FREDERICK COUNTY BANCORP, INC. 
By 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 December
30, 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; 15
10,000,000 shares authorized; 1,493,874; 1,510,574 and 1,508,574 shares
issued and outstanding 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, September 30, September 30, September 30,
2013 2012 2013 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, September 30,
2013 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, September 30,
2013 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 Common Additional Paid-in Accumulated Total
Outstanding Stock Capital Retained Other Shareholders'
Earnings Comprehensive Equity
Income
(Loss)
--- --- ---
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 2,910 33 33
transactions
Compensation expense from stock option 91 91
transactions
Excess tax benefit from equity-based 6 6
awards
------
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 200 2 2
transactions
Compensation expense from stock option 32 32
transactions
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
-------------------------------- ---- ----
Average Interest Average Average Interest Average
daily Income/ Yield/ daily Income/ Yield/
(dollars in thousands) balance Expense rate balance Expense 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' $319,130 $308,625
equity
======
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
------------------------------- ---- ----
Average Interest Average Average Interest Average
daily Income/ Yield/ daily Income/ Yield/
(dollars in thousands) balance Expense rate balance Expense 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' $317,827 $303,458
equity
======
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.
