Atlantic Bank Announces Increased Earnings.BOSTON Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. , Mass.--(BUSINESS WIRE)--Oct. 20, 1998--Atlantic Bank (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 :ATLB) (the "Company") announced consolidated net income available to common stockholders for the quarter ended September September: see month. 30, 1998 of $1,815,000, a 24% increase compared to $1,459,000 for the same quarter of 1997. On a 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. basis, earnings per share were $0.41 for the quarter ended September 30, 1998 compared to $0.34 for the quarter ended September 30, 1997. Consolidated net income available to common stockholders for the nine months ended September 30, 1998 was $5,343,000, a 31% increase compared to $4,090,000 for the same period of 1997. Also on a diluted basis, earnings per share were $1.20 for the nine month period ended September 30, 1998 compared to $.94 for the same period in 1997. "We are pleased with the level of both our quarterly and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. earnings," commented Nicholas Nicholas, Russian grand duke Nicholas (Nikolai Nikolayevich) (nyĭkəlī` nyĭkəlī`əvĭch), 1856–1929, Russian grand duke and army officer; first cousin of Czar Alexander III and grandson of Czar W. Lazares, Chairman. "The Company's purchased loan program continued to expand and its strong performance was the primary reason for these favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results. Net interest income increased to $16,956,000 for the nine months ended September 30, 1998, a $3,213,000 or 23% increase over net interest income for the same period of 1997. During the third quarter of 1998, we acquired loans with outstanding principal balances of $45,291,000 at a price of $39,365,000. This brings the total principal balance of loan acquisitions during the first nine months of 1998 to $145,483,000 and the total price to $126,965,000 compared to acquisitions of $125,819,000 at a price of $98,401,000 for the first nine months of 1997." "The widespread decline in liquidity in the capital markets may work to our advantage," Mr. Lazares continued. "A continuation of this situation could reduce the number of non-bank competitors bidding on loan sales and may result in increased investment opportunities at higher yields." The Company's 1998 results from banking operations were partially offset by the operating results of its newly formed leasing subsidiary, Dolphin dolphin, fish dolphin, large, swift game fish, Coryphaena hipparus, also called dorado. It is of nearly worldwide distribution in warm waters. Capital Corporation ("Dolphin"). Dolphin's revenue increased by $1,045,000 to $1,117,000 for the quarter ended September 30, 1998 as compared to the prior quarter. In addition, its pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss was $781,000, down from $1,107,000 in the previous quarter. Its year-to-date pre-tax loss is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the relatively high level of operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. incurred to establish the sales and support systems necessary to support its expected growth. In addition, Dolphin currently provides for estimated lease losses and records a liability for estimated losses on leases sold with recourse The right of an individual who is holding a Commercial Paper, such as a check or promissory note, to receive payment on it from anyone who has signed it if the individual who originally made it is unable, or refuses, to tender payment. . Such estimates amounted to $694,000 for the nine-month period ended September 30, 1998. Dolphin was established on May 1, 1998 and is located in Moberly, Missouri Moberly is a city in Randolph County, Missouri, United States. The population was 11,945 at the 2000 census. The city was incorporated 1868. The Moberly Micropolitan Statistical Area consists of Randolph County. . It provides lease financing to individuals and businesses for the acquisition of computers and business equipment. After focusing its start-up Start-up The earliest stage of a new business venture. efforts on developing a sufficient lease origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real platform, its sales force originated $17.5 million of leases through September 30, 1998. In addition, Dolphin acquired a $1.1 million portfolio of performing leases and will continue to explore similar acquisition opportunities in the future. Dolphin has the option of selling the leases it originates and generating non-interest income, or retaining the leases for inclusion in the Company's loan and lease portfolio. During the third quarter Dolphin sold approximately $10.0 million of leases, which it continues to service. At September 30, 1998, in addition to the $8.3 million of leases held in its portfolio, Dolphin serviced approximately $46 million of leases for others. It is expected that Dolphin will be accretive to earnings in 1999. Richard Wayne Dr. Richard Wayne (April 4, 1804 – June 27, 1858) served as mayor of Savannah, Georgia for four terms: 1844 - 1845, 1848 - 1851, 1852 - 1853 and 1857 - 1858. He died while in office.[1] Wayne was the first mayor of Savannah elected by its citizens. , President, commented that "We believe that the development and expansion of our equipment leasing Equipment Leasing is a financing option to lease equipment for a certain amount of time. Leasing Benefits
Claims on real assets. it generates will diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. the composition of our asset base and are expected to be sufficiently marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. to broaden our risk management opportunities. As evidenced by Dolphin's recent agreement to provide lease financing to customers of CompUSA CompUSA, Inc. is a retailer and reseller of consumer electronics, technology products and computer services. CompUSA serves consumer retail, small-to-medium businesses, corporate, government and education customers. on a national basis, we will continue to explore and develop additional leasing programs and sales initiatives to establish Dolphin as a key player in the small ticket leasing market." Mr. Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. concluded "We are pleased with the Company's performance and look forward to continued success in the future." A conference call will take place at 11am today to respond to questions. The dial-in number is 1-800-857-0250 and the password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. is "Atlantic." This news release contains 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. regarding future events or financial performance. These statements are only predictions and actual events or results may differ materially. Investors should refer to the documents that the Company files from time to time with the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. , specifically the cautionary statement identifying certain factors that could effect future results included in the Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial section of its most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . An analysis of selected consolidated results for the three and nine-month periods ended September 30, 1998 follows. Net interest income for the three months ended September 30, 1998 increased by $765,000 compared to the same period in 1997. Interest income increased to $11,107,000, a $2,834,000 or 34.3% increase over the same period in 1997, while interest expense increased to $5,440,000, an increase of $2,069,000 or 61.4% compared to the same period in 1997. While the 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. declined during 1998, the Company's average deposit base increased in anticipation of funding loan acquisitions. Net interest income for the nine months ended September 30, 1998 increased by $3,213,000 compared to 1997. Interest income increased to $31,843,000, an $8,705,000 or 37.6% increase over the same period in 1997, while interest expense increased to $14,887,000, an increase of $5,492,000 or 58.5% compared to the same period in 1997. The provision for loan and lease losses amounted to $223,000 for the three months ended September 30, 1998. No provision was required for the comparable period in 1997. The provision also increased to $819,000 for the nine months ended September 30, 1998 compared to $275,000 for the same period in 1997. Both increases are largely attributable to a provision for losses established on newly originated leases during 1998. The allowance for loan and lease losses as a percentage of originated loans and leases was 3.70% at September 30, 1998 compared to 3.22% at December December: see month. 30, 1997. Gains on sales of originated loans and leases for the nine months ended September 30, 1998 increased by $418,000 or 357% compared to the corresponding period of 1997. The increase is attributable to the sale of leases at a gross gain of $837,000, offset by an estimated provision for recourse liability of $302,000. Operating expenses increased by $1,330,000 for the three months ended September 30, 1998 or 51.3% and by $2,894,000 or 41.4% for the nine months ended September 30, 1998 compared to the corresponding period in 1997. Both increases were largely attributable to start-up and operating expenses of the Company's newly formed leasing subsidiary and the overall growth of the Company's banking operations. The effective tax rate decreased from 41.7% to 25.6% for the three months ended September 30, 1998 compared to the same period in 1997. For the nine months ended September 30, 1998 the effective tax rate decreased from 41.7% to 26.4% compared to the same period in 1997. The decline in the effective tax rate for 1998 is a result of the establishment of a real estate investment trust and the recognition of a historic tax credit relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the renovation of the Company's new main office building. The historic tax credit is being recognized ratably throughout 1998. Total assets amounted to $456.7 million at September 30, 1998, a $134.9 million or 41.9% increase over total assets of $321.8 million at December 31, 1997. Total loans and leases, net, amounted to $334.3 million at September 30, 1998, a 31.2% increase over total loans, net, of $254.8 million at December 31, 1997. 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. at September 30, 1998 was $39,614,000, or 8.7% of total assets compared to $31,801,000, or 9.9% of total assets at December 31, 1997. Atlantic Bank is a Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. chartered, FDIC FDICSee: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). insured trust company which conducts business from its executive and main offices in downtown Boston, a branch in Chestnut Hill, Massachusetts Located six miles west of downtown Boston, Massachusetts, Chestnut Hill is a wealthy suburban village notable for its stately old houses, scenic landscape, and the historic campus of Boston College. and through its leasing subsidiary in Moberly, Missouri. -0-
Atlantic Bank and Trust Company and Subsidiaries
Consolidated Financial Highlights
(Unaudited)
September 30, December 31,
1998 1997
(dollars in thousands, except per share data)
Total assets $ 456,662 $ 321,776
Purchased loans and leases: 321,115 227,147
Total discount (48,526) (40,184)
Allowance for loan losses (200) -
Originated loans and leases: 66,485 70,530
Allowance for loan and lease
losses (2,463) (2,273)
Unearned lease income (2,234) -
Net deferred loan and lease
cost (income) 97 (388)
Loans and leases, net 334,274 254,832
Investment securities 52,490 7,817
Deposits 411,475 285,522
Stockholders' equity 39,614 31,801
Non-performing assets:
Other real estate owned, net 2,107 3,591
Non-performing originated loans 1,046 450
Non-performing purchased loans 6,141 6,468
Total non-performing assets 9,294 10,509
Accruing loans past due ninety
days or more 130 -
Total non-performing assets to
total assets 2.04% 3.27%
Discount as a percentage of
purchased loans 15.11 17.69
Non-amortizing discount and
allowance for purchased loan
losses as a percentage of
purchased loans 10.03 9.74
Allowance for loan and lease
losses as a percentage of
originated loans and leases 3.70 3.22
Allowance for loan and lease
losses as a percentage of
non-performing originated loans
and leases 235.47 505.11
Book value per share $ 9.46 $ 7.84
Tangible book value per share 8.18 7.82
Shares outstanding, net 4,133,859 4,055,526
Capital ratios:
Tier 1 leverage 8.22% 10.55%
Tier 1 risk-based 9.68 11.98
Total risk-based 10.43 12.84
Atlantic Bank and Trust Company and Subsidiaries
Consolidated Operating Results and Related Financial Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(in thousands, except per share data)
Interest income $ 11,107 $ 8,273 $ 31,843 $ 23,138
Interest expense (5,440) (3,371) (14,887) (9,395)
Net interest income 5,667 4,902 16,956 13,743
Provision for loan and lease
losses (223) - (819) (275)
Net interest income, after
provision for loan and lease
losses 5,444 4,902 16,137 13,468
Gains on sales of originated loans
and leases 535 - 535 117
Gains on sales of securities 78 41 120 41
Other income 343 154 401 372
Operating expenses:
Other real estate owned income
(expense), net 406 (16) 1,013 272
Other operating expenses (4,331) (2,579) (10,890) (7,255)
Total operating expenses (3,925) (2,595) (9,877) (6,983)
Income before income taxes 2,475 2,502 7,316 7,015
Provision for income taxes (633) (1,043) (1,928) (2,925)
Net income 1,842 1,459 5,388 4,090
Preferred stock dividends (27) - (45) -
Net income available to common
stockholders $ 1,815 $ 1,459 $ 5,343 $ 4,090
Weighted average shares
outstanding:
Basic 4,134 4,336 4,099 4,298
Diluted 4,467 4,352 4,435 4,335
Earnings per share:
Basic $ 0.44 $ 0.34 $ 1.30 $ 0.95
Diluted 0.41 0.34 1.20 0.94
Financial ratios (annualized):
Return on average assets 1.73% 2.19% 1.87% 2.16%
Return on average stockholders'
equity 19.14% 19.64% 20.20% 19.64%
Atlantic Bank and Trust Company and Subsidiaries
Interest Rate and Loan and Lease Volume Analysis
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(dollars in thousands)
Weighted average yield/rate
(annualized):
Short-term investments 5.46% 5.46% 5.42% 5.32%
Securities available for sale 5.28 6.09 5.51 6.04
Purchased loan and lease
portfolio, net 13.41 16.39 14.39 16.58
Originated loan and lease
portfolio, net 10.79 11.69 11.02 11.50
Total interest-earning assets 11.38% 13.80% 11.92% 13.51%
Deposits 5.79% 5.94% 5.86% 5.85%
Interest rate spread 5.59% 7.86% 6.06% 7.66%
Net interest margin 5.81% 8.18% 6.35% 8.03%
Loan and lease volume:
Originations:
Loans $ 1,710 $ 4,824 $ 6,421 $ 8,887
Leases, net 10,838 - 17,474 -
Total originations, net 12,548 4,824 23,895 8,887
Acquisitions:
Loan and lease balances 46,370 37,557 146,562 125,819
Discount (5,926) (4,824) (18,518) (27,418)
Acquisitions, net 40,444 32,733 128,044 98,401
Total loan and lease
volume, net $ 52,992 $ 37,557 $151,939 $107,288
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