Logo [Letterhead of Resource Bankshares Corporation)
FOR IMMEDIATE RELEASE:
CONTACT: Lu Ann Klevecz Corporate Communications 757-463-2265 |
Resource Bankshares Reports Most Profitable
Quarter and Year in Company’s History
Net Income Up 85% from Prior Year
Virginia Beach, VA – January 20, 2004.Resource Bankshares Corporation (Nasdaq: RBKV) today announced net income of $11.7 million for 2003, an 85% increase over the $6.3 million reported for 2002. Diluted earnings per share increased 46% to $1.88 for the year ended 2003, compared to $1.29 for 2002. Net income for the fourth quarter totaled $2.9 million, or $0.46 per diluted share, compared to $1.9 million, or $0.41 per diluted share, for the fourth quarter of 2002.
Return on average equity was 23.20% and return on average assets was 1.45% for 2003, compared to 21.55% and 1.03%, respectively, for 2002. For the fourth quarter of 2003, return on average equity was 21.06% and return on average assets was 1.40%, compared to 26.23% and 1.18%, respectively, for the same period of 2002. Book value per share on December 31, 2003 was $9.84.
Total assets at December 31, 2003 increased 21.3% to $867 million from $715 million in 2002. This increase was driven by growth of total net loans to $586 million as of December 31, 2003, a 37% increase over the same period of 2002. Net interest income totaled $6.9 million and $24.5 million, respectively, for the three and 12 months ended December 31, 2003, compared to $4.8 million and $16.4 million for the same periods of 2002. The increase in net interest income was attributable to commercial loan growth, funds advanced for mortgage banking and an increase in the tax equivalent financial margin to 3.29% for the year ended December 31, 2003, from 2.87% for 2002.
“Resource enjoyed a tremendous year in 2003,” stated T.A. Grell, Jr., President of Resource Bank and Resource Bankshares. “While some banks have reported a decline in fourth quarter net income, we are proud to show an increase of nearly $1 million in net income for the quarter over 2002, despite a decrease in non interest
income. Much of this increase in net income resulted from growth in the commercial lending portfolio, which increased $132 million, or 84% of the total loan growth for the year, with $50 million of this growth in the fourth quarter alone.”
“We continue to maintain excellent asset quality with non-accrual loans and OREO totaling only 0.14% of total loans and funds advanced.At year end non-performing loans and OREO totaled only $1.9 million on our $586 million loan portfolio and charge-offs for 2003 were only 0.03%.”
“Resource Mortgage had an excellent year in 2003. They closed $1.2 billion of residential loans and generated pre-tax income of $3.7 million, compared to loan closings of $940 million and $2.7 million pre-tax income for 2002. The residential mortgage division accounted for 22% of the Company’s net pre-tax income for 2003, which is down from 31% for 2002 and is consistent with our business plan.”
“Atlantic Mortgage and Investment Company (AMIC), the Company’s commercial mortgage division, also had a great year and contributed $507 thousand income, as a result of the increase in its origination and sales of commercial mortgages.”
Exclusive of its mortgage operations, the Bank’s efficiency ratio (which is computed by dividing non-interest expense by the sum of net interest income and non-interest income), was 49.79% and the net overhead ratio (which is computed by subtracting non-interest income from non-interest expense, divided by average total assets), was 1.44% for 2003.
During the fourth quarter of 2003, the average number of diluted shares was 6,457,502, which reflects the adjustment made as a result of the three-for-two share stock split on September 5, 2003. As of December 31, 2003, shareholders equity increased $27 million and book value increased 39% to $9.84.
All per share figures have been adjusted to reflect a three-for-two stock split on September 5, 2003. Certain reclassifications have been made to prior year’s information to conform with the current year presentation.
Resource Bankshares Corporation (Nasdaq: RBKV) is the parent holding company of Resource Bank, a regional commercial bank with branches in Virginia Beach, Chesapeake, Newport News, Richmond and Northern Virginia, and additional mortgage loan offices in North Carolina, Maryland and Florida. Visit our investor relations web site atwww.resourcebankshares.com for a detailed overview of activities, financial information, and historical stock price data, and to register for email notification of company news, events, and stock activity.
In August, the Company announced that it will merge withFulton Financial Corporation. Fulton is a $9.3 billion Lancaster, Pennsylvania-based financial holding company which operates 199 banking offices in Pennsylvania, Maryland, Delaware and New Jersey through the following affiliates: Fulton Bank, Lancaster, PA; Lebanon Valley Farmers Bank, Lebanon, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust, Hagerstown, MD; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples Bank of Elkton, Elkton, MD; Skylands Community Bank, Hackettstown, NJ, and Premier Bank, Doylestown, PA.
Fulton’s financial services affiliates include Fulton Financial Advisors, N.A., Lancaster, PA; Fulton Insurance Services Group, Inc. Lancaster, PA; and Dearden, Maguire, Weaver and Barrett, LLP, West Conshohocken, PA.
This press release includes forward looking statements. Investors are cautioned that all forward looking statements involve risks and uncertainties. Certain risk factors could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements include statements regarding profitability, liquidity, allowance for loan losses; interest rate sensitivity, market risk, and financial and other goals. Forward-looking statements often use words such as “believes,” “expects,” “plans,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other words of similar meaning. Forward looking statements do not relate strictly to historical or current facts and are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors that could affect the actual outcome of future events:
| • | fluctuations in market rates of interest and loan and deposit pricing, which could negatively affect net interest margin, asset valuations and expense projections; |
| • | adverse changes in the economies of Resource’s market areas, which might affect business prospects and could cause credit-related losses and expenses; |
| • | continuing the well-established and valued relationships Resource has built with customers; |
| • | adverse developments in loan origination volume; |
| • | competitive factors in the banking industry such as the trend towards consolidation in the markets in which Resource operates; |
| • | an unfavorable resolution to the class action lawsuit to which Resource Bank is a party; and |
| • | changes in banking legislation or the regulatory requirements of federal and state agencies applicable to bank holding companies and banks. |
RESOURCE BANKSHARES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)
December 31 2003 | December 31 2002 | |||||
ASSETS | ||||||
Cash and cash equivalents | $ | 10,249 | $ | 13,399 | ||
Securities held to maturity | 144,582 | 108,650 | ||||
Securities available for sale | 12,949 | 21,191 | ||||
Funds advanced in settlement of mortgage loans | 77,011 | 111,113 | ||||
Loans receivable, net | 586,000 | 427,735 | ||||
Real estate owned | 536 | — | ||||
Other assets | 35,966 | 33,079 | ||||
Total assets | $ | 867,293 | $ | 715,167 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
LIABILITIES: | ||||||
Deposits | $ | 607,466 | $ | 516,449 | ||
Federal funds purchased and securities sold under agreements to repurchase | 51,245 | 32,347 | ||||
Advances from Federal Home Loan Bank | 120,992 | 105,000 | ||||
Capital Trust borrowings | 16,200 | 16,200 | ||||
Other liabilities | 11,938 | 13,004 | ||||
Total liabilities | $ | 807,841 | $ | 683,000 | ||
STOCKHOLDERS’ EQUITY | ||||||
Common stock, $1.50 par value, authorized 15,000,000 shares, issued and outstanding: December 31, 2003 – 6,039,281; December 31,2002 – 4,541,517 | $ | 9,060 | $ | 6,812 | ||
Additional paid in capital | 28,229 | 11,959 | ||||
Retained earnings | 21,911 | 12,759 | ||||
Accumulated other comprehensive income(loss) | 228 | 637 | ||||
Minority interest in subsidiary | 24 | — | ||||
Total stockholders’ equity | $ | 59,452 | $ | 32,167 | ||
Total liabilities and stockholders’ equity | $ | 867,293 | $ | 715,167 | ||
RESOURCE BANKSHARES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
| Three months ended December 31 | December 31 | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
Interest income | $ | 11,288 | $ | 9,637 | $ | 42,323 | $ | 35,798 | ||||||||
Interest expense | 4,331 | 4,794 | 17,808 | 19,425 | ||||||||||||
Net interest income | 6,957 | 4,843 | 24,515 | 16,373 | ||||||||||||
Provision for loan losses | 0 | 575 | 150 | 1,550 | ||||||||||||
Noninterest income | 6,958 | 7,133 | 32,514 | 24,176 | ||||||||||||
Noninterest expense | 9,622 | 8,873 | 40,119 | 30,312 | ||||||||||||
Net income before income taxes | 4,293 | 2,528 | 16,760 | 8,687 | ||||||||||||
Income tax expense | 1,311 | 540 | 5,072 | 2,358 | ||||||||||||
Net income | $ | 2,982 | $ | 1,988 | $ | 11,688 | $ | 6,329 | ||||||||
Basic earnings per common share | $ | 0.50 | $ | 0.44 | $ | 2.01 | $ | 1.37 | ||||||||
Diluted earnings per common share | $ | 0.46 | $ | 0.41 | $ | 1.88 | $ | 1.29 | ||||||||
Book value per share | $ | 9.84 | $ | 7.08 | ||||||||||||
Return on average assets | 1.40 | % | 1.18 | % | 1.45 | % | 1.03 | % | ||||||||
Return on average equity | 21.06 | % | 26.23 | % | 23.20 | % | 21.55 | % | ||||||||
Average basic common shares outstanding | 6,021,558 | 4,559,135 | 5,812,900 | 4,623,213 | ||||||||||||
Average diluted shares outstanding | 6,457,502 | 4,856,166 | 6,223,358 | 4,907,823 | ||||||||||||
Dividends declared per common share | $ | 0.11 | $ | 0.09 | $ | 0.44 | $ | 0.37 | ||||||||
Non earning assets (non-accruals and other real estate owned) | $ | 914 | $ | 506 | ||||||||||||
Net overhead ratio | 1.25 | % | 1.03 | % | 0.94 | % | 1.00 | % | ||||||||
Financial Margin (TE) | 3.48 | % | 3.05 | % | 3.29 | % | 2.87 | % | ||||||||
Average earning assets | $ | 808,069 | $ | 643,246 | $ | 758,881 | $ | 584,421 | ||||||||
RESOURCE BANKSHARES CORPORATION
(Unaudited)
For the period ended December 31 | ||||||||
| 2003 | 2002 | |||||||
ASSET QUALITY | ||||||||
Non accrual loans | $ | 377,247 | $ | 505,699 | ||||
Loans 90 days past due | $ | 1,033,948 | $ | 302,266 | ||||
Other real estate owned | $ | 536,382 | $ | — | ||||
Non accrual loans and OREO/loans and funds advanced | 0.14 | % | 0.09 | % | ||||
Net charge-offs | $ | 196,450 | $ | 238,053 | ||||
Net charge-off ratio (annualized) | 0.03 | % | 0.06 | % | ||||
Loan loss provision | $ | 150,000 | $ | 1,550,000 | ||||
Loan loss reserve | $ | 4,962,358 | $ | 5,008,808 | ||||
MORTGAGE GROUP | ||||||||
Retail loan closings | $ | 1,215,910,397 | $ | 940,054,560 | ||||
Retail mortgage banking income | $ | 28,002,836 | $ | 20,415,000 | ||||
Retail mortgage banking expense | $ | 24,320,969 | $ | 17,709,331 | ||||
Retail mortgage pre-tax income | $ | 3,681,867 | $ | 2,705,669 | ||||
Retail number of employees | 232 | 203 | ||||||
Commercial mortgage pre-tax income | $ | 506,633 | $ | (92,064 | ) | |||
Commercial number of employees | 10 | 10 | ||||||
OPERATING BANKING RATIO | ||||||||
Bank only | ||||||||
Non interest income | $ | 2,866,003 | $ | 3,070,983 | ||||
Non interest expense | $ | 14,206,715 | $ | 11,541,607 | ||||
Efficiency ratio | 49.79 | % | 56.11 | % | ||||
Net overhead ratio | 1.44 | % | 1.40 | % | ||||
Financial margin (TE) with deferred fees/costs | 3.45 | % | 3.06 | % | ||||
Financial margin (TE) without deferred fees/costs | 3.77 | % | 3.52 | % | ||||
Number of employees | 131 | 124 | ||||||
Bank and Mortgage Group | ||||||||
Efficiency ratio | 67.88 | % | 72.07 | % | ||||
Net overhead ratio | 1.04 | % | 0.96 | % | ||||
Number of employees | 373 | 337 | ||||||
