Frederick County Bancorp, Inc. Reports Results for the Second Quarter 2014

FREDERICK, Md., July 15, 2014 /PRNewswire/ -- Frederick County Bancorp, Inc. (the "Company") (OTCQB Marketplace: FCBI), the parent company for Frederick County Bank ("FCB"), announced today that, for the quarter ended June 30, 2014, the Company recorded net income of $377 thousand and diluted earnings per share of $0.25, as compared to net income of $490 thousand and diluted earnings per share of $0.32 recorded for the second quarter of 2013.  The Company earned $902 thousand with diluted earnings per share of $0.59 for the six months ended on June 30, 2014, as compared to $970 thousand in earnings and diluted earnings per share of $0.63 for the same period in 2013. 

The decrease in quarterly earnings was due primarily to an increase in total noninterest expense to $2.4 million in the second quarter of 2014 as compared to $2.2 million in the second quarter of 2013, along with a loss of $37 thousand on the sale of foreclosed property that occurred in 2014, whereas no losses on the sale of foreclosed property were recorded in 2013.  The increase in noninterest expenses was due primarily to increases in FDIC insurance costs and consulting expenses of $78 thousand and $33 thousand, respectively. 

The decrease in year-to-date earnings was due primarily to an increase in total noninterest expense to $4.7 million in the first half of 2014 as compared to $4.4 million in the first half of 2013, which offset the increase in net interest income to $5.6 million in the first six months of 2014 from $5.3 million for the same period in 2013.  The loss of $37 thousand on the sale of foreclosed property that occurred in 2014, as compared to a $28 thousand gain on the sale of foreclosed property recorded in 2013, also contributed to the decline in earnings year-to-date.  The increase in noninterest expenses was due primarily to increases in FDIC insurance costs and consulting expenses of $75 thousand and $52 thousand, respectively. 

The ratio of the allowance for loan losses to total loans stood at 1.32% and 1.57% as of June 30, 2014 and 2013, respectively.  Nonperforming assets stood at $5.8 million and $8.4 million at June 30, 2014 and 2013, respectively, and at $5.3 million at December 31, 2013.  The corresponding nonperforming assets to total assets ratios were 1.74% and 2.59% as of June 30, 2013 and 2012, respectively, and 1.67% at December 31, 2013. 

The Company also reported that, as of June 30, 2014, assets stood at $331.5 million, with total deposits of $274.4 million and gross loans of $256.7 million, representing increases of 4.2%, 2.8%, and 1.1%, respectively, compared to December 31, 2013. 

Frederick County Bank is headquartered in Frederick, Maryland, and conducts full service commercial banking services through five bank centers located in Frederick County, Maryland.

 

 



June 30,

June 30,




December 31,


2014

2013




2013

(dollars in thousands)

(unaudited)

(unaudited)




(audited)

Total assets

$331,509

$324,635




$318,131








Loans

256,677

235,739




253,913








Deposits

274,416

278,448




266,988








Shareholders' equity

26,999

26,420




26,187








Nonperforming assets:







Nonaccrual loans

$3,041

$3,912




$3,379

Accruing troubled debt restructurings

1,198

2,437




976

Loans 90 days or more past due and still accruing

770

--




--








Foreclosed properties

743

2,048




972

Total nonperforming assets

$5,752

$8,397




$5,327









For the Three Months Ended


For the Six Months Ended



June 30,

June 30,


June 30,

June 30,



2014

2013


2014

2013


(dollars in thousands, except for per share data)

(unaudited)

(unaudited)


(unaudited)

(unaudited)


SUMMARY OF OPERATING
RESULTS:







Net income

$377

$490


$902

$970


Total comprehensive income (loss) 

$526

$(64)


$1,268

$305









Charge-offs

$5

$       5


$47

$   53


(Recoveries)

(3)

(137)


(5)

(180)


Net charge-offs

$2

$(132)


$42

$(127)









PER COMMON SHARE DATA:







Basic earnings per share

$0.26

$0.32


$0.61

$0.64


Diluted earnings per share

$0.25

$0.32


$0.59

$0.63


Basic weighted average number of shares
outstanding

1,473,335

1,508,574


1,474,271

1,508,574


Diluted weighted average number of shares outstanding

1,528,023

1,546,150


1,525,551

1,544,292


Common shares outstanding

1,469,754

1,508,574


1,469,754

1,508,574

1,484,174

Dividends declared

$0.07

$0.06


$0.14

$0.11


Book value per share

$18.37

$17.51


$18.37

$17.51

$17.64








SELECTED UNAUDITED FINANCIAL
RATIOS:







Return on average assets

0.46%

0.62%


0.55%

0.61%


Return on average equity

5.56%

7.27%


6.71%

7.24%


Allowance for loan losses to total loans

1.32%

1.57%


1.32%

1.57%

1.35%

Nonperforming assets to total assets

1.74%

2.59%


1.74%

2.59%

1.67%

Ratio of net charge-offs to average loans

0.00%

(0.06)%


0.02%

(0.05)%


Tier 1 capital to risk-weighted assets

11.85%

12.28%


11.85%

12.28%

11.83%

Total capital to risk-weighted assets

13.06%

13.53%


13.06%

13.53%

13.07%

Tier 1 capital to average assets

10.03%

10.24%


10.03%

10.24%

10.29%

Average equity to average assets

8.19%

8.46%


8.17%

8.45%


Net interest margin

3.61%

3.64%


3.68%

3.65%


 


Frederick County Bancorp, Inc. and Subsidiaries





Consolidated Balance Sheets












June 30,

2014

June 30,

2013

December 31
2013



(unaudited)

(unaudited)

(audited)

(dollars in thousands)





ASSETS 





Cash and due from banks


$    2,234

$    2,222

$   1,922

Federal funds sold


21

24

22

Interest-bearing deposits in other banks


30,342

33,886

18,166

       Cash and cash equivalents


32,597

36,132

20,110

Investment securities available-for-sale at fair value


25,592

35,673

27,016

Restricted stock 


1,805

1,444

1,669

Loans


256,677

235,739

253,913

Less: Allowance for loan losses


(3,381)

(3,697)

(3,423)

       Net loans


253,296

232,042

250,490

Bank premises and equipment


6,501

6,610

6,570

Bank owned life insurance


8,160

7,914

8,040

Foreclosed properties


743

2,048

972

Other assets


2,815

2,772

3,264

       Total assets


$331,509

$324,635

$318,131






LIABILITIES AND SHAREHOLDERS' EQUITY










Liabilities





Deposits





  Noninterest-bearing deposits


$  55,460

$  53,556

$  50,286

  Interest-bearing deposits


218,956

224,892

216,702

       Total deposits


274,416

278,448

266,988

Short-term borrowings


3,050

2,700

3,050

FHLB advances


20,000

10,000

15,000

Junior subordinated debentures


6,186

6,186

6,186

Accrued interest and other liabilities


858

881

720

       Total liabilities


304,510

298,215

291,944






Shareholders' Equity





Common stock, per share par value $0.01;
   
10,000,000 shares authorized; 1,469,754; 1,508,574 and 1,484,174 shares 
    issued and  outstanding


15

15

 

 

15

Additional paid-in capital


15,051

15,688

15,302

Retained earnings


12,153

10,914

11,456

Accumulated other comprehensive loss


(220)

(197)

(586)

       Total shareholders' equity


26,999

26,420

26,187

       Total liabilities and shareholders' equity


$331,509

$324,635

$318,131








 


Frederick County Bancorp, Inc. and Subsidiaries





Consolidated Statements of Income (Unaudited)






For the Three Months Ended

For the Six Months Ended

(dollars in thousands, except per share amounts)

June 30,

2014

June 30,

2013

June 30,

2014

June 30,

2013

Interest income





  Interest and fees on loans

$3,027

$2,897

$6,076

$5,776

  Interest and dividends on investment securities:





    Interest – taxable

90

108

181

203

    Interest – tax exempt

52

60

102

127

    Dividends

18

14

38

29

  Other interest income

19

21

34

39

    Total interest income

3,206

3,100

6,431

6,174

Interest expense





  Interest on deposits

291

307

580

634

  Interest on short-term borrowings

20

17

39

34

  Interest on FHLB advances

83

81

165

160

  Interest on junior subordinated debentures

29

30

58

59

    Total interest expense

423

435

842

887

Net interest income

2,783

2,665

5,589

5,287

Provision for loan losses

-

-

-

-

Net interest income after provision for loan losses 

2,783

2,665

5,589

5,287

Noninterest income





  (Loss) gain on sale of foreclosed properties

(37)

-

(37)

28

  Bank owned life insurance income

60

63

120

126

  Service fees

82

89

163

175

  Other operating income

84

78

165

150

    Total noninterest income

189

230

411

479

Noninterest expense





  Salaries and employee benefits

1,400

1,326

2,692

2,596

  Occupancy and equipment expenses

376

362

748

717

  Other operating expenses

643

492

1,242

1,094

    Total noninterest expense

2,419

2,180

4,682

4,407

Income before provision for income taxes

553

715

1,318

1,359

Provision for income taxes

176

225

416

389

Net income

$377

$490

$902

$970

Basic earnings per share

$0.26

$0.32

$0.61

$0.64

Diluted earnings per share

$0.25

$0.32

$0.59

$0.63

Basic weighted average number of shares outstanding

1,473,335

1,508,574

1,474,271

1,508,574

Diluted weighted average number of shares outstanding

1,528,023

1,546,150

1,525,551

1,544,292

Dividends declared per share

$0.07

$0.06

$0.14

$0.11

 

Frederick County Bancorp, Inc. and Subsidiaries



Consolidated Statements of Comprehensive Income (Unaudited)




Three Months Ended

(dollars in thousands)

June 30,

June 30,

2014

2013

Net income

$377

$490

Changes in net unrealized gains (losses) on securities available for
 sale, net of  income taxes of $97 in 2014 and net of income tax
 benefits of $361 in 2013

 

 

149

 

 

(554)

    Total comprehensive income

$526

$(64)

 

Frederick County Bancorp, Inc. and Subsidiaries



Consolidated Statements of Comprehensive Income (Unaudited)




Six Months Ended

(dollars in thousands)

June 30,

June 30,

2014

2013

Net income

$902

$970

Changes in net unrealized gains (losses) on securities available for
 sale, net of  income taxes of $238 in 2014 and net of income tax
 benefits of $433 in 2013

 

 

366

 

 

(665)

    Total comprehensive income

$1,268

305

 


Frederick County Bancorp, Inc. and Subsidiaries

Consolidated Statement of Changes in Shareholders' Equity (Unaudited)









(dollars in thousands)

Shares
Outstanding

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income
(Loss)

Total
Shareholders'
Equity








Balance, January 1, 2013

1,508,574

$15

$15,663

$10,110

$468

$26,256

Comprehensive income




970

(665)

305

Dividends declared on common stock,
$0.11 per share




(166)


(166)

Compensation expense from stock option
transactions



25



25

Balance, June 30, 2013

1,508,574

$15

$15,688

$10,914

$(197)

$26,420

Balance, January 1, 2014

1,484,174

$15

$15,302

$11,456

$(586)

$26,187

Comprehensive income




902

366

1,268

Dividends declared on common stock,
$0.14 per share




(205)


(205)

Shares repurchased

(15,000)


(267)



(267)

Shares issued under stock option
transactions

580


7



7

Compensation expense from stock option
transactions



9



9

Balance, June 30, 2014

1,469,754

$15

$15,051

$12,153

$(220)

$26,999

 

Frederick County Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)




Six Months Ended


June 30,

2014

June 30,

2013

(dollars in thousands)



Cash flows from operating activities:



   Net income

$    902

$    970

      Adjustments to reconcile net income to net cash provided by

         operating activities:



           Depreciation and amortization

169

188

           Deferred income (benefits) taxes

(4)

190

           Net premium amortization on investment securities

90

186

           Bank owned life insurance income

(120)

(126)

           Loss (Gain) on sale of foreclosed properties

37

(28)

           Stock-based compensation expense

9

25

           Decrease in accrued interest and other assets

215

495

           Increase (decrease)  in accrued interest and other liabilities

138

(18)

             Net cash provided by operating activities

1,436

1,882

Cash flows from investing activities:



  Purchases of investment securities available for sale

--

(6,058)

   Proceeds from maturities, prepayments and calls

      investment securities available for sale

1,938

3,888

   (Purchase) redemption of restricted stock

(136)

60

   Net increase in loans

(2,806)

(6,324)

   Purchases of bank premises and equipment

(100)

(64)

   Proceeds from sale of foreclosed properties

192

28

            Net cash used in investing activities

(912)

(8,470)

Cash flows from financing activities:



   Net increase in NOW, money market accounts, savings  

     accounts and  noninterest-bearing deposits

9,279

16,643

   Net decrease in time deposits

(1,851)

(6,308)

   Proceeds from FHLB advances

5,000

--

   Proceeds from issuance of common stock

7

--

   Repurchase of common stock

(267)

--

   Dividends paid on common stock

(205)

(166)

            Net cash provided by financing activities

11,963

10,169

Net increase in cash and cash equivalents

12,487

3,581

Cash and cash equivalents – beginning of year

20,110

32,551

Cash and cash equivalents – end of period

$32,597

$36,132

Supplemental cash flow disclosures:



   Interest paid

$842

$900

   Income taxes paid

$410

$255

 

Distribution of Assets, Liabilities and Shareholders' Equity; Interest Rates and Interest Differential

The following tables show average balances of asset and liability categories, interest income and interest expense, and average yields and rates for the periods indicated.   

 

Three Months Ended June 30,

2014

2013

 

 

(dollars in thousands)

Average

daily

balance

Interest

Income/

Expense

Average

Yield/

rate

Average

daily

balance

Interest

Income/

Expense

Average

Yield/

rate

Assets







Interest-earning assets:







  Federal funds sold

$         21

$       --

--%

$         24

$       --

--%

  Interest bearing deposits in other banks

32,838

19

0.23

33,246

21

0.25

  Investment securities (1):







    Taxable

21,071

108

2.06

26,660

122

1.84

    Tax-exempt (2)

6,552

79

4.84

8,579

91

4.25

  Loans (3)

253,285

3,042

4.82

231,864

2,927

5.06

    Total interest-earning assets

313,767

3,248

4.15

300,373

3,161

4.22

Noninterest-earning assets

17,361



18,243



    Total assets

$331,128



$318,616










Liabilities and Shareholders' Equity







Interest-bearing liabilities:







   NOW accounts

$  21,645

8

0.15%

$  20,274

8

0.16%

   Savings accounts

8,265

1

0.05

7,341

--

--

   Money market accounts

96,282

69

0.29

88,333

63

0.29

   Certificates of deposit







      $100,000 or more

43,753

124

1.14

46,960

119

1.02

   Certificates of deposit







      less than $100,000

51,985

89

0.69

57,315

117

0.82

   Short-term borrowings

3,050

20

2.63

2,700

17

2.53

   FHLB advances

15,220

83

2.19

10,000

81

3.25

   Junior subordinated debentures

6,186

29

1.88

6,186

30

1.95

  Total interest-bearing liabilities

246,386

423

0.69

239,109

435

0.73

Noninterest-bearing deposits

56,986



51,748



Noninterest-bearing liabilities

651



792



   Total liabilities

304,023



291,649



   Total shareholders' equity

27,105



26,967



   Total liabilities and shareholders'    

     equity

$331,128



$318,616



Net interest income


$2,825



$2,726


Net interest spread



3.46%



3.49%

Net interest margin



3.61%



3.64%

(1) Yields on securities available-for-sale have been calculated on the basis of historical cost and do not give effect to changes in the fair value of those securities, which is reflected as a component of shareholders' equity.
(2)Presented on a taxable-equivalent basis using the statutory federal income tax rate of 34%.  Taxable-equivalent adjustments of $27 thousand in 2014 and $31 thousand in 2013 are included in the calculation of the tax-exempt investment interest income.
(3) Presented on a taxable-equivalent basis using the statutory federal income tax rate of 34%.  Taxable-equivalent adjustments of $15 thousand in 2014 and $30 thousand in 2013 are included in the calculation of the loan interest income.  Net loan origination income in interest income totaled $21 thousand in 2014 and $4 thousand in 2013.

 

Six Months Ended June 30,

2014

2013

 

 

(dollars in thousands)

Average

daily

balance

Interest

Income/

Expense

Average

Yield/

rate

Average

daily

balance

Interest

Income/

Expense

Average

Yield/

rate

Assets







Interest-earning assets:







  Federal funds sold

$         22

$       --

--%

$        13

$       --

--%

  Interest bearing deposits in other banks

30,330

34

0.23

32,854

39

0.24

  Investment securities (1):







    Taxable

21,458

219

2.06

26,418

232

1.77

    Tax-exempt (2)

6,554

155

4.76

8,596

192

4.50

  Loans (3)

253,163

6,126

4.88

230,983

5,835

5.09

    Total interest-earning assets

311,527

6,534

4.23

298,864

6,298

4.25

Noninterest-earning assets

17,303



18,301



    Total assets

$328,830



$317,165










Liabilities and Shareholders' Equity







Interest-bearing liabilities:







   NOW accounts

$  20,862

15

0.14%

$  18,943

16

0.17%

   Savings accounts

8,108

1

0.02

7,095

1

0.03

   Money market accounts

97,291

138

0.29

88,257

140

0.32

   Certificates of deposit







      $100,000 or more

43,663

235

1.09

47,501

236

1.00

   Certificates of deposit







      less than $100,000

52,557

191

0.73

58,100

241

0.84

   Short-term borrowings

3,050

39

2.58

2,700

34

2.54

   FHLB advances

15,110

165

2.20

10,000

160

3.23

   Junior subordinated debentures

6,186

58

1.89

6,186

59

1.92

  Total interest-bearing liabilities

246,827

842

0.69

238,782

887

0.75

Noninterest-bearing deposits

54,500



50,712



Noninterest-bearing liabilities

622



858



   Total liabilities

301,949



290,352



   Total shareholders' equity

26,881



26,813



   Total liabilities and shareholders'    

     equity

$328,830



$317,165



Net interest income


$5,692



$5,411


Net interest spread



3.54%



3.50%

Net interest margin



3.68%



3.65%

(1) Yields on securities available-for-sale have been calculated on the basis of historical cost and do not give effect to changes in the fair value of those securities, which is reflected as a component of shareholders' equity.
(2)Presented on a taxable-equivalent basis using the statutory federal income tax rate of 34%.  Taxable-equivalent adjustments of $53 thousand in 2014 and $65 thousand in 2013 are included in the calculation of the tax-exempt investment interest income.
(3) Presented on a taxable-equivalent basis using the statutory federal income tax rate of 34%.  Taxable-equivalent adjustments of $50 thousand in 2014 and $59 thousand in 2013 are included in the calculation of the loan interest income.  Net loan origination income in interest income totaled $38 thousand in 2014 and $15 thousand in 2013.

The statements in this press release that are not historical facts constitute "forward-looking statements" as defined by Federal securities laws.  Forward-looking statements can generally be identified by the use of forward- looking terminology such as "believes," "expects," "intends," "may," "will," "should," "anticipates" or similar terminology.  Such statements, specifically regarding the Company's intentions regarding growth and market expansion, are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, changes in interest rates, deposit flows, loan demand and real estate values, as well as changes in economic, competitive, governmental, regulatory, technological and other factors which may affect the Company specifically, its existing and target market areas or the banking industry generally.  Forward-looking statements speak only as of the date they are made.  The Company will not update forward-looking statements to reflect factual assumptions, circumstances or events that have changed after a forward-looking statement was made.

SOURCE Frederick County Bancorp, Inc.



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