COOPERATIVE BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 2005 December 31, 2004*
--------------------- ---------------------
(UNAUDITED)
ASSETS
Cash and due from banks, noninterest-bearing $ 19,489,219 $ 12,031,627
Interest-bearing deposits in other banks - 4,360,960
--------------------- ---------------------
Total cash and cash equivalents 19,489,219 16,392,587
Securities:
Available for sale (amortized cost of $43,123,458 in September 2005
and $44,432,476 in December 2004) 42,575,714 44,535,010
Held to maturity (estimated market value of $2,140,085 in September
2005 and $2,678,860 in December 2004) 2,175,074 2,659,595
FHLB stock 5,423,900 4,518,500
Loans held for sale 7,240,827 7,239,131
Loans 615,853,968 453,769,733
Less allowance for loan losses 5,844,105 4,353,227
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Net loans 610,009,863 449,416,506
Other real estate owned 26,291 -
Accrued interest receivable 2,916,686 2,085,164
Premises and equipment, net 9,937,441 8,597,015
Goodwill 1,461,543 1,461,543
Other assets 14,324,461 13,202,393
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Total assets $ 715,581,019 $ 550,107,444
===================== =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 542,009,276 $ 414,757,904
Short-term borrowings 25,419,470 32,342,878
Escrow deposits 396,846 194,408
Accrued interest payable 444,701 190,689
Accrued expenses and other liabilities 3,838,634 2,629,188
Long-term obligations 93,542,668 53,082,676
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Total liabilities 665,651,595 503,197,743
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Stockholders' equity:
Preferred stock, $1 par value, 3,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $1 par value, 14,000,000 shares authorized,
4,302,816 and 2,860,764 shares issued and outstanding 4,302,816 2,860,764
Additional paid-in capital 2,711,593 2,673,233
Accumulated other comprehensive income (loss) (361,511) 67,672
Retained earnings 43,276,526 41,308,032
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Total stockholders' equity 49,929,424 46,909,701
--------------------- ---------------------
Total liabilities and stockholders' equity $ 715,581,019 $ 550,107,444
===================== =====================
Book value per common share** $ 11.60 $ 10.93
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*Derived from audited consolidated financial statements.
**The 2004 information is computed after giving the retroactive effect of a
3-for-2 stock split in the form of a 50% stock dividend declared on January
19, 2005 and paid on February 24, 2005.
COOPERATIVE BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2005 2004 2005 2004
----------------- ----------------- ----------------- -----------------
INTEREST INCOME:
Loans $ 9,907,182 $ 6,409,154 $ 25,826,634 $ 18,445,865
Securities 524,467 557,179 1,592,552 1,675,783
Other 27,333 12,356 75,842 30,123
Dividends on FHLB stock 46,241 37,653 154,716 110,760
----------------- ----------------- ----------------- -----------------
Total interest income 10,505,223 7,016,342 27,649,744 20,262,531
----------------- ----------------- ----------------- -----------------
INTEREST EXPENSE:
Deposits 3,306,204 1,635,174 8,150,419 4,613,972
Borrowed funds 1,158,380 713,094 2,794,725 2,077,488
----------------- ----------------- ----------------- -----------------
Total interest expense 4,464,584 2,348,268 10,945,144 6,691,460
----------------- ----------------- ----------------- -----------------
NET INTEREST INCOME 6,040,639 4,668,074 16,704,600 13,571,071
Provision for loan losses 575,000 225,000 1,550,000 745,000
----------------- ----------------- ----------------- -----------------
Net interest income after provision for loan losses 5,465,639 4,443,074 15,154,600 12,826,071
----------------- ----------------- ----------------- -----------------
NONINTEREST INCOME:
Gain on sale of loans 570,694 682,115 1,895,323 1,959,574
Service charges and fees on loans 248,513 159,359 651,924 351,457
Deposit-related fees 494,672 418,910 1,304,519 1,177,449
Bank-owned life insurance earnings 95,283 73,182 253,198 244,195
Other income, net 48,813 61,750 137,064 165,500
----------------- ----------------- ----------------- -----------------
Total noninterest income 1,457,975 1,395,316 4,242,028 3,898,175
----------------- ----------------- ----------------- -----------------
NONINTEREST EXPENSES:
Compensation and fringe benefits 2,656,391 2,349,614 7,761,650 7,055,462
Occupancy and equipment 911,423 834,037 2,625,907 2,468,454
Professional and examination fees 118,623 87,276 370,852 311,552
Advertising 160,242 140,476 404,192 383,447
Other 516,777 503,713 1,576,322 1,520,666
----------------- ----------------- ----------------- -----------------
Total noninterest expenses 4,363,456 3,915,116 12,738,923 11,739,581
----------------- ----------------- ----------------- -----------------
Income before income taxes 2,560,158 1,923,274 6,657,705 4,984,665
Income tax expense 1,054,288 636,845 2,613,286 1,656,183
----------------- ----------------- ----------------- -----------------
NET INCOME $ 1,505,870 $ 1,286,429 $ 4,044,419 $ 3,328,482
================= ================= ================= =================
NET INCOME PER SHARE:
Basic* $ 0.35 $ 0.30 $ 0.94 $ 0.78
================= ================= ================= =================
Diluted* $ 0.34 $ 0.30 $ 0.92 $ 0.76
================= ================= ================= =================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic* 4,301,553 4,291,146 4,296,677 4,288,533
================= ================= ================= =================
Diluted* 4,379,214 4,360,517 4,375,156 4,364,873
================= ================= ================= =================
*The 2004 information is computed after giving the retroactive effect of a
3-for-2 stock split in the form of a 50% stock dividend declared on January
19, 2005 and paid on February 24, 2005.
AVERAGE BALANCES
COOPERATIVE BANKSHARES, INC.
For the quarter ended
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
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(DOLLARS IN THOUSANDS) Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
---------- ---------- ----------- ------------ ---------- ----------
Interest-earning assets:
Interest-bearing deposits in other banks $ 3,210 $ 27 3.36% $ 3,845 $ 12 1.25%
Securities:
Available for sale 43,435 499 4.60% 46,125 520 4.51%
Held to maturity 2,290 26 4.54% 2,969 37 4.98%
FHLB stock 5,667 46 3.25% 4,288 38 3.54%
Loan portfolio 599,633 9,907 6.61% 447,644 6,409 5.73%
---------- ---------- ---------- -------
Total interest-earning assets 654,235 10,505 6.42% 504,871 7,016 5.56%
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Non-interest earning assets 29,643 27,434
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Total assets $ 683,878 $ 532,305
========== ==========
Interest-bearing liabilities:
Deposits 470,601 3,306 2.81% 360,823 1,635 1.81%
Borrowed funds 114,472 1,158 4.05% 91,119 713 3.13%
---------- ---------- ---------- -------
Total interest-bearing liabilities 585,073 $ 4,464 3.05% 451,942 $2,348 2.08%
---------- -------
Non-interest bearing liabilities 48,876 35,141
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Total liabilities 633,949 487,083
Stockholders' equity 49,929 45,222
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Total liabilities and stockholders' equity $ 683,878 $ 532,305
========== ==========
Net interest income $ 6,041 $4,668
========== =======
Interest rate spread 3.37% 3.48%
========= ========
Net yield on interest-earning assets 3.69% 3.70%
Percentage of average interest-earning
assets to average interest-bearing
liabilities 111.8% 111.7%
=========== ========