Cardinal Reports Fourth Quarter and 2007 Annual Earnings.Asset Quality Remains Excellent; Loans Increase 23% TYSONS CORNER, Va. -- 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) (the "Company") today reported earnings of $1.4 million and $4.5 million, or $0.06 and $0.18 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, for the three month and annual periods ended December 31, 2007, respectively. This compares to net income of $2.2 million and $7.4 million, or $0.09 and $0.30 per diluted share, for the same periods of 2006. As previously disclosed, the Company's current quarter and 2007 annual results include expenses that arose from an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. arrangement with Liberty Growth Fund, LP and AIMS Worldwide, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AMWW.OB). This resulted in a decrease of $2.7 million in net income for the year. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , which does not include expenses related to this event, were $1.5 million and $7.1 million, equivalent to $0.06 and $0.29 per diluted share, for the three and twelve month periods ended December 31, 2007. This compares to operating earnings of $2.2 million and $9.3 million, equivalent to $0.09 and $0.37 per diluted share, respectively, for the same periods of 2006. This release includes a table reconciling operating earnings to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the 2007 and 2006 periods presented. Selected Financial Highlights * Asset quality remains excellent. As of December 31, 2007, the Company had no loans on non-accrual or non-performing status. Net loans charged-off in 2007 represented only 0.06% of average loans receivable for the year. * The Company continues to experience robust loan demand. The loan portfolio grew year over year by $194 million, or 23%. Outstanding balances now exceed $1 billion for the first time in the Company's history. * Consolidated assets at year-end were $1.690 billion versus $1.638 billion one year earlier, an increase of 3%. * Cardinal's mortgage banking subsidiary reported fourth quarter net income of $141 thousand versus $368 thousand for the same quarter last year. For the year, net income of this subsidiary was $1.6 million versus $1.9 million in 2006. * The Company's equity position remains very strong with all ratios exceeding "well-capitalized" regulatory status. Highlights of Banking Operations For the year ended December 31, 2007, the Company's commercial banking operations reported earnings of $7.4 million versus $9.6 million for the year ended December 31, 2006. For these comparable periods, net interest income increased to $38.7 million from $38.1 million due to 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 increasing by $161 million year over year. Non-interest income was $4.0 million in 2007 and $4.4 million in 2006. Non-interest income for 2006 included an $855 thousand recovery on a previously charged off investment. Service charges on deposit accounts increased 25% from $1.593 million to $1.988 million. Improvements in income during 2007 were offset by an increase in the provision for loan losses, which was $2.5 million versus $1.2 million the previous year. The increase in the provision was primarily the result of significant loan growth as the Company maintained its allowance for loan losses at 1.12% of total loans outstanding. Other non-interest expenses increased to $30.3 million in 2007 compared to $27.1 million in 2006, primarily due to the addition of personnel and occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal as the Bank added new business development officers and four new branches since mid- mid- pref. Middle: midbrain. 2006. Expenses were also impacted by the re-enactment of FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). insurance premiums in 2007. For the quarter ended December 31, 2007, net income from banking operations was $1.8 million compared to $2.4 million for the same quarter in 2006. For these same periods, net interest income increased to $9.7 million from $9.2 million due to average earning assets increasing by $96 million. Non-interest income was $1.0 million in 2007 and $1.9 million in 2006. Non-interest income for 2006 included the $855 thousand recovery mentioned above. The provision for loan losses was $878 thousand versus $362 thousand in the fourth quarter of last year. Non-interest expenses increased to $7.6 million in 2007 compared to $7.1 million in 2006. At December 31, 2007, total assets of the Bank were $1.664 billion. During the year, the loan portfolio grew $194 million, or 23%, to $1.040 billion at December 31, 2007, from $845 million at December 31, 2006. Investment securities grew $36 million, or 11% year over year, while mortgage loans held for sale decreased to $170 million at year end 2007, compared to $339 million at year end 2006. The Bank had no loans on non-accrual or non-performing status at December 31, 2007. For the entire year of 2007, net loans charged off totaled $544 thousand, or 0.06% of average loans receivable. Since the company's inception in 1998, net loans charged off total $696 thousand. Highlights of Mortgage Banking Operations Despite the turbulent housing and credit markets, the Company's mortgage banking subsidiary, George Mason, remained profitable. For the 2007 year, net income was $1.623 million, which is a slight decrease from $1.935 million in 2006. For the fourth quarter of 2007, this business unit reported net income of $141 thousand, compared to $368 thousand for the same quarter of 2006. We continue to closely watch every aspect of this operation to remain prepared for any positive or negative changes in the residential real estate market. Highlights of Wealth Management and Trust Services The Company's Wealth Management subsidiaries contributed $463 thousand toward operating earnings during 2007, compared to a loss of ($51) thousand in 2006. For the most recent quarter, operating earnings were $145 thousand versus a loss of ($36) thousand in the same period a year ago. MANAGEMENT COMMENTS Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. H. Clineburg, Chairman and Chief Executive Officer of the Company, said: "While 2007 was a difficult year for Cardinal, we still delivered an annual increase in quality loan growth of 23%, and we were proud to have no 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. at year end. Our mortgage banking subsidiary continues to be affected by the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in housing and disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in the credit markets, however, it remains a profitable operation. We are still extremely excited about the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. future for Cardinal. We are focused on operating a safe and sound institution, maintaining our credit quality and improving profitability. The board and management remain committed to maximizing the strength and value of the Cardinal franchise." CAUTION ABOUT 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. This press release contains "forward-looking statements" 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 regard to such matters as financial and operational performance, credit quality 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 actual results of the Company to differ materially from those matters expressed or implied 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-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. for the year ended December 31, 2006 and other reports filed with and furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. to the Securities and Exchange Commission. About Cardinal Financial Corporation: Cardinal Financial Corporation, a financial holding company headquartered 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. with assets of $1.690 billion at December 31, 2007, serves the Washington Metropolitan region through its wholly-owned subsidiary, Cardinal Bank, with 25 conveniently located banking offices. Cardinal also operates several other subsidiaries: George Mason Mortgage, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a residential mortgage lending company based in Fairfax, with seven offices throughout the Washington Metropolitan region; Cardinal Trust and Investment Services, a trust division; Cardinal Wealth Services, Inc., a full-service brokerage company; and Wilson/Bennett Capital Management, Inc., an asset management company. The Company's stock is traded on NASDAQ (CFNL). For additional information please visit our Web site at www.cardinalbank.com or call (703) 584-3400. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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