Record Quarterly Earnings at Annapolis Bancorp

  Record Quarterly Earnings at Annapolis Bancorp

Business Wire

ANNAPOLIS, Md. -- November 01, 2012

Annapolis Bancorp, Inc. (NASDAQ: ANNB), parent company of BankAnnapolis, today
announced net income of $1,111,000 for the third quarter of 2012, an increase
of $443,000 or 66.3% compared to net income of $668,000 in the third quarter
of 2011. These results make the third quarter of 2012 the most profitable in
the Company’s 22+ year history.

Third quarter net income available to common shareholders after accruing for
preferred stock dividends was $1,060,000 ($0.27 per basic and $0.26 per
diluted common share), an increase of $515,000 or 94.5% compared to net income
available to common shareholders of $545,000 ($0.14 per basic and diluted
common share) in the third quarter of 2011.

Return on average assets and return on average common equity for the quarter
improved to 1.00% and 13.31%, respectively, compared to 0.61% and 7.61% in the
same period of 2011.

Net income for the first nine months of 2012 grew to $2,856,000, an increase
of $1,354,000 or 90.1% from $1,502,000 in the same period of 2011.
Year-to-date net income available to common shareholders totaled $2,636,000
($0.66 per basic and $0.65 per diluted common share) compared to $1,135,000
($0.29 per basic and diluted common share) in the same nine month period of
2011.

Book value per common share at September 30, 2012 was $8.05 compared to $7.38
at December 31, 2011.

Total assets of $436.4 million at September 30, 2012 decreased 1.2% or $5.2
million from $441.6 million at December 31, 2011. Gross loans totaled $284.7
million compared to $290.5 million at year-end 2011.

As of September 30, 2012, the Company’s allowance for credit losses was $6.6
million or 2.33% of total loans. Quarter-end nonperforming assets amounted to
1.88% of total assets.

Deposits of $338.8 million at September 30, 2012 decreased by $11.6 million or
3.3% from $350.4 million reported at year-end 2011.

Common stockholders’ equity increased to $32.0 million at September 30, 2012
from $29.2 million at December 31, 2011. Preferred stock was reduced to $4.1
million at September 30, 2012 from $8.1 million at year-end 2011 as one-half
of the Company’s $8.2 million TARP obligation to the U.S. Treasury was repaid
in the second quarter of 2012.

At September 30, 2012, Annapolis Bancorp, Inc. exceeded all federal regulatory
requirements for a well-capitalized institution, with a Tier 1 capital ratio
of 12.6%, a total capital ratio of 13.8%, and a Tier 1 leverage ratio of 9.0%.

In the quarter just ended, net interest income increased by $42,000 to
$4,159,000 from $4,117,000 in the third quarter of 2011. The net interest
margin improved to 3.95% in the third quarter of 2012 from 3.93% in the same
period of 2011.

The Company lowered its provision for credit losses to $29,000 in the third
quarter of 2012 from $338,000 in the third quarter of 2011.

Noninterest income totaled $509,000 for the three months ended September 30,
2012, a decrease of $150,000 or 22.8% compared to $659,000 in the third
quarter of 2011.

Noninterest expense improved by $547,000 or 16.1% to $2,848,000 in the quarter
just ended compared to $3,395,000 in the third quarter of 2011. The Company’s
efficiency ratio improved to 60.99% in the third quarter of the year compared
to 71.08% in the linked quarter of 2011.

Year-to-date net interest income totaled $12,249,000 resulting in a net
interest margin of 3.90% for the first nine months of 2012. A $306,000
provision for credit losses was recorded in the first nine months of 2012
compared to $1,574,000 in the same period of 2011. Noninterest income
increased by $28,000 compared to the first nine months of 2011 and noninterest
expense was reduced by $875,000. The year-to-date efficiency ratio improved to
64.26% from 71.45% in the same period of 2011.

BankAnnapolis serves the banking needs of small businesses, professional
concerns, and individuals through eight community banking offices located in
Anne Arundel and Queen Anne’s Counties in Maryland. In October, the Bank
opened its newest branch in the Waugh Chapel Towne Centre adjacent to Wegmans
in Gambrills, Maryland.

On October 22, 2012, Annapolis Bancorp, Inc. announced that it had entered
into a definitive merger agreement with F.N.B Corporation (NYSE: FNB) pursuant
to which F.N.B. Corporation will acquire Annapolis Bancorp, Inc. in an all
stock transaction valued at approximately $12.09 per share, or $51 million in
the aggregate.

Under the terms of the merger agreement, which has been approved by the boards
of directors of both companies, shareholders of Annapolis Bancorp, Inc. will
be entitled to receive 1.143 shares of F.N.B. Corporation common stock for
each share of Annapolis Bancorp, Inc. stock. The exchange ratio is fixed and
the transaction is expected to qualify as a tax-free exchange for shareholders
of Annapolis Bancorp, Inc. A cash credit-related adjustment provides that
shareholders of Annapolis Bancorp, Inc. may receive up to an additional $0.36
per share in cash for each share of Annapolis Bancorp, Inc. stock they own,
dependent on Annapolis Bancorp, Inc.’s ability to resolve an agreed-upon
credit matter.

F.N.B. Corporation and Annapolis Bancorp, Inc. expect to complete the
transaction in April 2013, after satisfaction of customary closing conditions,
including regulatory approvals and the approval of the shareholders of
Annapolis Bancorp, Inc. Subject to the receipt of requisite approvals, it is
expected that Annapolis Bancorp, Inc. will redeem all of its preferred stock
held by the U.S. Treasury under the TARP Capital Purchase Program prior to
closing or it will be extinguished upon closing of the merger.

F.N.B. Corporation will file a registration statement on Form S-4 with the
SEC. The registration statement will include a proxy statement/prospectus and
other documents relevant to the merger.

SHAREHOLDERS OF ANNAPOLIS BANCORP, INC. ARE ADVISED TO READ THE PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

The proxy statement/prospectus and other relevant materials (when they become
available), and any other documents F.N.B. Corporation has filed with the SEC,
may be obtained free of charge at the SEC's website at www.sec.gov. In
addition, investors and security holders may obtain free copies of the
documents F.N.B. Corporation has filed with the SEC by contacting James Orie,
Chief Legal Officer, F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, PA
16148, telephone (724) 983-3317, or by contacting Edward J. Schneider, Chief
Financial Officer, Annapolis Bancorp, Inc., 1000 Bestgate Road, Suite 400,
Annapolis, MD 21401, telephone (410) 224-4455.

Annapolis Bancorp, Inc. and its directors, executive officers and other
members of its management and employees may be deemed to be participants in
the solicitation of proxies from its shareholders in connection with the
proposed merger. Information concerning such participants' ownership of
Annapolis Bancorp, Inc. common stock will be set forth in the proxy
statement/prospectus relating to the merger when it becomes available. This
communication does not constitute an offer of any securities for sale.

This press release may contain forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on management’s current expectations and involve certain
risks and uncertainties which could cause actual results to differ materially
from those expressed in forward-looking statements. Factors that might cause
such a difference include, but are not limited to: (i) the rate of declining
growth in the economy and employment levels, as well as general business and
economic conditions; (ii) changes in interest rates, as well as the magnitude
of such changes; (iii) the fiscal and monetary policies of the federal
government and its agencies; (iv) changes in federal bank regulatory and
supervisory policies, including required levels of capital; (v) the relative
strength or weakness of the consumer and commercial credit sectors and of the
real estate market; (vi) the performance of the stock and bond markets; (vii)
competition in the financial services industry; (viii) possible legislative,
tax or regulatory changes, and; (ix) such other risks and uncertainties as set
forth in the Company’s filings with the Securities and Exchange Commission.
Other than to the extent required by applicable law, including the
requirements of applicable securities laws, the Company does not undertake,
and specifically disclaims any obligation to update any forward-looking
statements to reflect occurrences or unanticipated events or circumstances
after the date of such statements.

The Company is not responsible for changes made to this press release by wire
services, Internet service providers or other media.

                                                               
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
as of September 30, 2012 and December 31, 2011
($000)
                                                                  
                                                  (Unaudited)     (Audited)
                                                  September 30,   December 31,
                                                  2012            2011
Assets
Cash and due from banks                           $    1,951      $   2,026
Interest bearing balances with banks                   39,996         18,288
Federal funds sold                                     11             26,583
Investment securities, available for sale              91,777         87,549
Federal Reserve and Federal Home Loan Bank             2,864          2,992
stock
Loans, net of allowance of $6,647 and $7,182           278,102        283,284
Premises and equipment                                 9,797          8,418
Accrued interest receivable                            1,350          1,279
Deferred income taxes                                  2,390          2,617
Investment in bank owned life insurance                5,783          5,624
Real estate owned                                      697            1,222
Prepaid FDIC Insurance                                 954            1,198
Other assets                                          683           490
Total Assets                                      $    436,355    $   441,570
                                                                  
Liabilities and Stockholders' Equity
Deposits
Noninterest bearing                               $    57,314     $   56,664
Interest bearing                                      281,501       293,717
Total deposits                                        338,815       350,381
Securities sold under agreement to repurchase          18,895         11,344
Long term borrowed funds                               35,000         35,000
Junior subordinated debentures                         5,000          5,000
Accrued interest and dividends payable                 188            219
Accrued expense and other liabilities                 2,381         2,258
Total Liabilities                                     400,279       404,202
                                                                  
Stockholders' Equity
Preferred stock                                        4,076          8,146
Common stock                                           40             39
Warrants to purchase common stock                      234            234
Paid in capital                                        11,847         11,779
Retained earnings                                      18,815         16,179
Accumulated other comprehensive income                1,064         991
Total Equity                                           36,076         37,368
                                                                
Total Liabilities and Equity                     $    436,355    $   441,570
                                                                  

                                                                
Annapolis Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
for the Three and Nine Month Periods Ended September 30, 2012 and 2011
(Unaudited)
(In thousands, except per share data)
                              
                                For the Three Months   For the Nine Months
                                Ended September 30,    Ended September 30,
                                2012         2011      2012         2011
                                                                    
Interest Income
Loans                           $  4,338     $ 4,348   $ 12,817     $ 12,807
Investments                        513         640       1,601        2,044
Interest bearing balances          9           4         24           13
with banks
Federal funds sold                9         12       31         27     
Total interest income             4,869     5,004    14,473     14,891 
                                                                    
Interest expense
Deposits                           367         541       1,203        1,729
Securities sold under              13          18        36           59
agreements to repurchase
Interest on long-term             330       328      985        974    
borrowings
Total interest expense            710       887      2,224      2,762  
Net interest income                4,159       4,117     12,249       12,129
                                                                    
Provision                         29        338      306        1,574  
                                                                    
Net interest income after         4,130     3,779    11,943     10,555 
provision
                                                                    
NonInterest Income
Service charges                    309         322       903          938
Mortgage banking                   111         59        207          76
Other fee income                   130         229       313          227
Gain on sale of loans              -           18        -            165
(Loss) Gain on sale of REO         (41   )     31        (12    )     8
and other assets
Loss on sale or disposal of       -         -        -          (31    )
fixed assets
Total noninterest income          509       659      1,411      1,383  
                                                                    
NonInterest Expense
Personnel expense                  1,620       1,826     4,927        5,301
Occupancy and equipment            361         360       1,108        1,204
expense
Data processing expense            209         214       629          635
Professional fees                  117         138       385          363
Marketing expense                  50          63        267          295
FDIC expense                       88          57        256          338
Other operating expense           403       737      1,207      1,518  
Total noninterest expense         2,848     3,395    8,779      9,654  
                                                                    
Income before taxes                1,791       1,043     4,575        2,284
Income tax expense                680       375      1,719      782    
Net income                         1,111       668       2,856        1,502
Preferred stock dividend and      51        123      220        367    
discount accretion
Net income available to         $  1,060    $ 545     $ 2,636     $ 1,135  
common shareholders
                                                                    
                                                                    
Basic earnings per common       $  0.27     $ 0.14    $ 0.66      $ 0.29   
share
Diluted earnings per common     $  0.26     $ 0.14    $ 0.65      $ 0.29   
share
Book value per common share     $  8.05     $ 7.26    $ 8.05      $ 7.26   
                                                                    

                                                               
Annapolis Bancorp, Inc. and Subsidiaries
Financial Ratios and Average Balance Highlights
(In thousands)
                       
                         For the Three Months        For the Nine Months
                         Ended September 30,         Ended September 30,
                         2012          2011          2012          2011
                         (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                                                                   
Performance Ratios
(annualized)
Return on average        1.00     %    0.61     %    0.86     %    0.46     %
assets
Return on average        13.31    %    7.61     %    11.49    %    5.50     %
common equity
Average equity to        8.11     %    8.37     %    8.23     %    8.23     %
average assets
Net interest margin      3.95     %    3.93     %    3.90     %    3.94     %
Efficiency ratio         60.99    %    71.08    %    64.26    %    71.45    %
                                                                   
Other Ratios
Allowance for credit     2.33     %    2.56     %    2.33     %    2.56     %
losses to loans
Nonperforming assets     1.88     %    1.83     %    1.88     %    1.83     %
to total assets
Net charge-offs to       0.10     %    0.03     %    0.28     %    0.32     %
average loans
Tier 1 capital ratio     12.6     %    12.9     %    12.6     %    12.9     %
Total capital ratio      13.8     %    14.2     %    13.8     %    14.2     %
                                                                   
Average Balances
Assets                   441,171       436,744       441,646       433,944
Earning assets           419,233       415,102       419,971       411,151
Loans, gross             291,994       294,649       296,111       288,312
Interest-bearing         344,155       346,244       345,518       347,795
liabilities
Stockholders' equity     35,782        36,539        36,340        35,712
                                                                   

Contact:

Annapolis Bancorp, Inc.
Edward J. Schneider, 410-224-4455
 
Press spacebar to pause and continue. Press esc to stop.