|
Smithtown Bancorp Announces First Quarter Earnings
(Market Wire Via Acquire Media NewsEdge) SMITHTOWN, NY, April 24 / MARKET WIRE/ --
Smithtown Bancorp (NASDAQ: SMTB), the parent
company of Bank of Smithtown, today announced that the Company had earnings
for the first quarter of 2008 of $3,573,886, or $.37 per share. These
figures represent a 6% increase in net income and a 6% increase in basic
earnings per share. Basic earnings per share for the last twelve months
now stand at $1.49.
Loan growth was exceptionally strong during the first quarter. Loans grew
by $140 million to $1.124 billion at the end of the period. This figure
represents loan growth of 14% for the quarter.
Consistent with the loan application inflows that began last December, 78%
of the first quarter net loan growth was in permanent mortgage loans.
Generally, these loans are on fully-tenanted commercial or multi-family
buildings with seasoned cash flows.
Loan payoffs diminished substantially with only $22 million paid off during
the first quarter. This figure compares very favorably with the $102
million of payoffs during the fourth quarter of last year. It also
compares favorably with payoffs of $77 million and $51 million in the
second and third quarters of 2007, respectively. This reduced volume of
payoffs contributed significantly to the Bank's strong net loan growth
during the first quarter of 2008.
The loan "pipeline" of approved but unfunded commitments at March 31, 2008,
was $289 million, the strongest it has ever been at quarter's end. During
the past two quarters, the Bank has closed and funded approximately 90% of
the pipeline during the following 90 days.
Asset quality remained strong. Nonperforming loans were .14% of total
loans at the end of the quarter. The small increase of 7 basis points in
nonperformers from $687,000 at December 31st to $1.6 million at March 31st
is attributable to one relationship where the borrower has died and the
loans are well-secured by multiple properties. The Bank does not hold any
sub-prime loans, "Alt-A" loans, option ARMs, 2/28 ARMs or loans with teaser
rates.
Due to the dramatic and unprecedented cuts in interest rates by the Federal
Reserve during this past quarter, the Bank chose to fund its loan growth
with low-cost structured borrowings from the Federal Home Loan Bank. The
Bank drew down $150 million of this wholesale funding, mostly at rates
ranging from 1.88% to 2.59%, and at an average rate of 2.44%.
The availability of these low-cost funds allowed the Bank to decrease rates
on deposits more quickly than some of its competitors in an effort to
offset the reductions in interest income caused by the rapid and deep Fed
rate cuts. As a result, deposits decreased slightly during the quarter by
$17 million, or less than 2%. We anticipate that the opening of two new
branches during the second quarter, together with the introduction of
several targeted promotional products, will rejuvenate the deposit growth
that was not pursued during the first quarter. In fact, thus far during a
little more than the first three weeks of the second quarter, with only one
new branch opened for a short period of time, deposits have grown by $70
million.
Net interest margin decreased from the fourth quarter of last year by 15
basis points to 3.90%. This decrease was mostly caused by two factors.
First, the Bank carried an average balance during the quarter of $440
million of loans tied to the "prime rate." When the Fed rapidly reduced
short-term rates by 200 basis points, interest income on these loans was
reduced significantly. Secondly, the fixed rates on the types of
high-quality permanent mortgage loans that the Bank has been adding to its
portfolio are generally lower than the rates on construction lending and
other types of business and consumer lending. Therefore, though the Bank
has been able to decrease deposit rates some and borrow at a low cost from
the Federal Home Loan Bank, the reduced rates on loans have nonetheless
squeezed the margin on the asset side.
The Company continued to control noninterest expense effectively, posting
an efficiency ratio of 52.60% for the first quarter, which is an
improvement of 123 basis points over last year. The average efficiency
ratio for peer group banks is 60.56%.
The Company's Chairman & CEO, Brad Rock, commented: "It has become clear
that the current economic environment is creating opportunities for us.
Many of our competitors have had to curtail lending due to capital
constraints or liquidity constraints caused by sub-prime mortgage problems
and other difficulties. As a result, we have greatly increased
opportunities for permanent commercial mortgage lending. Most of these
loans are on fully-tenanted commercial and multi-family buildings with
seasoned cash flows. Because of recent Fed rate cuts and the high quality
of these loans, the rates on these loans are somewhat lower than what we
are accustomed to, but the volume of these loans available to us is
unprecedented for our Company. Last year, loans grew by $135 million. For
the first quarter of this year, loans grew by $140 million. We expect
these increased lending opportunities to continue for the near future,
which should allow us to build a significantly increased revenue stream."
Mr. Rock continued: "We intend to fund these loans with a combination of
wholesale funding and deposit growth. Due to the Fed rate cuts, the low
cost of wholesale funding and the high deposit rates being paid by some of
our competitors, we decided not to pursue deposits aggressively during the
first quarter, but rather to wait for the openings of our new branches
later in the year as a source of new deposits. One of those branches
opened in early April, another will open in late May, and at least two more
(Manhattan and Huntington) will open later this year. We also continue to
negotiate for other sites, two of which could open this year if deals are
concluded." The Bank also expects to open 5 or 6 new branches in 2009,
including locations in Port Jefferson, Deer Park, Brentwood, East Setauket
and St. James.
Founded in 1910, Bank of Smithtown is nearing its 100th anniversary as a
community bank. The stock of its parent holding company, Smithtown
Bancorp, is traded on the NASDAQ Global Market under the symbol "SMTB." In
a recent issue of U.S. Banker magazine, the Company was rated the sixth
best "mid-size" bank in the United States, and the 13th best bank of any
size. There are approximately 8,300 banks in the United States. Smithtown
Bancorp has often been ranked among the top banks in the country, including
having been rated #1 by U.S. Banker and other rating services. At various
times in the past, the Company's stock has also been rated by Investors
Business Daily and U.S. Today as one of the top stocks in the nation.
Forward-Looking Statements
This release and other written materials and statements management may
make, may contain forward-looking statements regarding the Company's
prospective performance and strategies within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995, and is including this statement for purposes of said safe harbor
provisions.
Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies and expectations of the Company, are
sometimes identified by use of the words "plan," "believe," "expect,"
"intend," "anticipate," "estimate," "project," "appear" or other similar
expressions. The Company's ability to predict results or the actual
effects of its plans and strategies is inherently uncertain. Accordingly
actual results may differ materially from anticipated results.
Factors that could have a material adverse effect on the operations of the
Company and its subsidiaries include, but are not limited to, a change in
economic conditions; changes in interest rates, deposit flows, loan demand,
real estate values, and competition; changes in accounting principles,
policies, or guidelines; changes in legislation and regulation; other risk
factors disclosed in the Company's reports filed with the Securities and
Exchange Commission; and other economic, competitive, governmental,
regulatory, geopolitical and technological factors affecting the Company's
operations, pricing and services.
Investors are cautioned not to place undue reliance on forward-looking
statements as a prediction of actual results. Except as required by
applicable law or regulation, the Company undertakes no obligation to
republish or revise forward-looking statements to reflect events or
circumstances after the date the statements were made or to reflect the
occurrences of unanticipated results. Investors are advised, however, to
consult any further disclosures the Company makes on related subjects in
our reports to the Securities and Exchange Commission.
Consolidated Balance Sheets
As of
March 31, March 31,
2008 2007
----------- -----------
ASSETS
Cash and due from banks $ 19,936 $ 13,941
Federal funds sold 12,458 47,546
----------- -----------
Total cash and cash equivalents 32,394 61,487
Investment securities:
Available for sale:
Obligations of U.S. government agencies 13,896 59,084
Mortgage - backed securities 24,269 2,639
Obligations of state and political
subdivisions 5,834 8,565
Other securities 7,581 5,135
----------- -----------
Total securities available for
sale 51,580 75,423
Held to maturity:
Mortgage - backed securities 3 31
Obligations of state and political
subdivisions 202 293
----------- -----------
Total securities held to
maturity (estimated fair
value 205 in 2008 and
$327 in 2007) 205 324
----------- -----------
Total investment
securities 51,785 75,747
Restricted securities 9,048 2,547
Loans 1,124,033 890,505
Less: allowance for loan losses 9,039 7,414
----------- -----------
Loans, net 1,114,994 883,091
Bank premises and equipment 23,506 22,334
Other assets
Cash value of company owned life insurance 19,159 18,385
Goodwill 3,923 2,077
Intangible assets 1,276 1,471
Other real estate owned 6,972 6,972
Other 19,121 15,068
----------- -----------
Total other assets 50,451 43,973
----------- -----------
Total assets $ 1,282,178 $ 1,089,179
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand (non-interest bearing) $ 108,637 $ 103,100
Money market 371,028 351,634
NOW 30,681 37,509
Savings 59,167 53,263
Time 404,217 408,813
----------- -----------
Total deposits 973,730 954,319
Dividends payable 393 356
Other borrowings 175,000 35,000
Subordinated debt 38,836 18,217
Other liabilities 11,820 11,033
----------- -----------
Total liabilities 1,199,779 1,018,925
Stockholders' equity
Common stock - $.01 par value (20,000,000
shares authorized at March 31, 2008 and
2007; 11,886,341 shares issued, 9,834,477
shares outstanding at March 31, 2008;
11,852,374 shares issued, 9,800,510 shares
outstanding at March 31, 2007) 119 119
Additional paid in capital 26,070 4,302
Retained earnings 67,412 76,068
Accumulated other comprehensive loss (1,140) (173)
----------- -----------
92,461 80,316
Treasury stock (2,051,864 shares at cost) (10,062) (10,062)
----------- -----------
Total stockholders' equity 82,399 70,254
----------- -----------
Total liabilities and stockholders' equity $ 1,282,178 $ 1,089,179
=========== ===========
Consoidated Statements of Income
For the Three Months Ended
March 31,
2008 2007
------------ ------------
Interest income
Loans $ 19,262 $ 17,713
Federal funds sold 8 311
Investment securities:
Taxable:
Obligations of U.S. government
agencies 273 859
Mortgage - backed securities 238 37
Other securities 124 48
------------ ------------
Subtotal 635 944
Exempt from federal income taxes:
Obligations of state & political
subdivisions 58 79
Other interest income 125 59
------------ ------------
Total interest income 20,088 19,106
Interest expense
Money market accounts (including savings) 3,350 3,535
Time deposits of $100,000 or more 1,796 1,959
Other time deposits 2,672 2,935
Other borrowings 889 384
Subordinated debt 422 344
------------ ------------
Total interest expense 9,129 9,157
------------ ------------
Net interest income 10,959 9,949
Provision for loan losses 800 400
------------ ------------
Net interest income after provision for loan losses 10,159 9,549
Noninterest income
Trust and investment services 182 159
Service charges on deposit accounts 504 427
Revenues from insurance agency 1,048 903
Increase in cash value of company owned
life insurance 198 230
Other 414 507
------------ ------------
Total noninterest income 2,346 2,226
Noninterest expense
Salaries 3,146 2,992
Pension and other employee benefits 849 740
Net occupancy expense of bank premises 1,135 1,020
Furniture and equipment expense 657 645
Amortization of intangible assets 107 120
Other 1,078 1,128
------------ ------------
Total noninterest expense 6,972 6,645
------------ ------------
Income before income taxes 5,533 5,130
Provision for income taxes 1,958 1,751
------------ ------------
Net income $ 3,575 $ 3,379
============ ============
Earnings per share
Basic earnings per share $ 0.37 $ 0.35
Diluted earnings per share $ 0.37 $ 0.35
Cash dividends declared $ 0.04 $ 0.04
Weighted average common shares outstanding 9,787,266 9,766,753
Weighted average common equivalent shares 9,794,201 9,769,936
Comprehensive income $ 2,607 $ 3,537
Selected Financial Data
(in thousands, except per share data)
For the Three Months Ended
March 31, 2008 March 31, 2007
--------------- ---------------
Basic earnings per share (1) $ 0.37 $ 0.35
--------------- ---------------
Diluted earnings per share (1) 0.37 0.35
--------------- ---------------
--------------- ---------------
Assets $ 1,282,178 $ 1,089,179
--------------- ---------------
Loans 1,124,033 890,505
--------------- ---------------
Deposits 973,730 954,319
--------------- ---------------
--------------- ---------------
Return on Average Equity 17.59 19.71
--------------- ---------------
Cash Return on Average Equity (1) 17.93 20.18
--------------- ---------------
Return on Average Tangible Equity (2) 18.79 20.82
--------------- ---------------
Cash Return on Average Tangible Equity (3) 19.16 21.30
--------------- ---------------
--------------- ---------------
Return on Average Assets 1.19 1.28
--------------- ---------------
Cash Return on Average Assets (1) 1.21 1.31
--------------- ---------------
Return on Average Tangible Assets (2) 1.19 1.28
--------------- ---------------
Cash Return on Average Tangible Assets (3) 1.22 1.31
--------------- ---------------
--------------- ---------------
Net Interest Margin 3.90 4.04
--------------- ---------------
--------------- ---------------
Efficiency 52.60 54.94
--------------- ---------------
Efficiency - Cash Basis 51.80 54.15
--------------- ---------------
(1) Excludes amortization of intangibles
(2) Excludes intangible assets
(3) Excludes amortization of intangibles and intangible assets
Contact:
Ms. Judith Barber
Corporate Secretary
Corporate Headquarters
100 Motor Parkway, Suite 160
Hauppauge, NY 11788-5138
Direct Dial: 631-360-9304
Direct Fax: 631-360-9380brock@bankofsmithtown.net
Copyright ? 2008 Market Wire, Incorporated
[ Back To TMCnet.com's Homepage ]
|
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 16-18, 2008. Los Angeles, California.
