New branch costs impact Superior earnings

Earnings declined 69 percent at Superior Bancorp. in the first quarter of 2008 after the company incurred substantial expenses related to its de novo branch expansions.

The Birmingham-based bank holding company posted net income of $695,000 for the quarter ended March 31, compared to $2.3 million during the same period last year. The company's earnings per share slid to 7 cents per share, compared to 26 cents per share a year earlier.

Superior's net profit was hit by a $1.4 million in "net tax effect" for its new branch overhead expenses after opening 18 of its 20 planned new branches in Alabama and Florida, according to the press release.

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Overall, the company plans to invest up to $30 million in its de novo branching program.

"Our priorities in the current credit cycle are managing the quality of our balance sheet, fulfilling the potential of our 20 new branches, obtaining customers from our new foriegn and big bank competition, running a profitable operation and remaining a well capitalized bank," said Superior CEO Stan Bailey.

Also, the company's loan loss provisions to cover for defaulted loans increased to $1.9 million in the first quarter, compared to $1.7 million in the fourth quarter and $705,000 in the first quarter of 2007.

Superior's net interest margin slipped to 3.04 percent in the latest quarter, compared to 3.53 percent in the first quarter of last year.

Superior (Nasdaq: SUPR) is a $3 billion asset thrift holding company with 43 locations in Alabama and 31 in Florida.