SOURCE: Christiana Bank & Trust Company

April 20, 2006 16:35 ET

Christiana Bank Reports Continued Strong Earnings

First Quarter 2006

GREENVILLE, DE -- (MARKET WIRE) -- April 20, 2006 -- Christiana Bank and Trust Company (OTC BB: CBTD) (the "Bank") reported net income of $416 thousand for the quarter ended March 31, 2006, an increase of $155 thousand or 59% from $261 thousand in the first quarter of 2005. In the fourth quarter of 2005 net income was $512 thousand.

Net income per diluted share was $0.29 for the first quarter of 2006, an increase of $0.09 or 45% from $0.20 reported for the same quarter in 2005. The Bank reported $0.37 in net income per diluted share for the 2005 fourth quarter. All per share data have been restated for the 5% stock dividend declared on October 20, 2005, and distributed November 30, 2005.

Zissimos A. Frangopoulos, President and CEO stated, "We are very pleased with the continued strong increase compared to the same period last year. All of our businesses are showing robust growth."

FINANCIAL CONDITION

The Bank ended the first quarter with total assets of $157.5 million as compared to $166.1 million at December 31, 2005 and $144.8 million on March 31, 2005.

Loans, net of allowance for loan losses, were $121.8 million at March 31, 2006 as compared to $116.0 million at the end of 2005 and $102.7 million at March 31, 2005, reflecting growth of 5% and 19% respectively.

Total deposits at March 31, 2006 were $139.2 million as compared to $148.3 million at December 31, 2005 and $121.4 million at March 31, 2005.

EARNINGS

Relative to the same period last year, the earnings in the first quarter of 2006 reflect growth in revenues at a faster rate than expenses. The increase in revenues was due to continued growth in net interest income as well as strong growth in trust and related fees. The growth in 2006 expenses related to the growing volume of business. The 2005 expenses include the prepayment penalty of $166 thousand, which was incurred for the early repayment of $2 million in fixed rate long-term debt. There was no prepayment penalty expense in the first quarter of 2006.

The linked quarter comparison is impacted by the refund of $67 thousand in the fourth quarter of 2005 resulting from certain charges that had been erroneously assessed to and paid by the Bank. Also, the fourth quarter of 2005 included penalties of $42 thousand for the early repayment of fixed rate long-term debt.

Net Interest Income

Net interest income for the first quarter 2006 was $1.6 million as compared to $1.3 million in the first quarter 2005, and $1.7 million for the fourth quarter 2005. The increase in the net interest income over the prior year primarily reflects increased margins and the growth in loans. The net interest margin for the first quarter 2006 was 4.62% compared to 3.96% in the same period in 2005 and 4.73% in the fourth quarter of 2005. Average loans in the first quarter of 2006 were $119.4 million compared to $101.4 million in the same period last year and $114.3 million in the fourth quarter of 2005.

The improvement in the net interest margin over the same quarter last year reflects interest rates on earning assets rising faster than the interest rates on deposits and other interest-bearing liabilities. In addition, the margin benefited by the repayment in 2005 of fixed rate, long-term debt and replacement by lower-cost funding sources. The excess of rate-sensitive assets over rate-sensitive liabilities is a major factor contributing to the improvement of the net interest margin. If this interest rate re-pricing profile were to remain unchanged, the net interest margin would contract in a declining rate environment. During the first quarter of this year, the excess of rate-sensitive assets over rate-sensitive liabilities has been intentionally reduced so as to lessen the interest-rate risk profile of the Bank while still maintaining an attractive margin. This action has resulted in a slight compression of the net interest margin and is reflected in the lower net interest income when compared to the fourth quarter of 2005.

Provision for loan losses

During the first quarter of 2006 the Bank provided $63 thousand to the allowance for possible loan losses. By comparison the Bank provided $10 thousand in the first quarter of 2005 and $17 thousand in the fourth quarter of 2005. Since the provision for loan losses is made based on the balance of loans outstanding at the end of the period, loan balance increases late in the first quarter were fully included in the provision while they impacted only slightly the average loan balances and associated net interest income.

Other income

For the quarter ended March 31, 2006, trust fee income was $916 thousand as compared to $800 thousand in the first quarter of 2005. Trust fees in the fourth quarter of 2005 were $912 thousand. Assets under administration totaled $2.0 billion at March 31, 2006, as compared to $1.7 billion at March 31, 2005 and $1.8 billion at December 31, 2005 Assets under management were $529 million at March 31, 2006, as compared to $603 million at March 31, 2005 and $512 million at December 31, 2005.

The remaining other income was $102 thousand in the first quarter of 2006, as compared to $97 thousand in the first quarter of 2005 and $83 thousand in the fourth quarter of 2005. This income largely reflects fees charged for various banking services and earnings on bank-owned life insurance.

Total revenues for the first quarter of 2006 amounted to $2.6 million, compared to $2.2 million for the first quarter of 2005 and $2.7 million for the fourth quarter of 2005. Relative to the same period last year, total revenue increased by 19%.

Non-Interest Expense

Personnel expense was $1.1million in the first quarter of 2006, as compared to $907 thousand in the first quarter of 2005 and $1.1 million in the fourth quarter of 2005. The Bank's staff consisted of 44 full-time equivalent employees at March 31, 2006, as compared to 44 at March 31, 2005 and 41 at December 31, 2005. Also, in order to comply with accounting changes related to stock-based compensation, the Bank recognized an additional $16 thousand in personnel expense during the first quarter of 2006.

Occupancy expense for the first quarter 2006 was $94 thousand, compared to $101 thousand in the first quarter 2005 and $93 thousand in the fourth quarter 2005.

Trust operating expense totaled $128 thousand in the first quarter of 2006, compared to $115 thousand in the first quarter of 2005 and $49 thousand in the fourth quarter of 2005. The fourth quarter 2005 expense includes the benefit of a $67 thousand refund for certain charges that had been erroneously assessed to and paid by the Bank.

Other expense totaled $668 thousand for the first quarter of 2006, compared to $670 thousand in the first quarter 2005 and $620 thousand in the fourth quarter of 2005. The first quarter 2005 other expense includes $166 thousand in prepayment fees for the early redemption of certain fixed rate borrowings, and the fourth quarter 2005 includes $42 thousand in similar prepayment fees.

Total non-interest expense for the first quarter of 2006 was $1.9 million, compared to $1.8 million in the first quarter of 2005 and $1.9 million in the fourth quarter of 2005. Relative to the same period last year, total non-interest expense increased 8%, while on a linked quarter basis it was 5% higher than the fourth quarter of 2005.

ASSET QUALITY

There were no non-performing loans at March 31, 2006, or at March 31, 2005 or at December 31, 2005. No loans were charged off during the first quarter of 2006. There were no charge-offs in either the first quarter of 2005 or the fourth quarter of 2005.

The allowance for loan losses was $1.0 million or 0.81% of total loans at March 31, 2006, $937 thousand or 0.80% of total loans at December 31, 2005, and $829 thousand or 0.80% of total loans at March 31, 2005.

CAPITAL

Stockholders' equity totaled $16.6 million at March 31, 2006, compared to $16.0 million at December 31, 2005 and $14.5 million at March 31, 2005. The increase in stockholders' equity during the first quarter of 2005 reflects the earnings during the period, the issue of shares to cover the Bank's contributions to its 401(k) plan of $22 thousand and additional capital of $157 thousand from the exercise of options, offset by an increase in unrealized losses on securities classified as available-for-sale of approximately $25 thousand net of applicable federal tax.

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.


                        CHRISTIANA BANK AND TRUST CO


Income Statement (unaudited)              For the three months ended
Dollar amounts in thousands          Mar-06  Dec-05  Sep-05  Jun-05  Mar-05


Total interest income               $ 2,519 $ 2,394 $ 2,228 $ 1,936 $ 1,792
Total interest expense                  871     710     617     526     483
                                    ------- ------- ------- ------- -------
     Net interest income              1,648   1,684   1,611   1,410   1,309
Provision for loan losses                63      17      35      56      10
                                    ------- ------- ------- ------- -------

Net interest income after provision   1,585   1,667   1,576   1,354   1,299

Trust fees                              916     912     756     803     800
Service fees and other income           102      83      83      87      97
                                    ------- ------- ------- ------- -------
     Total non-interest income        1,018     995     839     890     897

Total revenues                        2,603   2,662   2,415   2,244   2,196
                                    ------- ------- ------- ------- -------

Personnel expenses                    1,054   1,090     990     898     907
Occupancy expense                        94      93     101      97     101
Trust operating expense                 128      49     100     119     115
Other expense                           668     620     634     552     670
                                    ------- ------- ------- ------- -------
     Total non-interest expense       1,944   1,852   1,825   1,666   1,793

Income before taxes                     659     810     590     578     403
Federal and state income taxes          243     298     205     204     142
                                    ------- ------- ------- ------- -------

Net income                          $   416 $   512 $   385 $   374 $   261
                                    ======= ======= ======= ======= =======

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



                       CHRISTIANA BANK AND TRUST CO

Balance Sheet (unaudited)
Dollar amounts in thousands  Mar-06    Dec-05    Sep-05    Jun-05    Mar-05


Cash and due from banks   $   6,092 $  20,776 $  11,111 $  12,218 $  16,020
Investment securities        21,137    21,260    20,728    20,053    17,739

Loans (net of unearned
 income)                    122,832   116,974   114,826   110,578   103,539
     Allowance for loan
      losses                  1,000       937       920       885       829
                          --------- --------- --------- --------- ---------
Net loans                   121,832   116,037   113,906   109,693   102,710

Bank premises and
 equipment - net              3,044     3,095     3,123     3,162     3,201
Other assets                  5,385     4,918     5,141     5,154     5,161
                          --------- --------- --------- --------- ---------

Total assets              $ 157,490 $ 166,086 $ 154,009 $ 150,280 $ 144,831
                          ========= ========= ========= ========= =========


Non-interest bearing
 deposits                 $  39,062 $  40,968 $  51,441 $  44,040 $  44,093
Savings and interest
 bearing demand              75,047    80,805    61,856    60,932    56,078
Time deposits                25,120    26,530    19,134    22,184    21,198
                          --------- --------- --------- --------- ---------
     Total deposits         139,229   148,303   132,431   127,156   121,369

Borrowings                        -         -     5,000     7,000     8,000
Other liabilities             1,691     1,799     1,124     1,061       928
                          --------- --------- --------- --------- ---------

Total liabilities           140,920   150,102   138,555   135,217   130,297

Total stockholders'
 equity                      16,570    15,984    15,454    15,063    14,534
                          --------- --------- --------- --------- ---------

Total liabilities and
 stockholders' equity     $ 157,490 $ 166,086 $ 154,009 $ 150,280 $ 144,831
                          ========= ========= ========= ========= =========

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



                        CHRISTIANA BANK AND TRUST CO

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

                               For and at the Three Months Ended
                       Mar-06     Dec-05     Sep-05     Jun-05     Mar-05

Share Data  *
Book value per share
 (period end)        $   12.48  $   12.17  $   11.86  $   11.59  $   11.21
Earnings per share
 (basic)             $    0.31  $    0.39  $    0.30  $    0.29  $    0.20
Earnings per share
 (diluted)           $    0.29  $    0.37  $    0.29  $    0.29  $    0.20
Basic shares         1,321,627  1,310,432  1,303,032  1,299,171  1,295,697
Diluted shares       1,457,114  1,403,780  1,350,849  1,319,307  1,314,345


Selected Averages
Average Gross Loans  $ 119,368  $ 114,343  $ 113,025  $ 106,941  $ 101,385
Average total
 deposits            $ 130,809  $ 123,990  $ 124,161  $ 111,229  $ 117,463
Average earning
 assets (1)          $ 144,542  $ 141,307  $ 141,330  $ 129,993  $ 133,883

Selected Performance
 Ratios
Return on average
 assets                   1.11%      1.36%      1.02%      1.08%      0.74%
Return on average
 equity                  10.33%     12.97%     10.00%     10.11%      7.30%
Net interest margin       4.62%      4.73%      4.52%      4.35%      3.96%
Non-interest income
 as % of revenue         39.11%     37.38%     34.75%     39.66%     40.84%
Non-interest income
 as % of average
 assets                   2.67%      2.67%      2.25%      2.57%      2.52%
Non-interest expense
 as % of average
 assets                   5.10%      4.97%      4.90%      4.82%      5.04%

Asset Quality
Net chargeoffs       $       -  $       -  $       -  $       -  $       -
Non-performing loans $       -  $       -  $       -  $       -  $       -
Allowance for loan
 losses to total
 loans (period end)       0.81%      0.80%      0.80%      0.80%      0.80%
Non-performing loans
 to total loans
 (period end)             0.00%      0.00%      0.00%      0.00%      0.00%

Capital
Stockholders' equity
 to total assets
 (period end)            10.52%      9.62%     10.03%     10.02%     10.04%
Tier 1 leverage
 ratio                   11.07%     10.91%     10.49%     10.98%     10.37%
Tier 1 capital to
 risk-weighted
 assets                  11.76%     11.73%     11.70%     11.82%     12.23%
Total capital to
 risk-weighted
 assets                  12.46%     12.40%     12.39%     12.51%     12.92%

(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.

 * Adjusted for 5% stock Dividend declared October 20, 2005

Contact Information

  • Contact:
    Chris Cusatis
    CFO
    (302) 888-7730
    Email Contact

    CHRISTIANA BANK AND TRUST COMPANY
    3801 Kennett Pike
    Greenville, DE 19807
    (302) 421-5800