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Frederick County Bancorp, Inc. Reports Results for the First Quarter 2016

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

Frederick County Bancorp, Inc. (the "Company") (OTCPink Marketplace: FCBI), the parent company for Frederick County Bank ("FCB"), announced today that for the quarter ended March 31, 2016 the Company recorded net income of $289 thousand and diluted earnings per share of $0.19, as compared to net income of $480 thousand and diluted earnings per share of $0.31 recorded for the same quarter of 2015.

The decrease in earnings was due primarily to a decrease in total noninterest income from $528 thousand in three months ended March 31, 2015 from the $229 thousand recorded for the three months ended March 31, 2016. In 2016, there was a gain on sale of loans in the amount of only $5 thousand and no securities gains recognized as compared to a gain on sale of loans in the amount of $238 thousand and securities gains of $69 thousand recognized in 2015. The increase in net interest income of $194 thousand for 2016 compared to 2015 was offset by an increase in noninterest expense of $190 thousand.

Net loan charge-offs for the quarters ended March 31, 2016 and 2015 totaled $20 thousand and $170 thousand, respectively. There were $30 thousand in charge-offs in 2016 compared to $172 thousand in 2015, which were offset by recoveries of $10 thousand and $2 thousand for the periods ended March 31, 2016 and 2015, respectively.

The ratio of the allowance for loan losses to total loans stood at 1.07%, 1.20% and 1.10% as of March 31, 2016 and 2015 and December 31, 2015, respectively. Nonperforming assets stood at $7.4 million, $5.3 million and $5.9 million as of March 31, 2016 and 2015 and December 31, 2015, respectively. The corresponding nonperforming assets to total assets ratios were 2.05%, 1.52% and 1.68% as of March 31, 2016 and 2015 and December 31, 2015, respectively.

The Company also reported that, as of March 31, 2016, assets stood at $362.9 million, with total deposits of $307.6 million and gross loans of $285.6 million, representing increases of 3.3%, 5.1%, and 7.4%, respectively, compared to March 31, 2015. Total shareholders' equity at March 31, 2016 was $29.9 million, an increase of $389 thousand from December 31, 2015. The increase primarily resulted from an increase in additional paid-in capital of $86 thousand, which was mainly from the exercise of stock options, and an increase in retained earnings of $186 thousand from December 31, 2015. On a per share basis, book value per share increased by 16 cents for 2016 to $20.19 per share at March 31, 2016 from $20.03 per share at December 31, 2015. The dividends declared per share remained constant at $0.07 per share for the periods ended March 31, 2016 and 2015.

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

     
March 31, March 31, December 31,
2016   2015   2015
(dollars in thousands) (unaudited) (unaudited) (unaudited)
Total assets $362,943 $351,487 $350,542
Loans 285,614 265,918 278,950
Deposits 307,566 292,691 295,632
Shareholders' equity 29,945 28,343 29,556
 
Nonperforming assets:
Nonaccrual loans $3,695 $2,767 $2,160
Accruing troubled debt restructurings 3,024 1,136 3,031
Loans 90 days or more past due and still accruing -- -- --
Foreclosed properties 706   1,435   706
Total nonperforming assets $7,425   $5,338   $5,897
 
For the Three Months Ended
March 31, March 31,
2016   2015
(dollars in thousands, except for per share data) (unaudited) (unaudited)
SUMMARY OF OPERATING RESULTS:
Net income $289 $480
Total comprehensive income 406 524
 
Charge-offs $ 30 $172
(Recoveries) (10)   (2)
Net charge-offs $ 20   $170
 
PER COMMON SHARE DATA:
Basic earnings per share $0.20 $0.33
Diluted earnings per share $0.19 $0.31
Basic weighted average number of shares outstanding 1,477,054 1,475,156
Diluted weighted average number of shares outstanding 1,540,323 1,534,896
Common shares outstanding 1,483,129 1,475,354 1,475,929
Dividends declared $0.07 $0.07
Book value per share $20.19 $19.21 $20.03
 
SELECTED UNAUDITED FINANCIAL RATIOS:
Return on average assets 0.33% 0.56%
Return on average equity 3.86% 6.77%
Allowance for loan losses to total loans 1.07% 1.20% 1.10%
Nonperforming assets to total assets 2.05% 1.52% 1.68%
Ratio of net (recoveries) charge-offs to average loans 0.01% 0.06%
Common Equity Tier 1 to risk-weighted assets 9.29% 9.62% 9.63%
Tier 1 capital to risk-weighted assets 11.15% 11.66% 11.58%
Total capital to risk-weighted assets 12.09% 12.75% 12.57%
Tier 1 capital to average assets 10.15% 10.02% 9.99%
Average equity to average assets 8.47% 8.28%
Net interest margin 3.65% 3.57%
 
     
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, March 31, December 31,
    2016   2015   2015
    (unaudited)   (unaudited)   (unaudited)
(dollars in thousands)            
ASSETS
Cash and due from banks $ 2,460 $ 2,217 $ 2,683
Federal funds sold 1,056 20 1,083
Interest-bearing deposits in other banks     32,449     38,954     26,482
Cash and cash equivalents     35,965     41,191     30,248
Investment securities available-for-sale at fair value 23,522 26,272 24,363
Restricted stock 1,636 1,827 1,629
Loans 285,614 265,918 278,950
Less: Allowance for loan losses     (3,044)     (3,192)     (3,064)
Net loans     282,570     262,726     275,886
Bank premises and equipment 7,173 6,365 6,445
Bank owned life insurance 8,567 8,338 8,511
Foreclosed properties 706 1,435 706
Other assets     2,804     3,333     2,754
Total assets   $ 362,943   $ 351,487   $ 350,542
 
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Liabilities
Deposits
Noninterest-bearing deposits $ 72,795 $ 63,408 $ 67,816
Interest-bearing deposits     234,771     229,283     227,816
Total deposits 307,566 292,691 295,632
Short-term borrowings 3,300 3,300 3,300
FHLB advances 15,000 20,000 15,000
Junior subordinated debentures 6,186 6,186 6,186
Accrued interest and other liabilities     946     967     868
Total liabilities     332,998     323,144     320,986
 
Shareholders' Equity

Common stock, per share par value $0.01; 10,000,000 shares authorized; 1,483,129; 1,475,354 and 1,475,929 shares issued and outstanding, respectively

 

15

 

15

 

15

Additional paid-in capital 15,270 15,166 15,184
Retained earnings 14,635 13,135 14,449
Accumulated other comprehensive income (loss)     25     27     (92)
Total shareholders' equity     29,945     28,343     29,556
Total liabilities and shareholders' equity   $ 362,943   $ 351,487   $ 350,542
 
   
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
 
   

For the Three Months Ended

March 31,

March 31,

(dollars in thousands, except per share amounts)

 

2016

 

2015

Interest income
Interest and fees on loans $3,187 $3,022
Interest and dividends on investment securities:
Interest – taxable 72 88
Interest – tax exempt 45 50
Dividends 25 23
Other interest income   37   21
Total interest income   3,366   3,204
Interest expense
Interest on deposits 279 259
Interest on short-term borrowings 27 24
Interest on FHLB advances 27 86
Interest on junior subordinated debentures   33   29
Total interest expense   366   398
Net interest income 3,000 2,806
Provision for loan losses   --   --
Net interest income after provision for loan losses   3,000   2,806
Noninterest income
Securities gains -- 69
Gain on sale of loans 5 238
Bank owned life insurance income 56 58
Service fees 82 80
Other operating income   86   83
Total noninterest income   229   528
Noninterest expense
Salaries and employee benefits 1,681 1,538
Occupancy and equipment expenses 453 420
Other operating expenses   689   675
Total noninterest expense   2,823   2,633
Income before provision for income taxes 406 701
Provision for income taxes   117   221
Net income   $289   $480
Basic earnings per share   $0.20   $0.33
Diluted earnings per share   $0.19   $0.31
Basic weighted average number of shares outstanding   1,477,054   1,475,156
Diluted weighted average number of shares outstanding   1,540,323   1,534,896
Dividends declared per share   $0.07   $0.07
 
   
Frederick County Bancorp, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
    For the Three Months Ended
(dollars in thousands)   March 31,

2016

  March 31,

2015

Net income $289 $480
Changes in net unrealized gains (losses) on securities available for sale, net of income taxes of $76 in 2016 and $56 in 2015

117

86

Reclassification adjustment for (gains) realized, net of income taxes of $0 in 2016 and $27 in 2015

  --   (42)
Total comprehensive income   $406   $524
 
   
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, 2015 1,475,154 $15 $15,158 $12,758 $(17) $27,914
Comprehensive income 480 44 524

Dividends declared on common stock, $0.07 per share

(103) (103)
Shares issued under stock option transactions 200 2 2
Compensation expense from stock option transactions               6                 6
Balance, March 31, 2015   1,475,354     $15     $15,166     $13,135     $27     $28,343
Balance January 1, 2016 1,475,929 $15 $15,184 $14,449 $(92) $29,556
Comprehensive income 289 117 406
Dividends declared on common stock, $0.07 per share (103) (103)
Shares issued under stock option transactions 7,200 80 80
Compensation expense from stock option transactions               6                 6
Balance, March 31, 2016   1,483,129     $15     $15,270     $14,635     $25     $29,945
 
   
Frederick County Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

    For The Three Months Ended
    March 31,   March 31,
(dollars in thousands)   2016   2015
Cash flows from operating activities:
Net income $ 289 $ 480

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

Depreciation and amortization 87 84
Deferred income taxes 26 3
Securities gains - (69)
Gain on sale of loans (5) (238)
Loans originated for sale (377) (1,811)
Proceeds from loans sold 382 2,049
Net premium amortization on investment securities 38 36
Bank owned life insurance income (56) (58)
Stock-based compensation expense 6 6
Increase in accrued interest and other assets (136) (558)
Increase in accrued interest and other liabilities   62   219
Net cash provided by operating activities   316   143
Cash flows from investing activities:
Purchases of investment securities available for sale -- (3,284)
Proceeds from sales of investment securities available for sale -- 575
Proceeds from maturities, prepayments and calls

investment securities available for sale

996 732
Purchase of restricted stock (7) (22)
Net increase in loans (6,684) (4,270)
Purchases of bank premises and equipment   (815)   (76)
Net cash used in investing activities   (6,510)   (6,345)
Cash flows from financing activities:
Net increase in NOW, money market accounts, savings

accounts and noninterest-bearing deposits

462 13,471
Net increase (decrease) in time deposits 11,472 (5,765)
Proceeds from issuance of common stock 80 2
Dividends paid on common stock   (103)   (103)
Net cash provided by financing activities   11,911   7,605
Net increase in cash and cash equivalents 5,717 1,403
Cash and cash equivalents – beginning of period   30,248   39,788
Cash and cash equivalents – end of period   $35,965   $41,191
Supplemental cash flow disclosures:
Interest paid   $345   $406
Income taxes paid   $187   $--
Transfer of loans to foreclosed properties   $--   $706
 
     
For the Three Months Ended March 31,   2016     2015

 

(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 $ 1,083 $ - - $ 20 $ - -

Interest bearing deposits in other banks

30,127 37 0.49 36,191 21 0.24
Investment securities (1):
Taxable 19,836 97 1.96 20,506 111 2.20
Tax-exempt (2) 5,923 68 4.60 6,535 76 4.72
Loans (3)   278,865     3,217     4.63     261,906     3,052     4.73
Total interest-earning assets   335,834     3,419     4.08     325,158     3,260     4.07
Noninterest-earning assets   17,967 17,340
Total assets   $353,801 $342,498
 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW accounts $ 28,582 $ 12 0.17 $ 24,725 9 0.15
Savings accounts 10,166 - - 9,185 - -
Money market accounts 99,212 70 0.28 99,943 72 0.29
Certificates of deposit 91,571 197 0.86 88,373 178 0.82
Federal funds purchased - - - - - -
Short-term borrowings 3,300 27 3.28 3,300 24 2.95
FHLB advances 15,000 27 0.72 20,000 86 1.74
Junior subordinated debentures   6,186     33     2.14     6,186     29     1.90
Total interest-bearing liabilities   254,017     366     0.58     251,712     398     0.64
Noninterest-bearing deposits 68,939 61,722
Noninterest-bearing liabilities 874 689
Total liabilities   323,830 314,123
Total shareholders' equity   29,971 28,375
Total liabilities and shareholders'

equity

  $353,801       $342,498      
Net interest income         $3,053       $2,862
Net interest spread 3.50% 3.43%
Net interest margin 3.65% 3.57%
 
(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 2016 and $26 thousand in 2015 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 $30 thousand in 2016 and $30 thousand in 2015 are included in the calculation of the loan interest income. Net loan origination income in interest income totaled $3 thousand in 2016 and $0 in 2015.
 

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., 240-529-1507
Executive Vice President, Chief Financial Officer and Chief Operating Officer

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