STAUNTON, Va., April 30, 2009 (GLOBE NEWSWIRE) -- Community Financial Corporation (Nasdaq:CFFC), a holding company whose sole subsidiary is Community Bank, Staunton, Virginia, today reported results for the quarter and fiscal year ended March 31, 2009. For the quarter ended March 31, 2009, Community Financial reported a net loss of $538,000, or $(0.17) per diluted share, compared to net income of $1,006,000, or $0.23 per diluted share, for the same period last year. The net loss for the current quarter compared to net income for the March 31, 2008 quarter was due to increases in the provision for loan losses of $2,470,000 and noninterest expense of $221,000, offset by an increase in net interest income of $188,000 and a decrease in income taxes of $862,000. The increase in the provision for loan losses is primarily related to both the increase in our lending and an increase in charge-offs and anticipated charge-offs related to loans for which we have established specific reserves based on the continuing deterioration of the real estate market.
Total interest income decreased by $1,098,000 to $6,817,000 during the March 31, 2009 quarter compared to the March 31, 2008 quarter. The decrease was the result of a decline in yield on interest earning assets, the elimination of the dividends on Fannie Mae and Freddie Mac preferred stock and on our Federal Home Loan Bank stock, partially offset by an increase in the volume of interest earning assets. Total interest expense decreased by $1,286,000 to 2,667,000 for the fourth quarter of 2009 compared to the same period in 2008 as a result of the decrease in the interest rates paid on interest-bearing liabilities, offset by the increase in the volume of interest-bearing liabilities. The interest rate spread increased by 8 basis points to 3.30% for the quarter ended March 31, 2009 compared to 3.22% for the same period in 2008.
Non-interest income increased by $97,000 to $837,000 for the quarter ended March 31, 2009 compared to the March 31, 2008 quarter due to a write down of a partnership ownership interest of $89,000 in the prior period and greater loan related fees, offset by lower deposit related fees. Non-interest expenses increased $221,000 to $3,247,000 for the March 31, 2009 quarter compared to the March 31, 2008 quarter. The increase in non-interest expenses was due primarily to information technology purchases and federal deposit insurance premiums.
Community recorded a net loss for the fiscal year ended March 31, 2009 of $(5,823,000), or $(1.38) diluted loss per share, compared to net income of $3,836,000, or $0.87 diluted earnings per share, for fiscal year ended March 31, 2008. The decrease in net income for the fiscal year ended March 31, 2009 compared to the same period ended March 31, 2008 is attributable to the impairment charges on Fannie Mae and Freddie Mac preferred stock. The impairment charge, net of taxes, reduced net income for the current fiscal year by $7,152,000, or $1.64 per diluted share, for fiscal 2009. Net interest income increased over fiscal 2008 due to an increase in the average outstanding balance of loans receivable and an increase in the interest rate spread for the fiscal year ended March 31, 2009 compared to March 31, 2008. The interest rate spread increased by 21 basis points to 3.31% for the fiscal year ended March 31, 2009 compared to 3.10% for the same period in 2008.
The Company's total assets increased $21.4 million to $512.6 million at March 31, 2009 from $491.2 million at March 31, 2008 due to an increase in loans receivable of $39.8 million. Investment securities decreased $10.6 million to $1.9 million at March 31, 2009, the proceeds of which, along with the $14.8 million increase in total deposits to $365.5 million at March 31, 2009 and approximately $12.6 million from the sale of preferred stock to the U.S. Treasury, were used to fund the increase in loans receivable. Stockholders' equity increased $7.6 million to $46.3 million at March 31, 2009 from $38.7 million at March 31, 2008, due to the previously reported issuance of $12.6 million of preferred stock under the U.S. Treasury's Capital Purchase Program and a reduction in unrealized losses on securities available for sale, partially offset by a $5.8 million net loss for the year ended March 31, 2009, and cash dividend payments on our common and preferred stock.
At March 31, 2009, Community Bank was classified as a "well capitalized" institution. Community Bank, the wholly owned subsidiary of Community Financial, is headquartered in Staunton, Virginia and has offices in Waynesboro, Stuarts Draft, Raphine, Verona, Lexington, Buena Vista and Virginia Beach. Community Financial Corporation is traded on the Nasdaq National Market, under the symbol CFFC.
Except for the historical information in this press release, the matters discussed may be deemed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, including, but not limited to, the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs that may be impacted by deterioration in the housing and commercial real estate markets and may lead to increased losses and non-performing assets in our loan portfolio, resulting in our allowance for loan losses not being adequate to cover actual losses which may require us to materially increase our reserves, changes in economic conditions in the Company's market areas, changes in the financial condition or business prospects of the Company's borrowers, changes in policies by regulatory agencies, the impact of competitive loan products, loan demand risks, fluctuations in interest rates and the relationship between long and short term rates, operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. Actual strategies and results in future periods may differ materially from those currently expected. These forward-looking statements represent the company's judgment as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements.
Community Financial Corporation (NASDAQ: CFFC)
Selected Financial Condition Data
---------------------------------
(Dollars in thousands)
Percent
March 31, March 31, Increase
2009 2008 (Decrease)
---------- ---------- ----------
Total assets $512,618 $491,246 4.4%
Loans receivable, net 476,950 437,174 9.1
Investment securities 1,907 12,503 (84.7)
Real estate owned and repossessed
assets 1,400 593 136.1
Deposits 365,506 350,731 4.2
Borrowings 96,476 98,834 (2.4)
Stockholders' equity 46,342 38,705 19.7
Selected Operations Data
------------------------
(Dollars in thousands)
Three Months Ended Percent
March 31, March 31, Increase
2009 2008 (Decrease)
---------- ---------- ----------
Interest income $6,817 $7,915 (13.9)%
Interest expense 2,667 3,953 (32.5)
Net interest income 4,150 3,962 4.7
Provision for loan losses 2,639 169 1,461.5
Net interest income after
provision for loan losses 1,511 3,793 (60.2)
Noninterest income 837 740 13.0
Noninterest expense 3,247 3,026 7.3
Income tax (benefit) expense (361) 501 (172.1)
Net income (loss) (538) 1,006 (153.5)
Effective dividend on preferred
stock (207) --
Net income (loss) available to
common stockholders (745) 1,006 (174.1)
At or for the
Quarter Ended Percent
March 31, March 31, Increase
2009 2008 (Decrease)
---------- ---------- ----------
Return (loss) on average equity (4.61)% 10.47% (144.0)%
Return (loss) on average assets (.42) .82 (151.2)
Interest rate spread 3.30 3.22 2.5
Diluted earnings (loss) per share (.17) .23 (173.9)
Dividends paid on common shares .00 .065 (100.0)
Year Ended Percent
(Dollars in thousands) March 31, March 31, Increase
2009 2008 (Decrease)
---------- ---------- ----------
Interest income $28,692 $32,244 (11.0)%
Interest expense 12,460 16,978 (26.6)
Net interest income 16,232 15,266 6.3
Provision for loan losses 4,285 625 585.6
Net interest income after
provision for loan losses 11,946 14,641 (18.4)
Noninterest income (loss) (8,113) 3,343 (342.7)
Noninterest expense 13,449 12,292 9.4
Income tax (benefit) expense (3,793) 1,856 (304.4)
Net income (loss) (5,823) 3,836 (251.8)
Effective dividend on preferred
stock (211) --
Net income (loss) available to
common stockholders (6,034) 3,836 (257.3)
Other Selected Data
-------------------
At or for the
Year Ended Percent
March 31, March 31, Increase
2009 2008 (Decrease)
---------- ---------- ----------
Return (loss) on average equity (14.57)% 9.77 % (249.1)%
Return (loss) on average assets (1.17) .80 (246.3)
Interest rate spread 3.31 3.10 6.8
Non-performing assets(1) to total
assets 1.75 .33 430.3
(1) Includes nonaccrual loans, and other real estate owned and
repossessed assets.
Per Share Data
--------------
At or for the
Year Ended Percent
March 31, March 31, Increase
2009 2008 (Decrease)
---------- ---------- ----------
Diluted earnings (loss) per share $(1.38) $0.87 (258.6)%
Book value per common share 7.73 8.93 (13.4)
Dividends paid on common shares .13 .26 (50.0)
Shares outstanding 4,361,658 4,335,958 5.9
Note: All share and per share data is restated for a 2 for 1 stock
split as of September 6, 2007.