FORT LAUDERDALE, FL--(Marketwired - Oct 23, 2013) - Stonegate Bank (
Third Quarter 2013 Highlights:
- Total assets of $1.086 billion
- Net income of $2,219,000 for the third quarter of 2013
- 31 consecutive quarters of profitability
- 2013 third quarter average net interest margin of 3.65%
- Tier 1 risk based capital ratio of 15.7% at September 30, 2013
- Signed definitive agreement to purchase two Florida Shores Banks
- Total loan growth of 6.6% in the first nine months of 2013
Stonegate Bank (
Income and Expenses:
Total interest income increased from $10.7 million in the third quarter of 2012 to $10.8 million in the third quarter of 2013. Total interest expense decreased from $1.8 million in the third quarter of 2012 compared to $1.6 million in the third quarter of 2013. This occurred even though total deposits increased $141 million period to period. Further, the Bank's cost of funds decreased 24 basis points period to period. This resulted in net interest income increasing from $8.9 million in the third quarter of 2012 to $9.2 million in the third quarter of 2013.
Total non-interest income declined slightly to $770,000 in the third quarter of 2013 from $777,000 in the third quarter of 2012. Realized gains on the sale of securities was $640,000 in the third quarter of 2012 versus a realized loss of $4,000 in the third quarter of 2013.
Non-interest expense increased slightly to $6.1 million for the third quarter of 2013 from $5.8 million for the third quarter of 2012. Approximately $225,000 of this increase is attributable to merger related expenses.
Margin and Cost of Funds:
Total cost of funds declined from a 0.92% September 2012 month-to-date average to a 0.68% September 2013 month-to-date average. Stonegate Bank's net interest margin declined from a third quarter 2012 average of 4.25% to 3.65% third quarter 2013 average. The increase in cash of approximately $100 million and the decrease in the investment portfolio of $45 million largely accounted for the decrease in the net interest margin year over year.
Balance Sheet and Capital:
Total assets grew from $942 million on September 30, 2012 to $1.086 billion on September 2013, a $144 million increase. Total loans increased $88 million from $692 million on September 30, 2012 to $780 million on September 30, 2013. Total deposits increased $141 million from $747 million on September 30, 2012 to $888 million on September 30, 2013. Non-interest bearing deposits represent 17.1% of total deposits. Total capital grew from $125.1 million on September 30, 2012 to $128.9 million on September 30, 2013. The undiluted book value of common shares of Stonegate Bank was $15.64 per share on September 30, 2013.
Total Stonegate Bank - September 30, 2013
|(dollars in thousands)|
|30 days past due||578|
|60 - 89 days||757|
*Approximately 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 as well as real estate owned. Overall, non-performing loans represent 1.07% of total loans and 0.77% of total assets.
Management believes all non-performing assets and REO are written down to fair market value. Real estate owned remained largely unchanged from $2.8 million on June 30, 2013 to $2.9 million on September 30, 2013.
The Bank's loan loss reserve was $16.7 million on September 30, 2013. This reserve represents 198% of all non-performing loans and 2.14% of total loans. Total loans past due more than 30 days decreased from $2.5 million on June 30, 2013 to $1.3 million on September 30, 2013.
"Our announcement in September that Stonegate had signed a definitive agreement to acquire both Florida Shores Banks has overshadowed our overall operating results in the third quarter and the year as a whole," said Dave Seleski, President and Chief Executive Officer. "That being said, we are on track to meet many of our earnings and loan growth goals for the year without the added benefit of the pending mergers. Earnings remain strong despite margin pressure. Overall loan growth of 7% (9% annualized) has certainly helped. Furthermore, we have been able to grow loans without significantly increasing non-interest expense. Strategically, in an effort to reduce the Bank's exposure to market volatility, we reduced the size of our investment portfolio substantially. This decrease in portfolio risk was offset by a reduction in the net interest margin as bonds were shifted to interest-bearing cash. Most importantly, we are seeing growth in all of our markets and I think this is a reflection of the continued improvement in the Florida economy."
"Finally, applications and appropriate paperwork for the proposed mergers with both Florida Shores Banks were filed with the Office of Financial Regulation, the FDIC and the Federal Reserve Bank in September. We are very excited about this pending transaction and look forward to the significant value it will add to the franchise and to the shareholders of Stonegate Bank," 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.
|As of September 30, 2013|
|Cash and due from banks||$||184,716|
|Federal funds sold||10,000|
|Commercial real estate loans - owner occupied||175,102|
|Commercial real estate loans - other||250,876|
|Residential 1 - 4 family loans||120,659|
|Consumer and other loans||8,809|
|Allowance for loan losses||(16,727||)|
|Non-interest bearing deposits||$||152,145|
|Money market accounts||372,264|
|Core reciprocal deposits||169,693|
|Certificates of deposit||79,548|
|FHLB and other borrowings||20,000|
|Total liabilities and capital||$||1,086,162|
|For Period Ended September 30, 2013|
|Net interest income||26,517|
|Less: Provision for loan losses||1,376|
|Net interest income after provision for loan losses||25,141|
|Realized gains (losses) on AFS securities||902|
|Less: Salaries and benefits expense||10,314|
|Occupancy and equipment expense||2,781|
|Data processing expense||377|
|Legal and professional expenses||1,618|
|Loan and OREO expenses||487|
|Total non-interest income||17,833|
|Net income before income taxes||10,596|