Please replace the release dated August 4, 2010 with the following corrected version due to certain numerical revisions. The revisions did not change reported earnings, asset levels or capital.
The corrected release reads:
CARROLLTON BANCORP REPORTS SECOND QUARTER NET INCOME AND ANNOUNCES A $0.04 QUARTERLY DIVIDEND
Carrollton Bancorp, (NASDAQ: CRRB) the parent company of Carrollton Bank, is issuing this corrected press release with respect to its results for the quarter ended June 30, 2010. The Company announced net income for the second quarter of 2010 of $221,000, compared to net income of $196,000 for the second quarter of 2009. Net income available to common shareholders for the second quarter of 2010 was $86,000 ($0.03 per diluted share) compared to net income available to common shareholders of $49,000 ($0.02 per diluted share) for the second quarter of 2009.
Carrollton Bancorp also announced a quarterly dividend of $0.04 per share, payable September 2, 2010 to stockholders of record on August 13, 2010.
The Company’s quarterly net income before taxes was $301,000 for the quarter ended June 30, 2010 compared to pre-tax operating income of $226,000 for the quarter ended June 30, 2009. During the second quarter of 2010, the Company improved net interest income by approximately $138,000 while decreasing non-interest expenses by approximately $298,000. These improvements were offset by a reduction in mortgage related fee income resulting from decreased volume in the Company’s mortgage subsidiary.
For the first six months of 2010, the Company’s net income before taxes decreased to $7,000 compared to $935,000 for the first half of 2009. A write down of $887,000 on securities during 2010 accounts for the majority of the change in operating income.
The Company has Trust Preferred securities with a cost basis of $7.2 million and a fair value of $1.7 million as of June 30, 2010. The $5.5 million of the unrealized loss is currently recognized as an adjustment to shareholders’ equity. These investments are measured for other than temporary impairment on a quarterly basis and the investments are written down through the income statement as the impairment calculations dictate. These investments, which were investment grade at the time of acquisition, are supported by underlying debt obligations of several financial institutions. Impairments result from the deferral of dividends by these institutions or complete failure of the institution. It is possible that continuation of the current economic environment will result in additional write-downs resulting from future deferrals or failures. While this creates volatility in the Company’s earnings, the write-downs have very little effect on the Bank’s regulatory capital position since the regulatory capital calculations allocate enough capital to cover the unrealized losses. Management is hopeful that these investments will increase in value as the economy improves and management will continuously evaluate all strategies to maximize the ultimate value realized from these investments.