Exhibit (99)
Cardinal Bankshares Corporation
101 Jacksonville Circle
Floyd, Virginia 24091
Contact: | Leon Moore | Telephone: (540) - 745-4191 | ||
Chairman of the Board, President and CEO | FAX: (540-) 745-4133 | |||
Stephanie Kent | ||||
Senior Vice President and Principal Financial Officer |
August 15, 2005 | Traded: OTC Bulletin Board | Symbol: CDBK |
For Immediate Release
Cardinal Bankshares Corporation Announces Steady Earnings for the First Six Months of 2005
FLOYD, VA – Cardinal Bankshares Corporation is pleased to report steady year to date earnings for the first half of 2005 as compared to the first half of 2004. “With the continued increasing costs of federal regulations, competition, branch expansion and automation upgrades, it is particularly gratifying to report continued strong earnings”, stated Leon Moore, chairman and chief executive officer.
Net income for the first six months of 2005 amounted to $1,103,000, a slight decrease of $52,000 from the income of $1,155,000 for the same period in 2004. Basic earnings per share amounted to $.72 per share.
Noninterest expense increased approximately $218,000 the first six months of 2005 compared to the first six months of 2004. The largest portion of that amount was related to bringing our new branches in Roanoke and Salem into operation. The majority of those expenses were related to buildings, furniture and fixtures, and personnel cost.
Mr. Moore added, “The second major increase in expenses has been related to increases in the cost of regulations. Cost of compliance with the US Patriot Act, Bank Secrecy Act, Anti-Money Laundering and Sarbanes-Oxley continues to be an expense that must be recovered through higher fees, higher loan rates, and other costs to our customers. The cost of compliance with the new regulations of Sarbanes-Oxley has reached nearly $50,000 in added accounting costs for the first 6 months of 2005. Estimates for other regulatory costs show a projected increase in non-interest expense of approximately $120,000 to $135,000 for 2005.”
Total assets at June 30, 2005 were $191,926,000. Net loans increased by $4 million from December 31, 2004 and ended at $126,662,000 as of June 30, 2005.
Moore added, “We continue to look for new expansion opportunities and products to serve our customers. Our continued strong performance allows Cardinal to add value to our shareholders, to the communities we serve and to our staff.”
Cardinal provides a wide range of commercial banking services to individuals and small to medium-sized businesses through its main office located in Floyd, Virginia and its branch locations in Christiansburg, Hillsville, Roanoke, Salem and Willis, Virginia.
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This press release may contain “forward-looking statements,” within the meaning of federal securities laws, that involve risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and other factors it believes are appropriate in the circumstances. However, the Company’s expectations are subject to a number of risks and uncertainties and other factors that could cause actual results, events and developments to differ materially from those contemplated by any forward-looking statements herein. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-KSB report and other documents filed with the Securities and Exchange Commission.
Cardinal Bankshares Corporation and Subsidiary
Consolidated Balance Sheets
(In thousands, except share data) | (Unaudited) June 30, 2005 | (Audited) December 31, 2004 | ||||||
Assets | ||||||||
Cash and due from banks | $ | 5,404 | $ | 4,162 | ||||
Interest-bearing deposits | 4,876 | 3,602 | ||||||
Federal funds sold | 4,725 | 7,175 | ||||||
Investment securities available for sale, at fair value | 19,772 | 20,942 | ||||||
Investment securities held to maturity (fair value June 30, 2005 - $19,182; December 31, 2004 - $20,729) | 18,639 | 20,001 | ||||||
Restricted equity securities | 546 | 603 | ||||||
Total loans | 128,347 | 124,673 | ||||||
Allowance for loan losses | (1,685 | ) | (1,631 | ) | ||||
Net loans | 126,662 | 123,042 | ||||||
Bank premises and equipment, net | 4,106 | 4,205 | ||||||
Accrued interest receivable | 910 | 933 | ||||||
Foreclosed properties | 2 | 2 | ||||||
Bank owned life insurance | 4,549 | 4,483 | ||||||
Other assets | 1,735 | 1,441 | ||||||
Total assets | $ | 191,926 | $ | 190,591 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Noninterest-bearing deposits | $ | 24,576 | $ | 27,211 | ||||
Interest-bearing deposits | 139,027 | 134,044 | ||||||
Total deposits | 163,603 | 161,255 | ||||||
Securities sold under agreements to repurchase | 738 | 2,493 | ||||||
Accrued interest payable | 135 | 110 | ||||||
Other liabilities | 935 | 883 | ||||||
Total liabilities | 165,411 | 164,741 | ||||||
Commitments and contingent liabilities | — | — | ||||||
Stockholders’ Equity | ||||||||
Common stock, $10 par value, 5,000,000 shares authorized, 1,535,733 shares issued and outstanding | 15,357 | 15,357 | ||||||
Additional paid-in capital | 2,925 | 2,925 | ||||||
Retained earnings | 8,163 | 7,444 | ||||||
Accumulated other comprehensive income, net | 70 | 124 | ||||||
Total stockholders’ equity | 26,515 | 25,850 | ||||||
Total liabilities and stockholders’ equity | $ | 191,926 | $ | 190,591 | ||||
Cardinal Bankshares Corporation and Subsidiary
Consolidated Statements of Income (Unaudited)
Three months ended June 30, | Six months ended June 30, | |||||||||||
(In thousands, except share data) | 2005 | 2004 | 2005 | 2004 | ||||||||
Interest income | ||||||||||||
Loans and fees on loans | $ | 2,165 | $ | 2,186 | $ | 4,167 | $ | 3,998 | ||||
Federal funds sold and securities purchased under agreements to resell | 32 | 22 | 58 | 44 | ||||||||
Investment securities: | ||||||||||||
Taxable | 208 | 208 | 418 | 446 | ||||||||
Exempt from federal income tax | 229 | 231 | 468 | 455 | ||||||||
Deposits with banks | 17 | 4 | 34 | 14 | ||||||||
Total interest income | 2,651 | 2,651 | 5,145 | 4,957 | ||||||||
Interest expense | ||||||||||||
Deposits | 844 | 771 | 1,619 | 1,563 | ||||||||
Borrowings | 10 | 11 | 22 | 20 | ||||||||
Total interest expense | 854 | 782 | 1,641 | 1,583 | ||||||||
Net interest income | 1,797 | 1,869 | 3,504 | 3,374 | ||||||||
Provision for loan losses | 12 | 25 | 36 | 25 | ||||||||
Net interest income after provision for loan losses | 1,785 | 1,844 | 3,468 | 3,349 | ||||||||
Noninterest income | ||||||||||||
Service charges on deposit accounts | 71 | 72 | 129 | 134 | ||||||||
Other service charges and fees | 26 | 23 | 49 | 43 | ||||||||
Net realized gains on sales of securities | 6 | — | 9 | 4 | ||||||||
Other operating income | 77 | 85 | 162 | 160 | ||||||||
Total noninterest income | 180 | 180 | 349 | 341 | ||||||||
Noninterest expense | ||||||||||||
Salaries and employee benefits | 702 | 632 | 1,385 | 1,252 | ||||||||
Occupancy and equipment | 173 | 131 | 365 | 270 | ||||||||
Foreclosed assets, net | — | 9 | — | 9 | ||||||||
Other operating expense | 349 | 376 | 660 | 661 | ||||||||
Total noninterest expense | 1,224 | 1,148 | 2,410 | 2,192 | ||||||||
Income before income taxes | 741 | 876 | 1,407 | 1,498 | ||||||||
Income tax expense | 164 | 214 | 304 | 343 | ||||||||
Net Income | $ | 577 | $ | 662 | $ | 1,103 | $ | 1,155 | ||||
Basic earnings per share | $ | 0.38 | $ | 0.43 | $ | 0.72 | $ | 0.75 | ||||
Diluted earnings per share | $ | 0.38 | $ | 0.43 | $ | 0.72 | $ | 0.75 | ||||
Weighted average basic shares outstanding | 1,535,733 | 1,535,733 | 1,535,733 | 1,535,733 | ||||||||
Weighted average diluted shares outstanding | 1,535,733 | 1,535,733 | 1,535,733 | 1,535,733 |