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Madison National Bancorp, Inc. Reports Fourth Quarter 2010 Results Highlighted by Solid Earnings

^{Published on 2011-02-17 13:11:03 - Market Wire}
 

HAUPPAUGE, N.Y.--([ BUSINESS WIRE ])--Madison National Bancorp, Inc. (aMadisona, athe Companya)(OTCBB: MNBZ), the parent company of Madison National Bank, today reported its financial results for the quarter ended December 31, 2010, highlighted by the Companya™s solid earnings, an expanded net interest margin and continued capital levels.

Solid Quarterly Earnings

Net income for the quarter ended December 31, 2010 was $234,752, or $.06 per share compared to $207,137, or $.06 per share on a linked quarter basis. Included in the 2010 fourth quarter income statement was approximately $220,000 in one-time merger related expenses which, on a tax effected basis, impacted earnings per share by $.03 per share. On a full-year basis, the Banka™s net interest income grew by $951,999, or 9.1%, to $11.4 million.

On a year over year pre-tax basis, the Company earned $115,536 in 2010 versus a pre-tax loss of $607,518 in 2009. Management believes the pre-tax basis is more reflective of comparison due to the prior yeara™s inclusion in tax expense of a $3.2 million tax benefit relating to the recognition of a net operating loss tax recapture. Excluding this benefit, the Company realized a net loss for 2009 of$287,394 as compared to the current year net loss of $50,748.

Improved Capital Ratios

The Banka™s tier one leverage capital ratio at December 31, 2010 was 10.52% and represents an increase of 98 basis points from September 30, 2010. The Banka™s total risk based capital ratio at December 31, 2010 was 13.83%, an increase of 103 basis points from September 30, 2010. The increase is largely attributable to a capital infusion of $1.5 million as per the terms of the merger agreement with FNBNY Bancorp, Inc.("FNBNY"). Pursuant to the agreement, FNBNY purchased 182,260 newly issued shares of Madisona™s common stock (or approximately 4.95% of outstanding shares) at $8.23 per share.

Balance Sheet

Total assets for the quarter decreased by $7.1 million, or 2.3%, to $296.6 million. On a year-over-year basis, total assets decreased by $28.7 million, or 8.8% from $325.3 million to $296.6 million. Cash and cash equivalents decreased by $3.5 million and net loans increased by $3.1 million during the quarter. Funding liabilities declined by $9.4 million primarily in savings accounts and certificates of deposit.

The Companya™s overall average cost of interest bearing liabilities decreased from 2.10% for the quarter ended December 2009 to 1.86% for the current quarter. More importantly, given the Banka™s retail focus, the cost of deposits for the fourth quarter of 2010 decreased to 1.49% from 1.83% for the same quarter of 2009, a decrease of 18.6%. During the fourth quarter, the Bank utilized the brokered certificate of deposit market to secure long-term funding at attractive cyclical rates.

Loan Portfolio and Asset Quality

Non-accrual loans and leases totaled $14.8 million or 6.0% of loans and leases outstanding at December 31, 2010 compared to $15.4 million or 6.2% at September 30, 2010. Net charge-offs of $630,676 were recorded during the fourth quarter of 2010 and represents charge-offs/write-downs of two loans and a small recovery on another loan. Subsequent to the end of the quarter, the Bank sold two non-performing loan notes totaling $5.0 million at their carrying values as of December 31, 2010. Currently, non-accrual loans as a percent of loans and leases outstanding is 4.45%. 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.

The allowance for loan losses decreased by approximately $130,676 to end the quarter at $5.1 million, or 2.08%, of gross loans. On a year-over-year basis, the allowance for loan losses has decreased by $203,457 but increased by 10 basis points relative to gross loans.

Provision for Income Taxes

The provision for income tax expense is unusually high in 2010 due to the Company incurring various non-deductible permanent items including various one-time merger related expenses.

About Madison National Bank

With assets of $296.6 million at December 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 Islanda™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 Companya™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.