SBIT Summit Bancshares

Summit Bancshares Reports First Quarter 2004 Earnings FORT WORTH, Texas, April 12 /PRNewswire-FirstCall/ -- Summit Bancshares, Inc. , a community-oriented bank holding company in Fort Worth, with assets of $860 million, reported first quarter earnings today. Philip E. Norwood, Chairman, President and Chief Executive Officer stated, "We are pleased to report positive financial performance of the Company for the first quarter of 2004. Growth in the average balance of loans and deposits were 20.5% and 10.9%, respectively, compared to the first quarter of the prior year. Net interest income increased 11.4% reflecting an 18.4% increase in earning assets over the prior year; however, the net interest margin declined 31 basis points from the first quarter of 2003. As we have noted in the past, the Company is more sensitive to movements in market interest rates than most community banks. In addition, because the Company has a somewhat larger funding base of non-interest bearing funds the current very low interest rate environment has a negative effect on the Company's net interest income and net interest margin. As market interest rates increase in the future the Company, because of its interest rate structure, will be in aposition to benefit from the increase." He further stated, "As we reported in February, we are excited about the opportunity to acquire Arlington National Bank. The addition of the Bank along with its staff will be a positive addition to the Company.It is our plan to complete this transaction in the second quarter." Results of Operations For the quarter ended March 31, 2004, net income was $2,451,000 compared to $2,433,000 for the same period in 2003. Net income per diluted share was $0.39 forthe three months ended March 31, 2004, the same as for the three months ended March 31, 2003. Return on average assets and return on average stockholders' equity for the first quarter of 2004 annualized were 1.22% and 14.06%, respectively. The Company's average stockholders' equity-to-assets ratio of 8.7% for the quarter ended March 31, 2004, continues to reflect a strong capital position for the Company. Financial Results Net interest income for the first quarter of 2004 was $8,283,000 compared to $7,435,000 in the first 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 4.36% for the quarter compared to 4.67% for the first quarter of the prior year reflecting the current very low market interest rate environment experienced by the Company. In addition, the Company's net interest margin was the same in the first quarter of this year compared to the last quarter of last year and was down one basis point from the margin recorded for the third quarter of last year. It is positive that the margin was somewhat steady during this nine month period when the prime rate remained at a historically low rate of 4.00% and the Company's fixed rate assets continued to reprice downward during this period. The Company's significant growth in assets in the period assisted in maintaining the margin. The Company's loans were $593 million at March 31,2004, an increase of $104 million, or 21.2% from a year ago. The March 31, 2004 deposits were $656 million, an increase of $69 million, or 11.8% at the same date of the prior year. Stockholders' equity at March 31, 2004, was $71.6 million compared to $66.6 million at March 31, 2003. Non interest income of $1,567,000 reflected a $219,000, or 16.2%, increase for the first quarter compared to the same quarter in the prior year with positive increases in service charges on deposit accounts and a gain of $167,000 on the sale of foreclosed assets. These increases were somewhat offset by lower mortgage origination fees and investment brokerage fees. Non interest expenses of $5,530,000 for the first quarter of 2004 increased $733,000 compared to the first quarter of last year. The increase in expense for the quarter reflected costs associated with the Company's growth and included expenses related to the opening in June 2003 of the Hulen Branch, the expenses related to the relocation of the supportstaff, including administrative, operations and IT staff, to a new 34,000 sq. ft. facility in May of 2003 and the addition of several lenders and related staff in the last half of 2003. Non-performing assets totaled $2.4 million or 0.41% of loans and foreclosed assets at March 31, 2004, compared to $2.4 million or .50% at March 31, 2003. The allowance for loan losses was 1.40% of total loans and 346% of non-performing loans at March 31, 2004. This level of allowance for loan losses is projected toprovide for any anticipated loan losses. The Company will host a conference call Tuesday, April 13th at 10:00 a.m. CT. To access the live call, please call (800)946-0716 and enter code 549970. A toll free replay of the call will be available startingTuesday, April 13th at 1:00 p.m. CT through midnight, April 27th by calling (888)203-1112 and entering code 549970. 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, 2003. SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per share data) Three Months Ended March 31, % EARNINGS SUMMARY 2004 2003 Change Interest income $ 10,198 $ 9,251 10.2% Interest expense 1,915 1,816 5.5% Net interest income 8,283 7,435 11.4% Provision for loan losses 605 300 101.7% Service charges on deposits 906 758 19.5% Gain on sale of investment securities --- --- 0.0% Other income 661 590 12.0% Salaries and benefits expense 3,368 2,905 15.9% Occupancy andequipment expense 933 722 29.2% Other expense 1,229 1,170 5.0% Earnings before income taxes 3,715 3,686 0.8% Provision for income taxes 1,264 1,253 0.9% Net earnings $ 2,451 $ 2,433 0.7% Basic earnings per share $ 0.40 $ 0.39 2.6% Basic weighted average shares outstanding 6,152 6,166 Diluted earnings per share $ 0.39 $ 0.39 0.0% Diluted weighted average shares outstanding 6,346 6,276 Average for Quarter Ended March 31, Dec. 31, Sept. 30, June 30, March 31, BALANCE SHEET SUMMARY 2004 2003 2003 2003 2003 Total loans $573,862 $537,635 $503,936 $499,545 $476,298 Total investment securities 187,988 205,162 199,367 165,600 170,609 Earning assets 767,274 746,066 718,601 676,834 648,193 Total assets 808,009 788,426 761,278 719,070 688,522 Noninterest bearing deposits 179,396 184,106 176,478 170,234 160,011 Interest bearing deposits 454,352 450,401 452,325 429,420 411,313 Total deposits 633,748 634,507 628,803 599,654 571,324 Other borrowings 101,349 82,160 61,199 48,866 48,012 Shareholders' equity 70,116 68,399 68,273 67,739 66,253 Average for Three Months Ended March 31, % BALANCE SHEET SUMMARY 2004 2003 Change Total loans $573,862 $476,298 20.5% Total investment securities 187,988 170,609 10.2% Earning assets 767,274 648,193 18.4% Total assets 808,009 688,522 17.4% Noninterest bearing deposits 179,396 160,011 12.1% Interest bearing deposits 454,352 411,313 10.5% Total deposits 633,748 571,324 10.9% Other borrowings 101,349 48,012 111.1% Shareholders' equity 70,116 66,253 5.8% Ending Balance March 31, Dec. 31, Sept. 30, June 30, March 31, BALANCE SHEET SUMMARY 2004 2003 2003 2003 2003 Total loans $593,271 $553,769 $517,994 $500,040 $489,352 Total investment securities 181,879 195,959 210,048 178,241 163,639 Total earning assets 818,393 751,063 728,766 693,257 653,066 Allowance for loan losses (8,320) (7,784) (7,483) (7,412) (7,365) Premises and equipment 12,755 12,920 13,237 13,391 11,652 Total assets 860,361 795,478 777,558 738,916 697,893 Noninterest bearing deposits 186,198 192,877 180,765 176,603 165,220 Interest bearing deposits 470,186 448,504 456,706 435,143 421,699 Total deposits 656,384 641,381 637,471 611,746 586,919 Other borrowings 129,691 82,234 69,230 55,627 41,317 Total liabilities 788,786 726,794 709,546 670,187 631,313 Shareholders' equity 71,575 68,684 68,012 68,729 66,580 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) March 31, Dec. 31, Sept. 30, June 30, March 31, NONPERFORMING ASSETS 2004 2003 2003 2003 2003 Nonaccrual loans $ 2,405 $ 2,351 $ 1,514 $ 1,458 $ 2,226 Restructured loans --- --- --- --- --- Other real estate & foreclosed assets 7 --- --- 125 125 Accruing loans past due 90 days or more --- 55 --- 14 80 Total nonperforming assets $ 2,412 $ 2,406 $ 1,514 $ 1,597 $ 2,431 Total nonperforming assets as a percentage of loans and foreclosed assets 0.41% 0.43% 0.29% 0.32% 0.50% Quarter Ended March 31, Dec. 31, Sept. 30, June 30, March 31, ALLOWANCE FOR LOAN LOSSES 2004 2003 2003 2003 2003 Balance at beginning of period $ 7,784 $ 7,483 $ 7,412 $ 7,365 $ 6,706 Loans charged off (137) (163) (24) (272) (80) Loan recoveries 68 170 49 79 439 Net (charge-offs) recoveries (69) 7 25 (193) 359 Provision for loan losses 605 294 46 240 300 Balance at end of period $ 8,320 $ 7,784 $ 7,483 $ 7,412 $ 7,365 Allowance for loan losses as a percentage of total loans 1.40% 1.41% 1.45% 1.48% 1.50% Allowance for loan losses as a percentage of nonperforming loans 345.95% 323.57% 494.39% 503.53% 319.38% Net charge-offs (recoveries) as a percentage of average loans 0.01% 0.00% -0.01% 0.04% -0.07% Provision for loan losses as a percentage of average loans 0.11% 0.05% 0.01% 0.05% 0.06% Quarter Ended March 31, Dec. 31, Sept. 30, June 30, March 31, SELECTED RATIOS 2004 2003 2003 2003 2003 Return on average assets (annualized) 1.22% 1.21% 1.29% 1.37% 1.43% Return on average equity (annualized) 14.06% 13.93% 14.38% 14.55% 14.89% Average shareholders' equity to average assets 8.68% 8.68% 8.97% 9.42% 9.62% Yield on earning assets 5.36% 5.35% 5.38% 5.68% 5.81% Cost of interest bearing funds 1.39% 1.38% 1.42% 1.62% 1.60% Net interest margin (tax equivalent) 4.36% 4.36% 4.37% 4.53% 4.67% Efficiency ratio 55.94% 59.29% 59.57% 56.74% 54.41% End of period book value per common share $11.63 $11.17 $11.04 $11.15 $10.81 End of period common shares outstanding 6,154 6,152 6,165 6,166 6,179 SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands) Three Months Ended March 31, 2004 March 31, 2003 Average Average YIELD ANALYSIS Balance Interest Yield Balance Interest Yield Interest Earning Assets: Federal funds sold, Repurchases, & Due from time $ 5,424 $ 13 0.96% $ 1,286 $ 4 1.18% Investment securities (taxable) 181,189 1,718 3.79% 165,615 1,711 4.19% Investment securities (tax-exempt) 6,799 89 5.24% 4,994 71 5.77% Loans 573,862 8,414 5.90% 476,298 7,499 6.39% Total Interest Earning Assets 767,274 10,234 5.36% 648,193 9,285 5.81% Noninterest Earning Assets: Cash and due from banks 25,136 25,639 Other assets 23,579 21,686 Allowance for loan losses (7,980) (6,996) Total Noninterest Earning Assets 40,735 40,329 Total Assets $808,009 $688,522 Interest Bearing Liabilities: Transaction and money market accounts $196,922 518 1.06% $177,053 462 1.06% Savings deposits 131,280 385 1.18% 116,568 397 1.38% Certificates andother time deposits 126,150 738 2.35% 117,692 801 2.76% Other borrowings 101,349 274 1.09% 48,012 156 1.32% Total Interest Bearing Liabilities 555,701 1,915 1.39% 459,325 1,816 1.60% Noninterest Bearing Liabilities: Demand deposits 179,396 160,011 Other liabilities 2,796 2,933 Shareholders' Equity 70,116 66,253 Total Liabilities and Shareholders' Equity $808,009 $688,522 Net Interest Income and Margin (tax equivalent) $ 8,319 4.36% $ 7,469 4.67% SUMMIT BANCSHARES, INC. (Unaudited) (Dollars in thousands, except per share data) March 31, March 31, LOAN PORTFOLIO 2004 % 2003 % Commercial and industrial $232,015 39.1% $202,448 41.4% Real estate: Commercial 169,376 28.5% 135,353 27.7% Residential 73,481 12.4% 53,388 10.9% Construction and development 86,315 14.6% 64,679 13.2% Consumer 32,084 5.4% 33,484 6.8% Total loans (gross) 593,271 100.0% 489,352 100.0% Unearned discounts --- 0.0% --- 0.0% Total loans (net) 593,271 100.0% 489,352 100.0% March 31, March 31, REGULATORY CAPITAL DATA 2004 2003 Tier 1Capital $ 69,626 $ 63,671 Tier 1 Ratio 11.01% 12.09% Total Capital (Tier 1 + Tier 2) $ 77,539 $ 70,264 Total Capital Ratio 12.26% 13.34% TotalRisk-Adjusted Assets $632,617 $526,659 Tier 1 Leverage Ratio 8.62% 9.04% March 31, March 31, OTHER DATA 2004 2003 Full Time Equivalent Employees (FTE's) 219 207 Stock Price Range (For the Quarter Ended): High $ 32.15 $ 20.00 Low $ 27.66 $ 18.86 Close $ 30.10 $ 19.12 http://www.newscom.com/cgi-bin/prnh/20020410/SBITLOGO 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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