OXFORD BANK CORP 
By OXFORD, Mich., Jan. 26 /PRNewswire-FirstCall/ -- Oxford Bank Corporation ("the Corporation") (OTC Bulletin Board: OXBC), the holding company for Oxford Bank ("the Bank"), today announced improved year-end and fourth quarter operating results for 2009.
The Corporation posted fourth quarter net income of $758,000, or $0.66 per share, on net revenues (net interest income plus noninterest income) of $3,638,000. This represents a $14,642,000 improvement compared to the same quarter last year. During the twelve-month period ending December 31, 2009, a net loss of $3,762,000, or $3.25 per share, was reported on net revenues of $14,787,000; an 81.4-percent improvement over 2008.
The Corporation's operating performance continues to be negatively effected by the economic environment, elevated levels of non-performing loans, maintenance costs associated with bank owned property and FDIC insurance expense. However, the financial results of the Corporation improved in 2009 as a result of the increased look back period for net operating losses, aggressive cost reduction initiatives and strategic balance sheet management.
In 2009, the net operating loss carry-back provision of the United States tax code was expanded as part of the Worker, Homeownership, and Business Assistance Act of 2009, providing a limited, one time benefit to the Corporation. The modification allowed the Corporation to recover $3.1 million in previously paid income taxes.
During the year, management implemented aggressive cost-cutting initiatives designed to reduce total expenditures. Measures included managing interest expense, containing problem asset costs and improving the efficiency of the organization. These efforts resulted in a $3.2 million decline in interest expense, a $2 million decrease in noninterest expense, and an $11.5 million reduction in loan loss provision in 2009. Due to these initiatives, the year-to-date pre-tax loss for 2009 was reduced by 62.4-percent relative to 2008.
Management also continued to strategically reduce the Bank's asset size in 2009 to preserve capital and improve the earnings capacity of the balance sheet. This decision resulted in a $31.7 million reduction in total assets. As a result of this tactic, the Corporation was able to maintain a Tier 1 capital ratio of 4.02-percent for the quarter ending December 31, 2009. Management also was able to generate a strong net interest margin despite a depressed rate environment. Net interest margin on a tax equivalent basis was 3.69-percent in 2009 compared to 3.74-percent in 2008. Liquidity also remains strong, with a combined total of $88.2 million in cash, cash equivalents and securities.
C. James Bess, President and Chief Executive Officer of the Corporation, issued the results and commented: "Although substantial progress has been made over the past six months, it is essential that we remain fully engaged with corrective-action and the reduction of non-performing loan assets. The Bank's long-term prospects rest with replenishing the capital account. Therefore, in order to maintain franchise value for the benefit of shareholders, employees, customers, and communities served, we continue to vigorously pursue new sources of capital that will allow us to purge problem loan assets from the balance sheet and facilitate a return to profitability."
Oxford Bank is a subsidiary of Oxford Bank Corporation, a registered holding company. It 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 banking office in Lake Orion. The Bank has operated continuously under local ownership and management since it first opened for business in 1884. For more information about Oxford Bank and its complete line of financial services, please visit www.oxfordbank.com.
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 Balance Sheet (Unaudited)
(Dollars in thousands except per share data)
December 31,
------------
2009 2008
---- ----
ASSETS
------
Cash and due from banks $37,701 $20,338
Federal funds sold - 1,177
--- -----
Total cash and cash equivalents 37,701 21,515
Securities available-for-sale 43,407 47,369
Securities held-to-maturity 6,001 9,174
Federal Home Loan Bank Stock 1,096 1,096
----- -----
Total securities 50,504 57,639
Portfolio loans
Consumer loans 46,409 60,504
Mortgage loans 64,102 76,624
Commercial loans 117,438 136,764
------- -------
Total loans 227,949 273,892
Less: Allowance for loan loss 9,348 10,664
----- ------
Net loans 218,601 263,228
Premises and equipment, net 9,061 9,255
Other real estate owned 10,068 6,873
Accrued interest receivable and
other assets 4,886 4,047
----- -----
TOTAL ASSETS $330,821 $362,557
======== ========
LIABILITIES
-----------
Deposits
Noninterest-bearing $56,340 $55,545
Interest-bearing 258,856 285,355
------- -------
Total deposits 315,196 340,900
Short term borrowings 414 1,258
Accrued interest payable, taxes and
other liabilities 1,899 2,565
----- -----
Total Liabilities 317,509 344,723
SHAREHOLDERS' EQUITY
--------------------
Common stock, no par value;
10,000,000 and 3,200,000 shares
authorized; 1,156,690 shares issued
and outstanding 16,271 16,271
Retained (deficit) earnings (2,921) 841
Accumulated other comprehensive
income, net of tax (38) 722
--- ---
Total shareholders' equity 13,312 17,834
------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $330,821 $362,557
======== ========
- -
Book value per share $11.51 $15.42
Oxford Bank Corporation
Consolidated Statement of Income (Unaudited)
(dollars in thousands except per share data)
Quarter to Date Year to Date
--------------- ------------
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Interest Income
---------------
Interest and fees on loans
Commercial loans $1,900 $2,175 $7,908 $9,193
Installment loans 342 536 1,641 2,524
Mortgage loans 861 1,180 4,004 5,509
Open end loans 358 467 1,528 2,053
Late charges and fees 63 72 296 323
--- --- --- ---
Total loan interest and
fee income 3,524 4,430 15,377 19,602
Interest on investment
securities
Taxable 180 512 1,172 2,540
Tax-exempt 73 144 423 656
--- --- --- ---
Total investment income 253 656 1,595 3,196
--- --- ----- -----
Total interest income 3,777 5,086 16,972 22,798
Interest Expense
----------------
Interest on deposits 1,109 1,632 5,618 8,792
Interest on borrowed funds - 32 - 44
--- --- --- ---
Total interest expense 1,109 1,664 5,618 8,836
----- ----- ----- -----
Net Interest Income 2,668 3,422 11,354 13,962
Provision for loan losses 2,000 7,300 5,850 17,300
----- ----- ----- ------
Net Interest Income After
Provision for Loan Losses 668 (3,878) 5,504 (3,338)
Noninterest Income
------------------
Service charge income 330 374 1,364 1,548
Mortgage banking
activities 38 60 303 458
Other income 602 392 1,766 761
--- --- ----- ---
Total noninterest income 970 826 3,433 2,767
Noninterest Expense
-------------------
Salaries and employee
benefits 1,129 1,826 5,723 6,822
Occupancy expense 268 301 1,216 1,306
Equipment expense 117 115 521 447
Other Loan Expense 1,373 1,844 3,523 4,703
Other expense 1,159 1,398 4,882 4,587
----- ----- ----- -----
Total noninterest expense 4,046 5,484 15,865 17,865
Loss Before Income Taxes (2,408) (8,536) (6,928) (18,436)
Income tax (recovery)
expense (3,166) 5,348 (3,166) 1,777
------ ----- ------ -----
Net Income (Loss) $758 $(13,884) $(3,762) $(20,213)
==== ======== ======= ========
Income (Loss) per Share -
Basic $0.66 $(12.00) $(3.25) $(17.47)
Oxford Bank Corporation
Financial Summary and Selected Ratios (Unaudited)
(Dollars in thousands except per share data)
Year to Date
December 31, Change
------------ ------
2009 2008 Amount Percentage
---- ---- ------ ----------
Financial Summary
Interest Income $16,972 $22,798 $(5,826) -25.6%
Interest Expense 5,618 8,836 (3,218) -36.4%
----- ----- ------
Net Interest Income 11,354 13,962 (2,608) -18.7%
Provision for loan
loss 5,850 17,300 (11,450) -66.2%
Noninterest income 3,433 2,767 666 24.1%
Noninterest expense 15,865 17,865 (2,000) -11.2%
------ ------ ------
Loss before Income
Taxes (6,928) (18,436) 11,508 62.4%
Income tax recovery (3,166) 1,777 (4,943) -278.2%
------ ----- ------
Net Loss $(3,762) $(20,213) $16,451 81.4%
======= ======== =======
Balance Sheet Data
Total assets 330,821 362,557 (31,736) -8.8%
Earning assets 278,452 332,708 (54,256) -16.3%
Total loans 227,949 273,892 (45,944) -16.8%
Allowance for loan
loss 9,348 10,664 (1,316) -12.3%
Total deposits 315,196 340,900 (25,704) -7.5%
Other borrowings 414 1,258 (844) -67.1%
Shareholders' equity 13,312 17,834 (4,522) -25.4%
Asset Quality
Other real estate
owned 10,068 6,873 3,195 46.5%
Net charge-offs 7,166 16,328 (9,162) -56.1%
Non-accrual loans 17,984 15,255 2,730 17.9%
Nonperforming assets 28,053 22,128 5,925 26.8%
Non-accrual loans /
total loans 7.89% 5.57% 2.32% 41.7%
Allowance for loan
loss /total loans 4.10% 3.89% 0.21% 5.3%
Allowance for loan
loss /non-accrual
loans 51.98% 69.91% -17.93% -25.6%
Performance
Measurements
Net interest margin
(tax equivalent) 3.69% 3.74% -0.05% -1.3%
Return on average
assets (annualized) -1.05% -5.03% 3.98% 79.1%
Return on average
equity (annualized) -24.6% -61.0% 36.4% 59.6%
Equity / Assets 4.0% 4.9% -0.9% -18.2%
Loans / Deposits 72.3% 80.3% -8.0% -10.0%
Book Value $11.51 $15.42 $(3.91) -25.4%
Loss per share -
Basic $(3.25) $(17.47) $14.22 81.4%
Shares Outstanding 1,156,690 1,156,690 - 0.0%
Quarter Ended
December September
31, 30, June 30,
2009 2009 2009
Financial Summary
Interest
Income $3,777 $3,995 $4,458
Interest
Expense 1,109 1,346 1,554
----- ----- -----
Net Interest Income 2,668 2,649 2,904
Provision
for loan
loss 2,000 2,050 1,000
Noninterest
income 970 469 1,023
Noninterest
expense 4,046 3,676 4,344
----- ----- -----
Loss before Income
Taxes (2,408) (2,608) (1,417)
Income tax
(recovery)
expense (3,166) - -
------ --- ---
Net Income (Loss) $758 $(2,608) $(1,417)
==== ======= =======
Balance Sheet Data
Total assets 330,821 347,956 366,223
Earning assets 278,452 298,061 312,092
Total loans 227,949 240,924 253,222
Allowance for loan
loss 9,348 10,089 9,473
Total deposits 315,196 332,865 348,070
Other borrowings 414 170 459
Shareholders' equity 13,312 12,980 15,418
Asset Quality
Other real estate
owned 10,068 11,374 8,873
Net charge-offs 2,741 1,434 1,572
Non-accrual loans 17,984 18,954 11,540
Nonperforming assets 28,053 30,328 20,413
Non-accrual loans /
total loans 7.89% 7.87% 4.56%
Allowance for loan
loss /total loans 4.10% 4.19% 3.74%
Allowance for loan
loss /non-accrual
loans 51.98% 53.23% 82.09%
Performance
Measurements
Net interest margin
(tax equivalent) 3.58% 3.46% 3.75%
Return on average
assets (annualized) 0.91% -2.82% -1.56%
Return on average
equity (annualized) 24.2% -70.5% -34.3%
Equity / Assets 4.0% 3.7% 4.2%
Loans / Deposits 72.3% 72.4% 72.8%
Book Value $11.51 $11.22 $13.33
Income (loss) per
share -Basic $0.66 $(2.25) $(1.22)
Shares Outstanding 1,156,690 1,156,690 1,156,690
December
March 31, 31,
2009 2008
Financial Summary
Interest
Income $4,742 $5,086
Interest
Expense 1,608 1,664
----- -----
Net Interest Income 3,135 3,422
Provision
for loan
loss 800 7,300
Noninterest
income 970 826
Noninterest
expense 3,800 5,484
----- -----
Loss before Income
Taxes (495) (8,537)
Income tax
(recovery)
expense - 5,348
--- -----
Net Income (Loss) $(495) $(13,885)
===== ========
Balance Sheet Data
Total assets 361,315 362,557
Earning assets 321,017 332,708
Total loans 263,431 273,892
Allowance for loan
loss 10,045 10,664
Total deposits 341,567 340,900
Other borrowings 468 1,258
Shareholders' equity 17,151 17,834
Asset Quality
Other real estate
owned 9,743 6,873
Net charge-offs 1,419 4,734
Non-accrual loans 12,553 15,255
Nonperforming assets 22,296 22,128
Non-accrual loans /
total loans 4.77% 5.57%
Allowance for loan
loss /total loans 3.81% 3.89%
Allowance for loan
loss /non-accrual
loans 80.02% 69.91%
Performance
Measurements
Net interest margin
(tax equivalent) 3.98% 4.06%
Return on average
assets (annualized) -0.55% -15.33%
Return on average
equity (annualized) -11.5% -203.4%
Equity / Assets 4.7% 4.9%
Loans / Deposits 77.1% 80.3%
Book Value $14.83 $15.42
Income (loss) per
share -Basic $(0.43) $(12.00)
Shares Outstanding 1,156,690 1,156,690
SOURCE Oxford Bank Corporation
