|By Marketwired .||
|January 17, 2014 04:28 PM EST||
FORT LAUDERDALE, FL -- (Marketwired) -- 01/17/14 -- Stonegate Bank (OTCBB: SGBK)
Fourth Quarter 2013 Highlights:
- $1.1 billion in total assets at December 31, 2013
- Net income of $2,540,000 for the fourth quarter of 2013
- Net income of $9,317,000 for fiscal year 2013
- 32 consecutive quarters of profitability
- 2013 fourth quarter average net interest margin of 3.74%
- Tier 1 risk based capital ratio of 15.3% at December 31, 2013
- Closed Florida Shores acquisition on January 15, 2014 creating a $1.7 billion bank
- Total loan growth of 11.0% in 2013
Stonegate Bank (OTCBB: SGBK) reported net income of $2,540,000, or 30.8 cents per share in the fourth quarter of 2013, as compared to net income of $2,164,000 or 26.2 cents per share in the fourth quarter of 2012. The Bank increased earnings year over year even though merger related expenses in 2013 were approximately $900,000. The Bank earned $9,317,000 in 2013 or $1.13 per share, as compared to $9,082,000 or $1.10 per share in 2012.
Income and Expenses:
Total interest income decreased from $12.2 million in the fourth quarter of 2012 to $11.0 million in the fourth quarter of 2013. Total interest expense decreased from $1.8 million in the fourth quarter of 2012 compared to $1.5 million in the fourth quarter of 2013. This occurred even though total deposits increased $189 million during 2013. Further, the Bank's cost of funds decreased 30 basis points since December 2012. Net interest income decreased from $10.3 million in the fourth quarter of 2012 to $9.5 million in the fourth quarter of 2013.
Total non-interest income increased to $2,146,000 in the fourth quarter of 2013 from $697,000 in the fourth quarter of 2012. Total non-interest income improved from $3,625,000 in 2012 to $4,532,000, or 25%, in 2013. The largest components of this improvement were increased service charges and overdraft fees, recovery on the sale of REO, and other loan related fees.
Non-interest expense increased to $6.5 million for the fourth quarter of 2013 from $5.8 million for the fourth quarter of 2012. But for merger related expenses in the fourth quarter of 2013, non-interest expenses would have remained unchanged.
Margin and Cost of Funds:
Total cost of funds declined from a 0.68% September 2013 month-to-date average to a 0.61% December 2013 month-to-date average. Stonegate Bank's net interest margin declined from a fourth quarter 2012 average of 4.76% to 3.74% fourth quarter 2013 average. The increase in cash of nearly $142 million and a decrease of $41 million in the investment portfolio largely accounted for the decrease in the net interest margin as well as timing differences on the realization of accretable discounts.
Balance Sheet and Capital:
Total assets grew organically from $944 million on December 31, 2012 to $1.119 billion on December 31, 2013, a $175 million increase. Total loans increased $80 million from $732 million on December 31, 2012 to $812 million on December 31, 2013. Total deposits increased $189 million from $746 million on December 31, 2012 to $935 million on December 31, 2013. Non-interest bearing deposits represented 19.4% of total deposits. Total capital grew from $126.7 million on December 31, 2012 to $131.4 million on December 31, 2013. The undiluted book value of common shares of Stonegate Bank was $15.95 per share on December 31, 2013.
Total Stonegate Bank ---------------------------------------------------------------------------- (dollars in thousands) September 30, 2013 December 31, 2013 ------------------------------------------- Total loans $ 780,207 $ 812,009 30 days past due 578 202 60 - 89 days 757 0 NPAs* 8,423 6,627 REO 2,962 2,120 ----------------------------------------------------------------------------
* 34% of the nonaccrual loans are currently making 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 0.81% of total loans and 0.59% of total assets.
Management believes all non-performing assets and REO are written down or reserved to fair market value. Real estate owned declined from $2.9 million on September 30, 2013 to $2.1 million on December 31, 2013. The Bank's loan loss reserve was $17.3 million on December 31, 2013. This reserve represents 261% of all non-performing loans and 2.13% of total loans. Total loans past due more than 30 days decreased from $1,335,000 on September 30, 2013 to $202,000 on December 31, 2013.
"First, I would like to welcome all the customers and investors of Florida Shores Southeast and Southwest to Stonegate Bank. The closing of the Florida Shores merger earlier this week creates some exciting opportunities for the combined bank as we move forward together in 2014," said Dave Seleski, President and Chief Executive Officer. "As for Stonegate, we ended the year with our strongest quarter. After a very slow start, including negative loan growth in the first quarter, we were able to achieve all of our goals in 2013 which included 11% loan growth, an improvement in percentage of non-interest bearing deposits to total deposits, higher earnings, and improved credit quality. Some of this is a reflection of the continued improvement in the Florida economy but most of the credit goes to the employees that really stepped up to the plate. Even more remarkable is that this was achieved with the distraction and the cost of the merger with Florida Shores which could have tempered our overall performance."
"The two biggest challenges and opportunities for Stonegate in 2014 are the data processing conversion of Florida Shores on April 25th and our pending NASDAQ listing. These are exciting times at Stonegate and I look forward to continuing to build our franchise in 2014," added 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 December 31, 2013 (In Thousands) Assets ----------------------------------------------------- Cash and due from banks $ 190,226 Federal funds sold 10,000 Investment securities 71,639 Commercial loans 128,654 Commercial real estate loans - owner occupied 179,643 Commercial real estate loans - other 265,223 Construction loans 64,805 Residential 1 - 4 family loans 122,351 HELOCs 40,691 Consumer and other loans 10,642 --------------------- Gross loans 812,009 Allowance for loan losses (17,307) --------------------- Net loans 794,702 Fixed assets 12,310 Other assets 40,856 --------------------- Total assets $ 1,119,733 ===================== Liabilities ----------------------------------------------------- Non-interest bearing deposits $ 181,281 NOW accounts 127,124 Money market accounts 392,108 Core reciprocal deposits 146,206 Savings accounts 6,543 Certificates of deposit 82,215 --------------------- Total deposits 935,477 Repurchase Agreements 22,733 FHLB and other borrowings 20,000 Other Liabilities 10,061 --------------------- Total liabilities 988,271 Total capital 131,462 --------------------- Total liabilities and capital $ 1,119,733 =====================
STONEGATE BANK Income Statement For Period Ended December 31, 2013 (In Thousands) Interest income $ 42,692 Interest expense 6,672 --------------------- Net interest income 36,020 Less: Provision for loan losses 2,444 --------------------- Net interest income after provision for loan losses 33,576 Non-interest income 4,532 Realized gains (losses) on AFS securities 902 Less: Salaries and benefits expense 13,909 Occupancy and equipment expense 3,646 Data processing expense 553 Legal and professional expenses 2,777 Loan and OREO expenses 346 Other expense 3,172 --------------------- Total non-interest income 24,403 Net income before income taxes 14,607 Income taxes 5,290 --------------------- Net income $ 9,317 =====================
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