SANTA ROSA, Calif., April 25, 2017 (GLOBE NEWSWIRE) -- Summit State Bank (Nasdaq:SSBI) today reported net income for the quarter ended March 31, 2017 of $881,000 and diluted earnings per share of $0.15. A quarterly dividend of $0.12 per share was declared for common shareholders.

Dividend

The Board of Directors declared a $0.12 per share quarterly dividend on April 24, 2017 to be paid on May 24, 2017 to shareholders of record on May 18, 2017. This represents a 25% increase in the dividend, as the prior quarter dividend was $0.096 as adjusted for the five-for-four stock split issued on March 14, 2017.

"The increase in the quarterly dividend is an integral part of providing a fair return to our shareholders," said Allan Hemphill, Chairman of the Board.

Net Income and Results of Operations

For the quarter ended March 31, 2017, Summit State Bank ("Bank") had net income of $881,000 and diluted earnings per share of $0.15 compared to $1,328,000 in net income, or $0.22 diluted earnings per share, for the same quarter in 2016. Earnings per share for 2016 was adjusted for the five-for-four stock split.

Annualized return on average assets for the first quarter of 2017 was 0.70% and annualized return on average equity was 6.1%. The Bank's efficiency ratio was 68.8% and the net interest margin was 3.60% during the first quarter of 2017. The first quarter of 2016 had an annualized return on average assets of 1.02%, annualized return on average equity of 9.2%, efficiency ratio of 57.7% and net interest margin of 3.68%.

Net interest income declined for the first quarter of 2017 from first quarter of 2016 by $253,000 or 5.4%, as a result of average loans for the first quarter of 2017 declining $4.7 million from the average loans for the first quarter of 2016, and the yield on the loan portfolio declining to 4.48% for the first quarter of 2017 from 4.58% for the same period in 2016. Additionally, the increase in short-term interest rates had an impact on the Bank's cost of funds with the cost of interest bearing liabilities increasing to 0.45% in 2017 compared to 0.37% for the first quarter of 2016. The increase in interest expense represented $51,000 of the decline in net interest income.

Non-interest income declined between the two first quarters by $124,000 due to a decline in gains on investment securities.

There was a $382,000 or 13.2% increase in operating expenses between the first quarter of 2017 as compared to the first quarter of 2016. Personnel expense increased as the Bank added employees, primarily to the lending functions.

"We are increasing the staffing in the areas of lending and branch operations to position the Bank for increasing customer contact and to drive an increase in loans." said James Brush, President and CEO.

Total assets at March 31, 2017 were $525 million compared to $522 million on March 31, 2016. Net loans declined by $6.5 million between the March 31, 2017 and 2016 as payoffs offset new loan production.

Deposits declined $6.9 million between March 31, 2017 and 2016, however demand deposit accounts increased $7.9 million or 4.8% at March 31, 2017 over March 31, 2016.

"Increasing our demand deposits as a percentage of our funding continues to be a key objective," said Linda Bertauche, Executive Vice President and COO.

Nonperforming assets were $3,240,000 or 0.62% of total assets at March 31, 2017 compared to $2,690,000 or 0.52% at March 31, 2016. The nonperforming assets at March 31, 2017, consist of eleven loans which predominantly are secured by real property.

About Summit State Bank

Summit State Bank, a local community bank, has total assets of $525 million and total equity of $59 million at March 31, 2017. Headquartered in Sonoma County, the Bank specializes in providing exceptional customer service and customized financial solutions to aid in the success of local small businesses and nonprofits throughout Sonoma County. 

Summit State Bank's workforce resembles the diverse community it serves. Presently, 80% of management are women and minorities with 40% represented on the Executive Management Team. Through the inclusion and engagement of its workforce, Summit State Bank has earned many prestigious awards including: Best Company to do Business with in Sonoma County; Best Places to Work in the North Bay; Super Performing Bank; and Top 75 Corporate Philanthropists in the San Francisco Bay. Summit State Bank's stock is traded on the Nasdaq Global Market under the symbol SSBI. Further information can be found at www.summitstatebank.com.

Forward-looking Statements

Except for historical information contained herein, the statements contained in this news release, are forward-looking statements within the meaning of the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank will be conducting its operations, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. You should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

SUMMIT STATE BANK AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF INCOME  
(In thousands except earnings per share data)  
                 
                 
          Three Months Ended  
          March 31, 2017   March 31, 2016  
          (Unaudited)   (Unaudited)  
                 
Interest income:        
  Interest and fees on loans $   3,940   $   4,111  
  Interest on federal funds sold     3       2  
  Interest on investment securities and deposits in banks     819       867  
  Dividends on FHLB stock     70       54  
      Total interest income     4,832       5,034  
Interest expense:        
  Deposits        256       239  
  FHLB advances     126       92  
      Total interest expense     382       331  
      Net interest income before provision for loan losses     4,450       4,703  
Provision for loan losses      -       -  
      Net interest income after provision for loan losses     4,450       4,703  
Non-interest income:        
  Service charges on deposit accounts     170       182  
  Rental income     144       138  
  Net securities gain     13       133  
  Net gain on other real estate owned     -       -  
  Other income      3       1  
      Total non-interest income     330       454  
Non-interest expense:        
  Salaries and employee benefits      1,741       1,587  
  Occupancy and equipment      356       265  
  Other expenses      1,183       1,046  
      Total non-interest expense     3,280       2,898  
      Income before provision for income taxes     1,500       2,259  
Provision for income taxes      619       931  
      Net income $   881   $   1,328  
                 
Basic earnings per common share (1) $   0.15   $   0.22  
Diluted earnings per common share (1) $   0.15   $   0.22  
                 
Basic weighted average shares of common stock outstanding (1)   6,022     5,980  
Diluted weighted average shares of common stock outstanding (1)   6,055     6,038  
                 
(1) Adjusted for stock split issued on March 14, 2017.  
                 

 
SUMMIT STATE BANK AND SUBSIDIARY  
CONSOLIDATED BALANCE SHEETS  
(In thousands except share data)  
                   
                   
        March 31, 2017   December 31, 2016   March 31, 2016  
        (Unaudited)     (2 )     (Unaudited)  
                   
ASSETS            
                   
Cash and due from banks $   20,824     $   24,231     $   21,127  
Federal funds sold     1,827         2,000         2,000  
Total cash and cash equivalents     22,651         26,231         23,127  
                   
Time deposits with banks     248         248         744  
                   
Investment securities:            
Held-to-maturity, at amortized cost     7,978         7,976         5,989  
Available-for-sale (at fair value; amortized cost of $124,539, $109,297 and $115,088)     123,598         107,771         116,966  
Total investment securities     131,576         115,747         122,955  
                   
Loans, less allowance for loan losses of $4,774, $4,765 and $4,735     353,045         354,638         359,553  
Bank premises and equipment, net      5,489         5,413         5,613  
Investment in Federal Home Loan Bank stock, at cost     3,085         3,085         2,701  
Goodwill       4,119         4,119         4,119  
Other Real Estate Owned     -         -         -  
Accrued interest receivable and other assets      4,324         4,223         3,370  
                   
Total assets $   524,537     $   513,704     $   522,182  
                   
LIABILITIES AND SHAREHOLDERS' EQUITY            
                   
Deposits:              
Demand - non interest-bearing $   111,731     $   112,540     $   110,193  
Demand - interest-bearing     61,514         62,006         55,082  
Savings      27,452         26,584         27,298  
Money market     51,276         53,866         59,018  
Time deposits that meet or exceed the FDIC insurance limit     55,577         52,594         52,793  
Other time deposits     92,596         76,661         102,717  
Total deposits     400,146         384,251         407,101  
                   
Federal Home Loan Bank advances     62,800         68,900         53,800  
Accrued interest payable and other liabilities     2,286         1,931         2,703  
                   
Total liabilities     465,232         455,082         463,604  
                   
Shareholders' equity             
Preferred stock, no par value; 20,000,000 shares authorized; no shares issued and outstanding     -         -         -  
Common stock, no par value; shares authorized - 30,000,000 shares; issued and outstanding 6,025,015, 6,019,850 and 5,991,286 (1)     36,766         36,726         36,711  
Retained earnings     23,085         22,781         20,874  
Accumulated other comprehensive income (loss)     (546 )       (885 )       993  
             
Total shareholders' equity     59,305         58,622         58,578  
             
Total liabilities and shareholders' equity $   524,537     $   513,704     $   522,182  
                   
(1) Adjusted for stock split issued on March 14, 2017.            
(2) Information derived from audited financial statements.            
                   

 
Financial Summary  
(In thousands except per share data)  
           
    At or for the  
    Three Months Ended  
    March 31, 2017   March 31, 2016  
    (Unaudited)   (Unaudited)  
Statement of Income Data:          
Net interest income   $   4,450     $   4,703    
Provision for loan losses        -         -    
Non-interest income       330         454    
Non-interest expense       3,280         2,898    
Provision for income taxes        619         931    
Net income   $   881     $   1,328    
           
Selected per Common Share Data:          
Basic earnings per common share (1)   $   0.15     $   0.22    
Diluted earnings per common share (1)   $   0.15     $   0.22    
Dividend per share (1)   $   0.096     $   0.096    
Book value per common share (1)(3)(4)   $   9.84     $   9.78    
           
Selected Balance Sheet Data:            
Assets   $   524,537     $   522,182    
Loans, net       353,045         359,553    
Deposits       400,146         407,101    
Average assets       512,895         522,255    
Average earning assets       501,919         513,647    
Average shareholders' equity       59,008         58,140    
Average common shareholders' equity       59,008         58,140    
Nonperforming loans       3,240         2,690    
Other real estate owned       -          -     
Total nonperforming assets       3,240         2,690    
           
Selected Ratios:          
Return on average assets (2)     0.70 %     1.02 %  
Return on average common equity (2)     6.06 %     9.19 %  
Efficiency ratio (5)     68.81 %     57.68 %  
Net interest margin (2)     3.60 %     3.68 %  
Common equity tier 1 capital ratio     13.6 %     13.1 %  
Tier 1 capital ratio     13.6 %     13.1 %  
Total capital ratio     14.8 %     14.3 %  
Tier 1 leverage ratio     11.0 %     10.3 %  
Common dividend payout ratio (6)     65.61 %     43.22 %  
Average equity to average assets     11.50 %     11.13 %  
Nonperforming loans to total loans (3)     0.91 %     0.74 %  
Nonperforming assets to total assets (3)     0.62 %     0.52 %  
Allowance for loan losses to total loans (3)     1.33 %     1.30 %  
Allowance for loan losses to nonperforming loans (3)   147.35 %     176.02 %  
(1) Adjusted for stock split issued on March 14, 2017.  
(2) Annualized.          
(3) As of period end.  
(4) Total shareholders' equity divided by total common shares outstanding.  
(5) Non-interest expenses to net interest and non-interest income, net of securities gains.  
(6) Common dividends divided by net income available for common shareholders.  
   

Contact: James Brush, President and CEO, Summit State Bank (707) 568-4920

Primary Logo

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX