Sturgis Bancorp is the holding company for Sturgis Bank & Trust Company | Toronto

Sturgis Bancorp is the holding company for Sturgis Bank & Trust Company (Bank), and its subsidiaries Oakleaf Financial Services, Inc. and Oak Mortgage, LLC. Sturgis Bancorp provides a full array of trust, commercial and consumer banking services from 11 banking centers in Sturgis, Bronson, Centreville, Climax, Colon, South Haven, Three Rivers and White Pigeon, Mich. Oakleaf Financial Services offers a complete range of investment and financial advisory services. Oak Mortgage offers residential mortgages in all markets of the Bank.
Key Highlights for the first quarter of 2014:

• Net income for the first quarter of 2014 increased to $547,000, compared to $502,000 for the first quarter of 2013.
• The Bank maintained strong capital ratios, exceeding "well-capitalized" requirements, with Tier 1 capital at 9.39%. Total capital at March 31, 2014 was 15.80% of risk-weighted assets.
• Nonaccrual and past due loans decreased.
• Total deposits increased 8.3% to $248.0 million, mostly in temporary municipal deposits.
• Allowance for loan losses was 1.60% of loans, down slightly from 1.74% at the end of 2013.

Three months ended March 31, 2014 vs. three months ended March 31, 2013 - Net income for the three months ended March 31, 2014 was $574,000, or $0.27 per share, compared to net income of $502,000, or $0.25 per share, for the three months ended March 31, 2013. The tax equivalent net interest margin increased to 3.60% in 2014 from 3.54% in 2013.
Noninterest income was $1.1 million in the first quarter of 2014, compared to $1.3 million in the first quarter of 2013. Mortgage banking activities decreased to $145,000 in 2014, as loan sale volume slowed significantly. Commission income also decreased to $398,000 in the first three months of 2014, compared to $464,000 in the first three months of 2013.
Noninterest expense was $2.9 million in 2014, compared to $3.2 million in 2013. Real estate owned expense decreased to $72,000 in 2014, compared to $303,000 in 2013. Real estate owned expense in 2014 included $30,000 written down for the carrying value of foreclosed assets, compared to $202,000 in 2013.
The Company provided ($214,000) to the allowance for loan losses in the first three months of 2014, compared to ($88,000) in the same quarter of 2013. Net charge-offs were $121,000 in 2014, compared to $77,000 in 2013.


Total assets increased to $324.0 million at March 31, 2014 from $305.0 million at December 31, 2013, primarily in securities. Loans decreased $115,000 from December 31, 2013, despite $3.3 million of government-guaranteed loans purchased. Most of the decrease in loans was in Home Equity Lines of Credit and Commercial Real Estate Loans.


Noninterest-bearing deposits increased to $43.9 million at March 31, 2014 from $41.7 million at December 31, 2013. Interest-bearing deposits also increased to $204.1 million at March 31, 2014 from $187.3 million at December 31, 2013. These increases in deposit accounts are typical for the first quarter of each year, as municipalities deposit property tax revenues. Municipalities historically have either used or reinvested those funds elsewhere during the second quarter of the year, and Management expects that pattern to continue for 2014.


Total equity was $29.2 million at March 31, 2014, compared to $28.5 million at December 31, 2013. Book value per share increased to $14.16 ($10.94 tangible) at March 31, 2014 from $13.21 ($10.67 tangible) at December 31, 2013.