Performance Highlights
- Net Interest Margin: Net interest margin of 4.09% for the first quarter of 2010 increased 73 basis points compared to the first quarter of 2009.
- Continued Capital Strength: The Bank's tier one capital ratio and tier one risk based capital ratio were 9.02% and 11.18% at March 31st, respectively, significantly above the regulatory requirements to qualify as a well capitalized institution.
- Balance Sheet: Assets totaled $308.2 million at March 31, 2010, up $29.6 million, or 10.6%, from March 31, 2009.
- Net Interest Income Growth: First quarter 2010 net interest income of $3.1 million, an increase of 41.9% compared to $2.2 million for the first quarter of 2009.
- Allowance for Loan Losses: The allowance for loan loss of $5.1 million at March 31, 2010 represents an increase of $3.2 million versus March 31, 2009.
- Madison Opens Massapequa Branch: The Bank opened its third branch located in Massapequa, NY on March 23, 2010.
Madison National Bancorp, Inc. ("Madison", "the Company")(OTCBB: MNBZ), the parent company of Madison National Bank, today reported its financial results for the quarter ended March 31, 2010, highlighted by the Company's strong net interest margin and continued capital strength.
Net Interest Margin
Net interest margin for the quarter ended March 31, 2010 was 4.09% compared to 3.78% on a linked quarter basis and 3.36% for the same period in 2009. Net interest income for the first quarter of 2010 increased to $3.1 million, or 3.2%, versus $3.0 million for the fourth quarter of 2009. Compared to the same period one year ago, net interest income increased by $900,000, or 41.9%.
Continued Capital Strength
The Bank's tier one leverage capital ratio for the quarter ended March 2010 was 9.02% and represents an increase of 12 basis points from the quarter ended December 2009. The Bank's tier one risk based capital ratio for the quarter ended March 2010 was 11.18%, or a decrease of 12 basis points from the quarter ended December 2009.
Balance Sheet
Total assets for the quarter decreased by $17.0 million, or 5.2%, to $308.2 million. On a year-over-year basis, total assets grew by $29.6 million, or 10.6%. Cash and cash equivalents declined by $6.5 million, total securities declined by $6.0 million, and net loans decreased by $5.1 million during the quarter. Funding liabilities declined by $15.7 million primarily in certificates of deposit.
Asset growth on a year-over-year basis was funded through growth in the deposit franchise of approximately $20.2 million, or 9.9%, and through long term borrowings of $10.5 million at the Federal Home Loan Bank of New York. The company's overall average cost of interest bearing liabilities decreased from 2.98% for the quarter ended March 2009 to 2.04% for the current quarter. More importantly, the cost of deposits for the 1st quarter of 2010 decreased to 1.82% from 2.98% for the same quarter of 2009.
Loan Portfolio and Asset Quality
Non-accrual loans and leases totaled $9.3 million or 3.9% of loans and leases outstanding at March 31, 2010 versus $7.4 million or 2.7% at December 31, 2009. Charge-offs of $2.4 million were recorded during the first quarter of 2010 and represent write-downs on two loans. Of the two loans, one is currently under contract for sale where the current carrying amount represents the price to dispose of the property. The second property is a loan where the bank wrote down the carrying amount to the current appraised value of the land only -- absent other site improvements or other aspects of collateral value. Management believes that future development on this site may result in enhanced value and improved recovery prospects for the bank. The bank continues to be proactive in managing its loan portfolio and aggressively addressing any issues arising during this difficult credit cycle. The bank experienced no loan charge-offs during 2009.
During the quarter, the bank entered into a contract for the sale of a pool of multifamily loans, at par, which settled early in the second quarter of 2010. This sale affords the company the benefit of reducing its concentration in commercial real estate loans and providing financial flexibility in repositioning its balance sheet. The bank will continue to focus its efforts on originating commercial loans and building business banking relationships in 2010.
During the first quarter of 2010, the bank recorded provision for loan losses totaling $2.2 million compared to $425,000 for the fourth quarter of 2009. Net of charge-offs, the allowance for loan losses decreased by approximately $200,000 to end the quarter at $5.1 million or 1.93% of gross loans. On a year-over-year basis, the allowance for loan losses has increased by $3.2 million and 106 basis points relative to gross loans.
In a joint statement, Madison's Co-Chairmen, Daniel L. Murphy and Michael P. Puorro stated, "Madison continues to proactively manage the credit profile of the institution in the current economic environment. During this particularly challenging cycle, Madison has remained vigilant by strengthening reserves to better position the company to benefit from opportunities as they present themselves in an improving market."
About Madison National Bank
With assets of $308.2 million at March 31, 2010, Madison National Bank is a locally owned and operated commercial bank, focusing on highly personalized and efficient services and products, responsive to local needs. Management and the Board of Directors is comprised of a select group of successful local businessmen and women who are committed to the success of the Company by knowing and understanding Long Island's financial needs and opportunities. Backed by state-of-the-art technology, Madison offers a full range of modern financial services. Madison employs a complete suite of consumer and commercial banking products and services, including multifamily and commercial mortgages, construction loans, home equity lines of credit, business loans and lines of credit. Madison also offers 24-hour ATM service with no fees attached, free checking with interest, telephone banking, the most advanced technologies in internet banking for our consumer and business customers, safe deposit boxes and much more. Madison National Bank maintains its corporate offices in Hauppauge, New York and currently operates three New York branch offices in Merrick, Melville, and Massapequa.
Madison National Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For further information, call 631-348-6999 or visit the Company's website at www.madisonnational.com.
Forward-Looking Statements
This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Madison National Bank. Any or all of the forward-looking statements in this release and in any other public statements made by Madison National Bank may turn out to be incorrect. They can be affected by inaccurate assumptions Madison National Bank might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Madison National Bank does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.
MADISON NATIONAL BANCORP, INC. | ||||||||||||
STATEMENTS OF CONDITION | ||||||||||||
(Unaudited) | ||||||||||||
 | ||||||||||||
 | March 31, 2010 |  | December 31, 2009 |  | March 31, 2009 | |||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 15,984,571 | $ | 22,482,568 | $ | 13,645,020 | ||||||
 | ||||||||||||
Debt and Equity Securities available for sale | 3,726,700 | 8,903,140 | 21,890,409 | |||||||||
Securities held to maturities | Â | 16,778,563 | Â | Â | 17,636,900 | Â | Â | 19,138,468 | Â | |||
Total securities | 20,505,263 | 26,540,040 | 41,028,877 | |||||||||
 | ||||||||||||
Loans held for sale | 17,876,599 | - | - | |||||||||
Loans, net of deferred loan fees and costs | 247,096,634 | 270,268,537 | 219,166,387 | |||||||||
Less: allowance for loan losses | Â | (5,108,000 | ) | Â | (5,335,000 | ) | Â | (1,895,000 | ) | |||
Loans, net | 259,865,233 | 264,933,537 | 217,271,387 | |||||||||
 | ||||||||||||
Other assets | Â | 11,882,831 | Â | Â | 11,304,295 | Â | Â | 6,706,400 | Â | |||
Total Assets | $ | 308,237,898 | Â | $ | 325,260,440 | Â | $ | 278,651,684 | Â | |||
 | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Demand Deposits | $ | 10,607,863 | $ | 10,171,634 | $ | 5,460,140 | ||||||
Savings, NOW & Money Market | 92,077,521 | 94,794,853 | 93,211,612 | |||||||||
Certificates of Deposit | Â | 121,421,694 | Â | Â | 133,322,267 | Â | Â | 105,189,115 | Â | |||
Total Deposits | 224,107,078 | 238,288,754 | 203,860,867 | |||||||||
 | ||||||||||||
Federal Home Loan Bank Advances | 53,500,000 | 55,000,000 | 43,000,000 | |||||||||
Other Liabilities | Â | 570,923 | Â | Â | 989,231 | Â | Â | 2,827,158 | Â | |||
Total Liabilities | 278,178,001 | 294,277,985 | 249,688,025 | |||||||||
 | ||||||||||||
Total Shareholders' Equity | Â | 30,059,897 | Â | Â | 30,982,455 | Â | Â | 28,963,659 | Â | |||
Total Liabilities and Shareholders' Equity | $ | 308,237,898 | Â | $ | 325,260,440 | Â | $ | 278,651,684 | Â |
MADISON NATIONAL BANCORP, INC. | ||||||||||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
 | ||||||||||||||||||||
 | Quarter to Date |  | Quarter to Date |  | Year to Date |  | Year to Date | |||||||||||||
 | ||||||||||||||||||||
Total interest income | $ | 4,422,985 | $ | 3,870,964 | $ | 4,422,985 | $ | 3,870,964 | ||||||||||||
Total interest expense | Â | 1,370,232 | Â | Â | 1,719,799 | Â | 1,370,232 | Â | Â | 1,719,799 | ||||||||||
Net interest income | 3,052,753 | 2,151,165 | 3,052,753 | 2,151,165 | ||||||||||||||||
Provision for loan losses | Â | 2,200,000 | Â | Â | 320,000 | Â | 2,200,000 | Â | Â | 320,000 | ||||||||||
 | ||||||||||||||||||||
Net interest income after provision for loan loss | 852,753 | 1,831,165 | 852,753 | 1,831,165 | ||||||||||||||||
 | ||||||||||||||||||||
 | ||||||||||||||||||||
Total non-interest income | 271,672 | 235,158 | 271,672 | 235,158 | ||||||||||||||||
 | ||||||||||||||||||||
Compensation and benefits | 1,196,538 | 962,122 | 1,196,538 | 962,122 | ||||||||||||||||
Occupancy and equipment | 464,190 | 333,515 | 464,190 | 333,515 | ||||||||||||||||
FDIC Assessment | 103,383 | 114,573 | 103,383 | 114,573 | ||||||||||||||||
Other operating expenses | Â | 593,337 | Â | Â | 454,070 | Â | 593,337 | Â | Â | 454,070 | ||||||||||
Total non-interest expense | 2,357,448 | 1,864,280 | 2,357,448 | 1,864,280 | ||||||||||||||||
 | ||||||||||||||||||||
Income Before Taxes | (1,233,023 | ) | 202,043 | (1,233,023 | ) | 202,043 | ||||||||||||||
 | ||||||||||||||||||||
Provision for income taxes | Â | (454,726 | ) | Â | - | Â | (454,726 | ) | Â | - | ||||||||||
Net income | $ | (778,297 | ) | $ | 202,043 | $ | (778,297 | ) | $ | 202,043 | ||||||||||
 | ||||||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||||||
 | ||||||||||||||||||||
Total interest income | $ | 4,422,985 | $ | 4,491,616 | $ | 4,250,630 | $ | 3,870,964 | ||||||||||||
Total interest expense | Â | 1,370,232 | Â | Â | 1,533,648 | Â | 1,403,076 | Â | Â | 1,719,799 | ||||||||||
Net interest income | 3,052,753 | 2,957,968 | 2,847,554 | 2,151,165 | ||||||||||||||||
Provision for loan losses | Â | 2,200,000 | Â | Â | 425,000 | Â | 745,000 | Â | Â | 320,000 | ||||||||||
 | ||||||||||||||||||||
Net interest income after provision for loan loss | ||||||||||||||||||||
852,753 | 2,532,968 | 2,102,554 | 1,831,165 | |||||||||||||||||
 | ||||||||||||||||||||
Total non-interest income | 271,672 | 95,784 | 239,491 | 235,158 | ||||||||||||||||
 | ||||||||||||||||||||
Compensation and benefits | 1,196,538 | 1,166,725 | 1,082,382 | 962,122 | ||||||||||||||||
Occupancy and equipment | 464,190 | 446,329 | 370,326 | 333,515 | ||||||||||||||||
FDIC Assessment | 103,383 | 100,901 | 87,344 | 114,573 | ||||||||||||||||
Other operating expenses | Â | 593,337 | Â | Â | 570,917 | Â | 469,920 | Â | Â | 454,070 | ||||||||||
Total non-interest expense | 2,357,448 | 2,284,872 | 2,009,972 | 1,864,280 | ||||||||||||||||
 | ||||||||||||||||||||
Income Before Taxes | (1,233,023 | ) | 343,879 | 332,073 | 202,043 | |||||||||||||||
 | ||||||||||||||||||||
Provision for income taxes | Â | (454,726 | ) | Â | 136,742 | Â | 131,396 | Â | Â | - | ||||||||||
Net income | $ | (778,297 | ) | $ | 207,137 | $ | 200,677 | Â | $ | 202,043 | ||||||||||
 | ||||||||||||||||||||
Basic Earnings per Share | $ | (0.21 | ) | $ | 0.06 | $ | 0.05 | $ | 0.05 | |||||||||||
Diluted Earnings per Share | $ | (0.21 | ) | $ | 0.06 | $ | 0.05 | $ | 0.05 |
MADISON NATIONAL BANCORP, INC. | ||||||||||||
STATEMENTS OF CONDITION | ||||||||||||
(Unaudited) | ||||||||||||
 | ||||||||||||
 | March 31, 2010 |  | December 31, 2009 |  | March 31, 2009 | |||||||
Asset Quality | ||||||||||||
Allowance for Loan Losses | $ | 5,108,000 | $ | 5,335,000 | $ | 1,895,000 | ||||||
Nonperforming Loans | Â | 9,261,115 | Â | 7,425,857 | Â | 3,095,375 | ||||||
Nonperforming Loans/Total Loans | 3.9 | % | 2.7 | % | 1.4 | % | ||||||
Charge-offs | $ | 2,427,000 | $ | - | $ | - | ||||||
Provision for Loan Loss | Â | 2,200,000 | Â | 425,000 | Â | 320,000 | ||||||
ALL/Loans, Gross | 1.93 | % | 1.98 | % | 0.87 | % | ||||||
 | ||||||||||||
Capital | ||||||||||||
Shares Issue - Basic | 3,685,800 | 3,685,800 | 3,685,800 | |||||||||
Book Value per Share | $ | 8.16 | $ | 8.41 | $ | 7.86 | ||||||
Tier 1 Capital Ratio | 9.02 | % | 8.90 | % | 10.50 | % | ||||||
Tier 1 Risk Based Capital Ratio | 11.18 | % | 11.30 | % | 14.91 | % | ||||||
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 | ||||||||||||
 | ||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||
Profitability | ||||||||||||
Yield on Average Earning Assets | 5.85 | % | 5.66 | % | 5.83 | % | ||||||
Cost of Avg. Interest Bearing Liabilities | 2.04 | % | 2.10 | % | 2.98 | % | ||||||
Net Spread | 3.81 | % | 3.56 | % | 2.85 | % | ||||||
Net Margin | 4.09 | % | 3.78 | % | 3.36 | % |
Contacts:
Madison National Bancorp, Inc.
Michael P. Puorro, Co-Chairman &
President
or
Bonnie Seider, Senior Vice President
631-348-6999