SANTA ROSA, Calif., April 29, 2010 (GLOBE NEWSWIRE) -- Summit State Bank (Nasdaq:SSBI) today reported net income for the Quarter ended March 31, 2010 of $540,000. On April 26, 2010, the Board of Directors declared a cash dividend of $.09 per common share payable May 21 to shareholders of record on May 11, 2010.
Net Income and Results of Operations
The Bank had net income of $540,000 and net income available for common stockholders, which deducts the preferred dividends, of $402,000, or $0.08 per diluted share, for the quarter ended March 31, 2010 compared to net income of $847,000 and net income available for common stockholders of $751,000, or $0.16 per diluted share, for the quarter ended March 31, 2009.
"Our net income continues to be driven by our expanding relationship base, strengthening of our core operations, and keen attention to gaining greater efficiencies with all our resources. Our focus has resulted in record net interest margins to date in the first quarter," stated Thomas Duryea, President and CEO.
The Bank's net interest margin increased to 4.80% for the three months ended March 31, 2010 compared to 4.33% for the three months ended March 31, 2009. Net interest income increased 5%, to $3,880,000 during the first quarter of 2010 compared to $3,702,000 for the same quarter of 2009. "Our margins continue to improve due largely to our key strategies introduced in the past few years", said CFO, Dennis Kelley.
The provisions for loan losses increased due to the negative current economic conditions, with a provision of $1,010,000 for the first quarter of 2010 compared to $450,000 for the same quarter in 2009, which impacted profit levels. The allowance for loan losses was 1.87% of total loans at March 31, 2010, an increase from 1.62% at December 31, 2009.
Higher operations performance has allowed continued dividends to our shareholders. The Bank's efficiency ratio for the first quarter of 2010 was 55% compared to 54% for the first quarter of 2009.
Nonperforming loans at March 31, 2010 were $11,442,000 compared to $11,653,000 at December 31, 2009. Nonperforming loans to gross loans was 3.94% at March 31, 2010 compared to 3.98% at December 31, 2009. "Nonperforming loans consist of eight borrowers and are primarily secured by real estate," said Guy Dana, Chief Credit Officer.
The Bank's regulatory capital remains well above the required capital ratios with a Tier 1 capital leverage ratio of 15.1%, a Tier 1 risk-based capital ratio of 18.3% and a Total risk-based capital ratio of 19.5% at March 31, 2010
"Based on independent third party bank rating companies including Bauer Financial and Thestreet.com, we remain the top rated bank in Sonoma County. During these times, Sonoma County residents are especially concerned with the Bank's rating, financial strength, and commitment to our local community," stated Mr. Duryea.
Total assets increased to $350,148,000 at March 31, 2010 compared to $340,400,000 at December 31, 2009, as the Bank increased its liquidity position.
"Continuing to be recognized as Sonoma County's Top Rated Bank has enabled us to focus on promoting the Bank in our market area," said Mr. Duryea. "We are gaining key new business relationships attracted by our financial performance, strong capital position, and top quality staff that are committed to our local community and, above all, providing the best service experience to our expanding quality customer base," Mr. Duryea continued.
About Summit State Bank
Summit State Bank has total assets of $350 million and total equity of $56 million at March 31, 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 | ||
| March 31, 2010 | March 31, 2009 | |
| (Unaudited) | (Unaudited) | |
| Interest income: | ||
| Interest and fees on loans | $ 4,473 | $ 4,744 |
| Interest on Federal funds sold | 2 | -- |
| Interest on investment securities and deposits in banks | 359 | 598 |
| Dividends on FHLB stock | 2 | -- |
| Total interest income | 4,836 | 5,342 |
| Interest expense: | ||
| Deposits | 820 | 1,352 |
| FHLB advances | 136 | 288 |
| Total interest expense | 956 | 1,640 |
| Net interest income before provision for loan losses | 3,880 | 3,702 |
| Provision for loan losses | 1,010 | 450 |
| Net interest income after provision for loan losses | 2,870 | 3,252 |
| Non-interest income: | ||
| Service charges on deposit accounts | 93 | 101 |
| Office leases | 126 | 225 |
| Net securities gains | 150 | 28 |
| Loan servicing, net | 12 | 27 |
| Other income | 46 | 25 |
| Total non-interest income | 427 | 406 |
| Non-interest expense: | ||
| Salaries and employee benefits | 1,242 | 1,124 |
| Occupancy and equipment | 389 | 442 |
| Other expenses | 748 | 669 |
| Total non-interest expense | 2,379 | 2,235 |
| Income before provision for income taxes | 918 | 1,423 |
| Provision for income taxes | 378 | 576 |
| Net income | $ 540 | $ 847 |
| Less: preferred dividends | 138 | 96 |
| Net income available for common stockholders | $ 402 | $ 751 |
| Basic earnings per common share | $ 0.08 | $ 0.16 |
| Diluted earnings per common share | $ 0.08 | $ 0.16 |
| Basic weighted average shares of common stock outstanding | 4,745 | 4,745 |
| Diluted weighted average shares of common stock outstanding | 4,762 | 4,745 |
| SUMMIT STATE BANK AND SUBSIDIARY | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (In thousands except share and per share data) | |||
| March 31, | December 31, | March 31, | |
| 2010 | 2009 | 2009 | |
| (Unaudited) | (Unaudited) | ||
| ASSETS | |||
| Cash and due from banks | $ 4,410 | $ 2,933 | $ 2,675 |
| Federal funds sold | 10,800 | -- | -- |
| Total cash and cash equivalents | 15,210 | 2,933 | 2,675 |
|
Available-for-sale investment securities - amortized cost of $28,667 at March 31, 2010 and $27,393 and $41,708 at December 31, and March 31, 2009 |
28,892 | 27,400 | 41,563 |
|
Loans, less allowance for loan losses of $5,422 at March 31, 2010, and $4,737 and $4,442 at December 31, and March 31, 2009 |
284,890 | 288,277 | 297,781 |
| Bank premises and equipment, net | 7,574 | 7,721 | 7,695 |
| Investment in Federal Home Loan Bank stock, at cost | 2,942 | 2,942 | 2,942 |
| Goodwill | 4,119 | 4,119 | 4,119 |
| Accrued interest receivable and other assets | 6,521 | 7,008 | 5,329 |
| Total assets | $ 350,148 | $ 340,400 | $ 362,104 |
| LIABILITIES AND | |||
| SHAREHOLDERS' EQUITY | |||
| Deposits: | |||
| Demand - non interest-bearing | $ 18,336 | $ 15,706 | $ 11,647 |
| Demand - interest-bearing | 22,738 | 22,206 | 17,142 |
| Savings | 14,492 | 12,783 | 11,302 |
| Money market | 36,764 | 43,489 | 26,461 |
| Time deposits, $100 thousand and over | 101,636 | 97,855 | 94,110 |
| Other time deposits | 80,928 | 72,214 | 89,338 |
| Total deposits | 274,894 | 264,253 | 250,000 |
| Federal Home Loan Bank (FHLB) advances | 19,000 | 20,120 | 52,320 |
| Accrued interest payable and other liabilities | 595 | 522 | 4,021 |
| Total liabilities | 294,489 | 284,895 | 306,341 |
| Shareholders' equity | |||
|
Preferred stock, no par value; 20,000,000 shares authorized; shares issued and outstanding - 8,500 in 2010 and 2009; per share redemption of $1,000 for total liquidation preference of $8,500 |
8,021 | 7,989 | 7,898 |
|
Common stock, no par value; shares authorized - 30,000,000; shares issued and outstanding 4,744,720 at March 31, 2010, December 31, 2009 and March 31, 2009 |
36,281 | 36,275 | 36,256 |
| Common stock warrant | 622 | 622 | 622 |
| Retained earnings | 10,590 | 10,615 | 11,076 |
| Accumulated other comprehensive income (loss), net of taxes | 145 | 4 | (89) |
| Total shareholders' equity | 55,659 | 55,505 | 55,763 |
| Total liabilities and shareholders' equity | $ 350,148 | $ 340,400 | $ 362,104 |
| Earnings Summary | ||
| (In Thousands) | ||
| Three Months Ended | ||
| March 31, 2010 | March 31, 2009 | |
| (Unaudited) | (Unaudited) | |
| Statement of Income Data: | ||
| Net interest income | $ 3,880 | $ 3,702 |
| Provision for loan losses | 1,010 | 450 |
| Non-interest income | 427 | 406 |
| Non-interest expense | 2,379 | 2,235 |
| Provision for income taxes | 378 | 576 |
| Net income | $ 540 | $ 847 |
| Less: preferred dividends | 138 | 96 |
| Net income available for common stockholders | $ 402 | $ 751 |
| Selected per Common Share Data: | ||
| Basic earnings per common share | $ 0.08 | $ 0.16 |
| Diluted earnings per common share | $ 0.08 | $ 0.16 |
| Book value per common share (2)(3) | $ 10.04 | $ 10.09 |
| Selected Balance Sheet Data: | ||
| Assets | $ 350,148 | $ 362,104 |
| Loans, net | 284,890 | 297,781 |
| Deposits | 274,894 | 250,000 |
| Average assets | 344,689 | 362,846 |
| Average earnings assets | 327,788 | 346,874 |
| Average shareholders' equity | 55,864 | 55,092 |
| Average common shareholders' equity | 47,252 | 46,587 |
| Nonperforming loans | 11,442 | 3,642 |
| Total nonperforming assets | 11,537 | 3,682 |
| Selected Ratios: | ||
| Return on average assets (1) | 0.64% | 0.95% |
| Return on average common equity (1) | 3.45% | 6.54% |
| Return on average common tangible equity (1) | 3.78% | 7.17% |
| Efficiency ratio | 55.24% | 54.41% |
| Net interest margin (1) | 4.80% | 4.33% |
| Tier 1 leverage captial ratio | 15.08% | 14.41% |
| Tier 1 risk-based captial ratio | 18.29% | 17.68% |
| Total risk-based captial ratio | 19.53% | 18.93% |
| Common dividend payout ratio (4) | 106.22% | 56.86% |
| Average equity to average assets | 16.21% | 15.18% |
| Nonperforming loans to total loans (2) | 3.94% | 1.21% |
| Nonperforming assets to total assets (2) | 3.29% | 1.02% |
| Allowance for loan losses to total loans (2) | 1.87% | 1.47% |
| Allowance for loan losses to nonperforming loans (2) | 47.39% | 121.97% |
| (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 | ||