of $702,000.
Total assets increased 8% to $438,266,000 at March 31, 2013 compared to $406,830,000 at March 31, 2012. The asset growth was funded in part by a $17,651,000 increase in deposits. The mix of deposits changed between the periods in favor of demand, savings and money market deposits now comprising 51% of total deposits at March 31, 2013 compared to 45% at March 31, 2012.
"Our continuing focus on attracting meaningful full banking relationships, with demand, savings, and money market accounts as a defining part of any banking relationship, continues to play an important role in helping lower our cost of funds to drive long term bank performance," said Dennis Kelley, Chief Financial Officer.
The Bank's efficiency ratio, which expresses operating costs as a percentage of revenues, was 62% for the first quarter of 2013 compared to 59% for the same quarter in 2012. Operating expense between the quarters increased 6.7% with $2,773,000 in operating expense in 2013 compared to $2,600,000 in 2012. The operating expense increase was due in part to increased loan staffing to better serve present and future loan requests as the local economy continues to improve.
"We are experiencing a noticeable pickup in quality loan inquiries over the past 2 to 3 months, particularly in commercial real estate and construction, which typically has a positive multiplier effect benefitting our local economy. In addition, we are allocating more resources to expand our servicing of our local wineries and vineyards that are key drivers of the Sonoma County experience," said Bill Fogarty, Chief Credit Officer
Gross loans were $280,172,000 at March 31, 2013 compared to $274,077,000 at March 31, 2012. Loan totals from new loan generation was partially offset as problem loans were worked out of the Bank during 2012. Additionally, new loan generation and the retention of current commercial real estate loans are experiencing increased competition.
The Bank recorded no provision for loan losses for the first quarter of 2013 as it also did in the fourth quarter of 2012. In the first quarter of 2012, the loan loss provision was $1,450,000. The coverage of allowance for loan losses to gross loans was 2.13% at March 31, 2013 compared to 2.49% at March 31, 2012. Nonperforming assets at March 31, 2013 declined to $9,956,000 from $14,245,000 for March 31, 2013 compared to March 31, 2012. This represents a decline in nonperforming assets to total assets of 2.3% compared to 3.5%. Nonperforming assets at March 31, 2013 included $4,973,000 in loans on non-accrual and $4,983,000 in OREO. Nonaccrual loans are primarily collateralized by commercial real estate and OREO consisted of three properties and have been written down to the expected disposal value.
The Bank's regulatory capital remains well above the required capital ratios with a Tier 1 capital leverage ratio of 13.3%, a Tier 1 risk-based capital ratio of 17.4% and a Total risk-based capital ratio of 18.7% at March 31, 2013.
About Summit State Bank
Summit State Bank has total assets of $438 million and total equity of $63 million at March 31, 2013. Headquartered in Sonoma County, the Bank provides diverse financial products and services throughout Sonoma, Napa, San Francisco, and Marin Counties. Summit State Bank received the 2012 Community Bank Award from the American Bankers Association for its nonprofit work. In addition, Summit has been recognized with the Gold Medal award for Best Business Bank from the Northbay Biz Magazine and as one of the North Bay's Best Places to Work by the North Bay Business Journal. Summit has also been consistently recognized as a high performing bank by Findley Reports. Summit State Bank's stock is traded on the Nasdaq Global Market under the symbol SSBI. Further information can be found at www.summitstatebank.com.
Forward-looking Statements
Except for historical information contained herein, the statements contained in this news release, are forward-looking statements within the meaning of the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank will be conducting its operations, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. You should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
| SUMMIT STATE BANK AND SUBSIDIARY | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (In thousands, except for earnings per share data) | ||
| Three Months Ended | ||
| March 31, 2013 | March 31, 2012 | |
| (Unaudited) | (Unaudited) | |
| Interest income: | ||
| Interest and fees on loans | $ 3,610 | $ 3,790 |
| Interest on Federal funds sold | -- | -- |
| Interest on investment securities and deposits in banks | 867 | 845 |
| Dividends on FHLB stock | 13 | 2 |
| Total interest income | 4,490 | 4,637 |
| Interest expense: | ||
| Deposits | 351 | 526 |
| FHLB advances | 24 | 88 |
| Total interest expense | 375 | 614 |
| Net interest income before provision for loan losses | 4,115 | 4,023 |
| Provision for loan losses | -- | 1,450 |
| Net interest income after provision for loan losses | 4,115 | 2,573 |
| Non-interest income: | ||
| Service charges on deposit accounts | 139 | 123 |
| Office leases | 125 | 136 |
| Net securities gains | 2 | 702 |
| Net gain (loss) on sale of other real estate owned | -- | -- |
| Loan servicing, net | 4 | 6 |
| Other income | 93 | 103 |
| Total non-interest income | 363 | 1,070 |
| Non-interest expense: | ||
| Salaries and employee benefits | 1,432 | 1,386 |
| Occupancy and equipment | 408 | 371 |
| Other expenses | 933 | 843 |
| Total non-interest expense | 2,773 | 2,600 |
| Income before provision for income taxes | 1,705 | 1,043 |
| Provision for income taxes | 703 | 430 |
| Net income | $ 1,002 | $ 613 |
| Less: preferred dividends | 140 | 172 |
| Net income available for common stockholders | $ 862 | $ 441 |
| Basic earnings per common share | $ 0.18 | $ 0.09 |
| Diluted earnings per common share | $ 0.18 | $ 0.09 |
| Basic weighted average shares of common stock outstanding | 4,746 | 4,745 |
| Diluted weighted average shares of common stock outstanding | 4,776 | 4,745 |
| SUMMIT STATE BANK AND SUBSIDIARY | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (In thousands except share and per share data) | |||
| March 31 | December 31, | March 31 | |
| 2013 | 2012 | 2012 | |
| (Unaudited) | (Unaudited) | ||
| ASSETS | |||
| Cash and due from banks | $ 14,888 | $ 19,979 | $ 18,771 |
| Total cash and cash equivalents | 14,888 | 19,979 | 18,771 |
| Time deposits with banks | 2,977 | 2,977 | -- |
| Investment securities: | |||
| Held-to-maturity, at amortized cost | 17,055 | -- | -- |
| Available-for-sale (at fair market value; amortized cost of $104,908, $123,026 and $95,271) | 107,706 | 125,714 | 95,795 |
| Total investment securities | 124,761 | 125,714 | 95,795 |
| Loans, less allowance for loan losses of $5,967, $5,749 and $6,835 | 274,205 | 275,877 | 267,242 |
| Bank premises and equipment, net | 5,009 | 5,160 | 6,596 |
| Investment in Federal Home Loan Bank stock, at cost | 2,265 | 2,265 | 2,085 |
| Goodwill | 4,119 | 4,119 | 4,119 |
| Other Real Estate Owned | 4,983 | 4,845 | 5,125 |
| Accrued interest receivable and other assets | 5,059 | 3,960 | 7,097 |
| Total assets | $ 438,266 | $ 444,896 | $ 406,830 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Deposits: | |||
| Demand - non interest-bearing | $ 54,911 | $ 58,548 | $ 42,551 |
| Demand - interest-bearing | 39,237 | 29,059 | 26,844 |
| Savings | 23,272 | 23,257 | 20,649 |
| Money market | 56,211 | 56,669 | 56,087 |
| Time deposits, $100 thousand and over | 120,762 | 128,785 | 128,020 |
| Other time deposits | 47,861 | 44,686 | 50,452 |
| Total deposits | 342,254 | 341,004 | 324,603 |
| Federal Home Loan Bank (FHLB) advances | 30,000 | 40,000 | 21,000 |
| Accrued interest payable and other liabilities | 2,579 | 1,022 | 850 |
| Total liabilities | 374,833 | 382,026 | 346,453 |
| Shareholders' equity | |||
| Preferred stock, no par value; 20,000,000 shares authorized; shares issued and outstanding - 13,750 Series B; per share redemption of $1,000 for total liquidation preference of $13,750 | 13,666 | 13,666 | 13,666 |
| Common stock, no par value; shares authorized - 30,000,000 shares; issued and outstanding 4,745,998, 4,744,720 and 4,744,720 | 36,459 | 36,396 | 36,364 |
| Retained earnings | 11,685 | 11,250 | 10,044 |
| Accumulated other comprehensive income, net of taxes | 1,623 | 1,558 | 303 |
| Total shareholders' equity | 63,433 | 62,870 | 60,377 |
| Total liabilities and shareholders' equity | $ 438,266 | $ 444,896 | $ 406,830 |
| Earnings Summary | ||
| (In Thousands) | ||
| Three Months Ended | ||
| March 31, 2013 | March 31, 2012 | |
| (Unaudited) | (Unaudited) | |
| Statement of Income Data: | ||
| Net interest income | $ 4,115 | $ 4,023 |
| Provision for loan losses | -- | 1,450 |
| Non-interest income | 363 | 1,070 |
| Non-interest expense | 2,773 | 2,600 |
| Provision for income taxes | 703 | 430 |
| Net income | $ 1,002 | $ 613 |
| Less: preferred dividends | 140 | 172 |
| Net income available for common stockholders | $ 862 | $ 441 |
| Selected per Common Share Data: | ||
| Basic earnings per common share | $ 0.18 | $ 0.09 |
| Diluted earnings per common share | $ 0.18 | $ 0.09 |
| Dividend per share | $ 0.09 | $ 0.09 |
| Book value per common share (2)(3) | $ 10.49 | $ 9.84 |
| Selected Balance Sheet Data: | ||
| Assets | $ 438,266 | $ 406,830 |
| Loans, net | 274,205 | 267,242 |
| Deposits | 342,254 | 324,603 |
| Average assets | 437,831 | 391,165 |
| Average earning assets | 424,328 | 373,102 |
| Average shareholders' equity | 63,201 | 61,250 |
| Average common shareholders' equity | 49,535 | 47,584 |
| Nonperforming loans | 4,973 | 9,120 |
| Other real estate owned | 4,983 | 5,125 |
| Total nonperforming assets | 9,956 | 14,245 |
| Troubled debt restructures (accruing) | 5,892 | 5,942 |
| Selected Ratios: | ||
| Return on average assets (1) | 0.93% | 0.63% |
| Return on average common equity (1) | 7.06% | 3.73% |
| Efficiency ratio (4) | 61.95% | 59.21% |
| Net interest margin (1) | 3.93% | 4.34% |
| Tier 1 leverage capital ratio | 13.3% | 14.5% |
| Tier 1 risk-based capital ratio | 17.4% | 17.7% |
| Total risk-based capital ratio | 18.7% | 19.0% |
| Common dividend payout ratio (5) | 49.54% | 96.83% |
| Average equity to average assets | 14.44% | 15.66% |
| Nonperforming loans to total loans (2) | 1.78% | 3.33% |
| Nonperforming assets to total assets (2) | 2.27% | 3.50% |
| Allowance for loan losses to total loans (2) | 2.13% | 2.49% |
| Allowance for loan losses to nonperforming loans (2) | 119.99% | 74.94% |
| (1) Annualized | ||
| (2) As of period end | ||
| (3) Total shareholders' equity, less preferred stock, divided by total common shares outstanding | ||
| (4) Excludes securities gains | ||
| (5) Common dividends divided by net income available for common stockholders | ||