SOURCE: Smithtown Bancorp

April 27, 2005 11:16 ET

Smithtown Bancorp Announces First Quarter Earnings

EPS Increase 11%; Deposits Increase 21%; ROE 23%

SMITHTOWN, NY -- (MARKET WIRE) -- April 27, 2005 -- Smithtown Bancorp (NASDAQ: SMTB), the parent company of Bank of Smithtown, today announced that the company had earnings for the first quarter of 2005 of $2,348,877, or $.40 per share. These earnings per share reflect an 11.11% increase over the same period last year. During the first quarter of 2004, EPS increased by 9.09% over the first quarter of the prior year. Earnings per share for the last twelve months now stand at $1.73.

Deposits grew at a rapid pace during the first quarter. Deposits increased by more than $107 million, to almost $622 million at quarter-end. This figure represents deposit growth of 20.94% during the first quarter alone. On an annualized basis, this figure would equate to deposit growth of more than 83%.

Commenting upon the Bank's strong deposit growth, Brad Rock, the company's Chairman & CEO, said: "Our excellent deposit growth is attributable to the success of our newest branches and several recent promotional campaigns. On the first business day of the quarter, we opened our new branch on Motor Parkway in Hauppauge near the Long Island Expressway. This branch has been remarkably successful. In addition, we started to feel some increased benefit from the branch we opened late last year in Miller Place."

Assets flew past the $700 million mark, finishing the quarter at $754 million. This figure represents quarterly growth of 11.39%, or annualized growth of more than 45%.

Loans grew by $7.3 million, to $577.4 million at quarter-end. The pace of loan growth for the quarter, however, was considerably slower than the pace of loan growth for prior years. Although the bank continued to close loans at a rapid pace, loan payoffs were unusually high and construction loan drawings were unusually low, therefore reducing net loan growth. The bank closed $65.3 million of loans during the quarter, which is on or ahead of the pace for most quarters during recent years. Nonetheless, $32.8 million of loans were paid off during the quarter. Most payoffs were for interim fundings where the projects were now complete. In addition, due to the unusually cold, snowy and wet weather on Long Island during the first quarter, there was very little outdoor construction activity, resulting in almost no drawings of construction funds during the period.

Mr. Rock said, commenting upon the prospects for loan growth during the balance of the year: "We expect loan closings to continue at their usual strong pace. We expect loan payoffs, however, to be higher than usual during the second quarter and, then, to resume normal levels during the balance of the year. We expect construction loan drawings to increase during the second quarter, and to be strong for the balance of the year. The net result from all of these factors and others is that we presently expect loan growth to be moderate (by our standards) during the second quarter, and to be strong during the third and fourth quarters."

The company's return on average equity over the last twelve months was 22.88%. The average return on equity for the 468 banks in the United States with assets between $500 million and $1 billion is 12.46%.

At the start of the second quarter, Bank of Smithtown opened another new branch, its 13th, in Port Washington. The bank also has a branch project currently under construction in Bohemia, near MacArthur Airport. The Bohemia branch is expected to open during the fourth quarter of the year.

Smithtown Bancorp's stock is traded on NASDAQ under the symbol "SMTB."

Forward-Looking Statements

This release and other written materials and statements management may make, may contain forward-looking statements regarding the Company's prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of said safe harbor provisions.

Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are sometimes identified by use of the words "plan," "believe," "expect," "intend," "anticipate," "estimate," "project," or other similar expressions. The Company's ability to predict results or the actual effects of its plans and strategies is inherently uncertain. Accordingly actual results may differ materially from anticipated results.

Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, a change in economic conditions; changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; and other economic competitive, governmental, regulatory, geopolitical, and technological factors affecting the Company's operations, pricing and services.

Investors are cautioned not to place undue reliance on forward-looking statements as a prediction of actual results. Except as required by applicable law or regulation, the Company undertakes no obligation to republish or revise forward-looking statements to reflect events or circumstances after the date the statements were made or to reflect the occurrences of unanticipated results. Investors are advised, however, to consult any further disclosures the Company makes on related subjects in our reports to the Securities and Exchange Commission.


SMITHTOWN BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except share and per share data)

                                                For the Three Months Ended
                                                         March  31,
                                                    2005           2004
                                                 ----------     ----------
Interest Income
Interest on loans                                $    9,756     $    7,754
Interest on federal funds sold                          205             49
Interest and dividends on investment securities:
     Taxable:
     Obligations of U.S. government                      11              -
     Obligations of U.S. government agencies            381            154
     Mortgage-backed securities                          44             86
     Other securities                                    29             79
                                                 ----------     ----------
       Subtotal                                         465            319
     Exempt from federal income taxes
     Obligations of state & political
      subdivisions                                      117            191
Other interest income                                    10             21
                                                 ----------     ----------
     Total interest income                           10,553          8,334
                                                 ----------     ----------

Interest Expense
Money market accounts (including savings)               739            610
Time deposits $100,000 and over                         592            496
Other time deposits                                   1,306            884
Other borrowings                                        755            489
                                                 ----------     ----------
     Total interest expense                           3,392          2,479
                                                 ----------     ----------
Net interest income                                   7,161          5,855
Provision for loan losses                               140              -
                                                 ----------     ----------
Net interest income after provision for
 loan losses                                          7,021          5,855
                                                 ----------     ----------

Other Non-Interest Income
Trust department income                                 103            110
Service charges on deposit accounts                     471            426
Other income                                          1,417            388
Net gain on sales of investment securities                4             94
                                                 ----------     ----------
     Total other non-interest income                  1,995          1,018
                                                 ----------     ----------

Other Operating Expenses
Salaries                                              2,390          1,776
Pension and other employee benefits                     609            335
Net occupancy expense of bank premises                  779            414
Furniture and equipment expense                         435            284
Other operating expense                               1,088            721
                                                 ----------     ----------
     Total other operating expense                    5,301          3,530
                                                 ----------     ----------
Income before income taxes                            3,715          3,343
Provision for income taxes                            1,366          1,213
                                                 ----------     ----------
     Net Income                                  $    2,349     $    2,130
                                                 ==========     ==========

Basic and diluted earnings per share             $     0.40     $     0.36
Cash dividends declared                          $     0.06     $     0.05
Weighted average shares outstanding               5,923,726      5,941,898
Comprehensive income                             $    1,926     $    2,301


SMITHTOWN BANCORP
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)

                                                      As of March 31,
                                                    2005           2004
                                                 ----------     ----------
Assets
Cash and due from banks                          $    9,463     $   11,793
Federal funds sold                                   30,974         35,583
Investment securities:
   Investment securities held to maturity
     Mortgage-backed securities                         144            255
     Obligations of state and
      political subdivisions                          1,343          1,625
                                                 ----------     ----------
       Total  investment securities held
        to maturity                                   1,487          1,880
                                                 ----------     ----------
       (Estimated fair value $1,520 in 2005
        and $1,964 in 2004)
   Investment securities available for sale
     Obligations of U.S. government                   6,880              -
     Obligations of U.S. government agencies         64,547         16,243
     Mortgage-backed securities                       2,899          7,206
     Obligations of state and political
      subdivisions                                   12,792         17,418
     Other securities                                 2,992          4,341
                                                 ----------     ----------
       Total investment securities available for
        sale (at estimated fair value)               90,110         45,208
                                                 ----------     ----------
     Total investment securities                     91,597         47,088

Restricted securities                                 4,005          2,712

Loans                                               577,415        493,907
     Less: unearned discount                            752             43
           allowance for loan losses                  5,060          4,763
                                                 ----------     ----------
Loans, net                                          571,603        489,101
Bank premises and equipment                          18,065         10,340
                                                 ----------     ----------
Other assets
     Cash surrender value - bank owned life
      insurance                                      17,099         16,439
     Goodwill                                           389              -
     Intangible assets                                  447              -
     Other                                           10,490          7,569
                                                 ----------     ----------

Total assets                                     $  754,132     $  620,625
                                                 ==========     ==========

Liabilities
Deposits:
     Demand (non-interest bearing)               $   95,740     $   85,547
     Money market                                   210,087        172,432
     NOW                                             29,877         42,803
     Savings                                         53,945         50,318
     Time                                           232,340        172,233
                                                 ----------     ----------
       Total deposits                               621,989        523,333
Dividends payable                                       355            297
Other borrowings                                     67,000         42,000
Subordinated debt                                    11,000         11,000
Other liabilities                                     5,275          2,984
                                                 ----------     ----------
     Total liabilities                              705,619        579,614

Stockholders' Equity
Common Stock - $.01 par value (15,000,000
 shares authorized; 7,167,280 shares issued)             72             72
Additional paid in capital                            4,408          4,408
Retained earnings                                    54,474         45,488
Accumulated other comprehensive income                 (379)           591
                                                 ----------     ----------
     Total                                           58,575         50,559
     Less: treasury stock (1,243,554 and
      1,225,382 shares at cost)                      10,062          9,548
                                                 ----------     ----------
     Total stockholders' equity                      48,513         41,011
Total liabilities and stockholders' equity       $  754,132     $  620,625
                                                 ==========     ==========


Corporate Headquarters
100 Motor Parkway, Suite 160
Hauppauge, NY  11788-5138
Direct Dial:  631-360-9304
Direct Fax:   631-360-9380
brock@bankofsmithtown.net

Contact Information

  • Contact:
    Ms. Judith Barber
    Corporate Secretary
    631-360-9304

    News Contact:
    Peter Hamilton
    Rubenstein Associates
    (work) 212-843-8015
    (home) 631-928-8437
    (cell) 516-375-6434