Cardinal Financial Corporation Reports First Quarter 2004 Results.Business Editors TYSONS CORNER, Va.--(BUSINESS WIRE)--April 14, 2004 Cardinal cardinal, in zoology cardinal or redbird, common name for a North American songbird of the family Fringillidae (New World finch family). Financial Corporation (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 :CFNL) (the "Company"), parent company of Cardinal Bank, N.A., located in Tysons Corner, Virginia Tysons Corner is an unincorporated place in Fairfax County, Virginia, near Washington, D.C. between McLean, Virginia and Vienna, Virginia along the Capital Beltway (I-495). Recognized by the U.S. , today announced earnings for the first quarter of 2004. First quarter net income increased by 96% to $719 thousand, or $0.04 per 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. share, compared to $366 thousand, or $0.04 per diluted share, for the same period in 2003. Weighted average fully diluted shares outstanding were 17.9 million and 10.2 million for the quarters ended March 31, 2004 and March 31, 2003, respectively. These results reflect an income tax provision of $362 thousand for the first quarter of 2004 compared to no tax provision for the same period in 2003. The 2003 results were not subject to a tax provision because of available net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . On March 29, 2004, the Company's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. automatically converted to common stock. As a result of the stock conversion, net income to common shareholders for the first quarter of 2004 did not include expenses related to preferred stock dividends. Expenses for preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) totaled $124 thousand for the first quarter of 2003. Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. Clineburg, Chairman 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. , said, "The conversion of our preferred stock marks another milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. of success for the company. Not only did the conversion improve our book value per share by ten cents Ten Cents has several meanings:
adj. 1. Almost exact or correct: the approximate time of the accident. 2. $490 thousand per year in dividends, which will be used to further support our growth strategy." The Company continues to achieve profitability through growth in the Company's 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 and a stable net interest margin of 3.00%, which is unchanged from the year ended December December: see month. 31, 2003. The Company opened a 12th bank office in Herndon Herndon, town (1990 pop. 16,139), Fairfax co., N Va., inc. 1874, rechartered 1938. A suburb of Washington, D.C., Herndon has a mix of light and high-tech industries. during February February: see month. 2004. Since March 31, 2003, the Company has opened four bank offices, which accounted for the increase in non-interest expense during the first quarter of 2004 when compared to the same quarter of 2003. At March 31, 2004, total assets had increased by $57.3 million or 9.0% to $693.5 million, compared to $636.2 million at December 31, 2003. Loans receivable, net of fees, were $335.2 million at March 31, 2004, compared to $336.0 million at December 31, 2003, a decrease of $800 thousand, or 0.02%. Investment securities increased $48.5 million, or 17.7%, to $322.1 million at March 31, 2004, compared to $273.6 million at December 31, 2003. Total deposits increased by $51.8 million or 10.9% to $525.9 million at March 31, 2004, compared to $474.1 million at December 31, 2003. Other borrowed funds were $71.8 million at March 31, 2004, compared to $74.5 million at December 31, 2003, a decrease of $2.7 million, or 3.6%. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. improved to $93.3 million at March 31, 2004, compared to $85.4 million at December 31, 2003. The increase of $7.9 million from the prior year was primarily driven by the underwriters' exercise in January January: see month. 2004 of their over allotment A portion, share, or division. The proportionate distribution of shares of stock in a corporation. The partition and distribution of land. ALLOTMENT. Distribution by lot; partition. Merl. Rep. h.t. option from the secondary offering in December 2003. The over allotment exercise resulted in the issuance of an additional 945,000 shares of the Company's common stock and the receipt of $6.3 million in total capital. Net income of $719 thousand for the quarter ended March 31, 2004 also added to the increase in shareholders' equity for the period. In addition, the Company had a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market value adjustment of $817 thousand on investment securities available-for-sale as of March 31, 2004. Book value per common share Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: at March 31, 2004 was $5.08, compared to $4.80 at December 31, 2003. 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. capital ratios for the Company at March 31, 2004 remained well above regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . Net interest income increased to $4.8 million for the first quarter of 2004, compared to $3.5 million for the first quarter of 2003, an increase of $1.3 million, or 39.7%. The increase is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the increase in the average volume of loans and investment securities during the first quarter of 2004 compared to the same period of 2003. The increases in average loans and investment securities were funded through increases in total deposits, other borrowed funds and shareholders' equity. For the three months ended March 31, 2004, the Company's net interest margin was 3.00%, compared to 3.11% during the first quarter of 2003. The historically low interest rate environment we have experienced in recent periods continues to affect the Company's margins; however, the results from increases in the volume of earning assets has more than offset the decreases in rates. The provision for loan loss expense was $74 thousand for the quarter ended March 31, 2004, compared to $80 thousand for the same period of 2003. For the quarter ended March 31, 2004, the Company continued to experience strong loan quality, with 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. net charge-offs to average loans receivable of 0.08% compared to 0.03% for the same period of 2003. The Company's allowance to total loans ratio was 1.30% at March 31, 2004 compared to 1.29% at December 31, 2003. Non-interest income decreased slightly to $877 thousand in the first quarter of 2004 from $976 thousand in the same quarter of 2003, due mostly to decreased gains on the sale of securities. Excluding the realized gains 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 the sale of investment securities of $241 thousand and $493 thousand for the first quarters of 2004 and 2003, respectively, non-interest income would have increased $153 thousand to $636 thousand for the first quarter of 2004 compared to $483 thousand for the first quarter of 2003. The Company experienced increases in service charges on deposit accounts, investment fee income and loan service charges. Non-interest expense increased to $4.6 million for the first quarter of 2004 from $3.9 million for the same period in 2003. The increases in non-interest expense were a result of the Company's bank office expansion during the past 12 months. Increases in salaries and benefits expense, 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 , advertising and marketing and professional fees were associated with this expansion and the strong asset growth that has occurred over the past 12 months. Bernard Clineburg, Chairman and CEO, said, "We expect our branch expansion pace to quicken A popular financial management program for PCs and Macs from Intuit, Inc., Mountain View, CA (www.intuit.com). It is used to write checks, organize investments and produce a variety of reports for personal finance and small business. for the balance of 2004. We have received regulatory approval to open a new branch adjacent to George Mason University Named after American revolutionary, patriot and founding father George Mason, the university was founded as a branch of the University of Virginia in 1957 and became an independent institution in 1972. in Fairfax Fairfax, city (1990 pop. 19,622), historic seat of Fairfax co., NE Va., a residential suburb of Washington, D.C.; inc. 1892, as a city 1961 (at which time it became independent and no longer included in a county). There is some light manufacturing. , which we expect to open in June June: see month. . We have been successful in securing contracts to purchase four additional full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. branch offices in prime locations and are in lease negotiations for up to three more. The additional branch offices we have under contract will expand our footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. to the rapidly growing markets of Stafford County Stafford County is the name of two counties in the United States:
1 Town (1990 pop. 6,934), Gillespie co., S central Texas, in the Texas Hill Country near the Pedernales River; inc. 1928. Located in an agricultural (cattle, peaches, wine, lavender) and quarrying (granite, sand, gravel) region, the city and will strengthen our presence in Loudoun
Loudoun (Lughdan in Scottish Gaelic) is an area of East Ayrshire, Scotland, east of Kilmarnock. The word Loudoun is derivative of the Celtic Pagan God name Lugh. County. We now expect to open up to seven new branch offices in 2004, with an additional three or four opening in 2005. Our goal is to expand our footprint in the Northern Virginia Northern Virginia (NoVA) consists of Arlington, Fairfax, Loudoun, and Prince William counties and the independent cities of Alexandria, Falls Church, Fairfax, Manassas, and Manassas Park. market to over 20 branches within the next year." This press release contains "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. " within the meaning of the federal securities laws. These forward-looking statements contain information related to matters such as the Company's intent, belief or expectation with respect to matters such as financial performance and branch expansion. Such statements are necessarily based on management's assumptions and estimates and are inherently subject to a variety of risks and uncertainties concerning the Company's operations and business environment, which are difficult to predict and beyond the control of the Company. Such risks and uncertainties could cause the actual results of the Company to differ materially from those matters expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in such forward-looking statements. For an explanation of the risks and uncertainties associated with forward-looking statements, please refer to the Company's Annual Report on Form 10-KSB for the year ended December 31, 2003 and other filings with the Securities and Exchange Commission. To learn more about Cardinal Financial Corporation and its subsidiaries, please log on to www.cardinalbank.com or call 703/ 584-3400.
Cardinal Financial Corporation and Subsidiaries
Summary Statements of Condition
March 31, 2004 and December 31, 2003
(Dollars in thousands)
(Unaudited)
March 31, December
2004 31, 2003 % Change
----------- ---------- ---------
Cash and due from banks $ 10,350 $ 9,555 8.3%
Federal funds sold 11,381 3,528 222.6%
Investment securities -
available-for-sale 167,981 130,762 28.5%
Investment securities -
held-to-maturity 154,140 142,852 7.9%
----------- ---------- ---------
Total investment securities 322,121 273,614 17.7%
Other investments 3,986 3,517 13.3%
Loans receivable, net of fees 335,164 336,002 -0.2%
Allowance for loan losses (4,347) (4,344) 0.1%
----------- ---------- ---------
Loans receivable, net 330,817 331,658 -0.3%
Premises and equipment, net 7,107 6,707 6.0%
Other assets 7,689 7,669 0.3%
----------- ---------- ---------
TOTAL ASSETS $ 693,451 $ 636,248 9.0%
=========== ========== =========
Non-interest bearing deposits $ 81,466 $ 70,998 14.7%
Interest bearing deposits 444,465 403,131 10.3%
----------- ---------- ---------
Total deposits 525,931 474,129 10.9%
Other borrowed funds 71,758 74,457 -3.6%
Other liabilities 2,422 2,250 7.6%
Shareholders' equity 93,340 85,412 9.3%
----------- ---------- ---------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $693,451 $636,248 9.0%
=========== ========== =========
Cardinal Financial Corporation and Subsidiaries
Summary Statements of Operations
Three Months Ended March 31, 2004 and 2003
(Dollars in thousands, except share and per share data)
(Unaudited)
For the Three Months
Ended
March 31,
2004 2003 % Change
----------- ----------- ---------
Net interest income $ 4,833 $ 3,459 39.7%
Provision for loan losses (74) (80) -7.5%
Non-interest income 877 976 -10.1%
----------- ----------- ---------
Net interest income & non-interest
income 5,636 4,355 29.4%
Salaries & benefits 2,140 1,649 29.8%
Occupancy 496 480 3.3%
Depreciation 310 196 58.2%
Data processing 195 204 -4.4%
Telecommunications 103 73 41.1%
Other operating expense 1,311 1,263 3.8%
----------- ----------- ---------
Total non-interest expense 4,555 3,865 17.9%
Net income before income taxes 1,081 490 120.6%
----------- ----------- ---------
Provision for income taxes 362 - 100.0%
---------------------------------
NET INCOME $ 719 $ 490 46.7%
=================================
Dividends to preferred shareholders $ - $ 124 100.0%
NET INCOME TO COMMON SHAREHOLDERS $ 719 $ 366 96.4%
=================================
Earnings per common share, basic $ 0.04 $ 0.04 0.0%
=================================
Earnings per common share, diluted $ 0.04 $ 0.04 0.0%
=================================
Weighted-average common shares
outstanding - basic 17,460,989 10,046,065 73.8%
=================================
Weighted-average common shares
outstanding - diluted 17,884,580 10,170,827 75.8%
=================================
Cardinal Financial Corporation and Subsidiaries
Average Statements of Condition and Yields on Earning Assets and
Interest-Bearing Liabilities
Three Months Ended March 31, 2004 and 2003
(Dollars in thousands)
For the Three Months Ended
March 31, 2004 March 31, 2003
Average Average Average Average
Balance Yield Balance Yield
--------- -------- --------- --------
Interest-earning assets:
Loans receivable, net of fees $336,785 5.62% $249,975 6.45%
Investment securities -
available-for-sale 141,839 3.58% 180,044 3.73%
Investment securities - held-to-
maturity 150,016 3.60% - 0.00%
Other investments 3,634 4.18% 1,853 5.18%
Federal funds sold 12,146 0.91% 13,503 1.16%
--------- -------- --------- --------
Total interest-earning assets 644,420 4.60% 445,375 5.18%
Non-interest earning assets:
Cash and due from banks 10,256 14,720
Premises and equipment, net 6,833 5,007
Accrued interest and other
assets 7,523 5,113
Allowance for loan losses (4,408) (3,397)
--------- ---------
TOTAL ASSETS $664,624 $466,818
========= =========
Interest-bearing liabilities:
Interest-bearing deposits $424,746 2.16% $342,953 2.61%
Other borrowed funds 73,545 1.63% 14,957 1.95%
--------- -------- --------- --------
Total interest-bearing
liabilities 498,291 2.08% 357,910 2.59%
Noninterest-bearing liabilities:
Noninterest-bearing deposits 72,399 66,638
Other liabilities 2,204 1,588
Shareholders' equity 91,730 40,682
--------- ---------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $664,624 3.00% $466,818 3.11%
========= =========
Cardinal Financial Corporation and Subsidiaries
Selected Financial Information
(In thousands, except per share data and ratios)
(Unaudited)
For the Three Months
Ended
March 31,
2004 2003
-----------------------
Results of Operations
Interest income $ 7,415 $ 5,772
Interest expense 2,582 2,313
----------------------------------------------------------------------
Net interest income 4,833 3,459
Provision for loan losses 74 80
----------------------------------------------------------------------
Net interest income after provision for loan
losses 4,759 3,379
Non-interest income 877 976
Non-interest expense 4,555 3,865
----------------------------------------------------------------------
Net income before income taxes 1,081 490
Provision for income taxes 362 -
----------------------------------------------------------------------
Net income 719 490
Dividends to preferred shareholders - 124
----------------------------------------------------------------------
Net income to common shareholders $ 719 $ 366
======================================================================
Balance Sheet Data: March 31, December 31,
2004 2003
Total assets $ 693,451 $ 636,248
Loans receivable, net of fees 335,164 336,002
Allowance for loan losses (4,347) (4,344)
Total investment securities 322,121 273,614
Total deposits 525,931 474,129
Other borrowed funds 71,758 74,457
Total shareholders' equity 93,340 85,412
Preferred shares outstanding - 1,365
Common shares outstanding 18,371 16,377
Selected Average Balances March 31, March 31,
2004 2003
Total assets $ 664,624 $ 466,818
Loans receivable, net of fees 336,785 249,975
Allowance for loan losses (4,408) (3,397)
Total investment securities 291,855 180,044
Earning assets 644,420 445,375
Total deposits 497,145 409,591
Other borrowed funds 73,545 14,957
Total shareholders' equity 91,730 40,682
Weighted Average:
-----------------
Common shares outstanding - basic 17,461 10,046
Common shares outstanding - diluted 17,885 10,171
Per Common Share Data:
Basic net income $ 0.04 $ 0.04
Fully diluted net income 0.04 0.04
Book value 5.08 3.24
Tangible book value 5.08 3.18
Performance Ratios:
Return on average assets 0.43% 0.42%
Return on average equity 3.14% 4.81%
Net interest margin 3.00% 3.11%
Efficiency ratio 79.77% 87.15%
Non-interest income to average assets 0.53% 0.84%
Non-interest expense to average assets 2.74% 3.31%
Asset Quality Data:
Annualized net charge-offs to average loans
receivable, net of fees 0.08% 0.03%
Non-performing loans to loans receivable, net
of fees 0.07% 0.33%
Non-performing loans to total assets 0.03% 0.17%
Allowance for loan losses to loans receivable,
net of fees 1.30% 1.36%
Allowance for loan losses to nonperforming
loans 1834.2% 410.90%
Capital Ratios:
Tier 1 risk-based capital 19.91% 12.20%
Total risk-based capital 20.84% 13.30%
Leverage capital ratio 14.65% 8.90%
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