|
| ||||||||||||||
TowneBank Reports Third Quarter 2008 Financial Results and Operating Performance SUFFOLK, Va., Oct. 13, 2008 (GLOBE NEWSWIRE) -- Hampton
Roads based TowneBank (NasdaqGS:TOWN - News) reported net income
totaling $6.41 million for the quarter ended September 30,
2008. The results reflect an increase of 7.11% as compared
to $5.99 million for the comparable reporting period last
year. Earnings also increased for the first nine months
of 2008 climbing to $18.45 million. This represented a 6.08%
increase over the $17.39 million reported last year for
the same period. Fully diluted earnings per share for the
third quarter were $.25 per share, a 4.17% increase. Year-to-date
fully diluted earnings per share increased 5.80% to $.73
per share compared to $.69 for the prior period. ``We remain focused on growth strategies here in Hampton Roads and believe our solid balance sheet, strong capital and liquidity position, excellent asset quality and diverse financial services place us in an unique position in the current operating environment for expanding our market presence and growing customer relationships,'' said G. Robert Aston, Jr., Chairman and Chief Executive Officer. Balance Sheet The company's balance sheet continued its strong growth with a 21.43% increase in total bank assets, ending the quarter at $3.02 billion, an increase of $532.16 million over September 30, 2007. Towne's commitment to the credit needs of the community was demonstrated by loan growth of $415.85 million reflecting an increase of 23.31%, while total deposits ended the period at $2.20 billion, an increase of 19.28% over September 30, 2007. Asset Quality The company's asset quality remained excellent with non-performing assets at $2.73 million or .09% of total assets compared to 0.08% for the second quarter in 2008. ``We are very pleased with the quality and performance of our loan portfolio,'' said Aston. Due to the significant loan growth during the third quarter, the bank's loan loss provision increased to $1.57 million compared to $266 thousand in the third quarter of 2007 for reserve maintenance. The bank's actual net charge-offs for the quarter were immaterial at $44 thousand or 0.01% of average outstanding loans. ``We have not engaged in nor are we exposed to the sub-prime mortgage market. We have not held any common or preferred equity securities of the Federal National Mortgage Association (FNMA or ''Fannie Mae``) or the Federal Home Loan Mortgage Corporation (FHMLC or ''Freddie Mac``). As a result, we have no exposure to these securities,'' said Aston. Capital and Liquidity In order to position the bank to take advantage of current growth opportunities, we raised $59.8 million in additional capital through the sale of more than 598,000 shares of our 8% Non-Cumulative Convertible Preferred Stock, Series A, well above the original maximum offering amount of $30 million. Our core and risk-based capital ratios as of September 30, 2008 are well in excess of the FDIC's guidelines for ``well-capitalized'' banks. Our core retail deposits have grown significantly in the third quarter of 2008 and we held over $268 million in highly liquid cash or cash-equivalent investments at September 30, 2008 in addition to various liquidity funding arrangements. ``We are exceptionally pleased with our solid overall performance for the quarter and year-to-date and our current capital and liquidity position. Our number one priority continues to be the safety and soundness of our company and customers,'' said Aston. ``Our earnings continue to show resiliency and remain ahead of last year. We were deeply appreciative of the overwhelming success of our capital offering during the quarter and strongly believe it was a reflection of the commitment of our bankers to the economic well being of our community. Our 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 $3.02 billion as of September 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
September 30, 2008
(Dollars in thousands)
Three Months Ended Increase/ % Increase/
September 30, 2008 2007 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Results of Operations:
Net interest income $ 22,927 $ 21,956 $ 971 4.42%
Noninterest income 11,725 9,243 2,482 26.85%
Noninterest expenses 24,040 22,114 1,926 8.71%
Provision for
loan losses 1,568 266 1,302 489.47%
Pretax Income 9,029 8,819 210 2.38%
Provision for income
tax expense 2,614 2,830 (216) (7.63%)
Net income 6,415 5,989 426 7.11%
Net income per
common share - basic 0.26 0.25 0.01 4.00%
Net income per
common share
- diluted 0.25 0.24 0.01 4.17%
---------------------------------------------------------------------
Period End Data:
Total assets $3,015,506 $2,483,344 $ 532,162 21.43%
Total assets
- tangible 2,942,613 2,415,999 526,614 21.80%
Loans (net of
unearned income and
deferred costs) 2,199,486 1,783,636 415,850 23.31%
Allowance for
loan losses 25,452 20,749 4,703 22.67%
Noninterest bearing
deposits 561,040 466,254 94,786 20.33%
Interest bearing
deposits 1,637,320 1,376,781 260,539 18.92%
Total deposits 2,198,360 1,843,035 355,325 19.28%
Shareholders' equity 333,372 247,185 86,187 34.87%
Shareholders' equity
- tangible 260,480 179,840 80,640 44.84%
Book value per share 13.67 10.30 3.37 32.72%
Book value per share
- tangible 10.68 7.49 3.19 42.59%
---------------------------------------------------------------------
Daily Average
Balances:
Total assets $2,862,793 $2,464,961 $ 397,832 16.14%
Total assets
- tangible 2,789,811 2,397,905 391,906 16.34%
Earning assets 2,593,447 2,252,124 341,323 15.16%
Loans (net of
unearned income) 2,139,210 1,765,908 373,302 21.14%
Allowance for
loan losses 24,562 20,580 3,982 19.35%
Noninterest bearing
deposits 506,676 468,802 37,874 8.08%
Interest bearing
deposits 1,563,047 1,365,219 197,828 14.49%
Total deposits 2,069,723 1,834,021 235,702 12.85%
Shareholders' equity 306,702 243,946 62,756 25.73%
Shareholders' equity
- tangible 233,720 176,890 56,830 32.13%
---------------------------------------------------------------------
Asset Quality Ratios:
Allowance for loan
losses to period
end loans 1.16% 1.16% -- --
Nonperforming loans
to period-end loans 0.07% 0.06% 0.01% 16.67%
Allowance for loan
losses to
nonperforming loans 16.22x 18.12x (1.90x) (10.49%)
Nonperforming assets
to period end assets 0.09% 0.10% (0.01%) (10.00%)
Net loan charge-offs
to average loans 0.01% 0.03% (0.02%) (66.67%)
---------------------------------------------------------------------
Key Ratios:
Return on
average assets 0.89% 0.96% (0.07%) (7.29%)
Return on
average assets
- tangible 0.91% 0.99% (0.08%) (8.08%)
Return on average
equity 8.32% 9.74% (1.42%) (14.58%)
Return on average
equity - tangible 10.92% 13.43% (2.51%) (18.69%)
Net interest margin 3.52% 3.87% (0.35%) (9.04%)
Average earning
assets/total
average assets 90.59% 91.37% (0.78%) (0.85%)
Average loans/average
deposits 103.36% 96.29% 7.07% 7.34%
Average noninterest
deposits/total
average deposits 24.48% 25.56% (1.08%) (4.22%)
Period end
shareholders'
equity/period end
total assets 11.06% 9.95% 1.11% 11.16%
Efficiency ratio 69.37% 70.88% (1.51%) (2.13%)
---------------------------------------------------------------------
Selected Financial Highlights (unaudited)
TOWNEBANK
September 30, 2008
(Dollars in thousands)
Nine Months Ended Increase/ % Increase/
September 30, 2008 2007 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Results of Operations:
Net interest income $ 64,815 $ 64,415 $ 400 0.62%
Noninterest income 34,671 27,728 6,943 25.04%
Noninterest expenses 68,942 64,569 4,373 6.77%
Provision for
loan losses 4,531 1,912 2,619 136.98%
Pretax Income 25,959 25,662 297 1.16%
Provision for income
tax expense 7,510 8,270 (760) (9.19%)
Net income 18,449 17,392 1,057 6.08%
Net income per common
share - basic 0.76 0.74 0.02 2.70%
Net income per common
share - diluted 0.73 0.69 0.04 5.80%
---------------------------------------------------------------------
Period End Data:
Total assets $3,015,506 $2,483,344 $ 532,162 21.43%
Total assets
- tangible 2,942,613 2,415,999 526,614 21.80%
Loans (net of
unearned income and
deferred costs) 2,199,486 1,783,636 415,850 23.31%
Allowance for
loan losses 25,452 20,749 4,703 22.67%
Noninterest bearing
deposits 561,040 466,254 94,786 20.33%
Interest bearing
deposits 1,637,320 1,376,781 260,539 18.92%
Total deposits 2,198,360 1,843,035 355,325 19.28%
Shareholders' equity 333,372 247,185 86,187 34.87%
Shareholders' equity
- tangible 260,480 179,840 80,640 44.84%
Book value per share 13.67 10.30 3.37 32.72%
Book value per share
- tangible 10.68 7.49 3.19 42.59%
---------------------------------------------------------------------
Daily Average
Balances:
Total assets $2,691,954 $2,350,216 $ 341,738 14.54%
Total assets
- tangible 2,619,406 2,284,560 334,846 14.66%
Earning assets 2,431,290 2,142,646 288,644 13.47%
Loans (net of
unearned income) 1,992,759 1,719,634 273,125 15.88%
Allowance for
loan losses 23,020 20,218 2,802 13.86%
Noninterest bearing
deposits 478,887 454,410 24,477 5.39%
Interest bearing
deposits 1,482,114 1,303,898 178,216 13.67%
Total deposits 1,961,001 1,758,308 202,693 11.53%
Shareholders' equity 278,079 239,005 39,074 16.35%
Shareholders' equity
- tangible 205,531 173,349 32,182 18.56%
---------------------------------------------------------------------
Asset Quality Ratios:
Allowance for loan
losses to period
end loans 1.16% 1.16% -- --
Nonperforming loans
to period-end loans 0.07% 0.06% 0.01% 16.67%
Allowance for loan
losses to
nonperforming loans 16.22x 18.12x (1.90x) (10.49%)
Nonperforming assets
to period end assets 0.09% 0.10% (0.01%) (10.00%)
Net loan charge-offs
to average loans 0.02% 0.06% (0.04%) (66.67%)
---------------------------------------------------------------------
Key Ratios:
Return on average
assets 0.92% 0.99% (0.07%) (7.07%)
Return on average
assets - tangible 0.94% 1.02% (0.08%) (7.84%)
Return on average
equity 8.86% 9.73% (0.87%) (8.94%)
Return on average
equity - tangible 11.99% 13.41% (1.42%) (10.59%)
Net interest margin 3.56% 4.02% (0.46%) (11.44%)
Average earning
assets/total
average assets 90.32% 91.17% (0.85%) (0.93%)
Average loans/average
deposits 101.62% 97.80% 3.82% 3.91%
Average noninterest
deposits/total
average deposits 24.42% 25.84% (1.42%) (5.50%)
Period end
shareholders'
equity/period
end total assets 11.06% 9.95% 1.11% 11.16%
Efficiency ratio 69.30% 70.07% (0.77%) (1.10%)
---------------------------------------------------------------------
Selected Financial Highlights (unaudited)
TOWNEBANK
September 30, 2008
(Dollars in thousands)
Nine Months Year
Ended Ended
Sept. 30, Dec. 31, Increase/ % Increase/
2008 2007 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Period End Data:
Total assets $3,015,506 $2,501,078 $ 514,428 20.57%
Total assets
- tangible 2,942,613 2,433,009 509,604 20.95%
Loans (net of
unearned income
and deferred costs) 2,199,486 1,829,456 370,030 20.23%
Allowance for
loan losses 25,452 21,323 4,129 19.36%
Noninterest bearing
deposits 561,040 439,122 121,918 27.76%
Interest bearing
deposits 1,637,320 1,395,224 242,096 17.35%
Total deposits 2,198,360 1,834,346 364,014 19.84%
Shareholders' equity 333,372 256,856 76,516 29.79%
Shareholders' equity
- tangible 260,480 188,787 71,693 37.98%
Book value per share 13.67 10.66 3.01 28.24%
Book value per share
- tangible 10.68 7.83 2.85 36.40%
---------------------------------------------------------------------
Daily Average
Balances:
Total assets $2,691,954 $2,387,258 $ 304,696 12.76%
Total assets
- tangible 2,619,406 2,321,193 298,213 12.85%
Earning assets 2,431,290 2,171,352 259,938 11.97%
Loans (net of
unearned income) 1,992,759 1,741,441 251,318 14.43%
Allowance for
loan losses 23,020 20,401 2,619 12.84%
Noninterest bearing
deposits 478,887 453,799 25,088 5.53%
Interest bearing
deposits 1,482,114 1,325,619 156,495 11.81%
Total deposits 1,961,001 1,779,418 181,583 10.20%
Shareholders' equity 278,079 242,186 35,893 14.82%
Shareholders' equity
- tangible 205,531 176,122 29,409 16.70%
---------------------------------------------------------------------
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 0.07% 0.04% 0.03% 75.00%
Allowance for loan
losses to
nonperforming loans 16.22x 29.37x (13.15x) (44.77%)
Nonperforming assets
to period end assets 0.09% 0.09% -- --
Net loan charge-offs
to average loans 0.02% 0.06% (0.04%) (66.67%)
---------------------------------------------------------------------
Key Ratios:
Return on average
assets 0.92% 0.97% (0.05%) (5.15%)
Return on average
assets - tangible 0.94% 1.00% (0.06%) (6.00%)
Return on average
equity 8.86% 9.60% (0.74%) (7.71%)
Return on average
equity - tangible 11.99% 13.21% (1.22%) (9.24%)
Net interest margin 3.56% 3.94% (0.38%) (9.64%)
Average earning
assets/total average
assets 90.32% 90.96% (0.64%) (0.70%)
Average loans/average
deposits 101.62% 97.87% 3.75% 3.83%
Average noninterest
deposits/total
average deposits 24.42% 25.50% (1.08%) (4.24%)
Period end
shareholders'
equity/period end
total assets 11.06% 10.27% 0.79% 7.69%
Efficiency ratio 69.30% 69.94% (0.64%) (0.92%)
---------------------------------------------------------------------
Contact: TowneBank
G. Robert Aston, Chairman and CEO
757-418-2700
Clyde E. McFarland, Jr., Senior Executive Vice President
and CFO
757-638-6801
Source: TowneBank
|  | |||||||||||||
