Sound Bank Has Successful Year Despite Economic Challenges
February 12 2008 - 4:53PM
PR Newswire (US)
MOREHEAD CITY, N.C., Feb. 12 /PRNewswire-FirstCall/ -- Sound
Banking Company (OTC:SNBN) (BULLETIN BOARD: SNBN) reported today
that 2007 was a successful year in accomplishing strategic
objectives. President and CEO Phil Collins stated that, "Despite
the economic challenges experienced by many businesses in our
market area as well as a general slowdown in businesses activity
throughout the region, Sound Bank continued its record of solid
growth in market share and earning assets. In July we opened our
Beaufort branch, which has been very favorably received by the
citizens of that area and has exceeded our expectations thus far.
In August, we rewarded our shareholders with a 6- for-5 stock
split. Our net income, though not as high as in 2006, was favorable
when taking into consideration the lower net interest margin,
general market conditions and increased expenses associated with
our branch expansion. The greatest challenge to Sound Bank, and the
banking industry in general, will be to manage its net interest
margin as the Federal Reserve continues to cut interest rates into
2008. Through a combination of deposit pricing and utilizing other
low cost funding sources, we will seek to minimize margin
compression until our deposit liabilities reprice to lower levels.
Fortunately, Sound Bank has no exposure in the sub-prime mortgage
market, an issue that is now adversely affecting many financial
institutions." Net income for the year ended December 31, 2007, was
$659,000 or $0.79 per diluted share compared with $917,000 or $1.12
per diluted share for the year ended December 31, 2006. Results for
the current year were impacted by a lower net interest margin, a
higher provision for loan losses and increases in operating
expenses primarily as a result of branch expansion. All earnings
per share figures for 2006 have been adjusted to reflect the
6-for-5 stock split paid in August 2007. Sound Bank reported total
assets of $113.5 million on December 31, 2007, reflecting a 12%
increase over total assets of $101.4 million on December 31, 2006.
Total loans increased by 11% from $81.3 million to $90.3 million,
total deposits increased 10% from $89.9 million to $99.3 million
and total stockholders' equity grew by 10% from $8.4 million to
$9.2 million. Unaudited net income for the three-month period ended
December 31, 2007, was $82,000 or $0.10 per diluted share compared
with $257,000 or $0.31 per diluted share for the same three-month
period of 2006. In comparing results for the two quarterly periods,
net interest income decreased by 2% to $1.0 million due to interest
margin compression, non-interest income increased by 50% and
non-interest expenses increased by 37% in part due to branch
expansion costs. In anticipation of continued slowdown in the real
estate market, which could lead to deterioration in loan credit
quality, the loan loss provision was $140,000 for the current
three-month period compared to $59,000 for the prior year period.
Sound Banking Company is a state chartered bank and offers a full
range of financial services. Sound Bank, headquartered in Morehead
City, operates full service offices in Morehead City, Beaufort and
Cape Carteret and a loan production office in New Bern, North
Carolina. Information about Sound Banking Company and its products
and services is available on its web site at:
http://www.soundbanking.com/ The information as of and for the
quarter ended December 31, 2007 as presented is unaudited. This
news release contains forward-looking statements. The actual
results might differ materially from those projected in the
forward-looking statements for various reasons, including our
limited operating history, substantial changes in financial
markets, regulatory changes, changes in interest rates, loss of
deposits and loan demand to other savings and financial
institutions, and changes in real estate values and the real estate
market. DATASOURCE: Sound Banking Company CONTACT: Phil Collins of
Sound Banking Company, +1-252-727-5558 Web site:
http://www.soundbanking.com/
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