Madison National Bancorp, Inc. Reports Second
Quarter 2010 Results Highlighted by Solid
l Solid Earnings: Net income for the second quarter was $208,303 or $.06 per share compared with a net
loss of $778,298 or $.21 per share for the first quarter of 2010.
l Improved Capital Strength: The Bank’s leverage ratio and tier one risk based capital ratio were 9.33%
and 11.07% at June 30th, respectively, in compliance with all numerical requirements to qualify as a well
l Balance Sheet: Assets totaled $305.1 million at June 30, 2010, up $19.2 million, or 6.7%, from June 30,
l Net Interest Income Growth: Second quarter 2010 net interest income was $2.8 million, an increase of
12.3% compared to $2.5 million for the second quarter of 2009. On a year to date basis, net interest income
grew by $1.2 million, or 26.1%.
l Allowance for Loan Losses: The allowance for loan losses of $5.0 million at June 30, 2010 represents an
increase of $864,000 versus June 30, 2009 and now stands at 2.02% of gross loans.
August 23, 2010 04:03 PM Eastern Daylight Time
HAUPPAUGE, N.Y.--(EON: Enhanced Online News)--Madison National Bancorp, Inc. (“Madison”, “the
Company”)(stock symbol MNBZ,OTCBB), the parent company of Madison National Bank, today reported its
financial results for the quarter ended June 30, 2010, highlighted by the Company’s solid earnings, strong net interest
margin and continued capital strength.
Solid Quarterly Earnings
Net income for the quarter ended June 30, 2010 was $208,303, or $.06 per share compared to a loss of $778,298
or $.21 per share on a linked quarter basis. On a year to date basis, net interest income grew by $1.2 million, or
Improved Capital Strength
The Bank’s tier one leverage capital ratio at June 30, 2010 was 9.33% and represents an increase of 31 basis points
from March 31, 2010. The Bank’s tier one risk based capital ratio at June 30, 2010 was 11.07%, or an increase of
seven basis points from March 31, 2010.
Total assets for the quarter decreased by $3.1 million, or 1.0%, to $305.1 million. On a year-over-year basis, total
assets grew by $19.2 million, or 6.7%. Cash and cash equivalents increased by $14.3 million, total securities
declined by $2.3 million, and net loans decreased by $15.6 million during the quarter. Funding liabilities declined by
$3.6 million during the quarter primarily in certificates of deposit.
Asset growth on a year-over-year basis was funded through growth in organic deposits of approximately $16.7
million, or 8.2%, and through long term borrowings of $4.5 million from the Federal Home Loan Bank of New
York. The company’s overall average cost of interest bearing liabilities decreased from 2.55% for the quarter ended
June 2009 to 1.99% for the current quarter. More importantly, given the bank's retail focus, the cost of deposits for
the 2nd quarter of 2010 decreased to 1.76% from 2.44%, a decrease of 28%, from the same quarter of 2009.
Loan Portfolio and Asset Quality
Non-accrual loans and leases totaled $12.4 million or 5.0% of loans and leases outstanding at June 30, 2010 versus
$9.3 million or 3.5% at March 31, 2010. A charge-off of $79,486 was recorded during the second quarter of 2010
and represents the write-down of one loan. The Bank continues to be proactive in managing its loan portfolio and
aggressively addressing any issues arising during this difficult credit cycle. The Bank experienced no loan charge-offs
During the quarter, the Bank closed on the sale of two pools of multi-family loans, at par, totaling $20.7 million.
These sales afford the Company the benefit of reducing its concentration in commercial real estate loans and
providing financial flexibility in repositioning its balance sheet. The Bank will continue to focus its efforts on originating
commercial loans and building business banking relationships in 2010.
During the second quarter of 2010, the Bank recorded no provision for loan losses due to the decline in the portfolio
from the multi-family loan sales. Net of charge-offs, the allowance for loan losses decreased by approximately
$80,000 to end the quarter at $5.0 million or 2.02% of gross loans. On a year-over-year basis, the allowance for
loan losses has increased by $864,000 and 21 basis points relative to gross loans.
On June 11, 2010, the Bank entered into a Formal Agreement (“the Agreement”) with the United States
Comptroller of the Currency (“OCC”). The OCC is the primary regulator for national banks. The Agreement
centers around limiting loan portfolio growth commensurate with increases in Bank capital. Further, the Bank will
provide to the OCC its process to manage its concentration of commercial real estate loans, which for Madison,
primarily relates to its multi-family loan portfolio. Management is pleased with the performance of this portfolio as it
is significantly comprised of rent-controlled and rent-stabilized apartment buildings in the boroughs of New York
City. Management believes that this portfolio will continue to provide the Company with traditionally safe credit
quality, greater liquidity and an enhanced interest-rate-risk profile. The Board of Directors and Executive
Management are confident in aligning the Company’s long term business plans with the objectives of the OCC.
In a joint statement, Madison’s Co-Chairmen, Daniel L. Murphy and Michael P. Puorro stated, “As economic
indicators continue to send mixed signals regarding the timing of the national recovery, we are pleased to report that
our second quarter yielded positive income results, expanded capital and reserve coverage, and strong liquidity. We
believe Madison is well positioned with its capital base along with ample liquid resources to prosper when economic
conditions begin to evidence sustainable stability.”
About Madison National Bank
With assets of $305.1 million at June 30, 2010, Madison National Bank is a locally owned and operated
commercial bank, focusing on highly personalized and efficient services and products, responsive to local needs.
Management and the Board of Directors is comprised of a select group of successful local businessmen and women
who are committed to the success of the Company by knowing and understanding Long Island’s financial needs and
opportunities. Backed by state-of-the-art technology, Madison offers a full range of modern financial services.
Madison employs a complete suite of consumer and commercial banking products and services, including multifamily
and commercial mortgages, construction loans, home equity lines of credit, business loans and lines of credit.
Madison also offers 24-hour ATM service with no fees attached, free checking with interest, telephone banking, the
most advanced technologies in internet banking for our consumer and business customers, safe deposit boxes and
much more. Madison National Bank maintains its corporate offices in Hauppauge, New York and currently operates
three New York branch offices in Merrick, Melville, and Massapequa.
Madison National Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal
Opportunity Lender. For further information, call 631-348-6999 or visit the Company’s website at
This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate,"
"should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable
terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the
financial condition, results of operations and business of Madison National Bank. Any or all of the forward-looking
statements in this release and in any other public statements made by Madison National Bank may turn out to be
incorrect. They can be affected by inaccurate assumptions Madison National Bank might make or by known or
unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Madison National
Bank does not intend to update any of the forward-looking statements after the date of this release or to conform
these statements to actual events.
MADISON NATIONAL BANCORP, INC.
STATEMENTS OF CONDITION
June 30,2010 March 31, 2010 June 30,2009
Cash and cash equivalents $ 30,299,548 $ 15,984,571 $ 14,317,604
Debt and Equity Securities available for sale 3,790,500 3,726,700 12,431,812
Securities held to maturity 14,440,304 16,778,563 18,477,145
Total securities 18,230,804 20,505,263 30,908,957
Loans, net of deferred loan fees and costs 249,244,399 264,973,233 230,654,993
Less: allowance for loan losses (5,028,514 ) (5,108,000 ) (4,165,000 )
Loans, net 244,215,885 259,865,233 226,489,993
Other assets 12,346,481 11,882,831 14,205,399
Total Assets $ 305,092,718 $ 308,237,898 $ 285,921,953
LIABILITIES AND SHAREHOLDERS' EQUITY
Total Deposits $ 220,541,090 $ 224,107,078 $ 203,822,312
Federal Home Loan Bank Advances 53,500,000 53,500,000 49,000,000
Other Liabilities 699,317 570,923 2,689,226
Total Liabilities 274,740,407 278,178,001 255,511,538
Total Shareholders' Equity 30,352,310 30,059,897 30,410,417
Total Liabilities and Shareholders' Equity $ 305,092,717 $ 308,237,898 $ 285,921,955
MADISON NATIONAL BANCORP, INC.
STATEMENTS OF INCOME
Quarter to Date Quarter to Date Year to Date Year to Date
6/30/10 6/30/09 6/30/10 6/30/09
Total interest income $ 4,077,538 $ 4,038,634 $ 8,500,523 $ 7,909,598
Total interest expense 1,310,131 1,573,659 2,680,364 3,293,458
Net interest income 2,767,407 2,464,975 5,820,159 4,616,140
Provision for loan losses 0 2,270,000 2,200,000 2,590,000
Net interest income after provision for loan loss 2,767,407 194,975 3,620,159 2,026,140
Total non-interest income 102,363 372,051 374,034 607,209
Compensation and benefits 1,189,495 995,601 2,386,033 1,957,723
Occupancy and equipment 485,802 356,419 949,992 689,934
FDIC Assessment 130,174 210,000 233,557 324,573
Other operating expenses 661,194 490,522 1,254,530 944,592
Total non-interest expense 2,466,665 2,052,542 4,824,112 3,916,822
Income Before Taxes 403,105 (1,485,516 ) (829,919 ) (1,283,473 )
Provision for income taxes 194,802 (3,138,311 ) (259,924 ) (3,138,311 )
Net income $ 208,303 $ 1,652,795 $ (569,995 ) $ 1,854,839
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
6/31/10 3/31/10 12/31/09 06/30/09
Total interest income $ 4,077,538 $ 4,422,985 $ 4,491,616 $ 4,038,634
Total interest expense 1,310,132 1,370,233 1,533,649 1,573,659
Net interest income 2,767,406 3,052,752 2,957,967 2,464,975
Provision for loan losses 0 2,200,000 425,000 2,270,000
Net interest income after provision for loan loss 2,767,406 852,752 2,532,967 194,975
Total non-interest income 102,362 271,672 95,783 372,051
Compensation and benefits 1,189,495 1,196,538 1,166,725 995,601
Occupancy and equipment 485,802 464,190 446,329 356,419
FDIC Assessment 130,174 103,383 100,901 210,000
Other operating expenses 661,194 593,337 570,917 490,522
Total non-interest expense 2,466,665 2,357,448 2,284,872 2,052,542
Income Before Taxes 403,103 (1,233,024 ) 343,878 (1,485,516 )
Provision for income taxes 194,802 (454,726 ) 136,742 (3,138,311 )
Net income $ 208,301 $ (778,298 ) $ 207,136 $ 1,652,795
Basic Earnings per Share $ 0.06 $ (0.21 ) $ 0.06 $ 0.45
Diluted Earnings per Share $ 0.06 $ (0.21 ) $ 0.06 $ 0.45
MADISON NATIONAL BANCORP, INC.
STATEMENTS OF CONDITION
June 30, 2010 March 31, 2010 June 30, 2009
Allowance for Loan Losses $ 5,028,514 $ 5,108,000 $ 4,165,000
Nonperforming Loans $ 12,433,850 $ 9,261,115 $ 3,095,375
Nonperforming Loans/Total Loans 5.0 % 3.5 % 1.3 %
Charge-offs $ 79,486 $ 2,427,000 $-
Provision for Loan Loss $- $ 2,200,000 $ 2,270,000
ALL/Loans, Gross 2.02 % 1.93 % 1.81 %
Shares Issue - Basic 3,685,800 3,685,800 3,685,800
Book Value per Share $ 8.23 $ 8.16 $ 8.53
Tier 1 Capital Ratio 9.33 % 9.02 % 10.70 %
Tier 1 Risk Based Capital Ratio 11.07 % 11.00 % 12.71 %
Quarter Ended Quarter Ended Quarter Ended
6/30/10 3/31/10 6/30/09
Yield on Average Earning Assets 5.70 % 5.85 % 5.94 %
Cost of Avg. Interest Bearing Liabilities 1.99 % 2.04 % 2.55 %
Net Spread 3.71 % 3.81 % 3.40 %
Net Margin 3.92 % 4.09 % 3.68 %
Madison National Bancorp, Inc.
Michael P. Puorro, 631-348-6999
Co-Chairman & President
Bonnie Seider, 631-348-6999
Senior Vice President