FORT WORTH, Texas, Oct. 17 /PRNewswire-FirstCall/ -- Summit
Bancshares, Inc. (NASDAQ:SBIT), a community-oriented bank holding
company in Fort Worth, reported third quarter earnings today.
Philip E. Norwood, Chairman, President and Chief Executive Officer
stated, "I am pleased to report a positive increase in earnings per
diluted share of 22.7% for the third quarter over earnings per
share for the same quarter of last year. The greatest contributor
to the increase in earnings is a 14.1% increase in net interest
income, which was aided by an increase in net interest margin and
an increase in earnings assets." He further stated, "We are very
fortunate to be operating in a robust economic environment and to
have such a strong position in an expanding Fort Worth/Tarrant
County market." Results of Operations - All prior year per share
data has been restated for the two-for-one stock split that was
effective December 31, 2004 For the quarter ended September 30,
2005, net income was $3,456,000 compared to $2,796,000 for the same
period in 2004. Net income per diluted share was $0.27 for the
three months ended September 30, 2005, compared to $0.22 for the
three months ended September 30, 2004. Return on average assets and
return on average shareholders' equity for the third quarter of
2005 were 1.32% and 17.34%, respectively. The Company's average
shareholders' equity- to-assets ratio was 7.6% for the quarter
ended September 30, 2005. Net income for the nine months ended
September 30, 2005 was $9,660,000, or $.76 per diluted share,
compared to $7,843,000, or $.62 per diluted share, for the same
period last year, an increase of 22.6% on a per share basis. Return
on average assets and return on average shareholders' equity for
the nine months ended September 30, 2005 were 1.27% and 16.75%,
respectively. Financial Results Net interest income (tax
equivalent) for the third quarter of 2005 was $11.3 million
compared to $9.9 million in the third quarter of last year, a 14.1%
increase. Since the Company believes it 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 from 4.29% for the third quarter of the prior year to
4.58% for the third quarter of this year. Since late June 2004, the
Federal Reserve has increased the target rate for Federal Funds by
275 basis points from 1.00% to 3.75%. During this same period, the
prime lending rate has increased from 4.00% to 6.75%. The average
prime lending rate increased from 4.42% for the third quarter of
2004 to 6.43% for the third quarter of 2005, an increase of 201
basis points. A portion of this increase in the prime lending rate
is reflected in a 93 basis point increase in the Company's yield on
earning assets as well as a 110 basis point increase in the yield
on loans between the third quarter of 2004 and the third quarter of
2005. The portion of the loan portfolio that has fixed rates and
the investment securities portfolio, which also has fixed rates,
accounted for the earnings asset yield not reflecting a greater
portion of the referenced prime rate increase. The cost of interest
bearing liabilities increased from 1.49% for the third quarter of
last year to 2.38% for the third quarter of this year, an 89 basis
point increase, which also reflected the increase in market
interest rates referenced above. The net interest margin did not
increase as much in the third quarter as the Company had expected
due to higher funding costs which were driven by competitive
pressures in the market. If market interest rates continue to rise,
the Company believes that its current asset sensitive position will
enhance earnings growth (assuming deposit rates do not increase
faster than interest rates on earning assets). Furthermore, the
Company believes that continued market increases will have a
positive impact on net interest income for that portion of earning
assets supported by the Company's non-interest bearing deposits and
shareholders' equity. Non-interest income increased $35,000 for the
third quarter of 2005 compared to the same quarter of the prior
year. This increase included a gain of $247,000 on the sale of land
previously held for expansion in the third quarter of 2005. In
comparison, there was a gain of $176,000 on sale of student loans
during the third quarter of 2004. In addition, increases were
experienced in the third quarter of this year compared to third
quarter of last year due to the acquisition in March 2005 of the
investment group Dignum Financial Services (now, Summit Financial
Partners) and also in merchant card and debit card activity.
However, there was a decrease in service charges on deposits,
primarily due to higher interest earning credits paid on commercial
deposit accounts that are under account analysis for charges.
Non-interest expenses for the third quarter increased $528,000 over
the same quarter of the previous year. This increase includes the
impacts of: (a) the inclusion in the third quarter of 2005 of the
expenses of Summit Financial Partners; (b) the expenses incurred in
the new Hulen Motor Bank facility and the permanent office for the
Euless Branch, both of which were occupied in the fourth quarter of
2004; and (c) certain staff additions to support the Company's
continued growth. These increases were partially offset by reduced
expenses, compared to the third quarter of the prior year, for
compliance with Sarbanes Oxley regulatory requirements. The
provision for loan losses was $315,000 for the third quarter of
2005 compared to $495,000 recorded in the third quarter of 2004. In
the third quarter of 2005 the Company had net recoveries of
previously charged-off loans of $18,000. The Allowance for Loan
Losses as a percent of outstanding loans was 1.48% (or 1.52% when
loans are reflected net of the guaranteed portion of SBA loans and
student guaranteed loans) at September 30, 2005 as compared to
1.46% at the end of the third quarter of 2004. For the first nine
months of 2005, the Company recorded net recoveries of $179,000.
Non-performing assets totaled $5.0 million, or 0.66% of loans and
foreclosed assets, at September 30, 2005, compared to $4.8 million,
or .70% at September 30, 2004. The Allowance for Loan Losses was
155% of non-performing loans at September 30, 2005. The Company
believes that it continues to maintain positive measures of asset
quality. The Company's loans were $754 million at September 30,
2005, an increase of $64 million, or 9.3%, from September 30, 2004.
Deposits increased over the past year from $792 million at
September 30, 2004 to $866 million at September 30, 2005, an
increase of $75 million, or 9.4%. Shareholders' equity at September
30, 2005 was $79.7 million, an increase of $6.2 million, or 8.4%
from a year ago. The Company will host a conference call Tuesday,
October 18, 2005 at 10:30 a.m. (CT). To access the live call,
please call (800) 481-7713 and enter confirmation code 8740000. A
toll free replay of the call will be available for two weeks
beginning October 18, 2005 at 3:00 p.m. (CT) through midnight,
November 1, 2005. You may access this replay by calling (888)
203-1112 and entering confirmation code 8740000. Additional
information regarding the Company is available on the Company's
website at http://www.summitbank.net/ . 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) Quarter Ended Nine Months Ended September 30, %
September 30, % EARNINGS SUMMARY 2005 2004 Change 2005 2004 Change
Interest income $15,476 $12,361 25.2% $43,227 $33,862 27.7%
Interest expense 4,263 2,533 68.3% 11,059 6,723 64.5% Net interest
income 11,213 9,828 14.1% 32,168 27,139 18.5% Provision for loan
losses 315 495 -36.4% 765 1,500 -49.0% Service charges on deposits
992 1,180 -15.9% 2,964 3,164 -6.3% Gain on sale of investment
securities --- 32 -100.0% --- 32 -100.0% Other income 1,184 929
27.4% 3,127 2,235 39.9% Salaries and benefits expense 4,579 4,029
13.7% 13,296 11,169 19.0% Occupancy and equipment expense 1,311
1,180 11.1% 3,744 3,230 15.9% Other expense 1,747 1,900 -8.1% 5,407
4,590 17.8% Earnings before income taxes 5,437 4,365 24.6% 15,047
12,081 24.6% Provision for income taxes 1,981 1,569 26.3% 5,387
4,238 27.1% Net earnings $3,456 $2,796 23.6% $9,660 $7,843 23.2%
Basic earnings per share $0.28 $0.23 21.7% $0.78 $0.64 21.9% Basic
weighted average shares outstanding 12,420 12,332 12,405 12,319
Diluted earnings per share $0.27 $0.22 22.7% $0.76 $0.62 22.6%
Diluted weighted average shares outstanding 12,664 12,670 12,705
12,667 Average for Quarter Ended Sept. 30, June 30, March 31, Dec.
31, Sept. 30, BALANCE SHEET SUMMARY 2005 2005 2005 2004 2004 Total
loans $735,109 $723,535 $706,902 $694,177 $678,915 Total investment
securities 226,441 216,825 220,161 226,530 218,831 Earning assets
974,844 945,251 932,258 924,557 914,595 Total assets 1,038,628
1,007,680 993,154 984,814 976,911 Noninterest bearing deposits
242,849 239,127 225,519 235,846 226,462 Interest bearing deposits
590,390 558,905 559,853 560,341 557,329 Total deposits 833,239
798,032 785,372 796,187 783,791 Other borrowings 121,435 128,684
128,174 109,713 118,083 Shareholders' equity 79,053 76,575 75,602
74,543 71,038 Average for Nine Months Ended September 30, % BALANCE
SHEET SUMMARY 2005 2004 Change Total loans $721,952 $632,076 14.2%
Total investment securities 221,165 201,327 9.9% Earning assets
950,940 851,216 11.7% Total assets 1,013,320 903,851 12.1%
Noninterest bearing deposits 235,896 204,638 15.3% Interest bearing
deposits 569,827 511,333 11.4% Total deposits 805,723 715,971 12.5%
Other borrowings 126,073 113,559 11.0% Shareholders' equity 77,089
70,581 9.2% Ending Balance Sept. 30, June 30, March 31, Dec. 31,
Sept. 30, BALANCE SHEET SUMMARY 2005 2005 2005 2004 2004 Total
loans $754,153 $721,161 $716,714 $702,619 $689,906 Total investment
securities 236,544 214,750 214,222 223,351 219,264 Total earning
assets 1,006,368 945,661 939,934 930,990 928,638 Allowance for loan
losses (11,131) (10,798) (10,519) (10,187) (10,079) Premises and
equipment 15,620 15,563 15,462 15,749 15,643 Total assets 1,074,261
1,008,475 999,914 989,117 990,406 Noninterest bearing deposits
258,644 241,643 232,556 235,399 232,586 Interest bearing deposits
607,384 562,846 565,002 556,865 558,938 Total deposits 866,028
804,489 797,558 792,264 791,524 Other borrowings 123,892 122,203
124,007 118,094 121,355 Total liabilities 994,534 930,891 925,477
914,627 916,858 Shareholders' equity 79,727 77,584 74,437 74,490
73,548 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands)
Sept. 30, June 30, March 31, Dec. 31, Sept. 30, NONPERFORMING
ASSETS 2005 2005 2005 2004 2004 Nonaccrual loans $4,989 $3,372
$3,294 $2,587 $2,545 Restructured loans --- --- --- --- --- Other
real estate & foreclosed assets --- --- --- --- 4 Total
nonperforming assets $4,989 $3,372 $3,294 $2,587 $2,549 Total
nonperforming assets as a percentage of loans and foreclosed assets
0.66% 0.47% 0.46% 0.37% 0.37% Accruing loans past due 90 days or
more 2,178 36 --- 18 2,300 Quarter Ended Sept. 30, June 30, March
31, Dec. 31, Sept. 30, ALLOWANCE FOR 2005 2005 2005 2004 2004 LOAN
LOSSES Balance at beginning of period $10,798 $10,519 $10,187
$10,079 $9,844 Loans charged off (25) (147) (84) (293) (415) Loan
recoveries 43 201 191 111 155 Net (charge-offs) recoveries 18 54
107 (182) (260) Provision for loan losses 315 225 225 290 495
Balance at end of period $11,131 $10,798 $10,519 $10,187 $10,079
Allowance for loan losses as a percentage of total loans 1.48%
1.50% 1.47% 1.45% 1.46% Allowance for loan losses as a percentage
of nonperforming loans 223.11% 320.23% 319.34% 393.78% 395.41% Net
charge-offs (recoveries) as a percentage of average loans 0.00%
-0.01% -0.02% 0.03% 0.04% Provision for loan losses as a percentage
of average loans 0.04% 0.03% 0.03% 0.04% 0.07% Quarter Ended Sept.
30, June 30, March 31, Dec. 31, Sept. 30, SELECTED RATIOS 2005 2005
2005 2004 2004 Return on average assets (annualized) 1.32% 1.27%
1.23% 1.18% 1.14% Return on average equity (annualized) 17.34%
16.71% 16.16% 15.58% 15.66% Average shareholders' equity to average
assets 7.61% 7.60% 7.63% 7.57% 7.27% Yield on earning assets 6.32%
6.12% 5.83% 5.61% 5.39% Cost of interest bearing funds 2.38% 2.13%
1.85% 1.65% 1.49% Net interest margin (tax equivalent) 4.58% 4.57%
4.47% 4.41% 4.29% Efficiency ratio 56.84% 59.07% 59.69% 59.71%
59.23% End of period book value per common share $6.41 $6.25 $6.01
$6.03 $5.96 End of period common shares outstanding 12,429 12,421
12,390 12,359 12,334 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars
in thousands) Three Months Ended September 30, 2005 September 30,
2004 Average Average YIELD ANALYSIS Balance Interest Yield Balance
Interest Yield Interest Earning Assets: Federal funds sold &
due from time $13,294 $114 3.40% $16,849 $51 1.21% Investment
securities (taxable) 216,541 2,073 3.83% 211,298 1,939 3.67%
Investment securities (tax-exempt) 9,900 133 5.37% 7,533 113 5.98%
Loans 735,109 13,203 7.13% 678,915 10,297 6.03% Total Interest
Earning Assets 974,844 15,523 6.32% 914,595 12,400 5.39%
Noninterest Earning Assets: Cash and due from banks 30,876 31,213
Other assets 43,824 41,022 Allowance for loan losses (10,916)
(9,919) Total Noninterest Earning Assets 63,784 62,316 Total Assets
$1,038,628 $976,911 Interest Bearing Liabilities: Transaction and
money market accounts $232,640 886 1.51% $253,642 672 1.05% Savings
deposits 173,539 866 1.98% 154,980 462 1.19% Certificates and other
time deposits 184,211 1,433 3.09% 148,707 862 2.31% Other
borrowings 121,435 1,078 3.52% 118,083 537 1.81% Total Interest
Bearing Liabilities 711,825 4,263 2.38% 675,412 2,533 1.49%
Noninterest Bearing Liabilities: Demand deposits 242,849 226,462
Other liabilities 4,901 3,999 Shareholders' equity 79,053 71,038
Total Noninterest Bearing Liabilities 326,803 301,499 Total
Liabilities and Shareholders' Equity $1,038,628 $976,911 Net
Interest Income and Margin (tax equivalent) $11,260 4.58% $9,867
4.29% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands)
Nine Months Ended September 30, 2005 September 30, 2004 Average
Average YIELD ANALYSIS Balance Interest Yield Balance Interest
Yield Interest Earning Assets: Federal funds sold & due from
time $7,823 $181 3.09% $17,813 $139 1.04% Investment securities
(taxable) 212,369 5,913 3.71% 194,295 5,435 3.73% Investment
securities (tax-exempt) 8,796 349 5.29% 7,032 291 5.51% Loans
721,952 36,905 6.83% 632,076 28,102 5.94% Total Interest Earning
Assets 950,940 43,348 6.09% 851,216 33,967 5.33% Noninterest
Earning Assets: Cash and due from banks 30,361 28,398 Other assets
42,663 33,314 Allowance for loan losses (10,644) (9,077) Total
Noninterest Earning Assets 62,380 52,635 Total Assets $1,013,320
$903,851 Interest Bearing Liabilities: Transaction and money market
accounts $233,203 2,400 1.38% $229,841 1,827 1.06% Savings deposits
168,002 2,206 1.76% 143,237 1,255 1.17% Certificates and other time
deposits 168,622 3,563 2.83% 138,255 2,392 2.31% Other borrowings
126,073 2,890 3.06% 113,559 1,249 1.47% Total Interest Bearing
Liabilities 695,900 11,059 2.12% 624,892 6,723 1.44% Noninterest
Bearing Liabilities: Demand deposits 235,896 204,638 Other
liabilities 4,435 3,740 Shareholders' equity 77,089 70,581 Total
Noninterest Bearing Liabilities 317,420 278,959 Total Liabilities
and Shareholders' Equity $1,013,320 $903,851 Net Interest Income
and Margin (tax equivalent) $32,289 4.54% $27,244 4.28% SUMMIT
BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per
share data) September 30, September 30, LOAN PORTFOLIO 2005 % 2004
% Commercial and industrial $270,807 35.9% $257,721 37.4% Real
estate: Commercial 244,966 32.5% 198,796 28.8% Residential 89,487
11.9% 81,318 11.8% Construction and development 109,431 14.5%
111,641 16.2% Consumer 39,462 5.2% 40,430 5.9% Total loans (gross)
754,153 100.0% 689,906 100.0% Unearned discounts --- 0.0% --- 0.0%
Total loans (net) $754,153 100.0% 689,906 100.0% September 30,
September 30, REGULATORY CAPITAL DATA 2005 2004 Tier 1 Capital
$82,621 $74,338 Tier 1 Ratio 10.45% 9.99% Total Capital (Tier 1 +
Tier 2) $92,520 $83,645 Total Capital Ratio 11.70% 11.25% Total
Risk-Adjusted Assets $790,653 $743,810 Tier 1 Leverage Ratio 8.04%
7.69% September 30, September 30, OTHER DATA 2005 2004 Full Time
Equivalent Employees (FTE's) 264 253 Stock Price Range (For the
Quarter Ended): High $19.28 $16.63 Low $17.16 $14.30 Close $18.37
$16.63 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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