SANTA ROSA, Calif., July 29, 2010 (GLOBE NEWSWIRE) -- Summit State Bank (Nasdaq:SSBI) today reported net income for the Quarter ended June 30, 2010 of $506,000. The Board of Directors declared a cash dividend of $.09 per common share payable August 23, 2010 to shareholders of record on August 11, 2010.
Net Income and Results of Operations
The Bank had net income of $506,000 and net income available for common stockholders, which deducts the preferred dividends, of $368,000, or $0.08 per diluted share, for the quarter ended June 30, 2010 compared to net income of $713,000 and net income available for common stockholders of $575,000, or $0.12 per diluted share, for the quarter ended June 30, 2009. Net income available for common and diluted earnings per share for the six months ended June 30, 2010 were $770,000 or $0.16 compared to $1,325,000 or $0.28 for the same period in 2009.
"Continuing strong operating results driven by our disciplined asset and liability side initiatives were tempered by the increase in the allowance for loan losses and credit expenses related to former transaction credit focus and present economic conditions," stated Thomas Duryea, President and CEO.
The Bank's net interest margin was 4.56% for the three months ended June 30, 2010 compared to 4.53% for the three months ended June 30, 2009. Net interest income was stable at $3,795,000 during the second quarter of 2010 compared to $3,872,000 for the same quarter of 2009.
The Bank's regulatory capital remains well above the required capital ratios with a Tier 1 capital leverage ratio of 14.7%, a Tier 1 risk-based capital ratio of 18.1% and a Total risk-based capital ratio of 19.4% at June 30, 2010.
"Continued strong core operations and strong capital ratios have allowed continued dividends to our shareholders," said Dennis Kelley, Chief Financial Officer.
The provisions for loan losses increased with a provision of $700,000 for the second quarter of 2010 compared to $550,000 for the same quarter in 2009. The provision was $1,710,000 compared to $1,000,000 for the six months ended June 30, 2010 and 2009. These provisions increased the allowance for loan losses to 1.98% of total loans at June 30, 2010 from 1.62% at December 31, 2009.
Nonperforming loans at June 30, 2010 were $10,683,000 compared to $11,653,000 at December 31, 2009. Nonperforming loans to gross loans were 3.68% at June 30, 2010 compared to 3.98% at December 31, 2009. "Nonperforming loans consist of eight borrowers and are primarily secured by real estate. Problem loans have been leveling, but we remain ever cautious during these economic times," said Guy Dana, Chief Credit Officer.
Total assets increased to $360,974,000 at June 30, 2010 compared to $340,400,000 at December 31, 2009, as the Bank increased its liquidity position.
Core deposits, defined as demand, savings and money market deposits, increased 43% to $98,691,000 at June 30, 2010 from $69,064,000 at June 30, 2009, which reflects the Bank's relationship focus.
"Continuing to be recognized as Sonoma County's Top Rated Bank by Bauer Financial has enabled us to attract new full banking relationships in our local communities. We continue to replace transaction based loans with loans that involve banking relationships, growing our core deposits accordingly, which will strengthen the Bank's future earnings stream."
About Summit State Bank
Summit State Bank has total assets of $361 million and total equity of $56 million at June 30, 2010. Headquartered in Sonoma County, the Bank provides diverse financial products and services throughout Sonoma, Napa, San Francisco, and Marin Counties. 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 | Six Months Ended | |||
| June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Interest income: | ||||
| Interest and fees on loans | $ 4,371 | $ 4,845 | $ 8,844 | $ 9,589 |
| Interest on Federal funds sold | 6 | -- | 8 | -- |
| Interest on investment securities and deposits in banks | 339 | 446 | 698 | 1,044 |
| Dividends on FHLB stock | 2 | -- | 4 | -- |
| Total interest income | 4,718 | 5,291 | 9,554 | 10,633 |
| Interest expense: | ||||
| Deposits | 787 | 1,149 | 1,607 | 2,501 |
| FHLB advances | 136 | 270 | 272 | 558 |
| Total interest expense | 923 | 1,419 | 1,879 | 3,059 |
| Net interest income before provision for loan losses | 3,795 | 3,872 | 7,675 | 7,574 |
| Provision for loan losses | 700 | 550 | 1,710 | 1,000 |
| Net interest income after provision for loan losses | 3,095 | 3,322 | 5,965 | 6,574 |
| Non-interest income: | ||||
| Service charges on deposit accounts | 96 | 98 | 189 | 199 |
| Office leases | 134 | 114 | 260 | 339 |
| Net securities gains | -- | -- | 150 | 28 |
| Loan servicing, net | 10 | 11 | 22 | 38 |
| Other income | 11 | 2 | 57 | 27 |
| Total non-interest income | 251 | 225 | 678 | 631 |
| Non-interest expense: | ||||
| Salaries and employee benefits | 1,177 | 1,049 | 2,419 | 2,173 |
| Occupancy and equipment | 402 | 407 | 791 | 849 |
| Other expenses | 853 | 859 | 1,601 | 1,528 |
| Total non-interest expense | 2,432 | 2,315 | 4,811 | 4,550 |
| Income before provision for income taxes | 914 | 1,232 | 1,832 | 2,655 |
| Provision for income taxes | 408 | 519 | 786 | 1,095 |
| Net income | $ 506 | $ 713 | $ 1,046 | $ 1,560 |
| Less: preferred dividends | 138 | 138 | 276 | 235 |
| Net income available for common stockholders | $ 368 | $ 575 | $ 770 | $ 1,325 |
| Basic earnings per common share | $ 0.08 | $ 0.12 | $ 0.16 | $ 0.28 |
| Diluted earnings per common share | $ 0.08 | $ 0.12 | $ 0.16 | $ 0.28 |
| Basic weighted average shares of common stock outstanding | 4,745 | 4,745 | 4,745 | 4,745 |
| Diluted weighted average shares of common stock outstanding | 4,795 | 4,764 | 4,781 | 4,749 |
| SUMMIT STATE BANK AND SUBSIDIARY | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (In thousands except share and per share data) | |||
| June 30, 2010 | December 31, 2009 | June 30, 2009 | |
| (Unaudited) | (Unaudited) | ||
| ASSETS | |||
| Cash and due from banks | $ 4,610 | $ 2,933 | $ 2,364 |
| Federal funds sold | 13,200 | -- | -- |
| Total cash and cash equivalents | 17,810 | 2,933 | 2,364 |
| Available-for-sale investment securities - amortized cost of $35,132 at June 30, 2010 and $27,393 and $32,699 at December 31, and June 30, 2009 | 36,177 | 27,400 | 32,050 |
| Loans, less allowance for loan losses of $5,741 at June 30, 2010 and $4,737 and $4,415 at December 31, and June 30, 2009 | 284,711 | 288,277 | 300,070 |
| Bank premises and equipment, net | 7,493 | 7,721 | 7,697 |
| Investment in Federal Home Loan Bank stock, at cost | 2,832 | 2,942 | 2,941 |
| Goodwill | 4,119 | 4,119 | 4,119 |
| Accrued interest receivable and other assets | 7,832 | 7,008 | 6,678 |
| Total assets | $ 360,974 | $ 340,400 | $ 355,919 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Deposits: | |||
| Demand - non interest-bearing | $ 22,928 | $ 15,706 | $ 12,722 |
| Demand - interest-bearing | 24,588 | 22,206 | 17,905 |
| Savings | 11,743 | 12,783 | 11,479 |
| Money market | 39,432 | 43,489 | 26,958 |
| Time deposits, $100 thousand and over | 95,860 | 97,855 | 89,460 |
| Other time deposits | 90,525 | 72,214 | 97,831 |
| Total deposits | 285,076 | 264,253 | 256,355 |
| Federal Home Loan Bank (FHLB) advances | 19,000 | 20,120 | 42,950 |
| Accrued interest payable and other liabilities | 797 | 522 | 959 |
| Total liabilities | 304,873 | 284,895 | 300,264 |
| Shareholders' equity | |||
| Preferred stock, no par value; 20,000,000 shares authorized; shares issued and outstanding - 8,500 in 2009 and 2008; per share redemption of $1,000 for total liquidation preference of $8,500 | 8,053 | 7,989 | 7,927 |
| Common stock, no par value; shares authorized - 30,000,000 shares; issued and outstanding 4,744,720 at June 30, 2010, December 31, 2009 and June 30, 2009 | 36,289 | 36,275 | 36,262 |
| Common stock warrants | 622 | 622 | 622 |
| Retained earnings | 10,531 | 10,615 | 11,223 |
| Accumulated other comprehensive income (loss), net of taxes | 606 | 4 | (379) |
| Total shareholders' equity | 56,101 | 55,505 | 55,655 |
| Total liabilities and shareholders' equity | $ 360,974 | $ 340,400 | $ 355,919 |
| Earnings Summary | ||||
| (In Thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Statement of Income Data: | ||||
| Net interest income | $ 3,795 | $ 3,872 | $ 7,675 | $ 7,574 |
| Provision for loan losses | 700 | 550 | 1,710 | 1,000 |
| Non-interest income | 251 | 225 | 678 | 631 |
| Non-interest expense | 2,432 | 2,315 | 4,811 | 4,550 |
| Provision for income taxes | 408 | 519 | 786 | 1,095 |
| Net income | $ 506 | $ 713 | $ 1,046 | $ 1,560 |
| Less: preferred dividends | 138 | 138 | 276 | 235 |
| Net income available for common stockholders | $ 368 | $ 575 | $ 770 | $ 1,325 |
| Selected per Common Share Data: | ||||
| Basic earnings per common share | $ 0.08 | $ 0.12 | $ 0.16 | $ 0.28 |
| Diluted earnings per common share | $ 0.08 | $ 0.12 | $ 0.16 | $ 0.28 |
| Book value per common share (2)(3) | $ 10.13 | $ 10.06 | $ 10.13 | $ 10.06 |
| Selected Balance Sheet Data: | ||||
| Assets | $ 360,974 | $ 355,919 | $ 360,974 | $ 355,919 |
| Loans, net | 284,711 | 300,070 | 284,711 | 300,070 |
| Deposits | 285,076 | 256,355 | 285,076 | 256,355 |
| Average assets | 352,380 | 357,568 | 348,591 | 360,192 |
| Average earnings assets | 334,098 | 343,185 | 330,949 | 349,291 |
| Average shareholders equity | 55,989 | 56,085 | 55,927 | 56,368 |
| Average common shareholders equity | 48,290 | 47,916 | 47,298 | 47,846 |
| Nonperforming loans | 10,683 | 3,886 | 10,683 | 3,886 |
| Total nonperforming assets | 10,683 | 3,927 | 10,683 | 3,927 |
| Selected Ratios: | ||||
| Return on average assets (1) | 0.58% | 0.80% | 0.61% | 0.87% |
| Return on average common equity (1) | 4.20% | 5.10% | 4.46% | 5.58% |
| Return on average common tangible equity (1) | 4.59% | 5.50% | 4.89% | 6.02% |
| Efficiency ratio | 60.11% | 56.50% | 57.60% | 55.45% |
| Net interest margin (1) | 4.56% | 4.53% | 4.68% | 4.37% |
| Tier 1 leverage capital ratio | 14.7% | 14.7% | 14.7% | 14.7% |
| Tier 1 risk-based capital ratio | 18.1% | 17.7% | 18.1% | 17.7% |
| Total risk-based capital ratio | 19.4% | 18.9% | 19.4% | 18.9% |
| Common dividend payout ratio (4) | 116.03% | 74.26% | 110.91% | 64.45% |
| Average equity to average assets | 15.89% | 15.69% | 16.04% | 15.65% |
| Nonperforming loans to total loans (2) | 3.68% | 1.28% | 3.68% | 1.28% |
| Nonperforming assets to total assets (2) | 2.96% | 1.10% | 2.96% | 1.10% |
| Allowance for loan losses to total loans (2) | 1.98% | 1.45% | 1.98% | 1.45% |
| Allowance for loan losses to nonperforming loans (2) | 53.74% | 113.61% | 53.74% | 113.61% |
| (1) Annualized. | ||||
| (2) As of period end | ||||
| (3) Total shareholders' equity less, preferred stock, divided by total common shares outstanding | ||||
| (4) common dividends divided by net income available for common stockholders | ||||