SOURCE: Christiana Bank & Trust Company

April 19, 2007 14:09 ET

Christiana Bank Reports Continued Strong Earnings

GREENVILLE, DE -- (MARKET WIRE) -- April 19, 2007 -- Christiana Bank and Trust Company (OTCBB: CBTD) (the "Bank") reported net income of $559 thousand for the quarter ended March 31, 2007, an increase of $143 thousand, or 34%, from $416 thousand in the first quarter of 2006. In the fourth quarter of 2006, net income was $724 thousand.

Net income per diluted share was $0.34 for the first quarter of 2007, an increase of $0.08, or 31%, from $0.26 reported for the same quarter in 2006. First quarter 2006 per share data have been restated for the 5% stock dividends distributed August 31, 2006 and November 30, 2006. The Bank reported $0.44 in net income per diluted share for the 2006 fourth quarter.

The Bank's return on average assets for the first quarter was 1.39% compared to 1.11% for the first quarter of 2006. For the fourth quarter of 2006, return on average assets was 1.74%.

Return on average equity for the first quarter amounted to 11.68% compared to 10.33% in the first quarter of the previous year. For the fourth quarter of 2006, the return on average equity was 15.45%. Return on equity is a function of net income and leverage. Leverage decreased in the first quarter of 2007 as average assets to average equity was 8.43x (times) compared to 9.34x (times) in the first quarter of 2006 and 8.90x (times) in the fourth quarter of 2006.

Relative to the same period last year, revenues grew at a faster rate than expenses. The increase in revenues was due primarily to strong growth in trust and related fees as well as continued growth in net interest income. The growth in 2007 expenses related to the growing volume of business.

Zissimos A. Frangopoulos, President and CEO, stated, "As banks enter a more challenging economic environment, we continue to remain focused on providing the highest quality service to our customers and creating value for our shareholders."

FINANCIAL CONDITION

The Bank ended the first quarter with total assets of $166.1 million as compared to $168.4 million at December 31, 2006 and $157.5 million on March 31, 2006.

Loans, net of allowance for loan losses, were $128.2 million at March 31, 2007 as compared to $129.5 million at the end of 2006 and $121.8 million at March 31, 2006.

Total deposits at March 31, 2007 were $142.6 million as compared to $145.1 million at December 31, 2006 and $139.2 million at March 31, 2006.

EARNINGS

Total revenues for the first quarter of 2007 amounted to $3.1 million, compared to $2.6 million for the first quarter of 2006 and $3.4 million for the fourth quarter of 2006. Relative to the same period last year, total revenue increased by 17%.

NET INTEREST INCOME

Net interest income for the first quarter 2007 was $1.7 million as compared to $1.6 million in the first quarter 2006, and $1.8 million for the fourth quarter 2006. When compared to the quarter ended March 31, 2006, the net interest income for the first quarter of 2007 benefited by an increase in yields and average balances of earning assets, primarily in loans, offset by increased funding costs. The increase in funding costs resulted from increased rates on deposits and borrowings along with a change in the funding mix, which used more time deposits and overnight borrowings. On a linked quarter basis, a slight drop in average loans and a largely unchanged funding mix pattern resulted in lower net interest income. The Bank continues its efforts to attract and preserve low-cost deposits. The net interest margin for the first quarter 2007 was 4.39% compared to 4.62% in the same period in 2006 and 4.50% in the fourth quarter of 2006. Average loans in the first quarter of 2007 were $128.3 million compared to $119.4 million in the same period last year and $129.9 million in the fourth quarter of 2006.

PROVISION FOR LOAN LOSSES

During the first quarter of 2007, the Bank provided $120 thousand to the allowance for possible loan losses. By comparison, the Bank provided $63 thousand in the first quarter of 2006 and $60 thousand in the fourth quarter of 2006. While the Bank has achieved favorable asset quality, it recognizes that this may be difficult to sustain if the overarching credit environment continues to deteriorate.

OTHER INCOME

For the quarter ended March 31, 2007, trust fee income was $1.4 million as compared to $916 thousand in the first quarter of 2006. Trust fees in the fourth quarter of 2006 were $1.5 million. Assets under administration totaled $2.8 billion at March 31, 2007, as compared to $2.0 billion at March 31, 2006 and $1.8 billion at December 31, 2006. Assets under management were $294 million at March 31, 2007, as compared to $529 million at March 31, 2006 and $350 million at December 31, 2006. During the period, several trusts reached scheduled termination and this resulted in distributions approximately equal to the reduction in assets under management.

The Bank considers revenue growth to be a better indicator of success of its trust business as compared to other volume statistics. Assets under administration or assets under management are not always particularly good indicators, as client asset levels may be affected by trust distributions and trust terminations, as well as by the timing of new business and changes in market valuation. In addition, assets related to certain trust transactions may fluctuate significantly from one reporting period to the next depending on the particular transaction. Finally, investment management is only one of many services the Bank provides to its trust clients and is not necessarily indicative of the overall trust business.

The remaining other income was $123 thousand in the first quarter of 2007, as compared to $102 thousand in the first quarter of 2006 and $95 thousand in the fourth quarter of 2006. This income largely reflects fees charged for various banking services and earnings on bank-owned life insurance.

NON-INTEREST EXPENSE

Personnel expense was $1.2 million in the first quarter of 2007, as compared to $1.1 million in the first quarter of 2006 and $1.3 million in the fourth quarter of 2006. The Bank's staff consisted of 54 full-time equivalent employees at March 31, 2007, as compared to 44 at March 31, 2006 and 53 at December 31, 2006. 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. No similar expense was necessary in the first quarter of 2007.

Occupancy expense for the first quarter 2007 was $104 thousand, compared to $94 thousand in the first quarter 2006 and $109 thousand in the fourth quarter 2006.

Trust operating expense totaled $183 thousand in the first quarter of 2007, compared to $128 thousand in the first quarter of 2006 and $161 thousand in the fourth quarter of 2006. This increase primarily reflects a change in the number of accounts under administration.

Other expense totaled $713 thousand for the first quarter of 2007, compared to $668 thousand in the first quarter 2006 and $631 thousand in the fourth quarter of 2006.

Total non-interest expense for the first quarter of 2007 was $2.2 million, compared to $1.9 million in the first quarter of 2006 and $2.2 million in the fourth quarter of 2006. Relative to the same period last year, total non-interest expense increased 12%, while on a linked quarter basis it was largely unchanged from the fourth quarter of 2006.

ASSET QUALITY

Non-performing loans amounted to $117 thousand at March 31, 2007, compared to none at March 31, 2006. At December 31, 2006, non-performing loans amounted to $87 thousand. There were no charge-offs in either the first quarter of 2007 or throughout the year of 2006.

The allowance for loan losses was $1.4 million, or 1.05% of total loans at March 31, 2007, $1.2 million, or 0.95% of total loans at December 31, 2006 and $1.0 million, or 0.81% of total loans at March 31, 2006. The increase in the allowance reflects management's judgment as to the uncertainties in the current economic environment and an unsettled real estate market, combined with the increased proportion of the Bank's portfolio represented by small business and commercial loans.

CAPITAL

Stockholders' equity totaled $19.8 million at March 31, 2007, compared to $19.1 million at December 31, 2006 and $16.6 million at March 31, 2006. The increase in stockholders' equity during the first quarter of 2007 reflects the earnings during the period, the issue of shares to cover the Bank's contributions to its 401(k) plan of $24 thousand, additional capital of $107 thousand from the exercise of options, and a decrease in unrealized losses on securities classified as available-for-sale of $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 personal and 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 and agency services in Delaware. Monarch Management Services LLC, wholly-owned by Christiana Corporate Services, Inc., provides commercial domicile services in Delaware. Christiana Trust Company LLC, a non-depository trust company, wholly-owned by the Bank, 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-07   Dec-06   Sep-06   Jun-06   Mar-06


Total interest income          $  2,875 $  2,959 $  2,945 $  2,867 $  2,519
Total interest expense            1,202    1,189    1,130    1,024      871
                               -------- -------- -------- -------- --------
   Net interest income            1,673    1,770    1,815    1,843    1,648
Provision for loan losses           120       60       85       95       63
                               -------- -------- -------- -------- --------

Net interest income after
 provision                        1,553    1,710    1,730    1,748    1,585

Trust fees                        1,378    1,548    1,399    1,193      916
Service fees and other income       123       95       90       94      102
Gain on sale of securities            -        -        -        -        -
                               -------- -------- -------- -------- --------
   Total non-interest income      1,501    1,643    1,489    1,287    1,018

Total revenues                    3,054    3,353    3,219    3,035    2,603
                               -------- -------- -------- -------- --------

Personnel expenses                1,181    1,319    1,262    1,248    1,054
Occupancy expense                   104      109       96       93       94
Trust operating expense             183      161      120      103      128
Other expense                       713      631      606      540      668
                               -------- -------- -------- -------- --------
   Total non-interest expense     2,181    2,220    2,084    1,984    1,944

Income before taxes                 873    1,133    1,135    1,051      659
Federal and state income taxes      314      409      422      372      243
                               -------- -------- -------- -------- --------

Net income                     $    559 $    724 $    713 $    679 $    416
                               ======== ======== ======== ======== ========


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


Cash and due from banks   $   4,815 $   5,368 $   7,854 $  26,107 $   6,092
Investment securities        23,126    23,172    20,985    20,952    21,137

Loans (net of unearned
 income)                    129,567   130,766   128,687   128,667   122,832
   Allowance for loan
    losses                    1,360     1,240     1,180     1,095     1,000
                          --------- --------- --------- --------- ---------
Net loans                   128,207   129,526   127,507   127,572   121,832

Bank premises and
 equipment - net              3,145     3,061     3,102     3,107     3,044
Other assets                  6,768     7,281     6,775     5,563     5,385
                          --------- --------- --------- --------- ---------

Total assets              $ 166,061 $ 168,408 $ 166,223 $ 183,301 $ 157,490
                          ========= ========= ========= ========= =========


Non-interest bearing
 deposits                 $  41,840 $  42,228 $  46,278 $  53,140 $  39,062
Savings and interest
 bearing demand              55,794    57,545    56,047    84,689    75,047
Time deposits                44,960    45,352    30,283    26,251    25,120
                          --------- --------- --------- --------- ---------
   Total deposits           142,594   145,125   132,608   164,080   139,229

Borrowings                      700     1,000    12,800         -         -
Other liabilities             2,936     3,170     2,555     1,959     1,691
                          --------- --------- --------- --------- ---------

Total liabilities           146,230   149,295   147,963   166,039   140,920

Total stockholders'
 equity                      19,831    19,113    18,260    17,262    16,570
                          --------- --------- --------- --------- ---------

Total liabilities and
 stockholders' equity     $ 166,061 $ 168,408 $ 166,223 $ 183,301 $ 157,490
                          ========= ========= ========= ========= =========


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

Share Data  *
Book value per share
 (period end)        $   13.31  $   12.89  $   12.37  $   11.76  $   11.32
Earnings per share
 (basic)             $    0.38  $    0.49  $    0.48  $    0.46  $    0.29
Earnings per share
 (diluted)           $    0.34  $    0.44  $    0.44  $    0.42  $    0.26
Basic shares         1,486,499  1,480,227  1,489,763  1,466,624  1,457,094
Diluted shares       1,637,543  1,643,598  1,638,862  1,607,636  1,606,468


Selected Averages
Average Gross Loans  $ 128,268  $ 129,903  $ 128,851  $ 126,563  $ 119,368
Average total
 deposits            $ 132,124  $ 128,147  $ 131,766  $ 145,738  $ 130,809
Average earning
 assets (1)          $ 154,569  $ 156,125  $ 155,418  $ 162,615  $ 144,542

Selected Performance
 Ratios
Return on average
 assets                   1.39%      1.74%      1.73%      1.60%      1.11%
Return on average
 equity                  11.68%     15.45%     15.95%     16.08%     10.33%
Net interest margin       4.39%      4.50%      4.63%      4.55%      4.62%
Non-interest income
 as % of revenue         49.15%     49.01%     46.26%     42.41%     39.11%
Non-interest income
 as % of average
 assets                   3.67%      3.97%      3.63%      3.02%      2.67%
Non-interest expense
 as % of average
 assets                   5.33%      5.36%      5.09%      4.65%      5.10%

Asset Quality
Net chargeoffs       $       -  $       -  $       -  $       -  $       -
Non-performing loans $     117  $      87  $       -  $       -  $       -
Allowance for loan
 losses to total
 loans (period end)       1.05%      0.95%      0.92%      0.85%      0.81%
Non-performing loans
 to total loans
 (period end)             0.09%      0.07%      0.00%      0.00%      0.00%

Capital
Stockholders' equity
 to total assets
 (period end)            11.94%     11.35%     10.99%      9.42%     10.52%
Tier 1 leverage
 ratio                   12.20%     11.64%     11.28%     10.34%     11.07%
Tier 1 capital to
 risk-weighted
 assets                  13.33%     12.81%     12.48%     11.63%     11.76%
Total capital to
 risk-weighted
 assets                  14.24%     13.63%     13.27%     12.36%     12.46%


(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, where appropriate,for 5% stock Dividend distributed November
 30, 2006 and the special stock dividend distributed August 31, 2006.

Contact Information

  • Contact:
    Chris Cusatis
    CFO
    (302) 888-7730
    Ccusatis@Christianabank.com

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