BIRMINGHAM, Ala., Nov. 15, 2010 /PRNewswire-FirstCall/ -- Superior
Bancorp (Nasdaq: SUPR) today reported on its third quarter 2010
results.
HIGHLIGHTS:
- Superior continues to work on its previously announced program
to augment its capital.
- Deposits were unchanged at $2.8
billion where they stood at the second quarter, 2010, and up
6.0% from the corresponding period in 2009.
- Loans continued to decline, in keeping with our emphasis on
reducing lower quality loans.
- At quarter end, loans stood at $2.3
billion, down from $2.4
billion at June 30, and at
September 30, 2009
The company realized a pre tax net loss from operations of
$109 million, related principally to
credit costs, as the provision for loan loss and charges for other
real estate losses aggregated $108
million. Superior also recorded an after tax non-cash
charge of $27 million to eliminate
its net deferred tax asset, resulting in net after tax loss of
$138 million for the quarter.
Stan Bailey, Chairman & CEO,
stated, "Management views the markets served by Superior as
continuing to be under considerable economic stress, especially in
Florida. Therefore, several
decisions were made during the third quarter as follows:
1. Aggressively review the loan portfolio to ascertain the
impact of the economy, especially in light of the Gulf Coast oil
spill and its adverse impact on the Gulf Coast we serve;
2. Aggressively re-appraise real estate values and their
impact on loan collateral impairment and reserves, again in light
of the Gulf coast oil spill;
3. Increase the loan loss reserve by 91% to approximately
$151.4 million; and
4. Eliminate the $26.7
million non-cash, deferred tax asset by establishing a
valuation reserve for it.
"We view these decisions as necessary in our efforts to return
the company to 'good health.' At the same time, we continue
to work aggressively to bring our capital optimization efforts to a
successful conclusion," Bailey concluded.
CAPITAL OPTIMIZATION
Senior management has dedicated a considerable amount of effort
this year to ensure the proper capitalizations of the company and
the bank in light of the current economic environment. We are
engaged in negotiations with potential investors considering an
investment in our company. However, no specific transaction
has been agreed upon and we can give no assurance that any
transaction will be agreed upon, or that any such transaction would
not be substantially dilutive to or eliminate present equity
interests.
CORE BANK PERFORMANCE
The company's core bank performance (pre-tax, pre-credit cost)
is reflective of the current challenges our customers and
communities are experiencing. First, customer deposits remain
stable at $2.8 billion as our
customers maintain considerable liquidity caused by uncertainty.
Likewise, loans declined 2.7% or $66.7
million as individuals and businesses are de-leveraging.
CREDIT QUALITY
Loan sector weakness continued in commercial real estate,
predominantly in Florida, and in
residential construction, predominantly in Alabama. Therefore, total credit costs,
consisting of provision, charge-offs, OREO expenses and other
direct expenses, was $108.3 million
for the quarter. $71.9 million was used to increase the loan
loss reserve by 91% to $151.4 million
or 6.27% of loans. Net charge-offs totaled $30.1 million, or an annualized rate of 4.85%.
OREO expenses totaled $6.2
million for the third quarter 2010. Non-performing
assets increased to 10.6% of total assets.
As the result of the large provision for loan losses made by
Superior Bank in the third quarter, the allowance for loan losses
stands at 6.27% of loans, one of the highest ratios among major
banks in the southeast. The total reserve, at $151 million, is up from $79 million at June 30,
2010, as we believe it appropriate to make significant
increases to our reserves in light of continued declines in
property values, particularly in Florida. A large portion of this
increase can be traced to the impact of the Gulf oil spill on
appraised values throughout the Gulf coast region of Florida, where our Florida footprint is concentrated.
LIQUIDITY
Liquidity at Superior Bank remained excellent. Superior
maintains considerable liquidity reserves, consisting principally
of cash, borrowing capacity and liquid securities, totaling
approximately $333 million in the
aggregate. Reliance on borrowings, brokered deposits and
CDARS continues to trend downward, in keeping with our goal of
reducing reliance on non-core sources of funding.
ABOUT SUPERIOR BANCORP
Superior Bancorp is a $3.2 billion
thrift holding company headquartered in Birmingham, and the second largest bank
holding company headquartered in Alabama. The principal subsidiary of Superior
Bancorp is Superior Bank, a southeastern community bank that
currently has 73 branches, with 45 locations throughout the state
of Alabama and 28 locations in
Florida. Superior Bank also
operates 24 consumer finance offices in North Alabama as 1st Community Credit and
Superior Financial Services.
The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements made by us or on our
behalf. Some of the disclosures in this release, including any
statements preceded by, followed by or which include the words
"may," "could," "should," "will," "would," "hope," "might,"
"believe," "expect," "anticipate," "estimate," "intend," "plan,"
"assume" or similar expressions constitute forward-looking
statements. These forward-looking statements, implicitly and
explicitly, include the assumptions underlying the statements and
other information with respect to our beliefs, plans, objectives,
goals, expectations, anticipations, estimates, intentions,
financial condition, results of operations, future performance and
business, including our expectations and estimates with respect to
our revenues, expenses, earnings, return on equity, return on
assets, efficiency ratio, asset quality, the adequacy of our
allowance for loan losses and other financial data and capital and
performance ratios.
Although we believe that the expectations reflected in our
forward-looking statements are reasonable, these statements involve
risks and uncertainties which are subject to change based on
various important factors (some of which are beyond our control).
Such forward-looking statements should, therefore, be considered in
light of various important factors set forth from time to time in
our reports and registration statements filed with the SEC. The
following factors, among others, could cause our financial
performance to differ materially from our goals, plans, objectives,
intentions, expectations and other forward-looking statements: (1)
our ability to raise additional capital to meet regulatory
requirements set forth in the Orders to Cease and Desist or fund
future growth; (2) the adequacy of our allowance for loan losses to
cover actual losses and impact of credit risk exposures; (3)
greater loan losses than historic levels and increased allowance
for loan losses; (4) our ability to comply with any requirements
imposed on us and Superior Bank by the Orders to Cease and Desist
or additional restrictions imposed by our regulators; (5)
restrictions or limitations on our access to funds from Superior
Bank; (6) our ability to resolve any regulatory, legal or judicial
proceeding on acceptable terms and its effect on our financial
condition or results of operations; (7) the effect of natural or
environmental disasters, such as, among other things, hurricanes
and oil spills, in our geographic markets; (8) the strength of
the United States economy in
general and the strength of the regional and local economies in
which we conduct operations; (9) changes in local economic
conditions in the markets in which we operate; (10) the continued
weakening in the real estate values in the markets in which we
operate; (11) the effects of, and changes in, trade, monetary and
fiscal policies and laws, including interest rate policies of the
Board of Governors of the Federal Reserve System; (12) increases in
FDIC deposit insurance premiums and assessments; (13) inflation or
deflation and interest rate, market and monetary fluctuations; (14)
our timely development of new products and services in a changing
environment, including the features, pricing and quality compared
to the products and services of our competitors; (15) the
willingness of users to substitute competitors' products and
services for our products and services; (16) changes in loan
underwriting, credit review or loss reserve policies associated
with economic conditions, examination conclusions, or regulatory
requirements or developments; (17) the impact of changes in
financial services policies, laws and regulations, including laws,
regulations and policies concerning taxes, banking, securities and
insurance, and the application thereof by regulatory bodies; (18)
changes in accounting policies, principles and guidelines
applicable to us; (19) our focus on lending to small to mid-size
community-based businesses, which may increase our credit risk;
(20) technological changes; (21) changes in consumer spending and
savings habits; (22) the continuing instability in the domestic and
international capital markets; (23) the effects on our operations
of policy initiatives or laws that have been and may continue to be
introduced by the Presidential administration or Congress and
related regulatory actions, including, but not limited to, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the
regulations promulgated thereunder; (24) our ability to
successfully integrate the assets, liabilities, customers, systems
and management we acquire or merge into our operations; and (25)
other factors and information contained in reports and other
filings we make with the SEC.
If one or more of the factors affecting our forward-looking
information and statements proves incorrect, then our actual
results, performance or achievements could differ materially from
those expressed in, or implied by, forward-looking information and
statements contained in this report. Therefore, we caution you not
to place undue reliance on our forward-looking information and
statements. We do not intend to update our forward-looking
information and statements, whether written or oral, to reflect
changes. All forward-looking statements attributable to us are
expressly qualified by these cautionary statements.
More information on Superior Bancorp and its subsidiaries may be
obtained over the Internet, http://www.superiorbank.com, or by
calling 1-877-326-BANK (2265).
SOURCE Superior Bancorp