Oxford Bank Corporation announced Friday their total operating results for 2007 and for the fourth quarter of the year.
For the twelve months ended December 31, 2007, the Corporation recorded a net loss of $5,928,000, or $4.87 per share, compared to net income of $3,216,000, or $2.51 per share for 2006.
This outcome was largely impacted by a $7.2 million provision for loan loss in the fourth quarter.
In addition, results for the fourth quarter of 2007 were a net loss of $5,245,000, or $4.53 per share versus net income of $375,000, or $0.29 per share, for the same three-month period in 2006.
?2007 proved to be one of the most challenging years in Oxford Bank’s 124-year history,? said Jeffrey M. Davidson, chairman, president and chief executive officer. ‘As I have stated in the past, a community bank shares a far more symbiotic relationship with its customers, and its surrounding communities, than larger counterparts who have greater access to a more diversified asset base.?
Oxford Bank has been severely impacted by a still deteriorating southeastern Michigan economy.
Large scale job losses and corporate restructuring within the automotive industry over the past two years has had a devastating ripple effect throughout our region, resulting in a tidal wave of residential home foreclosures and declining property values.
‘As a result, we made substantial contributions to our loan loss reserve in 2007, primarily in the fourth quarter, to offset this anomaly and prepare for a 2008 that promises to be equally challenging economically,? he said. ‘Approximately three-quarters of our losses stem from non-homeowner occupied real estate loans. Many of these loans were made to local builders and individuals who once represented strong, long-term relationships but are now struggling to work out of difficulties in their own industries.?
Davidson added, ‘It is important to note that our asset quality issues are not related to the well-publicized ‘sub-prime meltdown? affecting the rest of our nation. Oxford Bank has very minimal exposure to sub-prime mortgages as defined by our regulators, either in terms of loans on our books or securities in our investment portfolio.? Davidson went on to say, ‘We feel our management of the Bank’s provision for loan losses represents a vigorous, pro-active approach as we head into 2008. With the help of an independent third party loan review firm, we spent the last half of 2007 meticulously scrutinizing and re-assessing the quality of each loan in our portfolio. Furthermore, we constantly keep watch over local, state, and national economies in hopes of minimizing the negative effects of any further declines we may see in the coming year.
We feel we have taken every sensible action at our disposal to position ourselves to see improved results in 2008.?
The corporation’s total assets at December 31, 2007 were $462,460,000, a decrease of 10.24 percent from one year earlier, whereas total deposits declined 8.56 percent to $420,749,000 over the same period. In addition, net loans fell 15.22 percent to $320,691,000 during 2007, while shareholders? equity decreased 24.35 percent to stand at $37,734,000 as the year ended.
The decline in shareholder’s equity is directly related to both the stock repurchase program initiated in April of 2007 as well as our need to fund the loan loss reserve.