Exhibit 99.1
Press Release SOMERSET HILLS BANCORP (NASDAQ-SOMH)
Somerset Hills Bancorp Reports Earnings; Quarterly Cash Dividend of $0.05 Per
Share
Company Release - 10/ 24 /2008
Bernardsville, N.J., October 23, 2008 (PRIME NEWSWIRE) - Somerset Hills Bancorp
(Nasdaq: SOMH) reported net income for the quarter and nine months ended
September 30, 2008. For the quarter ended September 30, 2008, net income was
$425,000 or $0.08 per diluted share compared to $0.09 per diluted share during
the third quarter 2007. For the nine months ended September 30, 2008, net income
was $1,236,000, or $0.23 per diluted share compared to $0.29
per diluted share for the nine months ended September 30, 2007.
The company's net interest income increased in both the quarterly and nine month
periods, to $2.7 million in the current quarter and $8.1 million for the first
nine months of 2008. These increases were offset by declines in non-interest
income of $86 thousand in the three month period, year over year and $371
thousand in the nine month period, year over year and increases in the provision
for loan losses of $105 thousand and $320 thousand in the three and nine month
periods of 2008 over the prior year, respectively. In addition, interest
expenses declined by $1.0 million and $2.4 million in the three and nine month
periods of 2008 over the prior year, respectively. The decline in non-interest
income reflects the continued decline in gains on sale of mortgage loans. These
declines are related to the continued weak housing market, and the disruption in
the secondary market for residential mortgage loans.
Our net interest margin increased in both the three and nine month periods of
2008 over the comparable period of 2007, as our interest bearing liabilities
repriced faster than our interest earning assets in a declining rate market. For
the three and nine months ended September 30, 2008 our net interest margin was
4.28% and 4.21%, respectively, compared to 3.94% and 3.92% for the comparable
period of 2007.
At September 30, 2008, loans increased $6.0 million or 2.9% to $209.8 million
from $203.8 million when compared to September 30, 2007. At September 30, 2008
deposits decreased $20.9 million, or 8.1% to $237.1 million from $258.0 million
when compared to September 30, 2007. As we mentioned in last quarter's press
release, the decrease in deposits is primarily related to the payout of funds
held in accounts at the bank pending consummation of certain customer
transactions that closed subsequent to last year and the run off of certain
deposits originated at promotional rates in connection with the opening of the
Bank's Long Valley and Madison branches.
At September 30, 2008, total assets were $286.5 million compared to $296.6
million at September 30, 2007.
Stewart E. McClure, Jr., President and Chief Executive Officer said "All of us
now face unprecedented economic conditions which have been challenging for all
consumers, businesses and, certainly, financial institutions. We continue to be
grateful that we face these times as an extremely well capitalized institution
that continues to be profitable and has a great existing
franchise in a relatively strong geographic area. Our focus remains on
controlling non-interest expenses which showed a 3.2% decrease from the same
quarter last year; and credit quality, which is reflected in a decrease of total
non-performing loans and oreo since last quarter. Given the current conditions,
loan demand remains soft, although we have recently seen a slight improvement as
more businesses and individuals seem to be looking to community banks for
support. Similarly, competition for deposits has remained fierce. We have chosen
to be aggressive in our pursuit of new deposit customers as we see this as a
once in a lifetime opportunity to attract customers that had previously been
entrenched at other institutions. This competition will certainly have a short
term negative impact on net interest margins and profitability, but we feel
confident in the long term value of growing our customer base."
Somerset Hills Bancorp also declared a cash dividend of $0.05 per share payable
November 28, 2008 to shareholders of record as of November 14, 2008.
Somerset Hills Bancorp is a bank holding company for Somerset Hills Bank, a full
service commercial bank with offices in Bernardsville, Long Valley, Madison,
Mendham, Morristown, and Summit, New Jersey. Somerset Hills Bank focuses its
lending activities on small to medium sized businesses, high net worth
individuals, professional practices, and consumer and retail customers. The Bank
operates a licensed mortgage company subsidiary, Sullivan Financial Services,
Inc. and also operates Somerset Hills Wealth Management Services, LLC, a wholly
owned subsidiary licensed to provide financial services, including financial
planning, insurance (life, health, property and casualty), mutual funds and
annuities for individuals and commercial accounts, and Somerset Hills Title
Group, LLC, which, with its partner, Property Title Group, provides title
services in connection with the closing of real estate transactions. The common
stock of the company is traded on NASDAQ Global Market under the symbol SOMH.
You can visit our website at www.somersethillsbank.com.
Somerset Hills Bancorp
Selected Consolidated Financial data
(Unaudited)
($ in thousands except per share data) Nine Months Ended
September 30
2008 2007
-------- --------
Income Statement Data:
Interest income $ 11,337 $ 13,515
Interest expense 3,259 5,634
-------- --------
Net interest income 8,078 7,881
Provision for loan losses 365 45
-------- --------
Net interest income after prov. for loan
losses 7,713 7,836
Non-interest income 1,467 1,838
Non-interest expense 7,445 7,448
-------- --------
Income before income taxes 1,735 2,226
Income tax expense 499 666
-------- --------
Net income $ 1,236 $ 1,560
======== ========
Balance Sheet Data:
Total assets $286,522 $296,573
Loans, net 206,930 201,421
Loans held for sale 4,624 5,916
Allowance for loan losses 3,059 2,215
Investment securities held to maturity 12,056 13,422
Investment securities held for sale 22,044 34,034
Deposits 237,124 258,042
Borrowings 11,000 0
Shareholders' equity 36,814 37,210
Performance Ratios:
Return on average assets 0.59% 0.71%
Return on average equity 4.47% 5.53%
Net interest margin 4.21% 3.92%
Efficiency ratio 78.0% 76.6%
Per Share Data:
Earnings per share- Basic $ 0.24 $ 0.30
Earnings per share- Diluted $ 0.23 $ 0.29
Book value per share $ 7.13 $ 7.28
Tangible book value $ 7.13 $ 7.04
Somerset Hills Bancorp
Selected Consolidated Financial data (con't)
(Unaudited)
Sept. 30, June 30, March 30, Dec. 31, Sept. 30,
2008 2008 2008 2007 2007
Asset Quality:
Nonaccrual loans 1,963 2,100 2,759 3,036 217
OREO property 297 260 0 0 0
Net Charge-offs
(recoveries) 506 375 144 0 0
Allowance for
loan losses to
total loans 1.46% 1.45% 1.53% 1.54% 1.09%
Nonperforming
loans to total
loans 0.94% 1.00% 1.35% 1.46% 0.11%
SOMERSET HILLS BANCORP
Balance Sheets
(in thousands, except for share data)
Sept. 30, Dec. 31, Sept. 30,
2008 2007 2007
-----------------------------------
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $ 17,129 $ 12,069 $ 8,982
Federal funds sold 6,000 5,800 14,200
-----------------------------------
Total cash and cash
equivalents 23,129 17,869 23,182
Loans held for sale, net 4,624 3,063 5,916
Investment securities held
to maturity (Approximate
market value of $11,150 in
September 2008, $13,531 in
December 2007 and $13,344
in September 2007 12,056 13,646 13,422
Investments available for
sale 22,044 27,954 34,034
Loans receivable 209,849 208,376 203,778
Less allowance for loan
losses (3,059) (3,201) (2,215)
Deferred fees 140 82 (142)
-----------------------------------
Net loans receivable 206,930 205,257 201,421
Premises and equipment, net 6,095 6,343 6,474
Goodwill, net -- -- 1,191
Bank owned life insurance 8,371 8,111 8,023
Accrued interest receivable 1,203 1,435 1,557
Deferred tax asset 751 723 857
Other real estate owned 297 -- --
Other assets 1,022 1,069 496
-----------------------------------
Total assets $ 286,522 $ 285,470 $ 296,573
===================================
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing
deposits-demand $ 51,137 $ 53,783 $ 46,928
Interest bearing deposits
Now, M/M and savings 138,752 159,462 173,506
Certificates of deposit,
under $100,000 28,232 19,170 21,530
Certificates of deposit,
$100,000 and over 19,003 12,258 16,078
-----------------------------------
Total deposits 237,124 244,673 258,042
-----------------------------------
Federal Home Loan Bank
advances 11,000 3,000 --
Accrued interest payable 415 523 749
Taxes payable 177 -- 32
Other liabilities 992 653 540
-----------------------------------
Total liabilities 249,708 248,849 259,363
-----------------------------------
STOCKHOLDERS' EQUITY
Preferred stock- 1,000,000
shares authorized, none
issued -- -- --
*Common stock- authorized
9,000,000 shares of no
par value; issued and
outstanding, 5,161,412
shares at September 30,
2008, 5,176,586 at
December 31, 2007 and
5,116,795 at September
30, 2007 37,214 37,513 37,011
Accumulated (deficit)
retained earnings (397) (896) 477
Accumulated other
comprehensive income
(loss) (3) 4 (278)
-----------------------------------
Total stockholders' equity 36,814 36,621 37,210
-----------------------------------
Total liabilities and
stockholders' equity $ 286,522 $ 285,470 $ 296,573
===================================
*Restated to reflect 5% Stock Dividend
SOMERSET HILLS BANCORP
Statements of Income
(Dollars In Thousands, Except Per Share Data)
Three Three Nine Nine
months months months months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Interest Income:
Loans, including fees $ 3,256 $ 3,816 $ 9,861 $ 10,978
Investment securities 434 628 1,363 1,955
Federal funds sold 11 196 98 543
Interest bearing
deposits with other
banks 4 10 15 39
---------- ---------- ---------- ----------
Total interest income 3,705 4,650 11,337 13,515
Interest Expense:
Deposits 855 1,924 2,967 5,632
Federal funds purchased 12 -- 12 --
Federal Home Loan Bank
advances 98 -- 280 2
---------- ---------- ---------- ----------
Total interest expense 965 1,924 3,259 5,634
Net interest income 2,740 2,726 8,078 7,881
Provision for loan
losses 150 45 365 45
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 2,590 2,681 7,713 7,836
---------- ---------- ---------- ----------
Non-Interest Income:
Service fees on deposit
accounts 83 85 225 255
Gains on sales of
mortgage loans, net 249 330 794 1,168
Other income 148 151 448 415
---------- ---------- ---------- ----------
Total Non-Interest
Income 480 566 1,467 1,838
---------- ---------- ---------- ----------
Non-Interest Expense
Salaries and employee
benefits 1,303 1,354 3,918 3,948
Occupancy expense 493 496 1,451 1,418
Advertising & business
promotion 78 81 222 308
Stationery and supplies 41 68 138 204
Data processing 137 127 418 388
Other operating expense 417 421 1,298 1,182
---------- ---------- ---------- ----------
Total Non-Interest
Expense 2,469 2,547 7,445 7,448
---------- ---------- ---------- ----------
Income before
provision for taxes 601 700 1,735 2,226
Provision for Income
Taxes 176 196 499 666
---------- ---------- ---------- ----------
Net income $ 425 $ 504 $ 1,236 $ 1,560
========== ========== ========== ==========
*Per share data
Net income basic $ 0.08 $ 0.10 $ 0.24 $ 0.30
========== ========== ========== ==========
Net income diluted $ 0.08 $ 0.09 $ 0.23 $ 0.29
========== ========== ========== ==========
*Restated to reflect 5% Stock Dividend
Contact:
Somerset Hills Bancorp
Gerard Riker
908-221-0100
griker@somersethillsbank.com