BERNARDSVILLE, N.J., July 23 /PRNewswire-FirstCall/ -- Somerset Hills Bancorp (NASDAQ:SOMH) reported its results of operations for the second quarter of 2007. For the quarter ended June 30, 2007, net income increased by $51,000 to $536,000, or $0.10 per diluted share compared to $0.11 per share during the second quarter of 2006. For the six months ended June 30, 2007, net income increased by $96,000 to $1.1 million, or $0.21 per diluted share compared to $0.22 per diluted share for the six months ended June 30, 2006. The Company's return on equity declined to 5.60% for the six months ended June 30, 2007 from 7.32% for the six months ended June 30, 2006. The decline in earnings per diluted share and return on equity in the current period reflects the impact of the issuance of approximately 1.3 million shares in the fourth quarter of 2006, and the addition of approximately $10.3 million in equity, upon the exercise of the Company's outstanding common stock purchase warrants which expired in November, 2006.
For the quarter ended June 30, 2007 the Company's net interest income increased by $171,000 to $2.6 million, as interest income increased by $657,000 and interest expense increased by $486,000. For the six months ended June 30, 2007 the Company's net interest income increased by $391,000 to $5.2 million, as interest income increased by $1.5 million and interest expense increased by $1.1 million.
As a result of these changes, the Company's net interest margin declined from 4.28% for the six months ended June 30, 2006 to 3.91% for the six months ended June 30, 2007. The decline reflects the impact of certain promotional rates offered on deposit products at the Bank's two newest offices, Madison and Long Valley, New Jersey, as well as the overall competitive marketplace for deposits in the Company's trade area.
At June 30, 2007, loans increased $19.4 million, or 10.9 percent to $196.8 million from $177.4 million when compared to June 30, 2006. At June 30, 2007, deposits increased $34.1 million, or 15.6 percent to $253.1 million from $219.0 million when compared to June 30, 2006. During the same period, core deposits increased 9.4 percent and account for 83.5 percent of total deposits at June 30, 2007.
At June 30, 2007, total assets were $291.5 million, up from $257.6 million at June 30, 2006, or 13.2 percent increase.
Shareholders equity increased to $37.2 million at June 30, 2007 from $27.1 million at June 30, 2006, and tangible book value per share increased to $7.30 per share from $6.81 per share at June 30, 2006.
Stewart E. McClure, Jr., President and Chief Executive Officer said, "During this quarter we opened our sixth branch in Long Valley and I'm pleased to report it is already over $5 million in deposits. Additionally, our fifth office in Madison, which we opened just this past September, is now over $25 million in deposits. Despite the costs associated with opening these two offices and a very challenging operating environment, we showed solid growth in earnings, 10.5 percent, and look forward to continued growth in both our franchise and our earnings."
Somerset Hills Bancorp is a bank holding company for Somerset Hills Bank, a full service commercial bank with offices in Bernardsville, Long Valley, Madison, Mendham, Morristown, and Summit, New Jersey. The Company has announced plans to open an additional office in Stirling, New Jersey. Somerset Hills Bank focuses its lending activities on small to medium sized businesses, high net worth individuals, professional practices, and consumer and retail customers. The Bank operates a licensed mortgage company subsidiary, Sullivan Financial Services, Inc. and also operates Somerset Hills Wealth Management Services, LLC, a wholly owned subsidiary licensed to provide financial services, including financial planning, insurance (life, health, property and casualty), mutual funds and annuities for individuals and commercial accounts, and Somerset Hills Title Group, LLC, which, with its partner, Property Title Group, provides title services in connection with the closing of real estate transactions. The common stock of the company is traded on NASDAQ Global Market under the symbol SOMH. You can visit our website at www.somersethillsbank.com.
Somerset Hills Bancorp
Selected Consolidated Financial Data
(Unaudited)
($ in thousands except per share data) Six Months Ended
June 30
2007 2006
Income Statement Data:
Interest income $8,865 $7,378
Interest expense 3,710 2,614
Net interest income 5,155 4,764
Provision for loan losses 0 126
Net interest income after prov.
for loan losses 5,155 4,638
Non-interest income 1,272 1,184
Non-interest expense 4,901 4,337
Income before income taxes 1,526 1,485
Income tax expense 470 525
Net income $1,056 $960
Balance Sheet Data:
Total assets $291,452 $257,573
Loans, net 196,819 177,441
Loans held for sale 9,286 15,507
Allowance for loan losses 2,170 2,095
Investment securities held to maturity 13,420 10,205
Investment securities held for sale 36,726 29,522
Deposits 253,079 218,957
Borrowings 0 10,500
Shareholders' equity 37,152 27,053
Performance Ratios:
Return on average assets 0.73% 0.80%
Return on average equity 5.60% 7.32%
Net interest margin 3.91% 4.28%
Efficiency ratio 76.3% 72.9%
Asset Quality:
Nonaccrual loans 217 0
OREO property 0 0
Net charge-offs (recoveries) 0 2
Allowance for loan losses to total loans 1.09% 1.17%
Nonperforming loans to total loans 0.11% 0
Per Share Data:
Earnings per share- Basic $0.21 $0.26
Earnings per share- Diluted $0.21 $0.22
Book value per share $7.55 $7.12
Tangible book value $7.30 $6.81
Somerset Hills Bancorp
Balance Sheets
(in thousands, except for share data)
June 30, 2007 December 31, 2006
(unaudited)
ASSETS
Cash and due from banks $11,382 $22,662
Federal funds sold 5,100 5,900
Total cash and cash equivalents 16,482 28,562
Loans held for sale, net 9,286 5,003
Investment securities held to
maturity (Approximate market value of
$13,283 in 2007 and $10,552 in 2006) 13,420 10,485
Investment securities available-for-sale 36,726 38,914
Loans receivable 199,140 192,571
Less: allowance for loan losses (2,170) (2,170)
Deferred fees (151) (136)
Net loans receivable 196,819 190,265
Premises and equipment, net 6,545 6,295
Goodwill, Net 1,191 1,191
Bank owned life insurance 7,933 5,801
Accrued interest receivable 1,474 1,508
Deferred tax asset 1,033 805
Other assets 543 599
TOTAL ASSETS $291,452 $289,428
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits
Non-interest bearing deposits-demand $44,581 $51,015
Interest bearing deposits NOW,
money market and savings 166,807 163,590
Certificates of deposit, under $100,000 21,692 20,617
Certificates of deposit, $100,000
and over 19,999 14,999
Total deposits 253,079 250,221
Accrued interest payable 869 697
Taxes payable 62 34
Other liabilities 290 580
Total liabilities 254,300 251,532
STOCKHOLDERS' EQUITY
Preferred stock - 1,000,000 shares
authorized: none issued - -
Common stock - authorized,
10,000,000 shares of no par value;
issued and outstanding,
4,923,584 in 2007 and
4,997,490 in 2006 37,614 36,916
Retained earnings 168 1,166
Accumulated other comprehensive loss (630) (186)
Total Stockholders' Equity 37,152 37,896
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $291,452 $289,428
*Restated to reflect 5% stock
dividends in 2007 and 2006
Somerset Hills Bancorp
Statements of Operations
(in thousands, except for share data)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
(unaudited)(unaudited)(unaudited)(unaudited)
Interest Income:
Loans, including fees $3,617 $3,349 $7,162 $6,422
Investment securities 649 458 1,326 917
Federal funds sold 203 13 347 23
Interest bearing deposits
with other banks 16 8 30 16
Total interest income 4,485 3,828 8,865 7,378
Interest Expense:
Deposits 1,874 1,344 3,708 2,473
Federal Home Loan Bank
advances - 44 2 140
Federal funds purchased - - - 1
Total interest expense 1,874 1,388 3,710 2,614
Net Interest Income 2,611 2,440 5,155 4,764
Provision for loan losses - 50 - 126
Net Interest Income
After Provision for
Loan Losses 2,611 2,390 5,155 4,638
Non-Interest Income:
Service fees on deposit
accounts 90 75 169 150
Gains on sales of
mortgage loans, net 423 354 838 819
Other Income 161 99 265 215
Total Non-Interest Income 674 528 1,272 1,184
Non-Interest Expenses:
Salaries and employee
benefits 1,334 1,210 2,594 2,356
Occupancy expense 468 398 922 788
Advertising and business
promotion 114 131 226 301
Stationery and supplies 69 45 135 104
Data processing 127 104 262 206
Other operating expense 406 290 762 582
Total Non-Interest Expense 2,518 2,178 4,901 4,337
Income before provision
for income taxes 767 740 1,526 1,485
Provision for Income Taxes 231 255 470 525
Net Income $536 $485 $1,056 $960
Per share data
Net Income -basic $0.11 $0.13 $0.21 $0.26
Net Income -diluted $0.10 $0.11 $0.21 $0.22
*Restated to reflect 5% stock
dividends in 2007 and 2006
Source: Somerset Hills Bancorp
