Recent Press Releases

BANKANNAPOLIS’ BRENDA SPIES ELECTED VICE CHAIR OF ENTREPRENEUR’S EXCHANGE

Annapolis, MD, January 25, 2012 – Brenda Spies, vice president and branch manager of the BankAnnapolis Bestgate branch, has been elected to serve as Vice Chair for Entrepreneur’s Exchange for a three-year term beginning January 1, 2012. 

Entrepreneur's Exchange, Inc., established in 1985, is a non-profit organization located in Annapolis. Its mission is to provide encouragement, support, education, information exchange and marketing exposure to business owners or individuals with the entrepreneurial spirit.

“Entrepreneur’s Exchange has had a tremendous impact on the growth and support of new businesses in Annapolis,” said Ms. Spies. “I’m honored to take a leading role in this organization and am looking forward to helping entrepreneurs launch and market their companies.”

“We are extremely pleased that Brenda has taken on this role,” said BankAnnapolis Chairman and CEO Richard M. Lerner.  “It is yet another example of how our employees are making a difference in our community and helping businesses thrive here.”

Ms. Spies has been involved with Entrepreneur’s Exchange since 2009, when she was elected to the board as secretary. She has worked on the public relations committee since January 2010. 

Ms. Spies has been an employee of BankAnnapolis for 19 years. 

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BankAnnapolis Honored as Corporate Philanthropist of the Year
by the Community Foundation of Anne Arundel County


Annapolis, MD, November 9, 2011 – The Community Foundation of Anne Arundel County honored BankAnnapolis as Corporate Philanthropist of the Year at its annual Celebration of Philanthropy Luncheon in Annapolis on November 4, 2011.  This award is presented to a large- or medium-sized corporation with a proven record of exceptional generosity that has demonstrated outstanding civic and charitable responsibility.  The award is based on the corporation’s direct gift support, the impact of that support, success in motivating employees to make charitable contributions to local nonprofits, and the CEO’s philanthropic leadership and ability to encourage and motivate others to give back.

BankAnnapolis has a long history of supporting the community and, for 9 of the past ten years, has been named by the Baltimore Business Journal as one of the most generous corporate givers in the region.  BankAnnapolis contributes more than $40,000 a year to local nonprofits and community events and its employees donated more than 3,100 volunteer hours in 2010. BankAnnapolis provides support to CASA, Hospice of the Chesapeake, United Way of Queen Anne’s County, YMCA Camp Letts, Anne Arundel Community College, Wellness House, Habitat for Humanity, Children’s Museum, Boys and Girls Club, Maryland Therapeuatic Riding, Foundation for Community Partnerships, and Children’s Theatre of Annapolis, as well as many others.  In addition, sixteen BankAnnapolis employees serve on the boards of local nonprofit organizations.

“Over the past 22 years, BankAnnapolis has worked purposefully to build a strong financial institution committed to business and responsible corporate citizenship in Anne Arundel County,” said Michael McHale, President and CEO of Hospice of the Chesapeake, the organization that nominated BankAnnapolis for the award.

“We are extremely proud to be recognized by the Community Foundation of Anne Arundel County as the first recipient of its Corporate Philanthropist of the Year Award,” said BankAnnapolis Chairman and CEO Richard M. Lerner.  “Good corporate citizenship is central to who we are and what we stand for, and we are pleased that our longstanding support of local charitable organizations has helped to make a difference in our community.”

Just last month, BankAnnapolis was named by the Annapolis and Anne Arundel County Chamber of Commerce as the top financial services firm in the market for 2011.  “It’s incredibly gratifying to be acknowledged for our customer and community service by these two highly respected business and community organizations.  It validates and reinforces what has always been the central tenet of our community banking philosophy: what’s good for our customers and our community is also good for business,” said Lerner.

BankAnnapolis provides financial, in-kind and volunteer assistance to numerous nonprofit institutions and organizations that assist people in need and enhance the quality of life in the Greater Annapolis community and Queen Anne’s County. 

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BankAnnapolis Honored for Excellence in Financial Services

Annapolis, MD, November 1, 2011 – BankAnnapolis was recently honored for excellence in financial services by the Annapolis and Anne Arundel County Chamber of Commerce, as well as the Maryland Bankers Association.

The Annapolis and Anne Arundel County Chamber of Commerce awarded BankAnnapolis the 2011 Financial Services Award at its annual Comcast Hall of Fame and Business Awards dinner. The Chamber awards recognize the community’s top businesses in a variety of categories including individual business leader, small business, nonprofit, financial services, and sales and marketing, among others.  The Outstanding Business Achievement in Financial Services Award is presented to a business in the banking, insurance or other financial services industry for innovation and leadership in the identification of products or services that best fit the needs of the community.  The recipient must have an overall record of demonstrated corporate responsibility and community involvement.

Separately, the Maryland Bankers Association and Maryland Banker Magazine in partnership with The Warren Group recognized BankAnnapolis Vice President and Senior Credit Officer Shawn Schoene as one of sixteen “Next Leaders in Banking” at an awards gala prior to this year’s BankNext Conference and Exposition in Baltimore.  The inaugural awards event honored bankers throughout Maryland who are considered rising stars in their profession.  These individuals have made significant contributions to their institutions and the communities in which they serve.

“We are all extremely proud of Shawn’s accomplishment, and as an organization, we are honored to receive the Chamber’s Financial Services Award,” said Richard M. Lerner, Chairman and CEO of BankAnnapolis.  “But we are even more proud of the work we do every day to ensure that our clients receive the best possible, personalized service and attention that only a forward-thinking, locally-owned and managed bank can provide.”

BankAnnapolis provides financial, in-kind and volunteer assistance to numerous nonprofit institutions and organizations that assist people in need and enhance the quality of life in the Greater Annapolis community and Queen Anne’s County. 

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3rd Quarter Earnings Up 123% at Annapolis Bancorp

Annapolis, MD, November 1, 2011 – Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company of BankAnnapolis, today announced net income of $668,000 for the third quarter of 2011, up $369,000 or 123.4% compared to net income of $299,000 in the same quarter of last year.

Third quarter net income available to common shareholders after accruing for preferred stock dividends was $545,000 ($0.14 per basic and diluted common share), an increase of 209.7% compared to net income available to common shareholders of $176,000 ($0.04 per basic and diluted common share) in the third quarter of 2010.

Return on average assets and return on average equity improved to 0.61% and 7.25%, respectively, in the third quarter of 2011 compared to 0.28% and 3.36% in the comparable period of 2010.  The net interest margin widened 40 basis points to 3.93% in the three months ended September 30, 2011 from 3.53% in the third quarter of last year.

Net income for the first nine months of 2011 increased by 10.9% to $1,502,000 from $1,354,000 in the comparable period of last year.  Year-to-date net income available to common shareholders totaled $1,135,000 ($0.29 per basic and $0.26 per diluted common share) compared to $990,000 ($0.25 per basic and diluted common share) in the same nine month period of 2010.

“We are pleased to report strongly improved performance ratios and earnings that have more than doubled in the third quarter,” said Chairman and CEO Richard M. Lerner.  “Growth in the loan portfolio, reduced provision for credit loss expense and lower overall funding costs helped us to further improve the efficiency of our balance sheet and boost profits significantly.”

Last month, BankAnnapolis received the 2011 Financial Services Award from the Annapolis and Anne Arundel County Chamber of Commerce.  Presented at the Chamber’s Annual Comcast Business Hall of Fame Awards Ceremony on October 6th, the local business advocacy group cited BankAnnapolis for its outstanding business achievement as the top financial services firm in the market.

Later this week, BankAnnapolis will be honored as 2011 Corporate Philanthropist of the Year by the Community Foundation of Anne Arundel County at its annual Celebration of Philanthropy Awards Luncheon.  According to the Foundation, BankAnnapolis was selected because of “the extraordinary depth, breadth of service and philanthropy it has demonstrated in its work on behalf of local nonprofits and our community.”

“It is very flattering to be acknowledged for our customer and community service by such prominent and widely respected business and community organizations,” said Lerner.  “It’s especially gratifying to receive this recognition at a time when our efforts have resulted in improved financial performance, because it validates and reinforces our belief that what’s good for our customers and our community is also good for our shareholders.  This has always been the central tenet of our community banking philosophy.”

Total assets of $435.8 million at September 30, 2011 increased 0.9% or $3.7 million compared to $432.1 million at December 31, 2010.  Gross loans improved by $14.2 million or 5.1% to $294.2 million at September 30, 2011 from $279.9 million reported at year-end 2010.

Consistent with the Company’s strategy to fund loan growth through attrition in the investment portfolio, securities decreased by $11.4 million to $84.9 million at September 30, 2011 from $96.3 million at December 31, 2010.  Short-term liquidity increased 9.3% to $40.1 million at September 30, 2011 from $36.7 million at December 31, 2010.

Deposits of $340.1 million at September 30, 2011 decreased $830,000 or 0.2% compared to $340.9 million reported at year-end 2010.  Noninterest-bearing demand deposit account balances grew to $53.1 million, a lift of $7.6 million or 16.6% compared to $45.5 million at December 31, 2010.  This increase was offset by an $8.4 million or 2.8% decrease in interest-bearing deposit balances over the same nine month period, reflective of the Company’s focus on lowering its overall cost of funds.

Nonperforming assets at September 30, 2011 amounted to $8.0 million or 1.83% of total assets, a reduction of $2.1 million from $10.1 million or 2.35% of total assets at December 31, 2010 and a decrease of $5.2 million from $13.2 million or 3.06% of total assets at September 30, 2010.

As of September 30, 2011, the Company’s allowance for credit losses was $7.5 million or 2.56% of total loans, and provided 111.2% coverage of nonperforming loans.  The allowance for credit losses at December 31, 2010 was $6.9 million or 2.45% of total loans, and provided 81.7% coverage of nonperformers.

The Company recorded net charge-offs on loans deemed uncollectible of $910,000 or 0.32% of average loans for the nine months ended September 30, 2011 compared to $1.8 million or 0.63% of average loans for the same period in 2010.

Stockholders’ equity increased to $36.8 million at September 30, 2011 from $34.8 million at December 31, 2010.  At the end of the third quarter, Annapolis Bancorp, Inc. exceeded all federal regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 12.9%, a total capital ratio of 14.2%, and a Tier 1 leverage ratio of 9.3%.  Book value per common share at September 30, 2011 was $7.26 compared to $6.81 at December 31, 2010.  The Company’s common stock closed at a market price of $3.80 on September 30, 2011.

In the quarter just ended, net interest income increased by $439,000 or 11.9% and the net interest margin expanded 40 basis points to 3.93% compared to the same period one year ago.

Third quarter interest income totaled $5.0 million, an improvement of $233,000 or 4.9% compared to the same period in 2010.  Interest income on loans increased $420,000 compared to the third quarter of 2010, benefiting from a $17.3 million increase in average loans outstanding and an improvement to 5.85% from 5.62% in the yield earned on the loan portfolio.  Income on investment securities declined $185,000 for the quarter ended September 30, 2011 compared to the same quarter of 2010 due to a $12.0 million reduction in average balances and a 39 basis point drop in the yield on the investment portfolio to 2.89% from 3.28%.

Interest expense decreased by $206,000 or 18.8% due to a fall in the overall cost of interest-bearing liabilities to 1.02% in the quarter just ended from 1.24% in the third quarter of 2010, coupled with a $3.7 million decrease in average interest-bearing balances.  The Company’s overall cost of funds improved to 0.88% for the third quarter of 2011 compared to 1.11% for the same period last year.  The Company’s lower funding cost resulted from active management of deposit rates as well as a $7.5 million increase in average noninterest-bearing liabilities.

The Company lowered its provision for credit losses to $338,000 in the third quarter of 2011 from $622,000 in the same period of 2010.

Noninterest income increased to $659,000 in the three months ended September 30, 2011 from $469,000 in the third quarter of 2010, reflecting higher fee income earned on loans held for sale, an increase in mortgage banking revenue, and gains realized on the sale of foreclosed assets.

Noninterest expense rose by $323,000 in the quarter just ended compared to the same period last year.  This increase included a write-down of $198,000 on real property held for future branch expansion, as well as higher personnel and mortgage banking expenses.

Year-to-date net interest income increased by $726,000 compared to the first nine months of 2010, and the year-to-date net interest margin improved to 3.94% from 3.65% in 2010.  A $1.6 million provision for credit losses was recorded in the first three quarters of 2011 compared to $1.2 million in the same period of 2010.  Noninterest income remained essentially flat year-over-year at $1.4 million while noninterest expense increased by 2.3%.  The year-to-date efficiency ratio improved to 71.45% in 2011 from 73.92% in 2010.

BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through seven 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.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based on management’s current expectations and involve certain risks and uncertainties which could cause actual results to differ materially from those expressed in forward-looking statements.  Factors that might cause such a difference include, but are not limited to: (i) the rate of declining growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital; (v) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market; (vi) the performance of the stock and bond markets; (vii) competition in the financial services industry; (viii) possible legislative, tax or regulatory changes, and; (ix) such other risks and uncertainties as set forth in the Company’s filings with the Securities and Exchange Commission.  Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

The Company is not responsible for changes made to this press release by wire services, Internet service providers or other media.


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STEPHEN PRIMOSCH JOINS BANKANNAPOLIS AS VP PRIVATE BUSINESS BANKING

Annapolis, MD, October 3, 2011 – Stephen Primosch has joined the staff at BankAnnapolis as vice president in the Private Business Banking group. Based at the company’s headquarters on Bestgate Road, he will report to Senior Vice President and Chief Business Banking Officer Michael Schonfeld.

The Odenton resident comes to BankAnnapolis from the Harbor Bank of Maryland, where he was a commercial lending officer. Prior to that he worked as a business banking officer at Sun Trust and as a sales manager for Wells Fargo Home Mortgage.

Primosch, who has a bachelor’s degree and an MBA from Frostburg State University, praised BankAnnapolis as “a healthy organization in terms of financial strength,” but said his interest in coming aboard is also rooted in its close ties to the community. Having worked at big banks, “I enjoy not only that connection to the community but also being in a close-knit organization – a working environment where the president is around the corner and your boss is right here, next to you,” he said.

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ASSET QUALITY STRENGTHENS IN PROFITABLE SECOND QUARTER AT ANNAPOLIS BANCORP NONPERFORMERS DROP TO 1.68% OF TOTAL ASSETS

Annapolis, MD, July 28, 2011 – Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company of BankAnnapolis, today announced net income of $326,000 for the second quarter of 2011 compared to net income of $438,000 in the same quarter of last year.

Second quarter net income available to common shareholders after accruing for preferred stock dividends was $203,000 ($0.05 per basic and diluted common share) compared to net income available to common shareholders of $318,000 ($0.08 per basic and diluted common share) in the second quarter of 2010.

Net income for the first six months of 2011 dipped to $835,000 from $1,055,000 in the first half of 2010.  Year-to-date net income available to common shareholders totaled $590,000 ($0.15 per basic and $0.14 per diluted common share) compared to $814,000 ($0.21 per basic and diluted common share) in the same six month period of 2010.

Nonperforming assets at June 30, 2011 amounted to $7.3 million or 1.68% of total assets, a reduction of $2.8 million from $10.1 million or 2.35% of total assets at December 31, 2010.  The current quarter-end balance represents a $5.4 million improvement from nonperforming assets of $12.7 million reported one year ago at June 30, 2010.

The allowance for credit losses totaled $7.3 million (2.51% of total gross loans) at June 30, 2011 compared to $6.9 million (2.45% of total gross loans) at year-end 2010.  The allowance for credit losses covered 100% of nonperforming assets at the end of the second quarter of 2011 compared to 68% and 54% as of December 31, 2010 and June 30, 2010, respectively.

“We are pleased to report continued improvement in asset quality, with a 43% reduction in nonperforming assets compared to the same time last year,” said Chairman and CEO Richard M. Lerner.  ”As expected, the resolution of problem loans has required us to replenish our reserves and incur additional costs in the disposition of foreclosed and repossessed assets.  While constraining short-term profitability, we believe that our strategic and disciplined focus on problem loan resolution will unlock future earnings potential from the Bank’s core banking operations.”

Total assets grew to $434.0 million at June 30, 2011, up $1.8 million compared to $432.1 million at December 31, 2010.  Liquidity remained strong as short-term investments (cash, federal funds sold and interest-bearing balances with banks) totaled $36.6 million at both June 30, 2011 and December 31, 2010.  Investment securities decreased by $6.9 million to $89.4 million at June 30, 2011 from $96.3 million at December 31, 2010, as proceeds from maturing and called securities were redeployed to fund growth in the loan portfolio.

Gross loans improved by $10.2 million or 3.7% to $290.1 million at June 30, 2011 from $279.9 million reported at year-end 2010.  Increases of $12.1 million or 6.6% in real estate loans and $0.6 million or 1.6% in construction lending were partially offset by decreases in installment loans and loans held for sale.  Commercial loans outstanding of $51.3 million remained flat compared to year-end 2010.

“We are encouraged by the uptick in commercial real estate lending activity and remain cautiously optimistic regarding the prospects for commercial loan growth,” said Lerner.  “Despite the still tepid economy, BankAnnapolis remains committed to providing credit and exemplary customer service to its commercial customers so they can tackle the challenge of growing their businesses.”

Deposits totaled $339.9 million at June 30, 2011 compared to $340.9 million reported at year-end 2010.  Noninterest-bearing demand deposit account balances grew to $48.8 million, an increase of $3.3 million or 7.2% compared to $45.5 million at December 31, 2010.  Interest-bearing deposits decreased by $4.3 million or 1.4% over the same six month period.

Stockholders’ equity increased to $35.8 million at June 30, 2011 from $34.8 million at December 31, 2010.  At June 30, 2011, Annapolis Bancorp, Inc. exceeded all federal regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 12.8%, a total capital ratio of 14.0%, and a Tier 1 leverage ratio of 9.2%.  Book value per common share at June 30, 2011 was $7.00 compared to $6.81 at December 31, 2010.  The Company’s common stock closed at a market price of $ 4.13 on June 30, 2011.

In the quarter just ended, net interest income increased by $328,000 or 8.9% compared to the same period one year ago.  The net interest margin improved by 35 basis points to 3.90% from 3.55% in the second quarter of 2010.

Interest income on loans increased by $382,000 or 9.8% in the quarter ended June 30, 2011 compared to the same period in 2010.  Average loans increased by $11.9 million and the yield on the loan portfolio improved to 5.94% in the second quarter of 2011 compared to 5.64% in the linked quarter of last year.  Investment income decreased by $318,000 or 31.4% reflecting a significant drop in market yields and a shift in the asset mix from investments to loans.

Interest expense decreased by $268,000 or 22.1% due to a drop in the overall cost of interest-bearing liabilities from 1.36% in the second quarter of 2010 to 1.07% in the quarter just ended, coupled with a $4.7 million decrease in average balances.

The Company added to its reserves by recording a provision for credit losses of $679,000 in the second quarter of 2011, up from $363,000 in the same period of 2010.

Noninterest income decreased to $356,000 in the three months ended June 30, 2011 compared to $481,000 in the second quarter of 2010, reflecting lower fee income earned on loans held for sale and losses realized on the sale of repossessed assets.

Noninterest expense was $65,000 higher in the quarter just ended compared to the same period last year.  The increase reflected elevated occupancy and equipment costs, increased marketing expenses and greater charges associated with foreclosed and repossessed assets.

Year-to-date net interest income increased by $287,000, and the net interest margin improved to 3.95% from 3.71% in the first six months of 2010.  A $1.2 million provision for credit losses was recorded in the first half of 2011 compared to $599,000 in the same period of 2010.  Through June 30th, the Company incurred net charge-offs of $817,000 in 2011 and $1.7 million in 2010.  Noninterest income decreased by $169,000 compared to the first six months of last year and noninterest expense was reduced by $105,000.  The year-to-date efficiency ratio improved to 71.65% in 2011 from 73.85% in the same period of 2010.

BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through seven 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.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based on management’s current expectations and involve certain risks and uncertainties which could cause actual results to differ materially from those expressed in forward-looking statements.  Factors that might cause such a difference include, but are not limited to: (i) the rate of declining growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital; (v) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market; (vi) the performance of the stock and bond markets; (vii) competition in the financial services industry; (viii) possible legislative, tax or regulatory changes, and; (ix) such other risks and uncertainties as set forth in the Company’s filings with the Securities and Exchange Commission.  Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

The Company is not responsible for changes made to this press release by wire services, Internet service providers or other media.

Annapolis, MD, July 22, 2011 – BankAnnapolis today announced the addition of three new members to its board of directors: Hospice of the Chesapeake President and CEO Michael S. McHale, Watermark Cruises President Debbie H. Gosselin and CPS/Gumpert CEO Jeff W. Ostenso.

“We are honored and excited to welcome these new board members into our fold,” said Richard M. Lerner, Chairman and CEO of BankAnnapolis.  “They run some of the area’s most well-known, highly-regarded, community-minded businesses.”

“I’m struck by the caliber of these people and their accomplishments, and am extremely flattered by their desire to associate with BankAnnapolis,” said Lerner.  “It’s a validation of what we have worked hard to build over the past 21 years in this community—a reputation as a strong, stable financial institution committed to local businesses and to responsible corporate citizenship.”

McHale, who joined Hospice of the Chesapeake as Chief Operating Officer in 2007 and assumed his current position in 2010, oversees a team of 190 hospice professionals.  During his years with the organization, he has explored care innovations and new technologies along with proven methodologies to advance patient- and family-focused outcomes.  He has more than a dozen years’ experience in hospice and long-term care, including leadership roles in California and Michigan before coming to this region to work at the Washington Home and Community Hospices.

“Over the years, I have been impressed with the level at which BankAnnapolis invests in its customers and the greater community it serves,” said McHale, an Edgewater resident who serves on state and national advisory and governance committees concerned with hospice and palliative care.  “The Bank’s focus on being a local partner is good for business and good for our community.  I look forward to being a part of this tradition of service.”

“Michael is a compassionate, caring health care professional who understands that his organization’s ability to serve the community requires a strong business model.  He doesn’t hesitate to make tough business decisions to assure the continuity and success of his organization,” Lerner said.  “His election to the board reinforces the Bank’s longstanding commitment to local charities that assist people in need.”

Gosselin has been president of Watermark, which offers guided walking tours, sightseeing cruises on the Chesapeake Bay, private charter service, and water taxis in the Annapolis harbor, since 1990.  She is also president of Annapolis Landing Marina, is a member of the city’s Maritime Advisory Board, and has held leadership positions on the Maryland Tourism Council, the local chamber of commerce, and the city and county visitors bureau, among other groups.

Lerner described her enterprises “as among the most iconic in the area.  No business is more authentically ‘Annapolis’ than the water taxi service operated by Watermark.”  He praised Gosselin as “an astute, respected businesswoman who has established her company as a leader in the regional hospitality industry and as the central resource for those seeking a genuine Annapolis experience on land or water.”  He added, “Debbie is deeply immersed in the local business and civic communities and is committed to promoting commerce in downtown Annapolis.”

Gosselin, an Annapolis resident, calls herself “a real fan of BankAnnapolis.  I have respect for the staff and the president, all of whom exhibit integrity and excellent customer service consistently.”  As for her new role as a director, she said, “I expect that my goal of lifelong learning will get a new chapter from this experience. More importantly, I believe that I will be better positioned to spread the word about the benefits of working with BankAnnapolis.”

Ostenso’s Annapolis-based firm, CPS/Gumpert, specializes in creative design, commercial printing and promotion, serving an ever-widening market that reaches into the Baltimore and Washington areas, as well as Northern Virginia.

“Jeff is a forward-thinking innovator who has taken a traditional, low-tech, ‘old economy’ printing business and transformed it into a modern, multifaceted marketing firm via strategic acquisitions and product line expansions,” Lerner said.  “He learned his business from the bottom up and used that knowledge to keep his business at the leading edge of his industry.”

Lerner also praised Ostenso, who has served on the boards of various businesses and community organizations, for co-founding LinkAnnapolis, a local B2B networking group.  “Jeff is an active and effective networker with a vast array of contacts in the Bank’s market,” he said.

Ostenso, who lives in Annapolis, said he has “long admired BankAnnapolis for helping to meet the financing needs of local businesses and for its outreach to the community.  The Bank is a true fixture in Annapolis, and I look forward to working with a team of directors to enhance the banking relationships that tie us to our community.”

Ostenso and McHale join the board effective immediately; Gosselin’s term will begin on November 1, 2011.

BankAnnapolis serves the banking needs of small businesses, professional concerns, and individuals through seven 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 $426.1 million at March 31, 2011.

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BANKANNAPOLIS SUPPORTS OUR COMMUNITY

Annapolis, MD, August 17, 2011 - BankAnnapolis believes strongly in giving back to the community and demonstrates their commitment through charitable support, direct volunteer support, and active participation with a wide variety of local nonprofits and organizations that make a difference in our community.  Just over the past few months, BankAnnapolis has supported Rockin' on Rhode to benefit the YMCA, Hospice of the Chesapeake's Annual Gala, The Anne Arundel County Police Relations Council 5th Annual Shred Fest, American Cancer Society's Relay for Life,  golf tournaments supporting CASA and Anne Arundel Community College, Cape St. Claire Strawberry Festival, Severna Park Fourth of July Parade, and the Annapolis Comedy Festival just to name a few.  In addition to their extensive corporate support, BankAnnapolis employees also give back through hands-on volunteering and by actively participating as board members on over a dozen local non-profit boards. 

As part of their ongoing commitment to being good neighbors and good corporate citizens, BankAnnapolis will continue to support local charities and organizations providing vital services and programs to our county residents. For more information and a full listing of BankAnnapolis charitable partners and events, visit www.bankannapolis.com or follow BankAnnapolis on Facebook at BankAnnapolis.

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 RICHARD M. RILEY JOINS BANKANNAPOLIS AS MORTGAGE LOAN OFFICER

Annapolis, MD, AUG. 3, 2011 – Richard M. Riley has joined the staff at BankAnnapolis as a mortgage loan officer. Working out of the Bestgate branch, he will report to Executive Vice President and Chief Financial Officer Ed Schneider.

A University of Maryland graduate, Riley comes to BankAnnapolis from Washington Savings Bank, where he was a senior loan officer. Prior to that, he held the same position at Severn Savings Bank for nearly 18 years.

“I’m excited to join the BankAnnapolis team and offer the kind of products that only a local bank can,” said the Harwood resident, who was born and raised in Annapolis. “It’s the niche that I’m used to, working with builders, construction loans, lot loans.” He added that working for a local bank also allows him “to establish those close customer relationships, and that’s what I enjoy the most.”

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THE HUNGRY ARE BANKING ON YOU!
Help BankAnnapolis Fill Local Food Pantries

Annapolis, MD, June 27, 2011—Share summer’s bounty by participating in the BankAnnapolis Summer Food Drive July 1 through August 31 to support Food Link and Our Haven Shelter. Summer is a time of great need, particularly for child friendly food as families struggle through the summer months when kids are out of school.

According to Professor Beth Wyler of Anne Arundel Community College, below are some statistics that underscore the need to help the hungry in our county and participate in the BankAnnapolis Summer Food Drive:

• More than 466,000 Maryland residents (8.3% of state population) live below the national poverty line. More than 25,600 residents of Anne Arundel County (5.0% of the county population) live below the national poverty line. (US Census Bureau QuickFacts)

• According to the USDA, an estimated 36.2 million individuals including 12.4 million children are food insecure (11.1% of population), meaning these households are uncertain of having, or unable to acquire enough food to meet the needs of all their members due to limitations of money and other resources. (USSA/ERS, Household Food Security in the United States: 2007)

• 30.2% of households headed by a single woman are food insecure. (USSA/ERS, Household Food Security in the United States: 2007)

• Nearly half of the population (45%) relying on food assistance in Maryland report having to choose between paying for heat and utilities. (Maryland Food Bank)

• An estimated 17% of all people in need of food assistance and 15% of households with children needing assistance are not receiving it. (U.S. Conference of Mayors, A Status Report on Hunger and Homelessness in America's Cities: A 23-City Survey, December 2007)

• 37% of Maryland's households cannot afford rental units. Even in the state's most affordable rental housing jurisdictions, a minimum wage worker needs to work 80 hours a week to pay for a two-bedroom apartment. (Maryland Food Bank)

To help the hungry in Anne Arundel County, collection baskets will be located at all BankAnnapolis branches throughout July and August and the community is encouraged to bring in donations. BankAnnapolis will deliver the food to Food Link, serving Anne Arundel County, and Our Haven Shelter, serving Queen Anne’s County. Both organizations are in desperate need of the following donations:

-Peanut Butter & jelly
-Juice-canned or boxed
-Canned meats
-Saltine Crackers
-Tuna
-Spaghetti Sauce & Pasta
-Rice
-Canned pastas—ravioli, beefaroni, etc.
-Instant mashed potatoes
-Parmalot/shelf stable milk
-Beef stew
-Pop tarts and granola bars
-Chunky soups and chili
-Cereal
-Canned fruit
-Gravy—cans or mixes
-Applesauce       
-Gift cards to area grocery stores to purchase milk, butter, bread and other perishables

“Summer is a time of great fun for many children, but not for those who are hungry,” said Lori Mueller, Marketing Director of BankAnnapolis.  “Our school systems provide these children with free breakfast and lunch during the school year, but during the summer they need the support of the community to help ensure their basic nutritional needs are met.  Please consider bringing in a food donation to any BankAnnapolis branch throughout the summer and collectively we can help feed the hungry in our community.”

Food Link in Anne Arundel County strives to lead efforts in alleviating hunger in communities
by linking vital resources to families and individuals in need. For more information, visit
www.foodlinkmaryland.org.

Our Haven Shelter in Queen Anne’s County provides a safe and warm environment for the night
to men, women, and children. To serve three meals along with assistance for clothing, food,
and other necessities to all shelter guests. For more information, visit www.qacca.org.

For more information about the BankAnnapolis Summer Food Drive and a listing of all branch locations, visit www.bankannapolis.com or call 410-224-4455.

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 BANKANNAPOLIS’ BRENT McGRAW NAMED TO BOARD OF BOYS & GIRLS CLUB

Annapolis, MD, May 2, 2011 – Brent McGraw, a vice president in BankAnnapolis’ Private Business Banking Division, has been named to the board of directors of the Boys & Girls Club of Annapolis & Anne Arundel County (BGCAA).

Appointed to a two-year term, he joins other business and community leaders and elected officials in advising the organization, which provides a safe place for young people to grow, learn and have fun. The club currently operates in six locations throughout Anne Arundel County.

“I had been aware of the great work that the Boys & Girls Club has done in the community for years,” McGraw said. “For some time, I had been looking to get involved. As a father of two, my hope is to help advance and enhance the club’s programs to make a positive, lasting impact on the kids they serve.”

“The Boys & Girls Club has a strong, actively involved board” said Reginald Broddie, BGCAA’s chief professional officer. “We reach more than 2,400 young people a year in our six clubs and are very grateful to the board for their strategic direction, oversight and resources.” BGCAA is part of an organization that serves some 4.2 million boys and girls at approximately 4,000 locations in every state and overseas.

McGraw is no stranger to community involvement: He is a member of the Annapolis and Anne Arundel County Chamber of Commerce and the Northern Anne Arundel County Chamber of Commerce. In addition, he is a member of the Chesapeake Regional Technology Council.

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ANNAPOLIS BANCORP ANNOUNCES FIRST QUARTER EARNINGS
COMPANY REPORTS IMPROVEMENT IN LOAN GROWTH & ASSET QUALITY

Annapolis, MD, April 29, 2011 – Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company
of BankAnnapolis, today announced net income of $509,000 for the first quarter of 2011
compared to net income of $617,000 in the same period of last year. On a sequential quarter
basis, net income increased by $247,000 or 94% from $262,000 in the fourth quarter of 2010.

First quarter net income available to common shareholders after accruing for preferred stock
dividends was $387,000 ($0.10 per basic and $0.09 per diluted common share) compared to
net income of $497,000 ($0.13 per basic and diluted common share) available to common
shareholders in the first quarter of 2010.

Loan demand showed signs of recovery as gross loan balances at March 31, 2011 grew by
$5.2 million or 1.8% to $285.1 million from $279.9 million reported at year-end 2010.
Increases of $6.3 million in real estate lending and $0.9 million in commercial loans were
partially offset by attrition in the installment, construction and mortgages held for sale
portfolios.

Nonperforming assets at March 31, 2011 amounted to $8.5 million or 1.99% of total assets, a
reduction of $1.7 million compared to nonperforming assets of $10.1 million or 2.35% of total
assets at December 31, 2010. Year-to-date, the Company realized net charge-offs of
$518,000.

Nonperforming assets have improved by $5.7 million or 40% from levels reported one year
ago.

“We are pleased to begin the year with solid earnings, a significant reduction in problem
assets, and an improvement in loan originations,” said Chairman and CEO Richard M. Lerner.
“BankAnnapolis continues to differentiate itself as a strong local franchise that both consumers
and businesses can turn to for their savings and borrowing needs.”

In the quarter just ended, the Company continued to implement a strategy to improve the
efficiency of its balance sheet, shrinking total assets by $6.0 million or 1.4% to $426.1 million
at March 31, 2011 from $432.1 million at December 31, 2010. Surplus liquidity previously
placed in short-term investment securities and interest bearing balances with banks was
deployed to fund growth in the loan portfolio.

The Company continues to maintain a high level of liquidity and remains well-positioned to
capitalize on lending opportunities as the economy recovers. Deposits at March 31, 2011
totaled $336.2 million compared to $340.9 million at December 31, 2010.

The allowance for credit losses totaled $6.9 million (2.42% of total gross loans) at March 31,
2011 compared to $6.9 million (2.45% of total gross loans) at year-end 2010. The allowance
for credit losses provided 81.3% coverage of nonperforming assets at the end of the first
quarter of 2011 compared to 67.6% at December 31, 2010 and 54.8 % at March 31, 2010.

Stockholders’ equity totaled $35.0 million at quarter-end compared to $34.8 million at
December 31, 2010. As of March 31, 2011, Annapolis Bancorp, Inc. exceeded all federal
regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 12.8%, a
total capital ratio of 14.1%, and a Tier 1 leverage ratio of 9.3%. Book value per common share
at March 31, 2011 was $6.82 compared to $6.81 at December 31, 2010. The Company’s
common stock closed at a market price of $4.40 per share on March 31, 2011.

Although the Company’s net interest margin improved to 4.00% in the quarter just ended from
3.87% in the first quarter of 2010, net interest income actually declined by $41,000 or 1.0%
compared to the same period last year.

Interest income on investments decreased by $509,000 or 41.8%, reflecting both a reduction in
the level of investments and a significant decline in yields available for reinvestment of
proceeds from called and maturing securities. Interest income on loans increased by $71,000
or 1.7% for the first three months of 2011 compared to the same period in 2010. The yearover-
year increase in interest earned on loans includes the recognition of $180,000 of interest
in 2011 on the full payoff of a $1.0 million loan that was previously classified as nonaccrual.

Interest expense decreased by $398,000 or 29.9% due to a drop in the overall cost of interestbearing
liabilities from 1.48% in the first quarter of 2010 to 1.09% in the quarter just ended,
coupled with a $19.6 million decrease in the average balance of interest-bearing liabilities.
The Company recorded provisions for credit losses of $557,000 in the quarter just completed
and $236,000 in the first quarter of 2010.

Noninterest income decreased 10.7% to $368,000 in the first quarter of 2011 from $412,000 in
last year’s comparable period due to $31,000 in net losses on the disposal of fixed assets,
lower mortgage banking fees, and a drop in other fee income. Partially offsetting these
decreases were gains on the sale of loans, which increased by $26,000, and higher service
charges.

Noninterest expense decreased 5.3% in the quarter just ended compared to the same period
last year, reflecting $67,000 in lower professional fees related to the management of problem
assets and a reduction of $88,000 in other operating expenses. The Company’s efficiency
ratio improved to 70.02% as of March 31, 2011 compared to 72.51% at March 31, 2010.

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.

This press release may contain forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to risk and
uncertainties which could cause actual results to differ materially from those currently
anticipated due to a number of factors. Such factors include, but are not limited to, changes in
laws and regulations applicable to the Company and the Bank, changes in interest rates which
could effect net interest margins and net interest income, the possibility that increased demand
or prices for the Company’s financial services and products may not occur, changing economic
and competitive conditions, and such other risks and uncertainties as set forth in the
Company’s filings with the Securities and Exchange Commission. The Company does not
undertake, and specifically disclaims any obligation to update any forward-looking statements
to reflect occurrences or unanticipated events or circumstances after the date of such
statements.

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KENT ISLAND FAMILY DAY: BANKANNAPOLIS MARKS ANNIVERSARY WITH FREE FOOD, ACTIVITIES

Annapolis, MD, April 25, 2011 – The Kent Island branch of BankAnnapolis is throwing itself a party on May 14, and the community is invited.

To mark the fifth anniversary of the opening of its new building in Stevensville, the Bank will hold Kent Island Family Day from noon to 3 p.m. The event, at 1245 Shopping Center Road, will feature free food and lots of fun for all ages. Attractions include a coloring contest for kids with a $50 savings bond for the winner; a clown who will paint faces and make balloon animals; a lollipop pull with prizes; a fire truck from the Kent Island Volunteer Fire Department; and an appearance by BankAnnapolis’ mascot, Bucksworth.

There will also be a drawing for a $50 gift certificate to Kentmorr Restaurant, free coin counting and, for those who work up an appetite, free hot dogs, chips, cookies and drinks.

For further information, call the branch at 410-643-4191.

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Edward J. Schneider Promoted to Executive Vice President of BankAnnapolis

Annapolis, MD, April 25, 2011 – Edward J. Schneider has been promoted to executive vice president of BankAnnapolis, a new position created in recognition of his performance as senior vice president and chief financial officer. Schneider will continue as CFO.

In announcing the promotion, Chairman and CEO Richard M. Lerner noted that “Ed has become a valued and trusted advisor and a significant contributor to executive management since joining BankAnnapolis two years ago.  The leadership and initiative he has shown have helped to shape the strategic direction of the Bank.”

Schneider, who earned an MBA from Rutgers, has 25 years’ experience in banking, having worked previously at Citigroup and its various subsidiaries from 1995 to 2004 and again from 2005 to 2009. From 2004 to 2005 he served as senior vice president and director of corporate regulatory reporting at MBNA, prior to its acquisition by Bank of America. From 1986 to 1995, he held a number of positions at other banks and bank holding companies.

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GROWTH PROMPTS EXPANSION AT BANKANNAPOLIS HEADQUARTERS

Annapolis, MD, March 16, 2011 – BankAnnapolis has expanded into 6,000 square feet of office space in its Bestgate Road headquarters building. A dozen employees in the credit and mortgage departments have relocated to offices once occupied by another tenant, freeing up existing space to accommodate recent growth in the business banking staff and other departments of the Bank, according to Lori Mueller, senior vice president for marketing and communications.

“Opening up the new space has both practical and symbolic meaning for us,” said Mueller. “Despite the sluggish economic recovery, BankAnnapolis has emerged from the downturn as a strong and healthy institution in growth mode.  The expansion of staff reflects our commitment to developing new banking relationships and actively seeking new business lending opportunities throughout Central Maryland.”

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Kathryn E. Coursey Returns to BankAnnapolis As VP Private Business Banking

Annapolis, MD, February 22, 2011 – BankAnnapolis is marking an important homecoming as it welcomes back Kathryn E. Coursey, who returns as a vice president in the Private Business Banking group. Coursey developed a highly satisfied customer base drawn to her caring, personal touch during her three years with BankAnnapolis.

“I'm very excited to be back with a great team that recognizes the importance of working with each business as if they were the only business we service,” Coursey said of her return. “During my years here, I established many wonderful relationships with my clients and truly enjoyed working with my talented colleagues at BankAnnapolis. I have missed them all.”

Based at the company’s headquarters on Bestgate Road, Coursey will report to Senior Vice President and Chief Business Banking Officer Michael Schonfeld.

“Kathy's return to BankAnnapolis is much anticipated by her clients and colleagues,” Schonfeld said. “Kathy can boast some of the most loyal business customers in our area due to her understanding of her clients' needs and her commitment to superior customer service.”

Coursey brings nearly 30 years of experience to the job she performed so capably, with previous stops at BB&T, First Mariner Bank and Centreville National Bank. She is also a past Realtor trained in Maryland real estate law.

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Edward W. Kinsella Joins BankAnnapolis As VP Private Business Banking

Annapolis, MD, February 14 - Edward W. Kinsella, who has 20 years’ experience in commercial and retail banking, has joined the staff of BankAnnapolis as vice president in the Private Business Banking group. He will be responsible for developing new commercial loan and deposit relationships. 

Based at the company’s headquarters on Bestgate Road, Kinsella will report to Senior Vice President and Chief Business Banking Officer Michael Schonfeld.

“We are excited that Ed has chosen to bring his extensive business banking experience to our Private Business Banking team,” Schonfeld said. “Ed and his many years of meeting Central Maryland businesses' commercial banking needs help to complete our team.”

Kinsella comes to BankAnnapolis from Revere Bank, where he was a business development officer. The University of Maryland graduate also spent 12 years at Sandy Spring Bank as a relationship manager and portfolio manager, among other roles. Other career stops include the Columbia Bank and Mellon Bank.
 
“BankAnnapolis has a great reputation for its commitment to the community,” said Kinsella,  a member of the Annapolis and Anne Arundel County Chamber of Commerce. “I look forward to building on that relationship and extending our reach to businesses here and throughout the region.”

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Annapolis Bancorp Reports 2010 Earnings of $1.6 Million

Nonperforming Assets Reduced by 48%

Annapolis, MD, February 3, 2011 – Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company of BankAnnapolis, today announced a $3.3 million rebound in earnings for the year ended December 31, 2010, as net income improved to $1,616,000 from a net loss of  $1,707,000 for the twelve months ended December 31, 2009.

After accruing for preferred stock dividends, net income available to common shareholders for 2010 totaled $1,131,000 ($0.29 per basic and diluted common share) compared to a net loss of $2,149,000 ($0.56 per basic and diluted common share) available to common shareholders for fiscal year 2009.

Full year results for 2010 included a provision for credit losses of $2,148,000 compared to a provision for credit losses of $6,540,000 in 2009.  The allowance for credit losses totaled $6.9 million (67.6% of nonperforming assets) at December 31, 2010 compared to $7.9 million (41.0% of nonperforming assets) at year-end 2009.  Nonperforming assets at December 31, 2010 amounted to $10.1 million or 2.35% of total assets, a reduction of $9.2 million or 48% compared to $19.3 million or 4.35% of total assets at December 31, 2009.  The decrease reflects year-to-date net charge-offs of $3.2 million and $6.9 million in problem loan resolutions, which include the return of borrowers to performing status, payoffs, and sales of foreclosed assets.

“We are pleased to report a turnaround in operating earnings and significantly improved asset quality at year-end 2010,” said Chairman and CEO Richard M. Lerner.  “While encouraged that our response to the economic downturn has yielded positive results, we recognize there is still much to be accomplished, as we continue to aggressively manage nonperforming assets, build capital and reserves, and make investments in our franchise that are intended to benefit our customers and shareholders in future periods.”

Gross loans totaled $279.9 million at the end of 2010, down $2.1 million from $282.0 million at December 31, 2009, as persistently high unemployment and the anemic economic recovery suppressed business expansion and overall demand for credit throughout the year.

In response to limited lending and investment opportunities, total assets at December 31, 2010 decreased $12.2 million or 2.7% to $432.1 million compared to $444.3 million at December 31, 2009.  Over the course of 2010 the Company elected to reduce its investment securities by $21.6 million and bolster its level of short-term liquidity, which is placed in federal funds sold and balances with banks.

On the funding side of the balance sheet, demand deposit accounts (noninterest bearing deposits) increased to $45.5 million as of December 31, 2010, up $4.7 million or 11.5% from $40.8 million at year-end 2009, while interest bearing deposits decreased year-over-year by $14.2 million or 4.6%.  The reduction in interest bearing deposits was driven by an $18.4 million decrease in certificates of deposit that was partially offset by increases in savings, NOW and money market accounts.  Total long-term debt decreased by $5.0 million since December 31, 2009, reflecting a strategic reduction in Federal Home Loan Bank borrowings.

Stockholders’ equity increased $2.1 million or 6.6% to $34.8 million at December 31, 2010 compared to $32.6 million at December 31, 2009.  At December 31, 2010, Annapolis Bancorp, Inc. exceeded all federal regulatory requirements for a well-capitalized institution, with a Tier 1 capital ratio of 12.8%, a total capital ratio of 14.1%, and a Tier 1 leverage ratio of 9.1%.  Book value per common share at December 31, 2010 increased to $6.81 from $6.39 at December 31, 2009.

In the year just ended, net interest income improved by $1,129,000 or 8.0% compared to 2009, and the Company’s net interest margin expanded to 3.69% from 3.32%.

Interest income for 2010 decreased by $1,373,000 or 6.5% compared to the same period last year, as average earning assets contracted $12.6 million, reinvestment yields continued to decline, and the Company increased its short-term liquidity position.

Interest expense decreased by $2,502,000 or 35.1%, due to average interest-bearing liabilities falling by $15.3 million since December 31, 2009 and a drop in the overall cost of funds to 1.16% in 2010 from 1.96% in the prior year.

Noninterest income decreased 8.7% to $1,815,000 in the year ended December 31, 2010 from $1,989,000 in the same period last year.  A reduction in rental income and losses on the disposition of foreclosed assets and investment securities were partially offset by improvement in income earned on bank-owned life insurance and fees on loans held for sale.

Noninterest expense remained essentially flat year-to-year, with increases in personnel and marketing costs offset by lower FDIC and professional service charges.

Net incom