Somerset Hills Bancorp (SOMH, Financial) filed Quarterly Report for the period ended 2009-03-31.
Somerset Hills Bancorp is the parent of Somerset Hills Bank a commercial bank operating through its main office in Bernardsville New Jersey and branch office locations in Mendham and Morristown New Jersey. In addition Somerset Hills Bank is the parent of Sullivan Financial Services Inc. a licensed mortgage company originating loans in New Jersey New York and Florida. Somerset Hills Bancorp has a market cap of $38.1 million; its shares were traded at around $7.35 with a P/E ratio of 18.4 and P/S ratio of 2.3. The dividend yield of Somerset Hills Bancorp stocks is 2.7%.
Interest Expense. The Companys interest expense for the first quarter of 2009 decreased $408 thousand, or 31.7%, to $881 thousand from $1.3 million in the first quarter of 2008. This decrease was the result of a decrease in the average rate paid on interest bearing liabilities of 101 basis points to 1.69% during the first quarter of 2009 from 2.70% in the same period of 2008. The average balance of interest bearing liabilities increased $19.3 million to $211.0 million for the first quarter of 2009 from $191.7 million in the first quarter of 2008. Interest expense on interest bearing demand deposits decreased $515 thousand, or 67.0%, to $254 thousand in the first quarter of 2009 from $769 thousand in the first quarter in 2008, while the average interest rate paid decreased 155 basis points from 2.43% to 0.88% during the same period. Interest expense on money market deposits decreased $62 thousand or 71.3% while average money market deposits increased $2.3 million, or 13.4%, and the average rate paid decreased 154 basis points from 2.07% in the first quarter of 2008 to 0.53% in the first quarter of 2009. Interest expense on time deposits increased $174 thousand or 52.4% in the first quarter of 2009 compared to the same period in 2008 as the average rate decreased to 3.55% in the current period from 4.15% in the first quarter of 2008 and the average volume of time deposits increased by $25.6 million to $57.8 million for the quarter ended March 31, 2009 compared to $32.2 million in the prior years first quarter. The decline in rates reflects the repricing of deposits to lower rates. NOW deposit average balances decreased $10.6 million, or 8.3%, from $127.5 million during the first quarter of 2008 to $116.9 million in the first quarter of 2009. Average borrowed funds increased $308 thousand in the first quarter of 2009 to $11.0 million from $10.7 million in the first quarter of 2008. The
Non-Interest Income. Non-interest income increased by 130.3% or $606 thousand in the first quarter of 2009 to $1.1 million from $465 thousand in the first quarter of 2008. The increase in non-interest income in the first quarter of 2009 compared to the same period last year is primarily attributable to an increase in bank owned life insurance. Bank owned life insurance income increased $558 thousand, or 641.4% to $645 thousand in the first quarter of 2009 compared to $87 thousand in the first quarter of 2008. This increase was the result of a death benefit payment from the passing of the Companys founding Chief Financial Officer Gerard Riker. Gains on sale of mortgage loans increased $28 thousand, or 10.9% to $285 thousand in the first quarter of 2009 compared to $257 thousand in the first quarter of 2008. Other components of non-interest income include fees on deposit accounts, which increased $5 thousand or 7.6% to $71 thousand in the first quarter of 2009 from $66 thousand in the first quarter of 2008. Other income increased $15 thousand, to $70 thousand in the first quarter of 2009 compared to $55 thousand in the first quarter of 2008. This increase was primarily the result of an increase in income at the Banks wealth management subsidiary.
Total loans at March 31, 2009 decreased $3.9 million to $207.2 million from $211.1 million at year-end 2008. The changes in and composition of the loan portfolio, by category, as of March 31, 2009 from December 31, 2008 is as follows: Commercial loans decreased by $6.6 million or 10.1% to $58.9 million, consumer and installment loans decreased $45 thousand, or 4.3%, home equity loans decreased by $701 thousand, or 1.5% to $47.5 million and commercial real estate loans increased by $4.0 million, or 4.8%, to $88.6 million. Residential mortgage loans decreased $1.6 million, or 12.4%, to $11.1 million since year end.
At March 31, 2009, the allowance for loan losses decreased $196 thousand to $2.6 million compared to $2.8 million at year-end 2008. There were $646 thousand in charge offs, no recoveries and a $450 thousand provision reported in the first three months of 2009. The allowance for loan losses as a percentage of total loans was 1.27% at March 31, 2009 compared to 1.33% at December 31, 2008.
At March 31, 2009, liquid assets (cash and due from banks, interest bearing deposits at other banks, federal funds sold, and investment securities available for sale) were approximately $79.6 million, which represents 25.2% of total assets and 29.6% of total deposits and borrowings.
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Somerset Hills Bancorp is the parent of Somerset Hills Bank a commercial bank operating through its main office in Bernardsville New Jersey and branch office locations in Mendham and Morristown New Jersey. In addition Somerset Hills Bank is the parent of Sullivan Financial Services Inc. a licensed mortgage company originating loans in New Jersey New York and Florida. Somerset Hills Bancorp has a market cap of $38.1 million; its shares were traded at around $7.35 with a P/E ratio of 18.4 and P/S ratio of 2.3. The dividend yield of Somerset Hills Bancorp stocks is 2.7%.
Highlight of Business Operations:
Interest Income. Total interest income decreased $487 thousand, or 12.3%, to $3.5 million for the quarter ended March 31, 2009 from $4.0 million for the same period in 2008. The decrease reflects a decrease of 131 basis points, from 6.26% during the first quarter of 2008 to 4.95% in the first quarter of 2009, in the rate earned on average interest earning assets, partially offset by an increase of $30.1 million in average first quarter interest earning assets, from $253.8 million in 2008 to $283.9 million in 2009. The average rate earned on interest bearing deposits at other banks decreased by 274 basis points to 0.24% in the first quarter of 2009 from 2.98% during the first quarter of 2008, reflecting interest rate reductions by the Federal Reserve. The rate earned on federal funds sold decreased 235 basis points to 0.35% in the first quarter of 2009 from 2.70% during the first quarter of 2008. The average rate earned on investment securities decreased 19 basis points to 4.80% for the first quarter of 2009 from 4.99% in the first quarter of 2008. The average rate earned on loans held for sale decreased 108 basis points to 5.45% for the first quarter of 2009 from 6.53% for the first quarter of 2008. The average rate earned on loans decreased by 117 basis points for the first quarter of 2009 to 5.43%, from 6.60% for the first quarter of 2008. The decrease in rates earned reflects the current market trend of lower interest rates. The decrease in rates was off set by increases in volume as average interest bearing deposits at other banks increased from $821 thousand to $18.2 million from the first quarter 2008 to first quarter 2009. Average investment securities increased 26.2% from $37.4 million to $47.2 million from the first quarter 2008 to first quarter 2009. The average balance of federal funds sold decreased by $3.5 million, or 66.0%, to $1.8 million in the first quarter of 2009 from $5.3 million in the first quarter of 2008. The average balance of loans increased $5.3 million, or 2.6%, to $210.6 million during the first quarter of 2009 compared to $205.3 million during the first quarter of 2008.Interest Expense. The Companys interest expense for the first quarter of 2009 decreased $408 thousand, or 31.7%, to $881 thousand from $1.3 million in the first quarter of 2008. This decrease was the result of a decrease in the average rate paid on interest bearing liabilities of 101 basis points to 1.69% during the first quarter of 2009 from 2.70% in the same period of 2008. The average balance of interest bearing liabilities increased $19.3 million to $211.0 million for the first quarter of 2009 from $191.7 million in the first quarter of 2008. Interest expense on interest bearing demand deposits decreased $515 thousand, or 67.0%, to $254 thousand in the first quarter of 2009 from $769 thousand in the first quarter in 2008, while the average interest rate paid decreased 155 basis points from 2.43% to 0.88% during the same period. Interest expense on money market deposits decreased $62 thousand or 71.3% while average money market deposits increased $2.3 million, or 13.4%, and the average rate paid decreased 154 basis points from 2.07% in the first quarter of 2008 to 0.53% in the first quarter of 2009. Interest expense on time deposits increased $174 thousand or 52.4% in the first quarter of 2009 compared to the same period in 2008 as the average rate decreased to 3.55% in the current period from 4.15% in the first quarter of 2008 and the average volume of time deposits increased by $25.6 million to $57.8 million for the quarter ended March 31, 2009 compared to $32.2 million in the prior years first quarter. The decline in rates reflects the repricing of deposits to lower rates. NOW deposit average balances decreased $10.6 million, or 8.3%, from $127.5 million during the first quarter of 2008 to $116.9 million in the first quarter of 2009. Average borrowed funds increased $308 thousand in the first quarter of 2009 to $11.0 million from $10.7 million in the first quarter of 2008. The
Non-Interest Income. Non-interest income increased by 130.3% or $606 thousand in the first quarter of 2009 to $1.1 million from $465 thousand in the first quarter of 2008. The increase in non-interest income in the first quarter of 2009 compared to the same period last year is primarily attributable to an increase in bank owned life insurance. Bank owned life insurance income increased $558 thousand, or 641.4% to $645 thousand in the first quarter of 2009 compared to $87 thousand in the first quarter of 2008. This increase was the result of a death benefit payment from the passing of the Companys founding Chief Financial Officer Gerard Riker. Gains on sale of mortgage loans increased $28 thousand, or 10.9% to $285 thousand in the first quarter of 2009 compared to $257 thousand in the first quarter of 2008. Other components of non-interest income include fees on deposit accounts, which increased $5 thousand or 7.6% to $71 thousand in the first quarter of 2009 from $66 thousand in the first quarter of 2008. Other income increased $15 thousand, to $70 thousand in the first quarter of 2009 compared to $55 thousand in the first quarter of 2008. This increase was primarily the result of an increase in income at the Banks wealth management subsidiary.
Total loans at March 31, 2009 decreased $3.9 million to $207.2 million from $211.1 million at year-end 2008. The changes in and composition of the loan portfolio, by category, as of March 31, 2009 from December 31, 2008 is as follows: Commercial loans decreased by $6.6 million or 10.1% to $58.9 million, consumer and installment loans decreased $45 thousand, or 4.3%, home equity loans decreased by $701 thousand, or 1.5% to $47.5 million and commercial real estate loans increased by $4.0 million, or 4.8%, to $88.6 million. Residential mortgage loans decreased $1.6 million, or 12.4%, to $11.1 million since year end.
At March 31, 2009, the allowance for loan losses decreased $196 thousand to $2.6 million compared to $2.8 million at year-end 2008. There were $646 thousand in charge offs, no recoveries and a $450 thousand provision reported in the first three months of 2009. The allowance for loan losses as a percentage of total loans was 1.27% at March 31, 2009 compared to 1.33% at December 31, 2008.
At March 31, 2009, liquid assets (cash and due from banks, interest bearing deposits at other banks, federal funds sold, and investment securities available for sale) were approximately $79.6 million, which represents 25.2% of total assets and 29.6% of total deposits and borrowings.
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