4th Quarter Net Income Tops $1 Million at Annapolis Bancorp; Record Full-Year Earnings Approach $3 Million.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. -- Quarterly earnings at 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, exceeded $1 million for the first time in Company history, 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. announced today. For the three months ended December December: see month. 31, 2005, the Company posted net income of $1.01 million ($0.25 per basic and $0.24 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), a 33.9% increase over 4th quarter net income of $755,000 ($0.19 per basic and $0.18 per diluted share) in 2004. Net income for the year ended December 31, 2005 totaled $2.98 million ($0.73 per basic and $0.71 per diluted share), up 37.2% from 2004 net income of $2.17 million ($0.54 per basic and $0.52 per diluted share). "This is the fourth consecutive year of record earnings for Annapolis Bancorp," said Lerner. "It is also the fourth consecutive year in which we can report substantial improvement in each of the key metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. used to measure a bank's financial performance. Return on average assets rose to 0.97% from 0.84%, return on average equity climbed to 15.04% from 12.41%, and the efficiency ratio improved to 63.02% from 68.24% in 2004." Record 4th quarter earnings were fueled by improved yields on the loan and investment portfolios and a gain on the prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. of $10 million in Federal Home Loan Bank debt. In the three months ended December 31, 2005, the overall yield on interest-earning assets increased to 6.19% from 5.54% in the same period of 2004. The average loan yield rose to 7.08% from 6.27%, while the average return on investment securities improved to 4.19% from 3.79%. As a result, total interest income in the 4th quarter of 2005 increased by $813,000 or 22.1% over the same period in the prior year. Total interest expense in the final quarter of 2005 increased by $483,000 or 44.6% compared to the same period in 2004, as the overall cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities rose to 2.55% from 1.93%. The cost of money market deposits jumped to 2.52% in the 4th quarter of 2005 from 1.09% in the 4th quarter of 2004, driven by steadily rising rates throughout the year on the bank's indexed money fund. In the same time frame, average money market account balances grew by $15.4 million or 38.5%. Fourth quarter net interest income rose by $330,000 or 12.7% compared to the 4th quarter of 2004. Noninterest income improved by $183,000 or 35.7% due in large part to a $201,000 one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain associated with the prepayment of a $10 million Federal Home Loan Bank advance. Excluding this nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. item, noninterest income actually fell by $18,000 or 3.5% in the 4th quarter due to lower transaction-based fees on deposit products. Noninterest expense rose by $136,000 or 7.4% compared to the same quarter in 2004. Total assets grew to $304.9 million at 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. 2005, a 7.3% increase over total assets of $284.2 million at December 31, 2004. Most of the growth came in the investment securities portfolio, which expanded to $73.9 million at December 31, 2005 from $54.4 million at year-end 2004, a 35.8% increase. After experiencing strong growth in the 1st quarter followed by contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in the 2nd and 3rd, total gross loans ended the year up $0.5 million or 0.2% from year-end 2004 levels. "Our lending activities were disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. in the middle of the year by aggressive price competition in our marketplace and by our own reluctance to respond to the new realities of a flattened flat·ten v. flat·tened, flat·ten·ing, flat·tens v.tr. 1. To make flat or flatter. 2. To knock down; lay low: The boxer was flattened with one punch. yield curve," said Lerner. "The good news is that we recovered in the 4th quarter by adding $4.7 million to the loan portfolio, which equates to an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. growth rate of 9.2%." Total deposit balances increased by $23.1 million or 10.2% in 2005. The bulk of the growth came in core deposit categories, with demand deposits up by $4.0 million or 9.9%, NOW accounts up by $5.4 million or 16.5%, and money market account balances up by $14.6 million or 34.2%. Repurchase agreement Repurchase agreement An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. balances also rose by $5.1 million or 64.6% from December 31, 2004 levels. Early in the 4th quarter, the bank 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. to reduce excess cash balances by repaying a $10 million advance from the Federal Home Loan Bank prior to its maturity. This decision contributed to the decline in total assets from $322.2 million reported at September September: see month. 30, 2005. At year-end 2005, 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 $21.0 million, up 12.3% from $18.7 million at December 31, 2004. Book value per basic share at December 31, 2005 was $5.15. Average interest-earning assets increased in 2005 by 19.2% to $286.7 million from $240.5 million in 2004, and the overall yield on those assets improved to 5.97% from 5.51%. As a result, total interest income improved by $3,844,000 or 29.0% compared to 2004. Total interest expense in 2005 increased by $1,992,000 or 54.7% as average interest-bearing liabilities grew by $41.2 million or 20.4% and the cost of deposits and other borrowed funds rose to 2.32% from 1.80% in 2004. The Company'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. increased to 1.97% in 2005 from 1.51% in 2004. For the year ended December 31, 2005, the net interest margin held steady at its 2004 level of 4.00%. Net interest income improved by $1,852,000 or 19.3% due to higher average balances of interest-earning assets and interest-bearing liabilities. Despite a rising rate environment in 2005, improvement in the net interest margin did not materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. as competition intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: for local deposits driving up the bank's cost of funds, and unexpectedly low net loan production caused a shift in the asset mix toward lower yielding investment securities. After net charge-offs of $261,000 and a $442,000 provision for credit losses in 2005, the allowance for credit losses at December 31, 2005 stood at $2,012,000 (0.98% of total gross loans) compared to $1,832,000 (0.90% of total gross loans) at December 31, 2004. At year-end 2005, 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. amounted to $2,007,000 (0.98% of total gross loans). Noninterest income improved by $185,000 or 9.1% in 2005. Without the one-time gain realized on the prepayment of $10 million in Federal Home Loan Bank debt, noninterest income in 2005 would have decreased by $16,000 or 0.8% when compared to the prior year. With the exception of VISA See VESA. check card fees, all other transaction-based service charges fell from their 2004 levels. Offsetting this decline was a 37.7% increase in fees earned on brokered mortgage loans. Noninterest expense in 2005 rose by $676,000 or 8.5% compared to 2004. Marketing expense increased by $156,000 or 64.5% as the bank undertook several marketing initiatives including new print and cable advertising campaigns. Legal and professional expense, a large portion of which was related to the collection of nonperforming loans, rose by $111,000 or 72.1%. (Some of this amount may be recoverable in future periods.) Occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and equipment expense increased in 2005 by $143,000 or 14.9% as the Company incurred costs associated with occupying oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. a temporary facility while a new Kent Island branch was being constructed. Compensation expense also increased by $221,000 or 4.8%. 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. . In December of 2005, the bank acquired property in Odenton, Maryland Odenton is a census-designated place (CDP) in Anne Arundel County, Maryland, United States. The population was 20,534 at the 2000 census. The town is named after former Governor of Maryland, Oden Bowie. on which it intends to build its seventh branch. The new site in western Anne Arundel County is located in the heart of the Odenton Town Center The Odenton Town Center is an area of Anne Arundel County, Maryland, USA, designated in official plans for urban development. The Odenton Town Center has been planned as a Town Center since 1968. where substantial residential and commercial growth is expected over the next 5 to 10 years with the planned expansion of nearby Fort George Fort George, river, c.480 mi (770 km) long, rising in Lake Nichicun, E Que., Canada. It flows W into James Bay at Fort George, a Hudson's Bay Company trading post. Meade. 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 December 31, 2005 and December 31, 2004
($000)
(Unaudited) (Audited)
December 31, December 31,
2005 2004
------------ ------------
Assets
Cash and due $ 9,603 $ 7,455
Federal funds sold 3,400 7,213
Investments 73,902 54,440
Loans, net of allowance 202,568 202,296
Accrued interest receivable 1,423 1,061
Deferred income taxes 1,128 490
Premises and equipment 8,550 6,998
Investment in BOLI 3,638 3,510
Other assets 704 732
------------ ------------
Total Assets $ 304,916 $ 284,195
============ ============
Liabilities and Stockholders' Equity
Deposits
Noninterest bearing $ 43,448 $ 39,473
Interest bearing 206,501 187,361
------------ ------------
Total deposits 249,949 226,834
Securities under agreement to repurchase
12,986 7,901
Other borrowed funds 15,000 25,000
Junior subordinated debentures 5,000 5,000
Accrued expenses 1,022 798
------------ ------------
Total Liabilities 283,957 265,533
Stockholders' Equity
Common stock 41 41
Paid in capital 13,171 12,986
Retained Earnings 8,858 5,877
Comprehensive income (1,111) (242)
------------ ------------
Total Equity 20,959 18,662
------------ ------------
Total Liabilities and Equity $ 304,916 $ 284,195
============ ============
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Three and Twelve Month Periods Ended
December 31, 2005 and 2004
(Unaudited)
(In thousands, except per share data)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Interest Income
Loans $ 3,593 $ 3,178 $ 14,086 $ 11,596
Investments 749 416 2,446 1,507
Federal funds sold 156 91 572 157
---------- ---------- ---------- ----------
Total interest income 4,498 3,685 17,104 13,260
---------- ---------- ---------- ----------
Interest expense
Deposits 1,218 770 4,222 2,629
Securities sold under
agreements to
repurchase 91 50 290 159
Borrowed funds 165 196 794 617
Junior debentures 91 66 327 236
---------- ---------- ---------- ----------
Total interest expense 1,565 1,082 5,633 3,641
---------- ---------- ---------- ----------
Net interest income 2,933 2,603 11,471 9,619
Provision 149 106 442 294
---------- ---------- ---------- ----------
Net interest income
after provision 2,784 2,497 11,029 9,325
---------- ---------- ---------- ----------
NonInterest Income
Service charges 297 332 1,207 1,309
Mortgage banking 74 66 329 239
Other fee income 325 115 674 477
---------- ---------- ---------- ----------
Total noninterest
income 696 513 2,210 2,025
---------- ---------- ---------- ----------
NonInterest Expense
Personnel 1,026 1,089 4,807 4,586
Occupancy and equipment 269 249 1,105 962
Data processing expense 232 205 903 874
Other operating expense 447 295 1,807 1,524
---------- ---------- ---------- ----------
Total noninterest
expense 1,974 1,838 8,622 7,946
---------- ---------- ---------- ----------
Income before taxes 1,506 1,172 4,617 3,404
Income tax expense 495 417 1,636 1,231
---------- ---------- ---------- ----------
Net income $ 1,011 $ 755 $ 2,981 $ 2,173
========== ========== ========== ==========
Basic EPS $ 0.25 $ 0.19 $ 0.73 $ 0.54
========== ========== ========== ==========
Diluted EPS $ 0.24 $ 0.18 $ 0.71 $ 0.52
========== ========== ========== ==========
Book value per share $ 5.15 $ 4.61 $ 5.15 $ 4.61
========== ========== ========== ==========
Average fully diluted
shares 4,188,859 4,153,137 4,186,754 4,139,734
========== ========== ========== ==========
Annapolis Bancorp, Inc. and Subsidiaries
Financial Ratios and Average Balance Highlights
(In thousands)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Performance Ratios
(annualized)
Return on average
assets 1.29% 1.06% 0.97% 0.84%
Return on average
equity 19.41% 16.32% 15.04% 12.41%
Average equity to
average assets 6.69% 6.50% 6.46% 6.73%
Net interest margin 4.04% 3.92% 4.00% 4.00%
Efficiency ratio 54.40% 58.99% 63.02% 68.24%
Other Ratios
Allow for credit
losses to loans 0.98% 0.90% 0.98% 0.90%
Nonperforming to
gross loans 0.98% 0.29% 0.98% 0.29%
Net charge-offs to
avg loans 0.07% 0.05% 0.13% 0.05%
Tier 1 capital ratio 12.3% 11.1% 12.3% 11.1%
Total capital ratio 13.2% 12.0% 13.2% 12.0%
Average Balances
Assets $ 309,106 $ 283,185 $ 306,691 $ 258,771
Earning assets $ 288,141 $ 264,505 $ 286,726 $ 240,471
Loans, gross $ 201,205 $ 201,628 $ 208,280 $ 189,130
Interest Bearing
Liabilities $ 243,495 $ 222,657 $ 242,909 $ 201,723
Stockholders' Equity $ 20,672 $ 18,418 $ 19,820 $ 17,406
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