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Recent Press ReleasesAnnapolis Bancorp Reports $2.3 Million Increase in Second Quarter Earnings Back to List of Current Releases VP At BankAnnapolis Joins Habitat for Humanity Board; Kim M. Sherman To Help Shape Clay Street Project Annapolis, MD, June 18, 2010 – Ms. Kim Sherman, Vice President with BankAnnapolis has joined the Board of Directors of Habitat for Humanity of the Chesapeake (HFHC). As a member of the Board, Ms. Sherman will work with residents, community leaders, volunteers and donors to achieve the goal of providing affordable housing to deserving families. In addition, she will she will lead efforts for sponsorship for the Clay Street revitalization project in Annapolis, a project that is the first of its kind involving a public-private partnership with the Housing Authority of the City of Annapolis (HACA). Habitat for Humanity of the Chesapeake is a not-for-profit housing organization that works in partnership with people from all walks of life. The HFHC builds decent and affordable homes throughout Anne Arundel County and the Baltimore metropolitan region. According to Mike Mitchell, Executive Director of HFHC, “Kim is an active board member who understands that it’s so much more than just attending board meetings. Kim’s greatest impact will be getting involved in projects such as Clay Street, hiring senior staff and securing funds for the Jimmy Carter Work Project.” In Annapolis, HFHC will build ten new homes for current residents of public housing. HFHC’s unique partnership with the Housing Authority of Annapolis provides public housing residents with Habitat homes built on land formerly used for public housing. The project will increase homeownership within the Clay Street Community, supporting current revitalization efforts and affordable homes sold for zero-interest mortgages. To date, HFHC has built or renovated 13 homes on Clay Street. “It’s an honor to serve with the dedicated Board and the outstanding staff of Habitat for Humanity,” said Ms. Sherman. “They are passionate about helping families and stabilizing the communities in which we live and work. At a time when affordable housing has become a national crisis, it is incumbent upon all of us who have knowledge and expertise in this area to work toward solutions and help those in need.” In addition to her work with Habitat for Humanity, Ms. Sherman also serves on the membership committee for the Associated Builders and Contractors of the Chesapeake and volunteers with area schools. BankAnnapolis contributes financial, in-kind and volunteer assistance to numerous nonprofit institutions and organizations that assist people and enhance the quality of life in the Greater Annapolis community and Queen Anne’s County. Through its eight community banking offices in Anne Arundel and Queen Anne's Counties, BankAnnapolis serves the financial needs of small businesses, professional concerns and individuals. Back to List of Current Releases BankAnnapolis Hires Senior Mortgage Lender Marcus Goerdt Joins Growing Mortgage Team Annapolis, MD, June 8, 2010 – BankAnnapolis today announced the hiring of Mr. Marcus Goerdt as Senior Mortgage Loan Officer. Mr. Goerdt joins the financial institution’s growing mortgage department from 1st Mariner Bank where he had been Director, Wholesale Lending. Mr.Goerdt will be based in the Edgewater branch and will report to Bill Benner, Vice President, Mortgage Sales Manager. Commenting on the hire, Mr. Benner said, “I’ve worked with Marcus for years. His background in the wholesale market and construction lending along with his marketing savvy will be instrumental in growing the BankAnnapolis Mortgage department.” Mr. Goerdt, who was consistently ranked as a top 10 producer in his previous role, will be charged with developing BankAnnapolis’ construction lending portfolio. According to Marcus, “I am very happy to be with a local community bank. BankAnnapolis has earned an excellent reputation in the community and I look forward to building on that by developing long-term relationships with local builders while growing our construction loan business.” BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices in Anne Arundel and Queen Anne's Counties in Maryland. The Bank’s parent company, Annapolis Bancorp, Inc. (NASDAQ: ANNB), reported total assets of $434.4 million at March 31, 2010. Back to List of Current Releases Annapolis Bancorp Reports $1.1 Million Increase In First Quarter Earnings Back to List of Current Releases Commercial Real Estate Lender Gregory Owens Joins BankAnnapolis As Vice President Annapolis, MD., April 5, 2010 – BankAnnapolis announced today that Gregory R. Owens has joined its staff as a Vice President and Senior Commercial Real Estate Officer in its Commercial Real Estate Banking Division. In this post, Owens will be charged with helping to expand the Bank’s relationships with area real estate developers, owners and investors. Owens comes to BankAnnapolis with more than 7 years of banking experience, including 4 years as a commercial real estate lending officer. Prior to joining BankAnnapolis, Owens served as a Vice President with The Washington Savings Bank of Bowie, Md. where his responsibilities included new business development as well as management of a commercial real estate loan portfolio, and where he was the top producing lender since 2006. “Greg has an impressive track record as a proven lender in the commercial real estate market. This, plus his experience working with businesses in a community bank setting, make him a great addition to the BankAnnapolis team,” said John Miller, Senior Vice President and Chief Commercial Real Estate Officer of BankAnnapolis. “BankAnnapolis is perfectly positioned in the marketplace to meet the lending needs of our community. This is so important, especially now when so many banks for whatever reason are unable to make loans,” Owens said. “I look forward to growing with this bank over the long term and creating value for our shareholders and the community.” Owens is a resident of Annapolis and holds a bachelor’s degree from the University of Virginia in Charlottesville. BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices in Anne Arundel and Queen Anne's Counties in Maryland. The Bank’s parent company, Annapolis Bancorp, Inc. (NASDAQ: ANNB), reported total assets of $444.3 million at December 31, 2009. Back to List of Current Releases Annapolis Bancorp Earnings Increase In Fourth Quarter Of 2009 Annapolis, MD, February 3, 2010 – Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company of BankAnnapolis, today announced net income of $381,000 for the fourth quarter of 2009, an increase of $236,000 or 163% from net income of $145,000 in the fourth quarter of 2008. On a sequential quarter basis, net income increased $158,000 or 71% from $223,000 reported for the three months ended September 30, 2009. BankAnnapolis Adds Shawn Schoene as Vice President and Senior Credit Officer Annapolis, MD, December. 4, 2009 – Shawn Schoene has joined BankAnnapolis as Vice President and Senior Credit Officer. In this role, Schoene will manage the Commercial Credit Department reporting directly to Bob Kendrick, Senior Vice President and Chief Credit Officer. Schoene brings 12 years of banking experience to BankAnnapolis. He was most recently with PNC Bank as a result of its acquisition of Mercantile Bancshares. There he served as Assistant Vice President, Credit Officer with responsibility for underwriting and credit decision making for new and existing borrowers. He began his career with Citizens National Bank, an affiliate in the Mercantile organization. After several years in the retail business line, he moved into the credit analysis training program and quickly progressed to his most recent role. “Shawn’s experience, combined with his relationship-based approach to banking, makes him ideally suited for this position at BankAnnapolis,” said Kendrick. “He knows how to promote the kind of teamwork that generates results and we’re delighted to have him on board.” “BankAnnapolis is well known for its commitment to exceptional customer service, which I have always admired,” Schoene said. “It’s an organization built on relationships and relationships lead to trust. That’s what community banking is all about.” A resident of Arnold, Schoene graduated summa cum laude from the University of Baltimore with a bachelor’s degree in finance. He is Credit Risk Certified through Risk Management Associates (RMA). BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices in Anne Arundel and Queen Anne's Counties in Maryland. The Bank’s parent company, Annapolis Bancorp, Inc. (NASDAQ: ANNB), reported total assets of $445.5 million on Sept. 30, 2009. Back to List of Current Releases Peggy Hall Joins BankAnnapolis As Vice President Annapolis, MD, November 17, 2009 – BankAnnapolis announced today the addition of Peggy Hall to its staff as a Vice President and Asset Manager. In this new position, Hall will focus on assisting the Bank’s Special Assets Resolution Group with loan workouts and on building new commercial banking relationships with local businesses. Well known in the business community, Hall brings more than 30 years of diversified banking experience to BankAnnapolis and possesses a proven track record in commercial banking. She comes to BankAnnapolis from PNC Bank where she most recently served as a Senior Business Banker. She held a similar role with Annapolis Bank & Trust prior to its merger with PNC Bank. Before this, Hall spent 16 years developing new banking relationships with businesses in Anne Arundel County for M&T Bank. She started her career at Maryland National Bank in the mid- 1970s where she quickly rose through the ranks last serving as an Assistant Vice President. “Peggy’s experience in commercial banking is extensive. She has an established reputation and is highly regarded in the community,” said Richard M. Lerner, Chairman and CEO of BankAnnapolis. “She has been a formidable competitor in the past and it is truly a pleasure to welcome her to our team.” “BankAnnapolis has a great reputation in the market and the ability and desire to work with its customers to find innovative solutions to their financial needs,” said Hall. “This is a great opportunity for me to work at a community bank that is truly committed to supporting those it serves.” Active in the community, Hall currently serves as Scholarship Chair for the Kent Island High School Athletic Boosters. A Centreville resident, she holds a bachelor’s degree from Frostburg State University. BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices in Anne Arundel and Queen Anne's Counties in Maryland. The Bank’s parent company, Annapolis Bancorp, Inc. (NASDAQ: ANNB), reported total assets of $445.5 million on September 30, 2009. Back to List of Current Releases BankAnnapolis Names John Milller as Senior Vice President and Chief Commercial Real Estate Officer Annapolis, MD, November 13, 2009 – BankAnnapolis announced today the addition of John Miller to its management team as Senior Vice President and Chief Commercial Real Estate Officer. In this post, Miller will be responsible for management of the Bank’s newly created Commercial Real Estate Banking Division as well as oversight of its Special Assets Resolution Group. Miller, who joined BankAnnapolis as a consultant two years ago, has spent the last 30 years as a commercial real estate banker in the Annapolis area and held a similar post at Annapolis Bank & Trust for eight years. He started his career at Maryland National Bank in the mid-1970s and subsequently held senior level positions with several other financial institutions in the region. “Developments over the past few years in the real estate market have underscored the need for specialized expertise and experience in real estate lending,” said Richard M. Lerner, Chairman and CEO of BankAnnapolis. “John’s background and experience make him uniquely qualified to head the Commercial Real Estate Banking Division of BankAnnapolis.” In addition to his breadth of experience as a banker, Miller has also been involved in real estate development. “It has given me a much better understanding of the needs of people in the real estate and construction business,” said Miller, “and that insight has helped me to become an even better real estate banker.” BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices in Anne Arundel and Queen Anne's Counties in Maryland. The Bank’s parent company, Annapolis Bancorp, Inc. (NASDAQ: ANNB), reported total assets of $445.5 million on September 30, 2009. Back to List of Current Releases Annapolis Bancorp Announces Profitable Third Quarter Third quarter net income available to common shareholders after accruing for preferred stock dividends was $103,000 ($0.03 per basic and diluted common share) compared to $299,000 ($0.08 per basic and diluted common share) in the third quarter of 2008. Results for the quarter ended September 30, 2009 included a provision for credit losses of $1.1 million compared to provisions for credit losses of $0.9 million in the third quarter of last year and $3.8 million in the second quarter of 2009. The Company increased its allowance for credit losses to $9,092,000 (3.26% of total gross loans) at September 30, 2009, compared to $4,123,000 (1.54% of total gross loans) at December 31, 2008. “At a time of distress in the banking industry, we are pleased to report that Annapolis Bancorp earned a profit in the third quarter while continuing to fortify its reserves for credit losses,” said Richard M. Lerner, Chairman and CEO of Annapolis Bancorp, Inc. and BankAnnapolis. Nonperforming assets at September 30, 2009 amounted to $16.2 million or 5.80% of total gross loans compared to $11.5 million or 4.20% of total gross at June 30, 2009 and $6.5 million or 2.42% of total gross loans at December 31, 2008. The third quarter increase in nonperforming assets is principally attributable to the transfer of one $4.6 million commercial loan to nonaccrual status. Payments on the loan continue to be made under the terms of a forbearance agreement, and will be recognized by the Bank on a cash basis pending further developments. The allowance for credit losses at September 30, 2009 provided 56.2% coverage of nonperforming assets compared to 63.6% at year-end 2008. The Company recorded net charge-offs of $1.1 million for the nine months ended September 30, 2009. The Company’s total assets grew to $445.5 million at September 30, 2009 from $394.9 million at December 31, 2008, bolstered by a $45.7 million or 49.4% increase in total savings account balances since year-end 2008. Total gross loans increased by $6.7 million or 2.5% in the third quarter and through the first nine months of 2009 the Bank’s loan portfolio grew by $10.9 million or 4.1%. “Despite challenging economic conditions, BankAnnapolis is delivering on its commitment to extend credit in the communities it serves,” said Lerner. “We are encouraged by the recent uptick in loan demand and are actively seeking new lending opportunities.” At September 30, 2009, Annapolis Bancorp, Inc. exceeded all federal regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 12.6%, a total capital ratio of 13.9%, and a Tier 1 leverage ratio of 8.5%. Stockholders’ equity totaled $32.7 million at September 30, 2009 compared to $26.8 million at December 30, 2008. Book value per common share at September 30, 2009 was $6.41. In the quarter just ended, net interest income increased by $400,000 or 11.8% compared to the same period in 2008. The net interest margin decreased to 3.52% from 3.79% in the third quarter of last year, but showed a 46 basis point improvement from 3.06% in the second quarter of 2009. Interest income decreased by $69,000 or 1.3% in the three months just ended compared to the same period last year. A 109 basis point drop in the Company’s yield on earning assets was substantially offset by a $70.9 million or 19.9% increase in average earning assets compared to the third quarter of 2008. Interest expense for the quarter ended September 30, 2009 decreased by $469,000 or 22.6%, as the overall cost of interest-bearing liabilities fell by 95 basis points to 1.71% from 2.66% in the same three month period last year. Noninterest income increased 10.3% to $482,000 in the third quarter of 2009 from $437,000 in last year’s comparable period due to the Company’s expanded mortgage banking activity and gains on the sale of repossessed assets. Noninterest expense increased by $351,000 or 14.3% in the quarter just ended compared to the same period in 2008, reflecting strategic investments in personnel and higher legal, consulting and other costs associated with the collection of delinquent loans and the management of nonperforming assets, as well as higher operating expenses related to a new branch opened in the fourth quarter of 2008. Through the first three quarters of 2009, the Company’s net loss totaled $2,088,000. The year-to-date net loss available to common shareholders after accruing for preferred stock dividends was $2,410,000 ($0.63 per basic and diluted common share) compared to net income available to common shareholders of $1,282,000 ($0.33 per basic and $0.32 per diluted common share) for the same period in 2008. The Bank recorded provisions for credit losses of $6.1 million and $1.4 million for the respective nine month periods ended September 30, 2009 and 2008. BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices located in Anne Arundel and Queen Anne’s Counties in Maryland. The Bank’s headquarters building and main branch are located at 1000 Bestgate Road, directly across from the Westfield Annapolis Mall. Certain statements contained in this release, including without limitation, statements containing the words "believes," "plans," "expects," "anticipates," and words of similar import, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Company undertakes no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annapolis Bancorp Announces Second Quarter Results Results for the quarter ended June 30, 2009 included a provision for credit losses of $3.8 million compared to a provision for credit losses of $0.4 million in the second quarter of last year. The Company increased its allowance for credit losses to $8,521,000 (3.13% of total gross loans) at June 30, 2009, compared to $4,123,000 (1.54% of total gross loans) at December 31, 2008. “We added substantially to our reserves in the second quarter as borrowers continued to encounter difficult economic conditions,” said Richard M. Lerner, Chairman and CEO of Annapolis Bancorp, Inc. and BankAnnapolis. “Because of the continued weakness in the economy, we are regularly re-evaluating our collateral positions on loans, as well as borrowers’ ability to repay. The result has been further downward adjustments to internal risk ratings and the establishment of specific loan loss reserves in appropriate circumstances.” Nonperforming assets at June 30, 2009 amounted to $11.5 million or 4.20% of total gross loans compared to $6.5 million or 2.42% of total gross loans at December 31, 2008. Nonperforming assets at quarter-end were comprised of $11.2 million in nonaccrual loans and $0.3 million in other assets. At June 30, 2009, Annapolis Bancorp, Inc. continued to exceed all federal regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 12.5%, a total capital ratio of 13.8%, and a Tier 1 leverage ratio of 8.1%. To be considered “well-capitalized” under federal guidelines, a bank holding company must have a Tier 1 capital ratio of at least 6%, a total capital ratio of at least 10%, and a Tier 1 leverage ratio of at least 5%. Total assets were $459.1 million at June 30, 2009, compared to $394.9 million at December 31, 2008. The $64.2 million or 16.3% increase was primarily the result of the Company’s successful campaign to raise core deposits through its high-yield Superior Savings product. Total savings account balances increased by $56.1 million or 60.7% since year-end 2008. Increased unemployment, instability in the real estate market, and continued economic decline have resulted in diminished lending opportunities for the Company. Total gross loans increased by just $1.7 million or 0.6% in the second quarter and through the first six months of 2009 the Bank’s loan portfolio increased by a modest $4.2 million or 1.6%. “BankAnnapolis is eager to lend and remains committed to meeting the borrowing needs of the communities it serves,” said Lerner. “We look forward to renewed loan demand as economic conditions stabilize.” With muted loan demand, the Company’s investment portfolio has grown by a net of $47.4 million or 56.6% since December 31, 2008. Total cash and investments increased by $61.3 million or 54.4% in the six months ended June 30, 2009. In the quarter ended June 30, 2009, net interest income increased $110,000 or 3.4% compared to the second quarter of 2008, with average earning assets increasing $81.8 million or 22.6%. The Company’s net interest margin fell to 3.06% for the three months ended June 30, 2009 from 3.64% in the prior year comparable period. Benefiting from lower market interest rates, the cost of funds decreased to 1.83% in the quarter just ended from 2.45% in the second quarter of 2008. The yield on the Company’s earning assets decreased to 4.83% in the second quarter of 2009 from 6.03% in the same quarter last year. Declining market interest rates, combined with higher levels of nonperforming assets, resulted in a 5.85% yield on the loan portfolio in the quarter just ended compared to 6.83% in the second quarter of 2008. The returns on federal funds sold, interest bearing balances with banks, and the overall investment portfolio were also negatively impacted by the lower rate environment as re-investment rates have fallen considerably year-over-year. Noninterest income increased 12.6% in the second quarter to $508,000 from $451,000 in the comparable period due to the Company’s expanded mortgage banking activity. Noninterest expense increased by $554,000 or 20.9% in the second quarter of 2009 compared to the same period in 2008, with $237,000 of this increase due to higher FDIC deposit insurance premiums and assessments. The remaining higher operating expenses reflected increased personnel, professional and other costs associated with the collection of delinquent loans and the management of nonperforming assets, as well as higher operating expenses in 2009 from the December 2008 opening of a new branch in the Annapolis Towne Centre. The year-to-date net loss for 2009 totaled $2,311,000. The net loss available to common shareholders after accruing for preferred stock dividends was $2,513,000 ($0.65 per basic and diluted common share) compared to net income available to common shareholders of $983,000 ($0.25 per basic and $0.24 per diluted common share) for the six months ended June 30, 2008. The Bank recognized provisions for credit losses of $5,011,000 and $488,000 for the respective six month periods ended June 30, 2009 and 2008. BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices located in Anne Arundel and Queen Anne’s Counties in Maryland. The Bank’s headquarters building and main branch are located at 1000 Bestgate Road, directly across from the Westfield Annapolis Mall. Certain statements contained in this release, including without limitation, statements containing the words "believes," "plans," "expects," "anticipates," and words of similar import, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Company undertakes no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.Back to List of Current Releases Richard E. Hug Named to BankAnnapolis Board of Directors
Annapolis, MD, May 28, 2009 – BankAnnapolis today announced the election of Richard E. Hug, Chairman and CEO of Hug Enterprises, Inc., a firm specializing in business and real estate investment and consulting, to its Board of Directors. Hug is well known for his civic involvement and has served as chairman of the Maryland Chamber of Commerce, Maryland Business for Responsive Government, Leadership Maryland, The National Aquarium in Baltimore, the Kennedy Krieger Institute, the United Way of Central Maryland and the Duke University School of the Environment. No stranger to banking, Hug served on the board of Maryland National Bank from 1986 to 1993. He also previously served as a director of Blue Cross/Blue Shield of Maryland and as a member of the Board of Regents for the University System of Maryland. Hug was named the National Outstanding Volunteer Fund Raiser in 1992, and has led numerous area fund drives including those benefiting the National Aquarium in Baltimore, the United Way, and the University of Maryland Medical Systems. Currently, he sits on the boards of the University Systems of Maryland Foundation, the Duke University School of the Environment, Loyola College in Maryland, the Institute of Human Virology, and AAA-Maryland. “We are extremely pleased to welcome Dick Hug to the BankAnnapolis Board of Directors,” said Richard M. Lerner, Chairman and CEO of BankAnnapolis. “In addition to his impeccable reputation, strong leadership skills, and impressive record of success in the business world, Dick brings to the board an extensive contact list that will prove invaluable in helping the Bank generate new business. He and BankAnnapolis share the same business principles and values, as well as a commitment to strengthening the community through public service and giving back. Dick will be a real asset to BankAnnapolis and we’re fortunate to have him on our board.” “My recent election to the Board of Directors of BankAnnapolis is most gratifying,” Hug said. “I am so impressed with the Bank’s leadership and community culture, and believe that I can be helpful in their quest for growth and superb customer service.” Hug is a 1956/1957 graduate of Duke University and began his business career with Koppers Company, Inc., where he was named a corporate vice president in 1973. In 1983, he became President, Chairman and Chief Executive Officer of Environmental Elements Corporation, a firm specializing in air pollution control systems for the utility and industrial markets. After a successful IPO in 1990, the company was listed on the New York Stock Exchange in 1991. Hug retired in 1995, but remained a director, stockholder, and Chairman Emeritus until the company’s sale in 2006. Hug, 74, resides in Arnold with his wife Lois. They have two children and four grandchildren. Back to List of Current Releases Annapolis Bancorp Announces First Quarter Results Annapolis, MD, May 12, 2009 - Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company of BankAnnapolis, today announced a net loss of $450,000 for the first quarter of 2009. The net loss available to common shareholders after accruing for preferred stock dividends was $532,000 ($0.14 per basic and diluted common share) compared to net income available to common shareholders of $525,000 ($0.13 per basic and diluted common share) for the first quarter of 2008. Results for the quarter ended March 31, 2009 included a provision for credit losses of $1.2 million compared to a provision for credit losses of $0.1 million in the first quarter of last year. “Higher provision expense in the first quarter reflects rising levels of delinquent and nonperforming loans in the Bank’s portfolio, as borrowers continue to encounter unfavorable economic conditions,” said Richard M. Lerner, Chairman and CEO of Annapolis Bancorp, Inc. and BankAnnapolis. “With the economy in recession, unemployment rising, businesses in distress, and persistent uncertainty in the real estate market, the Bank continues to vigilantly monitor and manage its credit quality, regularly adjusting internal risk ratings on loans and establishing specific reserves when appropriate.” After provision expense of $1.2 million and net charge-offs of $172,000 in the first quarter, the Company’s allowance for credit losses rose to $5,159,000 (1.91% of total gross loans) at March 31, 2009 from $4,123,000 (1.54% of total gross loans) at December 31, 2008. Nonperforming assets at March 31, 2009 amounted to $11.7 million or 4.32% of total gross loans compared to $6.5 million or 2.42% of total gross loans at December 31, 2008. The allowance for credit losses provided 44% coverage of nonperforming assets at March 31, 2009 compared to 64% coverage at year-end 2008. Nonperforming assets at quarter-end were comprised of $8.6 million in nonaccrual loans, $2.8 million in loans over 90 days past due but still accruing, and $0.3 million in other assets. Total assets grew by $74.7 million or 18.9% in the first quarter to $469.6 million. In January, the Bank launched a successful promotional campaign to raise core deposits through its high-yield Superior Savings product. By March 31st, 1,100 new accounts were opened generating $67.5 million in new savings deposits. Total savings account balances increased by $68.6 million or 74.0% in the first quarter. “The Superior Savings campaign and the resulting influx of deposits is the first step in fulfilling our commitment to help stimulate the local economy,” said Lerner. “When the economy rebounds and loan demand returns, we will be well-positioned to support the recovery by transforming these deposits into loans to local consumers and businesses.” As previously disclosed, Annapolis Bancorp, Inc. chose to participate in the U.S. Treasury’s TARP Capital Purchase Program, and in January of this year sold $8.152 million in fixed-rate cumulative preferred stock to the federal government along with a warrant to purchase 299,706 shares of the Company’s common stock at an exercise price of $4.08 per share. This new capital, offset in part by a net loss for the quarter, boosted total stockholders’ equity to $34.4 million at March 31, 2009, an increase of $7.5 million or 28.2% since year-end 2008. Book value per common share at the end of the first quarter was $6.80. The capital generated by the sale of preferred stock to the U.S. Treasury qualifies as Tier 1 capital and further strengthened the Company’s core capital reserves. At March 31, 2009, Annapolis Bancorp, Inc. met all federal regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 13.4%, a total capital ratio of 14.7%, and a Tier 1 leverage ratio of 9.3%. To be considered “well-capitalized” under federal guidelines, a bank holding company must have a Tier 1 capital ratio of at least 6%, a total capital ratio of at least 10%, and a Tier 1 leverage ratio of at least 5%. Total gross loans grew by just $2.5 million or 0.9% in the first quarter, so much of the liquidity generated by the Superior Savings campaign was invested short-term in federal funds sold, which increased by $22.9 million or 96.6% since December 31, 2008, and in interest-bearing balances with other banks, which grew to $21.0 million at March 31, 2009 from $1.0 million at year-end 2008. Investment securities also experienced substantial growth in the first quarter, increasing by a net of $24.0 million or 28.7% after accounting for new purchases, repayments, calls and maturities in the portfolio. Overall, total cash and investments jumped by $72.5 million or 64.3% in the three months ended March 31, 2009. Average interest earning assets in the first quarter of 2009 increased by $51.5 million or 14.7% compared to the same period last year, but the yield on interest earning assets fell to 5.03% from 6.47% in the first three months of 2008. The yield on federal funds sold dropped to 0.21% from 2.96% as the Federal Reserve established a target range of 0% to 0.25% for this key rate in late 2008. The resulting drop in short-term interest rates and the increased volume of nonaccrual loans caused the Company’s yield on loans to decline to 5.91% in the first quarter compared to 7.29% in the same period last year. Total interest income for the quarter decreased year-over-year by $649,000 or 11.5%. Compared to the first quarter of last year, total interest expense decreased by $448,000 or 17.9% in the three months just ended, despite growth in average interest-bearing liabilities of $48.4 million or 15.9%. The Company’s overall cost of interest-bearing liabilities declined to 2.37% from 3.32% in the first quarter of 2008. The impact of significantly lower market deposit rates was blunted by a shift in the Company’s deposit mix toward the higher-yielding Superior Savings Account, which offered an above-market introductory promotional rate for new deposits throughout much of the first quarter. Net interest income for the quarter ended March 31, 2009 declined by $201,000 or 6.4% compared to the same period in 2008. The Company’s net interest margin contracted to 2.95% from 3.59% in the first quarter of last year due to a narrowing of its interest rate spread, higher levels of nonaccrual loans, and the initial, short-term negative spread earned on new Superior Savings balances. Noninterest income rose modestly in the first quarter to $450,000 from $434,000 in the comparable period due to a rebound in mortgage banking activity. Noninterest expense increased by $265,000 or 10.1% in the first three months of 2009 compared to the same period last year, as compensation, benefit, and occupancy expense rose to reflect the addition of a new branch in December of 2008. The Company also incurred higher FDIC deposit insurance premiums as well as increased professional, consulting and other costs associated with the collection of delinquent loans and the management of nonperforming assets. BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through eight community banking offices located in Anne Arundel and Queen Anne’s Counties in Maryland. The Bank’s headquarters building and main branch are located at 1000 Bestgate Road, directly across from the Westfield Annapolis Mall. Certain statements contained in this release, including without limitation, statements containing the words "believes," "plans," "expects," "anticipates," and words of similar import, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Back to List of Current Releases Annapolis Bancorp Names New CFO Annapolis, MD, April 27 2009 - Annapolis Bancorp, Inc. (NASDAQ: ANNB) today announced the appointment of Edward J. Schneider as Chief Financial Officer and Treasurer of the Company, and as Senior Vice President, Chief Financial Officer and Treasurer of its wholly-owned subsidiary, BankAnnapolis. Mr. Schneider replaces Margaret Theiss Faison, who becomes Senior Vice President and Controller of the Company and Bank effective today. “We are fortunate to have this opportunity to strengthen our financial management team by bringing Ed Schneider on board,” said Richard M. Lerner, Chairman and CEO of the Company and Bank. “Ed is a talented, innovative financial executive with a vast breadth of experience in the banking industry. His hiring clearly demonstrates the commitment of our board of directors to assembling the best possible management team to guide the Company and Bank out of the current recession and into a new era of financial success.” Prior to joining the Company and the Bank, Mr. Schneider, age 47, worked at Citigroup Inc. and its various subsidiaries from 1995 to 2004 and again from 2005 to 2009, where he most recently held the positions of Controller and Chief Accounting Officer of CitiFinancial Branch Network and Treasurer of CitiFinancial Credit Company. From 2004 to 2005, he served as Senior Vice President and Director of Corporate Regulatory Reporting at MBNA Corporation prior to its acquisition by Bank of America. Prior to joining Citigroup, Mr. Schneider served in a number of positions from 1986 to 1995 at other banks and bank holding companies. Back to List of Current Releases BankAnnapolis Well Positioned To Meet Credit Needs Of Area Consumers And Businesses Annapolis, MD, March 25, 2009 – While many believe that banks do not have money to lend right now, nothing could be further from the truth at BankAnnapolis. In fact, BankAnnapolis is expanding its efforts to attract borrowers by raising deposits, adding staff and ramping up its marketing program. |
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