BALTIMORE, July 21 /PRNewswire-FirstCall/ -- 1st Mariner Bancorp
(NASDAQ: FMAR), parent company of 1st Mariner Bank and Mariner
Finance, LLC, announced that its loss for the 2nd quarter of 2009
totaled $2.409 million (-$.37 per diluted share). While larger than
the reported net loss for the quarter ended June 30, 2008, of $469
thousand (-$.07 per diluted share), the loss was narrower than the
fourth quarter of 2008 loss of $9.060 million and the 1st quarter
of 2009 loss of $3.101 million. The quarter was marked by solid non
credit related operating performance, a decrease in non performing
assets, continued growth in loans and deposits, and higher loan
credit losses. 1st Mariner reported its total assets ended June 30,
2009 at $1.459 billion, an increase of 13% from June 30, 2008.
Highlights for the most recent quarter include: -- Pre tax current
quarter operating results (which excludes the loan loss provision,
write-downs or losses on sales of other real estate owned, and the
special assessment of FDIC deposit insurance) improved to a profit
of $2.593 million compared to a profit of $1.535 million in the
second quarter of 2008. -- 1st Mariner's total loans, including
commercial, consumer and residential loans, increased by 8% year
over year. -- Deposits increased by 16%. -- Residential loan
production was at a record level of $540 million. -- Restructuring
initiatives resulted in a decrease in compensation costs of $1.142
million compared to the 2nd quarter 2008. -- Non performing assets
(loans on non accrual status and other real estate owned) increased
$13.7 million compared to June 30, 2008, but decreased $2.7 million
when compared to March 31, 2009. "We experienced stable operating
results for the second quarter, excluding credit related losses,
that included continued robust mortgage banking originations as
well as solid advances in loan and deposit levels that contributed
significantly to the improvement in our revenues," said Edwin F.
Hale, Sr., 1st Mariner's chairman and chief executive officer. Mr.
Hale said that while the company did experience a decline in non
performing loans compared to the 1st quarter of 2009, the cost of
resolving problem loans and additions to the loan loss reserve for
the company was substantial in the most recent quarter and
continued to overshadow progress in core operating performance.
Real estate values continued their downward trend causing values on
loans in the process of foreclosure and foreclosed residential real
estate to deteriorate in value. This trend required the Bank to
make additional loan loss reserves and record further losses on
other real estate owned. "Residential real estate values remain in
a cycle of downward pressure. Lower appraisals result in higher
reserve levels and in increased losses as we liquidate foreclosed
properties." Mr. Hale said that the company continues to focus on
increasing the company's capital levels. "We continue to pursue
additional capital through the potential sale of assets as well as
exploring external sources of new equity independent of Government
support. While credit quality may be stabilizing, we do not see
convincing evidence that the credit environment is improving,
making the task of increasing our capital levels appropriate in
light of these uncertain market conditions," he concluded.
Operating Summary The reported loss for the second quarter of 2009
reflected $6.2 million credit related charges to earnings primarily
associated with residential real estate loans; comprised of $4.3
million in the provision for loan losses, and $1.9 million in
expenses for the disposition or cost to maintain foreclosed
property. The second quarter loss also included a non-recurring
charge for a special deposit insurance assessment by the FDIC that
approximated $600 thousand. -- Total revenue increased $1.433
million (+7%) when compared to the quarter ended June 30, 2008,
primarily reflecting strength in mortgage and finance company
revenues. -- Average earning assets grew by $97 million (+9%) from
last years' second quarter, as a result of growth in average loans
and reflected a shift in the mix in earning assets into higher
yielding mortgage loans held for sale and a reduction in lower
yielding short term interest bearing deposits. -- The net interest
margin decreased to 3.94% from 4.19% last year, reflecting the
increase in non-performing assets, and decreases in non-interest
bearing sources of funding. The net interest margin for the quarter
increased 24 basis points when compared to the quarter ended March
31, 2009 of 3.70%, reflecting a shift in the mix in earning assets
into higher yielding mortgage loans held for sale and a reduction
in lower yielding short term interest bearing deposits, as well as
lower costs for borrowings and deposits. The company estimated the
quarterly interest costs on its non performing assets to be
approximately $900 thousand and negatively impacts the net interest
margin by over 30 basis points. -- The provision for loan losses
totaled $4.344 million compared to $2.504 million in the
corresponding quarter last year. Net charge-offs increased $1.773
million primarily the result of higher charge-offs of residential
mortgage loans, residential construction loans, and modestly higher
consumer finance charge-offs. Management increased the allowance
for loan losses to $16.317 million from $14.543 million (+12%) at
June 30, 2008, totaling 1.64% of loans outstanding compared to
1.57% last year. Non-performing assets increased to $62.5 million
(4.28% of total assets) from $48.711 million (3.78% of total
assets) last year. Non- performing assets totaled 4.42% of assets
as of December 31, 2008 and 4.73% as of March 31, 2009. The
increase compared to June 30, 2008 is primarily attributable to
higher levels of non-performing residential construction and
development loans. Loans past due 90 days and still accruing
totaled $16.894 million as of June 30, 2009, compared to $16.539
million at June 30, 2008. -- Non-interest income increased by
$1.171 million (+15%) primarily due to stronger results in mortgage
banking and finance company revenues. Mortgage banking revenue
increased $2.6 million due to increased volume of loans sold and
increased pricing spreads. Sales on insurance products by Mariner
Finance improved $177 thousand while deposit service charges
declined by $276 thousand and commissions from sales of investment
products declined $143 thousand. Non interest income derived from
the changes in fair values of trading assets and borrowings
declined by $350 thousand. -- Non-interest expenses increased by
$1.795 million (+9%). Costs of FDIC insurance (including the
special assessment) increased $1.050 million. Losses recorded for
the write-down or sales of foreclosed properties increased by $820
thousand. Professional services grew by $213 thousand primarily
reflecting higher regulatory compliance and loan workout costs.
Salary and benefit expenses decreased by $1.142 million. Comparing
balance sheet data as of June 30, 2009, to June 30, 2008, total
assets were $1.459 billion, compared to $1.289 billion last year.
-- Loans outstanding increased $73 million (+8%). Commercial loans
outstanding increased by $13 million (+2%), while Mariner Finance
receivables increased by $18 million (+21%), and Bank consumer
loans increased by $19 million (+14%). Residential mortgage loans
grew by $60 million, while residential construction loans declined
by approximately $37 million. Total mortgage loans originated
totaled $540 million for the second quarter of 2009, compared to
$362 million for the same period of 2008. -- Deposits totaled
$1.096 billion (+16%) compared to $948 million at June 30, 2008.
Certificates of deposit increased $219 million, reflecting
continued shift out of money market accounts that decreased by $45
million. Non-interest bearing checking accounts decreased $14
million and NOW accounts declined $12 million. -- Stockholders'
Equity declined by $18 million, decreasing 1st Mariner's book value
per share to $6.45 compared to $9.31 as of June 30, 2008. Capital
Ratios at the end of the quarter for First Mariner Bank were as
follows: Leverage Ratio = 5.8%; Tier 1 risk-based ratio = 6.9%
Total Capital Ratio = 8.7%. Capital ratios for First Mariner Bank
continue to exceed minimum requirement levels under current
regulatory definitions. 1st Mariner Bancorp is a bank holding
company with total assets of $1.459 billion. Its wholly owned
banking subsidiary, 1st Mariner Bank, (total assets $1.347 billion)
operates 24 full service bank branches in Baltimore, Anne Arundel,
Harford, Howard, Talbot, and Carroll counties in Maryland, the City
of Baltimore, and Shrewsbury, Pennsylvania. 1st Mariner Mortgage, a
division of 1st Mariner Bank, operates retail offices in Central
Maryland and the Eastern Shore of Maryland. 1st Mariner Mortgage
also operates direct marketing mortgage operations in Baltimore
City. Mariner Finance, LLC, (total assets $106 million) is a
consumer finance subsidiary that currently operates branches in
Maryland, Delaware, Virginia, New Jersey, and Tennessee. 1st
Mariner Bancorp's common stock is traded on the Nasdaq National
Market under the symbol "FMAR". 1st Mariner's Web site address is
http://www.1stmarinerbancorp.com/, which includes comprehensive
level investor information. In addition to historical information,
this press release contains forward-looking statements that involve
risks and uncertainties, such as statements of the Company's plans
and expectations regarding efficiencies resulting from new programs
and expansion activities, revenue growth, anticipated expenses,
profitability of mortgage banking operations, and other unknown
outcomes. The Company's actual results could differ materially from
management's expectations. Factors that could contribute to those
differences include, but are not limited to, changes in regulations
applicable to the Company's business, successful implementation of
the Company's branch expansion strategy, its concentration in real
estate lending, increased competition, changes in technology,
particularly Internet banking, impact of interest rates,
possibility of economic recession or slowdown (which could impact
credit quality, adequacy of loan loss reserve and loan growth) and
control by and dependency on key personnel, particularly Edwin F.
Hale, Sr., Chairman of the Board of Directors and CEO of the
Company. FINANCIAL HIGHLIGHTS (UNAUDITED) First Mariner Bancorp
(Dollars in thousands, except per share data) For the three months
ended June 30, 2009 2008 $ Change % Change ---- ---- --------
-------- Summary of Earnings: Net interest income $12,173 $11,911
262 2% Provision for loan losses 4,344 2,504 1,840 73% Noninterest
income 9,119 7,948 1,171 15% Noninterest expense 21,181 19,386
1,795 9% Income before income taxes (4,233) (2,031) (2,202) 108%
Income tax expense (1,824) (1,562) (262) 17% Net income (2,409)
(469) (1,940) -414% Profitability and Productivity: Return on
average assets -0.70% -0.15% - -375% Return on average equity
-21.71% -2.97% - -632% Net interest margin 3.94% 4.19% - -6% Net
overhead ratio 3.49% 3.60% - -3% Efficiency ratio 99.06% 97.62% -
1% Mortgage loan production 540,086 362,255 177,831 49% Average
deposits per branch 43,838 35,115 8,723 25% Per Share Data: Basic
earnings per share $(0.37) $(0.07) (0.30) -433% Diluted earnings
per share $(0.37) $(0.07) (0.30) -433% Book value per share $6.45
$9.31 (2.86) -31% Number of shares outstanding 6,452,631 6,387,398
65,233 1% Average basic number of shares 6,452,631 6,366,804 85,827
1% Average diluted number of shares 6,452,631 6,366,804 85,827 1%
Summary of Financial Condition: At Period End: Assets $1,459,534
$1,288,624 170,910 13% Investment Securities 51,070 80,306 (29,236)
-36% Loans 997,130 924,296 72,834 8% Deposits 1,095,950 948,098
147,852 16% Borrowings and repurchase agreements 230,981 195,697
35,284 18% Stockholders' equity 41,615 59,466 (17,851) -30% Average
for the period: Assets $1,377,469 $1,274,697 102,772 8% Investment
Securities 50,532 80,762 (30,230) -37% Loans 991,888 883,228
108,660 12% Deposits 1,024,628 945,102 79,526 8% Borrowings and
repurchase agreements 301,812 264,677 37,135 14% Stockholders'
equity 44,509 63,391 (18,882) -30% Capital Ratios: First Mariner
Bank Leverage 5.8% 7.3% - -21% Tier 1 Capital to risk weighted
assets 6.9% 8.6% - -20% Total Capital to risk weighted assets 8.7%
10.5% - -17% Asset Quality Statistics and Ratios: Net Chargeoffs
3,542 1,769 1,773 100% Non-performing assets 62,429 48,711 13,718
28% 90 Days or more delinquent loans 16,894 16,539 355 2%
Annualized net chargeoffs to average loans 1.43% 0.80% - 79%
Non-performing assets to total assets 4.28% 3.78% - 13% 90 Days or
more delinquent loans to total loans 1.69% 1.77% - -4% Allowance
for loan losses to total loans 1.64% 1.57% - 4% FINANCIAL
HIGHLIGHTS (UNAUDITED) First Mariner Bancorp (Dollars in thousands,
except per share data) For the six months ended June 30, 2009 2008
$ Change % Change ---- ---- -------- -------- Summary of Earnings:
Net interest income $23,251 $23,881 (630) -3% Provision for loan
losses 8,740 6,327 2,413 38% Noninterest income 17,391 12,576 4,815
38% Noninterest expense 41,676 37,867 3,809 10% Income before
income taxes (9,774) (7,737) (2,037) 26% Income tax expense (4,264)
(3,990) (274) 7% Net income (5,510) (3,747) (1,763) 47%
Profitability and Productivity: Return on average assets -0.82%
-0.60% - 36% Return on average equity -24.03% -11.58% - 107% Net
interest margin 3.80% 4.27% - -11% Net overhead ratio 3.33% 4.06% -
-18% Efficiency ratio 98.18% 103.87% - -5% Mortgage loan production
1,052,661 777,210 275,451 35% Average deposits per branch 43,838
35,115 8,723 25% Per Share Data: Basic earnings per share $(0.85)
$(0.59) (0.26) 45% Diluted earnings per share $(0.85) $(0.59)
(0.26) 45% Book value per share $6.45 $9.31 (2.86) -31% Number of
shares outstanding 6,452,631 6,387,398 65,233 1% Average basic
number of shares 6,452,631 6,359,617 93,014 1% Average diluted
number of shares 6,452,631 6,359,617 93,014 1% Summary of Financial
Condition: At Period End: Assets $1,459,534 $1,288,624 170,910 13%
Trading and available for sale securities 51,070 80,306 (29,236)
-36% Loans 997,130 924,296 72,834 8% Deposits 1,095,950 948,098
147,852 16% Borrowings 230,981 195,697 35,284 18% Stockholders'
equity 41,615 59,466 (17,851) -30% Average for the period: Assets
$1,362,016 $1,255,441 106,575 8% Trading and available for sale
securities 51,005 81,198 (30,193) -37% Loans 986,357 866,134
120,223 14% Deposits 1,008,335 923,291 85,044 9% Borrowings 300,500
264,412 36,088 14% Stockholders' equity 46,247 65,088 (18,841) -29%
Capital Ratios: First Mariner Bank Leverage 5.8% 7.3% - -21% Tier 1
Capital to risk weighted assets 6.9% 8.6% - -20% Total Capital to
risk weighted assets 8.7% 10.5% - -17% Asset Quality Statistics and
Ratios: Net Chargeoffs 9,200 4,573 4,627 101% Non-performing assets
62,429 48,711 13,718 28% 90 Days or more delinquent loans 16,894
16,539 355 2% Annualized net chargeoffs to average loans 1.88%
1.06% - 77% Non-performing assets to total assets 4.28% 3.78% - 13%
90 Days or more delinquent loans to total loans 1.69% 1.77% - -4%
Allowance for loan losses to total loans 1.64% 1.57% - 4%
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) First
Mariner Bancorp (Dollars in thousands) As of June 30, 2009 2008 $
Change % Change ---- ---- --------- -------- Assets: Cash and due
from banks $123,892 $29,898 93,994 314% Interest-bearing deposits
8,399 51,422 (43,023) -84% Available-for-sale investment
securities, at fair value 39,281 46,123 (6,842) -15% Trading
Securities 11,789 34,183 (22,394) -66% Loans held for sale 117,242
62,453 54,789 88% Loans receivable 997,130 924,296 72,834 8%
Allowance for loan losses (16,317) (14,543) (1,774) 12% -------
------- ------ Loans, net 980,813 909,753 71,060 8% Other real
estate owned 29,384 19,102 10,282 54% Restricted stock investments,
at cost 7,933 5,941 1,992 34% Property and equipment 47,690 50,765
(3,075) -6% Accrued interest receivable 6,600 6,971 (371) -5%
Deferred income taxes 23,656 13,476 10,180 76% Bank owned life
insurance 35,588 35,677 (89) 0% Prepaid expenses and other assets
27,267 22,860 4,407 19% ------ ------ ----- Total Assets $1,459,534
$1,288,624 170,910 13% ========== ========== ======= Liabilities
and Stockholders' Equity: Liabilities: Deposits $1,095,950 $948,098
147,852 16% Borrowings 230,981 195,697 35,284 18% Junior
subordinated deferrable interest debentures 73,724 73,724 - 0%
Accrued expenses and other liabilities 17,264 11,639 5,625 48%
------ ------ ----- Total Liabilities 1,417,919 1,229,158 188,761
15% Stockholders' Equity Common Stock 323 319 4 1% Additional
paid-in-capital 56,761 56,603 158 0% Retained earnings (9,848)
5,856 (15,704) -268% Accumulated other comprehensive loss (5,621)
(3,312) (2,309) 70% ------ ------ ------ Total Stockholders Equity
41,615 59,466 (17,851) -30% ------ ------ ------- Total Liabilities
and Stockholders' Equity $1,459,534 $1,288,624 170,910 13%
========== ========== ======= CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) First Mariner Bancorp (Dollars in thousands) For the
three For the six months ended months ended June 30, June 30, 2009
2008 2009 2008 ---- ---- ---- ---- Interest Income: Investments and
interest-bearing deposits $783 $1,646 $1,583 $3,369 Loans 20,554
19,379 40,193 39,380 ------ ------ ------ ------ Total Interest
Income 21,337 21,025 41,776 42,749 Interest Expense: Deposits 6,270
6,018 12,688 12,174 Borrowings and repurchase agreements 2,894
3,096 5,837 6,694 ----- ----- ----- ----- Total Interest Expense
9,164 9,114 18,525 18,868 ----- ----- ------ ------ Net Interest
Income Before Provision for Loan Losses 12,173 11,911 23,251 23,881
Provision for Loan Losses 4,344 2,504 8,740 6,327 ----- ----- -----
----- Net Interest Income After Provision for Loan Losses 7,829
9,407 14,511 17,554 Noninterest Income: Service fees on deposits
1,323 1,600 2,655 3,135 ATM Fees 797 828 1,511 1,605 Gains on sales
of mortgage loans 3,210 1,110 6,824 1,764 Other mortgage banking
revenue 1,487 900 2,783 1,877 Gains on sales of investment
securities, net (89) - (1,805) - Commissions on sales of nondeposit
investment products 131 275 267 515 Commissions on sales of other
insurance products 1,020 840 1,754 1,460 Income from bank owned
life insurance 336 375 672 746 (Loss) Income on trading assets and
liabilities 670 1,020 1,438 - Other 234 1,000 1,292 1,474 --- -----
----- ----- Total Noninterest Income 9,119 7,948 17,391 12,576
Noninterest Expense: Salaries and employee benefits 8,550 9,692
17,757 18,896 Occupancy 2,907 2,771 5,854 5,402 Furniture, fixtures
and equipment 898 966 1,877 1,949 Advertising 333 158 591 588 Data
Processing 459 515 972 1,063 Professional services 711 498 1,569
919 Costs of other real estate owned 1,882 1,062 3,996 1,698
Valuation and secondary marketing reserves - 54 - 234 FDIC
Insurance 1,236 186 1,508 372 Other 4,205 3,484 7,552 6,746 -----
----- ----- ----- Total Noninterest Expense 21,181 19,386 41,676
37,867 Income Before Income Taxes (4,233) (2,031) (9,774) (7,737)
Income Tax Expense (1,824) (1,562) (4,264) (3,990) ------ ------
------ ------ Net Income $(2,409) $(469) $(5,510) $(3,747) =======
===== ======= ======= CONSOLIDATED AVERAGE BALANCES, YIELDS AND
RATES (UNAUDITED) First Mariner Bancorp (Dollars in thousands) For
the three months ended June 30, 2009 2008 Average Yield/ Average
Yield/ Balance Rate Balance Rate ------- ---- ------- ---- Assets:
Loans Commercial Loans and LOC $87,556 5.17% $86,406 5.72% Comm/Res
Construction 103,715 4.94% 116,112 6.05% Commercial Mortgages
329,530 6.65% 285,067 7.43% Residential Constr - Cons 64,441 5.64%
93,155 6.90% Residential Mortgages 151,554 6.25% 88,536 5.60%
Consumer 255,092 12.31% 213,952 13.41% ------- ------- Total Loans
991,888 7.67% 883,228 8.29% Loans held for sale 109,320 5.06%
66,821 5.63% Trading and available for sale securities, at fair
value 50,532 6.03% 80,762 5.68% Interest bearing deposits 57,266
0.15% 82,945 2.00% Restricted stock investments, at cost 7,830
0.00% 5,941 5.66% ----- ----- Total earning assets 1,216,836 6.96%
1,119,697 7.46% Allowance for loan losses (16,682) (13,441) Cash
and other non earning assets 177,315 168,441 ------- ------- Total
Assets $1,377,469 $1,274,697 ========== ========== Liabilities and
Stockholders' Equity: Interest bearing deposits NOW deposits 7,059
0.58% 16,826 0.60% Savings deposits 57,486 0.34% 57,692 0.30% Money
market deposits 157,378 0.75% 221,194 1.28% Time deposits 684,079
3.49% 510,807 4.13% ------- ------- Total interest bearing deposits
906,002 2.77% 806,519 3.00% Borrowings 301,812 3.85% 264,677 4.70%
------- ------- Total interest bearing liabilities 1,207,814 3.04%
1,071,196 3.42% Noninterest bearing demand deposits 118,626 138,583
Other liabilities 6,520 1,527 Stockholders' Equity 44,509 63,391
------ ------ Total Liabilities and Stockholders' Equity $1,377,469
$1,274,697 ========== ========== Net Interest Spread 3.92% 4.04%
Net Interest Margin 3.94% 4.19% CONSOLIDATED AVERAGE BALANCES,
YIELDS AND RATES (UNAUDITED) First Mariner Bancorp (Dollars in
thousands) For the six months ended June 30, 2009 2008 Average
Yield/ Average Yield/ Balance Rate Balance Rate ------- ----
------- ---- Assets: Loans Commercial Loans and LOC $87,989 5.17%
$75,800 6.24% Comm/Res Construction 104,349 5.13% 120,544 6.68%
Commercial Mortgages 327,285 6.69% 280,296 7.58% Residential Constr
- Cons 65,801 5.24% 91,763 7.27% Residential Mortgages 146,082
6.01% 88,593 5.98% Consumer 254,851 12.13% 209,138 13.40% -------
------- Total Loans 986,357 7.59% 866,134 8.55% Loans held for sale
97,162 5.11% 74,637 5.63% Trading and available for sale
securities, at fair value 51,005 6.09% 81,198 5.65% Interest
bearing deposits 58,986 0.16% 72,217 2.51% Restricted stock
investments, at cost 7,603 0.00% 5,962 5.78% ----- ----- Total
earning assets 1,201,113 6.93% 1,100,148 7.72% Allowance for loan
losses (16,949) (12,687) Cash and other non earning assets 177,852
167,980 ------- ------- Total Assets $1,362,016 $1,255,441
========== ========== Liabilities and Stockholders' Equity:
Interest bearing deposits NOW deposits 6,758 0.63% 16,343 0.46%
Savings deposits 55,216 0.34% 55,545 0.32% Money market deposits
158,726 0.81% 238,041 1.63% Time deposits 671,820 3.58% 475,013
4.28% ------- ------- Total interest bearing deposits 892,520 2.86%
784,942 3.12% Borrowings 300,500 3.92% 264,412 5.90% -------
------- Total interest bearing liabilities 1,193,020 3.13%
1,049,354 3.62% Noninterest bearing demand deposits 115,815 138,349
Other liabilities 6,934 2,650 Stockholders' Equity 46,247 65,088
------ ------ Total Liabilities and Stockholders' Equity $1,362,016
$1,255,441 ========== ========== Net Interest Spread 3.80% 4.10%
Net Interest Margin 3.80% 4.27% DATASOURCE: 1st Mariner Bancorp
CONTACT: Mark A. Keidel, EVP/COO, 1st Mariner Bancorp,
+1-410-558-4281 Web Site: http://www.1stmarinerbank.com/
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