FORT LAUDERDALE, FL--(Marketwire - Oct 18, 2011) - Stonegate Bank (OTCBB: [ SGBK ])

Third Quarter 2011 Highlights:

• Total assets grew to $848 million from $597 million year over year
• 23 straight quarters of profitability
• 3.91% net interest margin
• Net income of $1,560,571 for the third quarter of 2011, compared to net income of $904,693 for the same period in 2010
• Net income of $8,744,268 for the first nine months of 2011, compared to $2,594,222 for the same period in 2010
• Tier 1 risk based capital ratio of 17.4% at September 30, 2011

Net Income:
Stonegate Bank (OTCBB: [ SGBK ]) reported net income of $1,560,571 or 18.9 cents per share for the third quarter of 2011, as compared to net income of $904,693 or 11.7 cents per share in the third quarter of 2010, a 72% increase. The Bank earned $8,744,268 or $1.06 per share in the first nine months of 2011 as compared to $2,594,222 or 33.6 cents a share in the first nine months of 2010, a 315% increase.

Income and Expenses:
Total interest income increased from $8.1 million in the third quarter of 2010 to $9.9 million in the third quarter of 2011. This $1.8 million increase is largely due to an increase of $184 million in total loans period to period. Total interest expense increased from $1.9 million in the third quarter of 2010 to $2.1 million in the third quarter of 2011. This was due to the addition of $223 million in deposits period to period. The result of this was net interest income improved from $6.2 million in the third quarter of 2010 to $7.7 million in the third quarter of 2011. Total non-interest income decreased to $834,000 in the third quarter of 2011 from $1.4 million in the third quarter of 2010. This was the result of a reduction in fees associated with interest rate swaps entered into with our customers. Non-interest expense increased to $5.6 million for the third quarter of 2011 from $4.3 million for the third quarter of 2010. The higher than normal expense is directly related to the addition of our Tampa Bay acquisition.

Margin and Cost of Funds:
Total cost of funds declined from a 1.59% September 2010 month to date average to 1.20% September 2011 month to date average. Stonegate Bank's net interest margin decreased from a September 2010 month to date average of 4.2 % to September 2011 month to date average of 3.91%.

Balance Sheet and Capital:
Total assets grew from $597 million on September 30, 2010 to $848 million on September 30, 2011, a $251 million increase. Total loans increased $184 million from $400 million on September 30, 2010 to $584 million on September 30, 2011. Total deposits increased $223 million from $446 million on September 30, 2010 to $669 million on September 30, 2011. Approximately 13.3% of total deposits are non-interest bearing. Total capital grew from $95.3 million on September 30, 2010 to $114.9 million on September 30, 2011. This resulted in an undiluted book value of $13.95 per share on September 30, 2011.

The loan quality detail is presented by showing the legacy Stonegate portfolio as well as the Bank's second quarter FDIC acquisition of First Commercial Bank of Tampa Bay. This was done in order to provide additional clarity on the legacy portfolio trends as well as the Bank's progress in reducing non-performing loans and REO on the recent acquisition. The Bank's legacy non-performing assets decreased from $6.7 million on June 30, 2011 to $5.6 million on September 30, 2011. Approximately 10% of the NPAs are Southwest Capital Bank loans and are covered by a separate $2.8 million contingent payment account that will be reduced by any loan or REO losses incurred through March 2014. Overall, legacy non-performing assets represent 1.06% of total legacy loans. Total non-performing loans decreased from $13.6 million at June 30, 2011 to $11.6 million at September 30, 2011. Approximately half of the $11.6 million in non-performing loans are in the acquired First Commercial Bank of Tampa Bay portfolio. Non-performing loans represent 1.37% of assets and 1.99% of total loans on September 30, 2011.

Management believes all non-performing assets and REO are written down to fair market value. Real estate owned decreased from $8.2 million on June 30, 2011 to $6.6 million on September 30, 2011. Approximately 21% of the legacy REO is covered under the Southwest Capital Bank contingent payment account outlined above.

The Bank's loan loss reserve was $11.9 million on September 30, 2011. This reserve represents 102% of all non-performing loans and 2.04% of total loans. Total loans past due more than 30 days decreased from $1.1 million on June 30, 2011 to $685,000 on September 30, 2011.

"The third quarter results were very encouraging," said Dave Seleski, President and Chief Executive Officer. "Beyond the increase in net income, we were able to realize strong growth in assets and loans, while successfully mitigating non-performing assets and REOs. Our new management team in Tampa is successfully integrating First Commercial Bank of Tampa Bay, which we acquired in June 2011, already improving credit trends in that market. Another new market we look to is the Doral area of Miami-Dade County, where, pending regulatory approval, we anticipate opening a new banking center during the first quarter of 2012. We believe that Florida's real estate market is reaching price stabilization, and that the Florida economy, albeit slowly, is gathering genuine momentum."

The Bank cautions that certain statements contained in this press release are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995, which statements are made pursuant to the "safe harbor" provisions of such Act. These forward-looking statements describe future plans or strategies and may include the Bank's expectations of future financial results. The words "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements. The Bank's ability to predict results or the effect of future plans or strategies or qualitative or quantitative changes is inherently uncertain. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, changes in general market interest rates, changes in general economic conditions and those specific to the Bank's market area, legislative/regulatory changes, monetary and fiscal policies of the U.S. Treasury and the Federal Reserve, changes in the quality or composition of the Bank's loan portfolios, demand for loan products, changes in deposit flows, real estate values, and competition and other economic, competitive, governmental, regulatory and technological factors affecting the Bank's operations, pricing, products and services. The Bank makes periodic filings to the Federal Deposit Insurance Corporation which contain various Bank financial information, copies of which are available from the Bank without charge. The Bank disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained in this release to reflect future events or developments.