Cardinal Financial Corporation Reports Third Quarter 2003 Profits; Assets Exceed $560 Million.Business Editors TYSONS CORNER, Va.--(BUSINESS WIRE)--Oct. 16, 2003 Cardinal 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 - Common, NASDAQ:CFNLP CFNLP California Friday Night Live Partnership - Preferred) (the "Company"), parent company of Cardinal Bank, N.A., today announced third quarter 2003 net income of $645,000, or $0.06 per common share, compared to net income of $305,000, or $0.03 per common share, in the third quarter of 2002, representing an improvement of $340,000, or 111.5%. The improvement in net income is a result of increases in net interest income driven by loan and investment securities growth during the quarter, offset by increases in the provision for loan losses and non-interest expense. This quarterly result is presented after the effect of dividends of $124,000 paid in each quarter to preferred shareholders. The third quarter of 2003 is the fifth consecutive profitable quarter reported by the Company, resulting from the successful restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and consolidation that began in late 2001. For the nine months ended September September: see month. 30, 2003, the Company reported net income of $1.6 million or $0.15 per common share, compared to a loss of $1.1 million or $0.15 per common share for the comparable period in 2002, an improvement of $2.7 million. All results are presented after the effect of preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) paid year to date of $371,000 in 2003 and 2002. Total assets increased by 15.8% or $77.0 million to $563.3 million at September 30, 2003, compared to $486.3 million at December December: see month. 31, 2002. Total loans receivable, net of fees, were $290.8 million at September 30, 2003, compared to $249.1 million at December 31, 2002, an increase of $41.7 million or 16.7%. Total investment securities increased by $79.4 million or 48.5% to $243.1 million at September 30, 2003, compared to $163.7 million at December 31, 2002. Total deposits increased by $35.7 million or 8.4% to $459.2 million at September 30, 2003, compared to $423.5 million at December 31, 2002. Other borrowed funds at September 30, 2003 were $62.8 million, an increase of $60.8 million compared to $2.0 million at December 31, 2002. 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. decreased 3.9% to $39.1 million at September 30, 2003, compared to $40.7 million at December 31, 2002. The decrease of $1.6 million over the last nine months was driven by an unfavorable mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. adjustment of $3.3 million on the Company's primarily mortgage-backed Mortgage-backed may refer to:
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 September 30, 2003 was $3.21, compared to $3.37 at December 31, 2002. Tangible book value per common share at September 30, 2003 was $3.14, compared to $3.31 at December 31, 2002. Regulatory capital ratios for the Company remained well above regulatory minimum requirements. Net interest income increased $996,000 or 35.1% to $3.8 million for the three months ended September 30, 2003, compared to $2.8 million for the third quarter of 2002. Year to date, net interest income increased $2.9 million or 36.4% to $10.7 million, compared to $7.9 million for the same period of 2002. The increase is attributable to the increase in the average volume of investment securities and loans in the three and nine months ended September 30, 2003, compared with the same periods in the prior year, funded through the increase in total deposits and other borrowed funds. This increase was slightly offset by a decline in the year to date net interest margin, resulting from historically low interest rates. For the nine months ended September 30, 2003, the Company's net interest margin was 2.96%, a decrease of 9 basis points when compared to the same period of 2002. For the three months ended September 30, 2003, the Company's net interest margin increased 2 basis points to 2.88%, compared to 2.86% during the third quarter of 2002. During the quarter ended September 30, 2003, the provision for loan loss expense was $356,000, compared to $95,000 for the quarter ended September 30, 2002. For the year to date 2003, the provision for loan losses was $602,000, compared to $134,000 for the same period 2002. The reason for the increase in provision expense for the quarter and year to date periods was due to growth in the volume of loans receivable compared to the prior year. The Company's allowance to total loans ratio increased slightly to 1.36% at September 30, 2003, compared to 1.35% at December 31, 2002. The Company continued to experience strong loan quality as demonstrated by 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 of only .01% of total loans during the third quarter and non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. representing only .18% of total loans as of September 30, 2003. Non-interest income increased 53.2% to $971,000 in the third quarter of 2003 from $634,000 in the same quarter of 2002, due to an increase of $170,000 in gains on the sale of a portion of the Company's mortgage-backed and U.S. agency bond portfolios compared to the third quarter of 2002. In addition, during the third quarter, the Company recorded $171,000 in gains on the sale of mortgage loans through a loan sales program that began in March 2003. For the year to date 2003, non-interest income increased 58.2% to $3.0 million, compared to $1.9 million for the same period in 2002. Non-interest expense increased 24.8% to $3.7 million for the third quarter of 2003 from $3.0 million for the same period in 2002. The increase is mostly attributable to the branch expansion the Company completed during the third quarter of 2003. The Company opened its ninth branch at its headquarters location on September 2 and its tenth branch in Leesburg Leesburg, city (1990 pop. 14,903), Lake co., N central Fla., in a hill and lake region; inc. 1875. Leesburg, named for Evander Lee, its founder, is a processing and shipping center in a citrus-fruit and truck-farm area. on October October: see month. 1. For the year to date 2003, non-interest expense increased $834,000 or 8.0% to $11.2 million, compared to $10.4 million for the same nine-month period in 2002. The Company's headquarters move to Tysons Corner during the first quarter of 2003 and the opening of three branch locations during the past twelve months has impacted 2003 expenses. The Company has also increased its advertising and marketing efforts, and has experienced increases in other professional fees and loan expenses, all attributed to the Company's strong asset growth during the last nine months. As previously announced in January January: see month. 2003, the Company has reached an agreement to acquire at least two additional premier full service branch office sites in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). - one in western 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. County and one in eastern Prince William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack County. Pending regulatory approval, these two additional branch sites are expected to open during the first or second quarter of 2004. Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. H. Clineburg, Chairman, President and Chief Executive Officer of the Company, said "We continue to make progress in building our franchise while improving our profitability and maintaining our high standards for credit quality. We are gaining momentum in building our commercial and real estate loan portfolios and are experiencing steady growth in our consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. portfolio. We have opened two new branch offices in the past two months and have expanded 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. into the rapidly growing Leesburg and 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 markets. Subject to regulatory approval, we will expand into eastern Prince William County and western Fairfax County markets over the next three to six months and are continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. evaluating new branch sites in rapidly growing markets. Expenses associated with our branch expansion strategy may negatively affect our short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. profitability, however, we are encouraged by the strong loan growth we experienced during the third quarter, which should have a positive effect on interest margins as we begin the fourth quarter." Cardinal Financial Corporation is the parent company of Cardinal Bank, N.A., and Cardinal Wealth Services, Inc., a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. investment advisor Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and subsidiary. Cardinal Bank, N.A., serves 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. with ten conveniently located branches in Alexandria Alexandria, city, Egypt Alexandria, Arabic Al Iskandariyah, city (1996 pop. 3,328,196), N Egypt, on the Mediterranean Sea. It is at the western extremity of the Nile River delta, situated on a narrow isthmus between the sea and Lake Mareotis (Maryut). , Arlington Arlington, county, United States Arlington, county (1990 pop. 170,936), N Va., across the Potomac River from Washington, D.C. Arlington is a residential and commercial suburb of Washington. , Fairfax, Leesburg, Manassas Manassas (mənăs`əs), town (1990 pop. 27,957), seat of Prince William co., N Va., in a farm area; inc. 1873, rechartered 1938. Manassas has become a growing residential town with retail shopping centers; its development has been spurred as , McLean McLean, city (1990 pop. 38,168), Fairfax co., N Va., a suburb of Washington, D.C. Manufacturing includes foods, satellite components, and computer and telecommunications equipment. , Reston, Sterling and Tysons Corner. The company's common and 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. is traded on the NASDAQ SmallCap Market (CFNL-Common, CFNLP-Preferred). For additional information, please visit our website at www.cardinalbank.com. 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 statements may be identified by the use of forward-looking terminology such as "may," "could," "expect," "believe," "anticipate," "intend," "plan" or variations thereof. These forward-looking statements may contain information related to matters such as the Company's intent, belief or expectation with respect to matters such as its future operations and financial performance. Such statements are necessarily based on 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 in such forward-looking statements. For an explanation of certain risks and uncertainties associated with forward-looking statements, please refer to the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other filings that the Company makes with the Securities and Exchange Commission.
Cardinal Financial Corporation and Subsidiaries
Summary Statements of Condition
As of September 30, 2003 and December 31, 2002
(Dollars in thousands)
(Unaudited)
2003 2002
-------- --------
Cash & due from banks $ 9,332 $ 27,465
Federal funds sold 10,748 35,906
Investment securities - available-for-sale 97,174 163,665
Investment securities - held-to-maturity 145,892 -
-------- --------
Total investment securities 243,066 163,665
Other investments 3,748 1,615
Loans held for sale 785 -
Loans receivable, net of fees 290,811 249,106
Allowance for loan losses (3,943) (3,372)
-------- --------
Loans receivable, net 286,868 245,734
Premises and equipment, net 5,040 4,942
Goodwill 646 646
Other assets 3,115 6,350
-------- --------
TOTAL ASSETS $563,348 $486,323
======== ========
Non-interest bearing deposits $ 84,833 $ 72,962
Interest bearing deposits 374,378 350,517
-------- --------
Total deposits 459,211 423,479
Other borrowed funds 62,753 2,000
Other liabilities 2,253 20,132
Shareholders' equity 39,131 40,712
-------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $563,348 $486,323
======== ========
Non-performing loans/ loans receivable, net of
fees 0.18% 0.37%
Annualized net charge offs / loans receivable,
net of fees 0.01% 0.04%
Allowance / loans receivable, net of fees 1.36% 1.35%
Shareholders' equity $ 39,131 $ 40,712
Tier I capital 39,420 37,721
Ratio 10.62% 12.25%
Tier I & II capital $ 43,364 $ 41,093
Ratio 11.68% 13.35%
Book value per common share $ 3.21 $ 3.37
Tangible book value per common share $ 3.14 $ 3.31
Cardinal Financial Corporation and Subsidiaries
Summary Statements of Operations
Three and Nine Months Ended September 30, 2003 and 2002
(Dollars in thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
----------- ----------- ----------- ----------
Net interest income $ 3,838 $ 2,842 $ 10,742 $ 7,875
Provision for loan
losses (356) (95) (602) (134)
Non-interest income 971 634 2,994 1,893
----------- ----------- ----------- ----------
Net interest income
& non-interest
income 4,453 3,381 13,134 9,634
Salaries & benefits 1,671 1,368 4,861 4,176
Occupancy 317 273 1,093 729
Depreciation 276 176 731 555
Amortization of
intangibles - - - 22
Data processing 216 210 671 607
Telecommunications 99 69 294 204
Writedown on
corporate bond
impairment - - - 1,660
Other operating
expense 1,105 856 3,556 2,419
----------- ----------- ----------- ----------
Total non-interest
expense 3,684 2,952 11,206 10,372
----------- ----------- ----------- ----------
NET INCOME (LOSS) $ 769 $ 429 $ 1,928 $ (738)
=========== =========== =========== ==========
Dividends to
preferred
shareholders $ 124 $ 124 $ 371 $ 371
NET INCOME (LOSS)
TO COMMON
SHAREHOLDERS $ 645 $ 305 $ 1,557 $ (1,109)
=========== =========== =========== ==========
Basic and diluted
earnings (loss)
per common share $ 0.06 $ 0.03 $ 0.15 $ (0.15)
Average common
shares outstanding
for basic 10,072,262 10,044,345 10,058,202 7,243,053
Average common
shares outstanding
for diluted 10,344,977 10,142,930 10,249,184 7,243,053
Return on average
assets 0.56% 0.41% 0.51% -0.27%
Return on average
equity 7.79% 4.33% 6.42% -3.25%
Net interest margin 2.88% 2.86% 2.96% 3.05%
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