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Superior Bancorp's Third Quarter Income Increases 78%; Second Stock Repurchase Program Authorized- Operating earnings of $2.6 million; Operating EPS of $0.07 per share
BIRMINGHAM, Ala., Oct. 29 /PRNewswire-FirstCall/ -- Superior Bancorp (NASDAQ: SUPR) announced today a new record level of operating earnings and net income for the third quarter 2007. A reconciliation of operating earnings and net income is provided in the attached selected financial data.
Three Months Nine Months
(Dollars in thousands, Ended Ended
except per share data) September 30, September 30,
2007 2007
Operating earnings (Non-GAAP) $2,616 $7,152
Operating earnings per common share
(Non-GAAP) 0.07 0.20
Net income (GAAP) 1,450 5,717
Net income per common share (GAAP) 0.04 0.16
CEO Stan Bailey stated, "Despite external headwinds of our industry -- credit cycle, housing market correction and stock market volatility -- we are pleased to report a new record income level for our company. Also, we are focusing on those steps that create shareholder value through deposit growth, franchise expansion and household acquisition." Company Performance Third quarter 2007 operating income excludes the $1.2 million combined after-tax effect of the debt restructuring, ESOP termination and merger- related expenses. Third quarter 2007 net income (GAAP) of $1.5 million represents an increase of 78% compared to net income of $813,000 for the third quarter 2006. Net income for the first nine months of 2007 of $5.7 million represents a 95% increase in net income as compared to $2.9 million for the first nine months of 2006. Net income for the first nine months includes the $1.4 million combined after-tax effect of the debt restructuring, termination of ESOP and merger-related expenses. Superior Bancorp's total assets at September 30, 2007, increased 58% to $2.903 billion, compared to total assets of $1.836 billion at September 30, 2006. Loans, net of unearned interest, increased $782 million, or 62%, to $2.040 billion from $1.258 billion at September 30, 2006. Deposits increased $728 million, or 51%, to $2.150 billion at September 30, 2007 from $1.422 billion at September 30, 2006. The 2006 acquisition of Community Bancshares, Inc. and the 2007 acquisition of People's Community Bancshares, Inc. contributed an aggregate of approximately $626 million of loans and $675 million of deposits to the balance sheet growth. Excluding acquisitions, Superior grew its loan portfolio approximately 12% and deposits approximately 4% in the trailing twelve months ended September 30, 2007. Net interest income increased $9.0 million to $19.9 million for the third quarter of 2007 from $10.9 million for the third quarter of 2006. Net interest margin increased to 3.38% for the third quarter of 2007 from 2.94% for the third quarter of 2006. This increase reflects the benefits from the three bank mergers in 2006 and 2007 and our continued realignment of our balance sheet mix. Credit Quality With regards to asset quality at September 30, 2007, non-performing assets ("NPAs") were 1.24% of total loans plus NPAs compared to 0.63% at December 31, 2006. Attributing to the increase in NPAs are the recent bank acquisitions and management's aggressive collection efforts of two commercial real estate credits totaling approximately $8.4 million. Net loan charge-offs as a percentage of average loans remained stable at 0.20% during the first nine months of 2007 compared to 0.20% for all of 2006. The allowance for loan losses at September 30, 2007 was $22.9 million, or 1.12% of net loans, compared to $18.9 million, or 1.15% of net loans, at December 31, 2006. Acquisition Completed Superior Bancorp and People's Community Bancshares Inc. of Sarasota, Florida consummated their merger on July 27, 2007. The completed combination of People's Community Bank of the West Coast with Superior Bank, Superior Bancorp's principal subsidiary, creates a banking franchise totaling $2.9 billion in assets that serves its customers through 66 banking offices from Huntsville, Alabama to Venice, Florida. The Florida component, with approximately $1 billion in assets, has 26 branches from Panama City to Venice. De Novo Branch Expansion Regarding the status of Superior Bank's de novo branch strategy, eight of 20 planned branches have been opened in key Alabama and Florida markets attributing approximately $102 million of core deposits as of September 30, 2007. For the nine-months ended September 30, 2007, non-interest expense associated with the new branches was $2.0 million, or approximately a 2% premium on deposits. Nine new branches are scheduled to open during the fourth quarter of 2007 and three branches in early 2008 in Alabama and Florida. Superior Bank will invest approximately $25 to $30 million towards its de novo expansion program. Share Repurchase Superior Bancorp completed a repurchase of one million shares in the third quarter of 2007. The Board of Directors has authorized, beginning on or after November 2, 2007, a second repurchase program to purchase up to one million shares of Superior Bancorp's outstanding common stock. The Board continues to consider an investment in the Corporation's common stock to be an excellent use of capital in the foreseeable future. The shares may be purchased in open market, negotiated or block transactions. Superior Bancorp does not intend to repurchase any shares from its management team or other insiders. This stock buyback program does not obligate Superior Bancorp to acquire any specific number of shares and may be suspended or discontinued at any time. As of September 30, 2007, Superior Bancorp had approximately 40.3 million shares of its common stock outstanding. About Superior Bancorp Superior Bancorp is a $2.9 billion thrift holding company headquartered in Birmingham, Alabama. The principal subsidiary of Superior Bancorp is Superior Bank, a Southeastern community bank. Superior Bank has 66 branches with 40 locations throughout the state of Alabama and 26 locations in Florida. Superior Bank currently has 12 new branches planned for Alabama and Florida during the remainder of 2007 and 2008 in addition to the eight that have opened since November 2006. Superior Bank operates 20 consumer finance offices in North Alabama as 1st Community Credit and Superior Financial Services and also has a loan production office in Montgomery, Alabama. This press release contains financial information determined by methods other than in accordance with U. S. generally accepted accounting principles ("GAAP"). Superior's management uses these "non-GAAP" measures in their analysis of Superior's performance. Non-GAAP measures typically adjust GAAP performance measures to exclude the effects of charges, expenses and gains related to the consummation of mergers and acquisitions, and costs related to the integration of merged entities. These non-GAAP measures may also exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Since these items and their impact on Superior's performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of Superior's core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that are presented by other companies. Statements in this document that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Superior Bancorp cautions that such "forward looking statements," wherever they occur in this document or in other statements attributable to Superior Bancorp are necessarily estimates reflecting the judgment of Superior Bancorp's senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the "forward looking statements." Such "forward looking statements" should, therefore, be considered in light of various important factors set forth from time to time in Superior Bancorp's reports and registration statements filed with the SEC. While it is impossible to list all such factors that could affect the accuracy of such "forward looking statements," some of those factors include: general economic conditions, especially in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in the competitive environment in the markets served by Superior Bancorp.; changes in the loan portfolio and the deposit base of Superior Bancorp; and the effects of natural disasters such as hurricanes. Superior Bancorp disclaims any intent or obligation to update "forward looking statements." More information on Superior Bancorp and its subsidiaries may be obtained over the Internet, http://www.superiorbank.com, or by calling 1-877-326-BANK (2265).
Superior Bancorp and Subsidiaries
Condensed Consolidated Statements of Financial Condition
(Dollars In Thousands)
September 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited)
Assets
Cash and due from banks $53,399 $32,964 $49,783
Interest bearing deposits in other
banks 7,062 7,063 10,994
Federal funds sold 7,536 1,973 25,185
Investment securities available for
sale 367,538 306,339 354,716
Tax lien certificates 13,935 7,254 16,313
Mortgage loans held for sale 26,942 18,523 24,433
Loans, net of unearned income 2,039,530 1,257,640 1,639,528
Less: Allowance for loan losses (22,867) (13,222) (18,892)
Net loans 2,016,663 1,244,418 1,620,636
Premises and equipment, net 91,734 66,921 94,626
Accrued interest receivable 17,421 9,801 14,387
Stock in FHLB 17,870 9,372 12,382
Cash surrender value of life insurance 45,219 40,228 40,598
Goodwill and other intangibles 187,289 60,293 129,520
Other assets 50,183 30,949 47,417
Total assets $2,902,791 $1,836,098 $2,440,990
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $207,383 $119,030 $191,323
Interest-bearing deposits 1,942,654 1,303,413 1,679,518
Total deposits 2,150,037 1,422,443 1,870,841
Advances from FHLB 287,795 146,090 187,840
Federal funds borrowed and security
repurchase agreements 21,990 32,464 23,415
Notes payable 8,768 3,597 5,545
Junior subordinated debentures owed to
unconsolidated subsidiary trusts 53,831 31,959 44,006
Accrued expenses and other liabilities 33,035 18,661 33,256
Total liabilities 2,555,456 1,655,214 2,164,903
Stockholders' Equity
Common stock, par value $.001 per
share; authorized 60,000,000
shares;
shares issued 41,491,126,
26,428,942 and 34,732,345,
respectively;
outstanding 40,282,981,
19,980,261 and 34,651,669,
respectively 35 27 35
Surplus 328,371 160,571 253,815
Retained earnings 31,653 24,431 26,491
Accumulated other comprehensive
loss (968) (2,454) (1,452)
Treasury stock, at cost (11,105) (310) (716)
Unearned ESOP stock (651) (1,381) (2,086)
Total stockholders' equity 347,335 180,884 276,087
Total liabilities and
stockholders' equity $2,902,791 $1,836,098 $2,440,990
Superior Bancorp and Subsidiaries
Condensed Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
Three Months Nine Months Year
Ended Ended Ended
Sept. 30 Sept. 30 Dec. 31
2007 2006 2007 2006 2006
(Unaudited) (Unaudited)
Interest income
Interest and fees on loans $40,486 $23,366 $109,783 $62,038 $92,659
Interest on investment
securities
Taxable 4,271 3,248 12,805 8,757 12,994
Exempt from Federal income
tax 276 106 543 273 389
Interest on federal funds
sold 91 142 373 229 570
Interest and dividends on
other investments 875 596 2,304 1,418 2,165
Total interest income 45,999 27,458 125,808 72,715 108,777
Interest expense
Interest on deposits 21,410 12,653 57,659 30,833 46,511
Interest on FHLB advances
and other borrowings 3,617 3,093 9,636 8,212 11,603
Subordinated debentures 1,066 797 3,062 2,338 3,269
Total interest expense 26,093 16,543 70,357 41,383 61,383
Net interest income 19,906 10,915 55,451 31,332 47,394
Provision for loan losses 1,179 550 2,884 1,850 2,500
Net interest income
after provision for
loan losses 18,727 10,365 52,567 29,482 44,894
Noninterest income
Service charges and fees on
deposits 2,090 1,137 5,774 3,417 4,915
Mortgage banking income 970 919 3,052 2,158 2,997
Investment securities gains - - 242 - -
Change in fair value of
derivatives 202 6 169 43 374
Increase in cash surrender
value of life insurance 481 443 1,381 1,222 1,580
Other income 1,181 315 2,931 1,377 1,945
Total noninterest income 4,924 2,820 13,549 8,217 11,811
Noninterest expenses
Salaries and employee
benefits 10,724 6,390 30,959 18,064 26,805
Occupancy, furniture and
equipment expense 3,506 1,806 9,650 5,391 7,754
Amortization of intangibles 494 104 1,102 233 442
Extinguishment of debt 1,469 - 1,469 - -
Merger related costs 103 350 530 350 635
Termination of ESOP 158 - 158 - -
Subsidiary start-up costs - 135 - 135 135
Other operating expenses 4,836 3,421 13,504 9,566 14,014
Total noninterest
expenses 21,290 12,206 57,372 33,739 49,785
Income before
income taxes 2,361 979 8,744 3,960 6,920
Income tax expense 911 166 3,027 1,022 1,923
Net income $1,450 $813 $5,717 $2,938 $4,997
Basic net income per common
share $0.04 $0.04 $0.16 $0.14 $0.21
Diluted net income per
common share $0.04 $0.04 $0.16 $0.14 $0.21
Weighted average common
shares outstanding 38,773 22,234 35,903 20,810 23,409
Weighted average common
shares outstanding,
assuming dilution 39,082 22,849 36,369 21,444 24,034
SUPERIOR BANCORP AND SUBSIDIARIES
UNAUDITED SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
As of and for the Three-Months
Ended September 30,
2007 2006
Selected Average Balances:
Total assets $2,739,176 $1,653,429
Loans, net of unearned income 1,921,404 1,135,517
Mortgage loans held for sale 22,848 22,431
Investment securities 353,223 282,330
Total interest-earning assets 2,329,355 1,478,158
Noninterest-bearing deposits 197,977 100,872
Interest-bearing deposits 1,854,482 1,137,232
Advances from FHLB 242,985 197,503
Federal funds borrowed and security
repurchase agreements 20,186 34,100
Junior subordinated debentures owed
to unconsolidated subsidiary trusts 52,515 31,959
Total interest-bearing liabilities 2,180,567 1,404,409
Stockholders' Equity 327,909 131,163
Per Share Data:
Net income - basic $0.04 $0.04
- diluted $0.04 $0.04
Weighted average common shares
outstanding - basic 38,773 22,234
Weighted average common shares
outstanding - diluted 39,082 22,849
Common book value per share at period
end $8.63 $6.84
Tangible common book value per share
at period end $3.98 $4.56
Common shares outstanding at period
end 40,226 26,429
Performance Ratios and Other Data:
Return on average assets(1) 0.21% 0.20%
Return on average stockholders'
equity(1) 1.75 2.46
Net interest margin(1)(2)(3) 3.38 2.94
Net interest spread(1)(3)(4) 3.03 2.71
Noninterest income to average
assets(1)(5) 0.67 0.67
Noninterest expense to average
assets(1)(6) 2.76 2.70
Efficiency ratio (7) 77.13 81.49
Average loan to average deposit ratio 94.73 93.53
Average interest-earning assets to
average interest bearing liabilities 106.82 105.25
Intangible assets - goodwill $162,075 $55,162
- core deposit intangible
("CDI") and other
intangibles 25,214 5,130
Assets Quality Ratios:
Nonaccrual loans $17,286 $4,032
Accruing loans 90 days or more delinquent 5,923 65
Restructured loans 499 208
Other real estate owned and
repossessed assets 1,737 1,304
Net loan charge-offs 1,177 654
Allowance for loan losses to
nonperforming loans 96.45% 307.15%
Allowance for loan losses to loans,
net of unearned income 1.12 1.05
Nonperforming assets("NPA") to loans
plus NPA's, net of unearned income 1.25 0.45
NPA's to total assets 0.88 0.32
Nonaccrual loans to loans, net of
unearned income 0.85 0.32
Net loan charge-offs to average loans(1) 0.24 0.23
Net loan charge-offs as a percentage of:
Provision for loan losses 99.83 118.91
Allowance for loan losses(1) 20.42 19.62
As of As of
and for the and for the
Nine Months Year Ended
Ended September 30, December 31,
2007 2006 2006
Selected Average Balances:
Total assets $2,532,069 $1,512,451 $1,683,325
Loans, net of unearned income 1,745,261 1,050,562 1,159,083
Mortgage loans held for sale 24,082 17,410 17,761
Investment securities 345,680 261,056 286,733
Total interest-earning assets 2,147,300 1,356,679 1,499,297
Noninterest-bearing deposits 185,704 95,376 111,757
Interest-bearing deposits 1,728,865 1,038,102 1,152,017
Advances from FHLB 213,109 182,610 191,612
Federal funds borrowed and security
repurchase agreements 19,287 33,637 32,607
Junior subordinated debentures owed to
unconsolidated subsidiary trusts 46,790 31,959 33,642
Total interest-bearing liabilities 2,017,899 1,287,596 1,414,290
Stockholders' Equity 294,530 114,093 140,827
Per Share Data:
Net income - basic $0.16 $0.14 $0.21
- diluted $0.16 $0.14 $0.21
Weighted average common shares
outstanding - basic 35,903 20,810 23,409
Weighted average common shares
outstanding - diluted 36,369 21,444 24,034
Common book value per share at period
end $8.63 $6.84 $7.97
Tangible common book value per share
at period end $3.98 $4.56 $4.23
Common shares outstanding at period
end 40,226 26,429 34,652
Performance Ratios and Other Data:
Return on average assets(1) 0.30% 0.26% 0.30%
Return on average stockholders'
equity(1) 2.60 3.44 3.55
Net interest margin(1)(2)(3) 3.43 3.10 3.17
Net interest spread(1)(3)(4) 3.10 2.88 2.93
Noninterest income to average
assets(1)(5) 0.69 0.71 0.66
Noninterest expense to average
assets(1)(6) 2.85 2.88 2.84
Efficiency ratio (7) 78.88 82.52 81.46
Average loan to average deposit ratio 92.41 94.22 93.12
Average interest-earning assets to
average interest bearing liabilities 106.41 105.37 106.01
Intangible assets - goodwill $162,075 $55,162 $114,458
- core deposit
intangible ("CDI")
and other
intangibles 25,214 5,130 15,062
Assets Quality Ratios:
Nonaccrual loans $17,286 $4,032 $7,773
Accruing loans 90 days or more
delinquent 5,923 65 514
Restructured loans 499 208 305
Other real estate owned and
repossessed assets 1,737 1,304 1,821
Net loan charge-offs 2,627 1,654 2,316
Allowance for loan losses to
nonperforming loans 96.45% 307.15% 219.88%
Allowance for loan losses to loans,
net of unearned income 1.12 1.05 1.15
Nonperforming assets("NPA") to loans
plus NPA's, net of unearned income 1.25 0.45 0.63
NPA's to total assets 0.88 0.32 0.43
Nonaccrual loans to loans, net of
unearned income 0.85 0.32 0.47
Net loan charge-offs to average
loans(1) 0.20 0.21 0.20
Net loan charge-offs as a percentage
of:
Provision for loan losses 91.09 89.41 92.64
Allowance for loan losses(1) 15.36 16.72 12.26
(1)- Annualized for the three- and nine-month periods ended September 30,
2007 and 2006.
(2)- Net interest income divided by average earning assets.
(3)- Calculated on a taxable equivalent basis.
(4)- Yield on average interest-earning assets less rate on average
interest-bearing liabilities.
(5)- Noninterest income has been adjusted for such as change in fair value
of derivatives and investment security gains(losses).
(6)- Noninterest expense has been adjusted for CDI amortization,
extinguishment of debt, termination of ESOP, merger related costs,
management separation costs, losses on other real estate and the loss
on sale of assets.
(7)- Efficiency ratio is calculated by dividing noninterest expense,
adjusted for CDI amortization, merger related costs, extinguishment
of debt, termination of ESOP, management separation costs, losses on
other real estate and the loss on sale of assets, by noninterest
income, adjusted for changes in fair values of derivatives and
investment security gains (losses), plus net interest income on a
fully tax equivalent basis.
SUPERIOR BANCORP AND SUBSIDIARIES
UNAUDITED SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except Per Share Data)
For the For the
Three-Month Nine-Month
Period Ended Period Ended
September 30, 2007 September 30, 2007
Reconciliation Table
Net income (GAAP) $1,450 $5,717
Merger-related items,
net of tax 65 334
Extinguishment of debt,
net of tax 925 925
ESOP termination,
net of tax 100 100
Other non operating loss,
net of tax 76 76
Operating earnings (non-GAAP) $2,616 $7,152
As of
Sept. 30, Sept. 30, Dec. 31,
2007 2006 2006
Total stockholders' equity (GAAP) $347,335 $180,884 $276,087
Intangible assets (GAAP) 187,289 60,293 129,520
Total tangible equity (non-GAAP) $160,046 $120,591 $146,567
For the For the
Three-Month Nine-Month
Other Financial Data Period Ended Period Ended
of Subsidiary Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(Superior Bank) 2007 2006 2007 2006
Net income $3,700 $1,514 $10,144 $5,272
Total stockholders equity 389,468 201,113 389,468 201,113
Return on average assets(1) 0.54% 0.36% 0.54% 0.48%
Return on average stockholders'
equity(1) 4.01% 4.60% 4.14% 6.19%
Return on average tangible
equity(1) 7.37% 6.95% 7.29% 6.94%
(1) Annualized.
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