SANTA ROSA, Calif. - Summit State Bank (NASDAQ:SSBI) announced a decrease in net income for the first quarter ended March 31, 2024, reporting earnings of $1,395,000, or $0.21 per diluted share. This represents a decline from the $4,116,000, or $0.62 per diluted share, recorded in the same period last year.
Despite the drop in earnings, the Bank's Board of Directors declared an $0.12 per share quarterly cash dividend on April 29, 2024, payable on May 23, 2024, to shareholders of record as of May 16, 2024.
The Bank's President and CEO, Brian Reed, acknowledged the broader banking industry challenges that have impacted the quarter's earnings. Reed cited a competitive environment for deposits, high funding costs, and moderated loan growth as factors affecting the Bank's financial performance. He emphasized that the Bank is taking steps to reverse the decline in net income and is committed to improving financial results.
First quarter revenues decreased by 7.1% to $15,425,000 compared to the previous year, while the net interest margin contracted to 2.81%. Total deposits saw an 8% decrease to $939,202,000, and net loans grew marginally by 1% year-over-year but experienced a 2% decrease from the previous quarter. The Bank also reported an increase in nonperforming loans to 4.45% of gross loans and nonperforming assets to 3.85% of total assets.
Operating expenses for the first quarter rose to $6,400,000, driven by increases in salaries, commissions, and other operational costs. Summit State Bank's asset quality was closely monitored, with no charge-offs in the quarter and a slight decline in nonperforming loans from the prior quarter.
Summit State Bank, with total assets of $1.1 billion and total equity of $98 million as of March 31, 2024, continues to exceed the capital levels required to be considered well-capitalized. The Bank's tangible equity to tangible assets stood at 8.96%, up from 7.99% the previous year.
The Bank's commitment to diversity and community is reflected in its workforce, with 63% of management roles held by women and minorities. Summit State Bank has been recognized with various awards for its performance and community engagement.
This financial overview is based on a press release statement and preliminary results. Final financial results and disclosures will be available in Summit State Bank’s quarterly report on Form 10-Q for the period ended March 31, 2024.
InvestingPro Insights
As Summit State Bank (NASDAQ:SSBI) grapples with the challenges of the current financial quarter, insights from InvestingPro provide a deeper understanding of the bank's market position. With a market capitalization of $66.42 million and trading at a low earnings multiple with a P/E ratio of just 4.93 for the last twelve months as of Q3 2023, the bank presents a potentially undervalued opportunity for investors seeking entry points into the banking sector.
Moreover, an InvestingPro Tip highlights that Summit State Bank has maintained dividend payments for a remarkable 19 consecutive years, showcasing a commitment to shareholder returns even amidst market fluctuations. This consistency is further underscored by the current dividend yield of 4.9%, as of the beginning of 2024, which may appeal to income-focused investors.
Still, it is important to note that the bank is trading near its 52-week low, with the price having fallen by 34.79% over the past year. This could indicate either a potential buying opportunity or a need for caution depending on broader market trends and individual investment strategies.
For those interested in a comprehensive analysis, there are additional InvestingPro Tips available that could provide further clarity on Summit State Bank's financial health and future outlook. Using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights. Visit https://www.investing.com/pro/SSBI for more details and to explore the full range of tips, which currently number six beyond those mentioned here.
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