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 Sigman
Senior Vice President and Principal Financial Officer
February 9, 2007 | Traded: OTC Bulletin Board | Symbol: CDBK | ||
For Immediate Release |
Cardinal Bankshares Corporation Announces Increase in Net Earnings for 2006
FLOYD, VA – Cardinal Bankshares Corporation announces increase in 4th quarter earnings and record earnings for 2006.
Net income for the 4th quarter of 2006 increased by 5.50% over 2005, ending at $631 thousand, compared to $598 thousand in the 4th quarter 2005.
Net income amounted to $2.5 million, over the 2005 net income of $2.2 million. Basic earnings per share amounted to $1.63, compared to $1.44 per share in 2005. Total interest income for the year increased $1.2 million to $11.9 million. Interest expense increased by $795 thousand for the year to $4.3 million. Non-interest income increased $165 thousand to $924 thousand for the year, which included a one time gain of $126 thousand due to adjustment in a benefit plan.
Total assets ended the year at $207.8 million. Net loans ended the year at $121.3 million, a slight decline from 2005. The decline was primarily due to payout of several loan participations and a slow down in commercial activity. Total deposits increased by $9.4 million and ended the year at $177.3 million.
Leon Moore, Chairman of the Board, commented, “With the increased pressure on interest margins and a cooling loan demand, we are pleased that our net income remained strong. We were also able to produce a positive value for our shareholders with a 9% increase in cash dividends for the year. Cardinal Bankshares paid a record 58¢ per common share for the year 2006. This was a record 15th consecutive increase in cash dividends for the company.”
The company’s capital position remains very strong with an equity to asset ratio of 13.66% ending the year at $28.4 million.
Asset quality remained good with non-performing assets ending the year at $656 thousand. The company added an additional $208 thousand to reserve for loan loss. Moore stated, “Due to the uncertainty of the economy and commercial activity we felt it appropriate to increase the provision.”
“We look forward to 2007 for potential growth and expansion of Cardinal’s franchise,” stated Moore.
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. The opening of a new branch in Fairlawn, Pulaski County is on target for Spring 2007.
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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 Subsidiaries
Consolidated Balance Sheets
December 31, (In thousands, except share data) | 2006 | 2005 | ||||||
Assets | ||||||||
Cash and due from banks | $ | 3,416 | $ | 4,292 | ||||
Interest-bearing deposits in banks | 21,135 | 9,042 | ||||||
Federal funds sold | 8,800 | 5,125 | ||||||
Investment securities available for sale, at fair value | 23,654 | 19,308 | ||||||
Investment securities held to maturity | 17,248 | 17,470 | ||||||
Restricted equity securities | 554 | 546 | ||||||
Total loans | 122,974 | 129,981 | ||||||
Allowance for loan losses | (1,640 | ) | (1,427 | ) | ||||
Net loans | 121,334 | 128,554 | ||||||
Bank premises and equipment, net | 4,071 | 3,997 | ||||||
Accrued interest receivable | 974 | 998 | ||||||
Foreclosed properties | 212 | 418 | ||||||
Bank owned life insurance | 4,789 | 4,631 | ||||||
Other assets | 1,662 | 1,854 | ||||||
Total assets | $ | 207,849 | $ | 196,235 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Liabilities | ||||||||
Noninterest-bearing deposits | $ | 28,279 | $ | 26,747 | ||||
Interest-bearing deposits | 148,993 | 141,101 | ||||||
Total deposits | 177,272 | 167,848 | ||||||
Securities sold under agreements to repurchase | — | 134 | ||||||
Accrued interest payable | 221 | 134 | ||||||
Other liabilities | 1,966 | 1,061 | ||||||
Total liabilities | 179,459 | 169,177 | ||||||
Commitments and contingencies | — | — | ||||||
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 | 10,453 | 8,833 | ||||||
Accumulated other comprehensive income | (345 | ) | (57 | ) | ||||
Total stockholders’ equity | 28,390 | 27,058 | ||||||
Total liabilities and stockholders’ equity | $ | 207,849 | $ | 196,235 | ||||
Cardinal Bankshares Corporation and Subsidiaries
Consolidated Statements of Income
Years ended December 31, (In thousands, except share and per share data) | 2006 | 2005 | ||||||
Interest income | ||||||||
Loans and fees on loans | $ | 9,399 | $ | 8,698 | ||||
Federal funds sold and securities purchased under agreements to resell | 249 | 142 | ||||||
Investment securities: | ||||||||
Taxable | 835 | 759 | ||||||
Exempt from federal income tax | 852 | 918 | ||||||
Deposits with banks | 582 | 167 | ||||||
Total interest income | 11,917 | 10,684 | ||||||
Interest expense | ||||||||
Deposits | 4,317 | 3,500 | ||||||
Borrowings | 4 | 26 | ||||||
Total interest expense | 4,321 | 3,526 | ||||||
Net interest income | 7,596 | 7,158 | ||||||
Provision for loan losses | 208 | 48 | ||||||
Net interest income after provision for loan losses | 7,388 | 7,110 | ||||||
Noninterest income | ||||||||
Service charges on deposit accounts | 281 | 262 | ||||||
Other service charges and fees | 100 | 100 | ||||||
Net realized gains on sales of securities | 3 | 9 | ||||||
Other income | 540 | 388 | ||||||
Total noninterest income | 924 | 759 | ||||||
Noninterest expense | ||||||||
Salaries and employee benefits | 2,984 | 2,991 | ||||||
Occupancy and equipment | 681 | 710 | ||||||
Foreclosed assets, net | (7 | ) | (13 | ) | ||||
Other operating expense | 1,380 | 1,382 | ||||||
Total noninterest expense | 5,038 | 5,070 | ||||||
Income before income taxes | 3,274 | 2,799 | ||||||
Income tax expense | 763 | 596 | ||||||
Net income | $ | 2,511 | $ | 2,203 | ||||
Basic earnings per share | $ | 1.63 | $ | 1.44 | ||||
Diluted earnings per share | $ | 1.63 | $ | 1.44 | ||||
Weighted average basic shares outstanding | 1,535,733 | 1,535,733 | ||||||
Weighted average diluted shares outstanding | 1,535,733 | 1,535,733 | ||||||