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25.01.2018 22:46
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Suncrest Bank Reports Record Annual Net Income. Total deposit growth of 20%. Total loan growth of 15%.
Analysten bei der Arbeit (Symbolbild).
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PR Newswire
VISALIA, Calif., Jan. 25, 2018
VISALIA, Calif., Jan. 25, 2018 /PRNewswire/ -- Suncrest Bank (OTCQX: SBKK) today reported unaudited financial results for the fourth quarter and full year of 2017.
On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was signed into law, reducing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, and in accordance with GAAP, the Company revalued its net deferred tax asset as of December 31, 2017. This resulted in a one-time reduction in the value of our net deferred tax asset of $1.3 million or $0.18 per diluted share, recorded as additional income tax expense in the fourth quarter.
"2017 was an outstanding year in terms of organic balance sheet growth," said Ciaran McMullan, President and CEO of Suncrest Bank. "We finished the year with approximately $530 million in total assets, an 18.2% increase over the previous year, while total deposits increased by 20.0% and total loans by 14.9%."
"Our pre "Tax Act" net income set new records of $4.7 million for the full year and $1.4 million for the quarter, resulting in diluted EPS(1) for the year of 65 cents, a year-over year increase of over 90%."
McMullan added, "Our anticipated merger with Community Business Bank is progressing extremely well and we are excited by the opportunities that will come with a significantly expanded presence in the Greater Sacramento and Lodi markets."
Full Year 2017 Highlights
- Record net income for 2017 of $4.7 million(1), up 170.4% over the prior year
- Diluted full year EPS of $0.65(1), up 91.2% over the prior year
- Return on average assets of 0.96%(1) compared to 0.54% for the prior year
- Return on average equity of 7.85 %(1) compared to 4.19% for the prior year
- Efficiency ratio of 59.32% compared to 76.66% for the prior year
- Organic growth in total assets of $81.3 million or 18.2% over the prior year
- Organic growth in total deposits of $77.9 million, or 20.0% over the prior year
- Organic growth in total non-maturity deposits(2) of $93.0 million, or 30.5% over the prior year
- Organic growth in total loans of $45.9 million, or 14.9% over the prior year
- New loan originations(3) of over $110 million with average commitment size of approximately $600,000
Fourth Quarter 2017 Highlights
- Record fourth quarter net income of $1.4 million (1), up 3.4% compared to the linked quarter
- Return on average equity of 9.17%(1) compared to 9.05% for the linked quarter
- Net Interest Income increased by $2.1 million, up 61.1% compared to the fourth quarter 2016
- Net Interest Margin for the quarter was 4.45% compared to 4.02% for the fourth quarter 2016
- Total loans increased by $5.9 million, or 1.7%, during the quarter
- New loan originations(3) were $17.3 million during the quarter
- Total risk based capital ratio was 14.47% and Tier 1 leverage ratio was 10.58%
- On November 7, 2017 we announced an agreement to merge with Community Business Bank, headquartered in West Sacramento, CA with approximately $325.5. million in assets at September 30, 2017
- Merger is expected to close in the second quarter of 2018 and is subject to the customary closing conditions
| (1) Excludes one-time impact of tax expense associated with the "Tax Act" |
| (2) Non-interest bearing demand, NOW, Savings and Money Market |
| (3) Includes unfunded commitments |
Income Statement
The comparability of fourth quarter net income to the same quarter last year, and the linked quarter, is impacted by the one-time impact of tax expense associated with the "Tax Act", non-recurring costs associated with our acquisition of Security First Bank, and non-recurring income due to the recognition of fair value discount accretion on acquired loans.
| Period | Net Income | Non-recurring | Non-recurring | Core Net Interest | Core Net | Core | Core Diluted |
| | | | | | | | |
| Q4 2017 | $ 111,999 | $ 434,412 | $ 1,430,000 | $ 5,096,185 | $ 1,285,999 | 4.10% | $ 0.18 |
| Q3 2017 | $ 1,365,183 | $ 543,492 | $ - | $ 4,915,672 | $ 1, 045,338 | 4.21% | $ 0.15 |
| Q4 2016 | $ 110,438 | $ 43,986 | $ 725,000 | $ 3,389,802 | $ 554,538 | 3.97% | $ 0.11 |
| | |||||||
| (4) Includes $1.3 million related to the "Tax Act" and $130,000 in non-recurring merger expenses. (5) Excludes non-recurring income and non-recurring costs. (6) Non-GAAP financial measure. |
Core net income for the quarter, which excludes all non-recurring items, was a record $1.29 million or $0.18 per diluted share compared with core net income of $0.55 million or $0.11 per diluted share for the fourth quarter of 2016, and $1.05 million or $0.15 for the linked quarter. Core net interest income for the quarter was $5.1 million, an increase of $1.7 million or 50.3% over the same quarter last year.
Non-interest income for the quarter was $0.29 million, an increase of 23.9% over the same quarter last year while non-interest income for the full year was $1.36 million, an increase of 22.9% over the full year 2016. Full year 2017 non-interest income includes $0.28 million in income generated through the gain on sale of a number of government guaranteed loans. This gain on sale income was $0.29 million lower than the full year 2016. While we currently have a number of these loans available for sale, we chose to hold them on balance sheet, which largely explains the difference between gain on sale income from 2016 and 2017.
Non-interest expense for the quarter was $3.33 million, a decrease of approximately $44,000 or 1.3% compared to the fourth quarter of 2016, and an increase of approximately $142,000 compared to the linked quarter. This increase is largely explained by $130,000 in non-recurring costs associated with our upcoming merger.
Core net interest margin (NIM), which removes accretion of loan fair value marks and non-recurring items such as recovery of interest, was 4.10% for the quarter, an increase of 13 basis points from the same quarter last year. This improvement was driven primarily by a lower cost of funds and improved return on our investment securities. Our Core NIM declined by 11 basis points when compared to the linked quarter driven by average loans being a lower percentage of average earnings assets in the last quarter.
Balance Sheet
Total assets declined by $0.4 million during the quarter and have increased, year over year, by $81.3 million, or 18.2%. Total deposits declined during the quarter by approximately $0.5 million, or 0.1%, although this reflects the net impact of an increase in non-maturity deposits of approximately $3.0 million and a decline in time deposits of approximately $3.6 million. Total deposits have increased by $77.9 million or 20% year over year. This outstanding growth reflects our focus on lower cost core deposits. Non-maturity deposits have increased by $93.0 million or 30.5% over the prior year, while time deposits declined by $15.1 million, or 17.9%. Our cost of funds has declined by 3 basis points when comparing this quarter to the same quarter last year.
Total loans increased by $5.9 million during the quarter, or 1.7%, and new loan originations together with new unfunded commitments during the quarter were approximately $17 million. Commercial real estate loans (both owner and non-owner occupied) increased by $8.5 million or 6.3%, and were well distributed across various real estate sectors. Construction and land development loans declined by $4.7 million, or 27.7%, due to the completion of a number of commercial construction loans, which we transitioned to permanent financing. Loans to finance agricultural production declined by $1.3 million, which is the net result of pay downs of 2017 harvest lines and initial draws of our 2018 lines.
At December 31, 2017, commercial and industrial loans were $39.2 million or 11.1% or total loans, loans secured by farmland and loans to finance agricultural production were $94.7 million or 26.8%, and loans secured by real estate (excluding farmland) were $219.2 million or 62.0%.
At December 31, 2016, commercial and industrial loans were $47.3 million or 15.4% of total loans, loans secured by farmland and loans to finance agricultural production were $71.3 million or 23.2%, and loans secured by real estate (excluding farmland) were $188.6 million or 61.3%
| | % of Total Loans | % of Total Loans |
| Commercial & Industrial Loans | 11.1% | 15.4% |
| Farmland & Agricultural Production | 26.8% | 23.2% |
| Real Estate (excl. Farmland) | 62.0% | 61.3% |
Total loans have grown by $45.9 million or 14.9% over the previous year with 100% of this growth sourced locally through direct local business relationships rather than through purchased participations or loan pool investments.
Asset Quality
Non-performing assets were $0.97 million or 0.18% of total assets at December 31, 2017 compared with $1.95 million or 0.37% of total assets at September 30, 2017. This decrease was primarily due to the full pay off of one non-accrual loan relationship and the upgrade of an additional non-accrual loan.
The company did not record any additional loan loss provision during the fourth quarter, and the allowance for loan losses as a percentage of total loans, excluding acquired loans that have been marked to fair value, was 1.27% at December 31, 2017 (including $246,000 in specific reserves) compared to 1.27% at September 30, 2017.
Capital
Suncrest Bank remained well capitalized at December 31, 2017. All of the Bank's capital ratios are above minimum regulatory standards for "well capitalized" institutions.
At December 31, 2017 the tangible book value per common share was $8.02 with common shares issued of 7,007,594 as of the same date. This compares to a tangible book value per common share of $8.03 at September 30, 2017 and $7.83 at June 30, 2017. The decline in tangible book value per share of $0.01 from the linked quarter is primarily explained by the one-time impact of tax expense associated with the "Tax Act." The bank has only common shares on issue.
About Suncrest Bank
Suncrest Bank, member FDIC, is locally owned and operated and offers a full range of commercial, small business and agribusiness loans, cash management services and personal deposit products throughout the Central Valley of California. It is regularly rated Five Stars by Bauer Financial as one of the nation's strongest financial institutions, and in 2017 and 2018 was named to the OTCQX® Best 50, a ranking of top performing companies traded on the OTCQX Best Market. It is a Preferred Lender with the Small Business Administration and its stock can be purchased on the open market, trading on the OTCQX under the ticker symbol SBKK. For all other information, visit www.suncrestbank.com
Forward Looking Statements
Except for the historical information in this news release, the matters described herein contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and charge-offs, results of examinations by our banking regulators, our ability to maintain adequate levels of capital and liquidity, our ability to manage loan delinquency rates, our ability to price deposits to retain existing customers and achieve low-cost deposit growth, manage expenses and lower the efficiency ratio, expand or maintain the net interest margin, mitigate interest rate risk for changes in the interest rate environment, competitive pressures in the banking industry, access to available sources of credit to manage liquidity, the local and national economic environment, and other risks and uncertainties. Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. Suncrest Bank undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the Suncrest Bank annual reports which are available on our website.
| Suncrest Bank | | | | | ||
| Statements of Financial Condition | | | | | ||
| | | | | | | |
| | | December 31, | | September 30, | | December 31, |
| | | 2017 | | 2017 | | 2016 |
| ASSETS | | | | | | |
| Cash and Due from Banks | | $ 29,728,313 | | $ 24,718,147 | | $ 25,567,875 |
| Federal Funds Sold | | 33,006,000 | | 74,053,000 | | 36,979,000 |
| TOTAL CASH AND CASH EQUIVALENTS | | 62,734,313 | | 98,771,147 | | 62,546,875 Werbung Mehr Nachrichten zur SUNCREST BANK VISALI Aktie kostenlos abonnieren
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