Frederick County Bancorp, Inc. (the “Company”) (OTC Pink Marketplace: FCBI), the parent company for Frederick County Bank (“FCB”), announced today that, for the quarter ended March 31, 2019, the Company recorded net income of $645 thousand and diluted earnings per share of $0.41, as compared to net income of $849 thousand and diluted earnings per share of $0.55 recorded for the first quarter of 2018.
The decrease in quarterly earnings of $204 thousand for March 31, 2019 as compared to March 31, 2018 was largely due to a negative provision for loan losses realized in the first quarter of 2018. The negative provision for loan losses resulted in a positive earnings impact of $145 thousand for the first quarter of 2018. Net interest income was down $52 thousand for the first three months of 2019 as compared to the first three months of 2018, offset by a 54% or $326 thousand increase in interest expense due to rising funding costs. In addition, there was an increase in total noninterest expense of $105 thousand in the first quarter of 2019 as compared to the same period in 2018, which was primarily due to an increase in salary and benefit expense of $78 thousand.
Net loan recoveries for the quarters ended March 31, 2019 and 2018 totaled $8 thousand and $514 thousand, respectively. There were no charge-offs in the first quarter of 2019 compared to $26 thousand in 2018, which were offset by recoveries of $8 thousand and $540 thousand for the periods ended March 31, 2019 and 2018, respectively.
The ratio of the allowance for loan losses to total loans stood at 1.00%, 1.12% and 1.01% as of March 31, 2019 and 2018 and December 31, 2018, respectively. Nonperforming assets stood at $2.1 million, $4.7 million and $2.1 million as of March 31, 2019 and 2018 and December 31, 2018, respectively. The corresponding nonperforming assets to total assets ratios were 0.57%, 1.13% and 0.50% as of March 31, 2019 and 2018 and December 31, 2018, respectively.
The Company also reported that, as of March 31, 2019, assets stood at $442.4 million, with total deposits of $372.3 million and gross loans of $341.7 million, representing increases of 5.0%, 4.9%, and 7.2%, respectively, compared to March 31, 2018. Total shareholders’ equity at March 31, 2019 was $36.2 million, an increase of $650 thousand from December 31, 2018. The increase in total shareholders’ equity resulted primarily from earnings of $645 thousand in the first quarter, offset by dividends of $123 thousand and an increase in the fair value of available-for-sale securities of $129 thousand from December 31, 2018. On a per share basis, book value increased by 42 cents for 2019 to $23.48 per share at March 31, 2019 from $23.06 per share at December 31, 2018. The dividend declared per share was $0.08 for both the three month period ended March 31, 2019 and 2018.
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, | ||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| (dollars in thousands) | (unaudited) | (unaudited) | (audited) | |||||||||
| Total assets | $ | 442,421 | $ | 421,556 | $ | 418,588 | ||||||
| Loans | 341,729 | 325,790 | 339,461 | |||||||||
| Deposits | 372,349 | 347,221 | 352,373 | |||||||||
| Shareholders’ equity | 36,205 | 33,072 | 35,555 | |||||||||
| Nonperforming assets: | ||||||||||||
| Nonaccrual loans | $ | 492 | $ | 3,699 | $ | 492 | ||||||
| Accruing troubled debt restructurings | 1,198 | 341 | 1,254 | |||||||||
| Loans 90 days or more past due and still accruing | - | - | - | |||||||||
| Foreclosed properties | 360 | 706 | 360 | |||||||||
| Total nonperforming assets | $ | 2,050 | $ | 4,746 | $ | 2,106 | ||||||
| For the Three Months Ended | ||||||||||||
| March 31, | March 31, | |||||||||||
| 2019 | 2018 | |||||||||||
| (dollars in thousands, except for per share data) | (unaudited) | (unaudited) | ||||||||||
| SUMMARY OF OPERATING RESULTS: | ||||||||||||
| Net income | $ | 645 | $ | 849 | ||||||||
| Total comprehensive income | $ | 773 | $ | 569 | ||||||||
| Charge-offs | $ | - | $ | 26 | ||||||||
| (Recoveries) | (8) | (540) | ||||||||||
| Net (recoveries) charge-offs | $ | (8) | $ | (514) | ||||||||
| PER COMMON SHARE DATA: | ||||||||||||
| Basic earnings per share | $ | 0.42 | $ | 0.57 | ||||||||
| Diluted earnings per share | $ | 0.41 | $ | 0.55 | ||||||||
| Basic weighted average number of shares outstanding | 1,541,737 | 1,493,080 | ||||||||||
| Diluted weighted average number of shares outstanding | 1,580,070 | 1,556,723 | ||||||||||
| Common shares outstanding | 1,541,737 | 1,493,104 | 1,541,737 | |||||||||
| Dividends declared | $ | 0.08 | $ | 0.08 | ||||||||
| Book value per share | $ | 23.48 | $ | 22.15 | $ | 23.06 | ||||||
| SELECTED UNAUDITED FINANCIAL RATIOS: | ||||||||||||
| Return on average assets | 0.60% | 0.82% | ||||||||||
| Return on average equity | 7.14% | 10.27% | ||||||||||
| Allowance for loan losses to total loans | 1.00% | 1.12% | 1.01% | |||||||||
| Nonperforming assets to total assets | .46% | 1.13% | .50% | |||||||||
| Ratio of net charge-offs to average loans | 0.00% | (0.16)% | ||||||||||
| Common Equity Tier 1 to risk-weighted assets | 9.44% | 9.02% | 9.44% | |||||||||
| Tier 1 capital to risk-weighted assets | 11.02% | 10.64% | 11.02% | |||||||||
| Total capital to risk-weighted assets | 11.93% | 11.62% | 11.93% | |||||||||
| Tier 1 capital to average assets | 9.83% | 9.58% | 9.83% | |||||||||
| Average equity to average assets | 8.47% | 8.03% | ||||||||||
| Net interest margin | 3.50% | 3.66% | ||||||||||
| Frederick County Bancorp, Inc. and Subsidiaries | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| March 31, | March 31, | December 31, | ||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| (unaudited) | (unaudited) | (audited) | ||||||||||
| (dollars in thousands) | ||||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 2,868 | $ | 2,998 | $ | 2,778 | ||||||
| Federal funds sold | 5 | 5 | 5 | |||||||||
| Interest-bearing deposits in other banks | 47,312 | 48,887 | 33,342 | |||||||||
| Cash and cash equivalents | 50,185 | 51,890 | 36,125 | |||||||||
| Investment securities available-for-sale at fair value | 26,055 | 23,521 | 21,558 | |||||||||
| Restricted stock | 1,992 | 2,395 | 1,979 | |||||||||
| Loans held for sale | 472 | - | 268 | |||||||||
| Loans | 341,729 | 325,790 | 339,461 | |||||||||
| Less: Allowance for loan losses | (3,434) | (3,633) | (3,426) | |||||||||
| Net loans | 338,295 | 322,157 | 336,035 | |||||||||
| Bank premises and equipment | 12,052 | 9,450 | 9,280 | |||||||||
| Bank owned life insurance | 10,694 | 8,994 | 10,628 | |||||||||
| Foreclosed properties | 360 | 706 | 360 | |||||||||
| Other assets | 2,316 | 2,443 | 2,355 | |||||||||
| Total assets | $ | 442,421 | $ | 421,556 | $ | 418,588 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | ||||||||||||
| Noninterest-bearing deposits | $ | 107,171 | $ | 90,082 | $ | 100,200 | ||||||
| Interest-bearing deposits | 265,178 | 257,139 | 252,173 | |||||||||
| Total deposits | 372,349 | 347,221 | 352,373 | |||||||||
| Short-term borrowings | 3,450 | 4,200 | 3,450 | |||||||||
| FHLB advances | 20,000 | 29,800 | 20,000 | |||||||||
| Junior subordinated debentures | 6,186 | 6,186 | 6,186 | |||||||||
| Accrued interest and other liabilities | 4,231 | 1,077 | 1,024 | |||||||||
| Total liabilities | 406,216 | 388,484 | 383,033 | |||||||||
| Shareholders' Equity | ||||||||||||
Common stock, per share par value $0.01; 10,000,000 shares authorized; 1,541,737; 1,493,104 and 1,541,737 shares issued and outstanding, respectively | 15 | 15 | 15 | |||||||||
| Additional paid-in capital | 16,031 | 15,398 | 16,031 | |||||||||
| Retained earnings | 20,316 | 18,079 | 19,794 | |||||||||
| Accumulated other comprehensive loss | (157) | (420) | (285) | |||||||||
| Total shareholders' equity | 36,205 | 33,072 | 35,555 | |||||||||
| Total liabilities and shareholders' equity | $ | 442,421 | $ | 421,556 | $ | 418,588 | ||||||
| Frederick County Bancorp, Inc. and Subsidiaries | ||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||
For the Three Months Ended | ||||||||
| (dollars in thousands, except per share amounts) | March 31, | March 31, | ||||||
| Interest income | ||||||||
| Interest and fees on loans | $ | 3,994 | $ | 3,791 | ||||
| Interest and dividends on investment securities: | ||||||||
| Interest – taxable | 126 | 120 | ||||||
| Interest – tax exempt | 24 | 23 | ||||||
| Dividends | 31 | 40 | ||||||
| Other interest income | 212 | 139 | ||||||
| Total interest income | 4,387 | 4,113 | ||||||
| Interest expense | ||||||||
| Interest on deposits | 710 | 389 | ||||||
| Interest on short-term borrowings | 45 | 45 | ||||||
| Interest on FHLB advances | 110 | 122 | ||||||
| Interest on junior subordinated debentures | 68 | 51 | ||||||
| Total interest expense | 933 | 607 | ||||||
| Net interest income | 3,454 | 3,506 | ||||||
| Provision for loan losses | - | (145) | ||||||
| Net interest income after provision for loan losses | 3,454 | 3,651 | ||||||
| Noninterest income | ||||||||
| Change in fair value of equity securities | 7 | 6 | ||||||
| Gain on sale of loans | 58 | 81 | ||||||
| Gain on foreclosed properties | - | 12 | ||||||
| Bank owned life insurance income | 66 | 48 | ||||||
| Service fees | 77 | 94 | ||||||
| Other operating income | 169 | 123 | ||||||
| Total noninterest income | 377 | 364 | ||||||
| Noninterest expense | ||||||||
| Salaries and employee benefits | 1,765 | 1,687 | ||||||
| Occupancy and equipment expenses | 472 | 446 | ||||||
| Other operating expenses | 727 | 726 | ||||||
| Total noninterest expense | 2,964 | 2,859 | ||||||
| Income before provision for income taxes | 867 | 1,156 | ||||||
| Provision for income taxes | 222 | 307 | ||||||
| Net income | $ | 645 | $ | 849 | ||||
| Basic earnings per share | $ | 0.42 | $ | 0.57 | ||||
| Diluted earnings per share | $ | 0.41 | $ | 0.55 | ||||
| Basic weighted average number of shares outstanding | 1,541,737 | 1,493,080 | ||||||
| Diluted weighted average number of shares outstanding | 1,580,070 | 1,556,723 | ||||||
| Dividends declared per share | $ | 0.08 | $ | 0.08 | ||||
| Frederick County Bancorp, Inc. and Subsidiaries | ||||||||
| Consolidated Statements of Comprehensive Income (Unaudited) | ||||||||
| For the Three Months Ended | ||||||||
| (dollars in thousands) | March 31, | March 31, | ||||||
| Net income | $ | 645 | $ | 849 | ||||
| Changes in net unrealized gains (losses) on securities available for sale, net of income tax benefits of $49 in 2019 and income benefits of $106 in 2018 | 128 | (280) | ||||||
| Total comprehensive income | $ | 773 | $ | 569 | ||||
| Frederick County Bancorp, Inc. and Subsidiaries | |||||||||||||||||||||||
| Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) | |||||||||||||||||||||||
| (dollars in thousands) | Shares | Common | Additional | Retained | Accumulated | Total | |||||||||||||||||
| January 1, 2018 | 1,493,044 | $ | 15 | $ | 15,397 | $ | 16,829 | $ | 380 | $ | 32,621 | ||||||||||||
| Comprehensive income | - | - | - | 849 | (280) | 569 | |||||||||||||||||
| Cumulative change in accounting principle | - | - | - | 520 | (520) | - | |||||||||||||||||
| Dividends declared on common stock, $0.08 per share | - | - | - | (119) | - | (119) | |||||||||||||||||
| Shares issued under stock option transactions | 60 | 1 | 1 | ||||||||||||||||||||
| Balance, March 31, 2018 | 1,493,104 | $ | 15 | $ | 15,398 | $ | 18,079 | $ | (420) | $ | 33,072 | ||||||||||||
| January 1, 2019 | 1,541,737 | $ | 15 | $ | 16,031 | $ | 19,794 | $ | (285) | $ | 35,555 | ||||||||||||
| Comprehensive income | - | - | - | 645 | 128 | 773 | |||||||||||||||||
| Dividends declared on common stock, $0.08 per share | - | - | - | (123) | - | (123) | |||||||||||||||||
| Balance, March 31, 2019 | 1,541,737 | $ | 15 | $ | 16,031 | $ | 20,316 | $ | (157) | $ | 36,205 | ||||||||||||
| Frederick County Bancorp, Inc. and Subsidiaries | ||||||||
| Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| For The Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| (dollars in thousands) | 2019 | 2018 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 645 | $ | 849 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 122 | 124 | ||||||
| Deferred income taxes | 7 | 35 | ||||||
| Provision (recoveries) provision for loan losses | - | (145) | ||||||
| Change in fair value of equity securities | (7) | (6) | ||||||
| Securities gains | (58) | (81) | ||||||
| Loans originated for sale | (3,225) | (1,123) | ||||||
| Proceeds from loans sold | 3,283 | 1,204 | ||||||
| Net premium amortization on investment securities | 24 | 33 | ||||||
| Bank owned life insurance income | (66) | (48) | ||||||
| Gain on foreclosed property | - | (12) | ||||||
| (Increase)/decrease in accrued interest and other assets | (18) | 166 | ||||||
| Increase in accrued interest and other liabilities | 327 | 137 | ||||||
| Net cash provided by operating activities | 1,034 | 1,133 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of investment securities available for sale | (4,925) | - | ||||||
Proceeds from maturities, prepayments and calls of investment securities available for sale | 589 | 810 | ||||||
| Purchase of restricted stock | (13) | (28) | ||||||
| Net increase in loans | (2,464) | (3,120) | ||||||
| Purchases of bank premises and equipment | (14) | (32) | ||||||
| Proceeds from sale of foreclosed properties | - | 570 | ||||||
| Net cash used in investing activities | (6,827) | (1,800) | ||||||
| Cash flows from financing activities: | ||||||||
Net increase in NOW, money market accounts, savings accounts and noninterest-bearing deposits | 10,729 | 3,108 | ||||||
| Net increase in time deposits | 9,247 | 12,108 | ||||||
| Proceeds from FHLB advances | - | 100 | ||||||
| Proceeds from issuance of common stock | - | 1 | ||||||
| Dividends paid on common stock | (123) | (119) | ||||||
| Net cash provided by financing activities | 19,853 | 15,198 | ||||||
| Net increase in cash and cash equivalents | 14,060 | 14,531 | ||||||
| Cash and cash equivalents – beginning of period | 36,125 | 37,359 | ||||||
| Cash and cash equivalents – end of period | $ | 50,185 | $ | 51,890 | ||||
| Supplemental cash flow disclosures: | ||||||||
| Interest paid | $ | 950 | $ | 593 | ||||
| Supplemental noncash disclosures: | ||||||||
| Right of use assets - operating leases | $ | 2,923 | $ | - | ||||
| Lease liability arising from right of use assets - operating leases | $ | 3,013 | $ | - | ||||
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 March 31, | 2019 | 2018 | ||||||||||||||||||||
(dollars in thousands) | Average | Interest | Average | Average | Interest | Average | ||||||||||||||||
| Assets | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Federal funds sold | $ | 5 | $ | - | - | $ | 5 | $ | - | - | ||||||||||||
| Interest bearing deposits in other banks | 37,760 | 212 | 2.28 | 38,727 | 139 | 1.46 | ||||||||||||||||
| Investment securities (1): | ||||||||||||||||||||||
| Taxable | 20,540 | 157 | 3.10 | 23,158 | 160 | 2.80 | ||||||||||||||||
| Tax-exempt (2) | 3,456 | 30 | 3.52 | 3,340 | 29 | 3.52 | ||||||||||||||||
| Loans (3) | 341,032 | 4,015 | 4.77 | 325,141 | 3,803 | 4.74 | ||||||||||||||||
| Total interest-earning assets | 402,793 | 4,414 | 4.44 | 390,371 | 4,131 | 4.29 | ||||||||||||||||
| Noninterest-earning assets | 23,878 | 21,719 | ||||||||||||||||||||
| Total assets | $ | 426,671 | $ | 412,090 | ||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| NOW accounts | $ | 47,266 | $ | 83 | 0.71 | $ | 42,298 | $ | 25 | 0.24 | ||||||||||||
| Savings accounts | 15,173 | 1 | 0.03 | 13,537 | 1 | 0.03 | ||||||||||||||||
| Money market accounts | 92,486 | 177 | 0.78 | 97,570 | 67 | 0.28 | ||||||||||||||||
| Certificates of deposit | 100,932 | 449 | 1.80 | 94,501 | 296 | 1.27 | ||||||||||||||||
| Short-term borrowings | 3,450 | 45 | 4.35 | 4,200 | 45 | 4.35 | ||||||||||||||||
| FHLB advances | 19,944 | 110 | 2.24 | 29,729 | 122 | 1.66 | ||||||||||||||||
| Junior subordinated debentures | 6,186 | 68 | 4.46 | 6,186 | 51 | 3.34 | ||||||||||||||||
| Total interest-bearing liabilities | 285,437 | 933 | 1.33 | 288,021 | 607 | 0.85 | ||||||||||||||||
| Noninterest-bearing deposits | 102,179 | 90,144 | ||||||||||||||||||||
| Noninterest-bearing liabilities | 2,934 | 845 | ||||||||||||||||||||
| Total liabilities | 390,550 | 379,010 | ||||||||||||||||||||
| Total shareholders’ equity | 36,121 | 33,080 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 426,671 | $ | 412,090 | ||||||||||||||||||
| Net interest income | $ | 3,481 | $ | 3,524 | ||||||||||||||||||
| Net interest spread | 3.11% | 3.44% | ||||||||||||||||||||
| Net interest margin | 3.50% | 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 21%. Taxable-equivalent adjustments of $6 thousand in 2019 and $6 thousand in 2018 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 21%. Taxable-equivalent adjustments of $21 thousand in 2019 and $12 thousand in 2018 are included in the calculation of the loan interest income. Net loan origination income (expense) in interest income totaled $(6) thousand in 2019 and $(12) thousand in 2018. | |
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190422005556/en/
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