SBIT Summit Bancshares

FORT WORTH, Texas, July 17 /PRNewswire-FirstCall/ -- Summit Bancshares, Inc. (NASDAQ:SBIT), the bank holding company for Summit Bank, N.A., today reported net income for the second quarter of 2006 of $3,523,000, or $0.28 per diluted common share, compared to $3,191,000, or $.25 per diluted common share, for the comparable 2005 period, a 12.0% increase in per share earnings. For the six months ended June 30, 2006, net income was $5,949,000, or $0.47 per diluted common share, a 4.1% decrease over the same period of the prior year. This decrease for the six months reflects the somewhat large provision for loan losses that was recorded in the first quarter of 2006. Philip E. Norwood, Chairman, President and Chief Executive Officer stated, "The fundamentals of the Company remain strong with an 18.4% increase in net interest income for the quarter compared to the same period of the prior year. Also, average loans and average deposits for the quarter increased 14.7% and 12.1%, respectively, from the second quarter of 2005. These increases contributed to a double digit increase in earnings per share for the quarter." He further stated, "We are excited about the pending merger with Cullen/Frost Bankers, Inc. that was announced on July 3, 2006. We think this will provide many new opportunities to provide banking services to our customers in Tarrant County." Net interest income (tax equivalent) for the second quarter of 2006 was $12.7 million compared to $10.8 million in the second quarter of last year, an 18.4% increase. Contributing to this increase was a 13.6% increase in average earning assets and an increase in net interest margin of 19 basis points to 4.76%, comparing second quarter 2006 to second quarter 2005. For the six months ended June 30, 2006, net interest income (tax equivalent) was $24.8 million, an increase of 18.2% over the first six months of 2005. The increase in net interest margin continues to reflect the increase in market interest rates and the Company's sensitivity to changes in market interest rates. Non-interest income for the second quarter of 2006 was $2,196,000, an increase of $161,000, or 7.9% over the reported amount for the second quarter of the prior year. This increase reflected increases in investment service fees, mortgage origination fees, insurance commissions and debit card fees. For the six months ended June 30, 2006, non-interest income was $4,069,000, an increase of 3.9% over the first six months of 2005. Non-interest expenses of $8,284,000 for the second quarter of 2006 increased $726,000, or 9.6% compared to the second quarter of last year. Approximately half of this increase was due to increases in salary expenses for merit raises and staff additions. Also, the increase reflects higher occupancy expense, professional fees and the addition in 2006 of expense for stock options. Non-interest expense for the six months ended June 30, 2006, was $16,420,000 compared to $14,810,000 for the same period in the prior year, an increase of 10.9%. This increase in the six months' expense also reflects increases in salary expense and occupancy expense. The provision for loan losses was $1,100,000 for the second quarter of 2006 compared to $225,000 for the same quarter of 2005. This provision, along with the somewhat extraordinary provision for loan losses recorded in the first quarter of 2006, was necessary because of the net loan charge-offs of $4.2 million recorded in the second quarter. Also, the dynamic loan growth experienced in the quarter required the increased provision. The allowance for loan losses was 1.18% of total loans as of June 30, 2006. As of June 30, 2006, non-accrual loans were $6.1 million, or .72% of total loans. The Company's loans were $842 million at June 30, 2006, an increase of 16.8% over June 30, 2005. Deposits increased 12.5% to $905 million at June 30, 2006. At June 30, 2006, shareholders' equity was $84.3 million or a book value of $6.68 per outstanding share. Return on average assets and return on average shareholders' equity were 1.24% and 16.80%, respectively for the quarter ended June 30, 2006 and 1.06% and 14.39% respectively for the six months ended June 30, 2006. Summit files annual, quarterly and special reports, proxy statements and other information with the SEC. Investors may read and copy any of these reports, statements and other information at the SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549. Investors should call the SEC at 1-800-SEC-0330 for further information on the public reference room. The reports, statements, and other information filed by Summit with the SEC are also available free at the SEC's web site at http://www.sec.gov/ . You can also obtain a free copy of these reports, statements and other information from Summit's web site at http://www.summitbank.net/ . The Company will host a conference call at 10:30 a.m. (CT) on Tuesday, July 18, 2006 to discuss the Company's performance for the quarter ended June 30, 2006. To participate, please call (800) 479-9001 and enter confirmation code 3052444. If you are unable to participate an audio playback of the call will be available starting Tuesday, July 18, 2006 at 3:00 p.m. (CT) through midnight, Tuesday, August 1, 2006 (CT) by calling 888-203-1112 and entering confirmation code 3052444. Certain statements contained in this press release that 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 contain in such Act. We are including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements are based on assumptions involving certain known and unknown risks and uncertainties, many of which are beyond the Company's control, and the 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 risks and uncertainties are listed from time to time in the Company's filings with the Securities and Exchange Commission, including but not limited to, those set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2005. SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per share data) Quarter Ended Six Months Ended June 30, % June 30, % EARNINGS SUMMARY 2006 2005 Change 2006 2005 Change Interest income $18,912 $14,378 31.5% $36,478 $27,751 31.4% Interest expense 6,239 3,656 70.7% 11,755 6,796 73.0% Net interest income 12,673 10,722 18.2% 24,723 20,955 18.0% Provision for loan losses 1,100 225 388.9% 3,100 450 588.9% Service charges on deposits 1,001 990 1.1% 1,922 1,972 -2.5% Gain on sale of investment securities --- --- 0.0% --- --- 0.0% Other income 1,195 1,045 14.4% 2,147 1,943 10.5% Salaries and benefits expense 4,943 4,448 11.1% 9,836 8,717 12.8% Occupancy and equipment expense 1,418 1,231 15.2% 2,848 2,433 17.1% Other expense 1,923 1,879 2.3% 3,736 3,660 2.1% Earnings before income taxes 5,485 4,974 10.3% 9,272 9,610 -3.5% Provision for income taxes 1,962 1,783 10.0% 3,323 3,406 -2.4% Net earnings $3,523 $3,191 10.4% $5,949 $6,204 -4.1% Basic earnings per share $0.29 $0.26 11.5% $0.48 $0.50 -4.0% Basic weighted average shares outstanding 12,551 12,418 12,503 12,398 Diluted earnings per share $0.28 $0.25 12.0% $0.47 $0.49 -4.1% Diluted weighted average shares outstanding 12,777 12,734 12,758 12,726 Average for Quarter Ended BALANCE SHEET June 30, March 31, Dec. 31, Sept. 30, June 30, SUMMARY 2006 2006 2005 2005 2005 Total loans $830,097 $793,536 $753,311 $735,109 $723,535 Total investment securities 242,468 253,197 252,508 226,441 216,825 Earning assets 1,073,869 1,048,192 1,017,095 974,844 945,251 Total assets 1,139,224 1,116,659 1,082,477 1,038,628 1,007,680 Noninterest bearing deposits 258,103 251,034 259,062 242,849 239,127 Interest bearing deposits 636,102 608,619 608,863 590,390 558,905 Total deposits 894,205 859,653 867,925 833,239 798,032 Other borrowings 155,510 169,405 128,368 121,435 128,684 Shareholders' equity 84,121 82,609 80,684 79,053 76,575 Average for Six Months Ended June 30, % BALANCE SHEET SUMMARY 2006 2005 Change Total loans $811,917 $715,265 13.5% Total investment securities 247,803 218,484 13.4% Earning assets 1,061,101 938,791 13.0% Total assets 1,128,004 1,000,457 12.7% Noninterest bearing deposits 254,588 232,361 9.6% Interest bearing deposits 622,437 559,376 11.3% Total deposits 877,025 791,737 10.8% Other borrowings 162,419 128,430 26.5% Shareholders' equity 83,369 76,091 9.6% Ending Balance BALANCE SHEET June 30, March 31, Dec. 31, Sept. 30, June 30, SUMMARY 2006 2006 2005 2005 2005 Total loans $841,961 $808,606 $774,886 $754,153 $721,161 Total investment securities 235,246 247,882 256,842 236,544 214,750 Total earning assets 1,084,382 1,058,892 1,032,620 1,006,368 945,661 Allowance for loan losses (9,958) (13,092) (11,208) (11,131) (10,798) Premises and equipment 16,791 16,855 16,515 15,620 15,563 Total assets 1,160,731 1,121,269 1,099,735 1,074,261 1,008,475 Noninterest bearing deposits 262,264 262,087 263,027 258,644 241,643 Interest bearing deposits 643,036 627,810 615,749 607,384 562,846 Total deposits 905,300 889,897 878,776 866,028 804,489 Other borrowings 165,848 144,527 134,231 123,892 122,203 Total liabilities 1,076,480 1,038,928 1,018,402 994,534 930,891 Shareholders' equity 84,251 82,341 81,333 79,727 77,584 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) June 30, March 31, Dec. 31, Sept. 30, June 30, NONPERFORMING ASSETS 2006 2006 2005 2005 2005 Nonaccrual loans $6,058 $11,164 $3,000 $4,989 $3,372 Restructured loans --- --- --- --- --- Other real estate & foreclosed assets --- 387 --- --- --- Total nonperforming assets $6,058 $11,551 $3,000 $4,989 $3,372 Total nonperforming assets as a percentage of loans and foreclosed assets 0.72% 1.43% 0.39% 0.66% 0.47% Accruing loans past due 90 days or more $--- $--- $--- $2,178 $36 Quarter Ended June 30, March 31, Dec. 31, Sept. 30, June 30, ALLOWANCE FOR LOAN LOSSES 2006 2006 2005 2005 2005 Balance at beginning of period $13,092 $11,208 $11,131 $10,798 $10,519 Loans charged off (4,311) (257) (286) (25) (147) Loan recoveries 77 141 23 43 201 Net (charge-offs) recoveries (4,234) (116) (263) 18 54 Provision for loan losses 1,100 2,000 340 315 225 Balance at end of period $9,958 $13,092 $11,208 $11,131 $10,798 Allowance for loan losses as a percentage of total loans 1.18% 1.62% 1.45% 1.48% 1.50% Allowance for loan losses as a percentage of nonperforming loans 164.38% 117.27% 373.66% 223.11% 320.23% Net charge-offs (recoveries) as a percentage of average loans 0.51% 0.01% 0.03% 0.00% -0.01% Provision for loan losses as a percentage of average loans 0.13% 0.25% 0.05% 0.04% 0.03% Quarter Ended June 30, March 31, Dec. 31, Sept. 30, June 30, SELECTED RATIOS 2006 2006 2005 2005 2005 Return on average assets (annualized) 1.24% 0.88% 1.29% 1.32% 1.27% Return on average equity (annualized) 16.80% 11.91% 17.29% 17.34% 16.71% Average shareholders' equity to average assets 7.38% 7.40% 7.45% 7.61% 7.60% Yield on earning assets 7.09% 6.82% 6.55% 6.32% 6.12% Cost of interest bearing funds 3.16% 2.88% 2.53% 2.38% 2.13% Net interest margin (tax equivalent) 4.76% 4.68% 4.71% 4.58% 4.57% Efficiency ratio 55.46% 58.20% 58.70% 56.84% 59.07% End of period book value per common share $6.68 $6.60 $6.54 $6.41 $6.25 End of period common shares outstanding 12,604 12,484 12,444 12,429 12,421 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) Three Months Ended June 30, 2006 Average YIELD ANALYSIS Balance Interest Yield Interest Earning Assets: Federal funds sold & interest bearing deposits $1,304 $16 4.92% Investment securities (taxable) 228,017 2,297 4.03% Investment securities (tax-exempt) 14,451 196 5.43% Loans 830,097 16,471 7.96% Total Interest Earning Assets 1,073,869 18,980 7.09% Noninterest Earning Assets: Cash and due from banks 30,375 Other assets 48,362 Allowance for loan losses (13,382) Total Noninterest Earning Assets 65,355 Total Assets $1,139,224 Interest Bearing Liabilities: Transaction and money market accounts $263,205 1,379 2.10% Savings deposits 154,334 1,014 2.64% Certificates and other time deposits 218,563 2,075 3.81% Other borrowings 155,510 1,771 4.57% Total Interest Bearing Liabilities 791,612 6,239 3.16% Noninterest Bearing Liabilities: Demand deposits 258,103 Other liabilities 5,388 Shareholders' equity 84,121 Total Noninterest Bearing Liabilities 347,612 Total Liabilities and Shareholders' Equity $1,139,224 Net Interest Income and Margin (tax equivalent) $12,741 4.76% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) Three Months Ended June 30, 2005 Average YIELD ANALYSIS Balance Interest Yield Interest Earning Assets: Federal funds sold & interest bearing deposits $4,891 $36 2.95% Investment securities (taxable) 208,367 1,914 3.67% Investment securities (tax-exempt) 8,458 110 5.20% Loans 723,535 12,356 6.85% Total Interest Earning Assets 945,251 14,416 6.12% Noninterest Earning Assets: Cash and due from banks 30,139 Other assets 42,973 Allowance for loan losses (10,683) Total Noninterest Earning Assets 62,429 Total Assets $1,007,680 Interest Bearing Liabilities: Transaction and money market accounts $231,313 797 1.38% Savings deposits 162,065 704 1.74% Certificates and other time deposits 165,527 1,151 2.79% Other borrowings 128,684 1,004 3.13% Total Interest Bearing Liabilities 687,589 3,656 2.13% Noninterest Bearing Liabilities: Demand deposits 239,127 Other liabilities 4,389 Shareholders' equity 76,575 Total Noninterest Bearing Liabilities 320,091 Total Liabilities and Shareholders' Equity $1,007,680 Net Interest Income and Margin (tax equivalent) $10,760 4.57% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2006 Average YIELD ANALYSIS Balance Interest Yield Interest Earning Assets: Federal funds sold & interest bearing deposits $1,381 $32 4.67% Investment securities (taxable) 234,585 4,695 4.00% Investment securities (tax-exempt) 13,218 356 5.39% Loans 811,917 31,519 7.83% Total Interest Earning Assets 1,061,101 36,602 6.96% Noninterest Earning Assets: Cash and due from banks 31,881 Other assets 47,588 Allowance for loan losses (12,566) Total Noninterest Earning Assets 66,903 Total Assets $1,128,004 Interest Bearing Liabilities: Transaction and money market accounts $261,407 2,566 1.98% Savings deposits 151,430 1,834 2.44% Certificates and other time deposits 209,600 3,806 3.66% Other borrowings 162,419 3,549 4.41% Total Interest Bearing Liabilities 784,856 11,755 3.02% Noninterest Bearing Liabilities: Demand deposits 254,588 Other liabilities 5,191 Shareholders' equity 83,369 Total Noninterest Bearing Liabilities 343,148 Total Liabilities and Shareholders' Equity $1,128,004 Net Interest Income and Margin (tax equivalent) $24,847 4.72% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2005 Average YIELD ANALYSIS Balance Interest Yield Interest Earning Assets: Federal funds sold & interest bearing deposits $5,042 $67 2.68% Investment securities (taxable) 210,249 3,840 3.65% Investment securities (tax-exempt) 8,235 216 5.25% Loans 715,265 23,702 6.68% Total Interest Earning Assets 938,791 27,825 5.98% Noninterest Earning Assets: Cash and due from banks 30,099 Other assets 42,073 Allowance for loan losses (10,506) Total Noninterest Earning Assets 61,666 Total Assets $1,000,457 Interest Bearing Liabilities: Transaction and money market accounts $233,490 1,514 1.31% Savings deposits 165,188 1,340 1.64% Certificates and other time deposits 160,698 2,130 2.67% Other borrowings 128,430 1,812 2.85% Total Interest Bearing Liabilities 687,806 6,796 1.99% Noninterest Bearing Liabilities: Demand deposits 232,361 Other liabilities 4,199 Shareholders' equity 76,091 Total Noninterest Bearing Liabilities 312,651 Total Liabilities and Shareholders' Equity $1,000,457 Net Interest Income and Margin (tax equivalent) $21,029 4.52% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per share data) June 30, June 30, LOAN PORTFOLIO 2006 % 2005 % Commercial and industrial $302,998 36.0% $257,362 35.7% Real estate: Commercial 276,563 32.8% 236,142 32.7% Residential 94,015 11.2% 86,558 12.0% Construction and development 133,982 15.9% 105,256 14.6% Consumer 34,403 4.1% 35,843 5.0% Total loans (gross) 841,961 100.0% 721,161 100.0% Unearned discounts --- 0.0% --- 0.0% Total loans (net) $841,961 100.0% $721,161 100.0% June 30, June 30, REGULATORY CAPITAL DATA 2006 2005 Tier 1 Capital $90,123 $79,991 Tier 1 Ratio 10.49% 10.34% Total Capital (Tier 1 + Tier 2) $100,081 $89,671 Total Capital Ratio 11.65% 11.60% Total Risk-Adjusted Assets $859,044 $773,286 Tier 1 Leverage Ratio 7.99% 7.93% June 30, June 30, OTHER DATA 2006 2005 Full Time Equivalent Employees (FTE's) 265 257 Stock Price Range (For the Quarter Ended): High $21.73 $18.65 Low $17.93 $16.00 Close $21.21 $17.30 http://www.newscom.com/cgi-bin/prnh/20041025/DASBANKLOGO http://photoarchive.ap.org/ DATASOURCE: Summit Bancshares, Inc. CONTACT: Bob G. Scott, COO of Summit Bancshares, Inc., +1-817-877-2660 Web site: http://www.summitbank.net/

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