Exhibit 99.1
N E W S from Summit Bancshares, Inc.
For Immediate Release For Information Contact:
July 14, 2003 Bob G. Scott, COO
(817) 877-2660
SUMMIT BANCSHARES REPORTS
SECOND QUARTER 2003 EARNINGS
Fort Worth, Texas - Summit Bancshares, Inc. (NASDAQ: SBIT), a community-oriented
bank holding company in Fort Worth, with assets of $739 million, reported second
quarter earnings today. Philip E. Norwood, Chairman, President and Chief
Executive Officer stated, "Our growth continued to be strong in the quarter; as
compared to the first quarter of this year growth in average loans and average
deposits was 4.9% and 5.0%, respectively. Unfortunately, because of the current
low interest rate environment and related interest rate compression, net
interest income and net income did not fully reflect this growth."
He further stated, "However, because of a positive increase in non-interest
income and a decrease in provision for loan losses partially offset by an
increase in non-interest expense, net income increased 2.6% over the second
quarter of last year and 4.5% for the first six months of 2003 compared to the
prior year. The increase in non-interest expense reflects our investment in
people, faculties and other resources that we think are necessary for the long
term growth of the Company."
Results of Operations
- ---------------------
For the quarter ended June 30, 2003, net income was $2,457,000 compared to
$2,394,000 for the same period in 2002. Net income per diluted share was $0.39
for the three months ended June 30, 2003, compared to $0.37 for the three months
ended June 30, 2002. Return on average assets and return on average
stockholders' equity for the second quarter of 2003 were 1.37% and 14.55%,
respectively. Both of these measures of overall profitability compare favorably
to the Company's peers, particularly when considering the Company's strong
capital position. The Company's average stockholders' equity-to-assets ratio was
9.4% for the quarter ended June 30, 2003.
Net income for the six months ended June 30, 2003 was $4,890,000 or $0.78 per
diluted share, compared to $4,680,000, or $0.73 per diluted share for the same
period last year. Return on average assets and return on average stockholder's
equity for the six months ended June 30, 2003 were 1.40% and 14.72%,
respectively, again, strong returns when compared to Company peers and
considering the Company's strong capital position.
Financial Results
- -----------------
Net interest income for the second quarter of 2003 was $7.6 million compared to
$7.5 million in the second quarter of last year. Since the Company is somewhat
more sensitive to market interest rate changes than other community banks due to
its heavier commercial lending focus, the net interest margin declined to 4.53%
for the quarter compared to 4.85% for the second quarter of the prior year.
Although the Company has experienced a decline in net interest margin over the
last few quarters, the Company's current net interest margin compares favorably
to that of its peers.
The average prime rate in the second quarter of last year was 4.75% while the
average prime rate for the second quarter of this year was 4.24%, a decline of
51 basis points. Because of the decline in this important market interest rate,
the Company has continued to experience interest rate compression between what
it is earning on interest earning assets and paying on interest bearing
liabilities. Also, the current low interest rate environment has had a negative
impact on net interest income for that portion of earning assets supported by
the Company's high levels of non-interest bearing deposits and stockholders'
equity, when comparing results to periods when market interest rates were
higher. When market interest rates begin to rise sometime in the
future, the Company's current asset sensitive position will be positive to
earnings growth.
Non-interest income increased $266,000 or 20.0% for the second quarter of 2003
compared to the same quarter in the prior year with positive increases in
service charges on deposit accounts and increases in several other fee based
services. Growth of revenue in this area continues to be one of the Company's
focus areas.
Non-interest expenses for the second quarter increased $565,000 or 12.1% over
the same quarter of the previous year. This increase reflected costs associated
with the Company's growth and included increases in salary and employee benefit
expense, primarily for merit increases and for added staff, including three new
seasoned loan officers added in June, additions to the technology and operations
staff and staff additions for the Hulen Branch that opened in June and the Davis
Branch that opened in January. Also included in this increase is the impact on
occupancy and equipment expenses due to the addition of the two new branches and
the new operations facility that was occupied in May and the expense of the new
core operations system added in October 2002.
The provision for loan losses was $240,000 in the second quarter of 2003. This
was a decrease of $230,000 over the same quarter last year. In the quarter, the
Company had net loan charge-offs of $193,000. These loan charge-offs and the
growth in loans resulted in a slight decline of the Allowance for Loan Losses as
a percent of outstanding loans to 1.48% at June 30, 2003 as compared to 1.50% at
the end of the first quarter of 2003. For the six months of 2003 the Company has
net recoveries of previously charged-off loans of $166,000.
Non performing assets totaled $1.6 million or 0.32% of loans and foreclosed
assets at June 30, 2003, compared to $3.9 million or .84% at June 30, 2002. The
Allowance for Loan Losses was 504% of non-performing loans at June 30, 2003. The
Company has made significant progress in improving these measures of asset
quality over the last several quarters.
The Company's loans were $500 million at June 30, 2003, an increase of $33
million, or 7.1%, from a year ago. Deposits increased over the past year from
$562 million to $612 million, an increase of $50 million, or 8.9%. Stockholders'
equity at June 30, 2003 was $68.7 million compared to $63.5 million at June 30,
2002.
Mr. Norwood also stated, "The Company is involved in several activities to
improve top line revenue including new products and geographic expansion in the
Fort Worth/Tarrant County Metro Area. In addition we have been successful in
attracting some well qualified team members that we know will contribute to the
Company's growth."
The Company will host a conference call Monday, July 14th at 2:30 p.m. CT. To
access the live call, please call (800) 289-0730 and enter code 428968. A toll
free replay of the call will be available for two weeks beginning at 5:30 p.m.
CT, July 14, 2003. You may access this replay by calling (888) 203-1112 and
entering code 428968.
Certain statements contained in this press release, which are not historical in
nature, including statements regarding the company's and/or management's
intentions, strategies, beliefs, expectations, representations, plans,
projections, or predictions of the future, are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and are
intended to be covered by the safe harbor provisions for forward-looking
statements contained in such Act. We are including this statement for purposes
of invoking these safe harbor provisions. Forward-looking statements are made
based on assumptions involving certain known and unknown risks and
uncertainties, many of which are beyond the company's control, and other
important factors that could cause actual results, performance or achievements
to differ materially from the expectations expressed or implied by such
forward-looking statements. These risk factors and uncertainties are listed from
time to time in the company's filings with the Securities and Exchange
Commission, including but not limited to the annual report on Form 10-K for the
year ended December 31, 2002.
Summit Bancshares, Inc. o 3880 Hulen, Ste. 300 o Fort Worth, Texas 76107
Telephone (817) 336-6817 o FAX (817) 877-2672 o Web Site: www.summitbank.net
SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
------------------ % -------------------- %
EARNINGS SUMMARY 2003 2002 Change 2003 2002 Change
------- ------- ------ -------- -------- ------
Interest income $ 9,547 $ 9,666 -1.2% $ 18,798 $ 19,215 -2.2%
Interest expense 1,934 2,199 -12.1% 3,750 4,331 -13.4%
------- ------- ------ -------- -------- ------
Net interest income 7,613 7,467 2.0% 15,048 14,884 1.1%
Provision for loan losses 240 470 -48.9% 540 1,015 -46.8%
Service charges on deposits 890 723 23.1% 1,649 1,368 20.5%
Other Income 708 609 16.3% 1,297 1,214 6.8%
Salaries and benefits expense 3,090 2,873 7.6% 5,995 5,740 4.4%
Occupancy and equipment expense 842 686 22.7% 1,564 1,342 16.5%
Other expense 1,314 1,122 17.1% 2,484 2,242 10.8%
------- ------- ------ -------- -------- ------
Earnings before income taxes 3,725 3,648 2.1% 7,411 7,127 4.0%
Provision for income taxes 1,268 1,254 1.1% 2,521 2,447 3.0%
------- ------- ------ -------- -------- ------
Net earnings $ 2,457 $ 2,394 2.6% $ 4,890 $ 4,680 4.5%
======= ======= ====== ======== ======== ======
Basic earnings per share $ 0.40 $ 0.38 5.3% $ 0.79 $ 0.75 5.3%
======= ======= ====== ======== ======== ======
Basic weighted average shares
outstanding 6,162 6,259 6,164 6,262
Diluted earnings per share $ 0.39 $ 0.37 5.4% $ 0.78 $ 0.73 6.8%
======= ======= === ======== ======== ======
Diluted weighted average shares
outstanding 6,311 6,466 6,294 6,442
Average for Quarter Ended
--------------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
BALANCE SHEET SUMMARY 2003 2003 2002 2002 2002
--------- --------- ------------ ------------- ---------
Total loans $ 499,545 $ 476,298 $ 471,260 $ 471,888 $ 462,467
Total investment securities 165,600 170,609 166,980 155,499 140,232
Earning assets 676,834 648,193 650,995 646,378 619,187
Total assets 719,070 688,522 693,064 685,389 657,529
Noninterest bearing deposits 170,234 160,011 165,756 156,742 157,983
Interest bearing deposits 429,420 411,313 413,657 420,000 397,789
Total deposits 599,654 571,324 579,413 576,742 555,772
Other borrowings 48,866 48,012 44,487 41,035 36,145
Shareholders' equity 67,739 66,253 64,369 64,273 62,245
Average for Six Months
Ended June 30, %
---------------------- %
BALANCE SHEET SUMMARY 2003 2002 Change
--------- --------- ------
Total loans $ 487,985 $ 454,498 7.4%
Total investment securities 168,091 146,165 15.0%
Earning assets 662,593 610,719 8.5%
Total assets 703,880 648,253 8.6%
Noninterest bearing deposits 165,151 152,415 8.4%
Interest bearing deposits 420,416 394,395 6.6%
Total deposits 585,567 546,810 7.1%
Other borrowings 48,442 36,089 34.2%
Shareholders' equity 67,000 62,039 8.0%
Ending Balance
-----------------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
BALANCE SHEET SUMMARY 2003 2003 2002 2002 2002
--------- --------- --------- --------- ---------
Total loans $ 500,040 $ 489,352 $ 469,145 $ 474,401 $ 466,974
Total investment securities 178,241 163,639 173,512 168,250 144,314
Total earning assets 693,257 653,066 642,919 642,765 633,371
Allowance for loan losses (7,412) (7,365) (6,706) (6,334) (6,394)
Premises and equipment 13,391 11,652 11,486 10,011 9,112
Total assets 738,916 697,893 687,733 682,605 674,028
Noninterest bearing deposits 176,603 165,220 167,745 157,519 163,440
Interest bearing deposits 435,143 421,699 414,204 413,391 398,374
Total deposits 611,746 586,919 581,949 570,910 561,814
Other borrowings 55,627 41,317 37,255 43,871 45,629
Total liabilities 670,187 631,313 622,795 617,832 610,542
Shareholders' equity 68,729 66,580 64,938 64,773 63,486
SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands)
June 30, March 31, December 31, September 30, June 30,
NONPERFORMING ASSETS 2003 2003 2002 2002 2002
------ ------ ------ ------ ------
Nonaccrual loans $1,458 $2,226 $2,135 $4,635 $3,870
Restructured loans -- -- -- -- --
Other real estate & foreclosed assets 125 125 1,268 288 56
Accruing loans past due 90 days or more 14 80 16 37 13
------ ------ ------ ------ ------
Total nonperforming assets $1,597 $2,431 $3,419 $4,960 $3,939
====== ====== ====== ====== ======
Total nonperforming assets as a
percentage of loans and foreclosed assets 0.32% 0.50% 0.73% 1.04% 0.84%
====== ====== ====== ====== ======
Quarter Ended
--------------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
ALLOWANCE FOR LOAN LOSSES 2003 2003 2002 2002 2002
------- ------- ------- ------- -------
Balance at beginning of period $ 7,365 $ 6,706 $ 6,334 $ 6,394 $ 6,534
Loans charged off (272) (80) (637) (1,492) (650)
Loan recoveries 79 439 234 82 40
------- ------- ------- ------- -------
Net (charge-offs) recoveries (193) 359 (403) (1,410) (610)
Provision for loan losses 240 300 775 1,350 470
------- ------- ------- ------- -------
Balance at end of period $ 7,412 $ 7,365 $ 6,706 $ 6,334 $ 6,394
======= ======= ======= ======= =======
Allowance for loan losses as a
percentage of total loans 1.48% 1.50% 1.43% 1.34% 1.37%
======= ======= ======= ======= =======
Allowance for loan losses as a
percentage of nonperforming loans 503.53% 319.38% 311.76% 135.57% 164.67%
======= ======= ======= ======= =======
Net charge-offs (recoveries) as a percentage
of average loans 0.04% -0.07% 0.09% 0.30% 0.13%
======= ======= ======= ======= =======
Provision for loan losses as a percentage
of average loans 0.05% 0.06% 0.16% 0.29% 0.10%
======= ======= ======= ======= =======
Quarter Ended
--------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
SELECTED RATIOS 2003 2003 2002 2002 2002
------- ------- ------- ------- -------
Return on average assets (annualized) 1.37% 1.43% 1.30% 1.37% 1.46%
======= ======= ======= ======= =======
Return on average equity (annualized) 14.55% 14.89% 13.96% 14.64% 15.43%
======= ======= ======= ======= =======
Average shareholders' equity to average assets 9.42% 9.62% 9.29% 9.38% 9.47%
======= ======= ======= ======= =======
Yield on earning assets 5.68% 5.81% 5.87% 6.06% 6.28%
======= ======= ======= ======= =======
Cost of interest bearing funds 1.62% 1.60% 1.71% 1.89% 2.03%
======= ======= ======= ======= =======
Net interest margin (tax equivalent) 4.53% 4.67% 4.67% 4.71% 4.85%
======= ======= ======= ======= =======
Efficiency ratio 56.74% 54.41% 52.95% 45.82% 53.07%
======= ======= ======= ======= =======
End of period book value per common share $ 11.15 $ 10.81 $ 10.58 $ 10.42 $ 10.13
======= ======= ======= ======= =======
End of period common shares outstanding 6,166 6,179 6,159 6,275 6,268
======= ======= ======= ======= =======
SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands)
Three Months Ended
-------------------------------------------------------------
June 30, 2003 June 30, 2002
-------------------------- ---------------------------
Average Average
YIELD ANALYSIS Balance Interest Yield Balance Interest Yield
-------- -------- ----- -------- -------- -----
Interest Earning Assets:
Federal funds sold & due from time $ 11,689 $ 33 1.13% $ 16,488 $ 72 1.75%
Investment securities (taxable) 160,498 1,599 4.00% 138,271 1,662 4.82%
Investment securities (tax-exempt) 5,102 71 5.62% 1,961 28 5.82%
Loans 499,545 7,878 6.33% 462,467 7,925 6.87%
-------- ------ -------- ------
Total Interest Earning Assets 676,834 9,581 5.68% 619,187 9,687 6.28%
Noninterest Earning Assets:
Cash and due from banks 27,970 25,772
Other assets 21,648 18,998
Allowance for loan losses (7,382) (6,428)
-------- --------
Total Noninterest Earning Assets 42,236 38,342
-------- --------
Total Assets $719,070 $657,529
======== ========
Interest Bearing Liabilities:
Transaction and money market accounts $192,773 570 1.19% $179,847 661 1.47%
Savings deposits 114,259 411 1.44% 109,879 508 1.85%
Certificates and other time deposits 122,388 800 2.62% 108,063 875 3.25%
Other borrowings 48,866 153 1.26% 36,145 155 1.72%
-------- ------ -------- ------
Total Interest Bearing Liabilities 478,286 1,934 1.62% 433,934 2,199 2.03%
Noninterest Bearing Liabilities:
Demand deposits 170,234 157,983
Other liabilities 2,811 3,367
Shareholders' equity 67,739 62,245
-------- --------
Total Noninterest Bearing Liabilities 240,784 223,595
-------- --------
Total Liabilities and Shareholders' Equity $719,070 $657,529
======== ========
------ ------
Net Interest Income and Margin (tax equivalent) $7,647 4.53% $7,488 4.85%
====== ==== ====== ====
SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands)
Six Months Ended
--------------------------------------------------------------
June 30, 2003 June 30, 2002
--------------------------- -----------------------------
Average Average
YIELD ANALYSIS Balance Interest Yield Balance Interest Yield
-------- -------- ----- -------- -------- -----
Interest Earning Assets:
Federal funds sold & due from time $ 6,517 $ 37 1.14% $ 10,056 $ 91 1.82%
Investment securities (taxable) 163,042 3,310 4.09% 144,236 3,510 4.91%
Investment securities (tax-exempt) 5,049 142 5.69% 1,929 56 5.89%
Loans 487,985 15,377 6.35% 454,498 15,596 6.92%
-------- ------- -------- -------
Total Interest Earning Assets 662,593 18,866 5.74% 610,719 19,253 6.36%
Noninterest Earning Assets:
Cash and due from banks 26,810 24,950
Other assets 21,667 18,902
Allowance for loan losses (7,190) (6,318)
-------- --------
Total Noninterest Earning Assets 41,287 37,534
-------- --------
Total Assets $703,880 $648,253
======== ========
Interest Bearing Liabilities:
Transaction and money market accounts $184,956 1,033 1.13% $176,683 1,226 1.40%
Savings deposits 115,407 807 1.41% 109,339 982 1.81%
Certificates and other time deposits 120,053 1,601 2.69% 108,373 1,833 3.41%
Other borrowings 48,442 309 1.29% 36,089 290 1.62%
-------- ------- -------- -------
Total Interest Bearing Liabilities 468,858 3,750 1.61% 430,484 4,331 2.03%
Noninterest Bearing Liabilities:
Demand deposits 165,151 152,415
Other liabilities 2,871 3,315
Shareholders' equity 67,000 62,039
-------- --------
Total Noninterest Bearing Liabilities 235,022 217,769
-------- --------
Total Liabilities and Shareholders' Equity $703,880 $648,253
======== ========
Net Interest Income and Margin (tax equivalent) $15,116 4.60% $14,922 4.93%
======= ==== ======= ====
SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands, except per share data)
June 30, June 30,
LOAN PORTFOLIO 2003 % 2002 %
-------- ----- -------- -----
Commercial and industrial $204,647 40.9% $198,853 42.6%
Real estate:
Commercial 134,370 26.9% 125,299 26.8%
Residential 54,594 10.9% 47,170 10.1%
Construction and development 72,422 14.5% 60,981 13.1%
Consumer 34,007 6.8% 34,674 7.4%
-------- ----- -------- -----
Total loans (gross) 500,040 100.0% 466,977 100.0%
Unearned discounts -- 0.0% (3) 0.0%
-------- ----- -------- -----
Total loans (net) 500,040 100.0% 466,974 100.0%
======== ===== ======== =====
June 30, June 30,
REGULATORY CAPITAL DATA 2003 2002
-------- --------
Tier 1 Capital $ 65,394 $ 61,714
Tier 1 Ratio 12.09% 12.30%
Total Capital (Tier 1 + Tier 2) $ 72,161 $ 67,987
Total Capital Ratio 13.35% 13.55%
Total Risk-Adjusted Assets $540,676 $501,684
Tier 1 Leverage Ratio 8.85% 9.16%
June 30, June 30,
OTHER DATA 2003 2002
-------- --------
Full Time Equivalent Employees (FTE's) 209 202
Stock Price Range (For the Quarter Ended):
High $ 25.40 $ 25.30
Low $ 18.95 $ 20.30
Close $ 23.48 $ 24.29