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Madison National Bancorp, Inc. Reports First Quarter 2011 Results Highlighted by Solid Earnings, Capital Growth, and Improved Credit Quality

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Madison National Bancorp, Inc. Reports First Quarter 2011 Results Highlighted by Solid Earnings, Capital Growth, and Improved Credit Quality Powered By Docstoc
					Madison National Bancorp, Inc. Reports First
Quarter 2011 Results Highlighted by Solid
Earnings, Capital Growth, and Improved Credit
Quality
Performance Highlights

   l   Solid Earnings: Net income for the first quarter was $184,000, or $.05 per share, compared with net
       income of $162,000, or $.04 per share, for the fourth quarter of 2010.
   l   Continued Capital Strength: The Bank’s Tier 1 leverage capital ratio and Tier 1 risk based capital ratio
       were 10.59% and 13.07% at March 31st, up 17.4% and 18.8% from the prior year quarter, significantly
       above the levels required to qualify as “well capitalized” for regulatory capital purposes.
   l   Improved Credit Quality: During the first quarter of 2011 the Bank reduced non-performing loans by $6.8
       million, or 45.7%, compared to the fourth quarter of 2010.
   l   Allowance for Loan Losses: The allowance for loan loss of $5.0 million at March 31, 2011 represents
       2.06% of gross loans compared to $5.1 million, or 1.93% of gross loans at quarter end March 2010.
   l   Strong Deposit Growth: Retail deposit growth for the quarter exceeded $13 million or 27.0% on an
       annualized basis.

May 06, 2011 04:33 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 March 31, 2011, highlighted by the Company’s strong net interest margin and
continued capital strength.

Solid Quarterly Earnings

Net income for the quarter ended March 31, 2011 was $184,000, or $.05 per share compared to net income of
$162,000 or $.04 per share on a linked quarter basis. In the most recent four quarters the Bank earned $839,000,
or $.23 per share. Additionally, the Bank’s quarter-end book value per share of $8.46 represents an increase of
$.30 from quarter ended March 2010.

Net Interest Margin

Net interest margin for the quarter ended March 31, 2011 was 3.88% compared to 3.97% on a linked quarter basis
and 4.09% for the same period in 2010. Net interest income for the first quarter of 2011 increased to $2.4 million,
or 5.0%, versus $2.3 million for the fourth quarter of 2010. Compared to the same period one year ago, net interest
income after provision for loan losses increased by $1.6 million, or 187.1%.

Continued Capital Strength

The Bank’s Tier 1 leverage capital ratio for the quarter ended March 2011 was 10.59% and represents an increase
of 10 basis points from the quarter ended December 2010. The Bank’s Tier 1 risk based capital ratio for the quarter
ended March 2011 was 13.07%, representing an increase of 53 basis points from the quarter ended December
2010. On a year over year basis, the Bank’s Tier 1 leverage capital ratio increased by 157 basis points from 9.02%
to 10.59%, and the Tier 1 risk based capital ratio increased 207 basis points from 11.00% to 13.07%.

Balance Sheet

Total assets as of March 31, 2011 increased by $1.3 million, or .43%, as compared to December 31, 2010 totaling
$297.9 million at such date. From December 31, 2010 to March 31, 2011, cash and cash equivalents declined by
$8.4 million, or 45.1%, total securities increased by $13.9 million, or 57.2%, and net loans decreased by $10.8
million, or 4.5%. During this period, funding liabilities increased by $13.3 million primarily due to increases in money
market accounts.

From March 31, 2010 to March 31, 2011, total assets decreased by $10.3 million, or 3.34%. The decline in assets
on a year-over-year basis was primarily due to the payoff of long term borrowings totaling $13.3 million at the
Federal Home Loan Bank of New York which came due early in 2011. The company’s overall average cost of
interest bearing liabilities decreased from 2.04% for the quarter ended March 2010 to 1.78% for the current quarter.
More importantly, the cost of deposits for the 1st quarter of 2011 decreased to 1.46% from 1.74% for the same
quarter of 2010.

Loan Portfolio and Asset Quality

Non-accrual loans and leases totaled $8.1 million or 3.3% of total loans and leases outstanding at March 31, 2011
versus $14.8 million or 6.0% at December 31, 2010. This represents a decline of $6.8 million, or 45.7%. During the
quarter the Bank sold or reinstated to performing status $7.2 million of non-performing loans. Charge-offs of
$560,000 were recorded during the first quarter of 2011 and represented five loans. Subsequent to the end of the
quarter, the Bank sold an additional loan note to further reduce non-performing loans by $607,000. The Bank
continues to be proactive in managing its loan portfolio and aggressively addressing any issues arising during this
difficult credit cycle.

During the first quarter of 2011, the Bank recorded provision for loan losses totaling $400,000 compared to
$500,000 for the fourth quarter of 2010. Net of charge-offs, the allowance for loan losses decreased by
approximately $160,000 to end the quarter at $5.0 million or 2.06% of gross loans. On a year-over-year basis, the
allowance for loan losses has decreased by $138,000 but the allowance coverage ratio increased 13 basis points
relative to gross loans.

In a joint statement, Madison’s Co-Chairmen, Daniel L. Murphy and Michael P. Puorro stated, “We are extremely
pleased with our first quarter results especially in regard to continued earnings momentum, capital generation, and
deposit growth. Perhaps most important, the significant reduction in non-performing loans has resulted in substantial
improvement in our asset quality metrics. Madison remains committed to proactively managing the credit profile of
the institution in the current economic environment. During this particularly challenging cycle, Madison has remained
vigilant by strengthening reserves and building capital to better position the Company to benefit from opportunities as
they present themselves in an improving market.” 

On October 21, 2010, Madison entered into a definitive merger agreement with FNBNY Bancorp, Inc. and
Modern Capital (collectively “FNBNY”) whereby FNBNY will acquire all of the outstanding shares of Madison for
$9.09 per share subject to, among other things, stockholder and regulatory approval. The FNBNY merger remains
pending and subject to stockholder and regulatory approval. As part of the FNBNY merger, on October 21, 2010,
Madison also entered into a stock purchase agreement with FNBNY, which required FNBNY to purchase shares
of Madison common stock on such date and further required FNBNY to purchase additional shares of Madison
common stock if regulatory approval of the pending merger was not obtained by March 31, 2011. On March 31,
2011, the Bank sold 182,260 shares of its common stock to FNBNY pursuant to the October 21, 2010 stock
purchase agreement and on April 5, 2011, Madison sold an additional 40,468 shares to FNBNY pursuant to an
additional stock purchase agreement dated April 5, 2011. The shares sold on March 31 and April 5 were sold at
$8.48 per share, for an aggregate purchase price of approximately $1.9 million. As a result of these sales, and the
sale of 182,260 shares to FNBNY upon execution of the stock purchase agreement dated October 21, 2010,
FNBNY now holds a total of 404,988 shares of Madison’s common stock, or 9.9% of the total shares outstanding,
making FNBNY the largest shareholder of Madison.

The Bank has opted to relocate its corporate headquarters from Hauppauge, New York to Melville, New York
effective May 16, 2011. The move allows the Bank to maximize efficiencies, while taking advantage of a more
flexible space in a centralized location on a major corridor.
About Madison National Bank

With assets of $297.9 million at March 31, 2011, 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
www.madisonnational.com.

Forward-Looking Statements

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
(Unaudited)
                                                          3/31/11        12/31/10        3/31/10
ASSETS
Cash and cash equivalents                     $ 10,226,401 $ 18,634,053 $ 15,984,571
Debt and Equity Securities available for sale 38,157,951 24,276,816 3,726,700
Securities held to maturity                   -            -            16,778,563
Total securities                              38,157,951 24,276,816 20,505,263
Loans held for sale                           8,922,269    3,267,847    17,856,344
Loans, net of deferred loan fees and costs    233,094,244 244,053,407 247,116,889
Less: allowance for loan losses               (4,970,415) (5,131,543) (5,108,000)
Loans, net                                    228,123,829 238,921,864 242,008,889
Premises and equipment, net                   5,792,708    5,915,853    5,534,514
Other assets                                  6,716,403    5,640,243    6,348,317
Total Assets                                  $297,939,561 $296,656,676 $308,237,898
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand and NOW deposit accounts               $ 22,253,470 $ 24,084,481 $ 26,862,981
Money market accounts                         66,748,126 51,286,163 54,688,308
Savings accounts                              17,355,960 20,046,380 21,134,094
Certificates of deposit                       104,503,899 102,128,898 115,457,407
Brokered deposits                             11,952,997 11,945,045 5,964,288
Total Deposits                                222,814,452 209,490,967 224,107,078
Federal Home Loan Bank Advances               40,000,000 53,500,000 53,500,000
Other Liabilities                                  849,760       965,310        570,923
Total Liabilities                                  263,664,212 263,956,277 278,178,001
Total Shareholders' Equity                         34,275,349 32,700,399 30,059,897
Total Liabilities and Shareholders' Equity         $297,939,561 $296,656,676 $308,237,898
MADISON NATIONAL BANCORP, INC.
STATEMENTS OF INCOME
(Unaudited)
                                           Quarter to Date Quarter to Date Year to Date Year to Date

                                                  3/31/11         3/31/10          3/31/11       3/31/10
Total interest income                             $ 4,016,336     $ 4,422,985      $ 4,016,336 $ 4,422,985
Total interest expense                            1,167,976       1,370,233        1,167,976     1,370,233
Net interest income                               2,848,360       3,052,752        2,848,360     3,052,752
Provision for loan losses                         400,000         2,200,000        400,000       2,200,000
Net interest income after provision for loan loss 2,448,360       852,752          2,448,360     852,752
Total non-interest income                         326,066         271,672          326,066       271,672
Compensation and benefits                         1,167,998       1,196,538        1,167,998     1,196,538
Occupancy and equipment                           514,342         464,190          514,342       464,190
FDIC Assessment                                   119,450         103,383          119,450       103,383
Other operating expenses                          617,767         593,336          617,767       593,336
Total non-interest expense                        2,419,557       2,357,447        2,419,557     2,357,447
Income Before Taxes                               354,869         (1,233,023)      354,869       (1,233,023)
Provision for income taxes                        170,719         (454,726)        170,719       (454,726)
Net income                                        $ 184,150       $ (778,297)      $ 184,150     $ (778,297)
Basic Earnings per Share                          $ 0.05          $ (0.21)         $ 0.05        $ (0.21)
Diluted Earnings per Share                        $ 0.05          $ (0.21)         $ 0.05        $ (0.21)
                                                  Quarter Ended   Quarter Ended    Quarter Ended Quarter Ended

                                                  3/31/11         12/31/10         9/30/10       6/30/10
Total interest income                             $ 4,016,336     $ 4,008,247      $ 4,001,066   $ 4,077,538
Total interest expense                            1,167,976       1,176,452        1,279,357     1,310,132
Net interest income                               2,848,360       2,831,795        2,721,709     2,767,406
Provision for loan losses                         400,000         500,000          -             -
Net interest income after provision for loan loss 2,448,360       2,331,795        2,721,709     2,767,406
Total non-interest income                         326,066         648,618          116,120       102,363
Compensation and benefits                         1,167,998       1,063,898        1,053,964     1,189,495
Occupancy and equipment                           514,342         474,895          487,382       485,802
FDIC Assessment                                   119,450         127,980          133,286       130,174
Other operating expenses                          617,767         876,472          654,907       661,195
Total non-interest expense                        2,419,557       2,543,245        2,329,539     2,466,666
Income Before Taxes                               354,869         437,168          508,290       403,103
Provision for income taxes                        170,719         275,007          223,794       194,802
Net income                                        $ 184,150       $ 162,161        $ 284,496     $ 208,301
Basic Earnings per Share                          $ 0.05          $ 0.04           $ 0.08        $ 0.06
Diluted Earnings per Share                        $ 0.05          $ 0.04           $ 0.08        $ 0.06
MADISON NATIONAL BANCORP, INC.
STATEMENTS OF CONDITION
(Unaudited)
                                                   3/31/11        12/31/10        3/31/10
Asset Quality
Allowance for Loan Losses                          $ 4,970,415    $ 5,131,543     $ 5,108,000
Nonperforming Loans                                8,057,239      14,832,739      9,261,115
Nonperforming Loans/Total Loans                    3.3%           6.0%            3.5%
Charge-offs (Recoveries)                     $ 559,765    $ 630,676     $ 2,427,000
Provision for Loan Loss                      400,000      500,000       2,200,000
ALL/Loans, Gross                             2.06%        2.08%         1.93%
Capital
Shares Issue - Basic                         4,050,320     3,868,060     3,685,800
Weighted Avg Shares Basic                    3,870,085     3,830,419     3,685,800
Weighted Avg Shares Diluted                  3,875,793     3,831,427     3,693,003
Book Value per Share                         $ 8.46        $ 8.54        $ 8.16
Tier 1 Capital Ratio                         10.59%        10.49%        9.02%
Tier 1 Risk Based Capital Ratio              13.07%        12.54%        11.00%
                                             Quarter Ended Quarter Ended Quarter Ended
                                             3/31/11       12/31/10      3/31/10
Profitability
Yield on Average Earning Assets              5.39%        5.55%         5.85%
Cost of Avg. Interest Bearing Liabilities    1.78%        1.86%         2.04%
Net Spread                                   3.61%        3.69%         3.81%
Net Margin                                   3.88%        3.97%         4.09%

Contacts
Madison National Bancorp, Inc.
Michael P. Puorro, Co-Chairman & President
Bonnie Seider, Senior Vice President
631-348-6999

				
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Description: 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 March 31, 2011, highlighted by the Company’s strong net interest margin and continued capital strength. Solid Quarterly Earnings Net income for the quarter ended March 31, 2011 was $184,000, or $.05 per share compared to net income of $162,000 or $.04 per share on a a style='font-size: 10
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