3rd Quarter Earnings Top Previous Record 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)--Oct. 31, 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 $438,000 ($0.15 per basic share and $0.14 per 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 3rd quarter of 2003, surpassing a previous record for quarterly earnings set in the 4th quarter of 2002. Compared to the 3rd quarter of last year, net income rose by $15,000 or 3.5%. Net income through the first nine months of 2003 totaled $1,164,000 ($0.39 per basic share and $0.38 per diluted share), up 45.9% from $798,000 ($0.27 per basic share and $0.26 per diluted share) in the same period of 2002. "Despite continued pressure on our net interest margin and a deceleration deceleration /de·cel·er·a·tion/ (de-sel?er-a´shun) decrease in rate or speed. early deceleration in the pace of recent growth that was inevitable, we still managed to post record earnings for the quarter," 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. . Noninterest income has been a major component of the Bank's improved profitability, and that trend continued in the 3rd quarter. Demand deposit account service charges were up by 57.7% compared to the 3rd quarter of last year due to growth in the number of accounts and a new fee structure implemented in June June: see month. . Fees earned on brokered mortgage loans improved by 53.1% as the boom in the refinancing Refinancing An extension and/or increase in amount of existing debt. market continued through much of the 3rd quarter. With interest rates continuing to hover An option in Microsoft Internet Explorer that removes the permanent underline from hypertext links. The underline displays automatically and only when the cursor is placed over (hovers over) the link. Hover is available in Tools/Internet Options/Advanced/Underline links. at record low levels, the bank's net interest margin contracted to 3.75% in the 3rd quarter from 4.27% in the corresponding period of 2002. Net interest income improved by $80,000 or 4.1%, however, as higher interest-earning asset balances more than compensated for the compressed net interest margin. Average interest-earning assets in the third quarter of 2003 were $213.4 million compared to $180.0 million in the same period of 2002. As a result, total interest income for the three months ended September September: see month. 30, 2003 increased slightly by $14,000 or 0.5% over the same period last year despite a significantly lower yield on interest-earning assets (5.33% vs. 6.29%). The bank's cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities dropped as well, although not as steeply, to 1.85% from 2.37% in the third quarter of 2002. Total interest expense fell by $66,000 or 7.2% for the quarter, even though average interest-bearing liabilities for the period increased by 19.0% to $182.0 million from $153.0 million in the 3rd quarter of last year. Total assets at September 30, 2003 amounted to $231.3 million, up $31.2 million from year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002 but down $7.2 million from June 30, 2003. After an influx of deposits in the first half of this year, the bank invested its excess liquidity primarily in 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. At the end of the 2nd quarter, overnight investment balances totaled $27.2 million and carried a yield of less than 1.00%. With the Bank's overall cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. at 1.57% in the 3rd quarter, management took steps to relieve some of this excess liquidity and the negative spread associated with it. Deposit pricing was adjusted to allow for some run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → , and approximately $10.6 million of overnight investments was shifted into higher-yielding investment securities. By September 30, 2003, federal funds sold had been reduced to $10.5 million and total deposits declined by $5.9 million. Loan balances fell by $0.6 million in the 3rd quarter, with payoffs from unusually high refinancing activity and slackened summertime demand offsetting new loans booked in the period. In addition, several real estate loan closings scheduled for the end of September were delayed as a result of the need to reinspect Re`in`spect´ v. t. 1. To inspect again. the properties after Hurricane Isabel This article is about the 2003 hurricane; there was also a Tropical Storm Isabel during the 1985 Atlantic hurricane season Hurricane Isabel was the costliest and deadliest hurricane in the 2003 Atlantic hurricane season. . Total gross loans at September 30, 2003 amounted to $154.4 million compared to $147.3 million at December December: see month. 31, 2002. "While net loan growth was essentially flat in the 3rd quarter, thus far we believe there is evidence of renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. demand in the current period," Lerner said. "In fact, total loan balances have already increased by $7.9 million since September 30, 2003." At the end of the 3rd 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 September 30, 2003 was $5.31. Net recoveries in the 3rd quarter of $6,900 once again precluded the need to record a provision for credit losses. The allowance for credit losses at September 30, 2003 stood at $1,612,000 (1.04% of total gross loans) and provided greater than 7:1 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 $216,000 (0.14% 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 tenth consecutive quarter, up $124,000 or 27.1% compared to the 3rd quarter of 2002. Noninterest expense for the period rose by $168,000 or 9.6% compared to the same quarter last year, driven by a $156,000 or 16.6% increase in compensation expense which reflected staff additions in financial analysis and business development as well as general merit increases. For the nine months ended September 30, 2003, total interest income increased by $473,000 or 5.9% compared to the same period in 2002. Total interest expense decreased by $98,000 or 3.7%, resulting in a $571,000 or 10.6% improvement in net interest income before a provision for credit losses of $25,000. Noninterest income rose by $418,000 or 36.8% and noninterest expense was up $374,000 or 7.0%. 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 by such forward-looking statements.
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
as of September 30, 2003 and December 31, 2002
($000)
(Unaudited) (Audited)
September 30, December 31,
2003 2002
------------- ------------
Assets
Cash and due $ 9,294 $ 6,725
Federal funds sold 10,497 15,529
Investments 46,437 20,207
Loans, net of allowance 152,779 145,735
Acc int rec 880 732
Def inc taxes 528 363
Premises and equip 6,934 7,114
Investment in BOLI 3,326 3,223
Other assets 616 488
---------- ----------
Total Assets $ 231,291 $ 200,116
========== ==========
Liabilities and
Stockholders' Equity
Deposits
Noninterest bearing $ 34,816 $ 29,534
Interest bearing 153,673 134,455
---------- ----------
Total deposits 188,489 163,989
Sec under agree
to repurchase 10,861 10,500
Other borrowed funds 10,000 10,000
Junior subordinated debentures 5,000 -
Acc int & acc exp 926 549
---------- ----------
Total Liabilities 215,276 185,038
Stockholders' Equity
Common stock 30 30
Paid in capital 12,889 12,859
Retained Earnings 3,194 2,030
Comprehensive income (98) 159
---------- ----------
Total Equity 16,015 15,078
---------- ----------
Total Liabilities and Equity $ 231,291 $ 200,116
========== ==========
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Three and Nine Month Periods Ended September 30, 2003 and 2002
(Unaudited)
(In thousands, except Per Share data)
For the three months For the nine months
ended September 30, ended September 30,
----------------------- -----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Interest Income
Loans $ 2,451 $ 2,494 $ 7,510 $ 6,960
Investments 367 290 849 946
Federal funds sold 49 69 171 151
---------- ---------- ---------- ----------
Total int inc 2,867 2,853 8,530 8,057
Interest expense
Deposits 634 740 1,946 2,279
Sec sold under
agree to repurch 47 59 147 176
Borrowed funds 115 115 341 190
Junior debentures 52 - 113 -
---------- ---------- ---------- ----------
Total int exp 848 914 2,547 2,645
Net int inc 2,019 1,939 5,983 5,412
Provision - - 25 -
---------- ---------- ---------- ----------
Net int inc after
prov 2,019 1,939 5,958 5,412
NonInterest Income
Service charges 349 253 846 654
Mortgage banking 124 81 373 184
Other fee income 108 123 334 297
---------- ---------- ---------- ----------
Total nonint inc 581 457 1,553 1,135
NonInterest Expense
Personnel 1,093 937 3,185 2,867
Occ and equip 260 253 746 396
Data processing exp 213 194 625 151
Other operating exp 357 371 1,153 1,921
---------- ---------- ---------- ----------
Total Nonint Exp 1,923 1,755 5,709 5,335
Income before taxes 677 641 1,802 1,212
Income tax expense 239 218 638 414
---------- ---------- ---------- ----------
Net income $ 438 $ 423 $ 1,164 $ 798
====================== ========== ==========
Basic EPS $ 0.15 $ 0.14 $ 0.39 $ 0.27
========== ========== ========== ==========
Diluted EPS $ 0.14 $ 0.14 $ 0.38 $ 0.26
========== ========== ========== ==========
Book value per share $ 5.31 $ 4.86 $ 5.31 $ 4.86
========== ========== ========== ==========
Avg fully diluted
shares 3,059,464 3,023,295 3,053,428 3,018,507
========== ========== ========== ==========
Return on Avg Assets 0.74% 0.86% 0.70% 0.59%
Return on Avg Equity 10.92% 11.59% 9.94% 7.53%
Net interest margin 3.75% 4.27% 3.95% 4.32%
Allow for credit
losses to loans 1.04% 1.07% 1.04% 1.07%
Nonperforming to gross
loans 0.14% 0.13% 0.14% 0.13%
Net charge-offs to avg
loans 0.00% 0.02% (0.01%) 0.02%
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