Carrollton Bancorp Reports First Quarter Loss

  Carrollton Bancorp Reports First Quarter Loss

Business Wire

COLUMBIA, Md. -- May 02, 2012

Carrollton Bancorp, (NASDAQ: CRRB) the parent company of Carrollton Bank,
announced a net loss of $252,464 for the first quarter of 2012, compared to
net income of $171,295 for the comparable period in 2011. Net loss
attributable to common stockholders for the first quarter of 2012 was $389,543
($0.15 loss per diluted share) compared to a net income available to common
stockholders of $34,217 ($0.01 per diluted share) for the first quarter of
2011.

The Company’s pre-tax loss was $456,144 for the quarter ended March 31, 2012
compared to pre-tax income of $224,762 for the quarter ended March 31, 2011.

The decline in operating results for the quarter ended March 31, 2012, as
compared to the same period in 2011, is primarily a result of a $651,587
increase in securities write downs, an increase in the provision for loan
losses, as well as increases in legal and consulting costs associated with the
planned merger with Jefferson Bancorp, Inc. announced on April 9, 2012. The
impact of these items was partially offset by increased fee income from
mortgage banking and electronic banking activities.

Nonperforming assets (nonaccrual loans and foreclosed real estate) decreased
by 42.8% from $14.9 million at March 31, 2011 to $8.5 million at March 31,
2012. The allowance for loan losses represented 1.97% of outstanding loans as
of March 31, 2012 compared to 1.64% at March 31, 2011. The Company experienced
net charge-offs of $65,189 for the quarter ended March 31, 2012 as compared to
net recoveries of $18,152 for the same period in 2011.

The Company’s recent strategy, focused on carefully shrinking the balance
sheet, continued to benefit capital ratios. Reducing the size of the balance
sheet has improved the Company’s regulatory capital ratios even though it has
generated no capital growth after accounting for dividends on preferred stock.
We believe that the announced agreement to merge with Jefferson Bancorp will,
upon completion, create a larger and better capitalized bank which will enable
us to pursue opportunities to grow organically and through additional
acquisitions.

The Company’s noninterest income businesses continue to perform well as
demonstrated by increases in mortgage related income of $355,238 and
electronic banking income of $88,873.

Noninterest expenses increased by $209,943 for the three month period ended
March 31, 2012, compared to the same period in 2011. The quarterly increase
resulted from an increased mortgage related incentives included in salaries,
increased professional fees associated with legal and investment banker costs
related to the announced agreement to merge with Jefferson Bancorp, Inc and an
increase in expenses associated with the management and disposal of foreclosed
real estate. These increases were somewhat offset by decreases in FDIC
assessments, employee benefit costs, utility costs and other costs.

President and Chief Executive Officer Bob Altieri stated, “Unfortunately, our
investment made in corporate bonds (PreTSLs) continues to be a hindrance on
earnings. We had a couple quarters where deferrals and defaults in the
underlying debt that backs these securities slowed considerably; however, this
quarter the model reflected the results of additional deferrals and defaults
causing the Bank to recognize, through the P & L, a loss of $780,544 on these
securities. The loss does not impact our capital position since these
securities were written down through capital in 2009. Overall, the Company’s
asset quality has improved as reflected in a 42.8% decrease in nonperforming
assets and asset quality will continue to be a huge focus through this merger
process.”

Total assets as of March 31, 2012 compared to March 31, 2011 reflect a 0.7%,
or $2.5 million, increase to $372.4 million. Gross loans decreased 4.7%, or
$14.5 million, from $305.6 million at March 31, 2011 to $291.2 million at
March 31, 2012. Investments decreased 14.3%, or $4.5 million, to $27.2 million
at March 31, 2012 from $31.7 million as of March 31, 2011. 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 7.6%, or $23.5 million, to $332.2 million while
borrowings decreased $22.7 million from balances at March 31, 2011. The
increase in deposits was comprised of a $15.2 million increase in non-interest
bearing deposits and an $8.4 million increase in interest bearing accounts.

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 its Carrollton Financial Services, Inc.
subsidiary, and mortgage services through its Carrollton Mortgage Services
division of the Bank.

The statement regarding our expectation that upon the merger with Jefferson
Bancorp the merged entity will be better capitalized and in a position to
pursue opportunities to grow organically and through additional acquisitions
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: (i) the risk
that necessary stockholder and regulatory approvals for the merger will not be
obtained; (ii) the businesses of Carrollton Bancorp may not be integrated into
Jefferson Bancorp successfully or such integration may be more difficult,
time-consuming or costly than expected; (iii) expected revenue synergies and
cost savings from the merger may not be fully realized, or realized within the
expected timeframe; (iv) disruption in the parties’ businesses as a result of
the announcement and pendency of the merger; (v) revenues following the merger
may be lower than expected; (vi) customer and employee relationships and
business operations may be disrupted by the merger; (vii) the ability to
complete the merger may be more difficult, time-consuming or costly than
expected, or the merger may not be completed at all; (viii) unexpected changes
in the housing market or in general economic conditions in our market area and
Jefferson Bancorp’s market area; (ix) unexpected changes in market interest
rates; (x) the impact of new governmental regulations that might require
changes in our and Jefferson Bancorp’s business model; (xi) changes in laws,
regulations, policies and guidelines impacting our ability to collect on
outstanding loans or otherwise negatively impacting Carrollton Bancorp’s and
Jefferson Bancorp’s business; (xiii) changes in competitive, governmental,
regulatory, technological and other factors that may affect Carrollton Bancorp
or Jefferson Bancorp specifically or the banking industry generally; and (xiv)
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 March 31,
                                2012             2011            %Change
                             (unaudited)       (unaudited)       
Results of Operations
Net interest income            $ 3,360,135        $ 3,425,520        (1.91  %)
Provision for loan losses        245,514            114,217          114.95 %
Noninterest income               1,343,036          1,617,317        (16.96 %)
Noninterest expenses             4,913,801          4,703,858        4.46   %
Income tax expense (benefit)     (203,680    )      53,467           -
Net income (loss)                (252,464    )      171,295          -
Net income (loss) to common      (389,543    )      34,217           -
stockholders
                                                                     
Per Share
Net income - diluted           $ (0.15       )    $ 0.01             -
Cash dividends declared          0.00               0.00             0.00   %
Book value                       9.19               9.51             (3.38  %)
Common stock closing price       4.14               4.50             (8.00  %)
                                                                     
At March 31
Short term investments         $ 27,420,179       $ 4,153,961        560.10 %
Investment securities (b)        30,319,329         36,334,127       (16.55 %)
Loans held for sale              35,170,486         24,357,671       44.39  %
Loans (net of unearned           256,012,665        281,286,611      (8.99  %)
income) (a)
Earning assets (b)               351,033,959        349,595,370      0.41   %
Total assets                     372,416,942        369,947,323      0.67   %
Total deposits                   332,158,096        308,639,136      7.62   %
Stockholders' equity             32,718,718         33,428,191       (2.12  %)
                                                                     
Common shares outstanding        2,576,388          2,573,088
                                                                     
Average Balances
Short term investments         $ 23,026,677       $ 5,137,155        348.24 %
Investment securities (b)        31,740,678         36,864,158       (13.90 %)
Loans held for sale              24,574,228         23,375,894       5.13   %
Loans (net of unearned           262,352,223        284,274,433      (7.71  %)
income) (a)
Earning assets (b)               343,805,106        353,114,640      (2.64  %)
Total assets                     364,557,345        373,344,718      (2.35  %)
Total deposits                   316,955,681        307,722,990      3.00   %
Stockholders' equity             32,388,577         33,356,548       (2.90  %)
                                                                     
Earnings Ratios
Return on average total          (0.28       %)     0.19        %
assets
Return on average                (3.14       %)     2.08        %
stockholders' equity
Net interest margin              3.93        %      3.93        %
                                                                     
Credit Ratios
Nonperforming assets as a
percent of period-end loans      3.28        %      5.23        %
and foreclosed real estate
(a)(c)
Allowance to loans (a)           1.97        %      1.64        %
Net loan losses to average       0.02        %      (0.01       %)
loans (a)(d)
                                                                     
Capital Ratios (period end)
Stockholders' equity to          8.79        %      9.04        %
total assets
Leverage capital                 9.65        %      9.66        %
Tier 1 risk-based capital        11.17       %      10.17       %
Total risk-based capital         12.45       %      11.37       %
                                                                     
(a) Excludes loans held for sale
(b) Excludes market value adjustment on securities available for sale
(c) Nonperforming assets are comprised of non-accrual loans and foreclosed
real estate
(d) Ratio is not annualized

Contact:

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