Oak Ridge Financial Services, Inc. (NASDAQ CM: BKOR), the holding
company for Bank of Oak Ridge, today reported quarterly net income
increased 25% to $375,000 for the third quarter of 2008, compared with
quarterly net income of $299,000 for the same period in 2007. Basic and
diluted earnings per share also increased 24% to 21 cents per share for
the third quarter of 2008, compared with basic and diluted earnings per
share of 17 cents for the same period in 2007.
Bank of Oak Ridge President, Ron Black, in commenting on the results,
noted, “We are pleased with our results in the
third quarter of 2008, especially given the volatile economic conditions
that have persisted for all of 2008. Our efforts this year have been
primarily focused on maintaining our record of sound asset quality and
attracting low-cost business and checking account deposits, and our hard
work and sound financial condition continues to reward us with new
business and consumer relationships. I am appreciative of all the great
efforts of my teammates and the support of our clients and our Board of
Directors in helping us to achieve these results.”
Ron Black further noted, “We are proud of our
strong emphasis on safety and soundness in conducting the operations of
the Bank, which we believe is supported by the following factors:”
-
The Bank has never engaged in sub prime lending;
-
The Bank currently has a Bauer Financial four-star (excellent) rating;
-
At September 30, 2008, the Company’s,
nonperforming assets to total assets ratio was 0.28%, which is very
low by industry standards; and
-
The Bank was well capitalized at September 30, 2008.
As it relates to recent developments in the banking industry, the Bank
would like its investors and clients to take note of the Bank’s
capabilities:
-
The Bank’s experienced employees are able to
work with existing and new clients to make sure they maximize their
FDIC insurance coverage;
-
Through the Bank’s participation in the
CDARS program, the Bank can offer full FDIC insurance to clients and
businesses up to $50 million;
-
The Bank currently offers unlimited FDIC insurance on
noninterest-bearing accounts to consumers and businesses, and plans to
participate in the FDIC program to offer this insurance through the
end of December 2009; and
-
The Bank is going to apply for the Treasury’s
Capital Purchase Program and expects its application to be approved.
About Oak Ridge Financial Services, Inc.
Oak Ridge Financial Services, Inc., is the holding company for the Bank
of Oak Ridge, a community bank headquartered in Oak Ridge, NC, with five
locations in Oak Ridge, Summerfield and Greensboro. The Bank offers a
complete line of banking and investment services, including savings and
checking accounts, mortgage and business loans, extended weekday and
Saturday branch banking hours, same-day deposits, cash management
services, business and personal Internet banking with balance alerts and
reminders, Internet bill payment, and accounts designed specifically for
seniors, small businesses and civic organizations. For more information,
contact Bank of Oak Ridge at 336-644-9944, or visit www.bankofoakridge.com.
Forward-looking Information
This form contains certain forward-looking statements with respect to
the financial condition, results of operations and business of the Bank.
These forward-looking statements involve risks and uncertainties and are
based on the beliefs and assumptions of management of the Bank and on
the information available to management at the time that these
disclosures were prepared. These statements can be identified by the use
of words like “expect,”
“anticipate,” “estimate,”
and “believe,”
variations of these words and other similar expressions. Readers should
not place undue reliance on forward-looking statements as a number of
important factors could cause actual results to differ materially from
those in the forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, (1)
competition in the Bank’s markets, (2)
changes in the interest rate environment, (3) general national, regional
or local economic conditions may be less favorable than expected,
resulting in, among other things, a deterioration in credit quality and
the possible impairment of collectibility of loans, (4) legislative or
regulatory changes, including changes in accounting standards, (5)
significant changes in the federal and state legal and regulatory
environment and tax laws, (6) the impact of changes in monetary and
fiscal policies, laws, rules and regulations and (7) other risks and
factors identified in the Bank’s other
filings with the Federal Deposit Insurance Corporation. The Bank
undertakes no obligation to update any forward-looking statements.
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|
|
Oak Ridge Financial Services, Inc.
|
|
Unaudited Financial Highlights (dollars in thousands, except
share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
|
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
4,457
|
|
|
$
|
4,268
|
|
|
4.4
|
%
|
|
$
|
13,358
|
|
|
$
|
11,890
|
|
12.3
|
%
|
|
Total interest expense
|
|
|
2,181
|
|
|
|
2,348
|
|
|
(7.1
|
)
|
|
|
6,947
|
|
|
|
6,336
|
|
9.6
|
|
|
Net interest income
|
|
|
2,276
|
|
|
|
1,920
|
|
|
18.5
|
|
|
|
6,411
|
|
|
|
5,554
|
|
15.4
|
|
|
Provision for loan losses
|
|
|
74
|
|
|
|
110
|
|
|
(32.7
|
)
|
|
|
337
|
|
|
|
273
|
|
23.4
|
|
|
Noninterest income
|
|
|
898
|
|
|
|
735
|
|
|
22.2
|
|
|
|
2,549
|
|
|
|
1,747
|
|
45.9
|
|
|
Noninterest expense
|
|
|
2,501
|
|
|
|
2,082
|
|
|
20.1
|
|
|
|
7,332
|
|
|
|
6,116
|
|
19.9
|
|
|
Provision for income taxes
|
|
|
224
|
|
|
|
164
|
|
|
36.6
|
|
|
|
471
|
|
|
|
305
|
|
54.4
|
|
|
Net income
|
|
$
|
375
|
|
|
$
|
299
|
|
|
25.4
|
|
|
$
|
820
|
|
|
$
|
607
|
|
35.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data and shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share (1)
|
|
$
|
0.21
|
|
|
$
|
0.17
|
|
|
23.5
|
%
|
|
$
|
0.46
|
|
|
$
|
0.34
|
|
35.3
|
%
|
|
Diluted net income per share (1)
|
|
|
0.21
|
|
|
|
0.17
|
|
|
23.5
|
|
|
|
0.45
|
|
|
|
0.33
|
|
36.4
|
|
|
Book value at period end
|
|
|
10.16
|
|
|
|
9.56
|
|
|
6.3
|
|
|
|
10.16
|
|
|
|
9.56
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (000's):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,791.5
|
|
|
|
1,790.2
|
|
|
0.1
|
%
|
|
|
1,791.5
|
|
|
|
1,790.2
|
|
0.1
|
%
|
|
Diluted
|
|
|
1,791.5
|
|
|
|
1,809.1
|
|
|
(1.0
|
)
|
|
|
1,809.4
|
|
|
|
1,837.4
|
|
(1.5
|
)
|
|
Shares outstanding at period end
|
|
|
1,791.5
|
|
|
|
1,790.2
|
|
|
0.1
|
|
|
|
1,791.5
|
|
|
|
1,790.2
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
Balance sheet data
|
|
2008
|
|
2007
|
|
Change
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
309,730
|
|
|
$
|
262,208
|
|
|
18.1
|
%
|
|
|
|
|
|
|
|
Loans receivable
|
|
|
238,616
|
|
|
|
212,821
|
|
|
12.1
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
2,379
|
|
|
|
2,120
|
|
|
12.2
|
|
|
|
|
|
|
|
|
Other interest-earning assets
|
|
|
55,064
|
|
|
|
31,724
|
|
|
73.6
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
|
|
19,155
|
|
|
|
14,771
|
|
|
29.7
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
240,486
|
|
|
|
203,745
|
|
|
18.0
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
30,248
|
|
|
|
24,248
|
|
|
24.7
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
18,194
|
|
|
|
17,684
|
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
|
|
Selected performance ratios:
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
Return on average assets (2)
|
|
|
0.51
|
%
|
|
|
0.51
|
%
|
|
0.38
|
%
|
|
|
0.37
|
%
|
|
|
|
|
|
Return on average stockholders' equity (2)
|
|
|
8.48
|
|
|
|
7.07
|
|
|
6.21
|
|
|
|
4.85
|
|
|
|
|
|
|
Net interest margin (2)(3)
|
|
|
3.27
|
|
|
|
3.51
|
|
|
3.10
|
|
|
|
3.54
|
|
|
|
|
|
|
Net interest spread (2)(4)
|
|
|
2.99
|
|
|
|
3.01
|
|
|
2.85
|
|
|
|
3.12
|
|
|
|
|
|
|
Noninterest income as a % of total revenue
|
|
|
28.3
|
|
|
|
27.7
|
|
|
28.4
|
|
|
|
23.9
|
|
|
|
|
|
|
Noninterest income as a % of average assets (2)
|
|
|
1.2
|
|
|
|
1.2
|
|
|
1.2
|
|
|
|
1.1
|
|
|
|
|
|
|
Efficiency ratio (5)
|
|
|
78.80
|
|
|
|
78.42
|
|
|
81.83
|
|
|
|
83.77
|
|
|
|
|
|
|
Noninterest expense as a % of average assets (2)
|
|
|
3.4
|
|
|
|
3.5
|
|
|
3.4
|
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
|
|
|
Asset quality ratios (at period end):
|
|
2008
|
|
2007
|
|
2007
|
|
|
|
|
|
|
|
Nonperforming assets to period-end loans (6)
|
|
|
0.28
|
%
|
|
|
0.18
|
%
|
|
0.21
|
%
|
|
|
|
|
|
|
|
Allowance for loan losses to period-end loans
|
|
|
1.00
|
|
|
|
1.00
|
|
|
1.03
|
|
|
|
|
|
|
|
|
Allowance for loan losses to total assets
|
|
|
0.77
|
|
|
|
0.81
|
|
|
0.80
|
|
|
|
|
|
|
|
|
Net loan charge-offs to average loans outstanding (2)
|
|
|
0.04
|
|
|
|
0.02
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
|
|
|
Capital ratios (Bank of Oak Ridge):
|
|
2008
|
|
2007
|
|
2007
|
|
|
|
|
|
|
|
Total capital ratio
|
|
|
10.4
|
%
|
|
|
10.4
|
%
|
|
11.2
|
%
|
|
|
|
|
|
|
|
Tier 1 capital ratio
|
|
|
9.5
|
|
|
|
9.4
|
|
|
10.3
|
|
|
|
|
|
|
|
|
Leverage capital ratio
|
|
|
8.3
|
|
|
|
8.5
|
|
|
9.0
|
|
|
|
|
|
|
|
|
Oak Ridge Financial Services, Inc.
|
|
Unaudited Financial Highlights (dollars in thousands, except
share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
|
Total Revenue
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
Net interest income
|
|
$
|
2,276
|
|
|
$
|
1,920
|
|
18.5
|
%
|
|
$
|
6,411
|
|
$
|
5,554
|
|
|
15.4
|
%
|
|
Fees and other revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer service and other fees
|
|
|
222
|
|
|
|
160
|
|
38.8
|
|
|
|
575
|
|
|
405
|
|
|
42.0
|
|
|
Mortgage loan origination fees
|
|
|
98
|
|
|
|
94
|
|
4.3
|
|
|
|
330
|
|
|
316
|
|
|
4.4
|
|
|
Investment and insurance commissions
|
|
|
237
|
|
|
|
246
|
|
(3.7
|
)
|
|
|
687
|
|
|
626
|
|
|
9.7
|
|
|
Trading loss
|
|
|
(2
|
)
|
|
|
11
|
|
(118.2
|
)
|
|
|
1
|
|
|
(135
|
)
|
|
(100.7
|
)
|
|
Income from bank owned life insurance
|
|
|
41
|
|
|
|
40
|
|
2.5
|
|
|
|
121
|
|
|
118
|
|
|
2.5
|
|
|
Fee income from accounts receivable financing
|
|
|
209
|
|
|
|
113
|
|
85.0
|
|
|
|
561
|
|
|
236
|
|
|
137.7
|
|
|
Other
|
|
|
93
|
|
|
|
71
|
|
31.0
|
|
|
|
274
|
|
|
181
|
|
|
51.4
|
|
|
Total noninterest income
|
|
|
898
|
|
|
|
735
|
|
22.2
|
|
|
|
2,549
|
|
|
1,747
|
|
|
45.9
|
|
|
Total revenue
|
|
$
|
3,174
|
|
|
$
|
2,655
|
|
19.5
|
|
|
$
|
8,960
|
|
$
|
7,301
|
|
|
22.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
|
Noninterest Expense
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
Salaries and employee benefits
|
|
$
|
1,339
|
|
|
$
|
1,103
|
|
21.4
|
%
|
|
$
|
3,885
|
|
$
|
3,356
|
|
|
15.8
|
%
|
|
Occupancy expense
|
|
|
171
|
|
|
|
121
|
|
41.3
|
|
|
|
434
|
|
|
367
|
|
|
18.3
|
|
|
Equipment expense
|
|
|
158
|
|
|
|
145
|
|
9.0
|
|
|
|
438
|
|
|
407
|
|
|
7.6
|
|
|
Data and items processing
|
|
|
122
|
|
|
|
89
|
|
37.1
|
|
|
|
334
|
|
|
223
|
|
|
49.8
|
|
|
Professional and advertising expenses
|
|
|
259
|
|
|
|
269
|
|
(3.7
|
)
|
|
|
850
|
|
|
717
|
|
|
18.5
|
|
|
Stationary and supplies
|
|
|
81
|
|
|
|
50
|
|
62.0
|
|
|
|
192
|
|
|
158
|
|
|
21.5
|
|
|
Telecommunications expense
|
|
|
56
|
|
|
|
55
|
|
1.8
|
|
|
|
194
|
|
|
164
|
|
|
18.3
|
|
|
Other
|
|
|
315
|
|
|
|
250
|
|
26.0
|
|
|
|
1,005
|
|
|
724
|
|
|
38.8
|
|
|
Total noninterest expense
|
|
$
|
2,501
|
|
|
$
|
2,082
|
|
20.1
|
|
|
$
|
7,332
|
|
$
|
6,116
|
|
|
19.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
|
Average Balances
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
Total assets
|
|
$
|
293,729
|
|
|
$
|
233,418
|
|
25.8
|
%
|
|
$
|
285,346
|
|
$
|
218,780
|
|
|
30.4
|
%
|
|
Loans receivable
|
|
|
232,678
|
|
|
|
185,004
|
|
25.8
|
|
|
|
225,398
|
|
|
174,484
|
|
|
29.2
|
|
|
Allowance for loan losses
|
|
|
2,347
|
|
|
|
1,903
|
|
23.3
|
|
|
|
2,270
|
|
|
1,814
|
|
|
25.1
|
|
|
Other interest-earning assets
|
|
|
40,232
|
|
|
|
32,197
|
|
25.0
|
|
|
|
38,946
|
|
|
29,620
|
|
|
31.5
|
|
|
Total deposits
|
|
|
246,177
|
|
|
|
190,615
|
|
29.1
|
|
|
|
237,146
|
|
|
180,691
|
|
|
31.2
|
|
|
Total noninterest bearing deposits
|
|
|
17,213
|
|
|
|
15,916
|
|
8.1
|
|
|
|
16,029
|
|
|
14,952
|
|
|
7.2
|
|
|
Borrowings
|
|
|
30,408
|
|
|
|
24,248
|
|
25.4
|
|
|
|
27,599
|
|
|
20,140
|
|
|
37.0
|
|
|
Shareholders' equity
|
|
|
17,699
|
|
|
|
16,921
|
|
4.6
|
|
|
|
17,602
|
|
|
16,700
|
|
|
5.4
|
|
(1) Computed based on the weighted average number of shares outstanding
during each period.
(2) Ratios for the three- and nine-month periods ended September 30,
2008 and 2007 are presented on an annualized basis.
(3) Net interest margin is net interest income divided by average
interest earning assets.
(4) Net interest spread is the difference between the average yield on
interest earning assets and the average cost of interest bearing
liabilities.
(5) Efficiency ratio is noninterest expense divided by the sum of net
interest income and noninterest income.
(6) Nonperforming assets consist of non-accruing loans, restructured
loans and foreclosed assets, where applicable.
Oak Ridge Financial Services, Inc.
Ron Black, President &
CEO, 336-644-9944
