OXFORD, Mich., Oct. 22 /PRNewswire-FirstCall/ -- Oxford Bank Corporation (BULLETIN BOARD: OXBC) , the holding company for Oxford Bank, today announced earnings for the third quarter of 2007. During the first nine months of the year, a net loss of $693,000, or $0.60 per share, was recorded versus net income of $2,840,000 or $2.22 per share reported twelve months earlier. The Corporation posted a net loss of $1,688,000 or $1.45 per share for the third quarter of 2007 compared to net income of $829,000 or $0.65 per share in 2006.
The Corporation's total assets as of September 30, 2007 were $483,858,000. On the same date in 2006, total assets stood at $540,295,000. In the same twelve-month period, net loans outstanding declined 11.19 percent to $340,691,000, while total deposits dropped 9.95 percent to $436,768,000. Shareholders' equity decreased 15.72 percent to $41,940,000 largely as a result of the Corporation's stock repurchase program initiated in March of this year, and, in part, due to the Bank's efforts to fund it's loan loss reserve.
Jeffrey M. Davidson, chairman, president, and chief executive officer of the Corporation, issued the report and commented, "The on-going struggles in the Michigan economy continue to provide challenges for financial institutions such as ours whose revenue-producing assets are originated locally. While asset and deposit size is down on a year-to-year basis, this was a measured and strategic move. With a challenged local economy, a contracting housing market, and a shrinking source of quality commercial lending opportunities, there is no incentive to grow the Bank. We simply would not be able to do so at a comfortable interest spread."
Davidson continued, "And, while our earnings performance has been a source of frustration this year, we can clearly point to a number of positives relative to our operational efficiency. We continue to monitor and manage non-loan related expense areas very well. Total operating income remains favorably comparable to the same period a year ago, despite the fact that the Bank is $56 million smaller in relative size, as measured by total assets. And, we have witnessed a nominal, yet positive, improvement in our net- interest margin. Overall income for the Bank, however, has been strongly impacted by the substantial contributions we have made to our provision for loan losses in an effort to counter a rise in non-performing loans and the potential for loan charge-offs. The crisis in the residential real estate market, along with local job losses and subsequent declines in household income, has fueled a rising tide of delinquencies and foreclosures amongst homeowners and residential real estate developers. Furthermore, the steep drop in collateral (housing) values has escalated the need for additional contributions to the provision."
Davidson went on to say, "Management has been pro-active in addressing these issues. Parallel with internal evaluations, an independent third-party loan review firm was retained to help assess the quality of our loan portfolio, and to evaluate our current underwriting standards and policies. We are pleased with the results of this review and are encouraged with the recommendations, most of which have already been implemented. Management will continue to aggressively identify, fund for, and act on non-performing credits as quickly and prudently as is lawfully allowed."
Davidson concluded, "While 2007 will likely prove to be one of the most challenging in Oxford Bank's 123-year history, we believe that the aggressive actions taken during the past six-months, along with those yet to be taken, will result in a stronger, more efficient institution that is well positioned for the future."
Oxford Bank Corporation is a registered holding company. Its subsidiary, Oxford Bank, is the oldest commercial bank in Oakland County and operates eight full-service offices in Clarkston, Davison, Dryden, Goodrich, Lake Orion, Oakland Township, Ortonville and Oxford. It also manages a consumer lending center in Oxford and a commercial lending office in Lake Orion. The Bank has operated continuously under local ownership and management since it first opened for business in 1884.
Except for the historical information contained herein, the matters discussed in the Release may be deemed forward-looking statements that involve risk and uncertainties. Words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Factors which could cause actual results to differ, include, but are not limited to, fluctuations in interest rates, changes in economic conditions of the Bank's market area, changes in policies by regulatory agencies, the acceptance of new products, the impact of competitive products and pricing and the other risks detailed from time to time in the Bank's and Corporation's reports. These forward-looking statements represent the Bank's judgment as of the date of this report. The Bank, disclaims, however, any intent or obligation to update these forward-looking statements.
OXFORD BANK CORPORATION CONSOLIDATED STATEMENT OF CONDITION (000's omitted except for per share data) September 30 2007 2006 ASSETS Cash and due from banks $13,826 $18,362 Interest-bearing deposits with bank 333 217 U.S. Treasury securities 0 0 U.S. Government agency securities 23,890 55,263 State and municipal securities 20,408 26,741 Other securities 4,591 5,575 Federal funds sold 62,050 34,410 Loans and discounts, net 340,691 383,603 Bank premises and equipment, net 9,710 10,027 Other assets 8,359 6,097 TOTAL ASSETS $483,858 $540,295 LIABILITIES Demand deposits $60,449 $68,114 Savings and time deposits 376,318 416,893 Total deposits 436,768 485,007 TT&L and Other Borrowed Funds 1,522 1,370 Other liabilities 3,628 4,153 Total liabilities 441,918 490,530 SHAREHOLDERS' EQUITY Common stock, 3,200,000 shares authorized and 1,160,490 and 1,279,630 issued and outstanding in 2007 and 2006, respectively 18,000 18,000 Undivided profits 23,800 32,123 Net unrealized holding gains (losses) 140 (358) Total shareholders' equity 41,940 49,765 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $483,858 $540,295 Book value per share (1,160,490 and 1,279,630 shares issued and outstanding in 2007 and 2006, respectively) $36.14 $38.89 * Un-audited OXFORD BANK CORPORATION COMPARATIVE INCOME STATEMENT September 30, 2007 (000's omitted except for per share data) YEAR TO DATE QUARTER ONLY 2007 2006 2007 2006 INTEREST INCOME ACTUAL ACTUAL ACTUAL ACTUAL INTEREST AND FEES ON LOANS Commercial Loan $8,315 $8,140 $2,725 $2,808 Installment Loans 2,908 3,673 883 1,237 Mortgage Loans 5,543 6,862 1,732 2,263 Open End Loans 1,968 2,027 665 675 Late Charges & Fees 333 290 103 91 TOTAL 19,067 20,993 6,108 7,075 INTEREST ON INVESTMENTS Fed Funds Sold 1,731 524 731 374 Time Balances 10 4 3 1 U.S. Agency Securities 1,293 1,630 373 503 Tax Exempt Securities 570 591 180 178 Other Securities 313 249 94 86 TOTAL 3,916 2,998 1,380 1,142 TOTAL INTEREST INCOME 22,983 23,991 7,488 8,217 INTEREST EXPENSE Interest on Deposits 11,352 10,559 3,735 2,844 Interest on Borrowed Funds 21 128 5 7 TOTAL INTEREST EXPENSE 11,372 10,688 3,739 3,852 NET INTEREST INCOME 11,611 13,303 3,749 4,365 Provision for Loan Losses 4,720 1,276 3,275 496 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,891 12,027 474 3,869 Service Charge Income 1,271 1,286 440 444 Other Operating Income 1,158 1,008 272 352 NET INTEREST & OTHER INCOME 9,319 14,322 1,185 4,666 OTHER OPERATING EXPENSES Salaries & Employee Benefits 5,506 5,972 1,482 1,963 Occupancy Expense 1,031 941 311 294 Equipment Expense 379 326 129 117 Other Operating Expenses 3,392 2,952 1,534 986 TOTAL OPERATING EXPENSES 10,309 10,191 3,457 3,360 INCOME (LOSS) BEFORE INCOME TAXES (990) 4,131 (2,272) 1,306 Federal Income Tax Expense (Benefit) (297) 1,192 (584) 379 NET INCOME (LOSS) FROM OPERATIONS (693) 2,939 (1,688) 927 Securities Gains (Losses) 0 (99) 0 (99) NET INCOME (LOSS) ($693) $2,840 ($1,688) $829 NET INCOME (LOSS) PER SHARE - 1,160,490 and 1,279,630 in 2007 and 2006, respectively ($0.60) $2.22 ($1.45) $0.65 * Un-audited
