SUFFOLK, Va., July 16, 2008 (PRIME NEWSWIRE) -- Hampton Roads based TowneBank (Nasdaq:TOWN) reported stable earnings performance for the quarter ended June 30, 2008. Net income increased 2.29% to $6.04 million as compared to $5.91 million for the comparable reporting period last year.
Earnings also increased for the first six months of 2008 climbing to $12.03 million. This represented a 5.53% increase over the $11.40 million reported last year for the same period.
Fully diluted earnings per share for the second quarter were $.24 per share, a 4.35% increase. Year to date earnings per share increased 4.44% to $.47 per share compared to $.45 for the prior period.
With the Federal Reserve's rapid decrease in interest rates over the past nine months, net interest income remained essentially flat for the second quarter at $21.66 million compared to $21.87 million for the second quarter of 2007. This reduction in interest margin was partially offset by a 16.64% increase in non-interest income ending the quarter at $11.19 million as compared to $9.59 million for the comparative period. A number of business activities contributed to this growth including TFA Benefits and the bank's property management services provided by GSH and Corolla Classic Vacations.
The second quarter also included securities gains of $678 thousand as well as a net of tax non-recurring adjustment of $243 thousand in the bank's reported stock option expense.
The bank's continued growth in market presence led to a 10.40% increase in total bank assets, closing the quarter at $2.72 billion, a growth of $255.75 million. Towne continued to meet the credit needs of the community as demonstrated by loan growth of $313.52 million reflecting an increase of 17.84%. Deposits ended the period at $1.98 billion, an increase of 7.85%. Importantly, the bank's capital ratios continued to meet and exceed the regulatory standards for a well capitalized bank.
In spite of the overall slowdown in the economy, the bank's loan portfolio continued to perform well during the quarter. Non-performing assets remained modest at $2.11 million or .08% of total assets compared to 0.11% for the first quarter in 2008. Due to the significant loan growth during the second quarter, the bank's loan loss provision increased to $2.07 million compared to $1.04 million in the second quarter of 2007. The bank's actual net charge-offs for the quarter were modest at $338 thousand or 0.07% of average outstanding loans.
"Given the current disruption in the country's financial markets and particularly the banking sector, our operating results for the quarter and the first six months were very solid. We were particularly pleased with our overall performance in terms of growth, earnings and balance sheet quality," said G. Robert Aston, Jr., Chairman and CEO. "However, it is important to recognize that like all businesses, we are currently operating in a challenging economic environment. As Hampton Roads' Hometown Bank, our success is inextricably linked to the economic well being of our community. We are blessed with having the Best Bankers to be found anywhere here at Towne. These bankers are personally committed to standing steadfastly behind our local businesses, friends and neighbors while providing a foundation of caring, compassion and promise for a bright future."
As one of Virginia's top community banks, TowneBank now operates 17 banking offices in Chesapeake, Hampton, Portsmouth, Newport News, Virginia Beach, Norfolk, Williamsburg and York County. Towne also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Insurance Agency, TFA Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, GSH Real Estate Corporation, Corolla Classic Vacations and Corolla Real Estate. Through its strategic partnership with William E. Wood and Associates and Prudential McCardle, the bank also offers mortgage services in all of the offices of both companies in Hampton Roads and Northeastern North Carolina. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group's President and Board of Directors. With total assets of $2.72 billion as of June 30, 2008, TowneBank is the largest bank headquartered in Hampton Roads.
Forward-Looking Statement:
This release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Facts that may cause actual results to differ materially from those contemplated by such forward-looking statements include competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, deterioration in credit quality and/or a reduced demand for credit or other services, changes in the legislative or regulatory environment, including changes in accounting standards, may adversely affect our business; costs or difficulties; related to the integration of the business and the businesses we have acquired may be greater than expected; expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions, changes in the securities market and changes in our local economy with regards to our market area and its heavy concentration of U. S. military based and related personnel. We assume no obligation to update information contained in this release.
Selected Financial Highlights (unaudited)
TOWNEBANK
June 30, 2008
(Dollars in thousands)
Three Months Ended Increase/ % Increase/
June 30, 2008 2007 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Results of Operations:
Net interest
income $ 21,662 $ 21,867 $ (205) (0.94%)
Noninterest income 11,186 9,590 1,596 16.64%
Noninterest
expenses 22,350 21,684 666 3.07%
Provision for
loan losses 2,068 1,042 1,026 98.46%
Pretax Income 8,401 8,731 (330) (3.78%)
Provision for
income tax
expense 2,360 2,825 (465) (16.46%)
Net income 6,041 5,906 135 2.29%
Net income per
common share
- basic 0.25 0.25 -- --
Net income per
common share
- diluted 0.24 0.23 0.01 4.35%
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Period End Data:
Total assets $2,716,028 $2,460,275 $ 255,753 10.40%
Total assets
- tangible 2,643,199 2,393,577 249,622 10.43%
Loans (net of
unearned income
and deferred
costs) 2,071,251 1,757,731 313,520 17.84%
Allowance for
loan losses 23,929 20,615 3,314 16.08%
Noninterest
bearing deposits 526,157 510,258 15,899 3.12%
Interest bearing
deposits 1,456,709 1,328,243 128,466 9.67%
Total deposits 1,982,866 1,838,501 144,365 7.85%
Shareholders'
equity 263,991 239,400 24,591 10.27%
Shareholders'
equity - tangible 191,162 172,702 18,460 10.69%
Book value per
share 10.87 10.00 0.87 8.70%
Book value per
share - tangible 7.87 7.21 0.66 9.15%
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Daily Average Balances:
Total assets $2,649,180 $2,350,117 $ 299,063 12.73%
Total assets
- tangible 2,576,101 2,285,288 290,813 12.73%
Earning assets 2,390,103 2,141,437 248,666 11.61%
Loans (net of
unearned income) 1,976,214 1,733,386 242,828 14.01%
Allowance for
loan losses 22,843 20,229 2,614 12.92%
Noninterest
bearing deposits 482,975 461,843 21,132 4.58%
Interest bearing
deposits 1,455,351 1,281,191 174,160 13.59%
Total deposits 1,938,325 1,743,034 195,291 11.20%
Shareholders'
equity 265,927 238,992 26,935 11.27%
Shareholders'
equity - tangible 192,847 174,163 18,684 10.73%
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Asset Quality Ratios:
Allowance for loan
losses to period
end loans 1.16% 1.17% (0.01%) (0.85%)
Nonperforming
loans to period
end loans 0.03% 0.03% -- --
Allowance for loan
losses to
nonperforming
loans 41.24x 33.85x 7.39x 21.83%
Nonperforming
assets to period
end assets 0.08% 0.08% -- --
Net loan
charge-offs to
average loans 0.07% 0.06% 0.01% 16.67%
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Key Ratios:
Return on average
assets 0.92% 1.01% (0.09%) (8.91%)
Return on average
assets - tangible 0.94% 1.04% (0.10%) (9.62%)
Return on average
equity 9.14% 9.91% (0.77%) (7.77%)
Return on average
equity - tangible 12.60% 13.60% (1.00%) (7.35%)
Net interest
margin 3.65% 4.10% (0.45%) (10.98%)
Average earning
assets/total
average assets 90.22% 91.12% (0.90%) (0.99%)
Average loans/
average deposits 101.95% 99.45% 2.50% 2.51%
Average
noninterest
deposits/total
average deposits 24.92% 26.50% (1.58%) (5.96%)
Period end
shareholders'
equity/period
end total assets 9.72% 9.73% (0.01%) (0.10%)
Efficiency ratio 68.04% 68.93% (0.89%) (1.29%)
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Selected Financial Highlights (unaudited)
TOWNEBANK
June 30, 2008
(Dollars in thousands)
Six Months Ended Increase/ % Increase/
June 30, 2008 2007 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Results of Operations:
Net interest
income $ 41,888 $ 42,459 $ (571) (1.34%)
Noninterest income 22,946 18,485 4,461 24.13%
Noninterest
expenses 44,902 42,455 2,447 5.76%
Provision for
loan losses 2,963 1,646 1,317 80.01%
Pretax Income 16,930 16,843 87 0.52%
Provision for
income tax
expense 4,896 5,440 (544) (10.00%)
Net income 12,034 11,403 631 5.53%
Net income per
common share
- basic 0.50 0.48 0.02 4.17%
Net income per
common share
- diluted 0.47 0.45 0.02 4.44%
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Period End Data:
Total assets $2,716,028 $2,460,275 $ 255,753 10.40%
Total assets
- tangible 2,643,199 2,393,577 249,622 10.43%
Loans (net of
unearned income
and deferred
costs) 2,071,251 1,757,731 313,520 17.84%
Allowance for
loan losses 23,929 20,615 3,314 16.08%
Noninterest
bearing deposits 526,157 510,258 15,899 3.12%
Interest bearing
deposits 1,456,709 1,328,243 128,466 9.67%
Total deposits 1,982,866 1,838,501 144,365 7.85%
Shareholders'
equity 263,991 239,400 24,591 10.27%
Shareholders'
equity - tangible 191,162 172,702 18,460 10.69%
Book value per
share 10.87 10.00 0.87 8.70%
Book value per
share - tangible 7.87 7.21 0.66 9.15%
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Daily Average Balances:
Total assets $2,605,595 $2,291,892 $ 313,703 13.69%
Total assets
- tangible 2,533,268 2,226,948 306,320 13.76%
Earning assets 2,349,321 2,087,000 262,321 12.57%
Loans (net of
unearned income) 1,918,729 1,696,114 222,615 13.13%
Allowance for
loan losses 22,241 20,033 2,208 11.02%
Noninterest
bearing deposits 464,840 447,095 17,745 3.97%
Interest bearing
deposits 1,441,203 1,272,729 168,474 13.24%
Total deposits 1,906,043 1,719,824 186,219 10.83%
Shareholders'
equity 263,610 236,494 27,116 11.47%
Shareholders'
equity - tangible 191,282 171,550 19,732 11.50%
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Asset Quality Ratios:
Allowance for loan
losses to period
end loans 1.16% 1.17% (0.01%) (0.85%)
Nonperforming
loans to period
end loans 0.03% 0.03% -- --
Allowance for loan
losses to
nonperforming
loans 41.24x 33.85x 7.39x 21.83%
Nonperforming
assets to period
end assets 0.08% 0.08% -- --
Net loan
charge-offs to
average loans 0.04% 0.08% (0.04%) (50.00%)
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Key Ratios:
Return on average
assets 0.93% 1.00% (0.07%) (7.00%)
Return on average
assets - tangible 0.96% 1.03% (0.07%) (6.80%)
Return on average
equity 9.18% 9.72% (0.54%) (5.56%)
Return on average
equity - tangible 12.65% 13.40% (0.75%) (5.60%)
Net interest
margin 3.59% 4.10% (0.51%) (12.44%)
Average earning
assets/total
average assets 90.16% 91.06% (0.90%) (0.99%)
Average loans/
average deposits 100.67% 98.62% 2.05% 2.08%
Average
noninterest
deposits/total
average deposits 24.39% 26.00% (1.61%) (6.19%)
Period end
shareholders'
equity/period
end total assets 9.72% 9.73% (0.01%) (0.10%)
Efficiency ratio 69.26% 69.66% (0.40%) (0.57%)
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Selected Financial Highlights (unaudited)
TOWNEBANK
June 30, 2008
(Dollars in thousands)
Six Months
Ended %
June 30, December 31, Increase/ Increase/
2008 2007 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Period End Data:
Total assets $2,716,028 $2,501,078 $ 214,950 8.59%
Total assets -
tangible 2,643,199 2,433,009 210,190 8.64%
Loans (net of
unearned income
and deferred
costs) 2,071,251 1,829,456 241,795 13.22%
Allowance for loan
losses 23,929 21,323 2,606 12.22%
Noninterest bearing
deposits 526,157 439,122 87,035 19.82%
Interest bearing
deposits 1,456,709 1,395,224 61,485 4.41%
Total deposits 1,982,866 1,834,346 148,520 8.10%
Shareholders'
equity 263,991 256,856 7,135 2.78%
Shareholders'
equity
- tangible 191,162 188,787 2,375 1.26%
Book value per
share 10.87 10.66 0.21 1.97%
Book value per
share
- tangible 7.87 7.83 0.04 0.51%
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Daily Average Balances:
Total assets $2,605,595 $2,497,178 $ 108,417 4.34%
Total assets
- tangible 2,533,268 2,429,907 103,361 4.25%
Earning assets 2,349,321 2,256,534 92,787 4.11%
Loans (net of
unearned income) 1,918,729 1,806,149 112,580 6.23%
Allowance for loan
losses 22,241 20,944 1,297 6.19%
Noninterest bearing
deposits 464,840 451,987 12,853 2.84%
Interest bearing
deposits 1,441,203 1,390,072 51,131 3.68%
Total deposits 1,906,043 1,842,059 63,984 3.47%
Shareholders' equity 263,610 251,624 11,986 4.76%
Shareholders' equity
- tangible 191,282 184,347 6,935 3.76%
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Asset Quality Ratios:
Allowance for loan
losses to period end
loans 1.16% 1.17% (0.01%) (0.85%)
Nonperforming loans
to period end loans 0.03% 0.04% (0.01%) (25.00%)
Allowance for loan
losses to
nonperforming loans 41.24x 29.37x 11.87x 35.07%
Nonperforming assets
to period end assets 0.08% 0.09% (0.01%) (11.11%)
Net loan charge-offs
to average loans 0.04% 0.06% (0.02%) (33.33%)
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Key Ratios:
Return on average
assets 0.93% 0.93% -- --
Return on average
assets - tangible 0.96% 0.96% -- --
Return on average
equity 9.18% 9.25% (0.07%) (0.76%)
Return on average
equity - tangible 12.65% 12.63% 0.02% 0.16%
Net interest margin 3.59% 3.71% (0.12%) (3.23%)
Average earning
assets/total average
assets 90.16% 90.36% (0.20%) (0.22%)
Average loans/average
deposits 100.67% 98.05% 2.62% 2.67%
Average noninterest
deposits/total
average deposits 24.39% 24.54% (0.15%) (0.61%)
Period end
shareholders'
equity/period end
total assets 9.72% 10.27% (0.55%) (5.36%)
Efficiency ratio 69.26% 69.57% (0.31%) (0.45%)
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