Sturgis Bancorp, Inc. (OTCBB: STBI) today
announced net income of $436,000 for the second quarter of 2013.
Sturgis Bancorp is the holding company for Sturgis Bank & Trust Company (Bank), and its
subsidiaries Oakleaf Financial Services, Inc.
and Oak Mortgage, LLC. Sturgis Bancorp
provides a full array of trust, commercial and consumer banking
services from 11 banking centers in Sturgis, Bronson, Centreville,
Climax, Colon, South Haven, Three Rivers and White Pigeon, Mich.
Oakleaf Financial Services offers a complete range of investment
and financial-advisory services. Oak Mortgage offers residential
mortgages in all markets of the Bank.
Key Highlights as of June 30, 2013:
- Net income was $436,000 for the second quarter of 2013,
compared to $502,000 for the second quarter of 2012.
- The Bank maintained strong capital ratios, exceeding
"well-capitalized" requirements, with Tier 1 capital at 8.85%.
Total capital at June 30, 2013 was 14.58% of risk-weighted
assets.
- Nonaccrual and past due loans decreased from December 31,
2012.
- Total deposits decreased 0.9% to $232.9 million, mostly in
temporary municipal deposits.
- Allowance for loan losses was 1.95% of loans, down slightly
from 2.03% at the end of 2012.
President and CEO Eric L. Eishen stated: "Credit quality
continues to improve and earnings are stable. Capital ratios are
the strongest they have been since I took leadership of the Bank. I
am pleased we have navigated the financial crisis and come out a
stronger bank. Management will continue to focus on improving
earnings and expense control. The low sustained rates are
problematic for the industry and regulatory expectations are
increasing. We are confident the Bank is in excellent position to
return to normal operations, as soon as the economic conditions
have stabilized. Loan demand is weak and the increase in mortgage
rates has slowed down mortgage refinance activity. We continue to
be the market leader in St. Joseph County and real estate purchase
activity is improving."
Three months ended June 30, 2013 vs. three
months ended June 30, 2012 - Net income for the three months
ended June 30, 2013 was $436,000, or $0.21 per share, compared to
net income of $502,000, or $0.25 per share, for the three months
ended June 30, 2013. The tax equivalent net interest margin
decreased to 3.29% in 2013 from 3.52% in 2012.
Noninterest income was $1.2 million in the second quarters of
2013 and 2012. Investment brokerage commission income increased to
$494,000 in the second quarter of 2013, compared to $417,000 in the
second quarter of 2012. Mortgage banking activities decreased to
$213,000 in 2013, as loan sale volume slowed.
Noninterest expense increased to $3.1 million in 2013, compared
to $2.9 million in 2012. Salaries and employee benefits increased
$147,000, or 9.4%, to $1.7 million, due to increased health
insurance benefit expense, salary adjustments, and commissions
earned. Real estate owned expense of $182,000 included $124,000
written down for the carrying value of foreclosed assets.
The Company provided ($154,000) to the allowance for loan losses
in the second quarter of 2013, compared to ($11,000) in the same
quarter of 2012. Net charge-offs were $76,000 in the second quarter
of 2013, compared to $316,000 in the second quarter of 2012.
Six months ended June 30, 2013 vs. six months
ended June 30, 2012 - Net income for the six months ended June
30, 2013 was $938,000, or $0.46 per share, compared to net income
of $1.0 million, or $0.50 per share, for the six months ended June
30, 2012. The tax equivalent net interest margin decreased to 3.42%
in 2013 from 3.53% in 2012.
Noninterest income was $2.5 million in the first half of 2013,
compared to $2.2 million in the first half of 2012. The increase is
primarily in investment brokerage commission income, which
increased to $958,000 in the first half of 2013, compared to
$716,000 in the first half of 2012.
Noninterest expense increased to $6.3 million in 2013, compared
to $5.7 million in 2012. Salaries and employee benefits increased
$274,000, or 8.7%, to $3.4 million, due to increased health
insurance benefit expense, salary adjustments, and commissions
earned. Real estate owned expense of $485,000 included $326,000
written down for the carrying value of foreclosed assets.
The Company provided ($243,000) to the allowance for loan losses
in the first half of 2013, compared to ($9,000) in the first half
of 2012. Net charge-offs were $152,000 in the first half of 2013,
compared to $411,000 in the first half of 2012.
Total assets decreased to $316.1 million at June 30, 2013 from
$317.1 million at December 31, 2012, primarily in loans. Loans
decreased $10.3 million from December 31, 2012, primarily in
Commercial Mortgage and Commercial Nonmortgage Loans. Cash and cash
equivalents increased $9.9 million to $29.7 million.
Noninterest-bearing deposits increased by $592,000 at June 30,
2013 from $41.3 million at December 31, 2012. Interest-bearing
deposits decreased to $191.1 million at June 30, 2013 from $193.7
million at December 31, 2012. These decrease in interest-bearing
deposits includes $4.0 million decrease in brokered certificates of
deposit. The number of checking accounts continues to increase, as
the Bank continues to expand its customer base.
Total equity was $27.7 million at June 30, 2013, compared to
$26.9 million at December 31, 2012. Book value per share increased
to $13.53 at June 30, 2013 from $13.21 at December 31, 2012.
This release contains statements that constitute forward-looking
statements. These statements appear in several places in this
release and include statements regarding intent, belief, outlook,
objectives, efforts, estimates or expectations of Bancorp,
primarily with respect to future events and the future financial
performance of the Bancorp. Any such forward-looking statements are
not guarantees of future events or performance and involve risks
and uncertainties, and actual results may differ materially from
those in the forward-looking statement. Factors that could cause a
difference between an ultimate actual outcome and a preceding
forward-looking statement include, but are not limited to, changes
in interest rates and interest rate relationships; demand for
products and services; the degree of competition by traditional and
non-traditional competitors; changes in banking laws and
regulations; changes in tax laws; changes in prices, levies, and
assessments; the impact of technological advances; government and
regulatory policy changes; the outcome of any pending and future
litigation and contingencies; trends in consumer behavior and
ability to repay loans; and changes of the world, national and
local economies. Bancorp undertakes no obligation to update, amend
or clarify forward-looking statements as a result of new
information, future events, or otherwise. The numbers presented
herein are unaudited.
For additional information, visit our website at
www.sturgisbank.com.
CONSOLIDATED BALANCE SHEETS
June 30, 2013 and December 31, 2012
(Amounts in thousands, except share and per share data)
June 30, Dec. 31,
2013 2012
--------- ---------
ASSETS
Cash and due from banks $ 16,277 $ 10,237
Other short-term investments 13,431 9,611
--------- ---------
Total cash and cash equivalents 29,708 19,848
Interest-earning deposits in banks 12,940 12,196
Securities - Available for sale 1,602 1,242
Federal Home Loan Bank stock, at cost 4,064 4,064
Loans held for sale 1,683 2,261
Loans, net of allowance of $4,744 and $5,138 238,296 248,520
Premises and equipment, net 7,257 7,044
Goodwill 5,109 5,109
Originated mortgage servicing rights 1,287 1,273
Real estate owned 646 1,252
Bank-owned life insurance 9,398 9,259
Accrued interest receivable 871 861
Prepaid FDIC assessment - 414
Other assets 3,243 3,702
--------- ---------
Total assets $ 316,104 $ 317,045
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $ 41,853 $ 41,261
Interest-bearing 191,062 193,662
--------- ---------
Total deposits 232,915 234,923
Federal Home Loan Bank advances and other borrowings 52,264 52,440
Accrued interest payable 267 333
Other liabilities 2,967 2,425
--------- ---------
Total liabilities 288,413 290,121
Stockholders' equity
Preferred stock - $1 par value: authorized -
1,000,000 shares issued and outstanding - 0 shares
Common stock - $1 par value: authorized - 9,000,000
shares issued and outstanding 2,047,093 shares at
June 30, 2013 and 2,038,395 at December 31, 2012 2,047 2,038
Additional paid-in capital 7,037 6,979
Retained earnings 18,891 17,953
Accumulated other comprehensive income (loss) (284) (46)
--------- ---------
Total stockholders' equity 27,691 26,924
--------- ---------
Total liabilities and stockholders' equity $ 316,104 $ 317,045
========= =========
CONSOLIDATED STATEMENTS OF INCOME
Three Months ended June 30, 2013 and 2012
(Amounts in thousands, except share and per share data)
Three Months ended
June 30,
2013 2012
--------- ---------
Interest income
Loans $ 2,857 $ 3,080
Investment securities:
Taxable 53 26
Tax-exempt 15 12
Dividends 47 34
--------- ---------
Total interest income 2,972 3,152
Interest expense
Deposits 252 337
Borrowed funds 415 426
--------- ---------
Total interest expense 667 763
--------- ---------
Net interest income 2,305 2,389
Provision for loan losses (154) (11)
--------- ---------
Net interest income after provision for loan losses 2,459 2,400
Noninterest income:
Service charges and other fees 372 319
Investment brokerage commission income 494 417
Mortgage banking activities 213 305
Trust fee income 111 80
Increase in value of bank owned life insurance 70 70
Other income (62) (16)
--------- ---------
Total noninterest income 1,198 1,175
Noninterest expenses:
Salaries and employee benefits 1,716 1,569
Occupancy and equipment 426 361
Data processing 177 181
Professional services 107 69
Real estate owned expense 182 212
Advertising 27 24
FDIC premiums 110 113
Other 394 381
--------- ---------
Total noninterest expenses 3,139 2,910
--------- ---------
Income (loss) before income tax expense (benefit) 518 665
Provision for income tax 82 163
--------- ---------
Net income (loss) $ 436 $ 502
========= =========
Earnings per share $ 0.21 $ 0.25
Dividends declared per share $ 0.00 $ 0.00
Key Ratios:
Return on average equity 6.35% 7.77%
Return on average assets 0.54% 0.64%
Net interest margin (tax equivalent) 3.29% 3.55%
CONSOLIDATED STATEMENTS OF INCOME
Six Months ended June 30, 2013 and 2012
(Amounts in thousands, except share and per share data)
Six Months Ended
June 20
2013 2012
--------- ---------
Interest income
Loans $ 5,831 $ 6,218
Investment securities:
Taxable 93 48
Tax-exempt 31 15
Dividends 87 71
--------- ---------
Total interest income 6,042 6,352
Interest expense
Deposits 519 708
Borrowed funds 826 850
--------- ---------
Total interest expense 1,345 1,558
--------- ---------
Net interest income 4,697 4,794
Provision for loan losses (243) (9)
--------- ---------
Net interest income after provision for loan losses 4,940 4,803
Noninterest income:
Service charges and other fees 716 693
Investment brokerage commission income 958 716
Mortgage banking activities 542 564
Trust fee income 196 158
Increase in value of bank owned life insurance 140 139
Other income (56) (27)
--------- ---------
Total noninterest income 2,496 2,243
Noninterest expenses:
Salaries and employee benefits 3,412 3,138
Occupancy and equipment 829 714
Data processing 353 356
Professional services 224 187
Real estate owned expense 485 347
Advertising 55 51
FDIC premiums 215 211
Other 723 708
--------- ---------
Total noninterest expenses 6,296 5,712
--------- ---------
Income (loss) before income tax expense (benefit) 1,140 1,334
Provision for income tax 202 331
--------- ---------
Net income (loss) $ 938 $ 1,003
========= =========
Earnings per share $ 0.46 $ 0.50
Dividends declared per share $ 0.00 $ 0.00
Key Ratios:
Return on average equity 6.92% 7.93%
Return on average assets 0.59% 0.63%
Net interest margin (tax equivalent) 3.42% 3.53%
Contacts: Sturgis Bancorp Eric Eishen President & CEO or
Brian P. Hoggatt CFO P: 269 651-9345
Sturgis Bancorp (QX) (USOTC:STBI)
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