Bank of Oak Ridge Reports Record Quarterly and Annual Earnings for 2006.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 CM: BKOR) today reported net income for the 2006 fiscal year of $1.5 million compared with $794,000 for the 2005 fiscal year, an increase of 84 percent. 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 $0.78 for 2006 compared with $0.44 for the prior year, an increase of 77 percent. For the fourth quarter of 2006, the Bank reported net income of $433,000 compared with $298,000 for the 2005 fourth quarter, an increase of 45 percent. Diluted earnings per share were $0.23 for the current quarter compared with $0.16 for last year, an increase of 44 percent. 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 2006. During 2006, we opened our fourth full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. banking office, our second 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 extended our business hours BUSINESS HOURS. The time of the day during which business is transacted. In respect to the time of presentment and demand of bills and notes, business hours generally range through the whole day down to the hours of rest in the evening, except when the paper is payable it a bank or by a to 8:30 AM to 6:00 PM Monday Monday: see week. through Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , and from 8:30 AM to 1:00 PM on Saturday Saturday: see week; Sabbath. , and initiated our "Open Early, Open Late" and "Six-Day Branch Banking at all Locations" strategy. Our Bank enjoyed great growth: assets increased 20 percent, loans increased 30 percent and deposits increased 23 percent. Additionally, in 2006 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 slightly from its already strong 2005 levels. My thanks to all the great efforts in 2006 of our employees and our Board of Directors, as well as the support of our existing and new customers, in helping our bank achieve these results." Operating Results for the years ended December December: see month. 31, 2006 and 2005 Net Income. Bank of Oak Ridge ("The Bank") recorded net income of $1.5 million and $794,000 for the years ended December 31, 2006 and 2005, respectively. Net Interest Income The Bank's net interest income for fiscal year 2006 was $6.5 million, up $1.3 million, or 24 percent, from $5.3 million for fiscal year 2005. The increase reflects a 16 percent 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 6 basis point improvement in the net interest margin to 3.75 percent. 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 decreased to $333,000 for 2006 compared to $508,000 for 2005. Provisions for loan losses are charged to income to bring the allowance for loan losses to a level we deem appropriate. In evaluating the allowance for loan losses, we consider factors that include growth and composition of the loan portfolio, historical loan loss experience, individual loans that may have estimated losses, and other relevant factors. The primary reason for the decreased provision from 2005 to 2006 was a decrease in the allowance for loan losses from 1.15 percent to 1.07 percent of loans from December 31, 2005 to December 31, 2006, respectively. The decrease in the provision was based on our assessment of the strong credit quality of the Bank's current loan portfolio as well as a low level of charge offs in the last three fiscal years. The allowance for loan losses to total loans was 1.11 percent at December 31, 2004. Non-interest Income Noninterest income totaled $2.1 million for 2006, up $744,000, or 56 percent, from $1.3 million for 2005. Increases from 2005 to 2006 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, fee income purchase of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and other noninterest income of $26,000, $36,000, $479,000, $155,000 and $48,000, respectively, contributed to the increase in noninterest income. The continued growth in the Bank's loan and deposit portfolios generally lead to a higher level of noninterest 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. The continued expansion of the Bank's internal and independent investment departments contributed to the growth in investment and insurance commissions. Lastly, the addition of new customers led to the growth in fee income from purchase of accounts receivable. Noninterest Expense Noninterest expense totaled $6.8 million for 2006, up $1.5 million, or 29 percent, from $5.3 million for 2005. Salaries and employee benefits increased $1.1 million, or 41 percent, to $3.7 million in 2006. Increases in salaries and employee benefits were due to new banking offices that were opened in August 2005 and June June: see month. 2006, as well as an increase in support positions to service the Bank's continued growth. To a lesser extent, the increase was due to increased banking office and support positions to service the Bank's new extended business hours that were put in place in October October: see month. of 2006. 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 $186,000, or 23 percent, to $1.0 million in 2006. Increases in occupancy and equipment expense were mostly due to new banking offices that were opened in August 2005 and June 2006. The increase in data and items processing expenses of $27,000, or 11 percent, to $271,000 in 2006, is primarily due to the Bank's growth in 2006. Professional and advertising expenses increased $89,000, or 11 percent, to $885,000 in 2006, primarily as a result of higher advertising expenses in 2006 compared to 2005. Other noninterest expenses increased $136,000, or 17 percent, to $919,000 in 2006, primarily due to the Bank's growth from 2005 to 2006. Operating Results for the three months ended December 31, 2006 and 2005 Net Income. The Bank recorded net income of $433,000 and $298,000 for the fourth quarters of 2006 and 2005, respectively. Net Interest Income The Bank's net interest income for the fourth quarter of 2006 was $1.7 million, up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $239,000, or 16 percent, from $1.5 million for the same period of 2005. The increase reflects a 13 percent increase in average earning assets combined with a 9 basis point decline in the net interest margin to 3.58 percent. The small decline was primarily due to increasing competition in the Bank's market for deposits in 2006 which caused liability rates to increase faster than asset yields near the end of 2006. Provision for Loan Losses The provision for loan losses decreased to $10,000 for the fourth quarter of 2006 compared to $118,000 for the same period in 2005. Provisions for loan losses are charged to income to bring the allowance for loan losses to a level we deem appropriate. In evaluating the allowance for loan losses, we consider factors that include growth and composition of the loan portfolio, historical loan loss experience, individual loans that may have estimated losses, and other relevant factors. The primary reason for the decreased provision from 2005 to 2006 was a decrease in the allowance for loan losses from 1.15 percent to 1.07 percent of loans from December 31, 2005 to December 31, 2006, respectively. The decrease in the provision was based on our assessment of the strong credit quality of the Bank's current loan portfolio as well as a low level of charge offs in the last three fiscal years. The allowance for loan losses to total loans was 1.11 percent at December 31, 2004. Noninterest Income Noninterest income totaled $552,000 for the fourth quarter of 2006, up $155,000, or 39 percent, from $397,000 for the same period in 2005. Increases from 2005 to 2006 in service charges on deposit accounts, mortgage loan origination fees, investment and insurance commissions, fee income from purchase of accounts receivable and other noninterest income of $30,000, $8,000, $71,000, $34,000 and $12,000, respectively, contributed to the increase in no-interest income. The continued growth in the Bank's loan and deposit portfolios generally lead to a higher level of noninterest 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. The expansion of the Bank's internal and independent investment departments contributed to the growth in investment and insurance commissions. Lastly, the addition of new customers led to the growth in fee income from purchase of accounts receivable. Noninterest Expense Noninterest expense totaled $1.8 million for the fourth quarter of 2006, up $367,000, or 25 percent, from $1.4 million for the same period in 2005. Salaries and employee benefits increased $314,000, or 45 percent, to $1.0 million for the fourth quarter of 2006. Increases in salaries and employee benefits were due to a new banking office that opened in June 2006, as well as an increase in support positions to service the Bank's continued growth. To a lesser extent, the increase was due to increased banking office and support positions to service the Bank's new extended business hours that were put in place in October of 2006. Occupancy and equipment expense increased $24,000, or 10 percent, to $265,000 for the fourth quarter of 2006. Increases in occupancy and equipment expense were mostly due to a new banking office that was opened in June 2006. The increase in data and items processing expenses of $44,000, or 152 percent, to $73,000 for the fourth quarter of 2006 is primarily due to the Bank's growth in 2006 as well as a lower initial cost in 2005 of the new 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 that the Bank converted to in March of 2005. Professional and advertising expenses increased $6,000, or 3 percent, to $205,000 for the fourth quarter 2006, due to management's strategy to control professional and advertising expenses in the fourth quarter of 2006. Other noninterest expenses decreased $21,000, or 8 percent, to $254,000 for the fourth quarter of 2006, due to management's strategy of controlling these types of expenses in the fourth quarter of 2006. Comparison of Financial Condition at December 31, 2006 and December 31, 2005 In 2006, the Bank's assets increased from $172.5 million to $207.2 million, or 20 percent, from December 31, 2005 to December 31, 2006, respectively. The majority of the net increase in assets between the two periods was caused by an increase in loans, offset by decreases in other interest-earning assets. Loans In 2006 the Bank continued its history of strong growth in its loan portfolio. Gross loans receivable totaled $159.4 million at the end of 2006, up $36.8 million, or 30 percent, from $122.6 million at the end of 2005. The average yield on loans for all of 2006 was 8.03 percent, up 108 basis points from 6.95 percent in 2005. 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 $33.7 million at the end of 2006, down $5.9 million, or 15 percent, from $39.6 million at the end of 2005. The decline in investments was due to management's strategy to use maturities and cash inflows from the investment portfolio to assist in funding loan growth, especially in light of the flat or inverted yield curve Inverted Yield Curve Usually a chart showing long-term debt instruments that have lower yields than short-term debt instruments. It is sometimes referred to as a negative yield curve. that was present for all of 2006. The average yield on investments was 4.40 percent for all of 2006, up 30 basis points from 4.10 percent in 2005. Deposits Deposits totaled $172.3 million at the end of 2006, up $32.1 million, or 23 percent, from $140.2 million at the end of 2005. The growth in deposits was primarily a result of new Greensboro offices opened in August of 2005 and June of 2006 as well as continued growth in the Bank's Oak Ridge and Summerfield Summerfield is the name of some places in the United States of America:
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 $17.5 million at the end of 2006, down $1.3 million, or 8 percent, from $16.2 million at the end of 2005. The average cost of other borrowings was 5.12 percent for all of 2006, up 168 basis points from 3.44 percent for 2005. 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 $1.5 million from the end of 2005 to the end of 2006, primarily as a result of net income for 2006 of $1.5 million. Stockholders' equity totaled $16.7 million at the end of 2006 compared to $15.1 million at the end of 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. Nonaccrual and accruing loans greater than ninety days past due totaled $353,000 at the end of 2006, down $50,000, or 17 percent, from $353,000 at the end of 2005. Management believes that the loan loss reserves allocated to these loans are adequate to cover any anticipated losses. Nonperforming assets to total loans were 0.22 percent, 0.25 percent, and 1.12 percent at December 31, 2006, 2005, and 2004 respectively. About the Bank of Oak Ridge Bank of Oak Ridge, headquartered in Oak Ridge, NC, is a community Bank with four locations in Oak Ridge, Summerfield and Greensboro. The Bank offers a complete line of banking and investment services, including savings and checking accounts, mortgage and business loans, extended weekday and Saturday branch banking hours banking hours npl → heures fpl d'ouverture des banques banking hours npl → Schalterstunden pl banking hours npl , same-day deposits, cash management services, business and personal internet banking with balance alerts and reminders, 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 form 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. [TABLE OMITTED] [TABLE OMITTED] |
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