FIRST MARINER BANCORP 
By
Baltimore, MD (October 31, 2012) - 1st Mariner
Bancorp (OTCBB: FMAR), parent company of 1st
Mariner Bank, reported net income of $7.9 million for the
third quarter of 2012, compared to a net loss of $7.9 million
for the third quarter of 2011. For the nine months ended
September 30, 2012, net income was $15.4 million compared to
a loss of
$26.3 million for the nine months ended September 30,
2011.
Mark A. Keidel, 1st Mariner's Chief Executive
Officer, said, "Our positive momentum in earnings continued
as we experienced improvements in operating results across
all segments of operating performance measures. A record
number of mortgage originations during the quarter and for
the first nine months of 2012 drove a 110% increase in
non-interest income in the third quarter of 2012. While
mortgage led the way in operating performance improvement for
the third quarter, we also experienced higher net interest
income, lower charge offs and credit related expenses, and
reduced operating expenses."
Mr. Keidel added, "Along with the improved financial
performance, 1st Mariner successfully
consolidated administrative units in its Canton headquarters
in the third quarter which will reduce future occupancy costs
and recently completed a successful conversion of its data
processing platform that will enhance customer capabilities
and improve back office efficiencies. These initiatives
required extraordinary commitment and skill from our
employees, and lay the groundwork for improved customer
service and lower operating costs."
Mr. Keidel continued, "Our improved profitability has
increased our regulatory capital ratios, but these ratios
remain below the levels required by regulatory orders and we
continue to work diligently to increase capital to levels
required in our regulatory agreements."
Net interest income for the third quarter of 2012 was
$8.1million compared to $7.1million in the third quarter
of
2011. While the net interest margin decreased to 3.01% in the
third quarter of 2012, compared to 3.13% in the third quarter
of 2011, higher balances of mortgage loans held for sale
resulted in higher net interest income. The decrease in net
margin was due to a higher mix of residential mortgages held
for sale. For the three months ended September
30, 2012, the average rate earned on residential mortgage
warehouse loans was 3.54% and for the three months ended
September 30, 2011, the rate was 4.88%. Other loan categories
also saw their yields decrease too as the overall interest
rate environment has remained low. The average interest rate
earned on all loans was 5.24% for the
three months ended September 30, 2012 compared to 5.48% for
the three months ended September 30, 2011. The
decrease in the yield on loans was partially offset by
decreases in rates paid on deposits. Interest expense on
deposits was $2.9 million for the three months ended
September 30, 2012 compared to $3.6 million for the three
months ended September 30, 2011. The average rate paid on
deposits decreased to 1.17% for the three months ended
September 30, 2012, down from 1.64% for the three months
ended September 30, 2011. The largest decrease in the rates
paid on deposits was in the certificate of deposit category.
The average rate paid on certificates of deposit was
1.36% for the three months ended September 30, 2012, down
from 1.96% for the three months ended September 30,
2011.
Gross interest income was $11.9 million for the three months
ended September 30, 2012 versus $11.7 million in the same
period of 2011. Although the average yield on earning assets
decreased to 4.47% for the three months ended September 30,
2012 from 5.14% for the three months ended September 30,
2011, the growth in the volume of residential mortgage loans
held for sale contributed to the overall increase in interest
income for the three months ended September 30, 2012. Average
residential mortgage loans held for sale were $320.9 million
for the three months ended September 30, 2012 versus $73.3
million for the three months ended September 30, 2011. Total
average earning assets were $1.1 billion and $897.3 million
for the three months ended September 30, 2012 and
2011, respectively.
For the nine months ended September 30, 2012, net interest
income was $22.9 million compared to $20.6 million for the
nine months ended September 30, 2011. The net interest margin
was 3.08% for the nine months ended
September 30, 2012 versus 2.94% for the same period in 2011.
The increase was due to the higher volume of residential
mortgage loans held for sale and lower interest rates paid on
deposits. The average interest rate paid on deposits was
1.27% for the nine months ended September 30, 2012 versus
1.74% for the nine months ended September 30, 2011. Interest
expense on deposits was $8.9 million for the nine months
ended September 30, 2012 compared to $12.2 million for the
nine months ended September 30, 2011.
Gross interest income was $34.7 million for the nine months
ended September 30, 2012 versus $35.5 million in the same
period of 2011. Lower levels of portfolio loans were the
primary cause of the decrease. Average portfolio loans were
$671.7 million for the nine months ended September 30, 2012
versus $762.9 million for the nine months ended September 30,
2011. Average residential mortgage loans held for sale were
$234.2 million for the nine months ended September 30, 2012
compared to $65.3 million for the nine months ended September
30, 2011. Total average earning assets were $981.8 million
and $921.6 million for the nine months ended September 30,
2012 and
2011, respectively.
The provision for loan losses was zero for the three months
ended September 30, 2012 versus $5.0 million for the three
months ended September 30, 2011. Net charge-offs decreased to
$1.4 million for the three months ended September 30, 2012
from $5.0 million for the three months ended September 30,
2011. Costs related to foreclosed properties, including
write-downs due to declining appraised values, amounted to
$1.3 million for the three months ended September 30, 2012
compared to $3.2 million for the three months ended September
30, 2011. Combined credit- related costs (provision for loan
losses and costs of foreclosed properties) amounted to $1.3
million for the three months ended September 30, 2012 versus
$8.2 million for the three months ended September 30, 2011.
Improving portfolio credit quality and a stabilizing real
estate market in our operating region contributed to the
improvement in credit costs.
The provision for loan losses was $572 thousand for the nine
months ended September 30, 2012 compared to $11.6 million for
the nine months ended September 30, 2011. Net charge offs for
the nine months ended September 30,
2012 were $2.3 million, a significant decrease from the $11.6
million incurred during the nine months ended September 30,
2011. Costs related to foreclosed properties, including
write-downs due to declining appraised values, amounted to
$3.5 million for the nine months ended September 30, 2012
versus $6.6 million recorded for the nine months ended
September 30, 2011. Combined credit- related costs amounted
to $4.1 million for the nine months ended September 30, 2012
compared to $18.2 million for the nine months ended September
30, 2011. Improving portfolio credit quality and a
stabilizing real estate market in our operating region
contributed to the improvement in credit costs. As of
September 30, 2012, the non-performing assets were $56.6
million, a 16% improvement over the
$67.2 million of non-performing assets as of September 30,
2011.
Non-interest income was $16.3 million for the three months
ended September 30, 2012, which is an increase of $8.6
million from the $7.7 million that was reported in the third
quarter of 2011. The increase was due to high mortgage
banking revenue resulting from the large volume of
residential mortgage originations. Gross revenue from the
mortgage banking activities increased more than threefold,
with $15.4 million recorded in the quarter ended September
30, 2012 versus $4.6 million in the quarter ended September
30, 2011. For the three months ended September 30, 2012,
gross mortgage loan production volume was $742.2 million
compared to $297.8 million for the three months ended
September 30, 2011.
For the nine months ended September 30, 2012, non-interest
income was $39.5 million, which is a $23.9 million
improvement over the $15.5 million recorded in the nine
months ended September 30, 2011. Increased gross mortgage
banking revenue was the primary reason for the increase. For
the nine months ended September 30, 2012, the gross revenue
from mortgage banking activities was $35.5 million, a
significant increase over the $7.9 million that was recorded
in the nine months ended September 30, 2011. Mortgage loan
production volume was $1.8 billion for the nine months ended
September 30, 2012 versus $688.4 million for the nine months
ended September 30,
2011. Additionally, the company experienced increased spreads
on loans sold.
Non-interest expenses were $16.4 million for the three months
ended September 30, 2012 compared to $17.8 million for the
three months ended September 30, 2011. There were reductions
in occupancy expense due to office consolidation and the
sublet of remaining office space. Occupancy expenses were
$1.8 million for the three months ended September 30, 2012
compared to $2.2 million for the three months ended September
30, 2011. Professional fees related to regulatory compliance,
loan workouts, and efforts related to increasing capital
levels were $973 thousand for the three months ended
September 30, 2012 versus $1.3 million for the three months
ended September
30, 2011. Costs related to foreclosed properties, including
write-downs due to declining appraised values, amounted to
$1.3 million for the three months ended September 30, 2012
compared to $3.2 million for the three months ended September
30, 2011. Amounts paid for FDIC insurance premiums remain
high with $1.0 million incurred in the
three months ended September 30, 2012 and $878 thousand
incurred in the three months ended September 30, 2011.
Corporate insurance increased during the quarter as the
renewal premiums became effective in August. For the three
months ended September 30, 2012 corporate insurance expense
was $695 thousand compared to $388 thousand for the three
months ended September 30, 2012.
For the nine months ended September 30, 2012, non-interest
expenses were $46.7 million, which is an 8.1% decrease over
the $50.8 million recorded in the nine months ended September
30, 2011. Costs related to foreclosed properties, including
write-downs due to declining appraised values, amounted to
$3.5 million for the nine months ended September 30, 2012
versus $6.6 million recorded for the nine months ended
September 30, 2011. FDIC insurance premiums remain high with
$3.1 million incurred in the nine months ended September 30,
2012 and $3.4 million incurred in the nine months ended
September 30, 2011. Corporate insurance increased during the
quarter as the renewal premiums became effective in August.
Corporate insurance expense was $1.6 million for the nine
months ended September 30, 2012 compared to $1.1 million for
the nine months ended September 30, 2011.
Comparing balance sheet data as of September 30, 2012 and
2011, total assets increased 8% to $1.29 billion, from the
prior year's $1.20 billion. The increase is due to a $245.4
million increase in loans held for sale that resulted from
the high level of mortgage banking activity.
- Average earning assets were $1.06 billion for the third
quarter of 2012, which was a $158.8 million increase over the
third quarter 2011 balance of $897.3 million. The increase
was due to higher average loans held for sale that resulted
from the higher mortgage banking activity.
- Total loans outstanding were $643.5 million as of September
30, 2012, down 13% from the $736.7 million reported in prior
year. This was due to loan maturities, loan sales, and
reduced portfolio loan production.
- Total loans held for sale were $371.6 million as of
September 30, 2012, up 194% over the $126.2 million held for
sale as of September 30, 2011. The increase was due to the
high mortgage division production achieved in the three and
nine months ended September 30, 2102. For the nine months
ended September 30,
2012, gross mortgage loan production volume was $1.8
billion.
- The allowance for loan losses as of September 30, 2012 was
$12.1 million, a decrease of 14% over the prior
year's $14.1 million. The allowance for loan losses as a
percentage of total loans was 1.88% as of September
30, 2012, compared to 1.92% as of September 30, 2011.
- Total deposits increased 7% from $1.03 billion as of
September 30, 2011 to $1.11 billion as of September
30, 2012. Money market and NOW accounts increased $20.0
million, from $131.4 million as of September
30, 2011 to $151.4 million as of September 30, 2012. Savings
accounts decreased $1.1 million from $57.0 million as of
September 30, 2011 to $55.9 million as of September 30, 2012.
Certificates of deposit were
$798.6 million as of September 30, 2012, representing an
increase of $58.3 million, or 7%, from the $740.3 million as
of September 30, 2011.
- As of September 30, 2012, 1st Mariner Bank's
capital ratios were as follows: Total Risk Based Capital
7.1%; Tier 1 Risk Based Capital 5.8%; and Leverage 4.1%.
1st Mariner Bancorp is a bank holding company with total
assets of $1.29 billion. Its wholly owned banking subsidiary,
1st Mariner Bank, operates 21 full service bank branches in
Baltimore, Anne Arundel, Harford, Howard, Talbot, and Carroll
counties in Maryland, and the City of Baltimore. 1st Mariner
Mortgage, a division of 1st Mariner Bank, operates retail
offices in Central Maryland, the Eastern Shore of Maryland,
and portions of Northern Virginia.
1st Mariner also operates direct marketing mortgage
operations in Baltimore. 1st Mariner Bancorp's common stock
is quoted on the OTC Bulletin Board under the symbol "FMAR".
1st Mariner's Website address is www.1stMarinerBancorp.com,
which includes comprehensive level investor information.
In addition to historical information, this press release
contains forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans and
expectations regarding the Company's efforts to meet
regulatory capital requirements established by the Federal
Reserve and the FDIC, revenue growth, anticipated expenses,
profitability of mortgage banking operations, and other
unknown outcomes. The Company's actual results could differ
materially from management's expectations. Factors that could
contribute to those differences include, but are not limited
to, the Company's ability to increase its capital levels and
those of 1st Mariner Bank,
volatility in the financial markets, changes in regulations
applicable to the Company's business, its concentration in
real estate lending, increased competition, changes in
technology, particularly Internet banking, impact of interest
rates, and the possibility of economic recession or slowdown
(which could impact credit quality, adequacy of loan loss
reserve and loan growth).Greater detail regarding these
factors is provided in the forward looking statements
and Risk Factors sections included in the reports filed by
the Company with the SEC, including the Company's
Annual Report on Form 10-K for the year ended December 31,
2011 and the Company's Quarterly Report on Form
10-Q for the six months ended
June 30, 2012. Our forward-looking statements may also be
subject to other risks and uncertainties, including those we
may discuss elsewhere in this news release, or in our SEC
filings, which are accessible on our web site and at the
SEC's web site, www.sec.gov.
Contact:
Kevin O'Keefe
Weber Shandwick
410-558-2102
FINANCIAL HIGHLIGHTS (UNAUDITED) First Mariner Bancorp
(Dollars in thousands, except per share data)
Summary of Earnings:
For the three months ended September 30,
2012 2011 $ Change o/o Change
Net interest income | $ 8,059 | $ 7,138 | 921 | 13% |
Provision for loan losses | 5,000 | (5,000) | -100% | |
Noninterest income | 16,280 | 7,720 | 8,560 | 111% |
Noninterest expense | 16,413 | 17,818 | (1,405) | -8% |
Net income/(loss) before income taxes | 7,926 | (7,960) | 15,886 | 200% |
l neome tax expense/(benefit) | -100% | |||
Nelincome/(loss) | 7,926 | (7,960) | 15,886 | 200% |
Profitability and Productivity:
Net interest margin | 3.01% | 3.13% | -4% | |
Net overhead ratio | 0.04% | 3.44% | -99% | |
Efficiency ratio | 67.43% | 119.92% | 44% | |
Mortgage loan production | 742,191 | 297,762 | 444,429 | 149% |
Average deposits per branch | 52,769 | 46,904 | 5,866 | 13% |
Per Share Data:
Basic earnings per share | $ 0.42 | $ (0.42) | 0.84 | 200% |
Diluted earnings per share | $ 0.42 | $ (0.42) | 0.84 | 200% |
Book value per share | $ (0.46) | $ (1.14) | 0.68 | 59% |
Number of shares outstanding | 18,860,482 | 18,860,482 | 0% | |
Average basic number of shares | 18,860,482 | 18,860,482 | 0% | |
Average diluted number of shares | 18,860,482 | 18,860,482 | 0% |
Summary of Financial Condition: AlPeriod End:
C
A
FINANCIAL HIGHLIGHTS (UNAUDITED) First Mariner Bancorp
(Dollars in thousands, except per share data)
Summary of Earnings:
For the nine months ended September 30,
2012 2011 $ Change %Change
Net interest income | $ 22,971 | $ 20,593 | $ 2,378 | 12% |
Provision for loan losses | 572 | 11,580 | (11,008) | -95% |
Noninterest income | 39,494 | 15,527 | 23,967 | 154% |
Noninterest expense | 46,680 | 50,809 | (4,129) | -8% |
Net income/(loss) before income taxes | 15,213 | (26,269) | 41,482 | -158% |
l ncome tax expense/(benefit) | (205) | (205) | 100% | |
Nelincome/(loss) | 15,418 | (26,269) | 41,687 | -159% |
Profitability and Productivity:
Net interest margin | 3.08% | 2.94% | 5% | |
Net overhead ratio | 0.80% | 3.88% | -79% | |
Efficiency ratio | 74.73% | 140.67% | -47% | |
Mortgage loan production | 1,774,395 | 688,446 | 1,085,949 | 158% |
Average deposits per branch | 52,769 | 46,904 | 5,866 | 13% |
Per Share Data:
Basic earnings per share | $ 0.82 | $ (1.41) | 2.23 | -158% |
Diluted earnings per share | $ 0.82 | $ (1.41) | 2.23 | -158% |
Book value per share | $ (0.46) | $ (1.14) | 0.68 | -59% |
Number of shares outstanding | 18,860,482 | 18,860,482 | 0% | |
Average basic number of shares | 18,860,482 | 18,637,600 | 222,882 | 1% |
Average diluted number of shares | 18,860,482 | 18,637,600 | 222,882 | 1% |
Summary of Financial Condition:
C
A
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) First Mariner Bancorp
(Dollars in thousands)
Assets:
As of Se tember 30,
2012 2011 $ Chan9e o/o Chan9e
Cash and due from banks $78,897 $152,224 (73,327) -48% lnterest-bearing deposits 32,311 34,440 (2,129) -6% Available-for-sale investment securities, at fair value 45,334 22,646 22,688 100% Loans held for sale 371,554 126,191 245,363 194% Loans receivable 643,467 736,672 (93,205) -13% Allowance for loan losses (12,096) (14,112) 2,016 -14% Loans, net 631,371 722,560 (91,189) -13%
Real estate acquired through foreclosure 19,978 24,739 (4,761) -19%
Restricted stock investments, at cost 6,829 6,969 (140) -2% Premises and equipment, net 37,534 38,927 (1,393) -4% Accrued interest receivable 4,015 3,848 167 4% Bank OVvfled life insurance 38,332 37,172 1,160 3% Prepaid expenses and other assets 27,879 27,945 (66) 0%
Total Assets $ 1,294,034 $1,197,661 96,373 8%
Liabilities and Stockholders' Equity: Liabilities:
Deposits $ 1,108,151 $ 1,031,878 76,273 7%
Borrovvings 120,828 117,808 3,020 3% Junior subordinated deferrable interest debentures 52,068 52,068 0% Accrued expenses and other liabilities 21,756 17,479 4,277 24% Total Liabilities 1,302,803 1,219,233 83,570 7%
Stockholders' Equity
T T
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) First Mariner Bancorp
(Dollars in thousands) For the three months For the nine months ended September 30, ended September 30,
2012 2011 2012 2011
l nterest l ncome:
Loans $ 11,567 $ 11,222 $ 33,644 $ 33,867 lnvestments and interest-bearing deposits 352 455 1,063 1,651
T otal l nterest l ncome 11,919 11,677 34,707 35,518
lnterest Expense:
Deposits 2,898 3,626 8,857 12,217
Borrowings 962 913 2,879 2,708
Totallnterest Expense 3,860 4,539 11,736 14,925
Net lnterest lncome Before Provision for Loan Losses 8,059 7,138 22,971 20,593
Provision for Loan Losses 5,000 572 11,580
Net lnterest lncome After Provision for Loan Losses 8,059 2,138 22,399 9,013
Noninterest lncome:
Total other-than-temporary impairment ("OTTI") charges (299) 81 (327) Less: Portion included in other comprehensive income (382) (541) (491) Net OTTI charges on securities available for sale (681) (460) (818)
Mortgage banking revenue 15,384 4,609 35,450 7,942
ATM Fees 649 755 2,067 2,314
Service fees on deposits 623 717 1,927 2,194
Gain on sale of securities available for sale 781 781
Gain l (loss) on sale of assets (949) 4 (1,271) 4
Commissions on sales of nondeposit investment products 62 75 211 347 lncome from bank owned life insurance 273 316 853 984
Other 238 1,144 717 1,779
Total Noninterest lncome 16,280 7,720 39,494 15,527
Noninterest Expense:
Salaries and employee benefits 6,107 5,874 17,438 18,003
Occupancy 1,835 2,202 6,343 6,407
Furniture, fixtures and equipment 332 426 1,018 1,357
Professional services 973 1,260 2,085 3,742
Advertising and marketing 189 220 609 470
Data processing 403 393 1,237 1,237
ATM servicing expenses 225 217 678 655
Costs of other real estate owned 1,325 3,218 3,539 6,635
FDIC insurance premiums 1,009 878 3,131 3,390
Service and maintenance 644 595 1,799 1,872
Corporate insurance 695 388 1,571 1,069
Other 2,676 2,147 7,232 5,972
Total Noninterest Expense 16,413 17,818 46,680 50,809
Net income/(loss) before income taxes 7,926 (7,960) 15,213 (26,269)
lncome tax expense/(benefit) (205) Nelincome/(loss) $ 7,926 $ (7,960) $ 15,418 $ (26,269)
CONSOLIDATED AVERAGE BALANCES, YIELDS ANO RATES (UNAUDITED) First Mariner Bancorp
(Dollars in thousands)
For the three months ended September 30,
Assets:
Loans | ||||
Commerciai Loans and LOC | $ 50,483 | 5.22% | $ 60,831 | 5.23% |
Commerciai Mortgages | 298,291 | 5.72% | 335,168 | 5.99% |
Commerciai Construction | 51,819 | 5.43% | 55,560 | 5.79% |
Consumer Residential Construction | 18,134 | 4.73% | 22,310 | 4.89% |
Residential Mortgages | 114,369 | 5.04% | 127,694 | 5.31% |
Consumer | 123,371 | 4.27% | 140,61o | 4.51% |
Total Loans | 656,467 | 5.24% | 742,173 | 5.48% |
Loans held for sale 320,860 3.54% 73,263 4.88% Trading and available for sale securities, at fair value 42,913 2.75% 39,458 3.78% lnterest bearing deposits 28,996 0.79% 35,378 0.93% Restricted stock investments, at cost 6,857 0.00% 6,997 0.00%
Total earning assets 1,056,093 4.47% 897,269 5.14% Allowance for loan losses (13,292) (15,246)
Cash and other non earning assets 217,199 266,697
Total Assets $ 1,260,000 $ 1,148,720
Liabilities and Stockholders' Equity:
lnterest bearing deposits
NOW deposits 6,182 0.89% 6,506 0.03% Savings deposits 58,949 0.19% 56,690 0.20% Money market deposits 143,358 0.55% 126,202 0.57% T ime deposits 774,722 1.36% 689,805 1.96% Total interest bearing deposits 983,211 1.17% 879,202 1.64%
Borrowings 173,145 2.21% 169,641 2.13% Total interest bearing liabilities 1,156,356 1.33% 1,048,843 1.72% Noninterest bearing demand deposits 100,217 102,868
Other liabilities 15,625 12,901
Stockholders' Equity (12,198) (15,893) Total Liabilities and Stockholders' Equity $ 1,260,000 $ 1,148,720
Nell nterest Spread 3.14% 3.42% Net lnterest Margin 3.01% 3.13%
CONSOLIDATED AVERAGE BALANCES, YIELDS ANO RATES (UNAUDITED) First Mariner Bancorp
(Dollars in thousands)
For the nine months ended September 30,
Assets:
Loans
Commerciai Loans and LOC $ 52,000 5.13% $ 65,160 5.32% Commerciai Mortgages 306,833 5.80% 339,574 6.08% Commerciai Construction 53,181 5.55% 56,160 5.56% Consumer Residential Construction 16,909 4.35% 24,198 4.86% Residential Mortgages 116,784 5.41% 133,615 5.22% Consumer 125,982 4.33% 144,188 4.52% Total Loans 671,689 5.35% 762,895 5.49%
Loans held for sale 234,187 3.67% 65,250 4.54% Trading and available for sale securities, at fair value 32,221 3.64% 49,262 3.50%
l nterest bearing deposits 36,756 0.67% 37,134 1.29% Restricted stock investments, at cost 6,969 0.00% 7,046 0.00%
Total earning assets 981,822 4.68% 921,588 5.11% AlloVvance for loan losses (13,643) (14,532)
Cash and other non earning assets 231,968 309,644
Total Assets $ 1,200,147 $ 1,216,700
Liabilities and Stockholders' Equity:
l nterest bearing deposits
NOW deposits 5,921 0.95% 6,353 0.07% Savings deposits 58,273 0.19% 57,972 0.20% Money market deposits 134,924 0.54% 128,747 0.57% T ime deposits 730,773 1.50% 743,496 2.08% Total interest bearing deposits 929,891 1.27% 936,568 1.74%
Borrowings 173,150 2.22% 169,698 2.13% Total interest bearing liabilities 1,103,041 1.42% 1,106,265 1.80%
Noninterest bearing demand deposits 101,175 104,272
Other liabilities 14,684 12,853
Stockholders' Equity (18,752) (6,692) Total Liabilities and Stockholders' Equity $ 1,200,148 $ 1,216,700
Nell nterest Spread 3.26% 3.30% Net lnterest Margin 3.08% 2.94%
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