- Net Income for the quarter compares favorably to the earnings reported for the fourth quarter of 2012
- Loan growth exceeded expectations for the period
- Capital continues to grow organically through earnings and the current position is considered strong by industry standards
- Credit Quality continues to strengthen
- The Bank was released from its Consent Agreement with Federal and State regulatory agencies
FENTON, Mich., April 23, 2013 (GLOBE NEWSWIRE) -- Fentura Financial, Inc. (OTCQB:FETM) reported net income for the three months ended March 31, 2013 of $855,000, compared to the $739,000 operating loss reported for the first quarter of 2012.
"We continue to be pleased by our performance trends. During the first quarter of 2013, the Company grew loans by $12.5 million, strengthening net interest income for the quarter. The credit quality improvement experienced throughout 2012 continued in the first quarter of 2013, reducing certain expenses and again eliminating the need for any additional provision in order to maintain an adequate allowance for loan losses at the end of the quarter. Operating income has increased as well, as the strengthening of the market has improved revenue from Wealth Management services and mortgage lending," noted Ronald Justice, President and CEO.
Total assets increased $6.8 million or 2.2% at March 31, 2013 compared to December 31, 2012, as loan balances increased by $12.5 million or 6.2% from efforts to grow the portfolio to improve net interest income. During the quarter the Bank experienced growth in its consumer, mortgage and commercial loan portfolios.
During the first quarter of 2013, deposits increased $5.9 million or 2.1% from the prior quarter, primarily due to the seasonal trends of both commercial and public fund clients. Fentura continues to benefit from a solid and loyal core deposit funding base.
Both Fentura Financial and its subsidiary, have achieved their goal to maintain capital consistent with levels considered well capitalized by regulatory agencies.
The Bank's regulatory capital ratios follow, and indicate a modest decline at March 31, 2013 compared to December 31, 2012. While capital increased from quarterly operating results, assets grew at a slightly faster rate causing the modest decline.
| March 31, |
| December 31, |
| March 31, |
| Regulatory |
|Tier 1 Leverage Capital Ratio||8.70%||8.73%||7.86%||5.00%|
|Tier 1 Risk-Based Capital Ratio||11.89||12.06||11.30||6.00|
|Total Risk-Based Capital Ratio||13.15||13.34||12.59||10.00|
As reported previously, the Company benefited significantly from improvement in credit quality throughout 2012, and these trends continued in the first quarter of 2013. At March 31, 2013 loan delinquencies to total loans were 1.1% compared to 1.9% at the end of the fourth quarter of 2012, and 5.7% as of March 31, 2012. Substandard assets totaled $9.1 million at March 31, 2013, down from $13.2 million at December 31, 2012, and $25.5 million at March 31, 2012. These trends eliminated the need for provisions to the allowance for loan losses during the first quarter of 2013.
Net Interest Income
Net interest income of $2.6 million for the quarter ended March 31, 2013 improved modestly compared to the $2.5 million reported for both the first and fourth quarters of 2012. Interest income improved during the three months ended March 31, 2013, from the growth of loans during the quarter when compared to interest income for the fourth quarter of 2012. Additionally, interest expense declined comparing the two quarters as well, as deposits matured and re-priced at lower rates.
Noninterest Income and Expense
Noninterest income was $1.5 million for the quarter ended March 31, 2013 compared to the $1.2 million reported for the fourth quarter of 2012.
- Gains on the sale of mortgage loans originated and sold in the secondary market were $575,000 for the first quarter of 2013 compared to $389,000 in the fourth quarter of 2012. Market interest rates increased refinance and home purchase activity which contributed to an increase in new loan volume and accordingly, the gains from the sale of these loans.
- Income from trust and investment services was $231,000 in the first quarter of 2013 compared to $212,000 for the fourth quarter of 2012. The quarter to quarter improvement is supported by growth in investment assets under management and the strengthening of the market during the first quarter of 2013.
Noninterest expense was $3.2 million for the first quarter of 2013 compared to the $3.7 million reported for the fourth quarter of 2012.
- Salary and benefit expense, the largest category of noninterest expense, was $1.7 million for the three months ended March 31, 2013, down from the $1.9 million reported for the fourth quarter of 2012. During the fourth quarter of 2012, the company accrued additional required balances for certain retirement agreements which contributed to the increased expense during the period.
- Other general and administrative expense was $0.8 million during the first quarter of 2013 compared to $1.0 million for the fourth quarter of 2012. The decline of this expense in the first quarter of 2013 is primarily attributable to the reduction of the FDIC insurance assessment based on the Bank's release from its Consent Agreement with both Federal and State regulatory agencies.
Fentura Financial, Inc. is a bank holding company headquartered in Fenton, Michigan. Its subsidiary bank, The State Bank, is also headquartered in Fenton with offices serving Fenton, Linden, Holly, Grand Blanc and Brighton. The Brighton area is served by Livingston Community Bank, a division of The State Bank. The Bank offers comprehensive financial services including commercial, consumer, mortgage, trust and financial planning services, and deposit products. The Bank proudly provides services from its community offices in Genesee, Oakland and Livingston Counties and through on-line and mobile banking services. More information about The State Bank is available at www.thestatebank.com.
CAUTIONARY STATEMENT: This press release contains certain forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning future growth in earning assets and net income. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
|Fentura Financial Inc.|
|Balance Sheet Highlights|
|Cash and due from banks||45,272||45,712||42,768||16,529||30,476|
|Fed funds sold||--||--||--||--||--|
|Interest bearing non-maturity deposits||146,838||145,471||145,368||133,871||131,427|
|Fed funds purchased||--||--||--||--||--|
|BALANCE SHEET RATIOS|
|Gross Loans to Deposits||75.6%||72.7%||72.6%||78.0%||72.8%|
|Earning Assets to Total Assets||80.5%||80.1%||81.4%||89.7%||85.7%|
|Securities and Cash to Assets||27.7%||30.2%||30.9%||25.8%||30.6%|
|Deposits to Assets||88.7%||88.8%||88.9%||89.0%||89.3%|
|Loss Reserve to Gross Loans||2.2%||2.5%||3.2%||3.4%||3.9%|
|Net Charge-Offs to Gross Loans||0.1%||0.4%||0.0%||0.3%||0.7%|
|Leverage Ratio - The State Bank||8.7%||8.7%||8.5%||8.1%||7.9%|
|Income Statement Highlights - QTD||Mar-13||Dec-12||Sep-12||Jun-12||Mar-12|
|Net interest income||2,582||2,530||2,706||2,526||2,486|
|Provision for loan loss||7||(600)||(850)||80||862|
|Service charges on deposit accounts||220||268||264||248||251|
|Gain on sale of mortgage loans||575||389||204||153||215|
|Wealth management income||231||212||346||293||219|
|Other non-interest income||428||331||514||447||487|
|Salaries and benefits||1,656||1,900||1,544||1,608||1,723|
|Occupancy and equipment||533||550||544||540||521|
|Loan and collection||173||212||412||171||150|
|Other operating expenses||812||1,018||980||1,123||1,265|
|Net Income before tax||855||650||1,404||145||(863)|
|INCOME STATEMENT RATIOS/DATA|
|Basic earnings per share||$ 0.35||$ 0.19||$ 0.58||$ 0.06||$ (0.31)|
|Pre-tax pre-provision earnings||862||50||554||225||(1)|
|Net Charge offs||260||694||(34)||671||1,352|
|Return on Equity (ROE)||19.29%||7.26%||7.29%||-8.07%||-19.58%|
|Return on Assets (ROA)||1.12%||0.42%||0.36%||-0.40%||-0.98%|
|Average Bank Prime||3.25%||3.25%||3.25%||3.25%||3.25%|
|Average Earning Asset Yield||4.85%||4.70%||4.77%||4.74%||4.80%|
|Average Cost of Funds||0.71%||0.76%||0.73%||1.02%||1.16%|
|Net impact of free funds||0.11%||0.06%||-0.06%||0.16%||0.19%|
|Net Interest Margin||4.25%||4.00%||3.98%||3.88%||3.84%|
|Income Statement Highlights - YTD||Mar-13||Mar-12||Dec-12||Dec-11|
|Net interest income||2,582||2,486||10,248||10,159|
|Provision for loan loss||7||862||(508)||3,142|
|Service charges on deposit accounts||220||251||1,030||1,256|
|Gain on sale of mortgage loans||575||215||961||348|
|Wealth management income||231||219||1,071||960|
|Other non-interest income||428||487||1,780||3,496|
|Salaries and benefits||1,656||1,723||6,775||6,763|
|Occupancy and equipment||533||521||2,155||2,158|
|Loan and collection||173||150||944||1,309|
|Other operating expenses||812||1,265||4,386||4,169|
|Net Income before tax||855||(863)||1,338||(1,322)|
|INCOME STATEMENT RATIOS/DATA|
|Basic earnings per share||$ 0.35||$ (0.31)||$ 0.52||$ (0.69)|
|Pre-tax pre-provision earnings||862||(1)||830||1,820|
|Net Charge offs||260||1,352||2,683||5,005|
|Return on Equity (ROE)||19.29%||-19.58%||7.26%||-10.46%|
|Return on Assets (ROA)||1.12%||-0.98%||0.42%||-0.53%|
|Average Bank Prime||3.25%||3.25%||3.25%||3.25%|
|Average Earning Asset Yield||4.85%||4.80%||1.19%||1.22%|
|Average Cost of Funds||0.71%||1.16%||0.23%||0.33%|
|Net impact of free funds||0.11%||0.19%||3.04%||2.89%|
|Net Interest Margin||4.25%||3.84%||4.00%||3.78%|
CONTACT: Ronald L. Justice President & CEO Fentura Financial, Inc. (810) 714-3902
Source:Fentura Financial, Inc.