Market Overview

Frederick County Bancorp, Inc. Reports Results for the Third Quarter 2015

Share:
FREDERICK, Md.--(BUSINESS WIRE)--

Frederick County Bancorp, Inc. (the "Company") (OTC PINK: FCBI), the parent company for Frederick County Bank ("FCB"), announced today that, for the quarter ended September 30, 2015, the Company recorded net income of $378 thousand and diluted earnings per share of $0.24, as compared to net income of $460 thousand and diluted earnings per share of $0.30 recorded for the third quarter of 2014. The Company earned $1.21 million with diluted earnings per share of $0.79 for the nine months ended on September 30, 2015, as compared to $1.36 million in earnings and diluted earnings per share of $0.89 for the same period in 2014.

The decrease in quarterly earnings was due primarily to a decrease in total noninterest income in the amount of $42 thousand, and an increase in total noninterest expense of $108 thousand in the third quarter of 2015 as compared to the third quarter of 2014. The increase in noninterest expenses was due primarily to increases in salaries and employee benefits expense of $131 thousand.

The decrease in year-to-date earnings was due primarily to an increase in total noninterest expense to $8.0 million in the first nine months of 2015 as compared to $7.3 million in the first nine months of 2014, which offset both the increase in net interest income to $8.6 million in the first nine months of 2015 from $8.5 million for the same period in 2014, and the increase in total noninterest income to $1.2 million in the first nine months of 2015 from $847 thousand for the same period in 2014. Total noninterest income in the first nine months of 2015 included the gain on sale of loans in the amount of $359 thousand as compared to the gain on sale of loans in the same period in 2014 of $202 thousand and gains on the sale of securities in 2015 of $98 thousand as compared to no gains on the sale of securities in 2014. The increase in noninterest expense was due primarily to increases in salaries and employee benefits expense of $471 thousand.

The ratio of the allowance for loan losses to total loans stood at 1.15% and 1.27% as of September 30, 2015 and 2014, respectively. Nonperforming assets stood at $7.4 million and $5.3 million at September 30, 2015 and 2014, respectively, and at $5.6 million at December 31, 2014. The corresponding nonperforming assets to total assets ratios were 2.05% and 1.59% as of September 30, 2015 and 2014, respectively, and 1.63% at December 31, 2014.

The Company also reported that, as of September 30, 2015, assets stood at $359.0 million, with total deposits of $304.9 million and gross loans of $264.9 million, representing increases of 4.6%, 6.9%, and 0.9%, respectively, compared to December 31, 2014.

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

                   
September 30, September 30, December 31,
2015     2014 2014
(dollars in thousands) (unaudited) (unaudited) (audited)
Total assets $359,028 $334,867 $ 343,116
Loans 264,883 259,908 262,525
Deposits 304,880 277,198 284,985
Shareholders' equity 28,817 27,518 27,914
 
Nonperforming assets:
Nonaccrual loans $2,507 $3,396 $3,684
Accruing troubled debt restructurings 3,424 1,187 1,179
Loans 90 days or more past due and still accruing -- -- --
Foreclosed properties 1,435     729 729
Total nonperforming assets $7,366     $5,312 $5,592
 
 
For the Three Months Ended For the Nine Months Ended
September 30, September 30, September 30, September 30,
2015     2014 2015     2014
(dollars in thousands, except for per share data) (unaudited) (unaudited) (unaudited) (unaudited)
SUMMARY OF OPERATING RESULTS:
Net income $378 $460 $1,213 $1,362
Total comprehensive income 485 526 1,190 1,794
 
Charge-offs $ 79 $139 $362 $186
(Recoveries) (26)     (51) (53)     (56)
Net charge-offs $ 53     $ 88 $309     $130
 
PER COMMON SHARE DATA:
Basic earnings per share $0.26 $0.31 $0.82 $0.92
Diluted earnings per share $0.24 $0.30 $0.79 $0.89
Basic weighted average number of shares outstanding 1,475,824 1,472,537 1,475,448 1,474,954
Diluted weighted average number of shares outstanding 1,545,442 1,529,070 1,539,575 1,528,267
Common shares outstanding 1,475,929 1,474,954 1,475,929 1,474,954 1,475,154
Dividends declared $0.07 $0.07 $0.21 $0.21
Book value per share $19.52 $18.66 $19.52 $18.66 $18.92
 
SELECTED UNAUDITED FINANCIAL RATIOS:
Return on average assets 0.43% 0.55% 0.47% 0.55%
Return on average equity 5.24% 6.69% 5.65% 6.70%
Allowance for loan losses to total loans 1.15% 1.27% 1.15% 1.27% 1.28%
Nonperforming assets to total assets 2.05% 1.59% 2.05% 1.59% 1.63%
Ratio of net charge-offs to average loans 0.02% 0.03% 0.12% 0.05%
Common Equity Tier 1 to risk-weighted assets 9.88% 9.74% 9.88% 9.74% 9.76%
Tier 1 capital to risk-weighted assets 11.93% 11.85% 11.93% 11.85% 11.85%
Total capital to risk-weighted assets 12.98% 13.01% 12.98% 13.01% 13.02%
Tier 1 capital to average assets 9.91% 10.08% 9.91% 10.08% 10.05%
Average equity to average assets 8.20% 8.23% 8.25% 8.19%
Net interest margin 3.48% 3.66% 3.56% 3.68%
 
           
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, September 30, December 31,
      2015     2014     2014
      (unaudited)     (unaudited)     (unaudited)
(dollars in thousands)                  
ASSETS
Cash and due from banks

$2,778

$2,155

$2,402

Federal funds sold 35 21 21
Interest-bearing deposits in other banks     49,228     31,222     37,365
Cash and cash equivalents     52,041     33,398     39,788
Investment securities available-for-sale at fair value 24,660 24,784 24,190
Restricted stock 1,629 1,805 1,805
Loans 264,883 259,908 262,525
Less: Allowance for loan losses     (3,053)     (3,293)     (3,362)
Net loans     261,830     256,615     259,163
Bank premises and equipment 6,200 6,404 6,373
Bank owned life insurance 8,454 8,220 8,280
Foreclosed properties 1,435 729 729
Other assets     2,779     2,912     2,788
Total assets    

$359,028

    $334,867     $343,116
 
LIABILITIES AND SHAREHOLDERS' EQUITY                  
                   
Liabilities
Deposits
Noninterest-bearing deposits

$67,695

$58,607

$63,705

Interest-bearing deposits     237,185     218,591     221,280
Total deposits 304,880 277,198 284,985
Short-term borrowings 3,300 3,050 3,300
FHLB advances 15,000 20,000 20,000
Junior subordinated debentures 6,186 6,186 6,186
Accrued interest and other liabilities     845     915     731
Total liabilities     330,211     307,349     315,202
 
Shareholders' Equity

Common stock, per share par value $0.01; 10,000,000 shares authorized; 1,475,929; 1,474,954 and 1,475,154 shares issued and outstanding

15 15 15
Additional paid-in capital 15,180 15,148 15,158
Retained earnings 13,662 12,509 12,758
Accumulated other comprehensive loss     (40)     (154)     (17)
Total shareholders' equity     28,817     27,518     27,914
Total liabilities and shareholders' equity    

$359,028

   

$334,867

   

$343,116

 
               
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
     

For the Three Months Ended

   

For the Nine Months Ended

(dollars in thousands, except per share amounts)     September 30,

2015

    September 30,

2014

    September 30,

2015

    September 30,

2014

Interest income
Interest and fees on loans $3,110 $3,122 $9,265 $9,198
Interest and dividends on investment securities:
Interest – taxable 74 84 241 265
Interest – tax exempt 45 51 146 153
Dividends 20 19 76 57
Other interest income     26     19     67     53
Total interest income     3,275     3,295     9,795     9,726
Interest expense
Interest on deposits 261 292 781 872
Interest on short-term borrowings 27 20 77 59
Interest on FHLB advances 86 87 256 252
Interest on junior subordinated debentures     30     29     89     87
Total interest expense     404     428     1,203     1,270
Net interest income 2,871 2,867 8,592 8,456
Provision for loan losses     --     --     --     --
Net interest income after provision for loan losses     2,871     2,867     8,592     8,456
Noninterest income
Securities gains 29 -- 98 --
Gain on sale of loans 116 202 359 202
Loss on sale of foreclosed properties -- -- -- (37)
Bank owned life insurance income 58 60 174 180
Service fees 101 89 270 252
Other operating income     90     85     269     250
Total noninterest income     394     436     1,170     847
Noninterest expense
Salaries and employee benefits 1,597 1,466 4,629 4,158
Occupancy and equipment expenses 442 396 1,308 1,144
Other operating expenses     689     758     2,090     2,000
Total noninterest expense     2,728     2,620     8,027     7,302
Income before provision for income taxes 537 683 1,735 2,001
Provision for income taxes     159     223     522     639
Net income     $378     $460     $1,213     $1,362
Basic earnings per share     $0.26     $0.31     $0.82     $0.92
Diluted earnings per share     $0.24     $0.30     $0.79     $0.89
Basic weighted average number of shares outstanding     1,475,824     1,472,537     1,475,448     1,473,687
Diluted weighted average number of shares outstanding     1,545,442     1,529,070     1,539,575     1,527,000
Dividends declared per share     $0.07     $0.07     $0.21     $0.21
 
       
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
      For the Three Months Ended
(dollars in thousands)     September 30,

2015

    September 30,

2014

Net income $378 $460
Changes in net unrealized gains on securities available for sale, net of income taxes of $81 in 2015 and $43 in 2014    

125

   

66

Reclassification adjustment for (gains) realized, net of income taxes of $11 in 2015 and $0 in 2014     (18)     --
Total comprehensive income     $485     $526
 
 
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
      For the Nine Months Ended
(dollars in thousands)     September 30,

2015

    September 30,

2014

Net income $1,213 $1,362
Changes in net unrealized gains on securities available for sale, net of income taxes of $24 in 2015 and $281 in 2014 36 432
Reclassification adjustment for (gains) realized, net of income taxes of $39 in 2015 and $0 in 2014     (59)     --
Total comprehensive income    

$1,190

    $1,794
 
   
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, 2014 1,484,174 $15 $15,302 $11,456 $(586) $26,187
Comprehensive income 1,362 432 1,794
Dividends declared on common stock, $0.21 per share

(309)

(309)

Shares repurchased (15,000) (267) (267)
Shares issued under stock options transactions 5,780 65 65
Compensation expense from stock option transactions 29 29
Excess tax benefit from equity-based awards                 19                 19
Balance, September 30, 2014     1,474,954     $15     $15,148     $12,509     $(154)     $27,518
Balance, January 1, 2015 1,475,154 $15 $15,158 $12,758 $(17) $27,914
Comprehensive income 1,213 (23) 1,190
Dividends declared on common stock, $0.21 per share (309) (309)
Shares issued under stock option transactions 775 9 9
Compensation expense from stock option transactions                 13                 13
Balance, September 30, 2015     1,475,929     $15     $15,180     $13,662     $(40)     $28,817
 
 
Frederick County Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

      For the Nine Months Ended
      September 30,

2015

    September 30,

2014

(dollars in thousands)            
Cash flows from operating activities:        
Net income $1,213 $1,362

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 333 257
Deferred income taxes (benefits) 22 (26)
Securities gains (98) --
Gain on sale of loans (359) (202)
Loans originated for sale (3,774) (1,991)
Proceeds from loans sold 4,133 2,193
Net premium amortization on investment securities 125 132
Bank owned life insurance income (174) (180)
Loss on sale of foreclosed property -- 37
Stock-based compensation expense 13 29
Provision for foreclosed properties -- 14
Excess tax benefit from equity-based awards -- (19)
Decrease in accrued interest and other assets 2 114
Increase in accrued interest and other liabilities     114     195
Net cash provided by operating activities     1,550     1,915
Cash flows from investing activities:
Purchases of investment securities available for sale (5,210) --
Proceeds from sales of investment securities available for sale 1,511 --

Proceeds from maturities, prepayments and calls investment securities available for sale

3,164 2,812
Redemption (purchase) of restricted stock 176 (136)
Net increase in loans (3,373) (6,122)
Purchases of bank premises and equipment (160) (91)
Proceeds from sale of foreclosed properties     --     192
Net cash used in investing activities     (3,892)     (3,345)
Cash flows from financing activities:

Net increase in NOW, money market accounts, savings accounts and noninterest-bearing deposits

16,653 13,208
Net decrease in time deposits 3,242 (2,998)
Proceeds from FHLB advances (5,000) 5,000
Proceeds from issuance of common stock 9 65
Repurchase of common stock -- (267)
Dividends paid on common stock (309) (309)
Excess tax benefit from equity-based awards     --     19
Net cash provided by financing activities     14,595     14,718
Net increase in cash and cash equivalents 12,253 13,288
Cash and cash equivalents – beginning of period     39,788     20,110
Cash and cash equivalents – end of period     $52,041     $33,398
Supplemental cash flow disclosures:
Interest paid     $1,202     $1,273
Income taxes paid     $517     $515
Transfer of loans to foreclosed properties     $706     $--
 
 
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.

 
For the Three Months Ended September 30,     2015     2014

 

(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

$31

$--

--

$21

$--

--
Interest bearing deposits in other banks 42,390 26 0.24 31,620 19 0.24
Investment securities (1):
Taxable 20,354 94 1.83 20,482 103 2.00
Tax-exempt (2) 6,051 68 4.49 6,546 77 4.67
Loans (3)     264,635     3,138     4.70     258,312     3,150     4.84
Total interest-earning assets     333,425     3,326     3.96     316,981     3,349     4.19
Noninterest-earning assets     18,435 17,075
Total assets     $351,860 $334,056
 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW accounts

$29,615

11 0.15

$22,886

10 0.17
Savings accounts 9,683 1 0.04 8,051 1 0.05
Money market accounts 101,552 77 0.30 92,371 65 0.28
Certificates of deposit
$100,000 or more 42,308 83 0.78 43,884 124 1.12
Certificates of deposit
less than $100,000 46,473 89 0.76 50,819 92 0.68
Short-term borrowings 3,300 27 3.25 3,050 20 2.60
FHLB advances 15,000 86 2.27 20,000 87 2.16
Junior subordinated debentures     6,186     30     1.92     6,186     29     1.86
Total interest-bearing liabilities     254,117     404     0.63     247,247     428     0.68
Noninterest-bearing deposits 68,128 58,650
Noninterest-bearing liabilities     754 652
Total liabilities 322,999 306,549
Total shareholders' equity     28,861 27,507            

Total liabilities and shareholders' equity

    $351,860       $334,056      
Net interest income           $2,922       $2,921
Net interest spread 3.33% 3.51%
Net interest margin 3.48% 3.66%
 

(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 $23 thousand in 2015 and $26 thousand in 2014 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 $28 thousand in 2015 and $28 thousand in 2014 are included in the calculation of the loan interest income. Net loan origination income in interest income totaled $10 thousand in 2015 and $31 thousand in 2014.
 
       
For the Nine Months Ended September 30,     2015     2014

 

(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

$24

$--

--

$22

$--

--
Interest bearing deposits in other banks 38,136 67 0.23 30,764 53 0.23
Investment securities (1):
Taxable 20,549 317 2.06 21,128 322 2.04
Tax-exempt (2) 6,306 221 4.69 6,552 232 4.73
Loans (3)     264,065     9,357     4.74     254,899     9,277     4.87
Total interest-earning assets     329,080     9,962     4.05     313,365     9,884     4.22
Noninterest-earning assets     17,972 17,226
Total assets    

$347,052

$330,591
 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW accounts

$26,635

30 0.15

$21,545

25 0.16
Savings accounts 9,465 2 0.03 8,089 2 0.03
Money market accounts 102,333 230 0.30 95,633 203 0.28
Certificates of deposit
$100,000 or more 40,838 245 0.80 43,738 359 1.10
Certificates of deposit
less than $100,000 47,332 274 0.77 51,971 283 0.64
Short-term borrowings 3,300 77 3.12 3,050 59 2.28
FHLB advances 16,648 256 2.06 16,758 252 1.83
Junior subordinated debentures     6,186     89     1.92     6,186     87     1.69
Total interest-bearing liabilities     252,737     1,203     0.64     246,970     1,270     0.61
Noninterest-bearing deposits 64,980 55,899
Noninterest-bearing liabilities     717 631
Total liabilities 318,434 303,500
Total shareholders' equity     28,618 27,091            

Total liabilities and shareholders' equity

   

$347,052

     

$330,591

     
Net interest income          

$8,759

     

$8,614

Net interest spread 3.41% 3.61%
Net interest margin 3.56% 3.68%
 

(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 $75 thousand in 2015 and $79 thousand in 2014 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 2015 and $79 thousand in 2014 are included in the calculation of the loan interest income. Net loan origination income in interest income totaled $27 thousand in 2015 and $69 thousand in 2014.
 

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.

Frederick County Bancorp, Inc.
William R. Talley, Jr.
Executive Vice President, Chief Financial Officer and Chief Operating Officer
(240) 529-1507

View Comments and Join the Discussion!
 

Partner Center