BERNARDSVILLE, N.J., July 25, 2008 (PRIME NEWSWIRE) -- Somerset Hills Bancorp (Nasdaq:SOMH) reported net income for the quarter and six months ended June 30, 2008. For the quarter ended June 30, 2008, net income was $367,000, or $0.07 per diluted share compared to $0.10 per diluted share during the second quarter 2007. For the six months ended June 30, 2008, net income was $811,000, or $0.15 per diluted share compared to $0.19 per diluted share for the six months ending June 30, 2007.
The Company's net interest income increased in both the quarterly and six month periods, to $2.7 million in the current quarter and $5.3 million for the first six months of 2008. These increases were offset by declines in non-interest income and increased non-interest expense and an increase in the provision for loan losses. The increase in the provision reflects the increase in our non performing assets.
At June 30, 2008, loans increased $10.0 million, or 5.0% to $209.1 million from $199.1 million when compared to June 30, 2007. At June 30, 2008, deposits decreased $18.4 million, or 7.3% to $234.7 million from $253.1 when compared to June 30, 2007. The decrease in deposits is primarily related to the payout of funds held in accounts at the Bank pending consummation of certain customer transactions that closed during the second quarter and the run off of time deposits originated at promotional rates in connection with the opening of the Bank's Long Valley and Madison branches. The Bank also increased its borrowed funds to $11 million at June 30, 2008, from no borrowed funds at June 30, 2007. The increase reflects a strategic asset liability decision made during the fourth quarter of 2007 and the first quarter of 2008 to utilize borrowings as a cost efficient source of funding. During the same period the net interest margin increased from 3.91% to 4.19%. Core deposits represent 86.2% of total deposits at June 30, 2008.
At June 30, 2008, total assets were $283.5 million, compared to $291.5 million at June 30, 2007. The decline in assets reflects the decline in deposits described above.
Stewart E. McClure, Jr., President and Chief Executive Officer said "During the first half of 2008, the difficult economic conditions continue and this has made for an extremely challenging operating environment for banks. Loan demand remains weak and competition for deposits is fierce. As I mentioned in our first quarter release, this is a time to be cautious, with our focus on credit quality, improving technology and operations and taking a close look at expenses. With that in mind I am pleased that non-performers and OREO were reduced during the second quarter, to $2.4 million from $2.8 million, and our non interest expenses for the quarter grew only 0.8% over the same period last year. Our net interest margin of 4.19% and core deposit ratio of 86% are gratifying in this market. We also introduced our new remote deposit product named EZ SCAN and we're excited about the opportunities this provides to enhance existing relationships and attract new ones. Although no one can predict with certainty when the economy will turn around, we are grateful to face these challenges in a relatively strong geographic area and with a great franchise, from a profitable operation, and with a significant amount of capital."
Somerset Hills Bancorp also declared a cash dividend of $0.05 per share payable August 29, 2008 to shareholders of record as of August 15, 2008.
Somerset Hills Bancorp is a bank holding company for Somerset Hills Bank, a full service commercial bank with offices in Bernardsville, Long Valley, Madison, Mendham, Morristown, and Summit, New Jersey. Somerset Hills Bank focuses its lending activities on small to medium sized businesses, high net worth individuals, professional practices, and consumer and retail customers. The Bank operates a licensed mortgage company subsidiary, Sullivan Financial Services, Inc. and also operates Somerset Hills Wealth Management Services, LLC, a wholly owned subsidiary licensed to provide financial services, including financial planning, insurance (life, health, property and casualty), mutual funds and annuities for individuals and commercial accounts, and Somerset Hills Title Group, LLC, which, with its partner, Property Title Group, provides title services in connection with the closing of real estate transactions. The common stock of the company is traded on NASDAQ Global Market under the symbol SOMH. You can visit our website at www.somersethillsbank.com.
SOMERSET HILLS BANCORP Selected Consolidated Financial Data (Unaudited) ($ in thousands except per share data) Six Months Ended June 30 2008 2007 -------- -------- Income Statement Data: Interest income $ 7,632 $ 8,865 Interest expense 2,294 3,710 -------- -------- Net interest income 5,338 5,155 Provision for loan losses 215 0 -------- -------- Net interest income after prov. for loan losses 5,123 5,155 Non-interest income 987 1,272 Non-interest expense 4,976 4,901 -------- -------- Income before income taxes 1,134 1,526 Income tax expense 323 470 -------- -------- Net income $ 811 $ 1,056 ======== ======== Balance Sheet Data: Total assets $283,517 $291,452 Loans, net 206,163 196,819 Loans held for sale 4,419 9,286 Allowance for loan losses 3,041 2,170 Investment securities held to maturity 12,056 13,420 Investment securities held for sale 25,949 36,726 Deposits 234,735 253,079 Borrowings 11,000 0 Shareholders' equity 36,510 37,152 Performance Ratios: Return on average assets 0.59% 0.73% Return on average equity 4.39% 5.60% Net interest margin 4.19% 3.91% Efficiency ratio 78.68% 76.3% Asset Quality: Nonaccrual loans 2,100 217 OREO property 260 0 Net charge-offs (recoveries) 375 0 Allowance for loan losses to total loans 1.45% 1.09% Nonperforming loans to total loans 1.00% 0.11% Per Share Data: Earnings per share- Basic $ 0.16 $ 0.20 Earnings per share- Diluted $ 0.15 $ 0.19 Book value per share $ 7.08 $ 7.19 Tangible book value $ 7.08 $ 6.95 SOMERSET HILLS BANCORP Statement of Operations (in thousands, except per share data) (unaudited) Three Three Six Six months months months months ended ended ended ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ------ ------ ------ ------ INTEREST INCOME Loans, including fees $3,168 $3,617 $6,605 $7,162 Federal funds sold 51 203 87 347 Investment securities 457 649 929 1,326 Cash and due from banks 5 16 11 30 ------ ------ ------ ------ Total interest income 3,681 4,485 7,632 8,865 INTEREST EXPENSE Deposits 913 1,874 2,112 3,708 Federal Home Loan Bank advances 92 -- 182 2 ------ ------ ------ ------ Total interest expense 1,005 1,874 2,294 3,710 ------ ------ ------ ------ Net Interest Income 2,676 2,611 5,338 5,155 PROVISION FOR LOAN LOSSES 145 -- 215 -- ------ ------ ------ ------ Net interest income after provision for loan losses 2,531 2,611 5,123 5,155 ------ ------ ------ ------ NON-INTEREST INCOME Service fees on deposit accounts 76 90 142 169 Gains on sales of mortgage loans, net 288 423 545 838 Other income 158 161 300 265 ------ ------ ------ ------ Total Non-Interest Income 522 674 987 1,272 ------ ------ ------ ------ NON-INTEREST EXPENSE Salaries and employee benefits 1,310 1,334 2,615 2,594 Occupancy expense 474 468 958 922 Advertising & business promotions 84 114 144 226 Printing stationery and supplies 54 69 97 135 Data processing 142 127 281 262 Other operating expense 475 406 881 762 ------ ------ ------ ------ Total Non-Interest Expense 2,539 2,518 4,976 4,901 ------ ------ ------ ------ Income before provision for taxes 514 767 1,134 1,526 PROVISION FOR INCOME TAX 147 231 323 470 ------ ------ ------ ------ Net income $ 367 $ 536 $ 811 $1,056 ====== ====== ====== ====== Per share data Net income - basic $ 0.07 $ 0.10 $ 0.16 $ 0.20 ====== ====== ====== ====== Net income - diluted $ 0.07 $ 0.10 $ 0.15 $ 0.19 ====== ====== ====== ====== Per share data reflects a 5% stock dividend which was effective May 31, 2008 SOMERSET HILLS BANCORP Balance Sheets (in thousands, except for share data) June 30, December 31, 2008 2007 --------- --------- (Unaudited) (Unaudited) ASSETS Cash and due from banks $ 12,463 $ 12,009 Interest bearing deposits 236 60 Federal funds sold 4,100 5,800 --------- --------- Total cash and cash equivalents 16,799 17,869 Loans held for sale,net 4,419 3,063 Investment securities held to maturity (Market value $ 11,736 in 2008 and $ 13,531 in 2007) 12,056 13,646 Investment securities available- for-sale 25,949 27,954 Loans receivable 209,071 208,376 less allowance for loan losses (3,041) (3,201) deferred costs 133 82 --------- --------- Net loans receivable 206,163 205,257 Premises and equipment, net 6,253 6,343 Bank owned life insurance 8,284 8,111 Accrued interest receivable 1,203 1,435 Deferred tax asset 824 723 Other assets 1,567 1,069 --------- --------- Total assets $ 283,517 $ 285,470 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits Non-interest bearing deposits-demand $ 48,712 $ 53,783 Interest bearing deposits-NOW, money market and savings 153,695 159,462 Certificates of deposit, under $100,000 18,268 19,170 Certificates of deposit, $100,000 and over 14,060 12,258 --------- --------- Total deposits 234,735 244,673 --------- --------- Federal Home Loan Bank advances 11,000 3,000 Accrued interest payable 429 523 Taxes Payable 163 -- Other liabilities 680 653 --------- --------- Total liabilities 247,007 248,849 --------- --------- Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock-1,000,000 shares authorized; none issued -- -- *Common stock- authorized, 9,000,000 shares of no par value;issued and outstanding, 5,155,810 shares in 2008 and 5,176,586 in 2007 37,245 37,513 Accumulated deficit (565) (896) Accumulated other comprehensive (loss) income (170) 4 --------- --------- Total stockholders' equity 36,510 36,621 --------- --------- Total liabilities and stockholders' equity $ 283,517 $ 285,470 ========= ========= *Restated to reflect 5% stock dividend