Bank of Oak Ridge Reports Record Fourth Quarter Earnings and EPS.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 record 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 of 8 cents for the fourth quarter of 2004, compared with 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. loss per share of 0 cents for the same period of 2003. Net income for the fourth quarter of 2004 was $142,000, compared with net income of $5,000 for the same period in 2003. 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 results in the fourth quarter of 2004 and our five consecutive quarters of earnings and growth since the Summerfield Summerfield is the name of some places in the United States of America:
intersection a site at which one structure crosses another. of Bryan Bryan, city (1990 pop. 55,002), seat of Brazos co., E central Tex.; inc. 1872. Settled in the early 19th cent. in an area of large plantations, Bryan was long a cotton center. Boulevard boulevard Broad landscaped avenue that typically permits several lanes of vehicular traffic as well as pedestrian walkways. The earliest boulevards originally followed the city walls (the word originally meant “bulwark”) and were built in the ancient Middle and New Garden Road 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. will be warmly received by existing and new customers of the Bank." Net Interest Income Net interest income for 2004 was $3,790,000 up $1,298,000, or 52.1 percent, from the same period in 2003. The net interest margin in 2004 was 3.40 percent, compared with 3.05 percent for the same period in 2003. The 35 basis point increase in the net interest margin in 2004 over the same period in 2003 is primarily a result of a 8 basis point increase in earning asset Earning asset An asset that generates income, e.g., income from rental property. yields and a 17 basis point reduction in funding costs. An increase of $30.8 million in average interest-earning assets, and a increase of $24.8 million in interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities from 2003 to the same period in 2004 also contributed to the improvement in the net interest margin from 2003 to 2004. Non-interest Income Non-interest income totaled $1,014,000 for 2004, up $281,000, or 38.3 percent, from $733,000 for the same period in 2003. Increases from 2003 to 2004 in service charges on deposit accounts, investment and insurance commissions, and other non-interest income of $83,000, $221,000, and $80,000, respectively, offset a $103,000 decline in 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 from 2003 to 2004. The decline in mortgage loan origination fees from 2003 to 2004 primarily resulted from lower demand for mortgage refinancing Refinancing An extension and/or increase in amount of existing debt. in 2004 compared to 2003. Non-interest Expense Non-interest expense totaled $3,994,000 in 2004, up $768,000, or 23.8 percent, from $3,226,000 for 2003. Compensation and fringe benefits fringe benefits, n.pl the benefits, other than wages or salary, provided by an employer for employees (e.g., health insurance, vacation time, disability income). increased $341,000, or 21.1 percent, to $1,959,000 compared to 2003, due to a higher number of bank employees for all of 2004 compared to the same period in 2003. Professional and advertising expenses increased $187,000, or 43.1 percent, to $621,000 compared to 2003, due to higher advertising and marketing expenses, as well as higher hardware and software service and support expenses. The increase in data and items processing expenses of $62,000, or 22.4 percent, to $339,000 compared to 2003 is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a increase in the number of deposit and loan accounts from 2003 to 2004. Other non-interest expenses increased $80,000, or 22.3 percent, to $438,000. Loans Bank of Oak Ridge's lending operations continue to generate strong growth. Loans totaled $87.6 million at the end of 2004, up $24.1 million, or 37.9 percent, from $63.5 million at the end of the 2003 fourth quarter. The average yield on loans was 5.76 percent for 2004, down 3 basis points from 5.79 percent for 2003. Investments Investments, which consist of interest-bearing 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 $38.1 million at the end of 2004, up $9.8 million, or 34.8 percent, from $28.3 million at the end of 2004. The average yield on investments was 3.69 percent for 2004, up 6 basis points from 3.63 percent for 2003. Deposits Deposits totaled $97.7 million at the end of 2004, up $26.2 million, or 36.7 percent, from $71.5 million at the end of 2003. The average cost of interest-bearing deposits was 2.05% for 2004, down 28 basis points from 2.33 percent for 2003. Other Borrowings Other borrowings totaled $21.4 million at the end of 2004, up $3.1 million, or 17.1 percent, from $18.3 million at the end of 2003. The average cost of other borrowings was 1.65% for 2004, up 20 basis points from 1.45 percent for 2003. 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 substantially from the end of 2003, primarily as a result of a secondary offering that was completed on January January: see month. 28, 2004 that raised approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $7.4 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). . Stockholders' equity totaled $14.9 million at the end of 2004, up $7.5 million, or 102.1 percent, from $7.4 million at the end of 2003. Provision for Loan Losses The provision for loan loss increased significantly to $441,000 in 2004 compared to $262,000 for 2003. There were two primary reasons in the increased provision from 2003 to 2004. First, the bank increased the allowance for loan losses from 1.00% of loans to 1.11% of loans from December December: see month. 31, 2003 to December 31, 2004, while the allowance for loan loss decreased from 1.23% of loans from December 31, 2002 to December 31, 2003. Additionally, the Bank's charge-offs of $107,000 in 2004 were slightly higher than the charge-offs of $71,000 in 2003. The allowance for loan losses to total loans was 1.11, 1.00 and 1.01 percent at December 31, 2004, 2003 and 2002, respectively. 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 and foreclosed real estate totaled $922,000 at December 31, 2004, up $792,000, or 609.2 percent, from $130,000 at December 31, 2003. The large increase in nonaccrual and nonperforming loans between the two periods is primarily a result of two loans with outstanding balances totaling $483,000 that were on nonaccrual during the fourth quarter of 2004, as well as one foreclosed 1-4 family residence with a carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of $261,000 at December 31, 2004. The two loans are secured by a first deed of trust A document that embodies the agreement between a lender and a borrower to transfer an interest in the borrower's land to a neutral third party, a trustee, to secure the payment of a debt by the borrower. on commercial real estate. Management believes that the loan loss reserves allocated to these loans are adequate to cover any anticipated losses. Nonperforming assets to total loans were 0.52 percent, 0.20 percent, and 0.23 percent at December 31, 2004, 2003 and 2002, respectively. About the Bank of Oak Ridge Bank of Oak Ridge is a community bank headquartered in Oak Ridge, NC with more than $134 million in assets as of December 31, 2004. The bank currently has offices in Oak Ridge and Summerfield and offers a complete line of banking services, including savings and checking accounts, mortgage and business loans, Saturday Saturday: see week; Sabbath. hours, same-day deposits, business and personal internet banking, internet bill payment and accounts designed specifically for seniors, small businesses and civic organizations. For more information, contact Bank of Oak Ridge at 336-644-9944, or visit www.bankofoakridge.com. 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,
-----------------------------------------------------
2004 2003 Change 2004 2003 Change
--------- -------- ------ --------- -------- ------
Income Statement Data:
Total interest
income $1,635 $1,147 42.5 % $5,659 $3,984 42.0 %
Total interest
expense 580 384 51.0 1,869 1,492 25.3
--------- -------- --------- --------
Net interest
income 1,055 763 38.3 3,790 2,492 52.1
Provision for
loan losses 111 60 85.0 441 262 68.3
Non-interest
income 251 168 49.4 1,014 733 38.3
Non-interest
expense 1,053 866 21.6 3,994 3,226 23.8
Provision for
income taxes - - n/a - - n/a
--------- -------- --------- --------
Net income (loss) $142 $5 nm $369 $(263) nm
========= ======== ========= ========
Per share data
and shares
outstanding: (1)
Basic net income
(loss) per share $0.08 $- n/a % $0.21 $(0.34) nm %
Diluted net
income (loss)
per share 0.08 - n/a 0.21 (0.34) nm
Book value at
period end 8.31 7.37 12.8 8.31 7.37 12.8
Weighted average number of common
shares outstanding (000's):
Basic 1,789.4 998.8 79.2 % 1,728.6 972.4 77.8 %
Diluted 1,793.1 1,006.4 78.2 1,738.2 972.4 78.8
Shares
outstanding at
period end 1,789.4 998.8 79.2 1,789.4 998.8 79.2
December 31,
Balance sheet data 2004 2003 Change
--------- -------- ------
Total assets $134,406 $97,287 38.2 %
Loans receivable 87,612 63,526 37.9
Allowance for
loan losses 970 635 52.8
Other interest-
earning assets 38,065 28,236 34.8
Total deposits 97,679 71,477 36.7
Borrowings 21,405 18,273 17.1
Shareholders'
equity 14,870 7,359 102.1
Three months ended Years Ended
December 31, December 31,
------------------------------------
Selected performance
ratios: 2004 2003 2004 2003
--------- -------- ------ ---------
Return (loss)
on average
assets (2) 0.44 % 0.02 % 0.32 % (0.32)%
Return (loss) on
average
stockholders'
equity (2) 3.78 0.27 2.59 (3.60)
Net interest
margin (2)(3) 3.39 3.41 3.40 3.05
Net interest
spread (2)(4) 3.11 3.25 3.12 2.79
Noninterest income
as a % of total
revenue 19.2 18.0 21.1 22.7
Noninterest income
as a % of average
assets (2) 0.8 0.8 0.9 0.9
Efficiency
ratio (5) 81.12 93.12 83.28 101.07
Noninterest expense
as a % of average
assets (2) 3.3 3.9 3.5 4.0
Asset quality
ratios (at December 31,
period end): 2004 2003 2002
--------- -------- ------
Nonperforming
assets to period-end
loans (6) 0.52 % 0.20 % 0.23 %
Allowance for
loan losses to
period-end loans 1.11 1.00 1.23
Allowance for
loan losses to
total assets 0.72 0.65 0.71
Net loan charge-
offs to average
loans
outstanding (2) 0.45 0.15 0.02
Capital and
liquidity December 31,
ratios: 2004 2003 2002
--------- -------- ------
Total capital
ratio 16.7 % 11.4 % 14.9 %
Tier 1 capital
ratio 15.6 10.4 13.8
Leverage capital
ratio 11.5 7.5 9.1
Equity to assets
ratio 11.1 7.6 9.7
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 2004 2003 Change 2004 2003 Change
--------- -------- ------ --------- -------- ------
Net interest
income $1,055 $763 38.3 % $3,790 $2,492 52.1 %
--------- -------- --------- --------
Fees and other
revenue:
Customer service
and other fees 69 62 11.3 320 237 35.0
Mortgage loan
origination fees 52 37 40.5 213 316 (32.6)
Investment and
insurance
commissions 73 52 40.4 297 76 290.8
Other 57 17 235.3 184 104 76.9
--------- -------- --------- --------
Total noninterest
income 251 168 49.4 1,014 733 38.3
--------- -------- --------- --------
Total revenue $1,306 $931 40.3 $4,804 $3,225 49.0
========= ======== ========= ========
Three months ended Years Ended
December 31, December 31,
-----------------------------------------------------
Noninterest 2004 2003 Change 2004 2003 Change
Expense --------- -------- ------ --------- -------- ------
Compensation and
employee
benefits $514 $386 33.2 % $1,959 $1,618 21.1 %
Occupancy and
equipment 157 179 (12.3) 637 539 18.2
Data and items
processing 97 85 14.1 339 277 22.4
Professional and
advertising
expenses 157 111 41.4 621 434 43.1
Other 128 105 21.9 438 358 22.3
--------- -------- --------- --------
Total noninterest
expense $1,053 $866 21.6 $3,994 $3,226 23.8
========= ======== ========= ========
Three months ended Years Ended
December 31, December 31,
-----------------------------------------------------
Average Balances 2004 2003 Change 2004 2003 Change
--------- -------- ------ --------- -------- ------
Total assets $128,523 $87,955 46.1 % $115,261 $81,606 41.2 %
Loans receivable 80,671 56,169 43.6 74,415 50,511 47.3
Allowance for
loan losses 894 487 83.6 779 525 48.4
Other interest-
earning assets 40,333 27,322 47.6 34,640 27,765 24.8
Total deposits 95,713 62,679 52.7 83,548 59,050 41.5
Borrowings 17,921 17,296 3.6 17,504 15,259 14.7
Shareholders'
equity 14,889 7,278 104.6 14,209 7,297 94.7
(1) Computed based on the weighted average number of shares
outstanding during each period.
(2) Ratios for the three-month periods ended December 31, 2004 and
2003 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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