DEARBORN BANCORP SECOND QUARTER EARNINGS
UP 45.6 PERCENT
UP 45.6 PERCENT
DEARBORN, Michigan, July 18, 2006 ... Dearborn Bancorp, Inc. (Nasdaq: DEAR), the Holding Company for Community Bank of Dearborn, today reported earnings of $2,056,000 or $0.34 per fully diluted common share for the three month period ended June 30, 2006. This was 45.6 percent more than the organization’s earnings for the same period one year ago when net income was $1,412,000 or $0.24 per diluted share. Earnings for the first six months of 2006 were $4,002,000 or $0.67 per diluted share. In 2005, first half earnings were $3,177,000 or $0.53 per diluted share, making the year-to-year increase 26.0 percent.
Total assets at June 30, 2006, were $762,490,000, 8.9 percent more than they were one year earlier when the total was $700,493,000. Total deposits were $612,270,000 at the end of the second quarter. This was a 5.5 percent increase over deposits of $580,615,000 on the same date in 2005. Total loans stood at $696,052,000, 9.5 percent more than the total of $635,718,000 12 months earlier. The return on average assets during the first half of 2006 was 1.09 percent and the return on average equity was 9.23 percent.
Michael J. Ross, President and Chief Executive Officer of both the Bank and the Holding Company issued the report of his organization’s financial performance. He commented, “Like all banking companies, large and small, we have experienced pressure on our net interest margins in recent months as short-term interest rates have increased at a much faster rate than long-term rates. Still, our margin for the quarter was 3.88 percent, somewhat better than the margin at most of our peers. We have been able to offset this situation by continuing to book quality loans that have allowed us to maintain an above-average growth rate while improving our profitability.”
Ross went on, “The overall Michigan economy is not doing well and the problems in the automotive and supplier industries in particular are well known. However, the market is huge and there are still pockets of prosperity and profitability in southeastern Michigan. We think that our financial performance so far this year indicates that we have been successful even in a down economy. Moreover, we have not compromised our credit standards to “buy” new business. While our ratio of non-performing loans to total loans is up at 0.71 percent, our net charge offs in the entire first half were zero as recoveries have offset charge-offs.”
Dearborn Bancorp, Inc., is a registered bank holding company. Its sole subsidiary is Community Bank of Dearborn. The Bank operates twelve offices in Wayne, Oakland, Macomb and Washtenaw Counties in the State of Michigan. A new office in Shelby Township is expected to opening in the fourth quarter of 2006. The Company’s common shares trade on the Nasdaq Global Market under the symbol DEAR.
Contact: Michael J. Ross, President and CEO or Jeffrey L. Karafa, CFO at (313) 565-5700.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and about the Corporation and the Bank. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “projects,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise.
Future Factors include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economy. These are representative of the Future Factors and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
DEARBORN BANCORP, INC.
| (In thousands, except share and per share data) | Three months ended | Six months ended | ||||||||||||||
| June 30 | June 30 | |||||||||||||||
| Condensed Statement of Income: | 2006 | 2005 | 2006 | 2005 | ||||||||||||
| Interest income | $ | 13,062 | $ | 10,638 | $ | 25,306 | $ | 20,530 | ||||||||
| Interest expense | 6,106 | 3,973 | 11,494 | 7,285 | ||||||||||||
| Net interest income | 6,956 | 6,665 | 13,812 | 13,245 | ||||||||||||
| Provision for loan losses | 155 | 279 | 312 | 743 | ||||||||||||
| Net interest income after provision | 6,801 | 6,386 | 13,500 | 12,502 | ||||||||||||
| Non-interest income | 232 | (294 | ) | 440 | 107 | |||||||||||
| Non-interest expense | 3,918 | 3,954 | 7,876 | 7,797 | ||||||||||||
| Net income before taxes | 3,115 | 2,138 | 6,064 | 4,812 | ||||||||||||
| Income tax provision | 1,059 | 726 | 2,062 | 1,635 | ||||||||||||
| Net income | $ | 2,056 | $ | 1,412 | $ | 4,002 | $ | 3,177 | ||||||||
Share Data: | ||||||||||||||||
| Weighted avg no. of shares outstanding — basic | 5,704,053 | 5,595,546 | 5,700,807 | 5,582,474 | ||||||||||||
| Weighted avg no. of shares outstanding — diluted | 5,992,923 | 5,973,382 | 5,996,150 | 5,975,647 | ||||||||||||
| Period end shares outstanding | 5,677,923 | 5,601,226 | ||||||||||||||
Per Common Share Data: | ||||||||||||||||
| Net income, basic | $ | 0.36 | $ | 0.25 | $ | 0.70 | $ | 0.57 | ||||||||
| Net income, diluted | $ | 0.34 | $ | 0.24 | $ | 0.67 | $ | 0.53 | ||||||||
| Closing Stock Price | $ | 22.20 | $ | 23.49 | ||||||||||||
| Book Value | $ | 15.44 | $ | 14.08 | ||||||||||||
Selected Financial Ratios | ||||||||||||||||
| Return on average stockholders’ equity | 9.36 | % | 7.22 | % | 9.23 | % | 8.24 | % | ||||||||
| Return on average total assets | 1.10 | % | 0.81 | % | 1.09 | % | 0.93 | % | ||||||||
| Average equity to average total assets | 11.71 | % | 11.19 | % | 11.79 | % | 11.31 | % | ||||||||
| Condensed Balance Sheet: | June 30 | Dec. 31 | June 30 | |||||||||
| 2006 | 2005 | 2005 | ||||||||||
| Assets | ||||||||||||
| Cash and equivalents | $ | 16,718 | $ | 9,455 | $ | 20,433 | ||||||
| Mortgage loans held for sale | 1,174 | 1,041 | 2,373 | |||||||||
| Investment securities, available for sale | 28,331 | 18,446 | 20,791 | |||||||||
| Loans | 696,052 | 657,037 | 635,718 | |||||||||
| Allowance for loan losses | (7,154 | ) | (6,808 | ) | (6,616 | ) | ||||||
| Premises and equipment | 14,092 | 13,792 | 14,004 | |||||||||
| Goodwill and intangible assets | 7,639 | 7,764 | 7,918 | |||||||||
| Other assets | 5,638 | 5,770 | 5,872 | |||||||||
| Total assets | $ | 762,490 | $ | 706,497 | $ | 700,493 | ||||||
| Liabilities and stockholders’ equity | ||||||||||||
| Deposits | $ | 612,270 | $ | 582,438 | $ | 580,615 | ||||||
| Federal Home Loan Bank advances | 25,588 | 25,588 | 25,614 | |||||||||
| Securities sold under agreements to repurchase | 310 | 1,615 | 3,201 | |||||||||
| Federal funds purchased | 24,500 | — | — | |||||||||
| Other liabilities | 2,172 | 2,643 | 2,208 | |||||||||
| Subordinated debentures | 10,000 | 10,000 | 10,000 | |||||||||
| Stockholders’ equity | 87,650 | 84,213 | 78,855 | |||||||||
| Total liabilities and stockholders’ equity | $ | 762,490 | $ | 706,497 | $ | 700,493 | ||||||
Other Data: | ||||||||||||
| Nonperforming loans to total loans | 0.71 | % | 0.18 | % | 0.34 | % | ||||||
| Net charge-offs to average loans | 0.00 | % | 0.02 | % | 0.00 | % | ||||||
| Net interest margin for the quarter | 3.88 | % | 4.11 | % | 4.00 | % | ||||||
| Net interest margin for the year | 3.95 | % | 4.14 | % | 4.10 | % | ||||||