<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 September 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: 1,417,244 common shares outstanding at November 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>
September 30, December 31,
1998 1997
-------------- --------------
<S> <C> <C>
(Unaudited)
Assets
Cash and due from banks $ 24,973,712 $ 25,063,180
Federal funds sold -- --
Investment securities:
Available for sale 57,868,743 71,782,023
Held to maturity 8,390,077 11,825,605
(approximate market value of $8,738,125 and $12,092,724)
Loans, less allowance for loan losses of $2,361,753 and $2,302,981 197,195,727 168,531,267
Bank premises and equipment 7,030,077 5,973,203
Accrued interest receivable 1,940,353 2,147,801
Other assets 2,846,641 2,584,313
-------------- --------------
$ 300,245,330 $ 287,907,392
-------------- --------------
-------------- --------------
Liabilities and Shareholders' Equity
Deposits
Noninterest-bearing $ 36,097,262 $ 33,426,327
Interest-bearing 197,296,710 201,044,078
-------------- --------------
Total deposits 233,393,972 234,470,405
Federal funds purchased and securities sold under agreements to repurchase 15,007,712 11,024,441
Advances from the Federal Home Loan Bank 17,000,000 9,000,000
Notes payable -- U. S. Treasury 481,784 2,706,255
Accrued interest payable 190,511 204,617
Deferred income taxes 272,291 92,105
Other liabilities 2,967,055 617,335
-------------- --------------
269,313,325 258,115,158
-------------- --------------
Shareholders' equity
Common stock, par value $10.00 per share; authorized 5,000,000 shares; issued
and outstanding 1,423,474 and 1,454,275 shares 14,234,740 14,542,750
Surplus 7,769,979 8,593,801
Net unrealized holding gains on available for sale securities 1,130,196 843,822
Retained earnings 7,797,090 5,811,861
-------------- --------------
30,932,005 29,792,234
-------------- --------------
$ 300,245,330 $ 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 September 30, Nine Months Ended September 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest income
Interest and Fees on Loans $ 4,327,870 $ 3,609,082 $ 12,162,488 $ 10,344,329
Interest and Dividends on Securities:
Taxable interest income 577,281 1,077,720 2,122,218 3,123,297
Nontaxable interest income 310,075 271,979 886,304 768,237
Dividends 23,749 32,340 56,379 56,455
Interest on Federal funds sold and
other interest income 55,832 47,897 157,195 173,028
------------ ------------ ----------- ------------
Total interest income 5,294,807 5,039,018 15,384,584 14,465,346
------------ ------------ ----------- ------------
Interest expense
Deposits 2,048,720 2,057,416 6,091,326 6,082,671
Other 465,537 246,125 1,218,791 511,178
------------ ------------ ----------- ------------
Total interest expense 2,514,257 2,303,541 7,310,117 6,593,849
------------ ------------ ----------- ------------
Net interest income 2,780,550 2,735,477 8,074,467 7,871,497
Provision for loan losses 315,000 60,000 480,000 180,000
------------ ------------ ----------- ------------
Net interest income after provision for loan losses 2,465,550 2,675,477 7,594,467 7,691,497
------------ ------------ ----------- ------------
Other operating income
Service charges on deposit accounts 322,043 362,298 968,192 1,007,877
Brokerage commissions 231,570 265,488 715,601 689,595
Other fees and commissions 1,258,427 851,136 3,511,972 2,280,783
Gains (losses) on security sales 2,063,947 32,566 2,094,826 133,800
Gains (losses) on loan sales 253,630 0 253,630 0
------------ ------------ ----------- ------------
Total other income 4,129,617 1,511,488 7,544,221 4,112,055
------------ ------------ ----------- ------------
Other expenses
Salaries 1,365,929 1,228,856 3,931,634 3,434,730
Employee benefits 303,146 252,835 906,602 781,557
Occupancy 424,884 381,315 1,212,114 1,070,785
Furniture and equipment 328,498 263,411 898,334 676,288
Other operating expenses 1,670,772 1,211,795 4,518,802 3,481,321
------------ ------------ ----------- ------------
Total other expenses 4,093,229 3,338,212 11,467,486 9,444,681
------------ ------------ ----------- ------------
Income before income taxes 2,501,938 848,753 3,671,202 2,358,871
Income taxes 844,130 221,163 1,070,397 613,573
------------ ------------ ----------- ------------
Net income $ 1,657,808 $ 627,590 $ 2,600,805 $ 1,745,298
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Earnings per common share
Net income--basic and diluted $ 1.16 $ 0.43 $ 1.80 $ 1.19
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
</TABLE>
2
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Carrollton Bancorp
and Subsidiary
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
----------------- -------------
<S> <C> <C>
Cash flows from operating activities
Interest received $ 15,634,818 $ 14,210,400
Fees and commissions received 4,901,803 4,071,940
Interest paid (7,324,223) (6,558,629)
Cash paid to suppliers and employees (9,189,068) (8,168,974)
Income taxes paid (146,225) (272,481)
------------- ------------
3,877,105 3,282,256
------------- ------------
Cash Flows from investing activities
Proceeds from maturities of securities held to maturity 3,926,155 2,299,551
Purchases of securities held to maturity (499,688) 0
Proceeds from sales of securities available for sale 10,994,962 4,031,554
Proceeds from maturities of securities available for sale 25,617,711 6,742,269
Purchases of securities available for sale (19,918,103) (20,172,833)
Loans made, net of principal collected (40,412,229) (2,898,163)
Purchase of loans (7,683,806) (10,796,741)
Sale of loans 18,951,575 0
Purchases of premises and equipment (1,970,494) (1,308,159)
------------- ------------
(10,993,917) (22,102,522)
------------- ------------
Cash flows from financing activities
Net (decrease) increase in deposits (1,076,433) 212,110
Net increase (decrease) in other borrowed funds 9,851,185 17,422,503
Dividends paid (615,576) (555,085)
Common stock purchase and retirement (1,131,832) 0
------------- ------------
7,027,344 17,079,528
------------- ------------
Net increase (decrease) in cash and cash equivalent (89,468) (1,740,738)
Cash and cash equivalents at beginning of year 25,063,180 21,091,197
------------- ------------
Cash and cash equivalents at September 30th $ 24,973,712 $ 19,350,459
------------- ------------
------------- ------------
Reconciliation of net income to net cash
provided by operating activities
Net income $ 2,600,805 $ 1,745,298
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses 480,000 180,000
Depreciation and amortization 876,235 656,739
Amortization of premiums and discounts 42,786 5,859
Gain on disposal of securities (2,348,456) (133,800)
(Increase) decrease in
Accrued interest receivable 207,448 (260,805)
Other assets (317,328) 606,012
Increase (decrease) in
Accrued interest payable (14,106) 35,220
Income taxes payable 924,172 341,092
Other liabilities 1,425,549 106,641
------------- ------------
$ 3,877,105 $ 3,282,256
------------- ------------
------------- ------------
</TABLE>
3
<PAGE>
NOTE TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CARROLLTON BANCORP
Period ended September 30, 1998
The accompanying unaudited consolidated financial statements prepared as of and
for the quarter ended September 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,
but are necessary for a fair presentation. 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 nine month periods ended: September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Net income $2,600,805 $1,745,298
Other comprehensive income:
Unrealized holding gains during the period 524,826 898,402
Less: Adjustment for security gains ( 58,267) (133,800)
------------- -------------
Other comprehensive income, before tax 466,559 764,602
Income taxes on items of comprehensive income (180,185) (295,289)
------------- -------------
Other comprehensive income, after tax 286,374 469,313
------------- -------------
Comprehensive income $2,887,179 $2,214,611
------------- -------------
------------- -------------
</TABLE>
4
<PAGE>
Item 2. Management's Discussion and Analysis
of Operating Results and Financial Condition
Earnings
Summary
Carrollton Bancorp had net income for the third quarter of 1998 of
$1,658,000, or $1.16 a share. The third quarter of 1997 earnings amounted to
$628,000, or $.43 a share. Year to date 1998 net income was $2,601,000, or $1.80
per share, compared to $1,745,000, or $1.19 per share, in 1997. Earnings are up
dramatically over last years equivalent periods because of a non-recurring, one
time gain recorded by the Company in the third quarter of 1998. The gain relates
to the sale of an equity position, and amounted to $1,250,000 on an after tax
basis.
Net Interest Income
Net interest income increased for the third quarter of 1998 and for the
first nine months of 1998 compared to the same periods in 1997 due to loan
portfolio growth. Average loans grew by 20% for the first nine months of 1998 as
compared to 1997. Average investment securities decreased 15% to help fund loan
growth. Average total assets grew by 9% for the first nine months of 1998 as
compared to 1997.
Total interest expense increased for the first nine months of 1998 as
compared to 1997 because of an increase in borrowed funds. Since deposit growth
has been modest, borrowed money was used to fund loan growth. In the third
quarter of 1998, the rate of interest expense to interest-bearing liabilities
increased to 4.27% from 4.20% for the same period in 1997. The rate of interest
expense to interest-bearing liabilities was 4.24% for the first nine months of
1998, up from 4.14% for the same period in 1997.
Net interest income on a taxable equivalent basis increased marginally
for the third quarter for the first nine months of 1998 over 1997, principally
from the growth in earning assets. The net yield on average earning assets
decreased to 4.46% in the third quarter of 1998 from 4.58% for the third quarter
of 1997, and decreased to 4.38% in the first nine months of 1998 from 4.51% for
the same period in 1997.
Provision for Loan Losses
The provision for loan losses for the first nine months of 1998 was
$480,000 versus $180,000 for 1997. The provision was assessed based on a careful
evaluation of the allowance for loan losses, and considers growth in the loan
portfolio over last year as well as loss experience. The ratio of loan losses to
average loans increased to .30% for the nine months ended September 30, 1998
from .11% for the 1997 period as a result of commercial loan losses suffered
early in the year. Nonaccrual, restructured, and delinquent loans over 90 days
to total loans increased to 1.22% at September 30, 1998 from 1.11% a year
earlier.
5
<PAGE>
Non-Interest Income
Non-interest income for the first nine months of 1998, excluding
securities gains, increased 31% over the same period of 1997 due principally to
increases in fees assessed merchants for credit card transaction processing,
point of sale and point of purchase transaction fees resulting from debit card
use, and ATM fee income. Merchant discount fees more than doubled over 1997 to
$1,002,000 for 1998 as a result of an increase in the number of merchants
serviced. Brokerage commissions increased modestly in the period.
In the first nine months of 1998, security gains amounted to $2,095,000
compared to $134,000 in 1997. The increase is primarily attributed to the equity
sale mentioned in the summary, on which the gain was $2,036,000. This one time
gain was generated by a holding in a non-publicly traded company that operated
as a regional switch for electronic banking transactions, such as ATM and point
of sale transactions. The sale was also subject to a bidding process among
existing shareholders. Because the stock was not publicly traded and there did
not exist a ready market for it, the Company carried the stock at cost. The
Company also had a very low basis in the stock because it had owned the stock
for some time. An aggressive bid by an existing shareholder of the sold company
stock resulted in the gain.
The Company also began in the current period to sell loans generated by its
mortgage unit as well as other residential mortgage loans held in the portfolio.
The loans through September 30, 1998 were sold servicing released, and generated
gains of $254,000. The Company expects to sell loans servicing retained
beginning in the fourth quarter of 1998 which will derive service fee income in
the future.
Non-Interest Expenses
For the third quarter and first nine months of 1998, non-interest
expenses increased 23% and 21%, respectively, over 1997. The growth in
electronic banking operations, opening of an additional branch during 1998, the
addition of the mortgage unit, and expansion of the ATM network caused increases
in salaries and employee benefits, furniture and equipment costs, occupancy, and
other operating expenses.
Income Tax Provision
The effective tax rate was 29.2% for the first nine months of 1998 as
compared to 26.0% for the first nine months of 1997. The effective tax rate
increased primarily due to the one time, non-recurring gain on the sale of the
equity. This gain increased income before taxes substantially, and had taxes
provided at the marginal tax rate. The ratio of federal and state tax free
income to total income decreased as a result of this one time gain in 1998, but
continues to increase on an absolute dollar basis as investments increase in
municipal bonds and state tax free agency issues.
6
<PAGE>
Financial Condition
Summary
At September 30, 1998, total assets for the company increased to $300.2
million from $287.9 million at December 31, 1997. Loans increased 16.8% while
investment securities decreased by 20.8%. Deposits were flat during the period.
Investment Securities
At September 30, 1998, investment securities in total decreased $17.3
million or 20.8% from December 31, 1997. The decrease in securities occurred as
interest rates declined, and the callable agencies the Company had in the
portfolio were called away. This was part of the overall plan to reduce
securities to help fund loans in 1998.
Loans
Total loans increased $28.7 million or 16.8% to $199.6 million at
September 30, 1998 from the end of 1997. The Company's residential mortgage
portfolio represented the bulk of this growth as residential mortgage loans grew
from $39.9 million at December 31, 1997 to $57.9 million at September 30, 1998.
In addition, the Company's home equity line and loan portfolio grew by $11.0
million, and stood at $64.1 million at September 30, 1998. The commercial loan
portfolio grew in total by 1.3%, while other loan segments declined. The Company
is experiencing significant competition in its market for commercial loans and
for consumer loans, especially as interest rates decline.
The Company also sold loans during the period amounting to $19.0 million. The
sale of these loans generated gains of $254,000. These were residential mortgage
loans originated by the residential mortgage unit or that were held in the
Company's portfolio, and they were sold into the secondary market. The goal is
to begin to sell mortgage loans servicing retained and build a servicing
portfolio.
Allowance for Loan Losses
From December 31, 1997, the allowance for loan losses increased $59,000
and amounted to $2.4 million at September 30, 1998. The ratio of the allowance
to total loans was 1.35% at December 31, 1997 and 1.18% at September 30, 1998.
This ratio fell because of loan growth, and was impacted by losses incurred on
commercial loans in the period. The ratio of net loan losses to average loans
outstanding was .30% for the first nine months of 1998. For 1997 this ratio was
.11%. The ratio of nonaccrual, restructured and delinquent loans more than 90
days to total loans increased to 1.22% at September 30, 1998 from .61% at
December 31, 1997. This increase was caused by a rise in delinquencies and
nonaccrual loans. Included in delinquent loans were two commercial loans which
management believes are subject to little risk of loss based on collateral
values.
7
<PAGE>
Funding Sources
At September 30, 1998, total deposits were down slightly from December
31, 1998 and amounted to $233.3 million. Interest-bearing accounts decreased by
$3.7 million while non-interest bearing accounts increased by $2.7 million. This
likely reflects the competitive pressures caused by other financial institutions
in the Company's market area.
At the end of the third quarter of 1998, other borrowings increased
substantially to $32.4 million as compared to $22.7 million at December 31,
1997. Borrowings for federal funds purchased and securities sold under
agreements to repurchase increased to $15.0 million at September 30, 1998 from
$11.0 million at December 31, 1997. This was principally due to increases in
customer sweep accounts. Borrowings from the FHLB increased from $9.0 million at
the end of 1997 to $17.0 million at September 30, 1998. These borrowings funded
loan growth.
Capital
For the first nine months of 1998, shareholders' equity increased by
$1.1 million compared to December 31, 1997. Net income for the first nine months
of 1998 was $2.6 million. Shareholders' equity was also increased by a $286,000
increase in unrealized gains since December 31, 1997, net of tax, on securities
classified as available for sale. In addition, the Company paid dividends
totalling $616,000 for the first nine months of 1998, and purchased and retired
30,801 shares of Company stock amounting to $1.1 million. Shareholders' equity
amounted to 10.30% of total assets as compared to 10.35% at the end of 1997.
Tier 1 (Core) and Tier 2 (Total) capital to risk-adjusted assets ratios were
13.61% and 15.04%, respectively, at September 30, 1998. The risked-based capital
ratios were below December 31, 1997 levels because of loan growth, but far
exceed regulatory requirements. The Company's leverage ratio at September 30,
1998 was 8.98% as compared to 9.54% at December 31, 1997.
Liquidity
The Company's liquidity position remains strong at September 30, 1998.
Outstanding loan commitments and unused lines of credit for the Company totalled
$76.2 million as of September 30, 1998. Of this total, management places a high
probability of required funding within 1 year on approximately $23.5 million.
Management places a low probability on the remaining amount which is mainly
unused home equity lines and other consumer lines. At September 30, 1998, the
Company had additional borrowing capacity of approximately $38 million. In
addition, the Company's securities portfolio could be used to collateralize
additional borrowings.
Interest Rate Risk
Due to changes in interest rates, the level of income for a financial
institution can be affected by the repricing characteristics of its assets and
liabilities. At September 30, 1998, the Company's liability sensitive position
increased slightly from December 31, 1997 as a result of growth in residential
mortgage loans. A liability sensitive position, theoretically, is favorable in a
falling rate environment since more liabilities than assets will reprice in a
given time frame as interest rates fall. Management is diligent in its efforts
to maintain a
8
<PAGE>
consistent spread between yields on assets and costs of deposits and borrowings,
regardless of the direction of interest rates. In an attempt to better manage
its exposure to interest rate shifts, the Company continues to investigate
reasonable alternatives and adopt additional measures.
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.
9
<PAGE>
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 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
September 30, 1998.
Item 2. Changes in Securities
There is no information to be reported under this item for the quarter ended
September 30, 1998.
Item 3. Defaults Upon Senior Securities
There is no information to be reported under this item for the quarter ended
September 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
September 30, 1998.
Item 5. Other Information
There is no information to be reported under this item for the quarter ended
September 30, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11- Statement re: Computation of per share
earnings
Exhibit 27- Financial Data Schedule
(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 November 10, 1998 /s/ Dallas R. Arthur
------------------------ --------------------
Dallas R. Arthur
President and Chief Executive
Officer
Date November 10, 1998 /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 Nine Months Ended
September 30 September 30
----------------------- -----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Average Shares Outstanding (A) 1,434,199 1,463,738 1,445,765 1,463,738
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $1,657,808 $627,590 $2,600,805 $1,745,298
Divide by average shares
outstanding 1,434,199 1,463,738 1,445,765 1,463,738
---------- ---------- ---------- ----------
Earnings per share--Basic $1.16 $0.43 $1.80 $1.19
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</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 FORM10-QSB FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 24,973,712
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,868,743
<INVESTMENTS-CARRYING> 8,390,077
<INVESTMENTS-MARKET> 8,738,125
<LOANS> 199,557,480
<ALLOWANCE> 2,361,753
<TOTAL-ASSETS> 300,245,330
<DEPOSITS> 233,393,972
<SHORT-TERM> 32,489,496
<LIABILITIES-OTHER> 3,429,857
<LONG-TERM> 0
0
0
<COMMON> 14,234,740
<OTHER-SE> 16,697,265
<TOTAL-LIABILITIES-AND-EQUITY> 300,245,330
<INTEREST-LOAN> 12,162,488
<INTEREST-INVEST> 3,064,901
<INTEREST-OTHER> 157,195
<INTEREST-TOTAL> 15,384,584
<INTEREST-DEPOSIT> 6,091,326
<INTEREST-EXPENSE> 7,310,117
<INTEREST-INCOME-NET> 8,074,467
<LOAN-LOSSES> 480,000
<SECURITIES-GAINS> 2,094,826
<EXPENSE-OTHER> 11,467,486
<INCOME-PRETAX> 3,671,202
<INCOME-PRE-EXTRAORDINARY> 3,671,202
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,600,805
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 1.80
<YIELD-ACTUAL> 4.38
<LOANS-NON> 184,131
<LOANS-PAST> 1,848,620
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<LOANS-PROBLEM> 759,516
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<CHARGE-OFFS> 529,848
<RECOVERIES> 108,620
<ALLOWANCE-CLOSE> 2,361,753
<ALLOWANCE-DOMESTIC> 2,271,149
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 90,604
</TABLE>
