EXHIBIT 99.1
COOPERATIVE BANKSHARES REPORTS THIRD QUARTER EARNINGS
For Immediate Release:
Wilmington, NC October 30, 2007--Cooperative Bankshares, Inc. (NASDAQ:
"COOP") (the "Company") reported net income for the quarter ended September 30,
2007 of $2.1 million, or $0.32 per diluted share, an increase of 2.1% over the
same quarter last year exclusive of the effect of an adjustment of $215,000 in
the quarter ending September 30, 2006. During the quarter ended September 30,
2006, Cooperative Bank (the "Bank"), the Company's wholly owned subsidiary,
participated in the Settlement Initiative with the State of North Carolina
regarding dividends received from CS&L Real Estate Trust, Inc., a real estate
investment trust subsidiary of the Bank that was dissolved in June 2006, that
allowed the Bank to recover $215,000 in taxes and penalties. Net income as
reported for the quarter ended September 30, 2006 was $2.3 million, or $0.34 per
diluted share. Net income for the nine months ended September 30, 2007 was $6.3
million, or $0.95 per diluted share, an increase of 13.5% over the same period
last year. Net income for the nine months ended September 30, 2006 was $5.5
million, or $0.84 per diluted share. The increase in net income for the nine
months ended September 30, 2007 from the prior year period was mainly due to an
increase in net interest income caused primarily by growth in loans, a reduction
to the provision for loan losses, and a gain of $275,000 recognized on the sale
of a branch office that was relocated in Morehead City. Loans increased to
$814.3 million at September 30, 2007 representing a 7.0% increase from December
31, 2006 and a 10.2% increase from September 30, 2006. For the nine-month period
ended September 30, 2007, the largest increases in the loan portfolio occurred
in construction and land development loans, which grew $40.6 million (24.5%),
and one-to-four family loans, which grew $33.9 million (9.3%). For the
twelve-month period ended September 30, 2007, the majority of loan growth
occurred in one-to-four family loans, which grew $62.0 million (18.4%), and
construction and land development loans, which grew $37.7 million (22.4%). Loan
growth was primarily attributable to the growth of the markets in which the Bank
conducts its business, the Bank's expanded and improved branch network, and a
continued emphasis on increasing overall loan production. For the nine months
ended September 30, 2007, the provision for loan losses decreased to $1.0
million, representing a 46.9% decrease when compared to the nine months ended
September 30, 2006. The decrease in the provision for loan losses for the
nine-month period ended September 30, 2007 was primarily the result of slower
loan growth as compared to growth that occurred during the nine months ended
September 30, 2006.
Total assets increased to $922.0 million at September 30, 2007, an
increase of 7.2% compared to $860.1 million at December 31, 2006 and an increase
of 9.4% compared to $843.1 million at September 30, 2006. Asset growth was
primarily the result of continued loan growth, which was mostly funded by
deposit growth. Deposits at September 30, 2007 increased to $707.9 million from
$661.9 million at December 31, 2006 and from $648.5 million at September 30,
2006, primarily as a result of the Bank's expanded and improved branch network,
increasing brokered deposits and the acquisition of Bank of Jefferson in July
2007. At September 30, 2007, stockholders' equity was $63.5 million, or $9.69
per share, and represented 6.89% of assets, compared to $57.6 million, or $8.85
per share, representing 6.70% of assets, at December 31, 2006 and compared to
$55.8 million, or $8.57 per share, representing 6.62% of assets, at September
30, 2006. The Company's non-performing loans (loans 90 days or more delinquent
and non-accrual loans) increased to $8.3 million at September 30, 2007 compared
to $1.3 million at December 31, 2006 and compared to $976,000 at September 30,
2006. The majority of the increase is due to two lending relationships. With
respect to one such relationship, totaling $4.3 million, the Bank does not
anticipate a loss. The other relationship, totaling $2.2 million, was paid in
full subsequent to September 30, 2007 and the Bank incurred no loss. Management
considers the current level of the allowance for loan losses to be appropriate
based on loan composition, the current level of delinquencies and other
nonperforming assets, overall economic conditions and other factors.
On July 2, 2007, the Company consummated the acquisition of Bank of
Jefferson located in Chesterfield County, South Carolina, and on August 31,
2007, the Company completed the merger of Bank of Jefferson into the Bank.
Cooperative Bankshares, Inc. is the parent company of Cooperative Bank.
Chartered in 1898, Cooperative Bank provides a full range of financial services
through twenty three offices in Eastern North Carolina and one office in
Jefferson, South Carolina. Cooperative 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.
Contact: 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: 09/30/07 06/30/07 03/31/07 12/31/06 09/30/06
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ASSETS $ 921,965 $ 891,567 $ 865,225 $ 860,090 $ 843,086
STOCKHOLDERS' EQUITY 63,484 61,365 59,539 57,623 55,798
DEPOSITS 707,897 690,798 665,139 661,892 648,467
BOOK VALUE (6,549 SHARES AS OF 9/30/07) 9.69 9.37 9.14 8.85 8.57
NON-PERFORMING ASSETS:
ACCRUING LOANS 90 DAYS PAST DUE 5,114 1,082 1,015 1,124 608
NON-ACCRUAL LOANS 3,224 525 219 172 368
FORECLOSED REO 1,043 574 574 653 574
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TOTAL NON-PERFORMING ASSETS $ 9,381 $ 2,181 $ 1,808 $ 1,949 $ 1,550
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FOR THE QUARTER ENDED: 09/30/07 06/30/07 03/31/07 12/31/06 09/30/06
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NET INTEREST MARGIN 3.44% 3.48% 3.50% 3.48% 3.70%
(NET INTEREST INCOME/AVERAGE INTEREST-EARNING ASSETS)
EARNING ASSETS/LIABILITIES 110.6% 110.5% 110.1% 110.1% 110.9%
STOCKHOLDERS' EQUITY/ASSETS 6.89% 6.88% 6.88% 6.70% 6.62%
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NET INCOME $ 2,107 $ 2,066 $ 2,103 $ 2,109 $ 2,279
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NET INCOME PER DILUTED SHARE $ 0.32 $ 0.31 $ 0.32 $ 0.32 $ 0.34
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DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES 6,646 6,634 6,639 6,645 6,638
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ALLOWANCE FOR LOAN LOSSES
PROVISION $ 532 $ 350 $ 300 $ 350 $ 525
CHARGE OFFS 162 68 14 360 63
RECOVERIES 8 - 13 1 -
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BALANCE $ 8,745 $ 8,367 $ 8,085 $ 7,786 $ 7,795
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Note: The provision for allowance for loan losses for the quarter ended September 30, 2007 includes $182 representing the balance
of the allowance for loan losses acquired in the purchase of the Bank of Jefferson.