Bank of Oak Ridge Reports Record Second Quarter Net Income and Earnings Per Share.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 18 cents for the second quarter of 2006, compared with a diluted earnings per share of 12 cents for the same period of 2005. Net income for the second quarter of 2006 was $343,000, compared with net income of $212,000 for the same period in 2005. 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 second quarter of 2006. There was a 31 percent increase in loans and deposits from June June: see month. 30, 2005 to June 30, 2006, as well as a 71 percent increase in non-interest income for the six month period ending June 30, 2006 compared with the same period in 2005. Additionally, our asset quality trends continue to be exemplary, with a minimal level of 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. as of June 30, 2006. My thanks to all the great efforts of the employees and our Board of Directors in helping us to achieve these results." During the second quarter, the six-year old bank opened its fourth banking office at the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of Cornwallis Drive and North Elm Street 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. . The new full service location offers 6-day branch banking, two drive thru lanes, and a ATM. The bank now has two Greensboro full service banking offices, with plans to open a third Greensboro banking office in 2007 near the corner of Pisgah Pisgah may refer to several things:
Operating Results for the six months ended June 30, 2006 and 2005 Net Income The Bank recorded net income of $670,000 and $271,000 for the six months ended June 30, 2006 and 2005, respectively. Net Interest Income The Bank's net interest income for the six months ended June 30, 2006 was $3.2 million, up $732,000, or 30 percent, from $2.4 million in the same period in 2005. The net interest margin in the first six months of 2006 was 3.83 percent, compared with 3.66 percent for the same period in 2005. The 17 basis point increase in the net interest margin in the first six months of 2006 over the same period in 2005 is primarily a result of a 128 basis point increase in earning asset Earning asset An asset that generates income, e.g., income from rental property. yields, offset by a 125 basis point increase in funding costs. An increase of $32.4 million in average interest-earning assets, and an increase of $29.6 million in average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities from the first six months of 2005 to the same period in 2006 also contributed to the improvement in the net interest margin for the six month period ended June 30, 2006, compared to the same period in 2005. Provision for Loan Losses The provision for loan losses decreased slightly to $219,000 for the six months ended June 30, 2006 compared to $262,000 for the same period in the prior year. The decrease in the provision from 2005 to 2006 is primarily due to greater loan growth in the six months ended June 30, 2005 compared to the same period in 2006. The allowance for loan losses to total loans was 1.17, 1.15 and 1.12 percent at June 30, 2006, December December: see month. 31, 2005 and June 30, 2005, respectively. Noninterest Income Non-interest income totaled $1.0 million in the first six months of 2006, up $421,000, or 72 percent, from $588,000 for the same period in 2005. Increases from 2005 to 2006 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, investment and insurance commissions, fee income from accounts receivable financing Accounts Receivable Financing A type of asset-financing arrangement in which a company uses its receivables - which is money owed by customers - as collateral in a financing agreement. The company receives an amount that is equal to a reduced value of the receivables pledged. , and other noninterest income of $22,000, $313,000, $86,000 and $25,000, respectively, accounted for most of the total increase in noninterest income. These increases were offset by a decrease in service charges on deposit accounts of $18,000, which was caused by a lower level of non sufficient fees collected in 2006 compared to 2005. The large increase in investment and insurance commissions from 2005 to 2006 was primarily due to more financial advisors being employed by the Bank in the six months ended June 30, 2006, compared to the same period in 2005. Part of the increase in investment and insurance commissions was due to greater production per financial advisor in 2006 compared to 2005. The large increase in fee income from accounts receivable financing from 2005 to 2006 is due to four clients being serviced in 2006 compared to only one client being serviced in 2005. Noninterest Expense Non-interest expense totaled $3.3 million in the first six months of 2006, up $797,000, or 32 percent, from $2.5 million for the same period in 2005. Salaries and employee benefits increased $557,000, or 45 percent, to $1.8 million compared to 2005, due to a higher number of bank employees as well as higher commissions to mortgage originators and financial advisors in the first six months of 2006 compared to the same period in 2005. The higher number of bank employees is primarily due to the opening of two new banking offices in Greensboro in August of 2005 and June of 2006, as well as an expansion in the bank's support functions to service the Bank's continued growth. 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 expense increased $74,000, or 43 percent, to $245,000 from 2005 to 2006, due to the additional banking offices noted above. Equipment expense increased $55,000, or 29 percent, from 2005 to 2006, to $245,000 due to greater depreciation expense related to furniture and fixture An article in the nature of Personal Property which has been so annexed to the realty that it is regarded as a part of the real property. That which is fixed or attached to something permanently as an appendage and is not removable. acquisitions put into service after June of 2005. Data and items processing expense decreased $59,000, or 33 percent, from 2005 to 2006, to $120,000 due to the conversion to an 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. 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 with a lower initial overall monthly cost. Professional and advertising expenses increased $87,000, or 23 percent, from 2005 to 2006, to $467,000 due primarily to greater advertising expenses in 2006 compared to 2005. Other noninterest expenses, which consist primarily of stationary Stationary can mean:
Net Income The Bank recorded net income of $343,000 and $212,000 for the three months ended June 30, 2006 and 2005, respectively. Net Interest Income The Bank's net interest income for the three months ended June 30, 2006 was $1.6 million, up $352,000, or 28 percent, from $1.3 million in the same period in 2005. The net interest margin in the second quarter of 2006 was 3.94 percent, compared with 3.75 percent for the same period in 2005. The 19 basis point increase in the net interest margin in the second quarter 2006 over the same period in 2005 was primarily a result of an increase of $37.4 million in average interest-earning assets, and an increase of $33.7 million in average interest-bearing liabilities from the first quarter of 2005 to the same period in 2006, in addition to a 129 basis point increase in earning asset yields offset by a 133 basis point increase in funding costs. Provision for Loan Losses The provision for loan losses decreased to $103,000 for the three months ended June 30, 2006 compared to $196,000 for the same period in the prior year. The decrease in the provision from 2005 to 2006 is primarily due to an increase in the allowance for loan losses to total loans from 1.10 percent at March 31, 2005 to 1.12 percent at June 30, 2005. From March 31, 2006 to June 30, 2006 the allowance to loan losses to total loans remained unchanged at 1.17 percent. The allowance for loan losses to total loans was 1.15 percent at December 31, 2005. Noninterest Income Noninterest income totaled $496,000 for the 2006 second quarter, up $135,000, or 37 percent, from $361,000 for the 2005 second quarter. Increases from 2005 to 2006 in investment and insurance commissions, fee income from accounts receivable financing, and other service charges and fees of $104,000, $42,000, and $17,000, respectively, accounted for the total increase in noninterest income. These increases were mostly offset by a decrease in service charges on deposit accounts of $24,000, which was caused by a lower level of non sufficient fees collected in 2006 compared to 2005.The large increase in investment and insurance commissions from 2005 to 2006 was primarily due to greater production per financial advisor in 2006 compared to 2005. The large increase in fee income from accounts receivable financing from 2005 to 2006 is four clients being serviced in 2006 compared to only one client being serviced in 2005. Noninterest Expense Noninterest expense totaled $1.7 million for the 2006 second quarter, up $450,000, or 37 percent, from $1.2 million for the 2005 second quarter. Salaries and employee benefits increased $241,000, or 36 percent, to $917,000 compared to the second quarter of 2005, due to a higher number of bank employees as well as higher commissions to mortgage originators and financial advisors in the first six months of 2006 compared to the same period in 2005. The higher number of bank employees is primarily due to the opening of two new banking offices in Greensboro in August of 2005 and June of 2006, as well as an expansion in the bank's support functions to service the Bank's continued growth. Occupancy expense increased $44,000, or 56 percent, to $122,000 from 2005 to 2006, due to the additional banking offices noted above. Equipment expense increased $15,000, or 14 percent, from 2005 to 2006, to $120,000 due to greater depreciation expense related to furniture and fixture acquisitions put into service after June of 2005. Data and items processing expense increased $46,000, or 354 percent, from 2005 to 2006, to $59,000 due to initial data processing expenses recognized in 2005 after the Bank converted to a new data processing system in March of 2005. Professional and advertising expenses increased $33,000, or 17 percent, from 2005 to 2006, to $228,000 due primarily to greater advertising expenses in 2006 compared to 2005. Other noninterest expenses, which consist primarily of stationary and supplies, telecommunications expense, and dues and membership fees, increased $70,000, or 42 percent, to $235,000, due to the Bank's continued growth. Operating Results for the three months ended June 30, 2006 and 2005 Comparison of Financial Condition at June 30, 2006 and December 31, 2005 The Bank's assets increased from $172.5 million to $179.1 million, up $6.6 million, or 4 percent, from December 31, 2005 to June 30, 2006. The majority of the net increase in assets between the two periods was caused by an increase in loans and cash and due from banks, offset by a decrease in 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 and securities available-for-sale. Loans The Bank's lending operations continue to generate strong net loan growth. Net loans totaled $136.2 million at the end of the 2006 second quarter, up $15.0 million, or 12 percent, from $121.2 million at December 31, 2005. The average yield on loans was 8.03 percent for the 2006 second quarter, up 124 basis points from 6.79 percent for the same period in 2005. Investments Investments, which consist of interest-bearing deposits with banks, federal funds sold, securities available-for-sale and held-to-maturity, and Federal Home Loan Bank stock, totaled $28.6 million at the end of the 2006 second quarter, down $11.0 million, or 28 percent, from $39.6 million at December 31, 2005. This is in keeping with management's current strategy of using excess liquidity in the form of federal funds sold and cash flows from securities to assist in funding loan growth. The average yield on investments was 4.38 percent for the 2006 second quarter, up 26 basis points from 4.12 percent for the same period in 2005. Deposits Deposits totaled $146.3 million at the end of the 2006 second quarter, up $6.1 million, or 4 percent, from $140.2 million at December 31, 2005. The increase in deposits assisted in funding the bank's loan growth. The average cost of interest-bearing deposits was 3.75 percent for the 2006 second quarter, up 113 basis points from 2.62 percent for the same period in 2005. Borrowings Borrowings totaled $16.2 million at the end of the 2006 second quarter and at December 31, 2005. The average cost of other borrowings was 5.08 percent for the 2006 second quarter, up 179 basis points from 3.29 percent for the same period in 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 totaled $15.5 million at the end of the 2006 second quarter, up $400,000, or 3 percent, from $15.1 million at December 31, 2005. The increase primarily resulted from net income of $670,000 for the six months ended June 30, 2006, offset by a decline in accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as of $274,000 attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a decline in the Bank's available-for-sale investment securities during the six months ended June 30, 2006. Nonperforming Assets Nonaccrual and accruing loans greater than 90 days past due totaled $23,000 at June 30, 2006, down $280,000, or 92 percent, from $303,000 at December 31, 2005. The decrease was primarily due to two loans secured by first deeds deed n. 1. Something that is carried out; an act or action. 2. A usually praiseworthy act; a feat or exploit. 3. Action or performance in general: Deeds, not words, matter most. of trusts on 1-4 family residential properties that were brought current and one loan 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 a 1-4 family residential property that was foreclosed and transferred to foreclosed real estate. Management believes that the loan loss reserves allocated to these loans are adequate to cover any anticipated losses. Nonperforming loans to total loans were 0.02 percent and 0.25 percent at June 30, 2006 and December 31, 2005, 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 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.
Bank of Oak Ridge
Financial Highlights (dollars in thousands,
except share and per share data)
Three months ended
June 30,
------------------------
2006 2005 Change
-------- -------- ------
Income Statement Data:
Total interest income $3,068 $2,104 45.8 %
Total interest expense 1,437 825 74.2
-------- --------
Net interest income 1,631 1,279 27.5
Provision for loan losses 103 196 (47.4)
Noninterest income 496 361 37.4
Noninterest expense 1,681 1,232 36.4
Provision for income taxes - - n/a
-------- --------
Net income $343 $212 61.8
======== ========
Per share data and shares outstanding: (1)
Basic net income per share $0.19 $0.12 58.3 %
Diluted net income per share 0.18 0.12 50.0
Book value at period end 8.68 8.46 2.6
Weighted average number of common shares
outstanding (000's):
Basic 1,790.0 1,789.5 0.0 %
Diluted 1,868.5 1,794.1 4.1
Shares outstanding at period end 1,789.9 1,789.5 0.0
Six months ended
June 30,
------------------------
2006 2005 Change
-------- --------
Income Statement Data:
Total interest income $5,925 $3,903 51.8 %
Total interest expense 2,774 1,484 86.9
-------- --------
Net interest income 3,151 2,419 30.3
Provision for loan losses 219 262 (16.4)
Noninterest income 1,009 588 71.6
Noninterest expense 3,271 2,474 32.2
Provision for income taxes - - n/a
-------- --------
Net income $670 $271 147.2
======== ========
Per share data and shares outstanding: (1)
Basic net income per share $0.37 $0.15 146.7 %
Diluted net income per share 0.36 0.15 140.0
Book value at period end 8.68 8.46 2.6
Weighted average number of common shares
outstanding (000's):
Basic 1,789.8 1,789.5 0.0 %
Diluted 1,859.9 1,797.7 3.5
Shares outstanding at period end 1,789.9 1,789.5 0.0
June 30, Dec. 31,
Balance sheet data 2006 2005 Change
--------- --------- ------
Total assets $179,064 $172,504 3.8 %
Loans receivable 137,796 122,628 12.4
Allowance for loan losses 1,606 1,410 13.9
Other interest-earning assets 28,551 39,611 (27.9)
Total deposits 146,250 140,169 4.3
Borrowings 16,200 16,200 -
Shareholders' equity 15,544 15,143 2.6
Three months ended Six months ended
June 30, June 30,
------------------------------------
Selected performance ratios: 2006 2005 2006 2005
--------- --------- ------ ------
Return on average assets (2) 0.78 % 0.59 % 0.76 % 0.39 %
Return on average stockholders'
equity (2) 8.78 5.74 8.67 3.68
Net interest margin (2)(3) 3.94 3.75 3.83 3.66
Net interest spread (2)(4) 3.40 3.34 3.32 3.29
Noninterest income as a % of
total revenue 23.3 22.0 24.3 19.6
Noninterest income as a % of
average assets (2) 1.1 1.0 1.2 0.8
Efficiency ratio (5) 79.03 75.17 78.63 82.36
Noninterest expense as a % of
average assets (2) 3.8 3.4 3.7 3.5
June 30, Dec. 31,
Asset quality ratios 2006 2005
(at period end): --------- --------
Nonperforming assets to period-
end loans (6) 0.02 % 0.25 %
Allowance for loan losses to
period-end loans 1.17 1.15
Allowance for loan losses to
total assets 0.85 0.82
Net loan charge-offs to average
loans outstanding (2) 0.04 0.06
Bank of Oak Ridge
Financial Highlights
(dollars in thousands, except share and per share data)
(Unaudited)
Three months ended
June 30,
----------------------------
Total Revenue 2006 2005 Change
--------- --------- --------
Net interest income $1,631 $1,279 27.5 %
--------- ---------
Fees and other revenue:
Customer service and other fees 68 92 (26.1)
Mortgage loan origination fees 77 80 (3.8)
Investment and insurance commissions 230 126 82.5
Fee income from accounts receivable
financing 44 2 2,100.0
Other 77 61 26.2
--------- ---------
Total noninterest income 496 361 37.4
--------- ---------
Total revenue $2,127 $1,640 29.7
========= =========
Three months ended
June 30,
----------------------------
Noninterest Expense 2006 2005 Change
--------- --------- --------
Salaries and employee benefits $917 $676 35.7 %
Occupancy and equipment 242 183 32.2
Data and items processing 59 13 353.8
Professional and advertising expenses 228 195 16.9
Other 235 165 42.4
--------- ---------
Total noninterest expense $1,681 $1,232 36.4
========= =========
Three months ended
June 30,
----------------------------
Average Balances 2006 2005 Change
--------- --------- --------
Total assets $177,255 $144,862 22.4 %
Loans receivable 133,045 100,634 32.2
Allowance for loan losses 1,543 1,088 41.8
Other interest-earning assets 33,073 36,122 (8.4)
Total deposits 144,277 107,202 34.6
Borrowings 16,211 22,587 (28.2)
Shareholders' equity 15,672 14,820 5.7
Bank of Oak Ridge
Financial Highlights
(dollars in thousands, except share and per share data)
(Unaudited)
Six Months Ended
June 30,
Total Revenue 2006 2005 Change
-------------------------------
Net interest income $3,151 $2,419 30.3
--------------------------------
Fees and other revenue:
Customer service and other fees 167 185 (9.7)
Mortgage loan origination fees 147 125 17.6
Investment and insurance commissions 464 151 207.3
Fee income from accounts receivable
financing 88 2 4,300.0
Other 143 125 14.4
--------------------------------
Total noninterest income 1,009 588 71.6
--------------------------------
Total revenue $4,160 $3,007 38.3
================================
Six Months Ended
June 30,
Noninterest Expense 2006 2005 Change
--------------------------------
Salaries and employee benefits $1,786 $1,229 45.3
Occupancy and equipment 490 361 35.7
Data and items processing 120 179 (33.0)
Professional and advertising expenses 467 380 22.9
Other 408 325 25.5
--------------------------------
Total noninterest expense $3,271 $2,474 32.2
================================
--------------------------------
Six Months Ended
June 30,
Average Balances 2006 2005 Change
--------------------------------
Total assets $176,670 $141,798 24.6
Loans receivable 131,906 96,496 36.7
Allowance for loan losses 1,498 1,029 45.5
Other interest-earning assets 33,785 36,762 (8.1)
Total deposits 143,824 103,983 38.3
Borrowings 16,223 22,475 (27.8)
Shareholders' equity 15,577 14,864 4.8
(1) Computed based on the weighted average number of shares
outstanding during each period.
(2) Ratios for the three- and six-month periods ended June 30,
2006 and 2005 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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