COOPERATIVE BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2005 December 31, 2004 *
--------------------- ----------------------
(UNAUDITED)
ASSETS
Cash and due from banks, noninterest-bearing $ 18,784,582 $ 12,031,627
Interest-bearing deposits in other banks 5,037,911 4,360,960
--------------------- ----------------------
Total cash and cash equivalents 23,822,493 16,392,587
Securities:
Available for sale (amortized cost of $43,133,174 in December 2005
and $44,432,476 in December 2004) 42,380,655 44,535,010
Held to maturity (estimated market value of $1,980,533 in December
2005 and $2,678,860 in December 2004) 2,029,445 2,659,595
FHLB stock 5,828,800 4,518,500
Loans held for sale 4,893,564 7,239,131
Loans 643,727,167 453,769,733
Less allowance for loan losses 6,763,238 4,353,227
--------------------- ----------------------
Net loans 636,963,929 449,416,506
Other real estate owned 26,291 -
Accrued interest receivable 3,345,444 2,085,164
Premises and equipment, net 10,537,095 8,597,015
Goodwill 1,461,543 1,461,543
Other assets 14,976,781 13,202,393
--------------------- ----------------------
Total assets $ 746,266,040 $ 550,107,444
===================== ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 564,989,604 $ 414,757,904
Short-term borrowings 21,802,964 32,342,878
Escrow deposits 561,120 194,408
Accrued interest payable 417,565 190,689
Accrued expenses and other liabilities 3,857,534 2,629,188
Long-term obligations 103,541,295 53,082,676
--------------------- ----------------------
Total liabilities 695,170,082 503,197,743
--------------------- ----------------------
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,
4,305,316 and 2,860,764 shares issued and outstanding 4,305,316 2,860,764
Additional paid-in capital 2,734,611 2,673,233
Accumulated other comprehensive income (loss) (462,423) 67,672
Retained earnings 44,518,454 41,308,032
--------------------- ----------------------
Total stockholders' equity 51,095,958 46,909,701
--------------------- ----------------------
Total liabilities and stockholders' equity $ 746,266,040 $ 550,107,444
===================== ======================
Book value per common share** $ 11.87 $ 10.93
===================== ======================
* 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% 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2005 2004 2005 2004 *
----------------- ----------------- ----------------- -----------------
INTEREST INCOME:
Loans $ 10,935,119 $ 6,739,572 $ 36,761,753 $ 25,185,437
Securities 514,612 542,367 2,107,163 2,218,150
Other 95,770 19,313 171,612 49,436
Dividends on FHLB stock 62,774 39,412 217,490 150,172
----------------- ----------------- ----------------- -----------------
Total interest income 11,608,275 7,340,664 39,258,018 27,603,195
----------------- ----------------- ----------------- -----------------
INTEREST EXPENSE:
Deposits 3,851,047 1,811,664 12,001,466 6,425,637
Borrowed funds 1,362,685 701,783 4,157,410 2,779,271
----------------- ----------------- ----------------- -----------------
Total interest expense 5,213,732 2,513,447 16,158,876 9,204,908
----------------- ----------------- ----------------- -----------------
NET INTEREST INCOME 6,394,543 4,827,217 23,099,142 18,398,287
Provision for loan losses 935,000 225,000 2,485,000 970,000
----------------- ----------------- ----------------- -----------------
Net interest income after provision for
loan losses 5,459,543 4,602,217 20,614,142 17,428,287
----------------- ----------------- ----------------- -----------------
NONINTEREST INCOME:
Gain on sale of loans 526,623 563,672 2,421,946 2,523,246
Net gain on sale of securities - 9,600 - 9,600
Service charges and fees on loans 120,077 154,529 772,001 505,986
Deposit-related fees 498,318 414,270 1,802,838 1,591,762
Gain on sale of real estate 428,324 - 428,324 -
Bank-owned life insurance earnings 95,283 73,182 348,481 317,377
Other income, net 36,427 70,057 173,491 235,557
----------------- ----------------- ----------------- -----------------
Total noninterest income 1,705,052 1,285,310 5,947,081 5,183,528
----------------- ----------------- ----------------- -----------------
NONINTEREST EXPENSES:
Compensation and fringe benefits 2,609,408 2,266,764 10,371,057 9,322,226
Occupancy and equipment 924,148 794,167 3,550,056 3,262,622
Professional and examination fees 76,030 148,532 446,881 460,084
Advertising 169,659 141,895 573,852 525,341
Other 783,644 495,354 2,359,965 2,016,063
----------------- ----------------- ----------------- -----------------
Total noninterest expenses 4,562,889 3,846,712 17,301,811 15,586,336
----------------- ----------------- ----------------- -----------------
Income before income taxes 2,601,706 2,040,815 9,259,412 7,025,479
Income tax expense 1,144,588 688,122 3,757,874 2,344,304
----------------- ----------------- ----------------- -----------------
NET INCOME $ 1,457,118 $ 1,352,693 $ 5,501,538 $ 4,681,175
================= ================= ================= =================
NET INCOME PER SHARE:
Basic** $ 0.34 $ 0.32 $ 1.28 $ 1.09
================= ================= ================= =================
Diluted** $ 0.33 $ 0.31 $ 1.26 $ 1.07
================= ================= ================= =================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic** 4,304,214 4,291,146 4,298,561 4,289,187
================= ================= ================= =================
Diluted** 4,386,369 4,369,425 4,376,281 4,366,478
================= ================= ================= =================
* Derived from audited consolidated financial statements.
** Computed based on the weighted average number of dilutive shares outstanding
after giving the retroactive effect for the 3-for-2 stock split in the form
of a stock dividend announced on January 19, 2005
AVERAGE BALANCES
COOPERATIVE BANKSHARES, INC.
For the quarter ended
DECEMBER 31, 2005 DECEMBER 31, 2004
---------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------ ------------- ------------- -------------- ----------- ----------
Interest-earning assets:
Interest-bearing deposits in other banks $ 8,778 $ 96 4.37% $ 4,427 $ 19 1.72%
Securities:
Available for sale 42,913 490 4.57% 44,969 510 4.54%
Held to maturity 2,133 24 4.50% 2,780 33 4.75%
FHLB stock 5,414 63 4.65% 4,193 39 3.72%
Loan portfolio 634,025 10,935 6.90% 456,667 6,740 5.90%
------------- ------------- -------------- -----------
Total interest-earning assets 693,263 11,608 6.70% 513,036 7,341 5.72%
Non-interest earning assets 31,426 27,742
------------- --------------
Total assets $ 724,689 $ 540,778
============= ==============
Interest-bearing liabilities:
Deposits 503,283 3,851 3.06% 370,988 1,812 1.95%
Borrowed funds 118,262 1,363 4.61% 87,144 702 3.22%
------------- ------------- -------------- -----------
Total interest-bearing liabilities 621,545 $ 5,214 3.36% 458,132 $ 2,514 2.20%
------------- -----------
Non-interest bearing liabilities 52,055 36,045
------------- --------------
Total liabilities 673,600 494,177
Stockholders' equity 51,089 46,601
------------- --------------
Total liabilities and stockholders' equity $ 724,689 $ 540,778
============= ==============
Net interest income $ 6,394 $ 4,827
============= ===========
Interest rate spread 3.34% 3.52%
========== =========
Net yield on interest-earning assets 3.69% 3.76%
Percentage of average interest-earning
assets to average interest-bearing
liabilities 111.5% 112.0%
========== =========