<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
----------- ---------------
Commission file number 0-23090
Carrollton Bancorp
(Exact name of small business issuer as
specified in its charter)
Maryland 52-1660951
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
344 North Charles Street, Suite 300,
Baltimore, Maryland 21201
(Address of principal executive offices)
(410) 536-4600
(Issuer's telephone number)
- --------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes x No
---- ----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court. Yes No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 1,439,923 common shares
outstanding at August 5, 1998
Transitional Small Business Disclosure Format (check one):
Yes No x
----- -----
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
Carrollton Bancorp
and Subsidiary
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------ ------------
Assets (Unaudited)
<S> <C> <C>
Cash and due from banks $ 28,671,608 $ 25,063,180
Federal funds sold -- --
Investment securities:
Available for sale 57,566,639 71,782,023
Held to maturity 8,411,836 11,825,605
(approximate market value
of $8,661,979 and $12,092,724)
Loans, less allowance for loan losses
of $1,999,596 and $2,302,981 199,370,177 168,531,267
Bank premises and equipment 6,834,100 5,973,203
Accrued interest receivable 2,215,232 2,147,801
Other assets 3,472,568 2,584,313
------------ ------------
$306,542,160 $287,907,392
------------ ------------
------------ ------------
Liabilities and Shareholders' Equity
Deposits
Noninterest-bearing $ 31,896,701 $ 33,426,327
Interest-bearing 199,863,690 201,044,078
------------ ------------
Total deposits 231,760,391 234,470,405
Federal funds purchased and securities
sold under agreements to repurchase 15,175,481 11,024,441
Advances from the Federal Home Loan Bank 25,000,000 9,000,000
Notes payable - U. S. Treasury 1,449,809 2,706,255
Accrued interest payable 213,577 204,617
Deferred income taxes 233,483 92,105
Other liabilities 2,313,928 617,335
------------ ------------
276,146,669 258,115,158
------------ ------------
Shareholders' equity
Common stock, par value $10.00 per share;
authorized 5,000,000 shares; issued
and outstanding 1,449,923 and 1,454,275 shares 14,499,230 14,542,750
Surplus 8,475,082 8,593,801
Net unrealized holding gains on
available for sale securities 1,073,106 843,822
Retained earnings 6,348,073 5,811,861
------------ ------------
30,395,491 29,792,234
------------ ------------
$306,542,160 $287,907,392
------------ ------------
------------ ------------
</TABLE>
Note: Balances at December 31, 1997 are derived from audited financial
statements.
- 1 -
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Carrollton Bancorp
and Subsidiary
<TABLE>
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest income
Interest and Fees on Loans $ 4,085,770 $ 3,458,194 $ 7,834,618 $ 6,735,246
Interest and Dividends on Securities:
Taxable interest income 681,710 1,036,675 1,544,939 2,045,577
Nontaxable interest income 293,251 256,280 576,228 496,258
Dividends 18,308 12,395 32,630 30,651
Interest on Federal funds sold and
other interest income 50,778 59,884 101,362 118,596
--------- --------- --------- ---------
Total interest income 5,129,817 4,823,428 10,089,777 9,426,328
--------- --------- --------- ---------
Interest expense
Deposits 2,029,622 2,033,736 4,042,606 4,025,255
Other 435,643 144,727 753,255 265,053
--------- --------- --------- ---------
Total interest expense 2,465,265 2,178,463 4,795,861 4,290,308
--------- --------- --------- ---------
Net interest income 2,664,552 2,644,965 5,293,916 5,136,020
Provision for loan losses 90,000 60,000 165,000 120,000
--------- --------- --------- ---------
Net interest income after provision for loan losses 2,574,552 2,584,965 5,128,916 5,016,020
--------- --------- --------- ---------
Other operating income
Service charges on deposit accounts 320,638 328,110 646,148 645,578
Brokerage commissions 275,312 210,747 484,032 424,107
Other fees and commissions 1,072,355 773,955 1,999,915 1,429,647
Gains (losses) on security sales 195,995 72,349 284,509 101,234
--------- --------- --------- ---------
Total other income 1,864,300 1,385,161 3,414,604 2,600,566
--------- --------- --------- ---------
Other expenses
Salaries 1,306,549 1,119,363 2,565,705 2,205,874
Employee benefits 296,008 259,791 603,455 528,723
Occupancy 398,473 339,510 787,230 689,469
Furniture and equipment 304,540 198,997 569,836 412,877
Other operating expenses 1,559,101 1,207,230 2,848,030 2,269,526
--------- --------- --------- ---------
Total other expenses 3,864,671 3,124,891 7,374,256 6,106,469
--------- --------- --------- ---------
Income before income taxes 574,181 845,235 1,169,264 1,510,117
Income taxes 110,691 230,528 226,267 392,410
--------- --------- --------- ---------
Net income $ 463,490 $ 614,707 $ 942,997 $ 1,117,707
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per common share
Net income $ 0.32 $ 0.42 $ 0.65 $ 0.76
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
- 2 -
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Carrollton Bancorp
and Subsidiary
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Interest received $ 10,050,585 $ 9,359,812
Fees and commissions received 2,650,776 2,586,053
Interest paid (4,786,901) (4,282,242)
Cash paid to suppliers and employees (5,575,766) (5,183,996)
Income taxes paid (229,153) (324,894)
------------ ------------
2,109,541 2,154,733
------------ ------------
Cash Flows from investing activities
Proceeds from maturities of securities held to maturity 3,408,368 1,200,000
Purchases of securities held to maturity 0 0
Proceeds from sales of securities available for sale 8,870,037 2,343,865
Proceeds from maturities of securities available for sale 17,240,991 6,087,107
Purchases of securities available for sale (11,259,975) (12,187,876)
Loans made, net of principal collected (26,540,823) (2,004,499)
Purchase of loans (4,463,087) (4,777,058)
Purchases of premises and equipment (1,433,770) (1,054,609)
------------ ------------
(14,178,259) (10,393,070)
------------ ------------
Cash flows from financing activities
Net (decrease) increase in deposits (2,648,424) 4,416,464
Net increase (decrease) in other borrowed funds 18,894,594 2,489,919
Dividends paid (406,785) (359,820)
Common stock repurchased (162,239)
------------ ------------
15,677,146 6,546,563
------------ ------------
Net increase (decrease) in cash and cash equivalents 3,608,428 (1,691,774)
Cash and cash equivalents at beginning of year 25,063,180 21,091,197
------------ ------------
Cash and cash equivalents at June 30 $ 28,671,608 $ 19,399,423
------------ ------------
------------ ------------
Reconciliation of net income to net cash
provided by operating activities
Net income $ 942,997 $ 1,117,707
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses 165,000 120,000
Depreciation and amortization 555,450 452,043
Amortization of premiums and discounts 28,239 (548)
Gain on disposal of securities (284,509) (101,234)
(Increase) decrease in
Accrued interest receivable (67,431) (65,968)
Other assets (932,872) 491,926
Increase (decrease) in
Accrued interest payable 8,960 8,066
Income taxes payable 141,378 123,669
Other liabilities 1,552,329 9,072
------------ ------------
$ 2,109,541 $ 2,154,733
------------ ------------
------------ ------------
</TABLE>
- 3 -
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CARROLLTON BANCORP
Period ended June 30, 1998
The accompanying unaudited consolidated financial statements prepared as of and
for the quarter ended June 30, 1998 reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal recurring nature.
The results reflected by these statements may not be indicative, however, of the
results for the year ending December 31, 1998.
Note A -- Comprehensive Income
In June, 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS No. 130"). SFAS No. 130 establishes requirements for the
disclosure of comprehensive income in interim financial statements.
Comprehensive income is defined as net income plus transactions and other
occurrences which are the result of nonowner changes in equity. For the Company,
nonowner equity changes are comprised of unrealized gains or losses on debt
securities that will be accumulated with net income in determining comprehensive
income. This statement is effective for years beginning after December 15, 1997.
Adoption of this standard did not have an impact on the Company's historical
results of operations. Presented below is a reconcilement of net income to
comprehensive income indicating the components of other comprehensive income.
<TABLE>
<CAPTION>
For the six month periods ended: June 30, 1998 June 30, 1997
- -------------------------------- ------------- -------------
<S> <C> <C>
Net income $ 942,997 $1,117,707
Other comprehensive income:
Unrealized holding gains during the period 658,857 393,072
Less: Adjustment for security gains (284,509) (101,234)
---------- ----------
Other comprehensive income, before tax 373,548 291,838
Income taxes on items of comprehensive income (144,264) (112,708)
---------- ----------
Other comprehensive income, after tax 229,284 179,130
---------- ----------
Comprehensive income $1,172,281 $1,296,837
---------- ----------
---------- ----------
</TABLE>
4
<PAGE>
Item 2. Management's Discussion and Analysis of Operating Results and Financial
Condition
Earnings
Summary
Carrollton Bancorp's net income for the first half of 1998 was
$943,000, or $.65 per share as compared to $1,118,000, or $.76 per share, for
the same period of 1997. Net income for the second quarter of 1998 was $463,000,
or $.32 per share, as compared to $615,000, or $.42 per share, for the second
quarter of 1997. The decrease in earnings was due principally to increased
expenses in excess of revenue growth. The Company put in place certain marketing
and other plans at the beginning of the year based on anticipated revenue
growth. Actual revenue growth in the first half fell short of expectations, but
the marketing plan had already been implemented.
Net Interest Income
Because of growth in the loan portfolio since June, 1997, net interest
income increased for the Company by 3% for the first six months of 1998 as
compared to the same period of 1997. Total interest income increased 7% for the
first six months of 1998 and increased 6% for the second quarter of 1998 as a
result of growth in the loan portfolio. Total assets grew by 10% on average for
the first half of 1998 as compared to 1997, driven by 18% growth in the average
loan portfolio. Securities declined by 10% as the Company worked to increase its
loan portfolio. The tax equivalent yield on earning assets increased to 8.02%
for the first six months of 1998 as compared to 8.01% for 1997, but decreased to
8.05% in the second quarter of 1998 compared to 8.09% for the same period of
1997.
Total interest expense increased by 13% in the first half of 1998 as
compared to 1997 as a result of increased use of wholesale funds to support
asset growth. Interest bearing deposits were basically level for the periods.
However, the rate of interest expense to interest-bearing liabilities in total
increased to 4.22% in the first half of 1998 as compared to 4.11% for 1997. The
rate of interest expense to interest-bearing liabilities for the second quarter
of 1998 also increased to 4.24% compared to 4.13% for the same period in 1997.
As mentioned, the Company is using borrowings to fund asset growth.
Due to the decrease in the interest rate spread, the net yield on
average earning assets decreased to 4.31% in the second quarter of 1998 and to
4.34% year to date as compared to 4.55% and 4.48% for the comparable periods of
1997.
Provision for Loan Losses
During the first half of 1998, the provision for loan losses was
$165,000 compared to $120,000 for the first half of 1997. The provision was made
based on a thorough evaluation of the allowance for loan losses. Nonaccrual,
restructured, and delinquent loans over 90 days to total loans increased to .81%
at June 30, 1998 from .79% a year earlier. This ratio increased slightly because
of increased delinquencies.
5
<PAGE>
Non-Interest Income
For the first six months of 1998, non-interest income, excluding
securities gains, increased 25% over the same period of 1997. Other fees and
commissions increased $567,000 principally due to increases in merchant discount
income. Service charges on deposit accounts were about equal in both periods.
The Company's brokerage subsidiary has increased commission income by $60,000
over 1997, partly as a result of the continued growth in the stock market.
Security gains in the first six months of 1998 came principally from
the restructuring and repositioning of an equity security portfolio by an
outside fund manager. The fund manager was hired in early 1997, and decided to
sell certain issues in 1998 based on valuation models. Some gains were taken on
fixed income securities as the Company moved out of issues that are non-state
tax exempt into issues that are.
Non-Interest Expenses
Non-interest expenses increased in both the second quarter and first
six months of 1998 as compared to the same periods of 1997 by 24% and 21%.
Increases in salaries, employee benefits, occupancy, furniture and equipment,
and other operating expenses were due to growth in staff, branches, new ATM
installations, and expenses related to additional card service capabilities.
Staff additions came in the form of one new branch opened in 1998, and from
expansion of the Company's Electronic Banking Group. The new branch, along with
the new building purchased for the Company's Corporate headquarters, also
resulted in increased occupancy and equipment expense. The Company also
significantly increased spending in the first half of 1998 for marketing
programs to promote name awareness and new products and services.
Income Tax Provision
For the first six months of 1998, the effective tax rate was 19% as
compared to 26% for the same period in 1997. The effective tax rate has declined
primarily as a result of a change in the state law, subject to a three year
phase in, which enables financial institutions to exclude from taxable income
interest earned on certain investment securities. In addition, the ratio of
federal tax free income to total income has increased as the municipal bond
portfolio has grown, thereby reducing the tax rate. The decrease in the amount
of income tax during the first half of 1998 as compared to 1997 was also partly
due to the decrease in the amount of income before tax.
Financial Condition
Summary
Total assets for the Company were $306.5 million at June 30, 1998 as
compared to $287.9 million at the end of 1997. Loans increased by 18% while
investment securities decreased by 21%. In addition, deposits declined by 1% and
borrowed funds grew by 83% since December 31, 1997.
6
<PAGE>
Investment Securities
Investment securities decreased $17.6 million or 21% from December 31,
1997 to June 30, 1998. The decrease resulted from maturities or calls of
securities, and the funds were used to support loan portfolio growth.
Loans
At June 30, 1998, total loans increased $30.5 million or 18% to $201.4
million from the end of 1997. The Company's loan growth in 1998 has been
strictly retail in nature. The mortgage subsidiary, started in late 1997, has
generated 83% of the growth in the portfolio for the year, with home equity
loans growing another 25%. Installment loans have declined 8%, and commercial
loans are level with the start of the year. This indicates a very competitive
commercial loan market. The Company has not reduced its underwriting standards
in an attempt to originate commercial loans.
From December 31, 1997 to June 30, 1998, residential real estate loans
increased by $24.8 million to $64.7 million through the efforts of the Company's
new mortgage subsidiary, Carrollton Mortgage Services, Inc. Home Equity loans
and lines of credit grew by $7.7 million to $57.2 million. Installment loans
decreased by $2.2 million.
In the commercial loan portfolio, modest growth in commercial mortgages
and tax free loans and leases has been offset by equal declines in commercial
loans, SBA loans, and accounts receivable loans. As a result, the commercial
loan portfolio in total showed no growth for the period.
Allowance for Loan Losses
The allowance for loan losses decreased $300,000 from December 31, 1997
and amounted to $2.0 million at June 30, 1998. The decrease was the result of
commercial loan charge-offs during the six month period. The ratio of the
allowance to total loans was 1.35% at December 31, 1997 and 0.99% at June 30,
1998. This ratio fell primarily due to significant loan growth, but was also
affected by the charge-offs for the period. Part of the fall in the ratio of the
allowance to loans is attributable to an increase in the percentage of real
estate collateralized loans in the portfolio from 75% at December 31, 1997 to
80% at June 30, 1998. The ratio of net loan losses to average loans outstanding
increased to .51% for the first half of 1998 compared to .11% for the year ended
December 31, 1997 as a result of the commercial loan charge-offs. The ratio of
nonaccrual loans, restructured loans, plus loans delinquent more than 90 days to
total loans increased to .81% at June 30, 1998 from .61% at December 31, 1997.
The decline in this ratio came from an increase in delinquencies.
Funding Sources
Total deposits decreased by $2.7 million or 1% from the end of 1997 to
$231.7
7
<PAGE>
million at June 30, 1998. Interest-bearing accounts decreased by $1.2 million
while non-interest bearing accounts decreased by $1.5 million. Management does
not consider this to be a negative trend in deposits. The growth in the deposit
base over the last few years has caused greater variability in deposit balances
which affects comparisons between periods.
Other borrowings increased by $18.9 million to $41.6 million at June
30, 1998 from $22.7 million at December 31, 1997. Borrowings for federal funds
purchased and securities sold under agreements to repurchase increased to $15.1
million at June 30, 1998 from $11.0 million at the end of 1997. Borrowings from
the FHLB increased from $9.0 million at December 31, 1997 to $25.0 million at
June 30, 1998. As previously noted, the Company used more wholesale funds to
support asset growth than in past years as the growth rate of deposits has
slowed.
Capital
Shareholders' equity increased by $603,000 or 2% for the first six
months of 1998 compared to the end of 1997. This was primarily due to earnings
for the first half of 1998. Net income for the first six months of 1998 was
$943,000. Shareholders were paid dividends totalling $407,000, and the Company
reacquired shares on the open market. Shareholders' equity amounted to 9.9% of
total assets at June 30, 1998 compared to 10.5% at December 31, 1997. Tier 1
(Core) and Tier 2 (Total) capital to risk-adjusted assets ratios were 14.2% and
15.2%, respectively. Although the risked-based capital ratios were slightly
below levels at December 31, 1997, they still far exceeded regulatory minimums.
The Company's leverage ratio was 9.3% at June 30, 1998 and 10.0% at year end
1997.
Liquidity
As of June 30, 1998, outstanding loan commitments and unused lines of
credit for the Company totalled $78.2 million. Management places a high
probability for required funding within 1 year on approximately $14.0 million of
this total. The remaining amount is mainly unused home equity lines and credit
card lines on which management places a low probability for required funding. At
June 30, 1998, the Company's liquidity position continues to be solid. The
Company also had additional borrowing capacity of approximately $33 million at
June 30, 1998.
Interest Rate Risk
The level of income of a financial institution can be affected by the
repricing characteristics of its assets and liabilities due to changes in
interest rates. The Company's liability sensitive position at June 30, 1998 as
measured by the level of rate sensitive assets to rate sensitive liabilities was
slightly more liability sensitive than at December 31, 1997 due to growth in
residential mortgages. In theory, a liability sensitive position is favorable in
a falling interest rate environment since more liabilities than assets will
reprice in a given time frame as interest rates fall. Because of the greater use
of wholesale funds to support
8
<PAGE>
asset growth, the margin slipped from previous levels. Management continually
seeks methods to reduce its exposure to interest rate shifts.
The Year 2000 Issue
This issue relates to computer programs which use only two digits to
identify a year in the date field. Unless corrected, these programs will read
the year 2000 as the year 1900, and likely will adversely affect any number of
calculations that are made using that date field. For financial institutions,
this may affect interest calculations on loans and deposits, due dates for loans
and maturity dates for deposits.
As noted in the Company's Annual Report on Form 10-KSB for 1997, the
Company has begun to address this issue. A committee of members of the Board
of Directors and senior managers has developed an action plan and meets
monthly to evaluate progress. All software and hardware that is critical to
the company's operations has been identified. The appropriate vendor has been
contacted to determine if the product is year 2000 compliant, and the Company
has received responses from most vendors. The Company has already tested its
hardware, and is in the process of designing tests for all critical software,
to determine the validity of the vendors' claims.
Most of the company's data processing services are purchased from a
third party service provider which provides an integrated system for loan and
deposit accounting, proof operations, statement rendering, and ATM machine
transactions, all of which is downloaded to a general ledger package for
accounting information processing. The Company has been in close contact with
the third party service provider as it has addressed year 2000 issues. The third
party service provider has engaged one of the large international accounting
firms to assist it in this process. The third party servicer has in place
scheduled dates during which the Company will process test transactions designed
to determine whether or not the third party servicer's software and related year
2000 changes have appropriately addressed the problems. The testing should be
completed by the end of 1998.
The Company also faces credit or repayment risk from its loan customers
that may have a year 2000 problem in their computer operations. The loan staff
is in the process of determining which customers represent a higher risk profile
as a result of the year 2000 issue, and the means of monitoring the customers'
progress in dealing with the issues. A year 2000 review has been put in place as
part of the underwriting criteria for all new loans being made.
The Company is being billed currently for its pro-rata share of costs
expected to be incurred by its third party service provider. Based on the
current billing level, and assurances from the third party service provider, the
cost to the Company is not significant. The Company views the cost of internal
staff use and hardware replacement as part of ongoing operations and not
specifically applicable to the year 2000 issue. The Company may need to acquire
temporary staff assistance when transaction testing begins on a full scale, but
at the present this is not anticipated.
Financial institutions are highly computerized organizations, and the
year 2000 issue represents significant risk to the industry. The Company faces
the same risks as the industry. The financial institution regulatory agencies
have increased their efforts to monitor and evaluate each institution's plan to
address year 2000 issues. The Company has
9
<PAGE>
undergone two of these reviews from its regulator. The potential risk of any
major loan or deposit systems failure of the year 2000 issue are that loan
interest and balances could not be accurately calculated, billed and collected,
and deposit interest and balances could not be accurately calculated and paid to
customers. These failures could have a significant impact on a financial
institutions operations and liquidity.
The Company's contingency plan is currently in design, but basically
would return the Company to manual systems which were used prior to the use of
computers. Certain applications could be switched to spreadsheet programs which
are year 2000 compliant already, and it is expected that more PC based
alternatives will be identified in the future. Based on the progress to date of
the third party service provider and the Company, there appears to be little
probability of a major systems failure.
10
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings
There is no information to be reported under this item for the quarter ended
June 30, 1998.
Item 2. Changes in Securities
There is no information to be reported under this item for the quarter ended
June 30, 1998.
Item 3. Defaults Upon Senior Securities
There is no information to be reported under this item for the quarter ended
June 30, 1998.
Item 4. Submission of Matters to a Vote of Security Holders
There is no information to be reported under this item for the quarter ended
June 30, 1998.
Item 5. Other Information
There is no information to be reported under this item for the quarter ended
June 30, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11- Statement re: Computation of per share
earnings
(b) There have been no Reports on Form 8-K filed by the
Company during the quarter for which this report is
filed.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Carrollton Bancorp
-----------------------------
(Registrant)
Date 8/12/98 /s/ Dallas R. Arthur
------- -----------------------------
Dallas R. Arthur
President and Chief Executive
Officer
Date 8/12/98 /s/ David L. Costello III
------- -----------------------------
David L. Costello III
Treasurer and Chief Financial
Officer
12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ----
<S> <C> <C>
11 Statement Re: Computation of
Per Share Earnings 14
27 Financial Data Schedule 15
</TABLE>
13
<PAGE>
EXHIBIT 11- Statement Re: Computation of Per Share Earnings
CARROLLTON BANCORP
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Average Shares
Outstanding (A) 1,451,998 1,463,738 1,452,968 1,463,738
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 463,490 $ 614,707 $ 942,997 $1,117,707
Divide by average
shares
outstanding 1,451,998 1,463,738 1,452,968 1,463,738
---------- ---------- ---------- ----------
Earnings
per share--Basic $ 0.32 $ 0.42 $ 0.65 $ 0.76
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
(A) Adjusted to reflect the effect of a 5% stock dividend declared January
22, 1998.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CARROLLTON
BANCORP'S FORM 10-QSB FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000859222
<NAME> CARROLLTON BANCORP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 28,671,608
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,566,639
<INVESTMENTS-CARRYING> 8,411,836
<INVESTMENTS-MARKET> 8,661,979
<LOANS> 201,369,773
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0
0
<COMMON> 14,499,230
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<INTEREST-INVEST> 2,153,797
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<INTEREST-DEPOSIT> 4,042,606
<INTEREST-EXPENSE> 4,795,861
<INTEREST-INCOME-NET> 5,293,916
<LOAN-LOSSES> 165,000
<SECURITIES-GAINS> 284,509
<EXPENSE-OTHER> 7,374,256
<INCOME-PRETAX> 1,169,264
<INCOME-PRE-EXTRAORDINARY> 1,169,264
<EXTRAORDINARY> 0
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<NET-INCOME> 942,997
<EPS-PRIMARY> 0.65
<EPS-DILUTED> 0.65
<YIELD-ACTUAL> 4.34
<LOANS-NON> 219,978
<LOANS-PAST> 1,004,845
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<ALLOWANCE-CLOSE> 1,999,596
<ALLOWANCE-DOMESTIC> 1,968,953
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 30,643
</TABLE>
