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Press Release
Epic Bancorp Announces Fourth Quarter and Full Year Earnings San Rafael, CA, January 25, 2007--Epic Bancorp (the “Company") (NASDAQ:EPIK), the parent company for Tamalpais Bank and Epic Wealth Management, today reported net income for the quarter ended December 31, 2006 of $1,076,000, or $0.29 per diluted share, compared with net earnings of $940,000, or $0.25 per diluted share for the same quarter in 2005. The Company also announced a 7% stock dividend to be paid on February 14, 2007 to shareholders of record on January 31, 2007. Excluding the effect of Statement of Financial Accounting Standard No. 123R (SFAS 123R) implemented on January 1, 2006, which requires the Company to record stock options as compensation expense, net income for the quarter ended December 31, 2006 would have been $1,157,000, or $0.31 per diluted share. Net Income for the full year 2006 of $3,928,000, or $1.06 per diluted share, compared with net earnings of $4,096,000, or $1.08 per diluted share, for the same period in 2005. Excluding the effect of Statement of Financial Accounting Standard No. 123R (SFAS 123R) net income for the full year 2006 would have been $4,252,000, or $1.13 per diluted share. The total assets of the Company increased to $503.5 million as of December 31, 2006, up $41.7 million (9 percent) from $461.8 million as of December 31, 2005. In 2006 net loans receivable increased by 10 percent to $421.3 million, deposits increased 18 percent to $369.8 million, investment securities increased 10 percent to $48.3 million, and stockholders’ equity increased 15 percent to $30.9 million from December 31, 2005. The Company's net interest income before its provision for loan losses was $4,411,000 in the fourth quarter of 2006, compared to $4,279,000 for the full year 2005. The Company's net interest income before its provision for loan losses for the full year 2006 was $17,630,000, compared to $16,996,000 in the same period in 2005. The increases in net interest income are primarily attributable to an increased earning asset base partially offset by a narrowing net interest margin. Noninterest income in the fourth quarter of 2006 was $485,000, compared to $561,000 in the same period in 2005. The decrease in noninterest income in the fourth quarter was primarily due to a decrease in the volume of Small Business Administration (SBA) loans sold. Noninterest income for the full year 2006 was $2,176,000, compared to $1,634,000 for the full year 2005. The increase in noninterest income for the full year was primarily due to the increased volume of Small Business Administration (SBA) loans sold and increased investment advisory services fee income from Epic Wealth Management. Total noninterest expense in the fourth quarter of 2006 was $3,118,000, compared to $3,226,000 for the same period in 2005. The fourth quarter of 2006 included stock options expenses of $82,000, while the fourth quarter of 2005 did not reflect such expenses. Despite stock option expenses in the fourth quarter of 2006, noninterest expenses decreased $108,000 primarily due to decreases in personnel expenses. Total noninterest expense for the full year 2006 was $13,036,000, compared to $11,262,000 for the same period in 2005. Full year 2006 expenses included stock options expenses of $323,000, while the full year 2005 did not reflect such expenses. Other increases in noninterest expenses for the full year 2006 were primarily due to increased personnel costs in 2006 over 2005. “We are pleased with the 16 percent increase in fourth quarter earnings per share, which was accomplished primarily through controlled operating expenses that more than offset the expensing of stock options,” said Mark Garwood, Epic Bancorp CEO/president. “We were also able to increase net interest income three percent despite a narrowing net interest margin. “The full year 2006 was challenging for us and for community banks in general. The 17 consecutive ¼ point increases in interest rates by the Federal Reserve from June 2004 through June 2006 have caused an inverted yield curve and a narrowing of our net interest margin as well as a decrease in loan demand. We also incurred stock option related expense of $323,000 for the full year. In the face of these difficulties, we were able to increase income sequentially in each of the last three quarters of 2006. “Despite strong local competition, we continue to increase market share through our retail Marin County branch network, including our newest branch in Tiburon, CA which opened in August 2006. We also grew our Small Business Lending (SBA) division and originated loans in increasingly wider geographies throughout the year. In addition, our asset quality has remained exceptionally strong, with no non-performing loans as of quarter end and no loan losses for 10 consecutive years.” “We are beginning 2007 on sound footing. We have strengthened our team of seasoned business banking professionals and are encouraged by our progress. We are confident about our prospects and look forward to continued success in increasing profitability and market share. “We are also paying our first ever stock dividend on February 14, 2007, Valentine’s Day, to Shareholders of record on January 31, 2007. This dividend, which is intended to increase the number of shares outstanding and increase shareholder liquidity, is another way for us to say ‘thank you’ to our shareholders for their continued support,” he said. About Epic Bancorp About Tamalpais Bank About Epic Wealth Management |