Bank of Oak Ridge Reports Record Third 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 CM: 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 19 cents for the third quarter of 2006, compared with a diluted earnings per share of 12 cents for the same period of 2005. Net income for the third quarter of 2006 was $354,000, compared with net income of $225,000 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 third quarter of 2006, particularly in light of the additional expenses associated with our second 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. banking location that opened on June June: see month. of this year. There was a 29 percent increase in loans and a 30 percent increase in deposits from September September: see month. 30, 2005 to September 30, 2006, as well as a 64 percent increase in non-interest income for the nine month period ending September 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 September 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 third quarter, the six-year old bank increased its hours to 8:30 a.m. to 6:00 p.m. 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 to 8:30 a.m. to 1:00 p.m. on Saturdays. "We're we're Contraction of we are. we're we are Open Early, Open Late! with 6-Day Branch Banking At All Locations," said Bank of Oak Ridge president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Ron Black. "Our existing and new customers consistently tell us how much they appreciate our expanded hours." The rapidly growing bank now four 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 nine months ended September 30, 2006 and 2005 Net Income The Bank recorded net income of $1,024,000 and $495,000 for the nine months ended September 30, 2006 and 2005, respectively. Net Interest Income The Bank's net interest income for the nine months ended September 30, 2006 was $4.8 million, up $1.0 million, or 27 percent, from $3.8 million in the same period in 2005. The net interest margin in the first nine months of 2006 was 3.75 percent, compared with 3.64 percent for the same period in 2005. The 11 basis point increase in the net interest margin in the first nine months of 2006 over the same period in 2005 is primarily a result of a 123 basis point increase in earning asset Earning asset An asset that generates income, e.g., income from rental property. yields, offset by a 141 basis point increase in funding costs. An increase of $31.3 million in average interest-earning assets, and an increase of $20.1 million in average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities from the first nine months of 2005 to the same period in 2006 also contributed to the improvement in the net interest margin for the nine month period ended September 30, 2006, compared to the same period in 2005. Provision for Loan Losses The provision for loan losses decreased to $323,000 for the nine months ended September 30, 2006 compared to $390,000 for the same period in the prior year. The decrease in the provision from 2005 to 2006 is primarily due to slightly lower loan growth in the nine months ended September 30, 2006 compared to the same period in 2005, as well as a lower level of net charge offs in the nine months ended September 30, 2006 compared to the same period in 2005. The allowance for loan losses to total loans was 1.15, 1.15 and 1.14 percent at September 30, 2006. Noninterest Income Noninterest income totaled $1.5 million in the first nine months of 2006, up $594,000, or 64 percent, from $922,000 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, net realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. on sale of other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most , 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 $28,000, $409,000, $4,000, $122,000 and $42,000, respectively, accounted for most of the total increase in noninterest income. These increases were offset by a decrease in service charges on deposit accounts, net realized gain Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. on sale of investment securities available for sale, and income earned on bank owned life insurance of $5,000, $1,000, and $5,000, respectively. 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 nine months ended September 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 Noninterest expense totaled $5.0 million in the first nine months of 2006, up $1.2 million, or 32 percent, from $3.8 million for the same period in 2005. Salaries and employee benefits increased $772,000, or 40 percent, to $2.7 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 nine 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 $82,000, or 29 percent, to $368,000 from 2005 to 2006, due to the additional banking offices noted above. Equipment expense increased $80,000, or 27 percent, from 2005 to 2006, to $374,000 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 September of 2005. Data and items processing expense decreased $16,000, or 7 percent, from 2005 to 2006, to $199,000 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 $81,000, or 14 percent, from 2005 to 2006, to $679,000 due primarily to greater advertising expenses in 2006 compared to 2005. Other noninterest expenses, which consist primarily of stationary Stationary can mean:
Operating Results for the three months ended September 30, 2006 and 2005 Net Income The Bank recorded net income of $354,000 and $225,000 for the three months ended September 30, 2006 and 2005, respectively. Net Interest Income The Bank's net interest income for the three months ended September 30, 2006 was $1.7 million, up $295,000, or 22 percent, from $1.4 million in the same period in 2005. The net interest margin in the third quarter of 2006 was 3.69 percent, compared with 3.64 percent for the same period in 2005. The 5 basis point increase in the net interest margin in the third quarter 2006 over the same period in 2005 was primarily a result of an increase of $28.6 million in average interest-earning assets, and an increase of $16.2 million in average interest-bearing liabilities from the first quarter of 2005 to the same period in 2006, in addition to a 115 basis point increase in earning asset yields offset by a 143 basis point increase in funding costs. Provision for Loan Losses The provision for loan losses decreased to $104,000 for the three months ended September 30, 2006 compared to $128,000 for the same period in the prior year. The allowance for loan losses to total loans was 1.15, 1.15 and 1.14 percent at September 30, 2006, December 31, 2005 and September 30, 2005, respectively. Noninterest Income Noninterest income totaled $507,000 for the 2006 third quarter, up $173,000, or 52 percent, from $334,000 for the 2005 third quarter. Increases from 2005 to 2006 in service charges on deposit accounts, mortgage loan origination fees, investment and insurance commissions, net realized loss on sale of other real estate owned, fee income from accounts receivable financing, and other service charges and fees of $14,000, $6,000, $96,000, $4,000, $36,000 and $19,000, respectively, accounted for the total increase in noninterest income. These increases were offset by a decline of $2,000 in income earned on bank owned life insurance. 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 third quarter, up $363,000, or 27 percent, from $1.4 million for the 2005 third quarter. Salaries and employee benefits increased $215,000, or 31 percent, to $916,000 compared to the third 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 nine months of 2006 compared to the same period in 2005. The higher number of bank employees is primarily due to the opening of a new banking office in Greensboro in June of 2006, as well as an expansion in the bank's support functions to service the Bank's continued growth. Occupancy expense increased $8,000, or 7 percent, to $123,000 from 2005 to 2006, due to the additional banking offices noted above. Equipment expense increased $24,000, or 23 percent, from 2005 to 2006, to $129,000 due to greater depreciation expense related to furniture and fixture acquisitions put into service after September of 2005. Data and items processing expense increased $42,000, or 114 percent, from 2005 to 2006, to $79,000 due to recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. fees associated with a new deposit sweep product put in place in the third quarter of 2006, higher items processing expense associated with more deposit accounts, and additional teller TELLER. An officer in a bank or other institution. He is said to take that name from tallier, or one who kept a tally, because it is his duty to keep the accounts between the bank or other institution and its customers, or to make their accounts tally. system software license fees associated with a greater number of tellers in the third quarter of 2006 compared to the same period in 2005 . Professional and advertising expenses decreased $5,000, or 2 percent, from 2005 to 2006, to $212,000 due primarily to slightly lower 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 $79,000, or 45 percent, to $255,000, due to the Bank's continued growth. Comparison of Financial Condition at September 30, 2006 and December 31, 2005 The Bank's assets increased from $172.5 million to $194.7 million, up $22.2 million, or 13 percent, from December 31, 2005 to September 30, 2006. The majority of the net increase in assets between the two periods was caused by an increase in loans, cash and due from banks, and interest-bearing deposits with 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 $147.5 million at the end of the 2006 third quarter, up $26.3 million, or 22 percent, from $121.2 million at December 31, 2005. The average yield on loans was 8.21 percent for the 2006 third quarter, up 117 basis points from 7.04 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 $33.1 million at the end of the 2006 third quarter, down $6.5 million, or 16 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 4.46 percent for the 2006 third quarter, up 37 basis points from 4.09 percent for the same period in 2005. Deposits Deposits totaled $160.5 million at the end of the 2006 third quarter, up $20.3 million, or 14 percent, from $140.2 million at December 31, 2005. The increase in deposits assisted in funding the bank's loan growth, and was a result of competitive pricing of various deposit products in our marketplace as well our two new banking offices that opened in Greensboro in August of 2005 and June of 2006. The average cost of interest-bearing deposits was 4.08 percent for the 2006 third quarter, up 145 basis points from 2.63 percent for the same period in 2005. Borrowings Short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. totaled $17.0 million at the end of the 2006 third quarter, up $800,000, or 5 percent, from $16.2 million at December 31, 2005. The average cost of other borrowings was 5.39 percent for the 2006 third quarter, up 175 basis points from 3.64 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 $16.1 million at the end of the 2006 third quarter, up $980,000, or 7 percent, from $15.1 million at December 31, 2005. The increase primarily resulted from net income of $1,024,000 for the nine months ended September 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 $49,000 attributable to a decline in the Bank's available-for-sale investment securities during the nine months ended September 30, 2006. Nonperforming Assets Nonaccrual and accruing loans greater than 90 days past due totaled $159,000 at September 30, 2006, down $144,000, or 48 percent, from $303,000 at December 31, 2005. 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 September 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 and Greensboro. The bank offers a complete line of banking and investment services, including savings and checking accounts, mortgage and business loans, Saturday hours, same-day deposits, 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 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 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] [TABLE OMITTED] [TABLE OMITTED] (1) Computed based on the weighted average number of shares outstanding during each period. (2) Ratios for the three and six-month periods ended September 30, 2006 and 2005 are presented on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. (3) Net interest margin is net interest income divided by average interest 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 . (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, excluding gains on the sale of investment securities. (6) Nonperforming assets consist of non-accruing loans, restructured loans and foreclosed assets, where applicable. |
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