SBIT Summit Bancshares

Summit Bancshares Reports First Quarter 2005 Earnings FORT WORTH, Texas, April 13 /PRNewswire-FirstCall/ -- Summit Bancshares, Inc. (NASDAQ:SBIT), the bank holding company for Summit Bank, N.A., today reported net income for the first quarter of 2005 of $3,013,000, or $0.24 per diluted common share, compared to $2,451,000, or $.19 per diluted common share, for the comparable 2004 period, a 26.3% increase in per share earnings. Return on average assets and return on average shareholders' equity were 1.23% and 16.16%, respectively, for the quarter ended March 31, 2005 compared to 1.22% and 14.06%, respectively, for the same quarter in 2004. The per share earnings and all historical per share data have been restated to reflect a two-for-one stock split that was effective December 31, 2004. Also Summit completed its acquisition of ANB Financial Corporation and its subsidiary, Arlington National Bank ("ANB"), effective May 1, 2004. The results of operations for ANB have been included in Summit's consolidated financial statements since the purchase date. Philip E. Norwood, Chairman, President and Chief Executive Officer stated, "We are pleased to report positive financial performance of the Company for the first quarter of 2005. Compared to the first quarter of the prior year average loans and average deposits increased 23.2% and 23.9% respectively. Net interest income increased 23.5% reflecting an increase of eleven basis points in net interest margin and a 21.5% increase in average earning assets compared to the first quarter of 2004. The increase in net interest margin reflects the increase in market interest rates." He further stated, "As recently announced we are excited to have Kim Dignum and her staff of Dignum Financial Services join the Company as a department of the Bank. Kim brings many years of providing personal financial planning and other investment services to her customers. Currently DFS has $85 million of assets under management. Her talents will add an important service to the Bank's customers." Mr. Norwood also noted, "The Company celebrated its 30 year anniversary in January of 2005. In that 30 year period the Company has grown to approximately one billion dollars in assets with shareholders' equity of $74.4 million and a market capitalization of approximately $210 million. These are significant milestones for the Company." Net interest income of $10.2 million for the first quarter of 2005 improved $2.0 million, or 23.5% over the first quarter of 2004. Since the Company is somewhat more sensitive to market interest rate changes than other community banks due to its heavier commercial lending focus, the net interest margin increased to 4.47% for the first quarter of 2005 compared to 4.36% for the first quarter of the prior year partially reflecting the recent increases to the market interest rate environment. A provision for loan losses was $225,000 for the first quarter of 2005 while the provision for loan losses was $605,000 for the same quarter of 2004. For the first quarter of 2005 the Company experienced net loan loss recoveries of previously charged off loans of $107,000, which represented net recoveries to average loans for the quarter of 0.02%. As of March 31, 2005, the allowance for loan losses as a percentage of total loans was 1.47% and also represented over three times the balance of nonperforming loans as of the end of the first quarter of 2005. As of March 31, 2005, nonperforming loans were $3.3 million, or 0.46% of total outstanding loans. Non interest income for the first quarter of 2005 was $1,880,000, a $313,000 increase over the first quarter of 2004. The increase reflected improvements in service charges on deposit accounts of $76,000, an increase in other fees of $271,000 and a decrease in extraordinary income related to the sale of assets with the first quarter of last year having a $168,000 gain while the first quarter of this year had a gain of $134,000. These increases in non interest income also reflect the impact of the ANB acquisition. Non interest expenses of $7,252,000 for the first quarter of 2005 increased $1,722,000 compared to the first quarter of last year. Primarily the increase is due to the inclusion of ANB in the 2005 first quarter results as well as expenses in 2005 related to compliance with the Sarbanes Oxley Act's Section 404 which required additional expenditures for auditing and consulting fees in the amount of approximately $125,000. Summit files annual, quarterly and special reports, proxy statements and other information with the SEC. Investors may read and copy any of these reports, statements and other information at the SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549. Investors should call the SEC at 1-800-SEC-0330 for further information on the public reference room. The reports, statements, and other information filed by Summit with the SEC are also available free at the SEC's web site at http://www.sec.gov/ . You can also obtain a free copy of these reports, statements and other information from Summit's web site at http://www.summitbank.net/ . The Company will host a conference call Thursday, April 14, 2005 at 10:00 a.m. (CT) to discuss the Company's performance for the quarter ended March 31, 2005. To participate, please call (800)406-5345 and enter confirmation code 4367304. If you are unable to participate, an audio playback of the call will be available starting Thursday, April 14, 2005 at 2:30 p.m. (CT) through midnight April 28, 2005 (CT) by calling (888)203-1112 and entering 4367304. The 2005 Annual Meeting of Shareholders will be held on April 19, 2005 at 3:30 p.m. (CT) at Summit Bancshares, Inc. Corporate Headquarters, 3880 Hulen Street, Suite 300, Fort Worth, Texas. Certain statements contained in this press release that are not historical in nature, including statements regarding the Company's and/or management's intentions, strategies, beliefs, expectations, representations, plans, projections, or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions for forward-looking statements contain in such Act. We are including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements are based on assumptions involving certain known and unknown risks and uncertainties, many of which are beyond the Company's control, and the other important factors that could cause actual results, performance or achievements to differ materially from the expectations expressed or implied by such forward-looking statements. These risks and uncertainties are listed from time to time in the Company's filings with the Securities and Exchange Commission, including but not limited to, those set forth under the heading "Factors That May Affect Future Results" in the Company's Annual Report on Form 10-K for the year ended December 31, 2004. SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per share data) Three Months Ended March 31, % EARNINGS SUMMARY 2005 2004 Change Interest income $13,373 $10,198 31.1% Interest expense 3,140 1,915 64.0% Net interest income 10,233 8,283 23.5% Provision for loan losses 225 605 -62.8% Service charges on deposits 982 906 8.4% Gain on sale of investment securities --- --- 0.0% Other income 898 661 35.9% Salaries and benefits expense 4,269 3,368 26.8% Occupancy and equipment expense 1,202 933 28.8% Other expense 1,781 1,229 44.9% Earnings before income taxes 4,636 3,715 24.8% Provision for income taxes 1,623 1,264 28.4% Net earnings $3,013 $2,451 22.9% Basic earnings per share $0.24 $0.20 20.0% Basic weighted average shares outstanding 12,377 12,304 Diluted earnings per share $0.24 $0.19 26.3% Diluted weighted average shares outstanding 12,718 12,692 Average for Quarter Ended March 31, Dec. 31, Sept. 30, June 30, March 31, BALANCE SHEET SUMMARY 2005 2004 2004 2004 2004 Total loans $706,902 $694,177 $678,915 $642,935 $573,862 Total investment securities 220,161 226,530 218,831 196,972 187,988 Earning assets 932,258 924,557 914,595 871,084 767,274 Total assets 993,154 984,814 976,911 925,830 808,009 Noninterest bearing deposits 225,519 235,846 226,462 207,815 179,396 Interest bearing deposits 559,853 560,341 557,329 521,812 454,352 Total deposits 785,372 796,187 783,791 729,628 633,748 Other borrowings 128,174 109,713 118,083 121,193 101,349 Shareholders' equity 75,602 74,543 71,038 70,583 70,116 Average for Three Months Ended March 31, % BALANCE SHEET SUMMARY 2005 2004 Change Total loans $706,902 $573,862 23.2% Total investment securities 220,161 187,988 17.1% Earning assets 932,258 767,274 21.5% Total assets 993,154 808,009 22.9% Noninterest bearing deposits 225,519 179,396 25.7% Interest bearing deposits 559,853 454,352 23.2% Total deposits 785,372 633,748 23.9% Other borrowings 128,174 101,349 26.5% Shareholders' equity 75,602 70,116 7.8% Ending Balance March 31, Dec. 31, Sept. 30, June 30, March 31, BALANCE SHEET SUMMARY 2005 2004 2004 2004 2004 Total loans $716,714 $702,619 $689,906 $672,686 $593,271 Total investment securities 214,222 223,351 219,264 214,991 181,879 Total earning assets 939,934 930,990 928,638 905,228 818,393 Allowance for loan losses (10,519) (10,187) (10,079) (9,844) (8,320) Premises and equipment 15,462 15,749 15,643 15,145 12,755 Total assets 999,914 989,117 990,406 969,708 860,361 Noninterest bearing deposits 232,556 235,399 232,586 218,343 186,198 Interest bearing deposits 565,002 556,865 558,938 557,347 470,186 Total deposits 797,558 792,264 791,524 775,690 656,384 Other borrowings 124,007 118,094 121,355 121,785 129,691 Total liabilities 925,477 914,627 916,858 901,009 788,786 Shareholders' equity 74,437 74,490 73,548 68,699 71,575 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) March 31, Dec. 31, Sept. 30, June 30, March 31, NONPERFORMING ASSETS 2005 2004 2004 2004 2004 Nonaccrual loans $3,294 $2,587 $2,545 $2,832 $2,405 Restructured loans --- --- --- --- --- Other real estate & foreclosed assets --- --- 4 369 7 Accruing loans past due 90 days or more --- 18 2,300 111 --- Total nonperforming assets $3,294 $2,605 $4,849 $3,312 $2,412 Total nonperforming assets as a percentage of loans and foreclosed assets 0.46% 0.37% 0.70% 0.49% 0.41% Quarter Ended ALLOWANCE FOR March 31, Dec. 31, Sept. 30, June 30, March 31, LOAN LOSSES 2005 2004 2004 2004 2004 Balance at beginning of period $10,187 $10,079 $9,844 $8,320 $7,784 Balance acquired in Arlington National Bank Acquisition $--- --- --- 1,254 --- Loans charged off (84) (293) (415) (196) (137) Loan recoveries 191 111 155 66 68 Net (charge-offs) recoveries 107 (182) (260) (130) (69) Provision for loan losses 225 290 495 400 605 Balance at end of period $10,519 $10,187 $10,079 $9,844 $8,320 Allowance for loan losses as a percentage of total loans 1.47% 1.45% 1.46% 1.46% 1.40% Allowance for loan losses as a percentage of nonperforming loans 319.34% 393.82% 396.03% 347.60% 345.95% Net charge-offs (recoveries) as a percentage of average loans -0.02% 0.03% 0.04% 0.02% 0.01% Provision for loan losses as a percentage of average loans 0.03% 0.04% 0.07% 0.06% 0.11% Quarter Ended March 31, Dec. 31, Sept. 30, June 30, March 31, SELECTED RATIOS 2005 2004 2004 2004 2004 Return on average assets (annualized) 1.23% 1.18% 1.14% 1.13% 1.22% Return on average equity (annualized) 16.16% 15.58% 15.66% 14.79% 14.06% Average shareholders' equity to average assets 7.63% 7.57% 7.27% 7.62% 8.68% Yield on earning assets 5.83% 5.61% 5.39% 5.23% 5.36% Cost of interest bearing funds 1.85% 1.65% 1.49% 1.42% 1.39% Net interest margin (tax equivalent) 4.47% 4.41% 4.29% 4.18% 4.36% Efficiency ratio 59.69% 59.71% 59.23% 58.90% 55.94% End of period book value per common share $6.01 $6.03 $5.96 $5.57 $5.82 End of period common shares outstanding 12,390 12,359 12,334 12,372 12,308 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) Three Months Ended March 31, 2005 March 31, 2004 Average Average YIELD ANALYSIS Balance Interest Yield Balance Interest Yield Interest Earning Assets: Federal funds sold, Repurchases, & Due from time $5,195 $31 2.40% $5,424 $13 0.96% Investment securities (taxable) 212,152 1,926 3.63% 181,189 1,718 3.79% Investment securities (tax-exempt) 8,009 106 5.30% 6,799 89 5.24% Loans 706,902 11,346 6.51% 573,862 8,414 5.90% Total Interest Earning Assets 932,258 13,409 5.83% 767,274 10,234 5.36% Noninterest Earning Assets: Cash and due from banks 30,059 25,136 Other assets 41,164 23,579 Allowance for loan losses (10,327) (7,980) Total Noninterest Earning Assets 60,896 40,735 Total Assets $993,154 $808,009 Interest Bearing Liabilities: Transaction and money market accounts $235,691 717 1.23% $196,922 518 1.06% Savings deposits 168,346 636 1.53% 131,280 385 1.18% Certificates and other time deposits 155,816 979 2.55% 126,150 738 2.35% Other borrowings 128,174 808 2.56% 101,349 274 1.09% Total Interest Bearing Liabilities 688,027 3,140 1.85% 555,701 1,915 1.39% Noninterest Bearing Liabilities: Demand deposits 225,519 179,396 Other liabilities 4,006 2,796 Shareholders' Equity 75,602 70,116 Total Liabilities and Shareholders' Equity $993,154 $808,009 Net Interest Income and Margin (tax equivalent) $10,269 4.47% $8,319 4.36% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per share data) March 31, March 31, 2005 % 2004 % LOAN PORTFOLIO Commercial and industrial $266,782 37.3% $232,015 39.1% Real estate: Commercial 228,701 31.9% 169,376 28.5% Residential 85,293 11.9% 73,481 12.4% Construction and development 94,940 13.2% 86,315 14.6% Consumer 40,998 5.7% 32,084 5.4% Total loans (gross) 716,714 100.0% 593,271 100.0% Unearned discounts --- 0.0% --- 0.0% Total loans (net) 716,714 100.0% 593,271 100.0% March 31, March 31, REGULATORY CAPITAL DATA 2005 2004 Tier 1 Capital $77,496 $69,626 Tier 1 Ratio 10.25% 11.01% Total Capital (Tier 1 + Tier 2) $86,946 $77,539 Total Capital Ratio 11.50% 12.26% Total Risk-Adjusted Assets $755,992 632,617 Tier 1 Leverage Ratio 7.83% 8.62% March 31, March 31, OTHER DATA 2005 2004 Full Time Equivalent Employees (FTE's) 261 219 Stock Price Range (For the Quarter Ended): High $20.50 $16.07 Low $16.40 $13.83 Close $17.05 $15.05 http://www.newscom.com/cgi-bin/prnh/20041025/DASBANKLOGO http://photoarchive.ap.org/ DATASOURCE: Summit Bancshares, Inc. CONTACT: Bob G. Scott, COO of Summit Bancshares, Inc., +1-817-877-2660 Web site: http://www.summitbank.net/

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