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Carrollton Bancorp Reports Fourth Quarter and Full Year Net Income

  Carrollton Bancorp Reports Fourth Quarter and Full Year Net Income

Business Wire

COLUMBIA, Md. -- February 06, 2012

Carrollton Bancorp, (NASDAQ: CRRB) the parent company of Carrollton Bank,
announced net income of $569,000 for the fourth quarter of 2011 and $547,000
for the year ended December 31, 2011, compared to net losses of $1.2 million
and $946,000 for the comparable periods in 2010. Net income available to
common stockholders for the fourth quarter of 2011 was $431,000 ($0.17 per
diluted share) compared to a net loss attributable to common stockholders of
$1.3 million ($0.52 loss per diluted share) for the fourth quarter of 2010.
Net loss attributable to common stockholders for the year ended December 31,
2011 was $1,587 ($0.00 loss per diluted share) compared to net loss
attributable to common stockholders of $1.5 million ($0.58 loss per diluted
share) for the same period in 2010.

The Company’s pre-tax income was $887,000 for the quarter ended December 31,
2011 compared to a pre-tax loss of $2.0 million for the quarter ended December
31, 2010. For the year ended December 31, 2011, the Company earned income
before taxes of $701,000 compared to a loss before taxes of $1.8 million for
the year ended December 31, 2010.

The improvement in operating results for the quarter ended December 31, 2011,
as compared to the same period in 2010, is primarily a result of a $2.3
million decline in the provision for loan losses, as well as an $801,000
decline in noninterest expenses.

The improvement in operating results for the year ended December 31, 2011,
compared to 2010, is primarily a result of a $1.1 million improvement in
noninterest income and a $1.9 million decline in the provision for loan
losses. These improvements were partially offset by higher costs associated
with foreclosed real estate and lower net interest income earned on a smaller
asset base. During the year ended December 31, 2011, the Company recorded a
provision for loan losses of $2.2 million compared to $4.1 million during the
same period in 2010. Expenses and losses associated with foreclosed real
estate were $1.4 million for the year ended December 31, 2011 as compared to
$889,000 for 2010.

Nonperforming assets (nonaccrual loans and foreclosed real estate) decreased
by 7.9% from $9.5 million at December 31, 2010 to $8.8 million at December 31,
2011. The allowance for loan losses represented 1.81% of outstanding loans as
of December 31, 2011 compared to 1.55% at December 31, 2010. The Company
experienced net charge-offs of $1.8 million for the year ended December 31,
2011 as compared to net charge-offs of $3.9 million for 2010.

The Company’s recent strategy, focused on carefully shrinking the balance
sheet, continued to benefit net interest margins and capital ratios. The
Company’s net interest margin of 4.01% for the year ended December 31, 2011
improved from 3.74% for the year ended December 31, 2010. The benefit of
reducing the size of the balance sheet is that the Company has been able to
improve its regulatory capital ratios even though it has generated no capital
growth after accounting for dividends on preferred stock. Unfortunately the
benefit of stronger margins was offset by the lower interest earning assets in
2011 resulting in a $275,000 decline in net interest income for the year ended
December 31, 2011 as compared to 2010. As a result, management has revised its
strategy to maintaining asset levels while continuing to pursue opportunities
to lower funding costs.

The Company’s noninterest income businesses continue to perform well as
demonstrated by increases in noninterest income of $94,000 and $1.1 million
for the three and twelve month periods as a result of strength in the
Company’s electronic banking, investment brokerage and mortgage origination
businesses and a decrease in write-downs on investment securities.

Noninterest expenses decreased by $801,000 for the three month period ended
December 31, 2011 but increased by $226,000 for the year, compared to the same
periods in 2010. The quarterly decrease resulted from a reduction in salary
and employee benefit costs and a decrease in expenses and losses associated
with the management and disposal of foreclosed real estate.

The increase in the full year expenses include increases in loan workout
costs, the previously mentioned expenses and losses associated with the
management and disposal of foreclosed real estate and a change in the
structure of the mortgage banking division during the first quarter of 2010
that resulted in a shift of costs that were previously recorded as an offset
to mortgage fee income. These increased expenses were partially offset by
decreases in employee salaries and benefits.

President and Chief Executive Officer Bob Altieri stated, “We have followed
our strategic plan to improve capital levels and as our capital ratios
indicate, we have done so successfully. Unfortunately, that comes with a cost
and that is growth. In order to strategically grow, more improvement is needed
in capital, which could be derived from the capital markets, though it appears
a daunting challenge for community banks. We continue to focus on capital and
ways to prepare to redeem the preferred stock issued pursuant to the Troubled
Asset Relief Program (“TARP”).”

Total assets as of December 31, 2011 compared to December 31, 2010 reflect a
5.6%, or $21.7 million, decrease to $364.8 million. Gross loans decreased
7.6%, or $24.5 million, from $322.0 million at December 31, 2010 to $297.5
million at December 31, 2011. Investments, at amortized cost, decreased 13.0%,
or $4.8 million, to $32.2 million at December 31, 2011 from $37.0 million as
of December 31, 2010. This decrease is a result of management’s decision to
use cash flow from investments to shrink the balance sheet by reducing high
cost borrowings.

Total deposits increased 4.4%, or $13.4 million, to $315.0 million while
borrowings decreased $37.1 million from balances at December 31, 2010. The
increase in deposits was comprised of an $8.8 million increase in non-interest
bearing deposits and a $10.8 million increase in interest bearing transaction
accounts. These increases were partially offset by a $6.2 million reduction in
certificates of deposit. The significant and intentional deleveraging of the
balance sheet resulted in an improvement in net interest margins to 4.01% for
the year ended December 31, 2011 as compared to 3.74% for 2010.

Carrollton Bancorp is the parent company of Carrollton Bank, a commercial bank
serving the deposit and financing needs of both consumers and businesses
through a system of 10 branch offices in central Maryland. The Company
provides brokerage services through Carrollton Financial Services, Inc., and
mortgage services through Carrollton Mortgage Services, Inc., subsidiaries of
the Bank.

The statement regarding our current strategy to maintain asset levels and
continuing to pursue opportunities to lower funding costs is a forward-looking
statement within the meaning of and pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. A forward-looking
statement encompasses any estimate, prediction, opinion or statement of belief
contained in this release and the underlying management assumptions. Although
the Company believes this statement is based on reasonable estimates and
assumptions, the Company is unable to provide any assurance that its
expectations will, in fact, occur or that its estimates or assumptions will be
correct. Actual results could differ materially from those expressed or
implied by such forward-looking statement and such statement is not a
guarantee of future performance. Potential risks and uncertainties that could
cause anticipated results to differ from those expressed or implied by such
forward-looking statement include, but are not limited to, unexpected changes
in the housing market or in general economic conditions in our market area,
unexpected changes in market interest rates, the impact of new governmental
regulations that might require changes in our business model, and other risks
and uncertainties as described in reports Carrollton Bancorp files with the
Securities and Exchange Commission. The Company undertakes no obligation to
update or revise forward looking statements.

A summary of financial information follows. For additional information,
contact Mark A. Semanie, Chief Financial Officer, (410) 536-7308.

FINANCIAL                                                                                         
HIGHLIGHTS
Carrollton
Bancorp
                  Three Months Ended December 31,                   Year Ended December 31,
                  2011              2010               %Change      2011              2010               %Change
               (unaudited)      (unaudited)                   (unaudited)      (unaudited)       
Results of
Operations
Net interest      $ 3,503,461       $ 3,824,057        (8.38   %)   $ 14,073,224      $ 14,348,420       (1.92   %)
income
Provision for       119,798           2,461,991        (95.13  %)     2,156,626         4,106,353        (47.48  %)
loan losses
Noninterest         2,152,321         2,058,158        4.58    %      7,932,093         6,840,253        15.96   %
income
Noninterest         4,649,186         5,450,612        (14.70  %)     19,147,630        18,922,088       1.19    %
expenses
Income tax
expense             318,247           (841,491    )    -              154,333           (894,132    )    -
(benefit)
Net income          568,551           (1,188,898  )    -              546,728           (945,636    )    -
(loss)
Net income
(loss) to           431,471           (1,325,445  )    -              (1,587      )     (1,488,635  )    99.89   %
common
stockholders
                                                                                                         
Per Share
Net income -      $ 0.17            $ (0.52       )    (132.69 %)   $ 0.00            $ (0.58       )    100.00  %
diluted
Cash
dividends           0.00              0.02             (100.00 %)     0.00              0.14             (100.00 %)
declared
Book value          9.19              9.51             (3.39   %)     9.19              9.51             (3.39   %)
Common stock        2.80              4.31             (35.03  %)     2.80              4.31             (35.03  %)
closing price
                                                                                                         
At December
31
Short term        $ 13,185,809      $ 4,539,096        190.49  %    $ 13,185,809      $ 4,539,096        190.49  %
investments
Investment
securities          32,208,127        37,011,545       (12.98  %)     32,208,127        37,011,545       (12.98  %)
(b)
Loans held          28,420,897        32,754,383       (13.23  %)     28,420,897        32,754,383       (13.23  %)
for sale
Loans (net of
unearned            269,048,846       289,228,889      (6.98   %)     269,048,846       289,228,889      (6.98   %)
income) (a)
Earning             344,974,979       366,996,913      (6.00   %)     344,974,979       366,996,913      (6.00   %)
assets (b)
Total assets        364,810,229       386,490,730      (5.61   %)     364,810,229       386,490,730      (5.61   %)
Total               314,992,836       301,629,531      4.43    %      314,992,836       301,629,531      4.43    %
deposits
Stockholders'       32,684,536        33,395,068       (2.13   %)     32,684,536        33,395,068       (2.13   %)
equity
                                                                                                         
Common shares       2,576,388         2,573,088                       2,576,388         2,573,088
outstanding
                                                                                                         
Average
Balances
Short term        $ 11,937,305      $ 4,786,442        149.40  %    $ 8,753,007       $ 12,720,311       (31.19  %)
investments
Investment
securities          32,599,279        41,587,435       (21.61  %)     34,673,955        52,812,437       (34.35  %)
(b)
Loans held          27,702,068        29,242,855       (5.27   %)     26,200,969        20,945,815       25.09   %
for sale
Loans (net of
unearned            271,040,525       295,620,161      (8.31   %)     278,716,467       293,923,701      (5.17   %)
income) (a)
Earning             345,700,830       374,766,072      (7.76   %)     351,320,300       384,144,059      (8.54   %)
assets (b)
Total assets        365,846,229       392,571,357      (6.81   %)     371,403,345       403,844,988      (8.03   %)
Total               316,617,996       312,679,241      1.26    %      310,726,423       321,484,196      (3.35   %)
deposits
Stockholders'       34,065,108        35,658,462       (4.47   %)     33,632,880        36,001,949       (6.58   %)
equity
                                                                                                         
Earnings
Ratios
Return on
average total       0.62        %     (1.20       %)                  0.15        %     (0.23       %)
assets
Return on
average
stockholders'
equity              6.62        %     (13.23      %)                  1.63        %     (2.63       %)
Net interest        4.02        %     4.05        %                   4.01        %     3.74        %
margin
                                                                                                         
Credit Ratios
Nonperforming
assets as a
percent of
period-end          3.21        %     3.24        %                   3.21        %     3.24        %
loans and
foreclosed real
estate (c)
Allowance to        1.81        %     1.55        %                   1.81        %     1.55        %
loans (a)
Net loan losses
to average          0.00        %     1.02        %                   0.64        %     1.34        %
loans
                                                                                                         
Capital
Ratios
(period end)
Stockholders'
equity to total
assets              8.96        %     8.64        %                   8.96        %     8.64        %
Leverage            9.75        %     9.45        %                   9.75        %     9.45        %
capital
Tier 1
risk-based          10.59       %     10.12       %                   10.59       %     10.12       %
capital
Total
risk-based          11.87       %     11.35       %                   11.87       %     11.35       %
capital
                                                                                                         
(a) Excludes loans held for sale
(b) Excludes market value adjustment on securities available for sale
(c) Nonperforming assets are comprised of nonaccrual loans and foreclosed real estate. Excludes performing
restructured loans of $8.5 million and $7.8 million as of December 31, 2011 and 2010, respectively.


Contact:

Carrollton Bancorp
Mark A. Semanie, Chief Financial Officer, 410-536-7308
 
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