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Oak Ridge Financial Services Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 13, 2009 10:19PM
Oak Ridge Financial Services Inc. (BKOR) filed Quarterly Report for the period ended 2009-09-30. Bank of Oak Ridge 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. Oak Ridge Financial Services Inc. has a market cap of $9.2 million; its shares were traded at around $5.15 with a P/E ratio of 13.9 and P/S ratio of 0.4.
Highlight of Business Operations:
Management has continued to focus on providing additional liquidity sources, both on-balance sheet and off. During the nine months ended September 30, 2009, we reduced our borrowings with the FHLB from $22 million to $17 million by increasing noninterest and interest bearing deposits by approximately $14.5 million. This has increased our availability at the FHLB, and is available to meet certain unforeseen liquidity demands that may arise. We currently have securities with a market value of $4.2 million pledged to the FHLB, and have unpledged securities held in safekeeping at the FHLB with a market value of $55.3 million that could be pledged if needed. The Bank also has unused Federal Funds purchased lines of approximately $5.7 million with two correspondent banks. In addition, management has plans to continue to build off-balance sheet sources of liquidity. In the fourth quarter of 2009, the Bank intends to pledge commercial loans that qualify as loan collateral through the Federal Reserve Discount Window.
Pretax, pre-loan loss provision, post-CPP dividend payment, earnings were $1.2 million for the third quarter of 2009, compared to $673,000 for the third quarter of 2008, an increase of approximately $511,000. Pretax, pre-loan loss provision, post-CPP dividend payment, earnings were $2.5 million for the first nine months of 2009, compared to $1.6 million for the first nine months of 2008, an increase of approximately $912,000.
For the three months ended September 30, 2009, the Companys net income decreased 58 percent to $159,000 compared to $375,000 for the same period in 2008. Net income available to common stockholders decreased to a loss of $7,000 in 2009 compared to income of $375,000 in 2008. The Company recorded net income per diluted share of $0.00 compared to $0.21 for the prior year period. Returns on average assets and average equity were 0.22 percent and 1.20 percent, respectively, for the three months ended September 30, 2009, compared to 0.51 percent and 8.48 percent for the three months ended September 30, 2008.
For the nine months ended September 30, 2009, the Companys net income decreased 39 percent to $501,000 compared to $820,000 for the same period in 2008. Net income available to common stockholders decreased 92 percent to $64,000 in 2009 compared to $820,000 in 2008. Net income per diluted share decreased 91 percent to $0.04 compared to $0.45 for the prior year period. Returns on average assets and average equity were 0.19 percent and 1.89 percent, respectively, for the nine months ended September 30, 2009, compared to 0.38 percent and 6.21 percent for the prior year period.
FDIC assessment expense for the nine months ended September 30, 2009 was $402,000 reflecting a $223,000 increase when compared to $179,000 for the same period in 2008. The FDIC mandated a special assessment for all financial institutions in the second quarter of 2009 equivalent to 5 basis points on total assets minus Tier One capital. For the Bank the special assessment amounted to $162,000. The FDIC is considering a prepaid assessment that would be payable December 31, 2009, and used as a credit against future premium assessments. The Company expects that prepaid assessment, if approved, will amount to approximately $1.7 million.
Total assets increased to $339.7 million at September 30, 2009, or 6 percent, from $320.7 million at December 31, 2008. The primary contributors to the growth between the two periods were increases in available-for-sale securities, loans receivable, and property and equipment of $19.4 million, $3.4 million, and $2.0 million, respectively, offset by a decline in securities held-to-maturity of $2.3 million.
Stocks Discussed: BKOR,