Summit Bank Corporation (SBGA) (NASDAQ: SBGA), parent company of
The Summit National Bank, announces first quarter 2006 earnings of
$1.41 million, or $0.25 diluted earnings per share, up 7.9% over
the $1.31 million, or $0.23 diluted earnings per share, for the
first quarter last year. Net income for the first quarter, 2006
represented a return on average shareholders' equity of 15.20%, an
increase over the 15.06% for the first quarter of last year. The
increase in earnings was attained largely due to increased net
interest income resulting from improvement in net interest margin
and loan growth. Total assets increased to $553.7 million at March
31, 2006 from $525.9 million at December 31, 2005 and $522.3
million at March 31, 2005 primarily due to loan growth and $17.6
million of net proceeds from the Company's recently completed
common stock offering. Total loans grew 8.5% over the past twelve
months from $335.0 million at March 31, 2005 to $363.4 million at
March 31, 2006. During the first quarter, loans grew $5.4 million,
or 1.5%. Non-performing assets at March 31, 2006 remained flat
compared to year end 2005 at $1.2 million, or 0.32% of loans, but
have declined from $2.4 million, or 0.72% of loans, at March 31,
2005. Approximately half of the non-performing assets at March 31,
2006 were fully guaranteed by the SBA. The allowance for loan
losses totaled $4.8 million, or 1.33% of loans, at March 31, 2006
compared to $4.6 million, or 1.27% of loans, at December 31, 2005
and $4.4 million, or 1.31% of loans, one year ago. Deposits
increased from $435.0 million at March 31, 2005 to $460.9 million
at March 31, 2006, an increase of 5.9%. During the first quarter,
deposits grew $22.6 million, or 5.2%. Borrowed funds have declined
from $44.1 million at March 31, 2005 to $40.7 million at December
31, 2005 and $25.9 million at March 31, 2006 as part of the
deleveraging strategy the Company has deployed. Shareholders'
equity has increased from $34.1 million at March 31, 2005 to $36.6
million at December 31, 2005 and $54.9 million at March 31, 2006
due to earnings and the common stock offering, the net proceeds of
which were used on April 1, 2006 to fund the $23.7 million Concord
Bank, N.A. acquisition. The rising interest rate environment over
the past year resulted in net interest income increasing from $5.04
million for the first quarter of 2005 to $5.49 million for the same
period this year. Net interest margin improved to 4.50% for the
first quarter of 2006 from 4.08% for the same quarter last year.
For the fourth quarter ended December 31, 2005, net interest income
was $5.52 million, representing a net interest margin of 4.55%.
Total noninterest income was $796,000 for the first quarter of
2006, down from $933,000 for the first quarter last year primarily
due to losses on the Bank's low income housing tax credit
investment and interest rate floor that were both initiated after
the first quarter of 2005. The former was offset by federal income
tax credit benefit and the latter has only a remaining $61,000 book
value should the instrument remain ineffective going forward.
Noninterest income for the fourth quarter of 2005 was $789,000.
Noninterest expenses increased 5.5% from $3.87 million in the first
quarter of 2005 to $4.09 million for the same period this year. The
increase was primarily due to increased salaries and benefits and
occupancy and equipment partially due to one new branch opened in
the past year and increased temporary staffing and accrued
incentive expense. Noninterest expense for the fourth quarter of
2005 was only $3.62 million primarily due to a $240,000 fourth
quarter recovery on a 2004 loss. Summit Bank completed the purchase
of Concord Bank, N.A. in Houston, Texas on April 1, 2006. Concord
had approximately $120 million in assets, $96 million in loans and
$108 million in deposits at the closing date. The integration of
Concord is presently taking place and the results of the combined
banks will be reported at the end of the second quarter. Chief
Executive Officer, Pin Pin Chau, said, "We are pleased with the
result of the common stock offering and we believe that the
proceeds have been applied to a good use which will reward all of
our shareholders. The integration of Concord with Summit has been
very smooth thus far and we anticipate a very effective combination
of two solid organizations. We can look forward to Concord's
continued success in the vibrant Houston market." Summit Bank
Corporation is the parent company of The Summit National Bank, a
nationally chartered full-service community bank specializing in
the small business and international trade finance markets. It
currently operates five branches in the metropolitan Atlanta area
and two in the South Bay area of San Francisco, California. Concord
Bank now operates as a division of Summit Bank in one location in
Houston, Texas. Summit also operates a loan production office in
San Diego, California and a representative office in Shanghai,
China. This release contains forward-looking statements including
statements relating to present or future trends or factors
generally affecting the banking industry and specifically affecting
Summit's operations, markets and products. Without limiting the
foregoing, the words "believes," "anticipates," "intends,"
"expects," or similar expressions are intended to identify
forward-looking statements. These forward-looking statements
involve risks and uncertainties. Actual results could differ
materially from those projected for many reasons, including,
without limitation, changing events and trends that have influenced
Summit's assumptions, but that are beyond Summit's control. These
trends and events include (i) changes in the interest rate
environment which may reduce margins, (ii) not achieving expected
growth, (iii) less favorable than anticipated changes in the
international, national and local business environments and
securities markets, (iv) adverse changes in the regulatory
requirements affecting Summit, (v) greater competitive pressures
among financial institutions in Summit's markets, (vi) greater loan
losses than historic levels, a (vii) difficulties in integrating
the operations of Concord Bank, N.A. with those of Summit, and
(viii) difficulties in expanding into a new geographic market.
Additional information and other factors that could affect future
financial results are included in Summit's Annual Report on Form
10-K and its filings with the Securities and Exchange Commission.
-0- *T Selected Financial Information March 31, 2006 (In thousands,
except per share data) March 31, December 31, ---------------------
------------- % 2006 2005 Change 2005 ---------- --------- -------
-------- Summary Balance Sheet: Cash and Short Term Investments $
41,513 $ 18,408 125.5% $ 18,775 Investments 123,871 144,494 -14.3%
125,187 Commercial Loans 304,355 278,336 9.3% 300,609 SBA Loans
58,101 55,657 4.4% 56,686 Other Loans 925 1,047 -11.7% 691 Total
Loans 363,381 335,040 8.5% 357,986 Allowance for Loan Loss (4,848)
(4,373) 10.9% (4,555) Net Loans 358,533 330,667 353,431 Other
Assets 29,825 28,700 3.9% 28,529 Total Assets $ 553,742 $ 522,270
6.0% $525,922 Demand Deposits - Noninterest-Bearing $ 104,542 $
112,135 -6.8% $108,600 NOW & MMA 80,432 86,175 -6.7% 84,032
Savings & CDs 275,886 236,700 16.6% 245,600 Total Deposits
460,860 435,010 5.9% 438,232 Borrowed Funds 25,922 44,143 -41.3%
40,717 Other Liabilities 12,067 9,010 33.9% 10,334 Stockholders
Equity 54,893 34,107 60.9% 36,639 Total Liabilities &
Stockholders Equity $ 553,742 $ 522,270 6.0% $525,922 Three Months
Ended March 31, % Summary Income Statement: 2006 2005 Change
---------- ----------------- Interest Income $ 8,760 $ 7,336 19.4%
Interest Expense 3,268 2,300 42.1% Net Interest Income 5,492 5,036
9.0% Provision for Loan Losses 300 264 13.6% Net Interest Income
after Provision for Loan Loss 5,192 4,772 8.8% Service Charges on
Deposits 325 342 -4.9% International Fee Income 356 332 7.3% BOLI
121 122 -0.6% Other noninterest income/(loss) (6) 137 -104.7% Total
Noninterest Income 796 933 -14.6% Salaries & Benefits 2,240
2,000 12.0% Occupancy 356 298 19.3% Premises & Equipment 448
397 12.8% Other noninterest expense 1,042 1,178 -11.5% Total
Noninterest Expense 4,086 3,873 5.5% Income before Tax 1,902 1,832
3.9% Income Tax Expense 493 526 -6.2% Net Income $ 1,409 $ 1,306
7.9% Average Balances: Average Assets $ 530,427 $ 531,437 -0.2%
Average Earning Assets 487,620 494,221 -1.3% Average Total Loans
361,485 340,292 6.2% Average Deposits 447,307 437,228 2.3% Average
Total Funds 482,914 492,111 -1.9% Average Shareholder Equity 37,088
34,689 6.9% Per Share Data: Basic Earnings per Share $ 0.25 $ 0.23
8.7% Diluted Earnings per Share $ 0.25 $ 0.23 8.7% Dividend Per
Share $ 0.10 $ 0.10 0.0% Weighted - Average Shares Outstanding -
Basic 5,708,493 5,693,054 Weighted - Average Shares Outstanding -
Diluted 5,710,724 5,699,227 Common Shares Outstanding 6,944,604
5,694,604 Key Ratios: Return on Average Assets 1.06% 0.98% Return
on Average Shareholder Equity 15.20% 15.06% Yield on Earning Assets
7.21% 5.95% Cost of Funds 2.71% 1.87% Net Interest Margin 4.50%
4.08% Noninterest Income as % of Average Assets 0.60% 0.70%
Noninterest Expense as % of Average Assets 3.08% 2.92% Efficiency
Ratio 64.98% 64.92% ALLL as % of Total Loans 1.33% 1.31%
Nonperforming Assets as % of Total Loans and ORE 0.32% 0.72% Net
Chargeoffs(Recoveries) as % of Average Loans 0.01% 0.52% *T
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