San Joaquin Bancorp | ||
Administrative Offices | ||
1000 Truxtun Avenue | Phone: (661) 281-0360 | |
Bakersfield, CA 93301 | Fax: (661) 281-0366 |
News Release |
San Joaquin Bancorp Reports First Quarter Results for 2007
BAKERSFIELD, Calif., April 25, 2007 (Business Wire):
San Joaquin Bancorp (OTCBB: SJQU), a bank holding company with $761 million in assets, today announced financial results for the 1stquarter ended March 31, 2007.
Net income after tax for the 1stquarter of 2007 remained relatively constant at $2.22 million compared to $2.21 million in the 1stquarter of 2006. Earnings per share for the quarter were down slightly at $0.59 per diluted share compared to $0.60 per diluted share for the 1stquarter of 2006.
Bart Hill, President, said,"San Joaquin Bancorp continues to show healthy growth in total assets, deposits, and loans despite increased competitive pressures and a challenging interest rate environment. We remain the fastest growing bank in our market and have experienced excellent market penetration during the first quarter of this year. While income growth slowed this quarter, return on equity and assets remained at strong levels. We continue to be recognized in our market place as a quality business bank with a high profile."
Highlights for the quarter: |
- Net income – up slightly at $2.22 million
- Loans, net of unearned fees - up 24% to $547 million
- Deposits - up 10% to $684 million
- Assets - up 12% to $761 million
Income Statement |
Interest income for the 1stquarter of 2007 was $13.0 million compared to $10.4 million reported in the same quarter in 2006, an increase of $2.6 million, or 25%. The yield on average earning assets increased from 7.07% in the 1stquarter of 2006 to 7.77% in 2007. Loan and investment yields both increased in 2007 compared to 2006. Average earning assets to average total assets increased from 91% at the end of 1stquarter in 2006 to 92% in 2007.
Interest expense for the 1st quarter of 2007 was $5.8 million compared to $3.4 million for the 1stquarter of 2006. Overall, cost of funds for the 1stquarter of 2007 at 3.45% increased by 114 basis points compared to the 1stquarter of 2006 rate of 2.31% . Average non-core funding consisting of time deposits over $100,000, brokered time deposits, and other borrowings increased $36.4 million in the 1stquarter of 2007 compared to the 1stquarter of 2006.
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Net interest margin decreased in the comparative 1stquarters from 4.74% in 2006 to 4.33% in 2007 primarily due to the increased cost of funding from core deposits and use of non-core funding.
Non-interest income was $740,000 for the 1stquarter of 2007 compared to $656,000 for the same period in 2006. The improvement for the quarter was primarily due to increases in deposit fees, merchant card charges, and dividend income from Federal Home Loan Bank stock.
Non-interest expense increased to $3.9 million for the 1st quarter of 2007 compared to $3.6 million in the same period of 2006. The increase of $0.3 million for the quarter resulted mainly from increases in professional and legal fees associated with compliance and regulatory filings, as well as, increases in salaries and employee benefits. The Company’s efficiency ratio was 48.23% in the 1st quarter of 2007 compared to 47.07% in the 1st quarter of 2006.
Provision for loan losses remained virtually the same in the 1st quarter of 2007 at $225,000 compared to $230,000 in 2006.
Return on average assets was 1.22% for the quarter in 2007 compared to 1.36% in 2006. Return on average equity was 19.38% in the 1st quarter of 2007 and 21.90% in the 1st quarter of 2006.
Balance Sheet |
Total assets increased from $678 million at March 31, 2006 to $761 million March 31, 2007 due primarily to steady loan growth. Assets grew by 12% year over year.
Total loans, net of unearned fees, increased $107 million to $547 million, or 24%, compared to $440 million at the 1st quarter end in 2006. Loan growth was mainly attributable to growth in construction loans secured by real estate.
Total investment securities were $134 million at the end of the 1st quarter 2007 compared to $156 million at 1st quarter end 2006. The decrease of $22 million is in line with the Company’s plan to allow lower yielding investments to mature with subsequent reinvestment in higher yielding assets, such as loans.
Total deposits were $684 million at 1st quarter end 2007 compared to $624 million in 2006. The increase of $60 million, or 10%, was primarily due to growth in time and savings deposits.
The Company’s use of non-core funding, consisting of Federal Home Loan Bank (FHLB) advances, time deposits in amounts greater than $100,000, brokered time deposits, public funds, and other borrowings, continues to be a small percentage of total funding. At March 31, 2007, non-core funds were $64 million compared to $28 million at March 31, 2006. Non-core funding accounted for approximately 9% of total funding at 1st quarter end 2007 compared to 4% in 2006.
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Asset Quality
The Company had net charge-offs of $32,000 for the 1st quarter of 2007 compared to $86,000 in net recoveries for 2006. The allowance for loan losses was $8.6 million and $7.3 million or 1.57% and 1.66% of loans at March 31, 2007 and 2006, respectively.
Nonperforming and restructured loans were $3,669,000 at March 31, 2007, compared to $479,000 at March 31, 2006. The percentage of nonperforming and restructured loans to total loans, net of unearned income, was 0.67% at 1st quarter end 2007 compared to 0.11% at 1st quarter end 2006.
San Joaquin Bancorp assesses and manages credit risk on an ongoing basis through a formal credit review program and approval policies, internal monitoring and formal lending policies of its wholly-owned bank subsidiary, San Joaquin Bank. The Company believes that the Bank’s ability to identify and assess risk and return characteristics of the loan portfolio is critical for profitability and growth of the consolidated group. The Company, through the Bank, emphasizes credit quality in the loan approval process, active credit administration and regular monitoring. The Bank has designed and implemented a comprehensive loan review and grading system that functions to monitor and assess the credit risk inherent in the loan portfolio.
Capital
Total shareholders’ equity at March 31, 2007 was $48 million compared to $41 million at March 31, 2006. Total Tier I capital was $59 million at March 31, 2007 compared to $41 million at March 31, 2006. The increase of Tier I capital, year over year, includes a $10 million issuance of qualifying trust preferred securities in a private placement, which was consummated on September 1, 2006. Capital ratios for the Company continue to remain above the well-capitalized guidelines established by bank regulatory agencies.
Additional Information
San Joaquin Bancorp is a bank holding company formed in 2006 and is subject to the regulatory oversight of the Board of Governors of the Federal Reserve System. San Joaquin Bank, wholly-owned by San Joaquin Bancorp, is an insured state-chartered member bank of the Federal Reserve System. The Bank was established in 1980 and is headquartered in Bakersfield, California. San Joaquin Bank is a full-service, community bank with three banking offices in Bakersfield and one in Delano. San Joaquin Bank emphasizes professional, personal banking service directed primarily to small and medium-sized businesses and professionals. The Bank also provides a full range of banking services that are available to individuals, public entities, and non-profit organizations.
FORWARD-LOOKING INFORMATION:
The following appears in accordance with the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements about San Joaquin Bancorp for which it claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995, including statements with regard to descriptions of our plans or objectives
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for future operations, products or services, and forecasts of our revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors -- many of which are beyond our control -- could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements and reported results should not be considered an indication of our future performance. Some of these risk factors include, among others, certain credit, market, operational and liquidity risks associated with our business and operations, changes in business and economic conditions in California and nationally, rising interest rates, potential acts of terrorism (which are beyond our control), volatility of rate sensitive deposits and assets, value of real estate collateral securing many of our loans, accounting estimates and judgments, compliance costs associated with the company’s internal control structure and procedures for financial reporting. These risk factors are not exhaustive and additional factors that could have an adverse effect on our business and financial performance are set forth under “Risk Factors” and elsewhere in this quarterly report and in our annual report on Form 10-K.
Forward-looking statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward-looking statements are made.
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San Joaquin Bancorp and Subsidiaries | ||||
Consolidated Balance Sheet (unaudited) | ||||
As of March 31 | ||||
2007 | 2006 | |||
ASSETS | ||||
Cash and due from banks | $ 31,772,000 | $ 56,914,000 | ||
Interest-bearing deposits in banks | 884,000 | 2,551,000 | ||
Federal funds sold | 20,900,000 | - | ||
Total cash and cash equivalents | 53,556,000 | 59,465,000 | ||
Investment securities | ||||
Held to maturity | 126,828,000 | 148,825,000 | ||
Available-for-sale | 7,068,000 | 7,008,000 | ||
Total Investment Securities | 133,896,000 | 155,833,000 | ||
Loans, net of unearned income | 546,662,000 | 439,814,000 | ||
Less: allowance for loan losses | (8,602,000) | (7,319,000) | ||
Net Loans | 538,060,000 | 432,495,000 | ||
Premises and equipment | 7,542,000 | 7,800,000 | ||
Investment in real estate | 626,000 | 693,000 | ||
Interest receivable and other assets | 26,929,000 | 21,704,000 | ||
TOTAL ASSETS | $ 760,609,000 | $ 677,990,000 | ||
LIABILITIES | ||||
Deposits: | ||||
Noninterest-bearing | $ 176,323,000 | $ 183,037,000 | ||
Interest-bearing deposits | 507,180,000 | 440,579,000 | ||
Total Deposits | 683,503,000 | 623,616,000 | ||
Short-term borrowings | - | - | ||
Long-term debt | 17,095,000 | 6,795,000 | ||
Accrued interest payable and other liabilities | 12,406,000 | 6,663,000 | ||
Total Liabilities | 713,004,000 | 637,074,000 | ||
SHAREHOLDERS' EQUITY | ||||
Common stock, no par value - 20,000,000 shares authorized; | ||||
3,525,522 and 3,486,222 issued and outstanding | ||||
at March 31, 2007 and 2006, respectively | 10,726,000 | 10,221,000 | ||
Additional paid-in capital | 202,000 | 26,000 | ||
Retained earnings | 38,249,000 | 30,817,000 | ||
Accumulated other comprehensive income (loss) | (1,572,000) | (148,000) | ||
Total Shareholders' Equity | 47,605,000 | 40,916,000 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 760,609,000 | $ 677,990,000 | ||
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San Joaquin Bancorp and Subsidiaries
Consolidated Statement of Income (unaudited)
Three Months Ended March 31 | ||||
2007 | 2006 | |||
INTEREST INCOME | ||||
Loans (including fees) | $ 11,414,000 | $ 8,537,000 | ||
Investment securities | 1,515,000 | 1,622,000 | ||
Fed funds sold & other interest-bearing balances | 68,000 | 277,000 | ||
Total Interest Income | 12,997,000 | 10,436,000 | ||
INTEREST EXPENSE | ||||
NOW | 16,000 | 18,000 | ||
Money market | 3,209,000 | 2,356,000 | ||
Savings | 1,504,000 | 739,000 | ||
Time deposits & IRAs of $100,000 or more | 400,000 | 162,000 | ||
Other time deposits & IRAs | 229,000 | 46,000 | ||
Short-term borrowings | 90,000 | 2,000 | ||
Long-term borrowings | 304,000 | 114,000 | ||
Total Interest Expense | 5,752,000 | 3,437,000 | ||
Net Interest Income | 7,245,000 | 6,999,000 | ||
Provision for loan losses | 225,000 | 230,000 | ||
Net Interest Income After Loan Loss Provision | 7,020,000 | 6,769,000 | ||
NONINTEREST INCOME | ||||
Service charges & fees on deposits | 210,000 | 196,000 | ||
Other customer service fees | 279,000 | 292,000 | ||
Net gain on sale of fixed assets | 6,000 | 4,000 | ||
Other | 245,000 | 164,000 | ||
Total Noninterest Income | 740,000 | 656,000 | ||
NONINTEREST EXPENSE | ||||
Salaries and employee benefits | 2,367,000 | 2,277,000 | ||
Occupancy | 243,000 | 216,000 | ||
Furniture & equipment | 239,000 | 246,000 | ||
Promotional Expense | 150,000 | 158,000 | ||
Professional Expense | 389,000 | 239,000 | ||
Other | 463,000 | 467,000 | ||
Total Noninterest Expense | 3,851,000 | 3,603,000 | ||
Income Before Taxes | 3,909,000 | 3,822,000 | ||
Income Taxes | 1,694,000 | 1,616,000 | ||
NET INCOME | $ 2,215,000 | $ 2,206,000 | ||
Basic Earnings per Share | $ 0.64 | $ 0.64 | ||
Diluted Earnings per Share | $ 0.59 | $ 0.60 | ||
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Financial Highlights - March 31, 2007 | ||||||
(data in thousands except per share data) | ---First 3 Months--- | % Variance | ||||
(unaudited) | 2007 | 2006 | 2007 vs. 2006 | |||
Net Interest Income | $ 7,245 | $ 6,999 | 3.5% | |||
Non Interest Income | $ 740 | $ 656 | 12.8% | |||
Addition to Provision for Loan Losses | $ 225 | $ 230 | -2.2% | |||
Net Income | $ 2,215 | $ 2,206 | 0.4% | |||
Total Assets | $ 760,609 | $ 677,990 | 12.2% | |||
Total Net Loans | $ 538,060 | $ 432,495 | 24.4% | |||
Total Deposits | $ 683,503 | $ 623,616 | 9.6% | |||
Total Shareholders’ Equity | $ 47,605 | $ 40,916 | 16.3% | |||
Basic Earnings per Share | $ 0.63 | $ 0.64 | -1.6% | |||
Diluted Earnings per Share | $ 0.59 | $ 0.60 | 0.0% | |||
Book Value per Share | $ 13.50 | $ 11.78 | 14.6% | |||
Key Ratios: | ||||||
Annualized Return on Average Equity | 19.38% | 21.90% | ||||
Annualized Return on Average Assets | 1.22% | 1.36% | ||||
Annualized Net Interest Margin | 4.33% | 4.74% | ||||
Efficiency Ratio | 48.23% | 47.07% |
San Joaquin Bancorp Contact Information:
Bart Hill President (661) 281-0300 |
Stephen M. Annis
Executive Vice President &
Chief Financial Officer
(661) 281-0360
Company Website: www.sjbank.com
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