BERNARDSVILLE, N.J., Oct. 18, 2012 (GLOBE NEWSWIRE) -- Somerset Hills Bancorp (Nasdaq:SOMH) (the "Company"), parent company of Somerset Hills Bank (the "Bank"), today reported net income of $813,000, or $0.15 per diluted share, for the third quarter of 2012, a 10.3% increase from 2011 third quarter net income of $737,000, or $0.13 per diluted share. For the first nine months of 2012, the Company's net income amounted to $2.5 million, or $0.47 per diluted share, and $2.0 million, or $0.36 per diluted share, for same period of 2011. The Company realized securities gains of $161,000 pretax ($97,000 after taxes) in the first nine months of 2012 and $9,000 pretax ($5,000 after taxes) for the first nine months of 2011. Excluding these securities gains, the Company's net income for the first nine months of 2012 increased by 22.7% from its net income for the first nine months of 2011.
Stewart E. McClure, Jr., President and CEO stated, "The Company reported another quarter of solid financial performance given the continuing difficult operating environment marked by high levels of unemployment and weak real estate valuations. The current low interest rate environment continues to exert pressure on the banking industry's net interest margins as longer term assets reprice at increasingly lower levels. While our loan origination pipeline remains strong, the growth in total loans during the third quarter of this year was flat from the end of the second quarter. On a positive note, our credit quality remains strong and our cost containment efforts have been instrumental in the improvement in our efficiency ratio to 61.8% in the current quarter, down from 72.0% in the prior-year quarter."
Net Interest Income (Tax Equivalent Basis)Fully taxable equivalent ("FTE") net interest income for the third quarter of 2012 was $3.0 million, a decline of $74,000, or 2.4%, from the same quarter of a year ago. FTE net interest income for the first nine months of 2012 totaled $9.2 million, an increase of $198,000, or 2.2%, from $9.0 million earned in the first nine months of 2011. The decline in FTE net interest income for the third quarter of 2012 from the same quarter of 2011 was primarily due to a 19 basis-point narrowing in the net interest margin to 3.60% that was partly offset by an increase in average interest earning assets, which grew by 3.0% in the third quarter of 2012 over the third quarter of 2011. The 2.2% growth in FTE net interest income during the first nine months of 2012 from the same period of 2011 was largely due to a 6.1% growth in average interest-earning assets that was partially offset by a 14 basis-point reduction the net interest margin. Loan growth was principally responsible for the increase in average interest-earning assets. Average total loans increased by 3.5% in the third quarter comparison and by 6.0% in the year-to-date comparison.