Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - FNBH BANCORP INC | v313947_8k.htm |
Exhibit 99.1
FNBH BANCORP INC
Dear Shareholder,
FNBH Bancorp, Inc. reported net income of $46,000 or $.10 per share for the quarter ended March 31, 2012. This compares to net income of $760 for the immediately preceding quarter and a loss of $223,000 or $.49 per share for first quarter 2011.
At March 31, 2012, the Bank’s total capital to risk-weighted assets ratio and Tier One capital ratios were 4.61% and 2.47%, 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 (OCC) require 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.
The Bank’s first quarter 4.17% net interest margin remains strong and we believe above our peer group average. Quarter end on balance sheet liquidity consisted of $30.5 million in cash and cash equivalents and $50.2 million in investment securities. Asset quality continued to improve with an overall $2.9 million decrease in criticized loans during first quarter 2012.
Earlier this month, we announced that we entered into subscription agreements to sell up to $12 million of our common stock and debentures to a number of accredited investors. This is an important step toward restoring the capital of the Bank to a stronger position. However, there are material conditions that must occur before we are able to close on the sale of these securities. These include a condition regarding the continuing existence and terms of the Consent Order issued by the OCC and our receipt of subscription funds from a number of investors. The satisfaction of these conditions is largely out of our control. As a result, it is possible the capital raise will not occur or will occur at an aggregate amount less than $12 million. Assuming the conditions are satisfied, we would expect the transaction to close sometime during the third or fourth quarter of the year.
Even if we are able to raise the entire $12 million as discussed above, this amount would not be sufficient to restore our Bank's capital to the levels required by the OCC as noted above. In light of this, we are continuing to pursue opportunities to raise additional capital for the Bank.
Note: This letter is not an offer to sell any securities or a solicitation of an offer to purchase any securities. The sale of securities pursuant to the subscription agreements noted above was conducted via a private placement to accredited investors only. Investors should not make any investment decision regarding our stock based on the information contained in this letter regarding our efforts to raise capital.
We look forward to and welcome your participation at the Annual Shareholder Meeting to be held at 10:00 a.m. on Thursday, May 24th.
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 very much 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, | |||||||
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Cash and due from banks | $ | 30,266,639 | $ | 50,019,432 | ||||
| Short term investments | 196,880 | 196,767 | ||||||
| Total cash and cash equivalents | 30,463,519 | 50,216,199 | ||||||
| Investment securities: | ||||||||
| Investment securities available for sale, at fair value | 50,158,423 | 32,324,872 | ||||||
| FHLBI and FRB stock, at cost | 779,050 | 779,050 | ||||||
| Total investment securities | 50,937,473 | 33,103,922 | ||||||
| Loans held for investment: | ||||||||
| Commercial | 175,523,179 | 179,381,378 | ||||||
| Consumer | 14,307,226 | 14,673,761 | ||||||
| Real estate mortgage | 14,230,467 | 14,789,018 | ||||||
| Total loans held for investment | 204,060,872 | 208,844,157 | ||||||
| Less allowance for loan losses | (12,001,897 | ) | (12,689,859 | ) | ||||
| Net loans held for investment | 192,058,975 | 196,154,298 | ||||||
| Premises and equipment, net | 7,418,996 | 7,494,151 | ||||||
| Other real estate owned, held for sale | 3,252,862 | 3,026,073 | ||||||
| Accrued interest and other assets | 1,764,498 | 2,085,181 | ||||||
| Total assets | $ | 285,896,323 | $ | 292,079,824 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Demand (non-interest bearing) | $ | 80,955,705 | $ | 83,505,909 | ||||
| NOW | 28,713,444 | 27,723,407 | ||||||
| Savings and money market | 77,359,647 | 77,290,916 | ||||||
| Time deposits | 89,323,929 | 91,756,139 | ||||||
| Brokered certificates of deposit | 1,117,688 | 3,376,559 | ||||||
| Total deposits | 277,470,413 | 283,652,930 | ||||||
| Other borrowings | 80,000 | 59,813 | ||||||
| Accrued interest, taxes, and other liabilities | 1,724,577 | 1,757,766 | ||||||
| Total liabilities | 279,274,990 | 285,470,509 | ||||||
| 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, 2012 | ||||||||
| and December 31, 2011; 454,327 shares issued and outstanding at March 31, | ||||||||
| 2012 and 453,553 shares issued and outstanding at December 31, 2011 | 7,199,317 | 7,081,839 | ||||||
| Retained deficit | (779,220 | ) | (825,142 | ) | ||||
| Deferred directors' compensation | 460,939 | 577,110 | ||||||
| Accumulated other comprehensive loss | (259,703 | ) | (224,492 | ) | ||||
| Total shareholders' equity | 6,621,333 | 6,609,315 | ||||||
| Total liabilities and shareholders' equity | $ | 285,896,323 | $ | 292,079,824 | ||||
FNBH Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
| Three months ended March 31 | Three months ended March 31 | |||||||
| 2012 | 2011 | |||||||
| Interest and dividend income: | ||||||||
| Interest and fees on loans | $ | 2,686,766 | $ | 2,964,246 | ||||
| Interest and dividends on investment securities: | ||||||||
| U.S. Treasury, agency securities and CMOs | 207,118 | 193,445 | ||||||
| Obligations of states and political subdivisions | 13,501 | 63,764 | ||||||
| Other securities | 5,556 | 5,715 | ||||||
| Interest on short term investments | 487 | 323 | ||||||
| Total interest and dividend income | 2,913,428 | 3,227,493 | ||||||
| Interest expense | 307,970 | 451,003 | ||||||
| Net interest income | 2,605,458 | 2,776,490 | ||||||
| Provision for loan losses | 450,000 | 799,998 | ||||||
| Net interest income after provision for loan losses | 2,155,458 | 1,976,492 | ||||||
| Noninterest income: | ||||||||
| Service charges and other fee income | 692,843 | 627,006 | ||||||
| Trust income | 45,459 | 53,511 | ||||||
| Other | 204 | 31,402 | ||||||
| Total noninterest income | 738,506 | 711,919 | ||||||
| Noninterest expense: | ||||||||
| Salaries and employee benefits | 1,241,794 | 1,212,190 | ||||||
| Net occupancy expense | 230,748 | 270,973 | ||||||
| Equipment expense | 93,370 | 78,922 | ||||||
| Professional and service fees | 390,548 | 350,552 | ||||||
| Loan collection and foreclosed property expenses | 119,366 | 152,524 | ||||||
| Computer service fees | 113,104 | 112,641 | ||||||
| Amortization expense | 56,595 | 59,952 | ||||||
| FDIC assessment fees | 250,924 | 325,167 | ||||||
| Insurance | 146,510 | 147,440 | ||||||
| Printing and supplies | 34,567 | 29,633 | ||||||
| Director fees | 20,188 | 19,187 | ||||||
| Net loss on sale/writedown of OREO and repossessions | 5,548 | 25,155 | ||||||
| Other | 144,780 | 126,833 | ||||||
| Total noninterest expense | 2,848,042 | 2,911,169 | ||||||
| Income (loss) before federal income taxes | 45,922 | (222,758 | ) | |||||
| Federal income tax expense (benefit) | - | - | ||||||
| Net income (loss) | $ | 45,922 | $ | (222,758 | ) | |||
| Per share statistics: | ||||||||
| Basic and diluted EPS | $ | 0.10 | $ | (0.49 | ) | |||
| Basic and diluted average shares outstanding | 464,318 | 457,279 | ||||||