STURGIS, MI--(Marketwired - Jul 16, 2014) - Sturgis Bancorp, Inc . (
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, 2014:
- Net income was $554,000 for the second quarter of 2014, compared to $436,000 for the second quarter of 2013.
- The Bank maintained strong capital ratios, exceeding "well-capitalized" requirements, with Tier 1 capital at 9.52%. Total capital at June 30, 2014 was 15.94% of risk-weighted assets.
- Total deposits increased 0.6% to $230.4 million, mostly in noninterest-bearing deposit accounts.
- Allowance for loan losses was 1.53% of loans, down from 1.74% at the end of 2013.
Three months ended June 30, 2014 vs. three months ended June 30, 2013 - Net income for the three months ended June 30, 2014 was $554,000, or $0.27 per share, compared to net income of $436,000, or $0.21 per share, for the three months ended June 30, 2013. The tax equivalent net interest margin increased to 3.62% in 2014 from 3.29% in 2013.
Noninterest income was $1.3 million in the second quarter of 2014, compared to $1.2 million in the second quarters of 2013. Investment brokerage commission income, the largest component of noninterest income, decreased slightly to $491,000 in the second quarter of 2013, compared to $494,000 in the second quarter of 2013. Loss on sale of other real estate owned decreased net income by only $5,000 in 2014, compared to $62,000 in 2013. Mortgage banking activities decreased to $182,000 in 2014, as loan sale volume slowed.
Noninterest expense decreased to $3.0 million in 2014, compared to $3.1 million in 2013. Salaries and employee benefits decreased $31,000, or 1.8%, to $1.7 million. Real estate owned expense of $103,000 in 2014 included $54,000 written down for the carrying value of foreclosed assets, compared to $124,000 written down in 2013. The premium for FDIC deposit insurance decreased to $65,000 in the second quarter of 2013 from $110,000 in 2013.
The Company provided $19,000 to the allowance for loan losses in the second quarter of 2014, compared to ($154,000) in the same quarter of 2013. Net charge-offs were $49,000 in the second quarter of 2014, compared to $76,000 in the second quarter of 2013.
Six months ended June 30, 2014 vs. six months ended June 30, 2013 - Net income for the six months ended June 30, 2013 was $1.1 million, or $0.53 per share, compared to $938,000, or $0.46 per share, for the six months ended June 30, 2013. The tax equivalent net interest margin increased to 3.61% in 2014 from 3.42% in 2013.
Noninterest income was $2.3 million in the first half of 2014, compared to $2.5 million in the first half of 2013. The decrease is primarily in mortgage-banking activities, which decreased $177,000 to $365,000 in 2014. Investment brokerage commission income also decreased to $889,000 in the first half of 2014, compared to $958,000 in the first half of 2013.
Noninterest expense decreased to $5.9 million in 2014, compared to $6.3 million in 2013. Real estate owned expense of $175,000 included $85,000 written down for the carrying value of foreclosed assets, compared to $326,000 written down in the first half of 2013. The premium for FDIC deposit insurance decreased to $115,000 in the first half of 2014, compared to $215,000 for the first half of 2013.
The Company provided ($195,000) to the allowance for loan losses in the first half of 2014, compared to ($243,000) in the first half of 2013. Net charge-offs were $170,000 in the first half of 2014, compared to $152,000 in the first half of 2013.
Total assets increased to $307.2 million at June 30, 2014 from $305.0 million at December 31, 2013, primarily in securities held-to-maturity. Loans increased $1.9 million from December 31, 2013, primarily due to purchased loans guaranteed by the U.S. Government.
Cash and cash equivalents decreased $9.5 million to $11.3 million.
Noninterest-bearing deposits increased by $3.1 million at June 30, 2014 from $41.7 million at December 31, 2013. Interest-bearing deposits decreased to $185.6 million at June 30, 2014 from $187.3 million at December 31, 2013. The decrease in interest-bearing deposits includes $1.6 million decrease in brokered certificates of deposit.
Total equity was $29.7 million at June 30, 2014, compared to $28.5 million at December 31, 2013. Book value per share increased to $14.41 at June 30, 2014 from $13.89 at December 31, 2013. The Company reinstated regular quarterly dividends in 2014, paying $0.02 per common share in each quarter.
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, 2014 and December 31, 2013 | |||||||||||
| (Amounts in thousands, except share and per share data) | |||||||||||
| June 30, 2014 | Dec. 31, 2013 | ||||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 8,240 | $ | 14,236 | |||||||
| Other short-term investments | 3,089 | 6,638 | |||||||||
| Total cash and cash equivalents | 11,329 | 20,874 | |||||||||
| Interest-earning deposits in banks | 16,408 | 14,914 | |||||||||
| Securities - Available for sale | 2,515 | 1,575 | |||||||||
| Securities - Held to maturity | 6,457 | - | |||||||||
| Federal Home Loan Bank stock, at cost | 4,064 | 4,064 | |||||||||
| Loans held for sale | 2,015 | 1,034 | |||||||||
| Loans, net of allowance of $3,676 and $4,146 | 236,459 | 234,549 | |||||||||
| Premises and equipment, net | 7,073 | 7,113 | |||||||||
| Goodwill | 5,109 | 5,109 | |||||||||
| Originated mortgage servicing rights | 1,486 | 1,501 | |||||||||
| Real estate owned | 725 | 630 | |||||||||
| Bank-owned life insurance | 9,671 | 9,537 | |||||||||
| Accrued interest receivable | 879 | 828 | |||||||||
| Other assets | 3,022 | 3,252 | |||||||||
| Total assets | $ | 307,212 | $ | 304,980 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Liabilities | |||||||||||
| Deposits | |||||||||||
| Noninterest-bearing | $ | 44,784 | $ | 41,706 | |||||||
| Interest-bearing | 185,621 | 187,314 | |||||||||
| Total deposits | 230,405 | 229,020 | |||||||||
| Federal Home Loan Bank advances and other borrowings | 44,403 | 44,585 | |||||||||
| Accrued interest payable | 239 | 272 | |||||||||
| Other liabilities | 2,420 | 2,568 | |||||||||
| Total liabilities | 277,467 | 276,445 | |||||||||
| 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 2,063,607 shares at June 30, 2014 and 2,055,025 at December 31, 2013 | 2,064 | 2,055 | |||||||||
| Additional paid-in capital | 7,158 | 7,094 | |||||||||
| Retained earnings | 20,598 | 19,580 | |||||||||
| Accumulated other comprehensive income (loss) | (75 | ) | (194 | ) | |||||||
| Total stockholders' equity | 29,745 | 28,535 | |||||||||
| Total liabilities and stockholders' equity | $ | 307,212 | $ | 304,980 | |||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
| Three Months ended June 30, 2014 and 2013 | ||||||||||
| (Amounts in thousands, except share and per share data) | ||||||||||
| Three Months ended June 30, | ||||||||||
| 2014 | 2013 | |||||||||
| Interest income | ||||||||||
| Loans | $ | 2,796 | $ | 2,857 | ||||||
| Investment securities: | ||||||||||
| Taxable | 109 | 53 | ||||||||
| Tax-exempt | 22 | 15 | ||||||||
| Dividends | 38 | 47 | ||||||||
| Total interest income | 2,965 | 2,972 | ||||||||
| Interest expense | ||||||||||
| Deposits | 211 | 252 | ||||||||
| Borrowed funds | 318 | 415 | ||||||||
| Total interest expense | 529 | 667 | ||||||||
| Net interest income | 2,436 | 2,305 | ||||||||
| Provision for loan losses | 19 | (154 | ) | |||||||
| Net interest income after provision for loan losses | 2,417 | 2,459 | ||||||||
| Noninterest income: | ||||||||||
| Service charges and other fees | 394 | 372 | ||||||||
| Investment brokerage commission income | 491 | 494 | ||||||||
| Mortgage banking activities | 182 | 213 | ||||||||
| Trust fee income | 124 | 111 | ||||||||
| Increase in value of bank owned life insurance | 67 | 70 | ||||||||
| Other income | - | (62 | ) | |||||||
| Total noninterest income | 1,258 | 1,198 | ||||||||
| Noninterest expenses: | ||||||||||
| Salaries and employee benefits | 1,685 | 1,716 | ||||||||
| Occupancy and equipment | 462 | 426 | ||||||||
| Data processing | 197 | 177 | ||||||||
| Professional services | 81 | 107 | ||||||||
| Real estate owned expense | 103 | 182 | ||||||||
| Advertising | 31 | 27 | ||||||||
| FDIC premiums | 65 | 110 | ||||||||
| Other | 340 | 394 | ||||||||
| Total noninterest expenses | 2,964 | 3,139 | ||||||||
| Income (loss) before income tax expense (benefit) | 711 | 518 | ||||||||
| Provision for income tax | 157 | 82 | ||||||||
| Net income (loss) | $ | 554 | $ | 436 | ||||||
| Earnings per share | $ | 0.27 | $ | 0.21 | ||||||
| Dividends declared per share | $ | 0.02 | $ | 0.00 | ||||||
| Key Ratios: | ||||||||||
| Return on average equity | 7.63 | % | 6.35 | % | ||||||
| Return on average assets | 0.71 | % | 0.54 | % | ||||||
| Net interest margin (tax equivalent) | 3.65 | % | 3.29 | % | ||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
| Six Months ended June 30, 2014 and 2013 | ||||||||||
| (Amounts in thousands, except share and per share data) | ||||||||||
| Six Months Ended June 20 | ||||||||||
| 2014 | 2013 | |||||||||
| Interest income | ||||||||||
| Loans | $ | 5,554 | $ | 5,831 | ||||||
| Investment securities: | ||||||||||
| Taxable | 188 | 93 | ||||||||
| Tax-exempt | 36 | 31 | ||||||||
| Dividends | 94 | 87 | ||||||||
| Total interest income | 5,872 | 6,042 | ||||||||
| Interest expense | ||||||||||
| Deposits | 433 | 519 | ||||||||
| Borrowed funds | 634 | 826 | ||||||||
| Total interest expense | 1,067 | 1,345 | ||||||||
| Net interest income | 4,805 | 4,697 | ||||||||
| Provision for loan losses | (195 | ) | (243 | ) | ||||||
| Net interest income after provision for loan losses | 5,000 | 4,940 | ||||||||
| Noninterest income: | ||||||||||
| Service charges and other fees | 732 | 716 | ||||||||
| Investment brokerage commission income | 889 | 958 | ||||||||
| Mortgage banking activities | 365 | 542 | ||||||||
| Trust fee income | 212 | 196 | ||||||||
| Increase in value of bank owned life insurance | 134 | 140 | ||||||||
| Other income | (6 | ) | (56 | ) | ||||||
| Total noninterest income | 2,326 | 2,496 | ||||||||
| Noninterest expenses: | ||||||||||
| Salaries and employee benefits | 3,376 | 3,412 | ||||||||
| Occupancy and equipment | 926 | 829 | ||||||||
| Data processing | 373 | 353 | ||||||||
| Professional services | 188 | 224 | ||||||||
| Real estate owned expense | 175 | 485 | ||||||||
| Advertising | 62 | 55 | ||||||||
| FDIC premiums | 115 | 215 | ||||||||
| Other | 696 | 723 | ||||||||
| Total noninterest expenses | 5,911 | 6,296 | ||||||||
| Income (loss) before income tax expense (benefit) | 1,415 | 1,140 | ||||||||
| Provision for income tax | 314 | 202 | ||||||||
| Net income (loss) | $ | 1,101 | $ | 938 | ||||||
| Earnings per share | $ | 0.53 | $ | 0.46 | ||||||
| Dividends declared per share | $ | 0.04 | $ | 0.00 | ||||||
| Key Ratios: | ||||||||||
| Return on average equity | 7.62 | % | 6.92 | % | ||||||
| Return on average assets | 0.70 | % | 0.59 | % | ||||||
| Net interest margin (tax equivalent) | 3.61 | % | 3.43 | % | ||||||
Contacts: Sturgis Bancorp Eric Eishen President & CEO or Brian P. Hoggatt CFO P: 269 651-9345
