STURGIS, MI / ACCESSWIRE / July 19, 2024 / Sturgis Bancorp, Inc. (OTCQX:STBI) today announced for the second quarter of 2024:
Key Quarterly Highlights
Net income was $1.3 million.
Earnings per share of $0.60.
Paid dividend of $0.17 per share.
Total assets increased to $942 million.
Deposits decreased to $800 million.
Credit quality remains strong, with 99.20% of unguaranteed loans performing according to loan agreements.
The Bank maintained strong capital ratios, exceeding "well-capitalized" requirements, with Tier 1 leverage capital at 7.66%.
From Jason J. Hyska, Sturgis Bancorp, Inc. Chief Executive Officer
"This has been a challenging year for the Bank. The current economic environment and political climate seem to make for much uncertainty in all lines of business. The Bank continues to be focused on credit quality and margin management. Our staff continues to focus on relationship banking, and we continue to bring in new relationships that see value in the Community Banking model we offer. I am encouraged by those new relationships as we continue to grow in our newer markets."
Quarterly Income Statement Highlights
Net income for the quarter (2Q24) was $1.3 million, rebounding from last quarter's (1Q24) $(2.0 million) loss, while down from the net income of $1.7 million reported for the same quarter of the prior year (2Q23).
Earnings (loss) per share were $0.60 for 2Q24, $(0.92) for 1Q24, and $0.80 for 2Q23.
Net interest income was $6.84 million during 2Q24, a 0.68% increase from 1Q24's $6.79 million. This also represents a 5.12% decrease from 2Q23's $7.2 million in net interest income. The change from the same quarter a year ago was primarily due to:
Interest expense of $4.7 million in 2Q24, compared to $2.7 million in 2Q23.
Tax equivalent net interest margin remained at 3.21% for 2Q24, as it was in 1Q24, a decrease from the 3.59% margin in 2Q23.
During 2Q24, $165,000 was provided to the allowance for credit losses, compared to $4.7 million in 1Q24, and a reversal of the allowance for credit losses of $35,000 in 2Q23.
1Q24's provision for credit losses was heavily impacted by the one-time write-off of one customer's loans in the amount of $5.5 million. Due to the timing of the write-off, the Bank is very early in the recovery process, thus immaterial recoveries have been recognized.
Noninterest income totaled $2.2 million during 2Q24, a 29.35% decrease from 1Q24's $3.1 million, while it was a 21.37% increase from 2Q23's $1.8 million. These fluctuations were primarily due to:
Investment brokerage commission income for 2Q24 was $641,000, compared to $594,000 for 1Q24, and $541,000 for 2Q23.
Mortgage banking activities for 2Q24 were $487,000, compared to $486,000 for 1Q24, and $343,000 for 2Q23.
Trust fee income for 2Q24 was $166,000, compared to $87,000 for 1Q24, and $110,000 for 2Q23.
A one-time gain on termination of interest rate swaps resulted in recognizing $1.1 million during 1Q24, while there were no such gains (or losses) on termination of interest rate swaps for 2Q24 or 2Q23.
Noninterest expenses totaled $7.3 million during 2Q24, a 6.65% decrease from 1Q24's $7.8 million. This was a 4.98% increase from 2Q23's $7.0 million in noninterest expenses. These fluctuations were primarily due to:
Compensation and benefits in 2Q24 were $4.3 million, compared to $4.6 million for 1Q24, and $3.9 million for 2Q23.
Year-to-Date Income Statement Highlights
Net income (loss) for the first six months of 2024 (YTD 2024) was a $(673,000) loss, compared to $3.2 million income for the first six months of 2023 (YTD 2023).
Earnings (loss) per share were $(0.31) for YTD 2024 and $1.52 for YTD 2023.
Net interest income was $13.6 million for YTD 2024, a 5.05% decrease from YTD 2023's $14.4 million. This decrease was primarily due to:
Interest expense of $9.1 million for YTD 2024, compared to $5.0 million for YTD 2023.
During YTD 2024, $4.8 million was provided to the allowance for credit losses, compared to $232,000 for YTD 2023.
Noninterest income totaled $5.3 million for YTD 2024, compared to $3.5 million for YTD 2023. This represents a 50.84% increase. This increase was primarily due to:
Investment brokerage commission income of $1.2 million in YTD 2024, compared to $961,000 in YTD 2023.
Mortgage banking activities of $973,000 in YTD 2024, compared to $593,000 in YTD 2023.
The aforementioned $1.1 million one-time gain on termination of interest rate swaps in YTD 2024.
Noninterest expenses totaled $15.1 million for YTD 2024, compared to $13.7 million for YTD 2023. This represents a 10.35% increase. This increase was primarily due to:
Compensation and benefits in YTD 2024 were $8.9 million, compared to $8.0 million in YTD 2023.
Balance Sheet Highlights
Total assets increased to $942 million as of the end of 2Q24, a 1.85% increase from the end of 1Q24's $925 million balance, and a 5.31% increase from the end of 2Q23's $895 million balance. These increases were primarily due to:
Cash and cash equivalents ended 2Q24 at $21.1 million, compared to $16.5 million as of the end of 1Q24, and $24.1 million as of the end of 2Q23.
Securities - available-for-sale increased to $79.1 million as of the end of 2Q24, from $75.4 million as of the end of 1Q24, and $53.5 million as of the end of 2Q23.
Net loans increased to $753 million as of the end of 2Q24, from $742 million as of the end of 1Q24, and $724 million as of the end of 2Q23.
Total deposits as of the end of 2Q24 were $800 million, compared with $807 million as of the end of 1Q24, and $796 million as of the end of 2Q23. These fluctuations were comprised of:
Noninterest-bearing deposits increased to $169 million as of the end of 2Q24, from $155 million as of the end of 1Q24, and $160 million as of the end of 2Q23.
Interest-bearing deposits decreased to $631 million as of the end of 2Q24, from $652 million as of the end of 1Q24, and $637 million as of the end of 2Q23.
Borrowed funds increased to $65 million as of the end of 2Q24, from $41 million as of the end of 1Q24, and $20 million as of the end of 2Q23.
Total equity as of the end of 2Q24 was $53.5 million, compared to $52.7 million as of the end of 1Q24, and $54.5 million as of the end of 2Q23.
Book value per share was $24.81($20.66 tangible) as of the end of 2Q24, compared to $24.49 ($20.37 tangible) as of the end of 1Q24, and $25.41 ($21.33 tangible) as of the end of 2Q23.
About Sturgis Bancorp, Inc.
Sturgis Bancorp, Inc. is the holding company for Sturgis Bank & Trust Company (the Bank), and its subsidiaries: Oakleaf Financial Services, Oak Mortgage, Ayres/Oak Insurance, and Oak Title Services. The Bank provides a full array of trust, commercial, and consumer banking services from banking centers in: Sturgis, Bangor, Bronson, Centreville, Climax, Colon, Marshall, Niles, Portage, South Haven, St. Joseph, Three Rivers, and White Pigeon, Michigan. Oakleaf Financial Services offers a complete range of investment and financial-advisory services. Oakleaf Mortgage offers residential mortgages in all markets of the Bank. Ayres/Oak Insurance offers various competitive commercial and consumer insurance products. Oak Title Services offers commercial and consumer title insurance services.
Forward-Looking Statements
This release contains statements that constitute forward-looking statements. These statements appear in several places in this release and include statements regarding intent, belief, outlook, objectives, efforts, estimates, or expectations of Sturgis Bancorp, Inc. (Bancorp), primarily with respect to future events and the future financial performance of Bancorp. Any such forward-looking statements are not guarantees of future events or performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements. Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; government and regulatory policy changes; the outcome of any pending or future litigation and contingencies; trends in consumer behavior and ability to repay loans; and changes in the world, national, and local economies. Bancorp undertakes no obligation to update, amend, or clarify forward-looking statements as a result of new information, future events, or otherwise. The numbers presented herein are unaudited.
For additional information, visit our website at www.sturgis.bank.
Sturgis Bancorp, Inc. Contacts
Jason J. Hyska, CEO & President or Brian P. Hoggatt, CFO - (269) 651-9345
CONSOLIDATED BALANCE SHEETS (Unaudited - Amounts in thousands, except share and per share data)
Jun 30,
Mar 31,
Jun 30,
2024
2024
2023
2Q24
1Q24
2Q23
ASSETS
Cash and due from banks
$
9,629
$
8,711
$
12,617
Other short-term investments
11,501
7,784
11,518
Total cash and cash equivalents
21,130
16,495
24,135
Securities - available-for-sale
79,101
75,354
53,477
Securities - held-to-maturity
20,310
20,615
21,375
Federal Home Loan Bank stock
8,563
7,599
8,381
Loans held for sale
2,445
4,865
6,446
Loans, net of allowance for credit losses of $9,502; $9,381;
and $9,176 at 2Q24; 1Q24; and 2Q23, respectively
752,756
742,472
723,784
Premises and equipment, net
18,700
18,846
17,597
Goodwill
5,834
5,834
5,834
Mortgage servicing rights
3,110
3,036
2,908
Real estate owned
248
188
285
Bank-owned life insurance
16,047
15,939
16,185
Accrued interest receivable
3,439
3,239
2,763
Other assets
10,736
10,815
11,730
Total assets
$
942,419
$
925,297
$
894,900
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing
$
169,000
$
155,116
$
159,615
Interest-bearing
631,394
652,251
636,658
Total deposits
800,394
807,367
796,273
Federal Home Loan Bank advances and other borrowings
65,000
41,000
20,000
Subordinated debentures - $15,000 face amount (less
unamortized debt issuance costs of $123; $143; and $205
at 2Q24; 1Q24; and 2Q23, respectively)
14,877
14,857
14,795
Accrued interest payable
1,870
1,752
1,510
Other liabilities
6,821
7,606
7,806
Total liabilities
888,962
872,582
840,384
Stockholders' equity
Common stock - $1 par value: authorized - 9,000,000 shares;
issued and outstanding - 2,154,691 shares at 2Q24;
2,152,441 shares at 1Q24; and 2,145,691 shares at 2Q23
2,155
2,152
2,146
Additional paid-in capital
8,624
8,590
8,477
Retained earnings
50,624
49,694
49,983
Accumulated other comprehensive (loss)
(7,946
)
(7,721
)
(6,090
)
Total stockholders' equity
53,457
52,715
54,516
Total liabilities and stockholders' equity
$
942,419
$
925,297
$
894,900
CONSOLIDATED STATEMENTS OF INCOME (Unaudited - Amounts in thousands, except share and per share data)
Three Months Ended
Jun 30,
Mar 31,
Jun 30,
2024
2024
2023
2Q24
1Q24
2Q23
Interest and dividend income
Loans (including fees)
$
10,524
$
10,210
$
9,292
Investment securities:
Taxable
804
761
415
Tax-exempt
39
61
98
Dividends
172
147
110
Total interest and dividend income
11,539
11,179
9,915
Interest expense
Deposits
3,777
3,750
2,295
Borrowed funds
922
635
411
Total interest expense
4,699
4,385
2,706
Net interest income
6,840
6,794
7,209
Credit loss expense
165
4,663
(35
)
Net interest income, after credit loss expense
6,675
2,131
7,244
Noninterest income
Service charges on deposits and other fees
345
335
336
Interchange income
350
308
342
Investment brokerage commission income
641
594
541
Mortgage banking activities
487
486
343
Trust fee income
166
87
110
Earnings on cash value of bank-owned life insurance
108
107
99
Gain on sale of real estate owned, net
26
1
2
Gain on termination of interest rate swap
-
1,070
-
Proportionate net income from unconsolidated subsidiaries
61
114
26
Other income
15
11
13
Total noninterest income
2,199
3,113
1,812
Noninterest expenses
Compensation and benefits
4,340
4,569
3,945
Occupancy and equipment
1,029
1,064
919
Interchange expenses
166
165
152
Data processing
287
290
270
Professional services
120
169
95
Advertising
213
201
183
FDIC premiums
197
181
211
Other expenses
945
1,178
1,176
Total noninterest expenses
7,297
7,817
6,951
Income (loss) before income tax expense (benefit)
1,577
(2,573
)
2,105
Income tax expense (benefit)
280
(603
)
384
Net income (loss)
$
1,297
$
(1,970
)
$
1,721
Earnings (loss) per share
$
0.60
$
(0.92
)
$
0.80
Dividends per share
$
0.17
$
0.17
$
0.17
CONSOLIDATED STATEMENTS OF INCOME (Unaudited - Amounts in thousands, except share and per share data)
Six Months Ended
Jun 30,
Jun 30,
2024
2023
2Q24
2Q23
Interest and dividend income
Loans (including fees)
$
20,734
$
18,010
Investment securities:
Taxable
1,565
914
Tax-exempt
100
222
Dividends
319
217
Total interest and dividend income
22,718
19,363
Interest expense
Deposits
7,526
4,166
Borrowed funds
1,558
839
Total interest expense
9,084
5,005
Net interest income
13,634
14,358
Credit loss expense
4,828
232
Net interest income, after credit loss expense
8,806
14,126
Noninterest income
Service charges on deposits and other fees
680
655
Interchange income
658
654
Investment brokerage commission income
1,235
961
Mortgage banking activitives
973
593
Trust fee income
253
247
Earnings on cash value of bank-owned life insurance
215
197
Gain on sale of real estate owned, net
28
18
Gain on termination of interest rate swap
1,070
-
Proportionate net income from unconsolidated subsidiaries
