Frederick County Bancorp, Inc. Reports Results for the Third Quarter 2013

FREDERICK, Md., Oct. 15, 2013 /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 September 30, 2013, the Company recorded net income of $417 thousand and diluted earnings per share of $0.27, as compared to net income of $301 thousand and diluted earnings per share of $0.20 recorded for the same quarter of 2012.  The Company earned $1.4 million with diluted earnings per share of $0.90 for the nine months ended on September 30, 2013, as compared to $1.1 million in earnings and diluted earnings per share of $0.74 for the same period in 2012. 

The increase in quarterly earnings was due primarily to a reduction in total noninterest expense from $2.5 million in the third quarter of 2012 as compared to $2.3 million the third quarter 2013.  The primary cause of the decrease in noninterest expense was due to the lower level of foreclosed property expenses of $16 thousand in 2013, which was substantially lower than the $304 thousand incurred in 2012. In addition, the provision for loan losses of $75 thousand in 2013 was down from the $360 thousand recorded in 2012 and this total was partially offset by the gain on sale of securities in the amount of $236 thousand realized in 2012, whereas no securities gains were recognized in 2013.

The increase in year-to-date earnings was due primarily to a reduction in total noninterest expense from $7.2 million in the first nine months of 2012 as compared to $6.7 million in the same period of 2013.  The primary cause of the decrease in noninterest expense was due to the lower level of foreclosed property expenses of $43 thousand in 2013, which was substantially lower than the $627 thousand incurred in 2012.  In addition, the provision for loan losses of $75 thousand in 2013 was down from the $425 thousand recorded in 2012, along with a loss of $82 thousand on the sale of foreclosed property that occurred in 2012, whereas there was a $28 thousand gain on the sale of foreclosed property recorded in 2013, and this total was partially offset by the gain on sale of securities in the amount of $456 thousand realized in 2012, whereas no securities gains were recognized in 2013.

Net loan charge-offs for the first nine months of 2013 totaled $10 thousand, consisting of charge-offs from six (6) loans and recoveries from two (2) loans.  Net loan charge-offs for the same period in 2012 totaled $484 thousand, consisting predominantly of two loans in the third quarter.  

The ratio of the allowance for loan losses to total loans stood at 1.48% and 1.39% as of September 30, 2013 and 2012, respectively.  Nonperforming assets stood at $8.1 million and $6.8 million at September 30, 2013 and 2012, respectively, and at $8.0 million at December 31, 2012.  The corresponding nonperforming assets to total assets ratios were 2.54% and 2.17% as of September 30, 2013 and 2012, respectively. 

The Company also reported that, as of September 30, 2013, assets stood at $317.4 million, with total deposits of $271.4 million and gross loans of $246.4 million, representing increases of 0.9%, 1.2%, and 7.4%, respectively, compared to December 31, 2012.  Total shareholders' equity at September 30, 2013 was $26.2 million, a decline of $200 thousand from September 30, 2012 and $57 thousand from December 31, 2012.  The decline primarily results from the expenditures to repurchase 16,900 shares of common stock from October 1, 2012 through September 30, 2013, dividends declared, and the decline in the unrealized gain on available for sale securities to an unrealized loss of $515 thousand at September 30, 2013, offsetting retained earnings and proceeds from the exercise of options.  On a per share basis, book value per share increased by six cents to $17.54 per shares at September 30, 2013 over the level at September 30, 2012.

Frederick County Bank is headquartered in Frederick, Maryland, and conducts full service commercial banking services through five bank centers, four of which are located in the City of Frederick and one in Walkersville, Maryland.

 



September 30,

September 30,


December 31,



2013

2012


2012


(dollars in thousands)

(unaudited)

(unaudited)


(audited)


Total assets

$317,383

$311,479


$314,459


Loans, net

242,734

223,434


225,717


Deposits

271,407

264,814


268,113


Shareholders' equity

26,199

26,399


26,256








Nonperforming assets:






Nonaccrual loans

4,139

2,062


3,825


Accruing troubled debt restructurings

1,880

2,190


2,096


Loans 90 days or more past due and still accruing

--

250


--


Foreclosed properties

2,051

2,263


2,048


Total nonperforming assets

8,070

6,675


7,969









Three Months Ended


Nine Months Ended


September 30,


September 30,


2013

2012


2013

2012

(dollars in thousands, except for per share data)

(unaudited)

(unaudited)


(unaudited)

(unaudited)

SUMMARY OF OPERATING RESULTS:






Net income

$417

$301


$1,387

$1,119







Charge-offs

141

409


194

497

(Recoveries)

(4)

(4)


(184)

(13)

Net charge-offs

137

405


10

484







PER COMMON SHARE DATA:






Basic earnings per share

$0.28

$0.20


$0.92

$0.74

Diluted earnings per share

$0.27

$0.20


$0.90

$0.74

Basic weighted average number of shares outstanding

1,505,383

1,512,309


1,507,499

1,515,283

Diluted weighted average number of shares outstanding

1,549,148

1,519,781


1,545,950

1,516,369

Common shares outstanding

1,493,874

1,510,574


1,493,874

1,510,574

Dividends declared

$0.06

$0.05


$0.17

$0.15

Book value per share

$17.54

$17.48


$17.54

$17.48







SELECTED UNAUDITED FINANCIAL RATIOS:






Return on average assets

0.52%

0.39%


0.58%

0.49%

Return on average equity

6.23%

4.52%


6.92%

5.67%

Allowance for loan losses to total loans

1.48%

1.39%


1.48%

1.39%

Nonperforming assets to total assets

2.54%

2.17%


2.54%

2.17%

Ratio of net charge-offs to average loans

0.06%

0.18%


--

0.22%

Tier 1 capital to risk-weighted assets

11.94%

12.24%


11.94%

12.24%

Total capital to risk-weighted assets

13.19%

13.46%


13.19%

13.46%

Tier 1 capital to average assets

10.25%

10.24%


10.25%

10.24%

Average equity to average assets

8.32%

8.63%


8.41%

8.67%







Net interest margin

3.71%

3.92%


3.68%

3.95%

 

Frederick County Bancorp, Inc. and Subsidiaries





Consolidated Balance Sheets












September 30,

September 30,

December 31,



2013

2012

2012



(unaudited)

(unaudited)


(dollars in thousands)





ASSETS 





Cash and due from banks


$     2,173

$     1,750

$    2,202

Federal funds sold


23

--

--

Interest-bearing deposits in other banks


17,640

21,736

30,349

       Cash and cash equivalents


19,836

23,486

32,551

Investment securities available-for-sale at fair value


33,713

43,096

34,788

Restricted stock 


1,444

1,504

1,504

Loans


246,369

226,591

229,288

Less: Allowance for loan losses


(3,635)

(3,157)

(3,571)

       Net loans


242,734

223,434

225,717

Bank premises and equipment


6,555

6,746

6,734

Bank owned life insurance


7,978

7,719

7,788

Foreclosed properties


2,047

2,263

2,048

Other assets


3,076

3,231

3,329

       Total assets


$317,383

$311,479

$314,459






LIABILITIES AND SHAREHOLDERS' EQUITY










Liabilities





Deposits:





  Noninterest-bearing deposits


$  55,882

$  50,680

$   51,256

  Interest-bearing deposits


215,525

214,134

216,857

       Total deposits


271,407

264,814

268,113

Short-term borrowings


2,700

2,700

2,700

Long-term borrowings


10,000

10,000

10,000

Junior subordinated debentures


6,186

6,186

6,186

Accrued interest and other liabilities


891

1,380

1,204

       Total liabilities


291,184

285,080

288,203






Shareholders' Equity





Common stock, per share par value $0.01;

   10,000,000 shares authorized; 1,493,874; 1,510,574 and 1,508,574 shares

   issued and  outstanding


 

 

15

 

 

15

15

Additional paid-in capital


15,457

15,670

15,663

Retained earnings


11,242

9,910

10,110

Accumulated other comprehensive (loss) income


(515)

804

468

       Total shareholders' equity


26,199

26,399

26,256

       Total liabilities and shareholders' equity


$317,383

$311,479

$314,459








 

Frederick County Bancorp, Inc. and Subsidiaries





Consolidated Statements of Income (Unaudited)






 

Three Months Ended

 

Nine Months Ended

(dollars in thousands, except per share amounts)

 

 

September 30,

 2013

 

 

September 30,

 2012

 

 

September 30,

 2013

 

 

September 30,

 2012

Interest income:





  Interest and fees on loans

$2,987

$3,008

$  8,763

$  8,931

  Interest and dividends on investment securities:





    Interest – taxable

116

148

319

477

    Interest – tax exempt

61

116

188

307

    Dividends

15

13

44

38

  Other interest income

14

11

53

41

    Total interest income

3,193

3,296

9,367

9,794

Interest expense:





  Interest on deposits

302

366

936

1,150

  Interest on short-term borrowings

16

18

50

59

  Interest on long-term borrowings

80

81

240

241

  Interest on junior subordinated debentures

30

33

89

100

    Total interest expense

428

498

1,315

1,550

Net interest income

2,765

2,798

8,052

8,244

Provision for loan losses

75

360

75

425

Net interest income after provision for loan losses 

2,690

2,438

7,977

7,819

Noninterest income:





  Gain on sale of securities

--

236

--

456

  Gain (loss) on sale of foreclosed properties

--

--

28

(82)

  Bank owned life insurance income

64

39

190

118

  Service fees

90

96

265

263

  Other operating income

83

63

233

234

    Total noninterest income

237

434

716

989

Noninterest expense:





  Salaries and employee benefits

1,310

1,294

3,906

3,907

  Occupancy and equipment expenses

377

354

1,094

1,064

  Other operating expenses

651

841

1,745

2,270

    Total noninterest expense

2,338

2,489

6,745

7,241

Income before provision for income taxes

589

383

1,948

1,567

Provision for income taxes

172

82

561

448

Net income

$  417

$   301

$  1,387

$   1,119

Basic earnings per share

$0.28

$0.20

$0.92

$0.74

Diluted earnings per share

$0.27

$0.20

$0.90

$0.74

Basic weighted average number of shares outstanding

1,505,383

1,512,309

1,507,499

1,515,283

Diluted weighted average number of shares outstanding

1,549,148

1,519,781

1,545,950

1,516,369

Dividends declared per share

$0.06

$0.05

$0.17

$0.15

 

Frederick County Bancorp, Inc. and Subsidiaries





Consolidated Statements of Comprehensive Income (Unaudited)







 

Three Months Ended

(dollars in thousands)



 

 

September 30,

 2013

 

 

September 30,

 2012

Net income



$417

$301

Changes in net unrealized (losses) gains on securities available for
   sale, net of  income tax benefits of $207 in 2013 and income taxes

   of 132 in 2012



 

 

(318)

 

 

202

Reclassification adjustment for gains realized, net of income
  taxes of $0 in 2013 and $93 in 2012



 

--

 

(143)

    Total comprehensive income



$  99

$360











Frederick County Bancorp, Inc. and Subsidiaries





Consolidated Statements of Comprehensive Income (Unaudited)







 

Nine Months Ended

(dollars in thousands)



 

 

September 30,

2013

 

 

September 30,

 2012

Net income



$1,387

$1,119

Changes in net unrealized (losses) gains on securities available for
   sale, net of  income tax benefits of $640 in 2013 and income taxes

   of $181 in 2012



 

 

(983)

 

 

277

Reclassification adjustment for gains realized, net of income
  taxes of $0 in 2013 and $180 in 2012



 

--

 

(276)

    Total comprehensive income



$  404

$1,120

 

Frederick County Bancorp, Inc. and Subsidiaries

Consolidated Statement of Changes in Shareholders' Equity (Unaudited)

 


Nine  Months Ended September 30,







(dollars in thousands)

Shares

Outstanding

Common

Stock

Additional Paid-in

Capital

 

Retained

Earnings

Accumulated

Other

Comprehensive

Income

 (Loss)

Total

Shareholders'

Equity








Balance, January 1, 2012

1,514,314

$15

$15,621

$9,018

$803

$25,457

Comprehensive income




1,119

1

1,120

Dividends paid on common stock




(227)


(227)

Shares repurchased

(6,650)


(81)



(81)

Shares issued under stock option

   transactions

2,910


33



33

Compensation expense from stock option

   transactions



91



91

Excess tax benefit from equity-based

   awards



6



6

Balance, September 30, 2012

1,510,574

$15

$15,670

$9,910

$804

$26,399

Balance, January 1, 2013

1,508,574

$15

$15,663

$10,110

$468

$26,256

Comprehensive income




1,387

(983)

404

Dividends paid on common stock




(255)


(255)

Shares repurchased

(14,900)


(240)



(240)

Shares issued under stock option

   transactions

200


2



2

Compensation expense from stock option

   transactions



32



32

Balance, September 30, 2013

1,493,874

$15

$15,457

$11,242

$(515)

$26,199

 


Frederick County Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)




Nine Months Ended September 30,

(dollars in thousands)

2013

2012

Cash flows from operating activities:



   Net income

$    1,387

$    1,119

      Adjustments to reconcile net income to net cash provided by

         operating activities:



           Depreciation and amortization

281

281

           Deferred income taxes (benefits)

147

(36)

           Provision for loan losses

75

425

           Securities gains

--

(456)

           Net premium amortization on investment securities

271

337

           Loss on disposal of bank premises and equipment

--

5

           Bank owned life insurance income

(190)

(118)

           (Gain) loss on sale of foreclosed properties

(28)

82

           Stock-based compensation expense

32

91

           Provision for foreclosed properties

--

501

           Excess tax benefit from stock-based awards

--

(6)

           Decrease in accrued interest and other assets

441

392

           (Decrease) increase in accrued interest and other liabilities

(8)

199

             Net cash provided by operating activities

2,408

2,816

Cash flows from investing activities:



   Purchases of investment securities available for sale

(6,058)

(23,313)

   Proceeds from sales of investment securities available for sale

--

10,885

   Proceeds from maturities, prepayments and calls

      investment securities available for sale

 

5,239

 

5,875

   Redemption of restricted stock

60

6

   Net increase in loans

(17,091)

(14,761)

   Purchase of bank owned life insurance

--

(3,000)

   Purchases of bank premises and equipment

(102)

(573)

   Proceeds from sale of foreclosed properties

28

645

            Net cash used in investing activities

(17,924)

(24,236)

Cash flows from financing activities:



   Net increase in NOW, money market accounts, savings  

     accounts and  noninterest-bearing deposits

 

15,510

 

15,154

   Net (decrease) increase in time deposits

(12,216)

3,173

   Proceeds from issuance of common stock

2

33

   Repurchase of common stock

(240)

(81)

   Dividends paid on common stock

(255)

(227)

   Excess tax benefit from stock-based awards

--

6

            Net cash provided by financing activities

2,801

18,058

Net decrease in cash and cash equivalents

(12,715)

(3,362)

Cash and cash equivalents – beginning of period

32,551

26,848

Cash and cash equivalents – end of period

$19,836

$23,486

Supplemental cash flow disclosures:



   Interest paid

1,324

$1,555

   Income taxes paid

$455

$401

   Transfer of foreclosed properties to loans

$--

$366

 

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 September 30,

2013

2012

 

 

(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

$     23

$      --

--%

$     --

$      --

--%

  Interest bearing deposits in other banks

24,923

14

0.22

20,405

11

0.21

  Investment securities (1):







    Taxable

27,418

131

1.90

32,086

161

1.99

    Tax-exempt (2)

8,562

91

4.22

15,163

176

4.61

  Loans (3)

240,070

3,008

4.97

224,703

3,039

5.37

    Total interest-earning assets

300,996

3,244

4.28

292,357

3,387

4.60

Noninterest-earning assets

18,134



16,268



    Total assets

$319,130



$308,625










Liabilities and Shareholders' Equity







Interest-bearing liabilities:







   NOW accounts

$   21,753

$      8

0.15%

$   17,326

$      9

0.21%

   Savings accounts

7,404

1

0.05

6,347

1

0.06

   Money market accounts

88,552

57

0.26

78,126

90

0.46

   Certificates of deposit







      $100,000 or more

45,231

121

1.06

44,303

121

1.08

   Certificates of deposit







      less than $100,000

55,846

115

0.82

64,309

145

0.90

   Short-term borrowings

2,700

16

2.35

2,700

18

2.64

   Long-term borrowings

10,000

80

3.17

10,000

81

3.21

   Junior subordinated debentures

6,186

30

1.92

6,186

33

2.12

  Total interest-bearing liabilities

237,672

428

0.71

229,297

498

0.86

Noninterest-bearing deposits

54,241



51,384



Noninterest-bearing liabilities

675



1,299



   Total liabilities

292,588



281,980



   Total shareholders' equity

26,542



26,645



   Total liabilities and shareholders'    

     equity

$319,130



$308,625



Net interest income


$2,816



$2,889


Net interest spread



3.57%



3.74%

Net interest margin



3.71%



3.92%

(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 $30 thousand in 2013 and $60 thousand in 2012 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 $21 thousand in 2013 and $31 thousand in 2012 are included in the calculation of the loan interest income.  Net loan origination income in interest income totaled $13 thousand in 2013 and $31 thousand in 2012.

 


Nine Months Ended September 30,

2013

2012

 

 

(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

$         16

$      --

--%

$     190

$      --

--%

  Interest bearing deposits in other banks

30,182

53

0.23

24,459

41

0.22

  Investment securities (1):







    Taxable

26,756

363

1.81

31,441

515

2.18

    Tax-exempt (2)

8,584

285

4.44

12,463

465

4.97

  Loans (3)

234,045

8,855

5.06

218,172

9,024

5.51

    Total interest-earning assets

299,583

9,556

4.26

286,725

10,045

4.67

Noninterest-earning assets

18,244



16,733



    Total assets

$317,827



$303,458










Liabilities and Shareholders' Equity







Interest-bearing liabilities:







   NOW accounts

$   19,890

$      24

0.16%

$   16,998

$      29

0.23%

   Savings accounts

7,199

2

0.04

6,164

3

0.06

   Money market accounts

88,356

197

0.30

77,439

268

0.46

   Certificates of deposit







      $100,000 or more

46,737

357

1.02

42,187

371

1.17

   Certificates of deposit







      less than $100,000

57,339

356

0.83

66,265

479

0.97

   Short-term borrowings

2,700

50

2.48

2,700

59

2.91

   Long-term borrowings

10,000

240

3.21

10,000

241

3.21

   Junior subordinated debentures

6,186

89

1.92

6,186

100

2.15

  Total interest-bearing liabilities

238,407

1,315

0.74

227,939

1,550

0.91

Noninterest-bearing deposits

51,901



48,076



Noninterest-bearing liabilities

798



1,146



   Total liabilities

291,106



277,161



   Total shareholders' equity

26,721



26,297



   Total liabilities and shareholders'    

     equity

$317,827



$303,458



Net interest income


$8,241



$8,495


Net interest spread



3.52%



3.76%

Net interest margin



3.68%



3.95%

(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 $97 thousand in 2013 and $158 thousand in 2012 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 $92 thousand in 2013 and $93 thousand in 2012 are included in the calculation of the loan interest income.  Net loan origination income in interest income totaled $28 thousand in 2013 and $62 thousand in 2012.



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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http://www.frederickcountybank.com

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