BERNARDSVILLE, N.J., April 18, 2013 (GLOBE NEWSWIRE) -- Somerset Hills Bancorp (Nasdaq:SOMH) (the "Company"), parent company of Somerset Hills Bank (the "Bank"), today reported first quarter net income of $402,000 for 2013, a 51.0% decline from the $820,000 earned in the first quarter of 2012. First quarter diluted earnings were $0.07 per share for 2013 and $0.15 per share for 2012. First quarter 2013 results include $419,000 of pretax expenses related to the pending merger with Lakeland Bancorp, Inc. ("Lakeland") and amount to $352,000 on an after-tax basis. Net income of the first quarter of 2013 excluding these merger-related expenses was $754,000, a decline of 8.0% from the same quarter of 2012. Excluding merger-related expenses, fully diluted net income per share for the first quarter of 2013 was $0.14, a 6.7% decrease from the first quarter of 2012.
Stewart E. McClure, Jr., President and CEO, noted, "The Company continues to be challenged by the difficult economic operating environment for banks. Our net interest margin along with that of our industry peers has been under duress as longer term assets reprice at increasingly lower levels and banks are hesitant to extend the maturities of their securities portfolios in anticipation of a rise in interest rates in the future. As expected, our first quarter results for 2013 were adversely affected by a significant rise in expenses related to our pending merger with Lakeland. While we look forward to the consummation of our merger with Lakeland, the Company remains focused on maintaining our excellent credit quality and disciplined approach to cost management."
Net Interest Income (Tax Equivalent Basis)Fully taxable equivalent ("FTE") net interest income for the first three months of 2013 was $2.8 million, down $319,000 or 10.1%, from the $3.1 million earned in 2012. The decline in net interest income during 2013 was attributable to a 47 basis-point narrowing in first quarter net interest margin to 3.37% from 3.84% in the first quarter of 2012, partly offset by a 3.2% increase in average interest-earning assets to $340.2 million in 2013 from $329.6 million in 2012. The decline in the first quarter 2013 net interest margin was largely due to a $30.6 million decline in average securities to $23.1 million from $53.7 million in the first quarter of 2012 that led to a $29.9 million growth in average interest bearing deposits with banks to $70.2 million in the 2013 quarter from $40.3 million in the first quarter of 2012. The growth in average interest earning assets resulted from an $11.0 million increase in average loans to $243.5 million during the first quarter of 2013 versus $232.5 million in the same quarter of 2012.