Silver State Bancorp Reports Record Third Quarter Net Income.Strong Balance Sheet and Credit Quality
1 City (1990 pop. 25,945), seat of Henderson co., NW Ky., on the Ohio River, in an oil, coal, tobacco, corn, and livestock area; founded 1797, inc. as a city 1867. , Nev. -- Silver State Bancorp (NASDAQ NASDAQ
in full National Association of Securities Dealers Automated Quotations
U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : SSBX) today reported record net income for the third quarter ended September September: see month. 30, 2007 of $7.2 million, or $0.47 per share diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , up 17.5% from $0.40 per share reported a year ago.
3rd Quarter 2007 Financial Highlights
* Net income of $7.2 million, an increase of $1.6 million or 27.8% from the third quarter 2006
* Diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.47, an increase of 17.5% compared to $.40 per share in the third quarter 2006
* Net interest income of $22.4 million, an increase of $7.9 million or 54.0% from the third quarter 2006
* Net interest margin of 5.83% for the quarter
* Net loan growth of $144.9 million or 11.2% for the quarter
* Return on average equity (annualized annualized
Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. ) of 20.0% and return on average assets (annualized) of 1.8%
* Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. represented 0.06% of gross loans at September 30, 2007
* Non-performing assets represented 0.06% of total assets at September 30, 2007
* Net charge-offs as a percentage of average loans were less than 0.01% for the quarter
* Efficiency ratio of 42.91% for the quarter
* Completed initial registered public offering of common stock on July July: see month. 23, 2007 raising approximately $25.5 million of net proceeds Net Proceeds
The amount received after all costs are deducted from the sale of a piece of property or security.
In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions).
* Completed issuance of $30 million of trust preferred securities on July 24, 2007
Corey Cor·ey , Elias James Born 1928.
American chemist. He won a 1990 Nobel Prize for developing techniques of creating synthetic compounds. L. Johnson, President and Chief Executive Officer, said, "We are extremely pleased with the Company's financial results for the 3rd quarter considering the significant competitive pressures in the markets we operate. Our earnings and interest margins have continued to remain strong despite these challenging market conditions.
"The Company experienced the successful completion of our initial registered public offering of common stock in July raising approximately $25.5 million in net proceeds. In addition, the Company supplemented our capital through a $30 million trust preferred securities issuance. This expanded capital base will allow the Company to continue our strategic growth plans.
"Credit quality remains the top priority for management. To this end, we will continue to focus on quality earning asset Earning asset
An asset that generates income, e.g., income from rental property. generation. Through our underwriting Underwriting
1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).
2. The process of issuing insurance policies. guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and prudent lending measures, as well as the constant monitoring of our portfolio, there has been virtually no deterioration de·te·ri·o·ra·tion
The process or condition of becoming worse. in our credit quality. In addition, during the third quarter we continued to build our loan loss provision commensurate com·men·su·rate
1. Of the same size, extent, or duration as another.
2. Corresponding in size or degree; proportionate: a salary commensurate with my performance.
3. with our portfolio growth.
"We are seeing weakness in the residential real estate lending market; however, we are still primarily a commercial real estate lender and do not see a significant downturn Downturn
The transition point between a rising, expanding economy to a falling, contracting one.
A decline in security prices or economic activity following a period of rising or stable prices or activity. in the primary commercial real estate markets in which we lend.
"With regard to expansion, we are optimistic op·ti·mist
1. One who usually expects a favorable outcome.
2. A believer in philosophical optimism.
op about our strategic growth plan and look forward to the opportunities we have to expand our presence in both Nevada and Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). . In our view, these locations represent two of the most attractive markets in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ."
Silver State Bancorp reported net income of $7.2 million for the three months ended September 30, 2007, representing an increase of 27.8% when compared to net income of $5.6 million for the third quarter of 2006. Diluted earnings per share were $.47 for the three months ended September 30, 2007, an increase of 17.5%, when compared to $.40 for the corresponding period of 2006.
For the nine months ended September 30, 2007, net income was $19.0 million, representing an increase of 24.8% when compared to net income of $15.2 million for the first nine months of 2006. Diluted earnings per share were $1.31 for the nine months ended September 30, 2007, an increase of 17.0%, when compared to $1.12 for the corresponding period of 2006.
Total interest income was $38.8 million for the quarter ended September 30, 2007 compared to $23.8 million for the corresponding period of 2006. This increase of $15.0 million or 63.2% was primarily the result of significant growth in our average earning assets Earning Assets
Any income-earning asset owned by a company.
These assets are generally interest-bearing accounts, bonds, and securities available for sale.
See also: Asset, Asset Valuation, Earnings, Net Interest Margin . Our average earning assets, driven by an increase in our average loans, increased $606.7 million or 66.1% for the third quarter of 2007 compared to the corresponding period of 2006. The average yield on earning assets decreased to 10.09% for the quarter ended September 30, 2007 compared to 10.27% for the corresponding period of 2006.
Total interest expense increased $7.2 million or 77.8% to $16.4 million for the quarter ended September 30, 2007 compared to the corresponding period of 2006. The increase in total interest expense was a result of an increase in the average balance of interest bearing liabilities, driven by an increase in our average deposits, of $564.2 million or 79.2% for the third quarter of 2007 compared to the third quarter of 2006. The average cost of interest bearing liabilities decreased to 5.09% for the quarter ended September 30, 2007 compared to 5.13% for the quarter ended September 30, 2006.
Net interest income was $22.4 million for the third quarter of 2007, up $7.9 million or 54.0% from $14.6 million in the third quarter of 2006. The net interest margin decreased to 5.83% for the third quarter of 2007 compared to 6.29% for the third quarter of 2006. This decrease is primarily attributable to a slight decrease in the average yield of our loan portfolio reflecting continued competitive pressures on the pricing of our loan products. During the third quarter of 2007, our net interest margin continued to show signs of stabilizing stabilizing,
v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. at 5.83% compared to 5.72% and 5.85% for the first and second quarters of 2007 respectively.
The Company's provision for loan losses was $2.4 million for the quarter ended September 30, 2007 as compared to $817,000 for the corresponding quarter of 2006. The increased provision is primarily due to the significant increase in our loan portfolio. In addition, the Company increased its provision related to residential family loans due to the weaknesses in the residential real estate markets in the Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. and Phoenix metropolitan areas.
Total non-interest income was $1.9 million for the quarter ended September 30, 2007, an increase of $227,000 or 13.2% compared to the corresponding period of 2006. Total non-interest income represented 16.9% of income before income taxes for the third quarter of 2007 compared to 19.7% for the corresponding period of 2006. The increase in non-interest income was primarily the result of an increase in other bank fee income generated from our bank products and services.
Total non-interest expense increased $3.7 million or 55.0% to $10.5 million for the quarter ended September 30, 2007 compared to the corresponding period of 2006. The increase was primarily attributable to expenses associated with salaries and employee benefits due to the addition of new employees which is consistent with our overall growth. Full-time equivalent Full-time equivalent (FTE) is a way to measure a worker's involvement in a project, or a student's enrollment at an educational institution. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that the worker is only half-time. employees were 333 at September 30, 2007 compared to 245 at September 30, 2006. Occupancy expenses increased $225,000 or 31.1% to $949,000 for the quarter ended September 30, 2007 compared to the corresponding period of 2006 primarily as a result of the Company's number of full service branch offices increasing to 12 at September 30, 2007 from 9 at September 30, 2006. Professional fees increased $496,000 or 209.3% to $733,000 for the quarter ended September 30, 2007 compared to the corresponding period of 2006 due to increased legal, audit, accounting, and compliance fees attributed to the growth of the company and costs associated with being a public company. Depreciation and amortization expense increased $275,000 or 73.3% to $650,000 for the quarter ended September 30, 2007 compared to the corresponding period of 2006 due to increases in premises, equipment and other depreciable depreciable
Of, relating to, or being a long-term tangible asset that is subject to depreciation. assets. Insurance expense increased $259,000 or 345.3% to $334,000 for the quarter ended September 30, 2007 compared to the corresponding period of the prior year, due primarily to an increase in FDIC FDIC
See: Federal Deposit Insurance Corporation
See Federal Deposit Insurance Corporation (FDIC). deposit insurance assessments.
Total assets were $1.7 billion at September 30, 2007, an increase of $464.5 million or 38.4% from December 31, 2006. Total assets increased $163.4 million or 10.8% from June 30, 2007. This increase is due primarily to internally generated loan growth and reflects our ability to leverage our newly generated capital.
Net loans, excluding loans held for sale, totaled $1.4 billion at September 30, 2007, an increase of $437.6 million or 43.6% from December 31, 2006 and an increase of $144.9 million or 11.2% from June 30, 2007. Loans held for sale totaled $63.3 million at September 30, 2007, an increase of $29.2 million or 85.9% from December 31, 2006 and an increase of $11.2 million or 21.4% during the third quarter 2007. The majority of the loan growth was in construction and land loans which grew $365.6 million or 58.9% from December 31, 2006 and grew $117.0 million or 13.4% from June 30, 2007. Net loans represented approximately 86% of total assets at September 30, 2007 and June 30, 2007 compared to approximately 83% at December 31, 2006. The allowance for loan and lease losses represented 1.15% of gross loans at September 30, 2007 and 1.10% at December 31, 2006 and 1.09% at June 30, 2007. This increase is due to the Company increasing its allowance related to residential family loans due to the weaknesses in the residential real estate markets in the Las Vegas and Phoenix metropolitan areas.
Deposits totaled $1.4 billion at September 30, 2007, an increase of $369.8 million or 37.5% from December 31, 2006 and an increase of $110.8 million or 8.9% from June 30, 2007. The majority of our deposit growth occurred in interest bearing checking accounts which grew $97.0 million or 22.3% and time deposits which grew $256.6 million or 70.9% from December 31, 2006. Interest bearing checking accounts increased $16.0 million or 3.1% and time deposits grew $97.7 million or 18.7% from June 30, 2007. Federal Home Loan Bank advances were $76.6 million at September 30, 2007, an increase of $18.6 million or 32.1% from December 31, 2006 and $5.0 million or 7.0% from June 30, 2007. Both deposit liabilities and Federal Home Loan Bank advances are used as our primary funding sources to support our strong loan growth.
Junior subordinated debt Subordinated Debt
A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". totaled $69.6 million at September 30, 2007, an increase of $30.9 million or 80.0% from December 31, 2006 and June 30, 2007. Our junior subordinated debt, which is issued to our statutory trust subsidiaries that, in turn, issue trust preferred securities, is considered long term borrowing for financial reporting purposes but is included as a component of regulatory capital, subject to limitations.
Stockholders' equity Stockholders' Equity
The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased $45.5 million or 42.6% from December 31, 2006 and $33.3 million or 28.1% from June 30, 2007. This increase was a result of the company's initial registered public offering of common stock completed in July 2007 which raised approximately $25.5 million of net proceeds, $19.0 million in net income for the nine months ended September 30, 2007, and stock option exercises. Total stockholders' equity represented 9.1% of total assets at September 30, 2007, compared to 8.8% at December 31, 2006 and 7.9% at June 30, 2007. Tangible book value per share increased to $8.67 at September 30, 2007 from $6.33 at December 31, 2006 and $7.20 at June 30, 2007.
Asset Quality and Capital Ratios
At September 30, 2007 non-performing loans were $835,000 and represented 0.06% of gross loans and non-performing assets were $945,000 and represented 0.06% of total assets. Net charge-offs were $36,000 for the quarter ending September 30, 2007 and as a percentage of average loans were less than 0.01% for the quarter ending September 30, 2007.
The Company is considered "well-capitalized" pursuant to regulatory capital definitions at September 30, 2007 with Tier 1 Risk-Based, Total Risked-Based and Leverage Ratios of 10.7%, 12.7% and 11.6%, respectively.
Silver State Bancorp will hold a conference call to discuss third quarter results on October 24, 2007 at 11:00 AM Eastern; 8:00 AM Pacific. Dial in number: 866.713.8567. International dial in: 617.597.5326. Passcode: 22938680. A replay will be available through October 31, 2007. Replay dial in: 888.286.8010. International dial in: 617.801.6888. Replay passcode: 38154139.
About Silver State Bancorp
Silver State Bancorp, through its wholly-owned subsidiaries, Silver State Bank and Choice Bank, currently operates eleven full service branches in southern Nevada and two full service branches in the Phoenix/Scottsdale market area. Silver State Bank also operates loan production offices located in Nevada, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Washington, Oregon Oregon, city, United States
Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. , Utah, Colorado and Florida. Please visit www.silverstatebancorp.com for more information.
Forward-Looking Statements forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections.
This press release contains forward-looking statements. Terms such as "will," "should," "plan," "intend," "expect," "continue," "believe," "anticipate," "seek," and similar expressions are forward-looking in nature and reflect management's view only as the date hereof here·of
Formal or law of or concerning this
Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Actual results and events could differ materially from those expressed or anticipated and are subject to a number of risks and uncertainties including but not limited to fluctuations in interest rates, asset quality, government regulations, economic conditions and competition in the geographic and business areas in which Silver State Bancorp conducts its operations. We undertake no obligation to review or update any forward-looking statements, whether as a result of new information, future events, or otherwise.
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