BIRMINGHAM, Ala., July 27 /PRNewswire-FirstCall/ -- -- Deposits up
3.9%: $2.6 billion vs. $2.5 billion from first quarter -- Loans up
1.7%: $2.4 billion vs. $2.3 billion from first quarter -- Assets up
2.6%: $3.2 billion vs. $3.1 billion from first quarter -- Net
Interest Margin improves to 3.24% from 3.12% in first quarter --
"Well-Capitalized" bank with 11.20% total risk-based capital -- Net
loss of $3.8 million; $(0.49) per share -- Net loss includes $5.8
million in after-tax effect of: -- Securities impairment (OTTI
Charges -- $2.6 million) -- FDIC special assessment ($0.9 million)
-- Increased allowance for loan losses ($2.3 million) Superior
Bancorp (NASDAQ:SUPR) today reported its second quarter 2009
results. A summary of its results is provided below and in the
attached selected financial data. As of and for the Quarters Ended
(Dollars in thousands, except -------------------------------- per
share data June 30, 2009 June 30, 2008
--------------------------------------- ------------- -------------
Total assets $3,215,510 $3,039,558 Total loans, net of unearned
income 2,398,471 2,148,751 Total deposits 2,604,558 2,194,107
Stockholders' equity 246,770 348,785 Net interest income 22,915
21,388 Net (loss) income (3,762) 841 Net (loss) income available to
common stockholders (4,929) 841 Net (loss) income per common share
(0.49) 0.08 Total branches 77 75 The quarter's results included
three items that impacted otherwise favorable progress that we had
made on the earnings front. These items included charges for
non-cash securities impairments on mortgage-backed securities
deemed to be other-than-temporary (OTTI) of $4.1 million, an
increase the allowance for loan losses above last quarter's level
by $3.6 million, and a special assessment by the FDIC imposed on
all banks, of which our share was $1.5 million. These items
aggregated $9.2 million, or $5.8 million after tax. CEO Stan Bailey
stated, "Aside from the items mentioned above, we are relatively
pleased with the underlying trends for the quarter given the
economic environment. We saw a continued improvement in the net
interest margin, continued favorable trends in controllable income
and expenses, growth in deposits and strong liquidity, all of which
are in line with our expectations as outlined in last quarter's
report -- in the most difficult economic environment I've ever seen
in my almost 40 years of banking. Because of the current economic
conditions, we have instituted several measures to reduce expenses
in coming quarters. These include the closing of seven of our
smaller branches over the next quarter, and a reduction in overhead
in certain other administrative units largely accomplished by
attrition over the same timeframe. We anticipate that these
measures will reduce expenses by approximately $3.0 million
annually. The deposits of the closed branches will be transferred
to nearby branches, with little anticipated impact on deposit
levels or liquidity." Credit Quality Management Consistent with the
continuing economic decline in real estate related credits, our
non-performing loans increased during the quarter to $117.7
million, or 4.91% of loans at June 30, 2009, from $74.2 million, or
3.15% at March 31, 2009. This increase was largely driven by three
shared national credits totaling $22.4 million and increases in the
1-4 family mortgage portfolio of $6.5 million and real estate
construction of $15 million. Loans in the 30-89 days past due
category decreased to 1.50 % of total loans at June 30, 2009 from
2.33% of total loans at March 31, 2009. Non-performing assets are
4.77% of total assets at June 30, 2009. Net loan charge-offs
decreased slightly to 0.39% as a percentage of average loans during
the second quarter of 2009, compared to 0.42% during the first
quarter of 2009. Of the $2.3 million net charge-offs in the second
quarter of 2009, Superior Bank's net charge-offs were $1.8 million,
or 0.31% of consolidated average loans, and our two consumer
finance companies' net charge-offs were $0.5 million, or 0.08% of
consolidated average loans. The provision for loan losses was
approximately $6.0 million in the second quarter of 2009,
increasing the allowance for loan losses to 1.40% of net loans, or
$33.5 million at June 30, 2009, compared to 1.27% of net loans, or
$29.9 million, at March 31, 2009. Liquidity and Funding We continue
to make significant progress in reducing reliance on non-customer
funding sources for Superior Bank. This has been one of our key
strategic goals, and this quarter's results are very significant.
We reduced reliance on borrowings and brokered deposits to levels
where they are now approximately 8% and 4%, respectively, of the
Bank's funding, as we continue to bring core customer-based
deposits in to transform Superior Bank into a leading
relationship-based community bank in its markets. Superior's
branching program contributed significantly to this progress. To
date, new branches have added approximately $400 million in core
deposits. We expect these branches to make continued contributions
to our growth in the future, as most of them have yet to reach
maturity in their markets. Second Quarter 2009 Results - Comparison
with First Quarter, 2009 Net interest income increased
significantly, from $21.3 million to $22.9 million. The net
interest margin for the first quarter of 2009 was 3.12% compared to
3.24% for the second quarter of 2009. This increase is due
principally to improved loan and deposit pricing which more than
offset the impact of the higher level of non-performing assets. The
effect of loans placed on non-accrual on the net interest margin
for the second quarter of 2009 is estimated to be 0.11%. Core
noninterest income rose from $5.6 million to $6.6 million, due
principally to increases in mortgage banking income and service
charge income. Noninterest expense increased to $27.8 million,
driven principally by increases in FDIC insurance due to the
previously discussed special assessment and foreclosure losses of
$1.3 million. Balance Sheet Growth Superior Bancorp's total
deposits at June 30, 2009 were $2.6 billion, up 19% from $2.2
billion at June 30, 2008. Loans increased to $2.4 billion at June
30, 2009, an increase of 12% in the past year, but increased only
slightly more than 1% since March 31, 2009. This slowing of loan
growth is consistent with our expectations and policy in the
current economy. Outlook Bailey concluded, "As the banking industry
manages its way through these unprecedented times, it is
increasingly clear that capital is of paramount importance. In this
vein, we have raised additional common equity in July to augment
the capital ratios of our company. Our capital ratios were well
above the "well-capitalized" level before this equity raise, but
the additional equity raised is evidence of our continuing
commitment to maintaining a well-capitalized institution through
the current economic cycle. On the business development front, we
remain open for new business. Our lending standards remain as they
have been -- open to consideration of sensible business proposals
from potential new customers seeking a bank in it for the
long-term, with the capabilities to serve all their needs, a local
focus and local decision-making authority. At Superior, it is more
than a name -- it is what we are!" About Superior Bancorp Superior
Bancorp is a $3.2 billion thrift holding company headquartered in
Birmingham, Alabama. The principal subsidiary of Superior Bancorp
is Superior Bank, a southeastern community bank and the third
largest U S banking institution headquartered in Alabama. Superior
Bank currently has 77 branches, with 45 locations throughout the
state of Alabama and 32 locations in Florida. Superior Bank also
operates 24 consumer finance offices in North Alabama as 1st
Community Credit and Superior Financial Services. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements made by us or on our behalf. Some of the
disclosures in this release, including any statements preceded by,
followed by or which include the words "may," "could," "should,"
"will," "would," "hope," "might," "believe," "expect,"
"anticipate," "estimate," "intend," "plan," "assume" or similar
expressions constitute forward-looking statements. These
forward-looking statements, implicitly and explicitly, include the
assumptions underlying the statements and other information with
respect to our beliefs, plans, objectives, goals, expectations,
anticipations, estimates, intentions, financial condition, results
of operations, future performance and business, including our
expectations and estimates with respect to our revenues, expenses,
earnings, return on equity, return on assets, efficiency ratio,
asset quality, the adequacy of our allowance for loan losses and
other financial data and capital and performance ratios. Although
we believe that the expectations reflected in our forward-looking
statements are reasonable, these statements involve risks and
uncertainties which are subject to change based on various
important factors (some of which are beyond our control). Such
forward looking statements should, therefore, be considered in
light of various important factors set forth from time to time in
our reports and registration statements filed with the SEC. The
following factors, among others, could cause our financial
performance to differ materially from our goals, plans, objectives,
intentions, expectations and other forward-looking statements: (1)
the strength of the United States economy in general and the
strength of the regional and local economies in which we conduct
operations; (2) the effects of, and changes in, trade, monetary and
fiscal policies and laws, including interest rate policies of the
Board of Governors of the Federal Reserve System; (3) inflation,
interest rate, market and monetary fluctuations; (4) our ability to
successfully integrate the assets, liabilities, customers, systems
and management we acquire or merge into our operations; (5) our
timely development of new products and services in a changing
environment, including the features, pricing and quality compared
to the products and services of our competitors; (6) the
willingness of users to substitute competitors' products and
services for our products and services; (7) the impact of changes
in financial services policies, laws and regulations, including
laws, regulations and policies concerning taxes, banking,
securities and insurance, and the application thereof by regulatory
bodies; (8) our ability to resolve any legal proceeding on
acceptable terms and its effect on our financial condition or
results of operations; (9) technological changes; (10) changes in
consumer spending and savings habits; (11) the effect of natural
disasters, such as hurricanes, in our geographic markets; (12)
regulatory, legal or judicial proceedings; (13) the continuing
instability in the domestic and international capital markets; (14)
the effects of new and proposed laws relating to financial
institutions and credit transactions; and (15) the effects of
policy initiatives that have been and may continue to be introduced
by the new Presidential administration and related regulatory
actions. 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) June 30, December 31,
---------------------- 2009 2008 2008 --------- ---------
------------ (Unaudited) (Unaudited) Assets Cash and due from banks
$80,589 $71,905 $74,162 Interest-bearing deposits in other banks
19,900 4,064 10,117 Federal funds sold 2,426 3,366 5,169 -----
----- ----- Total cash and cash equivalents 102,915 79,335 89,448
Investment securities available for sale 315,551 356,408 347,142
Tax lien certificates 25,533 25,032 23,786 Mortgage loans held for
sale 100,707 29,097 22,040 Loans, net of unearned income 2,398,471
2,148,751 2,314,921 Less: Allowance for loan losses (33,504)
(27,243) (28,850) ------- ------- ------- Net loans 2,364,967
2,121,508 2,286,071 --------- --------- --------- Premises and
equipment, net 105,343 103,565 104,085 Accrued interest receivable
16,210 15,857 14,794 Stock in FHLB 18,212 23,412 21,410 Cash
surrender value of life insurance 49,174 47,290 48,291 Goodwill and
other intangibles 18,873 185,442 21,052 Other real estate 35,206
12,322 19,971 Other assets 62,819 40,290 54,611 ------ ------
------ Total assets $3,215,510 $3,039,558 $3,052,701 ==========
========== ========== Liabilities and Stockholders' Equity Deposits
Noninterest-bearing $246,724 $221,202 $212,732 Interest-bearing
2,357,834 1,972,905 2,130,256 --------- --------- --------- Total
deposits 2,604,558 2,194,107 2,342,988 Advances from FHLB 228,320
405,830 361,324 Federal funds borrowed and security repurchase
agreements 2,164 7,218 3,563 Notes payable 45,688 9,500 7,000
Subordinated debentures 60,774 53,571 60,884 Accrued expenses and
other liabilities 27,236 20,547 25,703 ------ ------ ------ Total
liabilities 2,968,740 2,690,773 2,801,462 Stockholders' Equity
Preferred stock, par value $.001 per share; shares authorized
5,000,000: Series A, fixed rate cumulative perpetual preferred
stock; 69,000 shares issued and outstanding at June 30, 2009 and
December 31, 2008, respectively - - - Common stock, par value $.001
per share; shares authorized 20,000,000; shares issued 10,438,590,
10,382,410 and 10,403,087, respectively; outstanding 10,111,684,
10,055,879 and 10,074,999, respectively 10 10 10 Surplus -
preferred 63,563 - 62,978 - warrants 8,646 - 8,646 - common 329,736
329,087 329,461 Accumulated (deficit) retained earnings (136,662)
35,094 (129,904) Accumulated other comprehensive loss (6,723)
(3,138) (7,925) Treasury stock, at cost (11,333) (11,364) (11,373)
Unearned ESOP stock (353) (531) (443) Unearned restricted stock
(114) (373) (211) ---- ---- ---- Total stockholders' equity 246,770
348,785 251,239 ------- ------- ------- Total liabilities and
stockholders' equity $3,215,510 $3,039,558 $3,052,701 ==========
========== ========== Superior Bancorp and Subsidiaries Condensed
Consolidated Statements of Operations (Amounts In Thousands, Except
Per Share Data) Three Months Ended Six Months Ended Year Ended June
30, June 30, December 31, ------------------ ----------------
------------ 2009 2008 2009 2008 2008 ------------------
---------------- ------------ (Unaudited) (Unaudited) Interest
income Interest and fees on loans $35,959 $36,708 $70,911 $74,053
$147,162 Interest on investment securities: Taxable 3,976 4,143
7,985 8,195 16,310 Exempt from Federal income tax 434 431 863 861
1,716 Interest on federal funds sold 2 18 7 98 122 Interest and
dividends on other investments 456 732 818 1,376 2,578 --- --- ---
----- ----- Total interest income 40,827 42,032 80,584 84,583
167,888 Interest expense Interest on deposits 14,109 16,709 29,002
36,962 68,405 Interest on FHLB advances and other borrowings 2,597
3,016 4,938 5,808 12,104 Interest on subordinated debt 1,206 919
2,400 1,934 4,094 ----- --- ----- ----- ----- Total interest
expense 17,912 20,644 36,340 44,704 84,603 ------ ------ ------
------ ------ Net interest income 22,915 21,388 44,244 39,879
83,285 Provision for loan losses 5,982 5,967 9,434 7,838 13,112
----- ----- ----- ----- ------ Net interest income after provision
for loan losses 16,933 15,421 34,810 32,041 70,173 Noninterest
income Service charges and fees on deposits 2,524 2,192 4,911 4,296
9,295 Mortgage banking income 2,271 1,031 3,961 2,297 3,972 Total
other-than-temporary impairment ("OTTI") losses (5,853) NA (7,631)
NA NA Portion of OTTI recognized in other comprehensive income
1,776 NA 3,230 NA NA ----- ---- ----- ---- ---- Investment
securities (losses) gains (4,077) 1,068 (4,401) 1,470 (8,453)
Change in fair value of derivatives (67) (418) (266) 632 1,240
Increase in cash surrender value of life insurance 540 555 1,055
1,107 2,274 Gain on extinguishment of liabilities - 2,918 - 2,918
2,918 Other income 1,340 1,660 2,557 2,888 5,521 ----- ----- -----
----- ----- Total noninterest income 2,531 9,006 7,817 15,608
16,767 Noninterest expenses Salaries and employee benefits 12,304
12,058 24,613 24,199 49,672 Occupancy, furniture and equipment
expense 4,503 4,120 8,907 8,180 17,197 Amortization of core deposit
intangibles 985 896 1,971 1,792 3,585 Goodwill impairment charge -
- - - 160,306 FDIC assessment 1,932 162 2,389 224 1,105 Foreclosure
losses 1,323 211 1,573 222 528 Other operating expenses 6,748 5,829
12,406 10,923 22,285 ----- ----- ------ ------ ------ Total
noninterest expenses 27,795 23,276 51,859 45,540 254,678 ------
------ ------ ------ ------- (Loss) income before income taxes
(8,331) 1,151 (9,232) 2,109 (167,738) Income tax (benefit) expense
(4,569) 310 (4,784) 572 (4,588) ------ --- ------ --- ------ Net
(loss) income (3,762) 841 (4,448) 1,537 (163,150) Preferred stock
dividends and amortization 1,167 - 2,310 - 311 ----- ---- -----
---- --- Net (loss) income applicable to common shareholders
$(4,929) $841 $(6,758) $1,537 $(163,461) ======= ==== =======
====== ========= Basic net (loss) income per common share $(0.49)
$0.08 $(0.67) $0.15 $(16.31) ====== ===== ====== ===== =======
Diluted net (loss) income per common share $(0.49) $0.08 $(0.67)
$0.15 $(16.31) ====== ===== ====== ===== ======= Weighted average
common shares outstanding 10,071 10,016 10,062 10,014 10,021
Weighted average common shares outstanding, assuming dilution
10,071 10,056 10,062 10,051 10,021 SUPERIOR BANCORP AND
SUBSIDIARIES UNAUDITED SUMMARY CONSOLIDATED FINANCIAL DATA (Dollars
in thousands, except per share data) As of and As of and for As of
and for for the the Three Months the Six Months Year Ended Ended
June 30, Ended June 30, December 31, ---------------------
--------------------- ------------ 2009 2008 2009 2008 2008
---------- ---------- ---------- ---------- ------------ Selected
Average Balances: Total assets $3,182,382 $2,991,343 $3,140,993
$2,944,466 $3,010,045 Total liabilities 2,930,444 2,639,589
2,889,197 2,592,914 2,659,816 Loans, net of unearned income
2,387,078 2,123,039 2,364,676 2,077,884 2,147,524 Mortgage loans
held for sale 71,942 31,038 61,091 34,310 25,251 Investment
securities 331,839 354,710 337,071 350,939 346,046 Total interest-
earning assets 2,866,072 2,562,387 2,833,001 2,517,706 2,576,505
Noninterest- bearing deposits 245,819 219,666 238,722 218,198
218,486 Interest-bearing deposits 2,311,069 1,982,570 2,255,912
1,982,782 2,009,918 Advances from FHLB 241,266 340,655 280,079
293,451 335,393 Federal funds borrowed and security repurchase
agreements 2,092 8,187 2,580 8,288 7,513 Subordinated debentures
60,795 53,613 60,823 53,660 55,736 Total interest- bearing
liabilities 2,664,339 2,398,221 2,629,548 2,351,394 2,421,892
Stockholders' equity 251,938 351,754 251,795 351,552 350,229 Per
Share Data: Net (loss) income - basic $(0.49) $0.08 $(0.67) $0.15
$(16.31) - diluted(5) $(0.49) $0.08 $(0.67) $0.15 $(16.31) Weighted
average common shares outstanding - basic 10,071 10,016 10,062
10,014 10,021 Weighted average common shares outstanding - diluted
(5) 10,071 10,056 10,062 10,051 10,021 Common book value per share
at period end $17.26 $34.68 $17.26 $34.68 $17.83 Tangible common
book value per share at period end $15.40 $16.24 $15.40 $16.24
$15.74 Preferred shares outstanding at period end 69 - 69 - 69
Common shares outstanding at period end 10,112 10,056 10,112 10,056
10,075 Performance Ratios and Other Data: Return on average
assets(1) (0.47%) 0.11% (0.29%) 0.10% (5.42%) Return on average
tangible assets(1) (0.48) 0.12 (0.29) 0.11 (5.78) Return on average
stockholders' equity(1) (5.99) 0.96 (3.56) 0.88 (46.58) Return on
average tangible equity(1) (6.49) 2.04 (3.87) 1.87 (99.05) Net
interest margin(1)(2)(3) 3.24 3.39 3.18 3.21 3.27 Net interest
spread(1)(3)(4) 3.04 3.17 2.98 2.96 3.06 Average loan to average
deposit ratio 96.17 97.81 97.24 95.97 97.50 Average interest-
earning assets to average interest- bearing liabilities 107.57
106.85 107.74 107.07 106.38 Intangible assets - goodwill $-
$162,390 $- $162,390 $- - core deposit intangible ("CDI") and other
intangibles 18,873 23,053 18,873 23,053 21,052 Assets Quality
Ratios: Nonaccrual loans $105,356 $37,111 $105,356 $37,111 $54,712
Accruing loans 90 days or more delinquent 12,373 1,859 12,373 1,859
8,033 Other real estate owned and repossessed assets 35,660 12,588
35,660 12,588 20,303 Total nonperforming assets ("NPAs") 153,389
51,558 153,389 51,558 83,048 Restructured loans, not included in
total NPAs 19,143 326 19,143 326 2,643 Net loan charge-offs 2,348
1,997 4,779 3,464 7,130 Allowance for loan losses to nonperforming
loans 28.46% 69.91% 28.46% 69.91% 45.98% Allowance for loan losses
to loans, net of unearned income 1.40% 1.27% 1.40% 1.27% 1.25% NPA
to loans plus NPAs, net of unearned income 6.30% 2.39% 6.30% 2.39%
3.56% NPAs to total assets 4.77% 1.70% 4.77% 1.70% 2.72% Net loan
charge-offs to average loans(1) 0.39% 0.38% 0.41% 0.34% 0.33% Net
loan charge-offs as a percentage of: Provision for loan losses
39.26% 33.47% 50.66% 44.19% 54.38% Allowance for loan losses(1)
28.11% 29.48% 28.77% 25.57% 24.71% (1)- Annualized for the three
and six-month periods ended June 30, 2009 and 2008. (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)- Common stock equivalents of 67,422 and 77,027
shares were not included in computing diluted earnings per share
for the three and six-month periods ending June 30, 2009,
respectively, and 65,226 shares for the year ended December 31,
2008 because their effects were antidilutive. DATASOURCE: Superior
Bancorp CONTACT: Jim White, Chief Financial Officer, Superior
Bancorp, +1-205-327-3656 Web Site: http://www.superiorbank.com/
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