Exhibit 99.1
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 21, 2006 For Immediate Release | Traded: OTC Bulletin Board Symbol: CDBK |
Cardinal Bankshares Corporation Announces Increased Earnings for the First Six Months of 2006
FLOYD, VA – Cardinal Bankshares Corporation is pleased to report increased year to date earnings for the first half of 2006 as compared to the first half of 2005. “As the bank continues to expand, we are quite pleased to report this increase in earnings”, stated Leon Moore, chairman and chief executive officer.
Net income for the first six months of 2006 amounted to $1,270,000, a slight increase of $167,000 from the income of $1,103,000 for the same period in 2005. Basic earnings amounted to $.83 per share as compared to $.72 per share for the first 6 months of 2005. This represents an increase of 15.1% above ending figures of June 2005.
Noninterest expense increased approximately $57,000 the first six months of 2006 compared to the first six months of 2005. The largest portion of that amount was attributed to personnel expenses related to Tanglewood and Salem branches added during 2005.
Total assets at June 30, 2006 were $191,122,000. Net loans ended the first six months at $123,342,000. Deposits at June 2006 were $162,068,000.
Mr. Moore stated, “Asset quality remains good and our capital position remains strong.”
Moore added, “Plans are underway to open our eighth branch in early 2007. This branch in Pulaski County, Virginia will serve the Fairlawn community. With this expansion, I believe the bank is well positioned for future growth and success. We appreciate the support of our customers, shareholders and employees. We welcome your comments and the opportunity to serve you.”
Mr. Moore commented on a recent article in the Roanoke, Virginia newspaper concerning the ongoing lawsuit between Cardinal and its former Chief Financial Officer David Welch. The newspaper article refers to a court filing by Welch in which Welch presents as fact his speculation about how much Cardinal has spent defending against his efforts to be reinstated as CFO. Mr. Moore said, “Mr. Welch could not know whether his speculation—which he passed off as fact in his court filing—is true or not. In reality, Mr. Welch’s speculation is false and greatly overstates Cardinal’s expenses in the case. Cardinal is troubled that its former CFO would go on record with these conjectures about Cardinal’s finances. The remarks reveal a casual willingness to pass off provocative speculation as fact. If anything, Welch’s statements illustrate exactly why Cardinal so vigorously opposes his reinstatement as CFO. Cardinal finds it unacceptable that its former CFO would make public representations about the finances of the company without knowing whether they were right or wrong. Like the vast majority of public companies, Cardinal has had to spend substantial amounts to comply with the new requirements of the Sarbanes Oxley Act. These expenses have nothing to do with Welch’s suit. Even so, Cardinal’s results are gratifying”.
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-K 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, 2006 | (Audited) December 31, 2005 | ||||||
Assets | ||||||||
Cash and due from banks | $ | 4,378 | $ | 4,292 | ||||
Interest-bearing deposits | 7,438 | 9,042 | ||||||
Federal funds sold | 6,600 | 5,125 | ||||||
Investment securities available for sale, at fair value | 19,771 | 19,308 | ||||||
Investment securities held to maturity (fair value June 30, 2006 - $17,488; December 31, 2005 - $17,743) | 17,455 | 17,470 | ||||||
Restricted equity securities | 554 | 546 | ||||||
Total loans | 124,809 | 129,981 | ||||||
Allowance for loan losses | (1,467 | ) | (1,427 | ) | ||||
Net loans | 123,342 | 128,554 | ||||||
Bank premises and equipment, net | 3,918 | 3,997 | ||||||
Accrued interest receivable | 1,019 | 998 | ||||||
Foreclosed properties | 212 | 418 | ||||||
Bank owned life insurance | 4,709 | 4,631 | ||||||
Other assets | 1,726 | 1,854 | ||||||
Total assets | $ | 191,122 | $ | 196,235 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Noninterest-bearing deposits | $ | 28,915 | $ | 26,747 | ||||
Interest-bearing deposits | 133,153 | 141,101 | ||||||
Total deposits | 162,068 | 167,848 | ||||||
Securities sold under agreements to repurchase | — | 134 | ||||||
Accrued interest payable | 137 | 134 | ||||||
Other liabilities | 1,109 | 1,061 | ||||||
Total liabilities | 163,314 | 169,177 | ||||||
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 | 9,688 | 8,833 | ||||||
Accumulated other comprehensive income, net | (162 | ) | (57 | ) | ||||
Total stockholders’ equity | 27,808 | 27,058 | ||||||
Total liabilities and stockholders’ equity | $ | 191,122 | $ | 196,235 | ||||
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) | 2006 | 2005 | 2006 | 2005 | ||||||||||
Interest income | ||||||||||||||
Loans and fees on loans | $ | 2,267 | $ | 2,165 | $ | 4,583 | $ | 4,167 | ||||||
Federal funds sold and securities purchased under agreements to resell | 47 | 32 | 74 | 58 | ||||||||||
Investment securities: | ||||||||||||||
Taxable | 207 | 208 | 399 | 418 | ||||||||||
Exempt from federal income tax | 213 | 229 | 431 | 468 | ||||||||||
Deposits with banks | 85 | 17 | 196 | 34 | ||||||||||
Total interest income | 2,819 | 2,651 | 5,683 | 5,145 | ||||||||||
Interest expense | ||||||||||||||
Deposits | 987 | 844 | 1,956 | 1,619 | ||||||||||
Borrowings | — | 10 | — | 22 | ||||||||||
Total interest expense | 987 | 854 | 1,956 | 1,641 | ||||||||||
Net interest income | 1,832 | 1,797 | 3,727 | 3,504 | ||||||||||
Provision for loan losses | 10 | 12 | 30 | 36 | ||||||||||
Net interest income after provision for loan losses | 1,822 | 1,785 | 3,697 | 3,468 | ||||||||||
Noninterest income | ||||||||||||||
Service charges on deposit accounts | 64 | 71 | 132 | 129 | ||||||||||
Other service charges and fees | 26 | 26 | 49 | 49 | ||||||||||
Net realized gains on sales of securities | — | 6 | 3 | 9 | ||||||||||
Other operating income | 92 | 77 | 222 | 162 | ||||||||||
Total noninterest income | 182 | 180 | 406 | 349 | ||||||||||
Noninterest expense | ||||||||||||||
Salaries and employee benefits | 741 | 702 | 1,488 | 1,385 | ||||||||||
Occupancy and equipment | 167 | 173 | 340 | 365 | ||||||||||
Foreclosed assets, net | (9 | ) | — | (9 | ) | — | ||||||||
Other operating expense | 314 | 349 | 621 | 660 | ||||||||||
Total noninterest expense | 1,213 | 1,224 | 2,440 | 2,410 | ||||||||||
Income before income taxes | 791 | 741 | 1,663 | 1,407 | ||||||||||
Income tax expense | 184 | 164 | 393 | 304 | ||||||||||
Net Income | $ | 607 | $ | 577 | $ | 1,270 | $ | 1,103 | ||||||
Basic earnings per share | $ | 0.40 | $ | 0.38 | $ | 0.83 | $ | 0.72 | ||||||
Diluted earnings per share | $ | 0.40 | $ | 0.38 | $ | 0.83 | $ | 0.72 | ||||||
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 |