Smithtown Bancorp, Inc. (NASDAQ: SMTB) announced a loss of $20.5
million for the third quarter of 2010, or $1.38 per fully diluted
share. The loss includes a valuation allowance during the quarter
of $8.8 million against the Company's deferred tax asset at
September 30, 2010. The net loss for the nine months ended
September 30, 2010 was $63.5 million, or $4.27 per fully diluted
share.
For the third quarter, Bank of Smithtown made provisions for
loan losses of $25.0 million. This figure is in line with
provisions made during the first two quarters of 2010 and brings
the year to date provisions to $77.5 million. Net charge offs for
the third quarter were $14.3 million, or 2.93% of average loans.
Combined with net charge offs of $33.0 million, during the first
six months of 2010, total net charge offs for the nine months ended
September 30, 2010, were $47.3 million, or 3.12% of average loans.
The allowance for loan losses was $68.7 million at September 30,
2010, or 3.59% of total loans.
The Bank continued to reduce its commercial real estate loans as
total loans (including loans held for sale) were down $65.1 million
for the quarter and $194.4 million for the year to date. The
year-to-date reductions include the resolution of $97.9 million in
problem loans as well as $47.4 million in gross charge-offs.
Nonperforming loans ended the third quarter at $279.8 million, or
14.62% of total loans and loans 30-89 days past due totaled $43.8
million, or 2.29% of total loans. At December 31, 2009,
nonperforming loans were $130.2 million, or 6.23%, of total loans
and loans 30-89 days past due were $20.8 million, or .99% of total
loans. Total loans (including loans held for sale) at September 30
were $1.913 billion compared to $2.107 billion at December 31,
2009.
At September 30, 2010, the Company's Tier 1 Leverage capital
ratio was 4.06%, Tier 1 Capital to Total Assets was 4.09%, Tier 1
Risk-Based Capital ratio was 5.40% and the Total Risk-Based Capital
ratio was 8.63%. The Bank's Tier 1 Leverage ratio was 4.72%, Tier 1
Capital to Total Assets was 4.74%, Tier 1 Risk-Based Capital ratio
was 6.28% and the Total Risk-Based Capital ratio was 8.59%. All of
these capital ratios are below the targets set forth in the Consent
Agreement with the FDIC and the New York State Banking
Department.
Smithtown Bancorp's Chairman & Chief Executive Officer Brad
Rock commented: "Our focus remains on serving the long term valued
customers of Bank of Smithtown as we work through the process of
merging our Company with People's United Financial, Inc. (NASDAQ:
PBCT) of Bridgeport, Connecticut. We presently expect the merger
transaction to close this quarter."
Bank of Smithtown is a 100 year-old community bank with
approximately $2.3 billion in assets and 30 branches on Long Island
and in Manhattan. The stock of its parent holding company,
Smithtown Bancorp, is traded on the NASDAQ Global Select Market
under the symbol "SMTB."
People's United Financial, Inc., a diversified financial
services company with approximately $22 billion in assets, provides
consumer and commercial banking services through its subsidiary,
People's United Bank, with nearly 300 branches in Connecticut,
Vermont, New Hampshire, Massachusetts, Maine and New York. Through
additional subsidiaries, People's United provides equipment
financing, asset management, brokerage and financial advisory
services, and insurance services.
Additional Information and Where to Find It
In connection with the proposed merger, People's United
Financial, Inc. ("People's") has filed with the SEC a Registration
Statement on Form S-4 that included a Proxy Statement of Smithtown
Bancorp, Inc. ("Smithtown") and a Prospectus of People's, as well
as other relevant documents concerning the proposed transaction. A
special meeting of the common stockholders of Smithtown Bancorp
will be held at the Sheraton Long Island Hotel, 110 Motor Parkway,
Hauppauge, New York 11788 on November 19, 2010 at 10:00 a.m. local
time. Smithtown mailed its Proxy Statement on October 15, 2010, to
shareholders of record as of October 8, 2010. Shareholders are
urged to read the Registration Statement and the Proxy
Statement/Prospectus regarding the merger and any other relevant
documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information. You will be able to obtain a free copy of the Proxy
Statement/Prospectus, as well as other filings containing
information about People's and Smithtown at the SEC's Internet site
(http://www.sec.gov). You will also be able to obtain these
documents, free of charge, from People's at www.peoples.com under
the tab "Investor Relations" and then under the heading "Financial
Information" or from Smithtown Bancorp by accessing Smithtown
Bancorp's website at www.bankofsmithtownonline.com under the tab
"Investor Relations" and then under the heading "SEC Filings."
People's and Smithtown and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Smithtown in
connection with the proposed merger. Information about the
directors and executive officers of People's is set forth in the
proxy statement for People's' 2010 annual meeting of shareholders,
as filed with the SEC on a Schedule 14A on March 23, 2010.
Information about the directors and executive officers of Smithtown
is set forth in the proxy statement for Smithtown's 2010 annual
meeting of shareholders, as filed with the SEC on a Schedule 14A on
March 12, 2010. Additional information regarding the interests of
those participants and other persons who may be deemed participants
in the transaction may be obtained by reading the Proxy
Statement/Prospectus regarding the proposed merger when it becomes
available. You may obtain free copies of this document as described
in the preceding paragraph.
Forward-Looking Statements
Certain statements contained in this release that are not
statements of historical fact constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Act"), notwithstanding that such statements are not
specifically identified as such. In addition, certain statements
may be contained in our future filings with the Securities and
Exchange Commission, in press releases, and in oral and written
statements made by us or with our approval that are not statements
of historical fact and constitute forward-looking statements within
the meaning of the Act. Examples of forward-looking statements
include, but are not limited to: (i) projections of revenues,
expenses, income or loss, earnings or loss per share, the payment
or nonpayment of dividends, capital structure and other financial
items; (ii) statements of our plans, objectives and expectations or
those of our management or Board of Directors, including those
relating to products or services; (iii) statements of future
economic performance; and (iv) statements of assumptions underlying
such statements. Words such as "believes," "anticipates,"
"expects," "intends," "targeted," "continue," "remain," "will,"
"should," "may" and other similar expressions are intended to
identify forward-looking statements but are not the exclusive means
of identifying such statements.
Forward-looking statements involve risks and uncertainties that
may cause actual results to differ materially from those in such
statements. Factors that could cause actual results to differ from
those discussed in the forward-looking statements include, but are
not limited to: local, regional, national and international
economic conditions and the impact they may have on us and our
customers and our assessment of that impact, changes in the level
of non-performing assets and charge-offs; changes in estimates of
future reserve requirements based upon the periodic review thereof
under relevant regulatory and accounting requirements; the effects
of and changes in trade and monetary and fiscal policies and laws,
including the interest rate policies of the Federal Reserve Board;
inflation, interest rate, securities market and monetary
fluctuations; political instability; acts of war or terrorism; the
timely development and acceptance of new products and services and
perceived overall value of these products and services by users;
changes in consumer spending, borrowings and savings habits;
changes in the financial performance and/or condition of our
borrowers; technological changes; acquisitions and integration of
acquired businesses; the ability to increase market share and
control expenses; changes in the competitive environment among
financial holding companies and other financial service providers;
the quality and composition of our loan or investment portfolio;
the effect of changes in laws and regulations (including laws and
regulations concerning taxes, banking, securities and insurance)
with which we and our subsidiaries must comply; the effect of
changes in accounting policies and practices, as may be adopted by
the regulatory agencies, as well as the Public Company Accounting
Oversight Board, the Financial Accounting Standards Board and other
accounting standard setters; changes in our organization,
compensation and benefit plans; the costs and effects of legal and
regulatory developments, including the resolution of legal
proceedings or regulatory or other governmental inquiries and the
results of regulatory examinations or reviews; greater than
expected costs or difficulties related to the opening of new branch
offices or the integration of new products and lines of business,
or both; and/or our success at managing the risk involved in the
foregoing items.
Forward-looking statements speak only as of the date on which
such statements are made. We undertake no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which such statement is made, or to reflect the
occurrence of unanticipated events.
SMITHTOWN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(Dollar amounts in thousands except share data)
September December
30, 2010 31, 2009
----------- -----------
ASSETS
Cash and cash equivalents $ 32,172 $ 18,745
Interest earning deposits with banks 69,611 3,409
----------- -----------
Total cash and cash equivalents 101,783 22,154
Term placements 507 507
Securities available for sale 199,102 397,274
Securities held to maturity (fair value of $34
and $67, respectively) 33 66
Loans held for sale - 16,450
Loans 1,912,963 2,090,896
Less: allowance for loan losses 68,682 38,483
----------- -----------
Loans, net 1,844,281 2,052,413
Restricted stock, at cost 18,002 18,353
Real estate owned, net 3,511 2,013
Premises and equipment, net 52,892 47,708
Goodwill 3,923 3,923
Intangible assets 433 616
Cash value of company owned life insurance 25,358 24,874
Accrued interest receivable and other assets 28,291 48,579
----------- -----------
Total assets $ 2,278,116 $ 2,634,930
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits $ 145,355 $ 152,306
Savings, NOW and money market deposits 867,661 999,066
Time deposits of $100,000 or more 457,842 508,632
Other time deposits 344,411 415,024
----------- -----------
Total deposits 1,815,269 2,075,028
Other borrowings 311,480 352,820
Subordinated debentures 56,595 56,351
Accrued interest payable and other liabilities 19,764 14,976
----------- -----------
Total liabilities 2,203,108 2,499,175
Stockholders' equity
Preferred stock, par value $.01 per share :
Authorized: 1,000,000 shares at September
30, 2010 and December 31, 2009,
respectively; no shares issued or
outstanding - -
Common stock, par value $.01 per share:
Authorized: 35,000,000 shares at September
30, 2010 and December 31, 2009,
respectively; 17,019,372 and 16,907,346
shares issued at September 30, 2010 and
December 31, 2009, respectively; 14,967,508
and 14,855,482 shares outstanding at
September 30, 2010 and December 31, 2009,
respectively 170 169
Additional paid-in capital 82,557 82,318
Retained earnings 1,361 64,820
Treasury stock, at cost, 2,051,864 shares (10,062) (10,062)
----------- -----------
74,026 137,245
Accumulated other comprehensive loss 982 (1,490)
----------- -----------
Total stockholders' equity 75,008 135,755
----------- -----------
Total liabilities and stockholders' equity $ 2,278,116 $ 2,634,930
=========== ===========
SMITHTOWN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(Dollar amounts in thousands except share data)
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
2010 2009 2010 2009
--------- --------- --------- ---------
Interest income:
Loans $ 24,555 $ 29,317 $ 78,585 $ 82,859
Taxable securities 1,464 2,314 4,890 4,020
Tax exempt securities 495 440 1,496 635
Interest earning deposits
with banks 21 20 61 146
Other 211 239 645 546
--------- --------- --------- ---------
Total interest income 26,746 32,330 85,677 88,206
Interest expense:
Savings, NOW and money market
deposits 2,026 3,715 6,689 10,364
Time deposits of $100,000 or
more 2,487 3,257 8,025 9,968
Other time deposits 2,250 3,291 7,431 10,559
Other borrowings 2,134 2,287 6,384 6,773
Subordinated debentures 1,041 922 3,067 1,915
--------- --------- --------- ---------
Total interest expense 9,938 13,472 31,596 39,579
--------- --------- --------- ---------
Net interest income 16,808 18,858 54,081 48,627
Provision for loan losses 25,000 10,000 77,500 13,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses (8,192) 8,858 (23,419) 35,627
Noninterest income:
Revenues from insurance
agency 843 836 2,560 2,711
Service charges on deposit
accounts 653 619 1,913 1,737
Net gain on the sale of
investment securities - 959 518 1,481
Trust and investment services 124 136 473 463
Increase in cash value of
company owned life insurance 206 108 484 341
OTTI loss:
Total OTTI losses (177) (69) (774) (324)
Portion of loss recognized
in other comprehensive
income 20 - 37 -
--------- --------- --------- ---------
Net impairment losses
recognized in earnings (157) (69) (737) (324)
Other 894 396 2,150 1,298
--------- --------- --------- ---------
Total noninterest income 2,563 2,985 7,361 7,707
Noninterest expense:
Salaries and employee
benefits 5,408 5,381 15,968 15,428
Occupancy and equipment 3,976 3,033 11,681 8,391
Federal deposit insurance 1,534 824 4,795 3,171
Amortization of intangible
assets 61 85 183 266
Valuation allowance for other
real estate owned - - - -
Other 4,416 1,664 12,113 4,334
--------- --------- --------- ---------
Total noninterest expense 15,395 10,987 44,740 31,590
--------- --------- --------- ---------
Income (loss) before income
taxes (21,024) 856 (60,798) 11,744
Provision (benefit) for income
taxes (548) (42) 2,661 3,817
--------- --------- --------- ---------
Net income (loss) ($ 20,476) $ 898 ($ 63,459) $ 7,927
========= ========= ========= =========
Comprehensive income (loss) $ (20,637) $ 4,237 $ (60,987) $ 9,605
Basic earnings (loss) per share $ (1.38) $ 0.06 $ (4.27) $ 0.60
Diluted earnings (loss) per
share $ (1.38) $ 0.06 $ (4.27) $ 0.59
Selected Financial Data
(in thousands, except per share data)
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Basic earnings per share $ (1.38) $ 0.06 $ (4.27) $ 0.60
---------- ---------- ---------- ----------
Diluted earnings per share (1.38) 0.06 (4.27) 0.59
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Assets $2,278,116 $2,670,257 $2,278,116 $2,670,257
---------- ---------- ---------- ----------
Loans 1,912,963 2,090,714 1,912,963 2,090,714
---------- ---------- ---------- ----------
Deposits 1,815,269 2,080,590 1,815,269 2,080,590
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Return on Average Equity (82.27) 2.32 (69.22) 7.62
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Return on Average Assets (3.58) 0.15 (3.54) 0.47
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net Interest Margin 3.10 3.26 3.18 3.04
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Efficiency 77.77 52.09 71.62 57.12
---------- ---------- ---------- ----------
Contact: Ms. Judith Barber Corporate Secretary Corporate
Headquarters 100 Motor Parkway, Suite 160 Hauppauge, NY 11788-5138
Direct Dial: 631-360-9304 Direct Fax: 631-360-9380
brock@bankofsmithtown.net
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