BankAnnapolis

Annapolis Bancorp Inc.

Introduction:

Annapolis Bancorp, Inc. (NASDAQ:ANNB) (“The Company”) was founded in 1988 and is based in Annapolis, Maryland.  Annapolis Bancorp, Inc. operates as a bank holding company for Bank Annapolis, which provides commercial and retail banking services to small businesses, professional concerns, and individuals in Maryland. The company also offers loan products comprising commercial, commercial and residential real estate, residential construction, one-to four-family residential mortgage, home equity, and consumer loans, as well as letters of credit. The company serves its customers through its headquarters in Annapolis, five other branches located in Anne Arundel County, and one branch located on Kent Island in Queen Anne’s County.

Stock Snapshot:

As of Oct 21’ 2012, the stock for Annapolis Bancorp, Inc. (NASDAQ:ANNB) stood at USD 8.10, representing a market capitalization of USD 32.20 million. The stock has traded between a range of USD 3.61 to USD 8.25 over the last 52 weeks. The stock has been trading at a P/E ratio of 12.7 and a P/B ratio of 1.04.

Competitor Analysis:

BankUnited (NYSE:BKU), a bank holding company, provides a range of banking products and financial services to commercial and middle-market businesses, as well as individual customers, primarily in Florida, of the United States. As of Oct 21’ 2012, the stock stood at USD 24.09, with a total market capitalization of USD 2.27 billion. The stock has been trading at a P/E ratio of 13.22 and a P/B ratio of 1.34.
First Citizens BancShares Inc. (NASDAQ:FCNCA) operates as the holding company for First-Citizens Bank & Trust Company that provides various banking products and services to retail and commercial customers in the United States. As of Oct 21’ 2012, the stock for the Company stood at USD 166.62, with a total market capitalization of USD 1.71 billion. The stock has been trading at a P/E ratio of 9.28 and a P/B ratio of 0.89.

Financial Analysis:

Interest & Dividend Income:

For 6MFY12, the Company reported total interest and dividend income of USD 9.6 million, as compared to 9.8 million for 6MFY11, representing a YoY decline of 2.9% as a result of lower yields, obtained on new loans and investments. The major sources of this income were the Mortgage backed securities and US Govt. Securities, which provided USD 0.6 million and USD 0.41 million of interest income respectively. In 6MFY11, the mortgage backed securities provided .71 million and .62 million in interest income. For 6MFY12, the yield on the investment portfolio decreased to 2.47% from 3.01% in 6MFY11. For 6MFY12, the yield on the loan portfolio decreased to 5.70%, compared to 5.98% for 6MFY11.

Interest Expense:

For 6MFY12, the Company reported interest expense of USD 1.51 million, as compared to USD 1.87 million, representing a YoY decline of 19.25%. This decline was mainly a result of the decrease in interest expenses related to “other deposits”. For 6MFY12, the average rate of interest paid on all interest bearing liabilities was 0.88%, as compared to 1.08% for 6MFY12.

Net Interest Margins:

For 6MFY12, the net interest income totaled USD 8.09 million, resulting in a net interest margin of 3.86%, as compared to USD 3.95% for the corresponding period last year. The decrease in net interest margin was mainly due to a decline in the yield on earnings assets, which was recorded at 4.58% for 6MFY12, as compared to 4.87% for the corresponding period last year.

Net Income:

For 6MFY12, the Company recorded net income of USD 1.7 million,  as compared to net income of USD 835,000 for the corresponding period last year; representing a YoY increase of 109%. Net income available to common shareholders for 6MFY12 was recorded at USD 1.6 million or USD 0.4 per basic share, as compared to net income available to common shareholders of USD.59 million, or USD 0.15 per share for 6MFY11.

Financial Position:

As of 30th June 2012,the book value per common share was USD 7.76, compared to USD 7.38 at December 31, 2011. Total assets were recorded at USD 437.5 million at June 30, 2012, as compared to USD 441.6 million at 31 December’ 2011; representing a YoY decline of 0.9%.The Company’s allowance for credit losses stood at 2.32% of total loan portfolio.

Factors to Watch Out For:

  • Strong growth in net earnings!