Sturgis Bancorp, Inc. (STBI: OTCQX U.S. Premier) | Sturgis Bancorp Reports Earnings for First Quarter 2015

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STURGIS, MI–(Marketwired – May 5, 2015) – Sturgis Bancorp, Inc. (OTCQX: STBI) today announced net income of $397,000 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 12 banking centers in Sturgis, Bangor, 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 2015:

  • Net income for the first quarter of 2015 decreased to $397,000, compared to $547,000 for the first quarter of 2014, primarily due to smaller negative provision to the allowance for loan losses and higher pension funding.
  • The Bank maintained strong capital ratios, exceeding “well-capitalized” requirements, with Tier 1 capital at 9.44%. Total capital at March 31, 2015 was 15.61% of risk-weighted assets.
  • Nonaccrual and past due loans decreased.
  • Total deposits increased 7.4% to $251.6 million, mostly in temporary municipal deposits.
  • Allowance for loan losses was 1.47% of loans, up slightly from 1.43% at the end of 2014.

Three months ended March 31, 2015 vs. three months ended March 31, 2014 – Net income for the three months ended March 31, 2015 was $397,000, or $0.19 per share, compared to net income of $574,000, or $0.27 per share, for the three months ended March 31, 2014. The tax equivalent net interest margin decreased to 3.53% in 2015 from 3.60% in 2014. 

Noninterest income was $1.4 million in the first quarter of 2015, compared to $1.1 million in the first quarter of 2014. Commission income increased $95,000 to $493,000 in 2015. Trust fee income increased $63,000 to $151,000 in 2015. Gain on sale of real estate increased to $71,000 in 2015, compared to a net loss of ($9,000) in 2014.

Noninterest expense was $3.4 million in 2015, compared to $3.0 million in 2014. Compensation expense increased $261,000, primarily due to pension funding. The Company made an elective additional contribution to fund pension liabilities in 2015, which increased expense by $166,000. Real estate owned expense increased to $141,000 in 2015, compared to $72,000 in 2014. 

The Company provided ($85,000) to the allowance for loan losses in the first three months of 2015, compared to ($214,000) in the same quarter of 2014. Net charge-offs were ($17,000) in 2015, compared to $121,000 in 2014. 

Total assets increased to $330.5 million at March 31, 2015 from $312.5 million at December 31, 2014, primarily in cash and cash equivalents. Loans decreased $1.2 million from December 31, 2014. Most of the decrease in loans was in and Commercial Real Estate Loans. 

Noninterest-bearing deposits increased to $53.2 million at March 31, 2015 from $51.4 million at December 31, 2014. Interest-bearing deposits also increased to $198.4 million at March 31, 2015 from $182.9 million at December 31, 2014. 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 2015. 

Total equity was $30.7 million at March 31, 2015, compared to $30.4 million at December 31, 2014. Book value per share increased to $14.83 ($11.68 tangible) at March 31, 2015 from $14.66 ($11.51 tangible) at December 31, 2014.

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  
March 31, 2015 and December 31, 2014  
(Amounts in thousands, except share and per share data)  
   
    March 31, 2015     Dec. 31, 2014  
ASSETS                
  Cash and due from banks   $ 21,589     $ 7,680  
  Other short-term investments     14,007       4,369  
    Total cash and cash equivalents     35,596       12,049  
                   
  Interest-earning deposits in banks     15,579       16,575  
  Securities – Available for sale     6,968       7,044  
  Securities – Held to maturity     2,304       5,792  
  Federal Home Loan Bank stock, at cost     3,409       3,409  
  Loans held for sale     1,519       1,716  
  Loans, net of allowance of $3,368 and $3,437     235,143       236,371  
  Premises and equipment, net     7,572       7,504  
  Goodwill     5,109       5,109  
  Originated mortgage servicing rights     1,411       1,413  
  Real estate owned     1,422       1,608  
  Bank-owned life insurance     9,876       9,808  
  Accrued interest receivable     944       868  
  Other assets     3,669       3,189  
                   
    Total assets   $ 330,521     $ 312,455  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Liabilities                
  Deposits                
    Noninterest-bearing   $ 53,208     $ 51,383  
    Interest-bearing     198,357       182,907  
      Total deposits     251,565       234,290  
  Federal Home Loan Bank advances and other borrowings     44,123       44,218  
  Accrued interest payable     242       238  
  Other liabilities     3,872       3,359  
    Total liabilities     299,802       282,105  
                 
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 2,071,941 shares at March 31, 2015 and 2,069,891 at December 31, 2014     2,072       2,070  
  Additional paid-in capital     7,224       7,204  
  Retained earnings     21,610       21,276  
  Accumulated other comprehensive income (loss)     (187 )     (200 )
    Total stockholders’ equity     30,719       30,350  
                     
      Total liabilities and stockholders’ equity   $ 330,521     $ 312,455  
   
   
CONSOLIDATED STATEMENTS OF INCOME  
Three Months ended March 31, 2015 and 2014  
(Amounts in thousands, except share and per share data)  
   
    Three Months ended March 31,  
    2015     2014  
Interest income                
  Loans   $ 2,702     $ 2,757  
  Investment securities:                
    Taxable     91       80  
    Tax-exempt     22       14  
  Dividends     40       56  
    Total interest income     2,855       2,907  
Interest expense                
  Deposits     159       222  
  Borrowed funds     312       316  
    Total interest expense     471       538  
                 
Net interest income     2,384       2,369  
                 
Provision for loan losses     (85 )     (214 )
                 
Net interest income after provision for loan losses     2,469       2,583  
                 
Noninterest income:                
  Service charges and other fees     246       234  
  Interchange income     147       137  
  Investment brokerage commission income     493       398  
  Mortgage banking activities     202       183  
  Trust fee income     151       88  
  Increase in value of bank owned life insurance     67       66  
  Gain (loss) on sale of real estate owned     71       (9 )
  Other income     13       4  
    Total noninterest income     1,390       1,101  
Noninterest expenses:                
  Salaries and employee benefits     1,953       1,692  
  Occupancy and equipment     411       413  
  Interchange expenses     87       80  
  Data processing     177       145  
  Professional services     137       107  
  Real estate owned expense     141       72  
  Advertising     40       44  
  Other     405       404  
    Total noninterest expenses     3,351       2,957  
                 
Income before income tax expense (benefit)     508       727  
                 
Income tax expense     111       180  
                 
Net income   $ 397     $ 547  
                 
Earnings per share   $ 0.19     $ 0.27  
Dividends declared per share   $ 0.03     $ 0.02  
    Key Ratios:                
Return on average equity     5.27 %     7.71 %
Return on average assets     0.50 %     0.69 %
Net interest margin (tax equivalent)     3.53 %     3.60 %
                 

Copyright © 2015 Marketwired. All Rights Reserved

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

Source: otc markets

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