2nd Quarter Earnings Up 75% at Annapolis Bancorp.Business Editors ANNAPOLIS Annapolis, river, Canada Annapolis, river, c.75 mi (120 km) long, rising in W Nova Scotia, Canada, and flowing SW past Annapolis Royal to Annapolis Basin, an arm of the Bay of Fundy. , Md.--(BUSINESS WIRE)--July 24, 2003 Annapolis Bancorp, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ANNB), parent company of BankAnnapolis, today announced net income of $402,000 ($0.13 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share) for the 2nd quarter of 2003, up from $230,000 ($0.07 per basic and diluted share) in the 2nd quarter of last year. Net income for the six months ended June June: see month. 30, 2003 totaled $726,000 ($0.24 per basic and diluted share) compared to $375,000 ($0.12 per basic and diluted share) for the same period in 2002. "Profitability continues to improve at Annapolis Bancorp despite an ever-tightening net interest margin," said Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a M. Lerner Ler·ner , Alan Jay 1918-1986. American playwright and lyricist. He wrote a number of musicals with the composer Frederick Loewe, including Brigadoon (1947) and My Fair Lady (1956). Noun 1. . "By steadily growing our loan portfolio and consistently increasing noninterest income, we have been able to overcome the effects of margin compression--and we've we've Contraction of we have. we've have done so while maintaining sound asset quality and delivering unsurpassed customer service." Total assets expanded to $238.5 million at June 30, 2003 from $200.1 million at December December: see month. 31, 2002. The $38.4 million increase resulted largely from the generation of $30.4 million in new deposits and the issuance of $5.0 million of floating rate trust preferred securities in the 1st quarter. The bulk of the deposit growth came in NOW accounts (up $10.8 million or 43.4%), certificates of deposit (up $10.5 million or 16.1%), and demand deposit accounts (up $5.0 million or 16.9%). The influx of deposits helped fund $7.7 million in year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. loan growth, while the balance was invested in securities (up $15.6 million or 77.2%) and federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve sold (up $12.5 million or 85.6%). Total gross loans grew at a pace of 5.2% in the first six months of 2003. New loan production remained robust, but was offset by some unusually large loan payoffs in the 2nd quarter. "Strategically, we elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. not to fix longer-term rates at today's historically low levels," said Lerner. "As a result, we did lose some loan business to aggressive competitors who were apparently willing to take on greater interest rate risk." "We may have lost a few transactions, but the relationships remain intact," Lerner added. "Our customers understand that the Bank has to act in its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. economic interest, and we respect the fact that our customers must do the same, even if it occasionally results in forgone lending opportunities." Portfolio growth since December 31, 2002 came mainly in commercial loans (up $5.1 million or 15.7%) and installment loans Noun 1. installment loan - a loan repaid with interest in equal periodic payments installment credit consumer credit - a line of credit extended for personal or household use loan - the temporary provision of money (usually at interest) (up $4.1 million or 28.5%). Construction loan balances fell by $5.8 million or 23.2% in the same six month period as weather conditions delayed new starts and inhibited in·hib·it tr.v. in·hib·it·ed, in·hib·it·ing, in·hib·its 1. To hold back; restrain. See Synonyms at restrain. 2. To prohibit; forbid. 3. progress on existing projects. At the end of the 2nd quarter, total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. amounted to $16.0 million, up 6.0% from $15.1 million at December 31, 2002. Book value per share at June 30, 2003 was $5.29. Interest income on loans improved by $226,000 or 9.8% in the 2nd quarter over the same period last year, as increased volume counteracted a reduction in overall yield on the loan portfolio (6.64% vs. 7.08% in the 2nd quarter of 2002). Investment income held steady compared to the same quarter last year, as did total interest expense, and as a result, net interest income was up by $231,000 or 13.0% despite further contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in the net interest margin (3.93% vs. 4.27% in the 2nd quarter of 2002). Net recoveries in the 2nd quarter of $18,000 precluded the need to record a provision for loan losses. The allowance for credit losses at June 30, 2003 stood at $1,605,000 (1.04% of total gross loans) and provided 54:1 coverage of nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. of $30,000 (0.02% of total gross loans). Noninterest income grew at a double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. rate for the ninth consecutive quarter. Up $164,000 or 45.7% compared to the 2nd quarter of 2002, noninterest income continued to benefit from the booming housing and refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. markets, as fees earned on brokered mortgage loans rose by 186.0%. Continuing growth in transaction-based service charges generated one-third of the increase in noninterest income. Noninterest expense for the quarter rose by $124,000 or 6.9% compared to the three month period ended June 30, 2002. For the six months ended June 30, 2003, total interest income increased by $459,000 or 8.8% compared to the same period in 2002. Total interest expense decreased by $32,000 or 1.8%, resulting in a $491,000 or 14.1% improvement in net interest income before a provision for credit losses of $25,000. Noninterest income rose by $294,000 or 43.4% and noninterest expense was up $206,000 or 5.8%. BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through six community banking offices located in Anne Anne, British princess Anne (Anne Elizabeth Alice Louise), 1950–, British princess, only daughter of Queen Elizabeth II and Prince Philip, duke of Edinburgh. She was educated at Benenden School. Arundel
Coordinates: and Queen Anne's Counties in Maryland This is a list of the twenty-four counties and county-equivalents in the U.S. state of Maryland. Though an independent city rather than a county, the City of Baltimore is considered the equal of a county for most purposes and is a county-equivalent. . The bank's headquarters building and main branch are located at 1000 Bestgate Road, directly across from the Annapolis Mall The Annapolis Mall, officially known as Westfield Annapolis, is a shopping mall owned by The Westfield Group, and is located near U.S. Route 50 and Interstate 97 in Annapolis, Maryland. . Certain statements contained in this release, including without limitation, statements containing the words "believes," "plans," "expects," "anticipates," and words of similar import, constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements.
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
as of June 30, 2003 and December 31, 2002
(in thousands)
(unaudited) (audited)
June 30, December 31,
2003 2002
-------- --------
Assets
Cash and due $ 10,166 $ 6,725
Federal funds sold 27,157 15,529
Investments 35,765 20,207
Loans, net of allowance 153,403 145,735
Acc int rec 736 732
Def inc taxes 322 363
Premises and equip 6,983 7,114
Cash surrender value of
BOLI 3,296 3,223
Other assets 658 488
-------- --------
Total Assets $238,486 $200,116
======== ========
Liabilities and
Stockholders' Equity
Deposits
Noninterest bearing $ 34,560 $ 29,534
Interest bearing 159,855 134,455
-------- --------
Total deposits 194,415 163,989
Sec under agree
to repurchase 12,445 10,500
Other borrowed funds 10,000 10,000
Junior subordinated
debentures 5,000 -
Acc int & acc exp 663 549
-------- --------
Total Liabilities 222,523 185,038
Stockholders' Equity
Common stock 30 30
Paid in capital 12,885 12,859
Undivided profits 2,756 2,030
Comprehensive income 292 159
-------- --------
Total Equity 15,963 15,078
Total Liabilities and
-------- --------
Equity $238,486 $200,116
======== ========
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Three and Six Month Periods Ended June 30, 2003 and 2002
(unaudited)
(in thousands, except Per Share data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
--------------------- ---------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Interest income
Loans $ 2,539 $ 2,313 $ 5,059 $ 4,466
Investments 288 301 482 649
Federal funds sold 67 53 122 90
---------- ---------- ---------- ----------
Total int inc 2,894 2,667 5,663 5,205
Interest expense
Deposits 657 748 1,312 1,540
Sec sold under
agree to repurch 51 61 100 117
Borrowed funds 114 75 226 75
Junior debentures 58 - 61 -
---------- ---------- ---------- ----------
Total int exp 880 884 1,699 1,732
Net int inc 2,014 1,783 3,964 3,473
Provision - - 25 -
---------- ---------- ---------- ----------
Net int inc after prov 2,014 1,783 3,939 3,473
NonInterest income
Service charges 268 210 497 401
Mortgage banking 143 50 249 103
Other fee income 112 99 226 174
---------- ---------- ---------- ----------
Total nonint inc 523 359 972 678
NonInterest expense
Personnel 1,028 970 2,092 1,931
Occ and equip 241 235 486 460
Data processing exp 209 193 412 388
Other operating exp 438 394 796 801
---------- ---------- ---------- ----------
Total nonint exp 1,916 1,792 3,786 3,580
Income before taxes 621 350 1,125 571
Income tax expense 219 120 399 196
---------- ---------- ---------- ----------
Net income $ 402 $ 230 $ 726 $ 375
========== ========== ========== ==========
Basic EPS $ 0.13 $ 0.07 $ 0.24 $ 0.12
========== ========== ========== ==========
Diluted EPS $ 0.13 $ 0.07 $ 0.24 $ 0.12
========== ========== ========== ==========
Book value per share $ 5.29 $ 4.71 $ 5.29 $ 4.71
========== ========== ========== ==========
Avg fully diluted shares 3,051,361 3,030,413 3,048,052 3,024,391
========== ========== ========== ==========
Return on avg assets 0.71% 0.50% 0.68% 0.43%
Return on avg equity 10.21% 6.54% 9.43% 5.40%
Net interest margin 3.93% 4.27% 4.07% 4.34%
Allow for credit losses
to loans 1.04% 1.15% 1.04% 1.15%
Nonperforming to gross
loans 0.02% 0.15% 0.02% 0.15%
Net charge-offs to avg
loans (0.01%) (0.01%) 0.00% 0.01%
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