Stonegate Bank Reports Net Income of $2.0 Million for First Quarter
2014
POMPANO BEACH, FL--(Marketwired - Apr 22, 2014) - Stonegate Bank
(OTCBB: SGBK)
First Quarter 2014
Highlights:
- $1.7 billion in total assets
- Net income of $2,058,000 for the first quarter of 2014
- 33 straight quarters of profitability
- 2014 first quarter average net interest margin of 3.52%
- Tier 1 risk based capital ratio of 13.50% at March 31,
2014
- Form 10 Securities Registration Statement filed on March 28,
2014
- NASDAQ application filed
Stonegate Bank (OTCBB: SGBK) reported net income of $2,058,000
in the first quarter of 2014 or 20.4 cents per share, as compared
to net income of $2,293,000 or 27.8 cents per share in the first
quarter of 2013. In the first quarter the Bank incurred
approximately $775,000 in merger related expenses in connection
with the January 15th acquisition of Florida Shores Bancorp and its
subsidiaries. In addition, the Bank had $72,000 in fees
related to the filing of the Registration Statement. The
following chart outlines expenses incurred in the first quarter and
anticipated expenses associated with the April 25th conversion of
Florida Shores, and any fees associated with the Registration
Statement:
|
|
1st Quarter |
|
Anticipated 2nd Quarter |
Data Processing |
|
$123,000 |
|
$520,000 |
Legal |
|
109,000 |
|
30,000 |
Employee payments |
|
432,000 |
|
425,000 |
Consulting |
|
153,000 |
|
- |
Contract buyouts |
|
- |
|
105,000 |
Lease terminations |
|
- |
|
785,000 |
NASDAQ fee |
|
25,000 |
|
100,000 |
Other |
|
5,000 |
|
10,000 |
Total |
|
$847,000 |
|
$1,975,000 |
Management expects the majority of the cost saves related to the
Florida Shores merger will be realized by June of this
year.
Income and
Expenses: Total interest income increased from $10 million
in the first quarter of 2013 to $14.5 million in the first quarter
of 2014. Total interest expense remained essentially flat
between the first quarter of 2013 when compared to the first
quarter of 2014. This occurred even though total deposits
increased $627 million period to period. Further, the Bank's cost
of funds decreased 30 basis points from March 2013 through March
2014. This resulted in net interest income increasing from $8.3
million in the first quarter of 2013 to $12.7 million in the first
quarter of 2014.
Total non-interest income increased to $1,435,000 in the first
quarter of 2014 from $856,000 in the first quarter of 2013. The
significant components of this increase were fees received on loans
under certain legal arrangements of $210,000 and loan prepayment
fees of $92,000.
Non-interest expense increased to $10.4 million for the first
quarter of 2014 from $6.0 million for the first quarter of
2013. The majority of this increase is attributable to the
addition of the Florida Shores franchise, plus merger and NASDAQ
listing related expenses.
Margin and Cost of
Funds: Total cost of funds declined from 0.82% March 2013
month-to-date average to 0.52% March 2014 month-to-date average.
Stonegate Bank's net interest margin declined from a first quarter
2013 average of 3.74% to 3.52% first quarter 2014 month to date
average. The increase in Cash and Federal Funds Sold of nearly
$204 million largely accounted for the decrease in the net interest
margin. This increase is primarily due to the liquidation of
the investment portfolios of the Florida Shores Banks.
Balance Sheet and
Capital: Total assets grew from $1.04 billion on March 31,
2013 to $1.71 billion on March 31, 2014, a $670 million increase.
Total loans increased $456 million, from $724 million on March 31,
2013 to $1.18 billion on March 31, 2014. Total deposits increased
$627 million, from $846 million on March 31, 2013 to $1.47 billion
on March 31, 2014. Non-interest bearing deposits represent 17.6% of
total deposits. Total capital grew to $187.9 million as of March
31, 2014. This includes $12.75 million of preferred stock
issued to the Small Business Lending Fund. This $12.75 million
was the amount held by Florida Shores at the time of
acquisition. Management expects to redeem the preferred stock
during the second quarter of 2014. Total common equity grew from
$127.6 million on March 31, 2013 to $175.1 million on March 31,
2014. The tangible book value of common shares of Stonegate Bank
was $15.48 per share on March 31, 2014.
Asset
Quality:
Total Stonegate Bank
(dollars in thousands) |
|
March 31, 2014 |
|
December 31, 2013 |
Total loans |
|
$1,180,719 |
|
$812,009 |
30 days past due |
|
917 |
|
202 |
60 - 89 days |
|
483 |
|
- |
NPAs |
|
8,336 |
|
6,627 |
REO |
|
1,461 |
|
2,120 |
The chart above shows the various categories and ending balances
of past due loans, nonaccrual loans as well as real estate
owned. At March 31, 2014, non-performing loans represented
0.70% of total loans and 0.48% of total assets.
Real estate owned declined from $2.1 million on December 31,
2013 to $1.4 million on March 31, 2014. The Bank's loan loss
reserve was $18.0 million on March 31, 2014. This reserve
represents 215% of all non-performing loans and 1.52% of total
loans. Total loans past due more than 30 days increased from
$202,000 on December 31, 2013 to $1,400,000 on March 31,
2014.
Management
Comments:
"Overall our performance was solid in the first quarter," said
Dave Seleski, President and Chief Executive Officer. "While actual
earnings were less than the prior year, earnings and earnings per
share would have been higher in 2014 than 2013 if non-recurring
items were eliminated from both years. Earnings per share
would have been approximately 26 cents per share for the first
quarter of 2014 if the one-time costs, tax-effected, of $534,000
for the merger and Registration Statement were not included as
expense in 2014. For 2013, if the $477,000 gains on sales of
securities were not included, tax effected, earnings per share
would have been approximately 22 cents per share for the first
quarter of 2013. This apples to apples comparison is remarkable
given that the majority of cost saves associated with the Florida
Shores transaction have not been fully realized and the Bank
increased its overall share count by over 1.8 million shares. It is
also important to point out that the actual dilution was 4.1% while
the original tangible book dilution was projected to be
6.0%. Even though earnings will be less in the 2nd quarter due
to Florida Shores and NASDAQ transactional costs, management is
confident that overall cost saves and efficiencies will improve in
the 3rd quarter and lead to an acceptable return to our
investors.
"Many of you are aware that the Bank filed its Registration
Statement on March 28th. We expect that the Bank will be
listed on NASDAQ by the end of May. This should be a positive
for our investors and provide additional liquidity and
transparency.
"Going forward the Bank is going to continue to capitalize on
the improving Florida economy. The focus ahead will be to
expand in our existing markets in order to increase overall market
share and improve efficiencies," said Dave Seleski, president and
Chief Executive Officer of Stonegate Bank.
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 March 31, 2014 |
|
|
|
(In Thousands) |
|
|
|
Assets |
|
|
|
|
Cash and due from banks |
|
$ |
312,368 |
|
Federal funds sold |
|
|
59,056 |
|
Investment securities |
|
|
80,120 |
|
|
|
|
|
|
Commercial loans |
|
|
177,023 |
|
Commercial real estate loans - owner occupied |
|
|
280,400 |
|
Commercial real estate loans - other |
|
|
370,911 |
|
Construction loans |
|
|
82,836 |
|
Residential 1 - 4 family loans |
|
|
196,484 |
|
HELOCs |
|
|
58,784 |
|
Consumer and other loans |
|
|
14,281 |
|
|
Gross
loans |
|
|
1,180,719 |
|
Allowance for loan losses |
|
|
(17,984 |
) |
|
Net
loans |
|
|
1,162,735 |
|
|
|
|
|
|
Fixed assets |
|
|
26,627 |
|
Intangible assets |
|
|
19,312 |
|
Other assets |
|
|
50,569 |
|
|
Total
assets |
|
$ |
1,710,787 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Non-interest bearing deposits |
|
$ |
259,661 |
|
NOW accounts |
|
|
213,724 |
|
Money market accounts |
|
|
649,784 |
|
Core reciprocal deposits |
|
|
184,360 |
|
Savings accounts |
|
|
13,042 |
|
Certificates of deposit |
|
|
153,181 |
|
|
Total
deposits |
|
|
1,473,752 |
|
Repurchase Agreements |
|
|
17,894 |
|
FHLB and other borrowings |
|
|
20,000 |
|
Other Liabilities |
|
|
11,240 |
|
|
Total
liabilities |
|
|
1,522,886 |
|
|
|
|
|
|
Capital |
|
|
|
|
Preferred stock |
|
|
12,750 |
|
Common stock |
|
|
50,342 |
|
Surplus |
|
|
85,575 |
|
Accumulated other comprehensive incom |
|
|
(2,039 |
) |
Retained earnings |
|
|
41,273 |
|
|
Total
capital |
|
|
187,901 |
|
|
|
|
|
|
|
Total
liabilities and capital |
|
$ |
1,710,787 |
|
|
|
|
|
|
|
|
|
|
|
|
STONEGATE BANK |
Income Statement |
For Period Ended March 31, 2014 |
|
(In Thousands) |
|
Interest income |
|
$ |
14,504 |
Interest expense |
|
|
1,770 |
|
Net interest income |
|
|
12,734 |
Less: Provision for loan losses |
|
|
525 |
|
Net interest income after provision for loan
losses |
|
|
12,209 |
Non-interest income |
|
|
1,435 |
Realized gains (losses) on AFS securities |
|
|
- |
|
|
|
|
Less: Salaries and benefits expense |
|
|
6,013 |
|
|
Occupancy and equipment expense |
|
|
1,570 |
|
|
Data
processing expense |
|
|
503 |
|
|
Legal
and professional expenses |
|
|
678 |
|
|
Loan
and OREO expenses |
|
|
150 |
|
|
Other
expense |
|
|
1,458 |
|
Total non-interest income |
|
|
10,372 |
|
|
|
|
Net income before income taxes |
|
|
3,272 |
Income taxes |
|
|
1,214 |
|
Net income |
|
$ |
2,058 |
|
|
|
|
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
Stonegate Bank (Fort Lauderdale (NASDAQ:SGBK)
Historical Stock Chart
From Apr 2024 to May 2024
Stonegate Bank (Fort Lauderdale (NASDAQ:SGBK)
Historical Stock Chart
From May 2023 to May 2024