First Quarter 2013 Earnings: Stonegate Bank Exceeds $1

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News Desk 2018
First Quarter 2013 Earnings: Stonegate Bank Exceeds $1 Billion in Assets

FORT LAUDERDALE, FL--(Marketwired - Apr 16, 2013) - Stonegate Bank ( OTCBB : SGBK )

First Quarter 2013 Highlights :

  • Increased the annual dividend from $0.08 to $0.16 cents per share
  • Total assets of $1.04 billion
  • Net income of $2,293,000 for the first quarter of 2013
  • 29 straight quarters of profitability
  • First quarter 2013 average net interest margin of 3.74%
  • Tier 1 risk based capital ratio of 16.1% at March 31, 2013

Stonegate Bank ( OTCBB : SGBK ) reported an increase in net income in the first quarter of 2013 over the first quarter of 2012. Net income was $2,293,000 or 27.8 cents per share for the first quarter of 2013, as compared to net income of $2,242,000 or 27.2 cents per share in the first quarter of 2012.

Income and Expenses: Total interest income increased slightly from $9.8 million in the first quarter of 2012 to $10.0 million in the first quarter of 2013. This was achieved largely due to an increase in loans of $91 million despite an overall decrease in investment income of $217,000 period to period. Total interest expense decreased from $1.88 million in the first quarter of 2012 compared to $1.72 million in the first quarter of 2013. This occurred even though total deposits increased $134 million period to period. Further, the Bank's cost of funds for March 2013 decreased 21 basis points from March 2012. The result is an improvement in net interest income from $7.9 million in the first quarter of 2012 to $8.3 million in the first quarter of 2013.

Total non-interest income decreased to $856,000 in the first quarter of 2013 from $1,079,000 in the first quarter of 2012. The largest change in non-interest income was a decrease of $336,000 in derivative fees period to period.

The Bank realized security gains of $745,000 in the first quarter of 2013. These gains were taken largely to reduce the size of the investment portfolio and to shorten the duration of the portfolio.

Non-interest expense increased to $6.0 million for the first quarter of 2013 from $5.8 million for the first quarter of 2012. The increase in non-interest expense is related to the addition of the Bank's Doral office in the fourth quarter of 2012.

Margin and Cost of Funds: Total cost of funds declined from a 0.92% December 2012 month-to-date average to 0.82% March 2013 month-to-date average. Stonegate Bank's net interest margin declined from a fourth quarter 2012 average of 4.09% to 3.74% first quarter 2013 average. Excess liquidity due to strong deposit growth contributed to the decline in the net interest margin. The timing of various recoveries associated with discounted assets was also a factor. The Bank has approximately $4.4 million in accretable discounts and $11 million in non-accretable discounts as of March 31, 2013. Management is currently evaluating these discounts to determine whether a percentage should be amortized over the life of the asset.

Balance Sheet and Capital: Total assets grew from $899 million on March 31, 2012 to $1.04 billion on March 31, 2013, a $141 million increase. Total loans increased $91 million from $633 million on March 31, 2012 to $724 million on March 31, 2013. Total deposits increased $134 million from $712 million on March 31, 2012 to $846 million on March 31, 2013. Non-interest bearing deposits represent 15.8% of total deposits. Total capital grew from $119.7 million on March 31, 2012 to $127.6 million on March 31, 2013. The undiluted book value of common shares of Stonegate Bank was $15.49 per share on March 31, 2013.

Asset Quality:

 
Total Stonegate Bank - March 31, 2013
In thousands    
     
Total loans   $ 724,495
30 days past due     892
60 - 89 days     593
NPAs     6,529
REO     3,832
       

The table above shows the various categories and ending balances of past due loans, nonaccrual loans as well as real estate owned. Overall, non-performing loans represent 0.9% of total loans and 0.62% of total assets. Approximately 19% of the nonaccrual loans are current.

Management believes all non-performing assets and REO are written down to fair market value. Real estate owned increased slightly from $3.2 million on December 31, 2012 to $3.8 million on March 31, 2013.

The Bank's loan loss reserve was $16.1 million on March 31, 2013. This reserve represents 246% of all non-performing loans and 2.22% of total loans. Total loans past due more than 30 days decreased from $3.246 million on December 31, 2012 to $1.485 million on March 31, 2013.

Management Comments: "The first quarter witnessed two major events for Stonegate," said Dave Seleski, President and Chief Executive Officer. "First, the Bank's assets exceeded $1 billion for the first time. Since inception, this has been a goal for the Bank, and I am very proud that we were able to achieve this without taking undue risk or sacrificing profitability for growth. Second, the bank doubled its dividend from $0.08 cents per share in 2012 to $0.16 cents per share in 2013. In the future we hope to continue to reward our investors as the Bank grows and matures."

"Once again, we see economic improvement in our local markets. A large part of this is being driven by foreign investors as well as appreciation and increased demand for residential housing. The trickle-down effect has certainly stabilized our markets and in some cases led to a surprising increase in economic activity. We anticipate this to continue and are focused on growing the Bank organically in each of our markets. It is also our sense that after a significant hiatus, merger and acquisitions in Florida are going to increase in 2013. We will look at these opportunities as a way to increase our overall market share in the communities we serve," added Seleski.

The Bank cautions that certain statements contained in this press release are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995, which statements are made pursuant to the "safe harbor" provisions of such Act. These forward-looking statements describe future plans or strategies and may include the Bank's expectations of future financial results. The words "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements. The Bank's ability to predict results or the effect of future plans or strategies or qualitative or quantitative changes is inherently uncertain. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, changes in general market interest rates, changes in general economic conditions and those specific to the Bank's market area, legislative/regulatory changes, monetary and fiscal policies of the U.S. Treasury and the Federal Reserve, changes in the quality or composition of the Bank's loan portfolios, demand for loan products, changes in deposit flows, real estate values, and competition and other economic, competitive, governmental, regulatory and technological factors affecting the Bank's operations, pricing, products and services. The Bank makes periodic filings to the Federal Deposit Insurance Corporation which contain various Bank financial information, copies of which are available from the Bank without charge. The Bank disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained in this release to reflect future events or developments.

   
STONEGATE BANK  
Balance Sheet  
As of March 31, 2013  
   
(In Thousands)  
   
Assets        
Cash and due from banks   $ 166,834  
Federal funds sold     -  
Investment securities     106,261  
         
Commercial loans     98,587  
Commercial real estate loans - owner occupied     175,723  
Commercial real estate loans - other     247,474  
Construction loans     46,494  
Residential 1 - 4 family loans     110,317  
HELOCs     36,482  
Consumer loans     9,418  
  Gross loans     724,495  
Allowance for loan losses     (16,149 )
  Net loans     708,346  
         
Fixed assets     12,844  
Other assets     45,942  
  Total assets   $ 1,040,227  
         
Liabilities        
Non-interest bearing deposits   $ 134,224  
NOW accounts     63,369  
Money market accounts     372,427  
Core reciprocal deposits     184,809  
Savings accounts     6,542  
Certificates of deposit     84,958  
  Total deposits     846,329  
Repurchase Agreements     30,100  
FHLB and other borrowings     20,060  
Other Liabilities     16,092  
  Total liabilities     912,581  
         
Total capital     127,646  
  Total liabilities and capital   $ 1,040,227  
           
           
           
STONEGATE BANK
Income Statement
For Period Ended March 31, 2013
 
(In Thousands)
 
Interest income   $ 10,015
Interest expense     1,723
  Net interest income     8,292
Less: Provision for loan losses     273
  Net interest income after provision for loan losses     8,019
Non-interest income     856
Realized gains (losses) on AFS securities     745
       
Less: Salaries and benefits expense     3,498
    Occupancy and equipment expense     919
    Data processing expense     206
    Legal and professional expenses     477
    Loan and OREO expenses     191
    Other expense     745
  Total non-interest income     6,036
       
Net income before income taxes     3,584
Income taxes     1,291
  Net income   $ 2,293
       

MEDIA CONTACT: Sissy DeMaria ( Email Contact ) Suzanne Schmidt ( Email Contact ) Kreps DeMaria (305) 663-3543 INVESTOR RELATIONS : Dave Seleski ( Email Contact ) Stonegate Bank (954) 315-5510

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