SOURCE: Boardwalk Bank

January 24, 2006 10:05 ET

Boardwalk Bank Reports 2005 Results

LINWOOD, NJ -- (MARKET WIRE) -- January 24, 2006 -- Boardwalk Bank (NASDAQ: BORD) (NASDAQ: BORDW) announced its operating results for the quarter and year ended December 31, 2005.

Fourth quarter 2005 net income was $759,000 or $0.22 diluted earnings per share compared to net income of $637,000 or $0.22 diluted earnings per share in the fourth quarter of 2004. For the quarter ended December 31, 2005, the Bank reported net interest income of $2,862,000 compared to $2,137,000 for the quarter ended December 31, 2004.

Net Income for the year 2005 was $2,600,000 or $0.77 diluted earnings per share compared to net income of $2,071,000 or $0.75 diluted earnings per share for the year ended December 31, 2004, an increase of $529,000 or 26%. Net income before taxes for the year 2005 was $3,810,000 compared to $3,052,000 for 2004, an increase of $758,000 or 25%. Net interest income exhibited strong growth as the bank continued its robust loan growth. For the year ended December 31, 2005, net interest income was $10,375,000 compared to $7,647,000 for the previous year, an increase of $2,728,000 or 36%. Net interest margin for the year 2005 was 3.27% compared to 3.15% for the year 2004. Return on average assets for the year 2005 was .77% compared to 2004 at .79%. Return on average equity for the year 2005 was 7.93% compared to 8.13% for the year 2004. Return on average equity was affected by an offering of additional shares of common stock completed during the second quarter of 2005.

At December 31, 2005, the Bank's total assets increased to $401,666,000 from $298,395,000 at December 31, 2004, an increase of $103,271,000 or 35%. Total loans rose to $244,237,000 from $179,881,000 at December 31, 2004, for a 36% increase.

For the quarter ended December 31, 2005, the Bank's provision for loan losses was $125,000 increasing the allowance for loan losses to $2,861,000 or 1.17% of total loans. For the entire year 2005, the provision for loan losses was $674,000 compared to $248,000 for the previous year. The Bank has no non-performing loans at December 31, 2005.

At December 31, 2005, the Bank's shareholders' equity totaled $35,343,000 or 8.80% of period end total assets compared to $27,031,000 or 9.06% of period end assets at year-end 2004.

Michael D. Devlin, President and CEO of Boardwalk, stated:

"The Bank enjoyed an excellent year. We continue with double-digit growth in loans and deposits. Our strong performance was achieved even as we opened two additional branches. Our first Egg Harbor Township office opened in August, and ended the year with $35 million in deposits. Our Cape May Court House office opened in October and ended the year with $26 million in deposits.

"Management has taken steps to plan for the future of the Bank by setting specific targets for the period ending December 31, 2008, which are intended to maximize the value of the Bank. The specific targets are:

--  We intend to complete our branching plan by June of 2007.  To achieve
    the coverage of our targeted market, we plan to open offices in Cape May
    City, Vineland and Egg Harbor Township in 2006, and Hamilton Township in
    2007.  That will bring our total to 9.
--  We expect all of our offices to have achieved at least $30 million in
    deposits by December 31, 2008.  We believe that will provide the best value
    to our branch franchise.
--  Our existing stock purchase warrants will expire at the end of 2006
    and, due to the performance of our stock, we anticipate that a very large
    majority of the warrant holders will exercise their right to purchase our
    common stock at $11.43 per share.  The additional capital of approximately
    $13.6 million will be valuable to support the growth of our branches.
--  In 2006, we expect to form a bank holding company.  Among other
    things, this charter will provide us with flexibility in managing our
    capital that is not permitted with our state bank charter.  For example,
    following a successful holding company formation we would expect to
    institute a stock buyback program that will allow us to keep capital at
    optimal levels.
--  We intend to continue to pay cash dividends throughout this period,
    with a target of a 25% dividend pay out ratio.  We do not expect to
    consider additional stock dividends until the outstanding warrants have
    been exercised or expire.
--  Management believes that as we complete our plans for the growth of
    the organization, we should begin to focus more on EPS growth.  Our diluted
    earnings per share in 2005 were $0.77 which represented an increase over
    2004 performance even after the addition of 431,650 shares in 2005.  We
    currently project diluted EPS of $0.88 for 2006 and goals of $0.99 in 2007
    and $1.20 for 2008.
--  We project that total assets at year end 2006 will be $470 million.
    By year end 2007 we project $580 million with assets at $650 million at
    December 31, 2008.
    
"While there are benefits for the company in charting its course for the next few years, we also believe that sharing these goals and targets with our shareholders is an important aspect of conveying the potential value of the company."

Boardwalk Bank's Annual Meeting of Shareholders is scheduled for 10:00 a.m. on Thursday, April 27, 2005.

SELECTED BALANCE SHEET DATA
(Unaudited, in thousands)

                           December 31, 2005    December 31, 2004
                           -----------------    -----------------
Investments                         $130,983             $ 92,414
Loans Net of Reserves                241,377              177,696
Allowance for Loan Losses              2,861                2,185
Total Assets                         401,666              298,395
Total Deposits                       272,494              210,954
Total Borrowings                      92,695               59,588
Total Equity                          35,343               27,031


SELECTED INCOME STATEMENT DATA
(Unaudited, in thousands except per share data)

                           For the three months      For the year
                            ended December 31,    ended December 31,
                              2005       2004       2005       2004
                           ---------  ---------  ---------  ---------
Interest Income            $   5,501  $   3,666  $  18,867  $  12,699
Interest Expense           $   2,639  $   1,530  $   8,493  $   5,052
Net interest income        $   2,862  $   2,137  $  10,375  $   7,647
Provision for loan losses  $     125  $     116  $     674  $     248
Pre-tax income             $   1,118  $     877  $   3,810  $   3,052
Net income                 $     759  $     637  $   2,600  $   2,071
Basic earnings per share   $    0.25  $    0.26  $    0.88  $    0.85
Diluted earnings per share $    0.22  $    0.22  $    0.77  $    0.75
Weighted average diluted
 shares outstanding        3,487,867  2,848,993  3,386,679  2,752,044
For further information contact Michael D. Devlin, CEO, Boardwalk Bank: (888) 720-2265.

This release contains statements of Boardwalk Bank's strategies, plans and objectives, and may be identified by the use of words such as "may," "will," "could," "should," "project," "expect," "anticipate," "plan," "intend," and similar words. These statements constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties, any of which may cause actual results to differ materially from the results or objectives expressed or implied from the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, general economic conditions; changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other competitive, governmental, regulatory, and technological factors affecting the Bank and its operations, pricing, products, and services. Other factors that may cause actual results to differ from results expressed or implied by forward-looking statements are described in the Bank's registration on Form 10-SB and other periodic filings by the Bank with the FDIC.

Contact Information

  • For further information contact:
    Michael D. Devlin
    CEO
    Boardwalk Bank
    (888) 720-2265