Press Releases

Chesapeake Financial Shares reports record earnings

Press release -- for immediate release
For additional information please contact
Jeffrey M. Szyperski -804-435-4249 or 1-800-434-1181

January 19, 2010 - On behalf of Chesapeake Financial Shares, Inc., Jeffrey M. Szyperski, Chairman of the Board & CEO, reported earnings for calendar year 2009 of $4,834,927, representing a 5.1% increase over 2008 earnings. Chesapeake Financial Shares is the parent company of both Chesapeake Bank and Chesapeake Investment Group. The reported earnings per share were $1.77 fully diluted as compared to $1.60 in 2008--a 10.6% increase. “This net income represents record earnings for Chesapeake Financial Shares, which is no small feat in this economic environment,” stated Szyperski. “Each day represented a new challenge for us, but our employees responded incredibly well. This is a team effort of which we’re proud.”

“CFS ended the year December 31, 2009 with total assets of $587,412,010, an increase of 9% over 2008. Despite continuous media reports to the contrary, we are still lending despite a pullback in demand. We had an increase in loans of 1% over 2008, ending with $366,603,611 at December 31, 2009,” Szyperski commented. “In addition to the net overall growth in loans, the loan portfolio remains strong. We also were able to boost our loan loss reserve to 1.41% of total loans at December 31, 2009 from 1.30% at yearend 2008.”

In addition to increased earnings, CFS was able to increase dividends paid to shareholders by 3.7% over 2008. During 2009 CFS paid $.420 per share as compared to $.405 per share in 2008. The Board of Directors voted to keep the dividend at $.105 per share payable on or before March 15, 2010 to shareholders of record as of March 1, 2010.

The other subsidiary of Chesapeake Financial Shares, Chesapeake Investment Group, also had a strong year growing assets under management from $213 million to $274 million during the year. Mark Monroe, President of Chesapeake Investment Group, stated, “Our emphasis on conservative money management coupled with a high level of communication with our clients has resulted in a great deal of new business for us.”

In addition to Chesapeake Investment Group, Chesapeake Financial Shares has been very deliberate in diversifying into other lines of business. Szyperski noted that these were largely responsible for their ability to maintain a strong earnings stream in a slow economic environment.

Chesapeake Payment Systems is the merchant card division of Chesapeake Bank. Chesapeake Payment Systems had over 700 merchants as of yearend 2009 and processed over $115 million in merchant card transactions for its merchants. This division alone was responsible for $3.4 million of gross income in 2009.

2009 was also the year in which Chesapeake Bank launched its Clear Sky online branch. Currently, the bank has customers in 49 states representing $39 million of new deposits. Marshall N. Warner, Executive Vice President of Chesapeake Bank, stated, “The source of our success is our ability to give a community bank feel to the online banking experience. We closely monitor the customer satisfaction of our Clear Sky branch and have found that our customers are truly amazed at the level of personalized service we can provide to the online environment.”

Cash Flow is another division of Chesapeake Bank which specializes in accounts receivable financing. This division was started in 1994 and has blossomed to a significant contributor to Chesapeake Bank’s noninterest income. The Cash Flow program is currently offered in the Eastern half of the United States and has approximately 80 customers.

Szyperski further stated, “With the diversity of the lines of business mentioned above, we still find that our core community bank relationships are the ‘bread and butter’ that fuel Chesapeake Financial Shares’ current success. However, we do feel that this differentiation and diversity are key elements to our current success.”

“Though 2009 was a record breaking year, we by no means take for granted the current economic environment and how 2010 appears to be shaping up. We are in a strong position currently but are continuing to be vigilant. It is clearly something that we do not want to underestimate and are taking very seriously,” Szyperski continued.

For more information about Chesapeake Financial Shares stock (CPKF), please go to Chesapeake Bank’s website at www.chesbank.com. Chesapeake Financial Shares remains a publicly traded company and is traded on the over-the-counter market. Also, you are invited to become a fan of Chesapeake Bank on Facebook and follow Chesapeake on Twitter at www.twitter.com/chesbank.

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