Shares of Sun American Bancorp continue to tumble amid speculation about further deteriorating credit quality at the Boca Raton, Fla. banking company.
The stock-price slide began Oct. 26 when Sun American’s shares fell 6%, to $6.45, after the $589 million-asset company reported late the day before that it had a net third-quarter loss of $265,000, compared with net income of $491,000 a year earlier.
It attributed the loss to higher costs related to recent branch openings; a 20-basis-point drop in its net interest margin, to 3.82%; and a 20% increase in nonperforming assets from the second quarter, to $9.5 million, or 2.17% of total assets.
On Tuesday, Sun American’s shares plunged 13.3%, to $5.20, prompting the company to issue a press release late that day saying it “knows of no corporate reason” why the stock began dropping a week and a half after the earnings report.
However, Samuel Caldwell, an analyst at KBW Inc.’s Keefe, Bruyette & Woods Inc. in Atlanta, said that investors probably were reacting to additional information about Sun American’s credit quality that was in the company’s third-quarter call report (made available Nov. 2 on the Federal Deposit Insurance Corp. Web site).
Sun American said in the call report that its past-due loans rose 167%, to $5.6 million, from the second quarter, and Mr. Caldwell said the bank’s nonperforming assets were probably rising in the fourth quarter.
Sun American officials did not return calls. The shares were at $5 in midday trading Thursday.
