Oxford Bank Corporation Announces Third Quarter Operating Results for 2008

OXFORD, Mich., Nov. 24 /PRNewswire-FirstCall/ -- Oxford Bank Corporation (OTC:OXBC) (BULLETIN BOARD: OXBC) , the holding company for Oxford Bank, today announced total operating results for the third quarter and first nine months of 2008. In the third quarter, the Corporation posted a net loss of $3,395,000 or $2.94 per share. For the same three-month period in 2007, the Corporation reported a loss of $1,688,000 or $1.44 per share. During the first nine months of the year a net loss of $6,329,000 or $5.47 per share was recorded compared to losses of $693,000 or $0.56 per share for the same period in 2007. The Corporation continues to realize quarterly gains in net-interest income and net revenues despite a strategic reduction in total assets. Net interest income for the third quarter of 2008 was $3,614,000, an improvement over the $3,606,000 and $3,320,000 reported in the second and first quarters, respectively. This improvement was achieved despite a significant decrease in total assets during 2008. Also, third-quarter net-interest income compares favorably to the $3,748,000 reported in the third quarter of 2007. Net revenue (net interest income plus non-interest income) during the third quarter of 2008 was $4,262,000 compared with net revenue of $4,200,000 in the second quarter and $4,019,000 during the first quarter. Comparatively, net revenue for the third quarter of 2007 was $4,423,000. For the nine-month period ended September 30, 2008, the Bank posted net revenue of $12,481,000 compared to $14,003,000 for same period in 2007. Jeffrey M. Davidson, chairman, president, and chief executive officer of the Corporation, issued the results and commented, "As detailed in previous correspondences, Oxford Bank continues to experience losses in our residential loan portfolio and incur significant expenses associated with maintaining foreclosed homes in ORE (other real estate owned). Unfortunately, due to the continued problems in the Michigan economy and the region, the influx of repossessed homes has yet to subside. And, the pool of qualified buyers to purchase this real estate is limited. As a result, we expect these issues to negatively impact earnings for the remainder of this year. It is important to note, however, that Oxford Bank's liquidity is strong and that it remains a well-capitalized financial institution by regulatory standards." Davidson added, "Management and our Board have done an outstanding job of managing the expenses that are within their influence. Through carefully implemented plans to reduce both interest related and non-interest related expenses, we have drastically improved the overall operating efficiency of the Bank. Both net-interest spread and net-interest margin continue to witness strong month-to-month gains. The Bank's margin as of September 30, 2008 was 4.15-percent, compared to only 3.00-percent in January and 2.83-percent in September of 2007. Similarly, net interest spread currently stands at 3.76-percent versus 2.37-percent twelve months prior. These results, as well as our net revenue improvements, represent positive trends for our institution as we look to weather this current economic storm." Total consolidated assets as of September 30, 2008 were $375,986,000, a 22.8-percent decline from the same period last year. Portfolio loans declined $60 million to $286,872,000 during the past twelve months and deposits were $341,814,000 as of September 30, 2008 compared to $436,739,000 as of September 30, 2007. 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. For more information about Oxford Bank and its complete line of financial services, please visit http://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) September 30, 2008 2007 ASSETS Cash and due from banks $10,699 $13,826 Interest-bearing deposits with banks 783 333 Federal funds sold 2,450 62,050 Total cash and cash equivalents 13,932 76,209 Securities available-for-sale 47,890 36,730 Securities held-to-maturity 10,134 12,212 Other securities 1,096 1,096 Total securities 59,120 50,038 Portfolio loans Consumer loans 63,422 83,292 Mortgage loans 83,754 111,021 Commercial Loans 139,696 152,866 Total loans 286,872 347,179 Less allowance for loan loss 8,113 6,488 Net loans 278,759 340,691 Bank premises and equipment, net 9,335 9,710 Other real estate owned 6,210 3,311 Accrued interest receivable and other assets 8,630 6,277 TOTAL ASSETS $375,986 $486,236 LIABILITIES Deposits Non-interest bearing $58,978 $60,420 Interest bearing 282,836 376,319 Total deposits 341,814 436,739 Short term borrowings 814 1,522 Accrued interest payable, taxes and other liabilities 2,129 5,223 Total Liabilities 344,757 443,484 SHAREHOLDERS' EQUITY Common stock, no par value; 3,200,000 shares authorized; 1,156,690 and 1,160,490 shares issued and outstanding, respectively 16,271 18,000 Retained earnings 14,724 24,612 Accumulated other comprehensive income/(loss), net of tax 234 140 Total shareholders' equity 31,229 42,752 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $375,986 $486,236 Book value per share $27.00 $36.84 Oxford Bank Corporation Consolidated Statement of Income (Unaudited) (Dollars in thousands except per share data) Quarter to Date Year to Date September 30, September 30, 2008 2007 2008 2007 Interest Income Interest and fees on loans Commercial loans $2,217 $2,724 $7,019 $8,315 Installment loans 590 883 1,988 2,908 Mortgage loans 1,327 1,731 4,330 5,543 Open end loans 492 665 1,586 1,968 Late charges and fees 73 103 250 333 Total loan interest and fee income 4,699 6,106 15,173 19,067 Interest on investment securities Taxable 535 469 1,523 1,615 Tax-exempt 152 180 511 570 Total investment income 687 649 2,034 2,185 Federal funds sold 36 731 505 1,731 Total interest income 5,422 7,486 17,712 22,983 Interest Expense Interest on deposits 1,798 3,733 7,159 11,351 Interest on borrowed funds 10 5 13 21 Total interest expense 1,808 3,738 7,172 11,372 Net Interest Income 3,614 3,748 10,540 11,611 Provision for loan losses 5,625 3,275 10,000 4,720 Net Interest Income After Provision for Loan Losses (2,011) 473 540 6,891 Noninterest Income Service charge income 412 440 1,174 1,271 Income from loan sales 148 96 398 395 Other income 88 139 369 726 Total noninterest income 648 675 1,941 2,392 Noninterest Expense Salaries and employee benefits 1,607 1,481 4,995 5,506 Occupancy expense 281 310 1,006 1,031 Equipment expense 114 129 332 379 Other loan expense 977 713 2,860 1,011 Other expense 888 787 3,188 2,346 Total noninterest expense 3,867 3,420 12,381 10,273 Income (Loss) Before Income Taxes (5,230) (2,272) (9,900) (990) Income tax expense (recovery) (1,835) (584) (3,571) (297) Net Income (Loss) $(3,395) $(1,688) $(6,329) $(693) Earnings (Loss) per Share - basic $(2.94) $(1.44) $(5.47) $(0.56) Oxford Bank Corporation Financial Summary and Selected Ratios (Unaudited) (Dollars in thousands except per share data) Year to Date September 30, Change 2008 2007 Amount Percentage Financial Summary Interest Income $17,712 $22,983 $(5,271) -22.9% Interest Expense 7,172 11,372 (4,200) -36.9% Net Interest Income 10,540 11,611 (1,071) -9.2% Provision for loan loss 10,000 4,720 5,280 111.9% Noninterest income 1,941 2,392 (452) -18.9% Noninterest expense 12,381 10,273 2,108 20.5% Income (Loss) before Income Taxes (9,900) (990) (8,911) 900.2% Income tax expense (recovery) (3,571) (297) (3,275) 1104.3% Net Income (Loss) $(6,329) $(693) $(5,636) 812.9% Balance Sheet Data Total assets 375,986 486,236 (110,250) -22.7% Earning assets 349,224 459,600 (110,375) -24.0% Total loans 286,872 347,179 (60,307) -17.4% Allowance for loan loss 8,113 6,488 1,625 25.1% Total deposits 341,814 436,739 (94,925) -21.7% Other borrowings 814 1,522 (708) -46.5% Shareholders' equity 31,229 42,752 (11,523) -27.0% Asset Quality Other real estate owned 6,210 3,311 2,899 87.6% Net charge-offs 11,579 2,425 9,154 377.6% Non-accrual loans 17,023 23,553 (6,530) -27.7% Nonperforming assets 23,233 26,864 (3,631) -13.5% Non-accrual loans / total loans 5.93% 6.78% -0.85% -12.5% Allowance for loan loss / total loans 2.83% 1.87% 0.96% 51.3% Allowance for loan loss / non- accrual loans 47.66% 27.55% 20.11% 73.0% Performance Measurements Equity / Assets 8.3% 8.8% -0.5% -5.5% Loans / Deposits 83.9% 79.5% 4.4% 5.6% Book Value $27.00 $36.84 $(9.84) -26.7% Earnings (Loss) per share - basic $(5.47) $(0.56) $(4.91) 875.3% Shares Outstanding 1,156,690 1,160,490 (3,800) -0.3% DATASOURCE: Oxford Bank Corporation CONTACT: Anthony P. Lasher of Oxford Bank Corporation, +1-248-628-2533, Fax: +1-248-969-7230 Web site: http://www.oxfordbank.com/