UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 15, 2013
CARROLL BANCORP, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 000-54422 | 27-5463184 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 1321 Liberty Road Sykesville, Maryland |
21784 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (410) 795-1900
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.02 Results of Operations and Financial Condition.
On July 15, 2013, Carroll Bancorp, Inc. issued a press release relating to its results of operations for the three and six months ended June 30, 2013. A copy of the release is furnished herewith as Exhibit 99.1.
The information in this Item 2.02 and the related information in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in any such filing.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 99.1 | Press Release dated July 15, 2013 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | July 17, 2013 | CARROLL BANCORP, INC. | ||||
| /s/ Michael J. Gallina | ||||||
| Michael J. Gallina | ||||||
| Chief Financial Officer | ||||||
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Russell J. Grimes
President and Chief Executive Officer
(410) 795-1900
Carroll Bancorp, Inc. Announces Second Quarter Results
SYKESVILLE, MD – July 15, 2013 – Carroll Bancorp, Inc. (the “Company”) (OTCBB: CROL), the parent company of Carroll Community Bank (the “Bank”), today announced quarterly net income of $61,000, or $0.18 per common share, for the quarter ended June 30, 2013 compared to a net loss of $63,000, or $0.19 per common share, for the quarter ended June 30, 2012. The Company earned $112,000, or $0.33 per common share, for the six months ended June 30, 2013 compared to a net loss of $36,000, or $0.11 per common share for the six months ended June 30, 2012.
The increase in net income for the three months ended June 30, 2013 was the result of the growth in net interest income of $192,000, or 27.5%, as the Bank’s average earning assets increased by $10.0 million in conjunction with the change in the earning asset mix and the further reduction in the Bank’s cost of funds. The net interest margin improved to 3.60% for the three months ended June 30, 2013 compared to 3.15% for the three months ended June 30, 2012.
Provision for loan losses decreased by $112,000 for the quarter ended June 30, 2013 compared to the quarter ended June 30, 2012 due primarily to a specific reserve recorded last year for a single nonperforming residential loan. Noninterest income declined by $47,000 due mainly to the reduction in security gains taken on securities available for sale and noninterest expenses increased by $68,000 due to higher compensation, benefit and data processing costs for the 2013 period.
The Company also reported at June 30, 2013 total assets of $107.1 million, an increase of 8.7%, gross loans of $83.0 million, an increase of 18.2%, and total deposits of $91.2 million representing an increase of 7.3%, compared to June 30, 2012. Non-interest bearing deposits increased by $2.0 million, or 62.1%, to $5.2 million and interest bearing checking increased by $1.1 million, or 30.0%, to $4.7 million at June 30, 2013 compared to June 30, 2012, reflecting the Company’s continued focus on core business and consumer deposit account relationships.
Nonperforming loans decreased to $561,000 at June 30, 2013 from $841,000 at June 30, 2012 while total nonperforming assets decreased by $856,000, or 38.7%, to $1.4 million from $2.2 million over the same comparable periods. Past due loans decreased by $752,000, or 56.2%, to $586,000 at June 30, 2013 compared to $1.3 million at June 30, 2012.
“Consistent with our plan to focus on improving asset quality and our earning asset mix, the Company continued to make substantial progress in reaching our strategic plan objectives in 2013. We are pleased with the continued improvement in these key metrics.” stated Russell J. Grimes, President and CEO of Carroll Bancorp, Inc.
During the quarter, the Company successfully completed its stock repurchase program of 10,783 shares for the 2011 Employee Recognition and Retention Plan and Trust. The Company repurchased the shares at an average price of $12.42 for a total of $134,000. Total stockholders’ equity decreased by $184,000 compared to December 31, 2012 due to the repurchase program and accumulated other comprehensive income declining by $161,000 due to the impact of higher long term rates on the mark to market of the securities available for sale portfolio.
Carroll Bancorp, Inc.’s common stock trades on the OTC Bulletin Board (www.otcbb.com) under the symbol “CROL.” For more information, visit our website at www.carrollcobank.com or contact Russell Grimes, President & CEO at 410-795-1900.
About Carroll Bancorp, Inc. and Carroll Community Bank
Carroll Bancorp, Inc. is the holding company of Carroll Community Bank. Carroll Community Bank, originally founded in 1870, is a state-chartered commercial bank with branch offices in the towns of Eldersburg and Westminster in Carroll County, Maryland. Carroll Community Bank operates as a community-oriented institution, offering a variety of loan and deposit products and serving the financial needs of its local community.
Financial Highlights
| (Dollars in thousands) | At June 30, 2013 |
At December 31, 2012 |
At June 30, 2012 |
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| (unaudited) | (audited) | (unaudited) | ||||||||||
| Selected Financial Condition Data: |
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| Total assets |
$ | 107,091 | $ | 102,532 | $ | 98,485 | ||||||
| Total loans |
82,996 | 78,742 | 70,207 | |||||||||
| Allowance for loan losses |
694 | 859 | 692 | |||||||||
| Deposits |
91,164 | 87,453 | 84,925 | |||||||||
| Federal Home Loan Bank advances |
7,500 | 6,500 | 5,000 | |||||||||
| Total stockholders’ equity |
8,284 | 8,468 | 8,461 | |||||||||
| Asset Quality Ratios: |
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| Allowance for loan losses to total loans |
0.84 | % | 1.09 | % | 0.99 | % | ||||||
| Nonperforming loans to total loans |
0.68 | % | 0.86 | % | 1.20 | % | ||||||
| Nonperforming assets to total assets |
1.27 | % | 1.43 | % | 2.25 | % | ||||||
| Capital Ratios (bank level): |
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| Total capital to risk-weighted assets |
13.12 | % | 13.42 | % | 14.93 | % | ||||||
| Tier 1 capital to risk weighted assets |
12.08 | % | 12.17 | % | 13.72 | % | ||||||
| Tier 1 capital to average assets |
7.63 | % | 7.55 | % | 8.05 | % | ||||||
| Tangible equity to tangible assets |
7.45 | % | 7.83 | % | 8.15 | % | ||||||
| (unaudited) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2013 | 2012 | Variance | 2013 | 2012 | Variance | ||||||||||||||||||
| Selected Operating Data: |
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| Interest and dividend income |
$ | 1,111 | $ | 960 | $ | 151 | $ | 2,187 | $ | 1,929 | $ | 258 | ||||||||||||
| Interest expense |
217 | 258 | (41 | ) | 452 | 517 | (65 | ) | ||||||||||||||||
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| Net interest income |
894 | 702 | 192 | 1,735 | 1,412 | 323 | ||||||||||||||||||
| Provision for loan losses |
55 | 167 | (112 | ) | 83 | 172 | (89 | ) | ||||||||||||||||
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| Net interest income after provision for loan losses |
839 | 535 | 304 | 1,652 | 1,240 | 412 | ||||||||||||||||||
| Noninterest income |
66 | 113 | (47 | ) | 130 | 191 | (61 | ) | ||||||||||||||||
| Noninterest expense |
821 | 753 | 68 | 1,637 | 1,500 | 137 | ||||||||||||||||||
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| Income before income tax expense |
84 | (105 | ) | 189 | 145 | (69 | ) | 214 | ||||||||||||||||
| Income tax expense |
23 | (42 | ) | 65 | 33 | (33 | ) | 66 | ||||||||||||||||
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| Net income |
$ | 61 | $ | (63 | ) | $ | 124 | $ | 112 | $ | (36 | ) | $ | 148 | ||||||||||
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| Earnings per share (basic and fully diluted) |
$ | 0.18 | $ | (0.19 | ) | $ | 0.37 | $ | 0.33 | $ | (0.11 | ) | $ | 0.44 | ||||||||||
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| Select Financial Ratios (unaudited): |
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| Return on average assets |
0.23 | % | -0.26 | % | 0.22 | % | -0.08 | % | ||||||||||||||||
| Return on average equity |
2.89 | % | -2.97 | % | 2.65 | % | -0.85 | % | ||||||||||||||||
| Interest rate spread |
3.54 | % | 3.11 | % | 3.48 | % | 3.16 | % | ||||||||||||||||
| Net interest margin |
3.60 | % | 3.15 | % | 3.55 | % | 3.20 | % | ||||||||||||||||
| Efficiency ratio |
85.55 | % | 92.45 | % | 87.79 | % | 93.58 | % | ||||||||||||||||
| Noninterest expense to average assets |
3.15 | % | 3.10 | % | 3.15 | % | 3.11 | % | ||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
107.74 | % | 103.43 | % | 107.20 | % | 103.55 | % | ||||||||||||||||