FREDERICK, Md., Jan. 27 /PRNewswire-FirstCall/ -- Frederick County Bancorp, Inc. (the "Company") (OTC Bulletin Board: FCBI), the parent company for Frederick County Bank, announced today that, for the quarter ended December 31, 2008, the Company recorded net income of $154,000, which included a provision for loan losses of $475,000, and diluted earnings per share of $0.10, as compared to net income of $494,000, which included a provision for loan losses of $250,000 and a gain from insurance proceeds in the amount of $230,000, and diluted earnings per share of $0.33 recorded for the fourth quarter of 2007.

The Company earned $1.04 million, which included a provision for loan losses of $935,000, with diluted earnings per share of $0.69 for the full year of 2008 as compared to $1.56 million in earnings, which included a provision for loan losses of $491,000 and a gain from insurance proceeds in the amount of $230,000, and diluted earnings per share of $1.03 for the same period in 2007. The increased provision for loan losses reflects management's continuing deep concern with deteriorating economic conditions, weakness in real estate markets, and the ongoing pressure on consumer households and the small business sector. The Company has seen a modest increase in its ratio of nonperforming assets to total assets which is 0.61% and its ratio of net charge-offs to average loans which is 0.21% for 2008.

The Company also reported that, as of December 31, 2008, assets stood at $254.6 million, with deposits of $216.9 million and gross loans of $211.8 million, representing only minor changes from 2007. The Company's flat asset, deposit and loan growth reflects management's determination to limit balance sheet growth, thereby strengthening its capital and liquidity positions in anticipation of continued economic weakness.

The Company also announced today that it has decided to not participate in the U.S. Treasury Department's TARP (Troubled Asset Relief Program) Capital Purchase Program. The Treasury Department recently approved an investment in the Bank of up to $7.016 million in new capital under the TARP Program. As part of the Emergency Economic Stabilization Act, the Capital Purchase Program has only been made available to sound financial institutions meeting or exceeding strict qualifying criteria.

President and CEO Martin S. Lapera said, "Frederick County Bank is currently well capitalized. In fact, our capital ratios significantly exceed the regulatory requirements for well capitalized banks, with our ratios of 12.43% and 11.18% for Total Risk-Based Capital and Tier 1 Capital, respectively, compared to the regulatory minimums of 10.00% and 6.00%. Our liquidity position is equally strong, with $15.25 million in federal funds sold and other overnight investments, which equates to 6.0% of assets. While we are pleased to have been approved for the Treasury investment, participation in the Capital Purchase Program is nevertheless associated with certain long-term restrictions and costs. Management of Frederick County Bank believes that its level of existing capital is adequate to support continued successful implementation of the Bank's business plan without the need for government capital assistance." Frederick County Bank maintains a solid Four Star Rating from Bankrate.com and the top Five Star Rating from Bauer Financial, Inc., both ratings in effect as of September 30, 2008.

Frederick County Bank commenced operations in 2001 and has posted positive quarterly earnings continuously since 2002, its second year in operation. The Bank is headquartered in Frederick, Maryland, and conducts full service commercial banking services through four offices, three of which are in the City of Frederick and one office located in Walkersville, Maryland.


                                              December 31,    December 31,
                                                  2008           2007
    (dollars in thousands)                    (unaudited)      (audited)

    Total assets                               $254,562        $255,991
    Cash and due from banks                         808           3,828
    Federal funds sold and other
     overnight investments                       15,247           8,538
    Investment securities - available
     for sale                                    20,040          27,512
    Restricted stock                              1,599           1,440
    Loans, net                                  208,720         206,371
    Deposits                                    216,883         219,228
    Long-term borrowings                         10,000          10,000
    Junior subordinated debentures                6,186           6,186
    Shareholders' equity                         20,612          19,580



    SELECTED FINANCIAL DATA
                                   Three Months Ended        Years Ended
                                      December 31,           December 31,
                                   2008         2007        2008      2007
    (dollars in thousands,
    except per share data)     (unaudited) (unaudited) (unaudited) (audited)

    SUMMARY OF OPERATING
     RESULTS:

    Interest income                $3,725      $4,260    $15,480    $16,247
    Interest expense                1,633       2,147      7,116      7,977
    Net interest income             2,092       2,113      8,364      8,270
    Provision for loan losses         475         250        935        491
    Net interest income after
     provision for loan losses      1,617       1,863      7,429      7,779
    Securities gains                    -          27         26         27
    Gain from insurance proceeds        -         230          -        230
    Gain on sale of foreclosed
     property                           -           -         15          -
    Noninterest income (excluding
     gains)                           143         127        535        410
    Noninterest expense             1,546       1,521      6,526      6,172
    Income before provision for
     income taxes                     214         726      1,479      2,274
    Provision for income taxes         60         232        441        714
    Net income                        154         494      1,038      1,560

    PER COMMON SHARE DATA:
    Basic earnings per share        $0.11       $0.34      $0.71      $1.07
    Diluted earnings per share      $0.10       $0.33      $0.69      $1.03
    Basic weighted average
     number of shares
     outstanding                1,460,802   1,460,602  1,460,670  1,460,125
    Diluted weighted average
     number of shares
     outstanding                1,494,816   1,507,884  1,503,372  1,518,155
    Common shares outstanding   1,460,802   1,460,602  1,460,802  1,460,602
    Book value per share           $14.11      $13.41     $14.11     $13.41



    SELECTED UNAUDITED FINANCIAL
     RATIOS:
    Return on average assets        0.24%       0.76%      0.40%      0.63%
    Return on average equity        2.99%      10.14%      5.12%      8.35%
    Allowance for loan losses to
     total loans                    1.47%       1.26%      1.47%      1.26%
    Nonperforming assets to total
     assets                         0.61%       0.12%      0.61%      0.12%
    Ratio of net charge-offs to
     average loans                  0.03%       0.01%      0.21%      0.01%
    Average equity to average
     assets                         7.96%       7.52%      7.83%      7.58%

    Weighted average yield/rate on:
    Loans                           6.43%       7.20%      6.64%      7.31%
    Interest-earning assets         5.92%       6.87%      6.28%      6.93%
    Interest-bearing liabilities    3.21%       4.16%      3.50%      4.10%
    Net interest spread             2.71%       2.71%      2.78%      2.83%
    Net interest margin             3.35%       3.46%      3.44%      3.58%

The statements in this press release that are not historical facts constitute "forward-looking statements" as defined by Federal Securities laws. Forward-looking statements can generally be identified by the use of forward- looking terminology such as "believes," "expects," "intends," "may," "will," "should," "anticipates" or similar terminology. Such statements, specifically regarding the Company's intentions regarding growth and market expansion, are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, changes in interest rates, deposit flows, loan demand and real estate values, as well as changes in economic, competitive, governmental, regulatory, technological and other factors which may affect the Company specifically, its existing and target market areas or the banking industry generally. Forward-looking statements speak only as of the date they are made. The Company will not update forward-looking statements to reflect factual assumptions, circumstances or events that have changed after a forward-looking statement was made. For further information, please refer to the Company's reports filed with the U.S. Securities and Exchange Commission.

SOURCE Frederick County Bancorp, Inc.