FREDERICK COUNTY BANCORP, INC.

Transcription

1 FREDERICK COUNTY BANCORP, INC. NEWS RELEASE Frederick County Bancorp, Inc. Reports Results for the First Quarter 2018 April 13, 2018, Frederick, MD --- 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, 2018, the Company recorded net income of $849 thousand and diluted earnings per share of $0.55, as compared to net income of $367 thousand and diluted earnings per share of $0.24 recorded for the first quarter of The increase in quarterly earnings was due primarily to an increase in net interest income of $307 thousand in first quarter of 2018 compared to the first quarter of In addition, a negative provision for loan losses of $145 thousand was recognized in 2018 compared to a provision of $178 thousand in Net loan (recoveries) charge-offs for the quarters ended March 31, 2018 and 2017 totaled $(514) thousand and $100 thousand, respectively. There were $26 thousand in charge-offs in 2018 compared to $267 thousand in 2017, which were offset by recoveries of $540 thousand and $167 thousand for the periods ended March 31, 2018 and 2017, respectively. A recovery of $500 thousand was realized from one commercial client in The ratio of the allowance for loan losses to total loans stood at 1.12%, 1.23% and 1.01% as of March 31, 2018 and 2017 and December 31, 2017, respectively. Nonperforming assets stood at $4.7 million, $7.7 million and $5.4 million as of March 31, 2018 and 2017 and December 31, 2017, respectively. The corresponding nonperforming assets to total assets ratios were 1.13%, 1.95% and 1.32% as of March 31, 2018 and 2017 and December 31, 2017, respectively. The Company also reported that, as of March 31, 2018, assets stood at $421.6 million, with total deposits of $347.2 million and gross loans of $325.8 million, representing increases of 6.4%, 4.4%, and 4.7%, respectively, compared to March 31, Total shareholders equity at March 31, 2018 was $33.1 million, an increase of $451 thousand from December 31, The increase in total shareholders equity resulted primarily from earnings of $849 thousand in the first quarter, offset by dividends of $119 thousand and a decline in the fair value of available-for-sale securities of $280 thousand from December 31, On a per share basis, book value increased by 30 cents for 2018 to $22.15 per share at March 31, 2018 from $21.85 per share at December 31, The dividend declared per share was $0.08 for the three month period ended March 31, 2018 as compared to $0.07 per share for the same period in Frederick County Bank is headquartered in Frederick, Maryland, and conducts full service commercial banking services through five bank centers located in Frederick County, Maryland.

2 March 31, March 31, December 31, (dollars in thousands) (unaudited) (unaudited) (audited) Total assets $421,556 $396,073 $405,796 Loans 325, , ,156 Deposits 347, , ,005 Shareholders equity 33,072 31,527 32,621 Nonperforming assets: Nonaccrual loans $3,699 $6,620 $3,756 Accruing troubled debt restructurings Loans 90 days or more past due and still accruing Foreclosed properties ,264 Total nonperforming assets $4,746 $7,724 $5,365 For the Three Months Ended March 31, March 31, (dollars in thousands, except for per share data) (unaudited) (unaudited) SUMMARY OF OPERATING RESULTS: Net income $849 $367 Total comprehensive income $569 $459 Charge-offs $ 26 $267 (Recoveries) (540) (167) Net (recoveries) charge-offs $(514) $100 PER COMMON SHARE DATA: Basic earnings per share $0.57 $0.25 Diluted earnings per share $0.55 $0.24 Basic weighted average number of shares outstanding 1,493,080 1,492,282 Diluted weighted average number of shares outstanding 1,556,723 1,548,504 Common shares outstanding 1,493,104 1,492,764 1,493,044 Dividends declared $0.08 $0.07 Book value per share $22.15 $21.12 $21.85 SELECTED UNAUDITED FINANCIAL RATIOS: Return on average assets 0.82% 0.38% Return on average equity 10.27% 4.65% Allowance for loan losses to total loans 1.12% 1.23% 1.01% Nonperforming assets to total assets 1.13% 1.95% 1.32% Ratio of net charge-offs to average loans (0.16)% 0.03% Common Equity Tier 1 to risk-weighted assets 9.02% 8.65% 8.72% Tier 1 capital to risk-weighted assets 10.64% 10.33% 10.35% Total capital to risk-weighted assets 11.62% 11.40% 11.23% Tier 1 capital to average assets 9.58% 9.63% 9.65% Average equity to average assets 8.03% 8.23% Net interest margin 3.66% 3.60%

3 Frederick County Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets March 31, March 31, December 31, (unaudited) (unaudited) (audited) (dollars in thousands) ASSETS Cash and due from banks $ 2,998 $ 2,778 $ 2,726 Federal funds sold Interest-bearing deposits in other banks 48,887 38,052 34,628 Cash and cash equivalents 51,890 40,890 37,359 Investment securities available-for-sale at fair value 23,521 23,963 24,745 Restricted stock 2,395 1,950 2,367 Loans 325, , ,156 Less: Allowance for loan losses (3,633) (3,822) (3,265) Net loans 322, , ,891 Bank premises and equipment 9,450 9,739 9,542 Bank owned life insurance 8,994 8,788 8,946 Foreclosed properties ,264 Other assets 2,443 2,705 2,682 Total assets $421,556 $396,073 $405,796 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Deposits Noninterest-bearing deposits $ 90,082 $ 88,850 $ 89,616 Interest-bearing deposits 257, , ,389 Total deposits 347, , ,005 Short-term borrowings 4,200 4,300 4,200 FHLB advances 29,800 19,800 29,700 Junior subordinated debentures 6,186 6,186 6,186 Accrued interest and other liabilities 1,077 1,552 1,084 Total liabilities 388, , ,175 Shareholders' Equity Common stock, per share par value $0.01; ,000,000 shares authorized; 1,493,104; 1,492,764 and 1,493,044 shares issued and outstanding, respectively Additional paid-in capital 15,398 15,415 15,397 Retained earnings 18,079 15,552 16,829 Accumulated other comprehensive (loss) income (420) Total shareholders' equity 33,072 31,527 32,621 Total liabilities and shareholders' equity $421,556 $396,073 $405,796

4 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, 2018 March 31, 2017 Interest income Interest and fees on loans $3,791 $3,383 Interest and dividends on investment securities: Interest taxable Interest tax exempt Dividends Interest on federal funds sold - 1 Other interest income Total interest income 4,113 3,588 Interest expense Interest on deposits Interest on short-term borrowings Interest on FHLB advances Interest on junior subordinated debentures Total interest expense Net interest income 3,506 3,199 Provision for loan losses (145) 178 Net interest income after provision for loan losses 3,651 3,021 Noninterest income Change in fair value of equity securities 6 - Gain on sale of loans Gain (loss) on foreclosed properties 12 (34) Bank owned life insurance income Service fees Other operating income Total noninterest income Noninterest expense Salaries and employee benefits 1,687 1,693 Occupancy and equipment expenses Other operating expenses Total noninterest expense 2,859 2,727 Income before provision for income taxes 1, Provision for income taxes Net income $ 849 $ 367 Basic earnings per share $0.57 $0.25 Diluted earnings per share $0.55 $0.24 Basic weighted average number of shares outstanding 1,493,080 1,492,282 Diluted weighted average number of shares outstanding 1,556,723 1,548,504 Dividends declared per share $0.08 $0.07

5 Frederick County Bancorp, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Unaudited) For the Three Months Ended (dollars in thousands) March 31, 2018 March 31, 2017 Net income $849 $367 Changes in net unrealized (losses) gains on securities available for sale, net of income tax benefits of $106 in 2018 and income taxes of $60 in 2017 (280) 92 Total comprehensive income $569 $459 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 January 1, ,491,844 $15 $15,404 $15,289 $453 $31,161 Comprehensive income Dividends declared on common stock, $0.07 per share (104) (104) Shares issued under stock option transactions Compensation expense from stock option transactions 1 1 Balance, March 31, ,492,764 $15 $15,415 $15,552 $545 $31,527 January 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 Balance, March 31, ,493,104 $15 $15,398 $18,079 $(420) $33,072

6 Frederick County Bancorp, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) For The Three Months Ended March 31, March 31, (dollars in thousands) Cash flows from operating activities: Net income $ 849 $ 367 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Deferred income taxes (benefit) 35 (82) (Recoveries) provision for loan losses (145) 178 Change in fair value of equity securities (6) - Gain on sale of loans (81) (38) Loans originated for sale (1,123) (1,768) Proceeds from loans sold 1,204 1,806 Net premium amortization on investment securities Bank owned life insurance income (48) (53) (Gain) loss on foreclosed property (12) 34 Stock-based compensation expense - 1 Decrease in accrued interest and other assets Increase in accrued interest and other liabilities Net cash provided by operating activities 1,133 1,116 Cash flows from investing activities: Proceeds from maturities, prepayments and calls of investment securities available for sale Purchase of restricted stock (28) (263) Net increase in loans (3,120) (4,655) Purchases of bank premises and equipment (32) (2,367) Proceeds from sale of foreclosed properties Net cash used in investing activities (1,800) (6,362) Cash flows from financing activities: Net increase in NOW, money market accounts, savings accounts and noninterest-bearing deposits 3,108 8,934 Net increase in time deposits 12,108 1,822 Net increase in short-term borrowings - 1,000 Proceeds from FHLB advances 100 4,800 Proceeds from issuance of common stock 1 10 Dividends paid on common stock (119) (104) Net cash provided by financing activities 15,198 16,462 Net increase in cash and cash equivalents 14,531 11,216 Cash and cash equivalents beginning of period 37,359 29,674 Cash and cash equivalents end of period $51,890 $40,890 Supplemental cash flow disclosures: Interest paid $593 $380

7 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, (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 $ 5 $ - - $ 538 $ Interest bearing deposits in other banks 38, , Investment securities (1) : Taxable 23, , Tax-exempt (2) 3, , Loans (3) 325,141 3, ,377 3, Total interest-earning assets 390,371 4, ,220 3, Noninterest-earning assets 21,719 19,758 Total assets $412,090 $383,978 Liabilities and Shareholders Equity Interest-bearing liabilities: NOW accounts $ 42,298 $ $ 34,062 $ Savings accounts 13, , Money market accounts 97, , Certificates of deposit 94, , Short-term borrowings 4, , FHLB advances 29, , Junior subordinated debentures 6, , Total interest-bearing liabilities 288, , Noninterest-bearing deposits 90,144 84,096 Noninterest-bearing liabilities 845 1,143 Total liabilities 379, ,393 Total shareholders equity 33,080 31,585 Total liabilities and shareholders equity $412,090 $383,978 Net interest income $3,524 $3,237 Net interest spread 3.44% 3.45% Net interest margin 3.66% 3.60% (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% for 2018 and 34% for Taxableequivalent adjustments of $6 thousand in 2018 and $13 thousand in 2017 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% for 2018 and 34% for Taxableequivalent adjustments of $12 thousand in 2018 and $25 thousand in 2017 are included in the calculation of the loan interest income. Net loan origination income (expense) in interest income totaled $(12) thousand in 2018 and $10 thousand in 2017.

8 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. Contact: William R. Talley, Jr., Executive Vice President, Chief Financial Officer and Chief Operating Officer, (240) ###