Doreen D. Tyburski
SOMERSET HILLS BANCORP REPORTS RECORD PRE-TAX INCOME
UP 32.6% FOR 2006 YEAR-TO-DATE AND 6.9% FOR THE 4th QUARTER
DECLARES QUARTERLY CASH DIVIDEND
BERNARDSVILLE, NJ - February 6, 2007… Somerset Hills Bancorp (NASDAQ: “SOMH””) today announced its fourth quarter and year end results of operations.
The Company reported net income of $665,000 and $2,198,000 for the quarter and year ended December 31, 2006, respectively, compared to net income of $1,052,000 and $2,115,000 for the respective year ago periods. Net income was $0.15 per diluted share and $0.55 per diluted share for the quarter and year ended December 31, 2006 respectively, compared to $0.27 per diluted share and $0.54 per diluted share for the quarter and year ended December 31, 2005. In the fourth quarter of 2005, the Company recorded $449,000 in income due to the reversal of a valuation allowance for deferred tax assets. Exclusive of the reversal of a valuation allowance, 2005 fourth quarter and annual net income was $603,000 and $1,666,000, respectively, and earnings per share were $0.16 and $ 0.42 per diluted share for the quarter and year ended December 31, 2005, respectively.
The Company’s return on average assets was .98 percent and .86 percent for the quarter and year ended December 31, 2006, respectively, compared to 1.78 percent and 1.00 percent for the respective year ago periods. Exclusive of the reversal of a valuation allowance, the Company’s return on average assets was 1.02 percent and .79 percent for the quarter and year ended 2005. The Company’s return on average equity was 7.86 percent and 7.62 percent for the quarter and year ended December 31, 2006, respectively, compared to a return on equity of 17.01 percent and 8.82 percent for the respective year ago periods. Exclusive of the reversal of a valuation allowance, return on average equity for the quarter and year ended December 31, 2005 was 9.77 percent and 6.95 percent.
The Company is presenting its 2005 year-end and fourth quarter results exclusive of the reversal of a valuation allowance because management believes it more accurately reflects the Company’s operating results. The reversal of a valuation allowance for deferred tax assets was a one time event, which will not recur in future periods.
Somerset Hills Bancorp also declared a cash dividend of $.03 per share payable February 28, 2007 to shareholders of record as of February 16, 2007.
Stewart E. McClure, Jr., President and Chief Executive Officer said, “We are extremely pleased that at a time when most of the industry is feeling pressure on their deposit and loan growth, net interest margin, and net income, we have continued to show improvement in our growth and earnings. This is despite the opening of our fifth branch in Madison this past September. The Madison office recently reached $21 million in deposits and we expect to open our sixth branch in Long Valley this April. Our capital base increased by over $10 million as a result of the exercise of 99.8 percent of our outstanding warrants prior to their expiration date of November 30, 2006. We believe our continued successful performance is the result of our strong brand of old fashioned relationship banking built on outstanding personal service and some of the best products available in our market area.”
At December 31, 2006, loans increased $25.2 million, or 15.3 percent, to $190.3 million from $165.1 million at December 31, 2005. At December 31, 2006, deposits increased $42.0 million, or 20.2 percent, to $250.2 million from $208.2 million from December 31, 2005. Core deposits represent 86 percent of total deposits.
At December 31, 2006, total assets were $289.3 million, up from $245.9 million at December 31, 2005, a 17.6 percent increase.
Included with this release are selected financial data, balance sheet and income statement.
Somerset Hills Bancorp is a bank holding company for Somerset Hills Bank, a full service commercial bank with offices in Bernardsville, Madison, Mendham, Morristown, and Summit, New Jersey. The Company has announced plans to open two additional offices in Long Valley and Stirling, New Jersey. Somerset Hills Bank focuses its lending activities on small to medium sized businesses, high net worth individuals, professional practices, and consumer and retail customers. The Bank operates a licensed mortgage company subsidiary, Sullivan Financial Services, Inc. and also operates Somerset Hills Wealth Management Services, LLC, a wholly owned subsidiary licensed to provide financial services, including financial planning, insurance (life, health, property and casualty), mutual funds and annuities for individuals and commercial accounts, and Somerset Hills Title Group, LLC, which, with its partner, Property Title Group, provides title services in connection with the closing of real estate transactions. The common stock of the Company is traded on NASDAQ under the symbol SOMH. You can visit our website at www.somersethillsbank.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements are subject to known and unknown risk, uncertainties and other factors that could cause the actual results to differ materially from those contemplated by the statements. We based the forward-looking statements on various factors and using numerous assumptions. Important factors that may cause actual results to differ from those contemplated by forward-looking statements include, for example, the success or failure of our efforts to implement our business strategy, the effect of changing economic conditions and, in particular, changes in interest rates, changes in government regulations, tax rates and similar matters, our ability to attract and retain quality employees, and other risks which may be described in our future filings with the SEC.
