Welcome!

News Feed Item

Stonegate Bank Reports Net Income of $2.0 Million for First Quarter 2014

POMPANO BEACH, FL -- (Marketwired) -- 04/22/14 -- 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,  December 31,
                           2014         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

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
When growing capacity and power in the data center, the architectural trade-offs between server scale-up vs. scale-out continue to be debated. Both approaches are valid: scale-out adds multiple, smaller servers running in a distributed computing model, while scale-up adds fewer, more powerful servers that are capable of running larger workloads. It’s worth noting that there are additional, unique advantages that scale-up architectures offer. One big advantage is large memory and compute capacity...
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, highlighted the current challenges of these transformative technologies and shared strategies for preparing your organization for these changes. This “view from the top” outlined the latest trends and developments i...
Artificial intelligence, machine learning, neural networks. We’re in the midst of a wave of excitement around AI such as hasn’t been seen for a few decades. But those previous periods of inflated expectations led to troughs of disappointment. Will this time be different? Most likely. Applications of AI such as predictive analytics are already decreasing costs and improving reliability of industrial machinery. Furthermore, the funding and research going into AI now comes from a wide range of com...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...
Cloud Expo, Inc. has announced today that Andi Mann and Aruna Ravichandran have been named Co-Chairs of @DevOpsSummit at Cloud Expo Silicon Valley which will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. "DevOps is at the intersection of technology and business-optimizing tools, organizations and processes to bring measurable improvements in productivity and profitability," said Aruna Ravichandran, vice president, DevOps product and solutions marketing...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"Loom is applying artificial intelligence and machine learning into the entire log analysis process, from start to finish and at the end you will get a human touch,” explained Sabo Taylor Diab, Vice President, Marketing at Loom Systems, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), provided an overview of various initiatives to certify the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldwide re...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
"We are a monitoring company. We work with Salesforce, BBC, and quite a few other big logos. We basically provide monitoring for them, structure for their cloud services and we fit into the DevOps world" explained David Gildeh, Co-founder and CEO of Outlyer, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.