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8-K - FNBH BANCORP INC | fnbh8k_05312011.htm |
Exhibit 99.1
Dear Shareholder,
FNBH Bancorp, Inc. reported a net loss of $223,000 or $.07 per share for the quarter ended March 31, 2011. This compares to a net loss of $620,000 or $.19 per share for first quarter 2010.
As a result of improved economic conditions and asset quality metrics, the provision for loan losses was reduced by $400,000 from the prior year. In addition, ongoing efficiency initiatives contributed to a $441,000 decrease in noninterest expense compared to first quarter 2010.
While pleased with the Company’s improved financial performance and asset quality metrics, we remain vigilant in pursuit of further asset quality enhancement and are striving for a return to profitability.
At March 31, 2011, the Bank’s total capital to risk-weighted assets ratio and Tier One capital ratios were 5.59% and 3.40%, respectively. These ratios are significantly less than the minimum capital requirements imposed by the Bank’s primary regulator. As discussed in prior shareholder letters, the terms of our Consent Order with the Office of the Comptroller of the Currency requires the Bank to maintain total capital of at least 11% of risk-weighted assets and Tier One capital equal to at least 8.50% of adjusted total assets.
In addition to the time spent on improved asset quality and financial performance, the management team and the Board have continued their efforts to raise capital. We hope to be able to report on the success of those efforts as the year progresses.
The Bank’s first quarter 4.23% net interest margin (tax equivalent) remains strong and we believe above our peer group average. Quarter end on balance sheet liquidity consisted of $18.6 million in cash and cash equivalents and $43.2 million in investment securities. The improving economy, stable funding and our enhanced asset quality metrics provided the opportunity to invest $15 million of on balance sheet cash into low risk, liquid investments during first quarter 2011.
We look forward to and welcome your participation at the Annual Shareholder Meeting to be held at 10:00 a.m. on Thursday, June 23rd.
On behalf of the FNBH Bancorp family, we thank you for your investment in the Company and your commitment to community banking. If you have questions, please call me at 517-545-2221. I always enjoy speaking with shareholders and welcome the opportunity to become better acquainted.
Sincerely,
Ronald L. Long
President and CEO
FNBH Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
March 31, |
December 31, |
||||||
Assets |
2011 |
2010 |
|||||
Cash and due from banks |
$ |
18,414,764 |
$ |
40,376,267 |
|||
Short term investments |
196,388 |
196,159 |
|||||
Total cash and cash equivalents |
18,611,152 |
40,572,426 |
|||||
Investment securities: |
|||||||
Investment securities available for sale, at fair value |
42,288,433 |
27,269,670 |
|||||
FHLBI and FRB stock, at cost |
901,350 |
901,350 |
|||||
Total investment securities |
43,189,783 |
28,171,020 |
|||||
Loans held for investment: |
|||||||
Commercial |
199,992,047 |
203,025,518 |
|||||
Consumer |
16,042,891 |
16,641,544 |
|||||
Real estate mortgage |
15,851,269 |
16,271,284 |
|||||
Total loans held for investment |
231,886,207 |
235,938,346 |
|||||
Less allowance for loan losses |
(13,734,387 |
) |
(13,970,170 |
) | |||
Net loans held for investment |
218,151,820 |
221,968,176 |
|||||
Premises and equipment, net |
7,705,568 |
7,692,185 |
|||||
Other real estate owned, held for sale |
3,518,667 |
4,294,212 |
|||||
Accrued interest and other assets |
2,356,105 |
2,642,511 |
|||||
Total assets |
$ |
293,533,095 |
$ |
305,340,530 |
|||
Liabilities and Shareholders' Equity |
|||||||
Liabilities |
|||||||
Deposits: |
|||||||
Demand (non-interest bearing) |
$ |
75,070,847 |
$ |
62,294,189 |
|||
NOW |
28,064,897 |
52,018,941 |
|||||
Savings and money market |
77,103,747 |
75,226,475 |
|||||
Time deposits |
98,007,532 |
100,382,011 |
|||||
Brokered certificates of deposit |
3,363,014 |
3,358,573 |
|||||
Total deposits |
281,610,037 |
293,280,189 |
|||||
Accrued interest, taxes, and other liabilities |
1,930,318 |
1,926,543 |
|||||
Total liabilities |
283,540,355 |
295,206,732 |
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Shareholders' Equity |
|||||||
Preferred stock, no par value. Authorized 30,000 shares; no shares |
|||||||
issued and outstanding |
- |
- |
|||||
Common stock, no par value. Authorized 7,000,000 shares at March 31, 2011 |
|||||||
and December 31, 2010; 3,171,523 shares issued and outstanding at March 31, |
|||||||
2011 and 3,165,392 shares issued and outstanding at December 31, 2010 |
7,070,181 |
6,935,140 |
|||||
Retained earnings |
2,524,857 |
2,747,615 |
|||||
Deferred directors' compensation |
577,111 |
708,372 |
|||||
Accumulated other comprehensive income |
(179,409 |
) |
(257,329 |
) | |||
Total shareholders' equity |
9,992,740 |
10,133,798 |
|||||
Total liabilities and shareholders' equity |
$ |
293,533,095 |
$ |
305,340,530 |
FNBH Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
Three months ended March 31 |
|||||||
2011 |
2010 |
||||||
Interest and dividend income: |
|||||||
Interest and fees on loans |
$ |
2,964,246 |
$ |
3,445,008 |
|||
Interest and dividends on investment securities: |
|||||||
U.S. Treasury, agency securities and CMOs |
193,445 |
210,621 |
|||||
Obligations of states and political subdivisions |
63,764 |
73,277 |
|||||
Other securities |
5,715 |
4,793 |
|||||
Interest on short term investments |
323 |
89 |
|||||
Total interest and dividend income |
3,227,493 |
3,733,788 |
|||||
Interest expense: |
|||||||
Interest on deposits |
451,003 |
708,814 |
|||||
Interest on other borrowings |
- |
1,174 |
|||||
Total interest expense |
451,003 |
709,988 |
|||||
Net interest income |
2,776,490 |
3,023,800 |
|||||
Provision for loan losses |
799,998 |
1,200,000 |
|||||
Net interest income after provision for loan losses |
1,976,492 |
1,823,800 |
|||||
Noninterest income: |
|||||||
Service charges and other fee income |
627,006 |
774,273 |
|||||
Trust income |
53,511 |
71,571 |
|||||
Other |
31,402 |
1,447 |
|||||
Total noninterest income |
711,919 |
847,291 |
|||||
Noninterest expense: |
|||||||
Salaries and employee benefits |
1,212,190 |
1,399,247 |
|||||
Net occupancy expense |
270,973 |
284,374 |
|||||
Equipment expense |
78,922 |
90,150 |
|||||
Professional and service fees |
350,552 |
390,381 |
|||||
Loan collection and foreclosed property expenses |
152,524 |
266,425 |
|||||
Computer service fees |
112,641 |
117,101 |
|||||
Computer software amortization expense |
59,952 |
66,044 |
|||||
FDIC assessment fees |
325,167 |
356,361 |
|||||
Insurance |
147,440 |
161,278 |
|||||
Printing and supplies |
29,633 |
34,797 |
|||||
Director fees |
19,187 |
16,950 |
|||||
Net loss on sale/writedown of OREO and repossessions |
25,155 |
31,250 |
|||||
Other |
126,833 |
138,193 |
|||||
Total noninterest expense |
2,911,169 |
3,352,551 |
|||||
Loss before federal income taxes |
(222,758 |
) |
(681,460 |
) | |||
Federal income tax expense (benefit) |
- |
(61,316 |
) | ||||
Net loss |
$ |
(222,758 |
) |
$ |
(620,144 |
) | |
Per share statistics: |
|||||||
Basic and Diluted EPS |
$ |
(0.07 |
) |
$ |
(0.19 |
) | |
Dividends |
$ |
- |
$ |
- |
|||
Basic and diluted average shares outstanding |
3,197,620 |
3,189,393 |