Bank of Oak Ridge Reports 2005 Net Income Up 115% From 2004.OAK RIDGE Oak Ridge, city (1990 pop. 27,310), Anderson and Roane counties, E Tenn., on Black Oak Ridge and the Clinch River; founded by the U.S. government 1942, inc. as an independent city 1959. , N.C. -- Bank of Oak Ridge (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 : BKOR) today reported net income for the 2005 fiscal year of $794,000 compared with $369,000 for the prior fiscal year, an increase of 115%. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.44 for 2005 compared with $0.21 for the prior year, an increase of 110%. For the fourth quarter of 2005, the Bank reported net income of $298,000 compared with $142,000 for the prior-year fourth quarter, an increase of 110%. Diluted earnings per share were $0.16 for the current quarter compared with $0.08 for last year, and increase of 100%. Bank of Oak Ridge President, Ron Noun 1. Ron - a Chadic language spoken in northern Nigeria Bokkos, Daffo West Chadic - a group of Chadic languages spoken in northern Nigeria; Hausa in the most important member Black, in commenting on the results, noted, "We are very pleased with our record quarterly and annual earnings for 2005. During 2005, we opened one new full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. banking office and one new independent brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. office, both in Greensboro Greensboro, city (1990 pop. 183,521), seat of Guilford co., N central N.C.; inc. 1829. The city is a financial, insurance, and distribution center for the region. . We also converted to a new in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. processing system in March of 2005 that will allow us to better meet our customer's needs in the future. With all this internal activity, assets still increased 28%, loans increased 40% and deposits increased 43%. Additionally, we improved on all measures of core profitability: return on average equity, return on average assets, net interest margin, and the efficiency ratio. Lastly, asset quality improved from its already strong 2004 levels. My thanks to all the great efforts of the employees and our Board of Directors in helping us to achieve these results." Operating Results for the years ended December December: see month. 31, 2005 and 2004 Net Income. Bank of Oak Ridge ("The Bank") recorded net income of $794,000 and $369,000 for the years ended December 31, 2005 and 2004, respectively. Net Interest Income The Bank's net interest income for fiscal year 2005 was $5.3 million, up $1.5 million, or 38.7 percent, from $3.8 million for fiscal year 2004. The increase reflects a 30% increase in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin combined with a 22 basis point improvement in the net interest margin to 3.62%. The improvement was a result of the Bank's asset sensitive balance sheet combined with a growing core deposit base. Provision for Loan Losses The provision for loan losses increased to $508,000 for 2005 compared to $441,000 for 2004. The allowance for loan losses to total loans was 1.15, 1.11 and 1.00 percent at December 31, 2005, 2004 and 2003, respectively. Non-interest Income Non-interest income totaled $1.3 million for 2005, up $308,000, or 30 percent, from $1.0 million for 2004. Increases from 2004 to 2005 in service charges on deposit accounts, mortgage loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. fees, investment and insurance commissions, and other non-interest income of $88,000, $83,000, $51,000, and $86,000, respectively, contributed to the increase in non-interest income. The continued growth in the Bank's loan and deposit portfolios generally lead to a higher level of non-interest income. Therefore, to a large extent, most of the increases were indirectly caused by the continued growth of the Bank's loan and deposit portfolios. Operating Results for the years ended December 31, 2005 and 2004 (continued) Non-interest Expense Non-interest expense totaled $5.3 million for 2005, up $1.3 million, or 32 percent, from $4.0 million for 2004. Salaries and employee benefits increased $676,000, or 34 percent, to $2.6 million in 2005. 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 $184,000, or 29 percent, to $821,000 in 2005. The increase in both salaries and employee benefits and occupancy and equipment reflected significant infrastructure expansion in 2005 with one new banking office and one new brokerage office, as well as the conversion to an in-house data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a system in March of 2005. The Bank added 14 new employees in 2005 bringing total full-time equivalent Full-time equivalent (FTE) is a way to measure a worker's involvement in a project, or a student's enrollment at an educational institution. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that the worker is only half-time. employees to 44. The decrease in data and items processing expenses of $95,000, or 28 percent, to $244,000 in 2005 is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to savings associated with the conversion to an in-house data processing system from an outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, data processing system. Professional and advertising expenses increased $175,000, or 28 percent, to $796,000 in 2005, primarily as a result of higher advertising expenses in 2005 compared to 2004. Other non-interest expenses increased $342,000, or 78 percent, to $780,000 in 2005, primarily as a result of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs associated with the conversion to an in-house data processing system in March of 2005 as well as the opening in Greensboro of the Bank's third banking office in August of 2005. Operating Results for the three months ended December 31, 2005 and 2004 Net Income. The Bank recorded net income of $298,000 and $142,000 for the three months ended December 31, 2005 and 2004, respectively. Net Interest Income The Bank's net interest income for the three months ended December 31, 2005 was $1.5 million, up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $413,000, or 39.1 percent, from $1.1 million for the same period of 2005. The increase reflects a 31% increase in average earning assets combined with a 20 basis point improvement in the net interest margin to 3.59%. The improvement was a result of the Bank's asset sensitive balance sheet combined with a growing core deposit base. Provision for Loan Losses The provision for loan losses was relatively unchanged at $118,000 for the three months ended December 31, 2005 compared to $111,000 for the same period in 2005. The allowance for loan losses to total loans was 1.15, 1.11 and 1.00 percent at December 31, 2005, 2004 and 2003, respectively. Non-interest Income Non-interest income totaled $397,000 for the three months ended December 31, 2005, up $146,000, or 58 percent, from $251,000 for 2004. Increases from 2004 to 2005 in service charges on deposit accounts, mortgage loan origination fees, investment and insurance commissions, and other non-interest income of $43,000, $34,000, $45,000, and $24,000, respectively, contributed to the increase in non-interest income. The continued growth in the Bank's loan and deposit portfolios generally lead to a higher level of non-interest income. Therefore, to a large extent, most of the increases were indirectly caused by the continued growth of the Bank's loan and deposit portfolios. Non-interest Expense Non-interest expense totaled $1.4 million for the three months ended December 31, 2005, up $396,000, or 38 percent, from $1.1 million for the same period in 2004. Salaries and employee benefits increased $191,000, or 37 percent, to $705,000 for the three months ended December 31, 2005. Occupancy and equipment expense increased $84,000, or 54 percent, to $241,000 for the three months ended December 31, 2005. The increase in both salaries and employee benefits and occupancy and equipment reflected significant infrastructure expansion in 2005 with one new banking office and one new brokerage office, as well as the conversion to an in-house data processing system in March of 2005. The Bank added 14 new employees in 2005 bringing total full-time equivalent employees to 44. The decrease in data and items processing expenses of $68,000, or 70 percent, to $29,000 for the three months ended December 31, 2005 is primarily attributable to savings associated with the conversion to an in-house data processing system from an outsourced data processing system. Professional and advertising expenses increased $42,000, or 27 percent, to $199,000 for the three months ended December 31, 2005, primarily as a result of higher advertising expenses in 2005 compared to 2004. Other non-interest expenses increased $147,000, or 115 percent, to $275,000 for the three months ended December 31, 2005, primarily as a result of one-time costs associated with the conversion to an in-house data processing system in March of 2005 as well as the opening in Greensboro of the Bank's third banking office in August of 2005. Comparison of Financial Condition at December 31, 2005 and December 31, 2004 The Bank's assets increased from $134.4 million to $172.5 million, or 28 percent, from December 31, 2004 to December 31, 2005, respectively. The majority of the net increase in assets between the two periods was caused by an increase in loans. Loans The Bank's lending operations continue to generate strong growth. Gross loans receivable totaled $122.6 million at the end of the 2005 fourth quarter, up $35.0 million, or 40 percent, from $87.6 million at the end of the 2004 fourth quarter. The average yield on loans was 7.45 percent for the 2005 fourth quarter, up 143 basis points from 6.02 percent for the same period in 2004. Investments Investments, which consist of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid deposits with banks, 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, securities available-for-sale and held-to-maturity, and Federal Home Loan Bank stock, totaled $39.6 million at the end of the 2005 fourth quarter, up $1.5 million, or 4.1 percent, from $38.1 million at the end of the 2004 fourth quarter. The average yield on investments was 4.12 percent for the 2005 fourth quarter, up 31 basis points from 3.81 percent for the same period in 2004. Deposits Deposits totaled $140.2 million at the end of the 2005 fourth quarter, up $42.5 million, or 44 percent, from $97.7 million at the end of the 2004 fourth quarter. The average cost of interest-bearing deposits was 3.28 percent for the 2005 fourth quarter, up 110 basis points from 2.18 percent for the same period in 2004. Short and Long-term Debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. Short and long-term debt totaled $16.2 million at the end of the 2005 fourth quarter, down $5.2 million, or 24 percent, from $21.4 million at the end of the 2004 fourth quarter. The average cost of other borrowings was 4.12 percent for the 2005 fourth quarter, up 198 basis points from 2.14 percent for the 2004 fourth quarter. 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. Stockholders' equity increased $272,000 from the end of the 2004 fourth quarter to the end of the 2005 fourth quarter, primarily as a result of net income of $794,000, offset by a decrease in the market value of the Bank's securities available-for-sale net of tax benefit of $521,000 for the year ended December 31, 2005. Stockholders' equity totaled $15.1 million at the end of the 2005 fourth quarter compared to $14.9 million at the end of the 2004 fourth quarter. 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. Nonaccrual and accruing loans greater than ninety days past due totaled $303,000 at December 31, 2005, down $373,000, or 55 percent, from $676,000 at December 31, 2004. Management believes that the loan loss reserves allocated to these loans are adequate to cover any anticipated losses. Nonperforming assets to total loans were 0.25 percent, 1.12 percent, and 0.20 percent at December 31, 2005, 2004, and 2003 respectively. About the Bank of Oak Ridge Bank of Oak Ridge, headquartered in Oak Ridge, NC, is a community bank with locations in Oak Ridge, Summerfield Summerfield is the name of some places in the United States of America:
Forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Information This earnings release contains certain 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. with respect to the financial condition, results of operations and business of the Bank. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Bank and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like "expect," "anticipate," "estimate" and "believe," variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, (1) competition in the Bank's markets, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than expected, resulting in, among other things, a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in credit quality and the possible impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of collectibility of loans, (4) legislative or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environment and tax laws, (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations and (7) other risks and factors identified in the Bank's other filings 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. . The Bank undertakes no obligation to update any forward-looking statements.
Bank of Oak Ridge
Financial Highlights (dollars in thousands, except share and per
share data)
Three months ended Years Ended
December 31, December 31,
------------------- -------------------
2005 2004 Change 2005 2004 Change
--------- --------- -------- --------- --------- ------
Income
Statement
Data:
Total interest
income $2,689 $1,635 64.5 % $8,958 $5,659 58.3 %
Total interest
expense 1,221 580 110.5 3,702 1,869 98.1
--------- --------- --------- ---------
Net interest
income 1,468 1,055 39.1 5,256 3,790 38.7
Provision for
loan losses 118 111 6.3 508 441 15.2
Non-interest
income 397 251 58.0 1,322 1,014 30.4
Non-interest
expense 1,449 1,053 37.6 5,276 3,994 32.1
Provision for
income taxes - - n/a - - n/a
--------- --------- --------- ---------
Net income $298 $142 109.5 $794 $369 115.2
========= ========= ========= =========
Per share data and shares
outstanding: (1)
Basic net
income per
share $0.17 $0.08 112.5 % $0.44 $0.21 109.5 %
Diluted net
income per
share 0.16 0.08 100.0 0.44 0.21 109.5
Book value at
period end 8.46 8.31 1.8 8.46 8.31 1.8
Weighted average number of common shares
outstanding (000's):
Basic 1,789.5 1,789.5 - % 1,789.5 1,728.7 3.5 %
Diluted 1,806.7 1,793.1 0.8 1,803.7 1,756.0 2.7
Shares
outstanding
at period end 1,789.5 1,789.5 - 1,789.5 1,789.5 -
December December
31, 31,
Balance sheet data 2005 2004 Change
--------- --------- --------
Total assets $172,504 $134,406 28.3 %
Loans receivable 122,628 87,612 40.0
Allowance for loan losses 1,410 970 45.4
Other interest-earning assets 39,611 38,065 4.1
Total deposits 140,169 97,679 43.5
Borrowings 16,200 21,405 (24.3)
Shareholders' equity 15,142 14,870 1.8
Three months ended Years Ended
Selected performance December 31, December 31,
ratios: ------------------- -----------------
2005 2004 2005 2004
--------- --------- -------- --------
Return (loss) on average
assets (2) 0.70 % 0.44 % 0.52 % 0.32%
Return (loss) on average
stockholders' equity (2) 8.00 3.79 5.38 2.59
Net interest margin (2)(3) 3.59 3.39 3.62 3.40
Net interest spread (2)(4) 3.21 3.11 3.28 3.12
Noninterest income as a % of total
revenue 21.3 19.2 20.1 21.1
Noninterest income as a % of
average assets (2) 0.9 0.8 0.9 0.9
Efficiency ratio (5) 77.69 81.11 80.24 83.28
Noninterest expense as a % of
average assets (2) 3.4 3.3 3.5 3.5
Asset quality ratios (at December December December
period end): 31, 31, 31,
2005 2004 2003
-------- --------- --------
Nonperforming assets to period-end
loans (6) 0.25 % 1.12 % 0.20 %
Allowance for loan losses to period-end
loans 1.15 1.11 1.00
Allowance for loan losses to total
assets 0.82 0.72 0.65
Net loan charge-offs to average loans
outstanding (2) 0.23 0.14 0.20
Capital and liquidity ratios: December December December
31, 31, 31,
2005 2004 2003
--------- --------- --------
Total capital ratio 13.0 % 16.7 % 11.4 %
Tier 1 capital ratio 12.0 15.6 10.4
Leverage capital ratio 9.4 11.5 7.5
Equity to assets ratio 8.8 11.1 7.6
Bank of Oak Ridge
Financial Highlights (dollars in thousands, except share and per
share data)(Unaudited)
Three months ended Years Ended
December 31, December 31,
-------------------- --------------------
Total Revenue 2005 2004 Change 2005 2004 Change
--------- --------- -------- --------- --------- ------
Net interest
income $1,468 $1,055 39.1 % $5,256 $3,790 38.7 %
--------- --------- --------- ---------
Fees and other
revenue:
Customer
service and
other fees 112 69 62.3 408 320 27.5
Mortgage loan
origination
fees 86 52 65.4 296 213 39.0
Investment and
insurance
commissions 118 73 61.6 348 297 17.2
Other 81 57 41.5 270 184 46.7
--------- --------- --------- ---------
Total
noninterest
income 397 251 58.0 1,322 1,014 30.4
--------- --------- --------- ---------
Total revenue $1,865 $1,306 42.8 $6,578 $4,804 36.9
========= ========= ========= =========
Three months ended Years Ended
December 31, December 31,
Noninterest -------------------- -------------------
Expense 2005 2004 Change 2005 2004 Change
--------- --------- -------- --------- --------- ------
Compensation
and employee
benefits $705 $514 37.2 % $2,635 $1,959 34.5 %
Occupancy and
equipment 241 157 53.5 821 637 28.9
Data and items
processing 29 97 (70.1) 244 339 (28.0)
Professional
and
advertising
expenses 199 157 26.8 796 621 28.2
Other 275 128 114.8 780 438 78.1
--------- --------- --------- ---------
Total
noninterest
expense $1,449 $1,053 37.6 $5,276 $3,994 32.1
========= ========= ========= =========
Three months ended Years Ended
December 31, December 31,
Average -------------------- -------------------
Balances 2005 2004 Change 2005 2004 Change
--------- --------- -------- --------- --------- ------
Total assets $169,246 $128,523 31.7% $151,680 $115,261 31.6 %
Loans
receivable 119,746 80,671 48.4 105,229 74,415 41.4
Allowance for
loan losses 1,352 894 51.2 1,165 779 49.6
Other
interest-
earning
assets 38,846 40,333 (3.7) 37,019 34,640 6.9
Total deposits 131,236 95,155 37.9 113,509 83,231 36.4
Borrowings 21,580 17,921 20.4 22,455 17,504 28.3
Shareholders'
equity 14,779 14,889 (0.7) 14,754 14,209 3.8
(1) Computed based on the weighted average number of shares
outstanding during each period.
(2) Ratios for the three-month periods ended December 31, 2005 and
2004 are presented on an annualized basis.
(3) Net interest margin is net interest income divided by average
interest earning assets.
(4) Net interest spread is the difference between the average yield on
interest earning assets and the average cost of interest bearing
liabilities.
(5) Efficiency ratio is noninterest expense divided by the sum of net
interest income and noninterest income.
(6) Nonperforming assets consist of non-accruing loans, restructured
loans and foreclosed assets, where applicable.
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