EXHIBIT 99.1
COOPERATIVE BANKSHARES REPORTS 52% INCREASE IN THIRD QUARTER EARNINGS
For Immediate Release:
Wilmington, NC October 25, 2006--Cooperative Bankshares, Inc. (NASDAQ:
"COOP") (the "Company") reported net income for the quarter ended September 30,
2006 of $2.3 million or $0.34 per diluted share, an increase of 51.9% over the
same quarter last year. Net income for the quarter ended September 30, 2005 was
$1.5 million or $0.23 per diluted share. Net income for the nine months ended
September 30, 2006 was $5.6 million or $0.84 per diluted share, an increase of
37.5% over the same period last year. Net income for the nine months ended
September 30, 2005 was $4.0 million or $0.62 per diluted share. The increase in
net income was mainly due to a rise in net interest income caused primarily by
growth in loans. Loans increased to $739.3 million at September 30, 2006
representing a 14.8% increase from December 31, 2005 and a 20.0% increase from
loans at September 30, 2005. The majority of loan growth for the nine-month
period ended September 30, 2006 occurred in construction and land development
loans which grew $39.7 million (30.8%), one-to-four family loans which grew
$41.3 million (13.9%) and commercial real estate loans which grew $14.5 million
(9.8%) from the amounts at December 31, 2005. Loan growth was primarily
attributable to continued strength in the economy of the markets in which the
Company conducts its business, Cooperative Bank's (the "Bank") expanded and
improved branch network and a continued emphasis on increasing overall loan
production. Also during the quarter ending September 30, 2006, the Bank
participated in the Settlement Initiative with the State of North Carolina
regarding dividends received from CS&L Real Estate Trust, Inc. This settlement
allowed the Bank to recover $198,000 in penalties and $17,000 in taxes, which
were expensed in a previous period. Per share data has been adjusted to reflect
a 3-for-2 stock split in the form of a 50% stock dividend. The stock dividend
was paid June 30, 2006 to stockholders of record as of June 12, 2006.
Total assets increased to $843.0 million at September 30, 2006, an
increase of 17.8% compared to $715.6 million at September 30, 2005 and a 13.0%
increase compared to $746.3 million at December 31, 2005. Asset growth was
primarily the result of continued loan growth, which was primarily funded by
deposit growth. Deposits at September 30, 2006 increased to $648.5 million from
$565.0 million at December 31, 2005, and from $542.0 million at September 30,
2005 primarily as a result of the Bank's expanded and improved branch network,
increasing brokered deposits and the Bank being located in markets experiencing
strong economic growth. At September 30, 2006, stockholders' equity was $56.0
million, or $8.60 per share, and represented 6.64% of assets, compared to $51.1
million, or $7.91 per share, representing 6.85% of assets at December 31, 2005.
Cooperative Bankshares, Inc. is the parent company of Cooperative Bank.
Chartered in 1898, Cooperative Bank provides a full range of financial services
through 21 offices in Eastern North Carolina. The Bank's subsidiary, Lumina
Mortgage, Inc., is a mortgage banking firm, originating and selling residential
mortgage loans through three offices in North Carolina.
Statements in this news release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements, which contain words such as
"expects," "intends," "believes" or words of similar import, are subject to
numerous risks and uncertainties disclosed from time to time in documents the
Company files with the Securities and Exchange Commission (the "SEC"), which
could cause actual results to differ materially from the results currently
anticipated. Undue reliance should not be placed on such forward-looking
statements.
The Company has filed a Form 8-K with the SEC containing additional
financial information.
For Additional Information
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Frederick Willetts, III, President,
Todd L. Sammons, CPA, Senior Vice President/CFO,
Linda B. Garland, Vice President/ Secretary, 910-343-0181
COOPERATIVE BANKSHARES, INC.
201 MARKET ST. UNAUDITED SELECTED FINANCIAL DATA
WILMINGTON, NC 28401 NASDAQ SYMBOL: COOP
(In thousands, except per share data)
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BALANCES AS OF: 09/30/06 06/30/06 03/31/06 12/31/05 09/30/05
====================================================================================================================================
ASSETS $ 842,986 $ 827,664 $ 782,627 $ 746,266 $ 715,581
STOCKHOLDERS' EQUITY 55,977 53,453 52,252 51,096 49,929
DEPOSITS 648,467 633,430 591,871 564,990 542,009
BOOK VALUE (6,511 SHARES AS OF 09/30/06) 8.60 8.22 8.08 7.91 7.74
NON-PERFORMING ASSETS:
ACCRUING LOANS 90 DAYS PAST DUE 608 2,278 2,006 9 316
NON-ACCRUAL LOANS 368 18 1,341 23 3
FORECLOSED REO 574 574 10 26 26
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TOTAL NON-PERFORMING ASSETS $ 1,550 $ 2,870 $ 3,357 $ 58 $ 345
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FOR THE QUARTER ENDED: 09/30/06 06/30/06 03/31/06 12/31/05 09/30/05
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NET INTEREST MARGIN 3.70% 3.72% 3.60% 3.69% 3.69%
(NET INTEREST INCOME/AVERAGE INTEREST-EARNING ASSETS)
EARNING ASSETS/LIABILITIES 110.9% 111.2% 110.7% 111.5% 111.8%
STOCKHOLDERS' EQUITY/ASSETS 6.64% 6.46% 6.68% 6.85% 6.98%
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NET INCOME $ 2,288 $ 1,808 $ 1,464 $ 1,457 $ 1,506
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NET INCOME PER DILUTED SHARE $ 0.34 $ 0.27 $ 0.22 $ 0.22 $ 0.23
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DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES 6,638 6,619 6,593 6,580 6,569
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ALLOWANCE FOR LOAN LOSSES
PROVISION $ 525 $ 775 $ 585 $ 935 $ 575
CHARGE OFFS 63 789 7 19 18
RECOVERIES - 1 5 3 -
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BALANCE $ 7,795 $ 7,333 $ 7,346 $ 6,763 $ 5,844
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Note: Per share information is 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 50% stock dividend declared on
May 31, 2006 and paid on June 30, 2006.