Stonegate Bank (OTCBB: SGBK)
Second Quarter 2013 Highlights:
- Total assets of $1.09 billion
- Net income of $2,265,000 for the second quarter of 2013
- 30 straight quarters of profitability
- Second quarter 2013 average net interest margin of 3.72%
- Tier 1 risk based capital ratio of 15.75% at June 30, 2013
Stonegate Bank (OTCBB: SGBK) reported an increase in net income
in the second quarter of 2013 over the second quarter of 2012. Net
income was $2,265,000 or 27.5 cents per share for the second
quarter of 2013, as compared to net income of $2,250,000 or 27.3
cents per share in the second quarter of 2012. The Bank earned
$4,558,000 or 55.3 cents per share for the first six months of
2013, as compared to $4,491,000 or 54.5 cents per share in the
first six months of 2012.
Income and Expenses: Total interest income
increased from $10.1 million in the second quarter of 2012 to $10.8
million in the second quarter of 2013. Total interest expense
decreased from $1.9 million in the second quarter of 2012 to $1.8
million in the second quarter of 2013. This decrease occurred even
though total deposits increased $174 million period to period.
Further, the Bank's cost of funds decreased 24 basis points period
to period, which led to an increase in net interest income from
$8.2 million in the second quarter of 2012 to $9.0 million in the
second quarter of 2013.
Total non-interest income decreased to $760,000 in the second
quarter of 2013 from $1.1 million in the second quarter of
2012.
The Bank realized security gains of $160,000 in the second
quarter of 2013. These gains were taken largely to reduce risk and
the overall size of the investment portfolio.
Non-interest expense increased slightly to $5.7 million for the
second quarter of 2013 from $5.6 million for the second quarter of
2012.
Margin and Cost of Funds: Total cost of
funds declined from a 1.00% June 2012 month to date average to a
0.76% June 2013 month to date average. Stonegate Bank's net
interest margin declined from a June 2012 month to date average of
4.02% to 3.72% for June 2013 month to date average. Excess
liquidity of $120 million largely accounted for the margin
decrease. The Bank had approximately $9.3 million in non-accretable
discounts and $6 million in unamortized discounts at June 30,
2013.
Balance Sheet and Capital: Total assets
grew from $906 million on June 30, 2012 to $1.09 billion on June
30, 2013, a $188 million increase. Total loans increased $72
million from $676 million on June 30, 2012 to $748 million on June
30, 2013. Total deposits increased $174 million from $723 million
on June 30, 2012 to $897 million on June 30, 2013. Non-interest
bearing deposits represent 15.6% of total deposits. Total capital
grew from $122.1 million on June 30, 2012 to $127.1 million on June
30, 2013. The undiluted book value of common shares of Stonegate
Bank was $15.43 per share on June 30, 2013.
Asset Quality:
Total Stonegate Bank - June 30,
2013
Total loans $748,250
30 days past due 2,508
60 - 89 days past due 0
NPAs* 6,868
REO 2,836
*Approximately 25% of the nonaccrual loans are current with
their payments.
The chart above shows the various categories and ending balances
of past due loans, nonaccrual loans and real estate owned. Overall,
non-performing loans represent 0.92% of total loans and 0.62% of
total assets.
Management believes all non-performing assets and REO are
written down to fair market value. Real estate owned decreased from
$6.4 million on June 30, 2012 to $2.8 million on June 30, 2013.
The Bank's loan loss reserve was $16.5 million on June 30, 2013.
This reserve represents 240% of all non-performing loans and 2.2%
of total loans. Total loans past due more than 30 days increased
from $1.9 million on June 30, 2012 to $2.5 million on June 30,
2013.
Management Comments: "Despite industry
wide declining margins Stonegate Bank has demonstrated that
respectable earnings can be realized without resorting to reducing
expenses or releasing loan loss reserves," said Dave Seleski,
President and Chief Executive Officer. "Most banks are experiencing
lackluster growth compounded by decreasing margins in this low
interest rate environment. I am proud of the fact that we continue
to grow and our margins remain respectable. This is even more
remarkable with Stonegate's overall liquidity increasing $120
million since June 30, 2012. The goal going forward is to continue
to leverage this liquidity and reduce our cost of funds to protect
the bank from any significant margin compression in the future.
Overall credit quality continues to improve in all of our markets.
Year to date annualized net charge offs as a percentage of average
loans was approximately 0.05%. I find this very encouraging. These
improved credit matrices make evaluating potential acquisitions
easier and will mitigate some of the risks associated with these
future acquisitions," said Seleski.
The Bank cautions that certain statements contained in this
press release are "forward-looking statements" as defined under the
Private Securities Litigation Reform Act of 1995, which statements
are made pursuant to the "safe harbor" provisions of such Act.
These forward-looking statements describe future plans or
strategies and may include the Bank's expectations of future
financial results. The words "believe," "expect," "anticipate,"
"estimate," "project," and similar expressions identify
forward-looking statements. The Bank's ability to predict results
or the effect of future plans or strategies or qualitative or
quantitative changes is inherently uncertain. Actual results may
differ materially from stated expectations. Specific factors
include, but are not limited to, changes in general market interest
rates, changes in general economic conditions and those specific to
the Bank's market area, legislative/regulatory changes, monetary
and fiscal policies of the U.S. Treasury and the Federal Reserve,
changes in the quality or composition of the Bank's loan
portfolios, demand for loan products, changes in deposit flows,
real estate values, and competition and other economic,
competitive, governmental, regulatory and technological factors
affecting the Bank's operations, pricing, products and services.
The Bank makes periodic filings to the Federal Deposit Insurance
Corporation which contain various Bank financial information,
copies of which are available from the Bank without charge. The
Bank disclaims any obligation to update any such factors or to
publicly announce the results of any revisions to any
forward-looking statements contained in this release to reflect
future events or developments.
STONEGATE BANK
Balance Sheet
As of June 30, 2013
(In Thousands)
Assets
Cash and due from banks $ 201,783
Federal funds sold 10,000
Investment securities 94,719
Commercial loans 111,059
Commercial real estate loans - owner occupied 171,025
Commercial real estate loans - other 248,650
Construction loans 54,828
Residential 1 - 4 family loans 115,821
HELOCs 37,805
Consumer and other loans 9,062
------------
Gross loans 748,250
Allowance for loan losses (16,524)
------------
Net loans 731,726
Fixed assets 12,648
Other assets 43,748
------------
Total assets $ 1,094,624
------------
Liabilities
Non-interest bearing deposits $ 139,949
NOW accounts 122,056
Money market accounts 381,500
Core reciprocal deposits 165,495
Savings accounts 6,446
Certificates of deposit 81,292
------------
Total deposits 896,738
Repurchase Agreements 37,181
FHLB and other borrowings 20,000
Other Liabilities 13,556
------------
Total liabilities 967,475
Total capital 127,149
------------
Total liabilities and capital $ 1,094,624
------------
STONEGATE BANK
Income Statement
For Period Ended June 30, 2013
(In Thousands)
Interest income $ 20,848
Interest expense 3,509
------------
Net interest income 17,339
Less: Provision for loan losses 996
------------
Net interest income after provision for loan losses 16,343
Non-interest income 1,616
Realized gains (losses) on AFS securities 905
Less: Salaries and benefits expense 6,879
Occupancy and equipment expense 1,855
Data processing expense 226
Legal and professional expenses 899
Loan and OREO expenses 337
Other expense 1,533
------------
Total non-interest income 11,729
Net income before income taxes 7,135
Income taxes 2,577
------------
Net income $ 4,558
============
MEDIA CONTACT: Sissy DeMaria (Email Contact) Suzanne
Schmidt (Email Contact) Kreps DeMaria (305) 663-3543 INVESTOR
RELATIONS: Dave Seleski (Email Contact) Stonegate Bank
(954) 315-5510
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