SOURCE: Christiana Bank & Trust Company

October 18, 2007 17:06 ET

Christiana Bank Reports Earnings

GREENVILLE, DE--(Marketwire - October 18, 2007) - Christiana Bank and Trust Company (OTCBB: CBTD) (the "Bank") reported net income of $205 thousand for the quarter ended September 30, 2007. Net income for the third quarter 2006 was $ 713 thousand and net income for the second quarter 2007 was $450 thousand. For the first nine months of 2007, net income was $1.2 million versus $1.8 million for the same period last year.

On June 25, 2007, the Bank announced the signing of a definitive agreement for the Bank to be acquired by National Penn Bancshares, Inc. ("National Penn"), in a strategic transaction that the Bank views as beneficial to stockholders, customers and staff. Expenses related to this transaction affected the quarter's and year to date results. The Bank expects additional expenses to be incurred between now and the anticipated closing date in the first quarter of 2008.

Zissimos A. Frangopoulos, President and CEO, stated, "We are pleased with the continued strong record of our national trust business. Christiana, much like the banking industry at large, faces challenges in today's highly competitive environment and unsettled credit markets. The results we announced today reflect this as well as other factors."

Net income per diluted share was $0.12 for the third quarter of 2007 compared to $0.44 for the third quarter in 2006. The Bank reported $0.27 in net income per diluted share for the second quarter 2007. For the first nine months of 2007, net income per diluted share was $0.73 versus $1.12 for the same period in 2006.

Excluding National Penn deal-related pre-tax expenses of approximately $314 thousand incurred in the third quarter of this year and $500 thousand for the nine months ended September 30, 2007, net income was $402 thousand and $1.5 million for the quarter and the nine months of 2007, respectively. On a fully diluted basis, these earnings were $0.24 and $0.92 per share, respectively.

Based on reported earnings, the Bank's resulting return on average assets for the third quarter of 2007 was 0.50% compared to 1.73% for the third quarter 2006 and 1.09% for the second quarter of 2007. Return on average equity for the third quarter of this year amounted to 3.96%, in contrast to 15.95% and 8.99% for third quarter 2006 and the second quarter of this year, respectively. For the nine months ended September 2007, the return on average assets and the return on average equity were 0.99% and 8.11%, respectively, compared to 1.49% and 14.22% last year. Excluding the National Penn transaction expenses, return on average assets was 0.98% for the third quarter and 1.88% for the nine months of 2007, while return on average equity was 7.77% and 15.39%, respectively.

FINANCIAL CONDITION

The Bank ended the third quarter with total assets of $163.7 million as compared to $184.9 million at June 30, 2007, and $166.2 million on September 30, 2006.

Loans, net of allowance for loan losses, were $118.7 million at September 30, 2007 versus $121.5 million at June 30, 2007 and $127.5 million at the end of the third quarter 2006. The loan volume statistics recorded in this quarter reflect the generally slower economic environment and, in particular, the continuing lower activity in real estate and associated sectors.

Total deposits at September 30, 2007 were $140.6 million, as compared to $162.4 million at June 30, 2007, and $132.6 million at September 30, 2006.

EARNINGS

When compared to the same quarter of 2006, the earnings in the third quarter of 2007 reflect lower net interest income after provision and relatively unchanged fee revenues, leading to a decrease in total revenues of 7.5%. Non-interest expense grew by 28.3%, reflecting deal-related expenses for the National Penn transaction and certain increases in operating costs. Excluding the National Penn transaction expenses, non-interest expense during the quarter increased by 13.2%. Compared to the second quarter, non-interest expense increased by 5.1% while total revenues decreased by 6.9%. Excluding the National Penn transaction expenses, non-interest expense was flat when compared to the second quarter.

For the nine months of 2007, total revenues increased by 4.2%, and non-interest expense grew by 23.1%, as measured against the same period last year. Excluding the National Penn deal expenses, non-interest expense increased by 14.7%.

Net Interest Income

Net interest income for the third quarter 2007 was $1.7 million as compared to $1.8 million in the third quarter 2006, and $1.7 million for the second quarter 2007. The change in the net interest income resulted, in part, from an $8.5 million and $4.8 million decline in average loans versus the third quarter of 2006 and second quarter of 2007. Net interest income was also affected by a reduced net interest margin for the third quarter of 2007 of 4.27% compared to 4.63% for the same period in 2006. The net interest margin for the second quarter of this year was 4.27%.

For the nine months, net interest income was $5.0 million, compared to $5.3 million in the same period last year. The net interest margin for the nine months of 2007 was 4.31% versus 4.60% for the same period in 2006.

Provision for loan losses

During the third quarter of 2007, the Bank provided $190 thousand to the allowance for possible loan losses. By comparison, the Bank provided $85 thousand in the second quarter of 2006, and $165 thousand in the second quarter of 2007. The provision for possible loan losses for the first nine months of 2007 totaled $475 thousand, in contrast to $243 thousand provided in the same period last year. The increase in the provision reflects the uncertain economic environment and declines in the real estate sector and related areas.

Other income

For the third quarter of 2007, trust revenues were $1.4 million, compared to $1.4 million in the third quarter of last year and $1.6 million in the second quarter of 2007. For the nine months of 2007, trust revenues totaled $4.4 million versus $3.5 million in the same period in 2006. The growth of trust revenues in the third quarter was adversely affected by disruptions in the mortgage market, resulting in lower than normal levels of new corporate trust business.

Assets under administration totaled $3.8 billion at September 30, 2007, $2.9 billion at June 30, 2007 and $1.7 billion at the end of the third quarter in 2006. Assets under management were $410 million at September 30, 2007, as compared to $260 million at June 30, 2007 and $412 million at September 30, 2006. The increases in volume statistics reflect the establishment of a number of new significant trust relationships.

There were no gains or losses on the sale of securities in the third quarter and the nine months of 2007 or 2006.

The remaining other income for the third quarter of 2007 was $97 thousand compared to $90 thousand in the third quarter of 2006 and $99 thousand in the second quarter of 2007. For the nine months of 2007, other income totaled $319 thousand compared to $286 thousand in the same period of 2006. This largely reflects fees charged for various banking services and earnings on bank-owned life insurance.

Total revenues for the third quarter of 2007 amounted to $3.0 million compared to $3.2 million for the third quarter of 2006 and for the second quarter of 2007. For the first nine months of 2007, total revenues were $9.2 million in contrast to $8.9 million for the same period in 2006.

Non-Interest Expense

Total non-interest expense for the third quarter of 2007 was $2.7 million compared to $2.1 million in the third quarter of 2006, and $2.5 million in the second quarter of 2007. For the nine months of 2007, total non-interest expense was $7.4 million as measured against $6.0 million in the nine months of 2006. Total non-interest expense increased 28.3% relative to the same quarter last year, while expenses increased by 5.1% compared to the second quarter of 2007. For the nine months, total non-interest expenses increased 23.1% versus the same period last year. Excluding the National Penn deal-related expenses, quarterly expenses increased by 13.2% relative to last year and not at all relative to the second quarter of this year, while nine month expenses increased by 14.7% relative to last year.

Personnel expense was $1.4 million in the third quarter of 2007, compared to $1.3 million in the third quarter of 2006 and in the second quarter of 2007. Personnel expense for the nine months of this year was $3.9 million versus $3.6 million in the same period last year. The Bank's staff included 56 full-time equivalent employees at September 30, 2007 as compared to 47 at September 30, 2006. Additionally, increased incentives and commissions due to the increased trust business during the year are reflected in personnel expense.

Occupancy expense for the third quarter of 2007 was $115 thousand, compared to $96 thousand in the third quarter of 2006 and $117 thousand in the second quarter 2007. Occupancy expense for the first nine months of this year was $336 thousand versus $283 thousand in the same period last year. As a result of the growing business and associated staff expansion, the Bank entered into a lease for additional office space in Wilmington, Delaware, starting in March 2007.

Trust operating expense totaled $169 thousand in the third quarter of 2007, compared to $120 thousand in the third quarter of 2006 and $139 thousand in the second quarter of 2007. For the nine months, trust operating expense was $491 thousand versus $351 thousand in the same period last year.

The remaining other expense totaled $971 thousand for the third quarter of 2007, compared to $606 thousand in the third quarter of 2006 and $970 thousand in the second quarter of 2007. For the nine months of 2007, other expenses totaled $2.7 million versus $1.8 million for the same period last year. For the third quarter of 2007 and the nine months of 2007, additional expenses related to the National Penn deal were $314 thousand and $500 thousand, respectively.

ASSET QUALITY

At September 30, 2007, there were $1.4 million in non-performing assets compared to $1.3 million at June 30, 2007 and none at September 30, 2006. The increase in non-performing assets relative to the same time last year represents, almost exclusively, a single borrowing relationship where the Bank has acquired the underlying real estate collateral in satisfaction of the obligation.

During the third quarter of 2007, no loans were charged-off, while loan charge-offs in the second quarter of 2007 amounted to $355 thousand, all relating to the above mentioned problem loan. For the first nine months of 2007, loan charge-offs totaled $355 thousand while no loans were charged off during the nine months of 2006.

The allowance for loan losses was $1.4 million, or 1.13% of total loans at September 30, 2007, $1.2 million, or 0.95% of total loans at June 30, 2007, and $1.2 million, or 0.92% of total loans at September 30, 2006.

CAPITAL

Stockholders' equity totaled $20.9 million at September 30, 2007, compared to $20.3 million at June 30, 2007, and $18.3 million at September 30, 2006. The increase in stockholders' equity during the third quarter of 2007 reflects the earnings during the period, the issuance of shares to cover the Bank's contribution of $46 thousand to its 401(k) plan, proceeds and tax benefit recognition from the exercise of stock options amounting to $238 thousand and a $88 thousand decrease, net of applicable federal tax, in unrealized losses on securities classified as available-for-sale. All the regulatory capital ratios of the Bank are in excess of the "well-capitalized" threshold.

THE COMPANY

Christiana Bank and Trust Company, headquartered in Greenville, Delaware, is listed on the OTC Bulletin Board under the symbol "CBTD." The Bank provides commercial banking as well as trust and asset management services from locations in Greenville and Wilmington, Delaware. In addition, Christiana Corporate Services, Inc., a wholly owned subsidiary, provides commercial domicile services in Delaware and Nevada and Christiana Trust Company LLC, a wholly owned non-depository trust company, provides commercial domicile and trust services in Nevada.

Forward-looking Statements

This news release contains forward-looking statements. Such statements are subject to certain factors that may cause the Bank's results to vary from those expected. These factors include changing economic and financial market conditions, competition, ability to execute the Bank's business plan, items already mentioned in this press release and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of this date. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect events and circumstances that arise after the date of this release.



Balance Sheet (unaudited)
Dollar amounts in thousands

                             Sep-07    Jun-07    Mar-07    Dec-06    Sep-06

Cash and due from banks   $  12,715 $  30,267 $   4,815 $   5,368 $   7,854
Investment securities        21,936    22,895    23,126    23,172    20,985

Loans (net of unearned
 income)                    120,048   122,703   129,567   130,766   128,687
  Allowance for loan
   losses                     1,360     1,170     1,360     1,240     1,180
                          --------- --------- --------- --------- ---------
Net loans                   118,688   121,533   128,207   129,526   127,507

Bank premises and
 equipment - net              3,148     3,203     3,145     3,061     3,102
Other assets                  7,201     7,041     6,768     7,281     6,775
                          --------- --------- --------- --------- ---------

Total assets              $ 163,688 $ 184,939 $ 166,061 $ 168,408 $ 166,223
                          ========= ========= ========= ========= =========

Non-interest bearing
 deposits                 $  45,541 $  51,795 $  41,840 $  42,228 $  46,278
Savings and interest
 bearing demand              61,102    64,642    55,794    57,545    56,047
Time deposits                33,971    45,918    44,960    45,352    30,283
                          --------- --------- --------- --------- ---------
  Total deposits            140,614   162,355   142,594   145,125   132,608

Borrowings                        -         -       700     1,000    12,800
Other liabilities             2,198     2,286     2,936     3,170     2,555
                          --------- --------- --------- --------- ---------

Total liabilities           142,812   164,641   146,230   149,295   147,963

Total stockholders'
 equity                      20,876    20,298    19,831    19,113    18,260
                          --------- --------- --------- --------- ---------

Total liabilities and
 stockholders' equity     $ 163,688 $ 184,939 $ 166,061 $ 168,408 $ 166,223
                          ========= ========= ========= ========= =========



Income Statement (unaudited)
Dollar amounts in thousands

                           For the three months ended         Year to Date
                     Sep-07  Jun-07  Mar-07  Dec-06  Sep-06  Sep-07  Sep-06
Total interest
 income             $ 2,812 $ 2,842 $ 2,875 $ 2,959 $ 2,945   8,529   8,331
Total interest
 expense              1,153   1,177   1,202   1,189   1,130   3,532   3,025
                    ------- ------- ------- ------- ------- ------- -------
  Net interest
   income             1,659   1,665   1,673   1,770   1,815   4,997   5,306
Provision for loan
 losses                 190     165     120      60      85     475     243
                    ------- ------- ------- ------- ------- ------- -------

Net interest income
 after provision      1,469   1,500   1,553   1,710   1,730   4,522   5,063

Trust fees            1,411   1,600   1,378   1,548   1,399   4,389   3,508
Service fees and
 other income            97      99     123      95      90     319     286
Gain on sale of
 securities               -       -       -       -       -       -       -
                    ------- ------- ------- ------- ------- ------- -------
  Total non-
   interest income    1,508   1,699   1,501   1,643   1,489   4,708   3,794

Total revenues        2,977   3,199   3,054   3,353   3,219   9,230   8,857
                    ------- ------- ------- ------- ------- ------- -------

Personnel expenses    1,418   1,318   1,181   1,319   1,262   3,917   3,564
Occupancy expense       115     117     104     109      96     336     283
Trust operating
 expense                169     139     183     161     120     491     351
Other expense           971     970     713     631     606   2,654   1,814
                    ------- ------- ------- ------- ------- ------- -------
  Total non-
   interest expense   2,673   2,544   2,181   2,220   2,084   7,398   6,012

Income before taxes     304     655     873   1,133   1,135   1,832   2,845
Federal and state
 income taxes            99     205     314     409     422     618   1,037
                    ------- ------- ------- ------- ------- ------- -------

Net income          $   205 $   450 $   559 $   724 $   713   1,214   1,808
                    ======= ======= ======= ======= ======= ======= =======




SELECTED CONSOLIDATED FINANCIAL DATA (unaudited)
Dollar amounts in thousands except share and per share

                              For and at the Three Months Ended
                       Sep-07     Jun-07     Mar-07     Dec-06     Sep-06

Share Data*
Book value per share
 (period end)        $   13.85  $   13.61  $   13.31  $   12.89  $   12.37
Earnings per share
 (basic)             $    0.14  $    0.30  $    0.38  $    0.49  $    0.48
Earnings per share
 (diluted)           $    0.12  $    0.27  $    0.34  $    0.44  $    0.44
Basic shares         1,500,128  1,491,093  1,486,499  1,480,227  1,489,763
Diluted shares       1,677,309  1,653,163  1,637,543  1,643,598  1,638,862


Selected Averages
Average Gross Loans  $ 120,380  $ 125,135  $ 128,268  $ 129,903  $ 128,851
Average total
 deposits            $ 140,127  $ 139,440  $ 132,124  $ 128,147  $ 131,766
Average earning
 assets (1)          $ 154,068  $ 156,394  $ 154,569  $ 156,125  $ 155,418

Selected Performance
 Ratios
Return on average
 assets                   0.50%      1.09%      1.39%      1.74%      1.73%
Return on average
 equity                   3.96%      8.99%     11.68%     15.45%     15.95%
Net interest margin       4.27%      4.27%      4.39%      4.50%      4.63%
Non-interest income
 as % of revenue         50.67%     53.12%     49.15%     49.01%     46.26%
Non-interest income
 as % of average
 assets                   3.69%      4.12%      3.67%      3.97%      3.63%
Non-interest expense
 as % of average
 assets                   6.54%      6.17%      5.33%      5.36%      5.09%

Asset Quality
Net chargeoffs       $       -  $     355  $       -  $       -  $       -
Non-performing loans $     168  $     240  $     117  $      87  $       -
Other real estate
 owned               $   1,189  $   1,065  $       -  $       -  $       -
Allowance for loan
 losses to total
 loans (period end)       1.13%      0.95%      1.05%      0.95%      0.92%
Non-performing loans
 to total loans
 (period end)             0.14%      0.20%      0.09%      0.07%      0.00%

Capital
Stockholders'
 equity to total
 assets (period end)     12.75%     10.98%     11.94%     11.35%     10.99%
Tier 1 leverage ratio    12.83%     12.42%     12.20%     11.64%     11.28%
Tier 1 capital to
 risk-weighted assets    14.70%     13.74%     13.33%     12.81%     12.44%
Total capital to
 risk-weighted assets    15.65%     14.53%     14.24%     13.63%     13.23%


                                               Year to Date
                                             Sep-07     Sep-06


Share Data*
Book value per share (period end)          $   13.85  $   12.37
Earnings per share (basic)                 $    0.81  $    1.23
Earnings per share
 (diluted)                                 $    0.73  $    1.12
Basic shares                               1,492,623  1,471,622
Diluted shares                             1,658,614  1,618,046


Selected Averages
Average Gross Loans                        $ 124,565  $ 124,962
Average total deposits                     $ 137,260  $ 136,108
Average earning assets (1)                 $ 155,008  $ 154,232

Selected Performance Ratios
Return on average assets                        0.99%      1.49%
Return on average equity                        8.11%     14.22%
Net interest margin                             4.31%      4.60%
Non-interest income as % of revenue            51.01%     42.84%
Non-interest income as % of average assets      3.83%      3.12%
Non-interest expense as % of average assets     6.01%      4.94%

Asset Quality
Net chargeoffs                             $     355  $       -
Non-performing loans                       $     168  $       -
Other reall estate owned                   $   1,189  $       -
Allowance for loan losses to total loans
 (period end)                                   1.13%      0.92%
Non-performing loans to total loans
 (period end)                                   0.14%      0.00%

Capital
Stockholders' equity to total assets
 (period end)                                  12.75%     10.99%
Tier 1 leverage ratio                          12.83%     11.28%
Tier 1 capital to risk-weighted assets         14.70%     12.44%
Total capital to risk-weighted assets          15.65%     13.23%

(1) Earning assets include loan balances before loan loss reserve
    and AFS investments before unrealized holding gains or losses.

Certain reclasses have been made to conform prior periods to current period presentation.

Contact Information

  • Contact:
    Chris Cusatis
    302-888-7730