Sturgis Bancorp Reports Earnings for First Quarter 2014
April 23 2014 - 10:33AM
Marketwired
Sturgis Bancorp Reports Earnings for First Quarter 2014
STURGIS, MI--(Marketwired - Apr 23, 2014) - Sturgis Bancorp,
Inc. (OTCBB: STBI) today announced net income of $547,000 for the
first quarter of 2014.
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 for the first quarter of 2014:
- Net income for the first quarter of 2014 increased to $547,000,
compared to $502,000 for the first quarter of 2013.
- The Bank maintained strong capital ratios, exceeding
"well-capitalized" requirements, with Tier 1 capital at
9.39%. Total capital at March 31, 2014 was 15.80% of
risk-weighted assets.
- Nonaccrual and past due loans decreased.
- Total deposits increased 8.3% to $248.0 million, mostly in
temporary municipal deposits.
- Allowance for loan losses was 1.60% of loans, down slightly
from 1.74% at the end of 2013.
Three months ended
March 31, 2014 vs. three months ended March 31, 2013 - Net
income for the three months ended March 31, 2014 was $574,000, or
$0.27 per share, compared to net income of $502,000, or $0.25 per
share, for the three months ended March 31, 2013. The tax
equivalent net interest margin increased to 3.60% in 2014 from
3.54% in 2013.
Noninterest income was $1.1 million in the first quarter of
2014, compared to $1.3 million in the first quarter of
2013. Mortgage banking activities decreased to $145,000 in
2014, as loan sale volume slowed significantly. Commission
income also decreased to $398,000 in the first three months of
2014, compared to $464,000 in the first three months of 2013.
Noninterest expense was $2.9 million in 2014, compared to $3.2
million in 2013. Real estate owned expense decreased to
$72,000 in 2014, compared to $303,000 in 2013. Real estate
owned expense in 2014 included $30,000 written down for the
carrying value of foreclosed assets, compared to $202,000 in
2013.
The Company provided ($214,000) to the allowance for loan losses
in the first three months of 2014, compared to ($88,000) in the
same quarter of 2013. Net charge-offs were $121,000 in 2014,
compared to $77,000 in 2013.
Total assets increased to $324.0 million at March 31, 2014 from
$305.0 million at December 31, 2013, primarily in
securities. Loans decreased $115,000 from December 31, 2013,
despite $3.3 million of government-guaranteed loans
purchased. Most of the decrease in loans was in Home Equity
Lines of Credit and Commercial Real Estate Loans.
Noninterest-bearing deposits increased to $43.9 million at March
31, 2014 from $41.7 million at December 31,
2013. Interest-bearing deposits also increased to $204.1
million at March 31, 2014 from $187.3 million at December 31,
2013. These increases in deposit accounts are typical for the
first quarter of each year, as municipalities deposit property tax
revenues. Municipalities historically have either used or
reinvested those funds elsewhere during the second quarter of the
year, and Management expects that pattern to continue for
2014.
Total equity was $29.2 million at March 31, 2014, compared to
$28.5 million at December 31, 2013. Book value per share
increased to $14.16 ($10.94 tangible) at March 31, 2014 from $13.21
($10.67 tangible) at December 31, 2013.
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.
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CONSOLIDATED BALANCE SHEETS |
March 31, 2014 and December 31, 2013 |
(Amounts in thousands, except share and per share
data) |
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March 31, 2014 |
|
|
Dec. 31, 2013 |
|
ASSETS |
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
18,392 |
|
|
$ |
14,236 |
|
|
Other short-term investments |
|
|
13,224 |
|
|
|
6,638 |
|
|
|
Total cash and cash equivalents |
|
|
31,616 |
|
|
|
20,874 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning deposits in banks |
|
|
16,408 |
|
|
|
14,914 |
|
|
Securities - Available for sale |
|
|
2,468 |
|
|
|
1,575 |
|
|
Securities - Held to maturity |
|
|
6,678 |
|
|
|
- |
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|
Federal Home Loan Bank stock, at cost |
|
|
4,064 |
|
|
|
4,064 |
|
|
Loans held for sale |
|
|
525 |
|
|
|
1,034 |
|
|
Loans, net of allowance of $4,974 and $4,146 |
|
|
234,434 |
|
|
|
234,549 |
|
|
Premises and equipment, net |
|
|
7,071 |
|
|
|
7,113 |
|
|
Goodwill |
|
|
5,109 |
|
|
|
5,109 |
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|
Originated mortgage servicing rights |
|
|
1,518 |
|
|
|
1,501 |
|
|
Real estate owned |
|
|
654 |
|
|
|
630 |
|
|
Bank-owned life insurance |
|
|
9,603 |
|
|
|
9,537 |
|
|
Accrued interest receivable |
|
|
868 |
|
|
|
828 |
|
|
Other assets |
|
|
2,989 |
|
|
|
3,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
324,005 |
|
|
$ |
304,980 |
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Liabilities |
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|
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|
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Deposits |
|
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|
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|
|
|
|
|
|
Noninterest-bearing |
|
$ |
43,884 |
|
|
$ |
41,706 |
|
|
|
|
Interest-bearing |
|
|
204,067 |
|
|
|
187,314 |
|
|
|
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|
Total
deposits |
|
|
247,951 |
|
|
|
229,020 |
|
|
|
Federal Home Loan Bank advances and other
borrowings |
|
|
44,494 |
|
|
|
44,585 |
|
|
|
Accrued interest payable |
|
|
263 |
|
|
|
272 |
|
|
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Other liabilities |
|
|
2,138 |
|
|
|
2,568 |
|
|
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Total liabilities |
|
|
294,846 |
|
|
|
276,445 |
|
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Stockholders' equity |
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Preferred stock - $1 par value: authorized - 1,000,000
shares issued and outstanding - 0 shares |
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Common stock - $1 par value: authorized - 9,000,000
shares issued and outstanding 2,059,538 shares at March 31, 2014
and 2,055,025 at December 31, 2013 |
|
|
2,060 |
|
|
|
2,055 |
|
|
|
Additional paid-in capital |
|
|
7,128 |
|
|
|
7,094 |
|
|
|
Retained earnings |
|
|
20,085 |
|
|
|
19,580 |
|
|
|
Accumulated other comprehensive income (loss) |
|
|
(114 |
) |
|
|
(194 |
) |
|
|
|
Total stockholders' equity |
|
|
29,159 |
|
|
|
28,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
liabilities and stockholders' equity |
|
$ |
324,005 |
|
|
$ |
304,980 |
|
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|
|
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CONSOLIDATED STATEMENTS OF INCOME |
Three Months ended March 31, 2014 and 2013 |
(Amounts in thousands, except share and per share
data) |
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Three Months ended March 31, |
|
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2014 |
|
|
2013 |
|
Interest income |
|
|
|
|
|
|
|
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Loans |
|
$ |
2,757 |
|
|
$ |
2,974 |
|
|
Investment securities: |
|
|
|
|
|
|
|
|
|
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Taxable |
|
|
80 |
|
|
|
41 |
|
|
|
Tax-exempt |
|
|
14 |
|
|
|
16 |
|
|
Dividends |
|
|
56 |
|
|
|
39 |
|
|
|
Total
interest income |
|
|
2,907 |
|
|
|
3,070 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
222 |
|
|
|
267 |
|
|
Borrowed funds |
|
|
316 |
|
|
|
411 |
|
|
|
Total
interest expense |
|
|
538 |
|
|
|
678 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
2,369 |
|
|
|
2,392 |
|
|
|
|
|
|
|
|
|
|
Provision for loan losses |
|
|
(214 |
) |
|
|
(88 |
) |
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan
losses |
|
|
2,583 |
|
|
|
2,480 |
|
|
|
|
|
|
|
|
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Noninterest income: |
|
|
|
|
|
|
|
|
|
Service charges and other fees |
|
|
338 |
|
|
|
344 |
|
|
Investment brokerage commission income |
|
|
398 |
|
|
|
464 |
|
|
Mortgage banking activities |
|
|
183 |
|
|
|
328 |
|
|
Trust fee income |
|
|
88 |
|
|
|
85 |
|
|
Increase in value of bank owned life insurance |
|
|
66 |
|
|
|
70 |
|
|
Other income |
|
|
(5 |
) |
|
|
7 |
|
|
|
Total
noninterest income |
|
|
1,068 |
|
|
|
1,298 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
1,692 |
|
|
|
1,696 |
|
|
Occupancy and equipment |
|
|
463 |
|
|
|
403 |
|
|
Data processing |
|
|
176 |
|
|
|
176 |
|
|
Professional services |
|
|
107 |
|
|
|
117 |
|
|
Real estate owned expense |
|
|
72 |
|
|
|
303 |
|
|
Advertising |
|
|
31 |
|
|
|
28 |
|
|
Other |
|
|
407 |
|
|
|
433 |
|
|
|
Total
noninterest expenses |
|
|
2,948 |
|
|
|
3,156 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax expense (benefit) |
|
|
703 |
|
|
|
622 |
|
|
|
|
|
|
|
|
|
|
Provision for income tax |
|
|
156 |
|
|
|
120 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
547 |
|
|
$ |
502 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
$ |
0.27 |
|
|
$ |
0.25 |
|
Dividends declared per share |
|
$ |
0.02 |
|
|
$ |
0.00 |
|
|
|
Key
Ratios: |
|
|
|
|
|
|
|
|
Return on average equity |
|
|
7.71 |
% |
|
|
7.59 |
% |
Return on average assets |
|
|
0.69 |
% |
|
|
0.63 |
% |
Net interest margin (tax equivalent) |
|
|
3.60 |
% |
|
|
3.54 |
% |
|
|
|
|
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Contacts: Sturgis Bancorp Eric Eishen President & CEO Brian
P. Hoggatt CFO P: 269 651-9345
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