Attached files
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| 8-K - FORM 8-K - HomeTown Bankshares Corp | hmta20150501_8k.htm |
Exhibit 99.1
Wednesday, April 29, 2015
HomeTown Bankshares Corporation Reports Strong Growth for
First Quarter
2015 YTD Revenue Up 8% over 2014
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Solid Operating Performance |
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Revenue of $4.8 million in Q1 2015, up 8% from $4.4 million in Q1 2014 | |
| o | Net Income of $790,000 for first quarter 2015, compared with $803,000 in first quarter 2014 | |
| o | Earnings slightly lower for Q1 2015 vs. Q1 2014 due to accelerated marketing expenses incurred to take advantage of unique competitive opportunities in the local banking market | |
| o | Fully diluted Earnings per Share of $0.14 for first quarter of 2015, compared with $0.15 per share for 2014 | |
| o | Net Interest Income up 4% in Q1 2015 over prior year with Net Interest Margin of 3.84% | |
| o | Noninterest Income for first quarter 2015 up 49% over prior year, net of securities gain |
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Strong Loan and Deposit Growth |
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Total Loans of $339 Million at March 31, 2015 |
| ■ | Up $28 million or 9% for Q1 2015 over 2014 |
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Total Deposits of $367 Million, Up $18 million or 5% for Q1 2015 over 2014 |
| ■ | Non-Interest Bearing Deposits up 18%; Interest Bearing Core Deposits up 3% |
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Credit Quality Remains Strong |
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YTD net charge-offs for Q1 2015 of $3,000 and $2,000 for Q1 2014 | |
| o | Non-performing assets of 1.90% of total assets at March 31, 2015 vs. 1.97% in 2014 | |
| o | Nonaccrual loans remained low at .41% of total loans at March 31, 2015 and .30% of total loans at March 31, 2014 | |
| o | Past due accruing loans improved and were at historically low levels of 0.35% of total loans at March 31, 2015 vs. 0.79% at March 31, 2014 |
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Well-Capitalized with Solid Capital Ratios |
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Total Risk-Based Capital amounted to 12.46% at March 31, 2015 | |
| o | Tier 1 Risk-Based Capital amounted to 11.60% at March 31, 2015 | |
| o | Tier 1 Leverage Ratio of 10.00% at March 31, 2015 | |
| o | Common Equity Tier 1 Capital amounted to 8.04% at March 31, 2015 |
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News Release
FOR IMMEDIATE RELEASE
For more information contact:
Susan K. Still, President and CEO, 540-278-1705
Charles W. Maness, Jr. Executive Vice President and CFO, 540-278-1702
HomeTown Bankshares Reports Strong Growth for the First Quarter of 2015
Revenue Up 8% Over 2014
ROANOKE, Va., April 29, 2015 - HomeTown Bankshares Corporation, the parent company of HomeTown Bank, reported strong revenue growth of 8% for the first quarter of 2015 over the prior year. Earnings of $790,000 were realized for the quarter ended March 31, 2015 vs. $803,000 in 2014. Net income available to common shareholders amounted to $566,000 for the first quarter of 2015 vs. $593,000 during the prior year after preferred stock dividend payments of $210,000 in Q1 2015 and Q1 2014. Fully diluted earnings per share amounted to $0.14 per share for the first quarter of 2015 compared to $0.15 per share for the comparative period of 2014. Earnings were slightly lower for Q1 2015 vs. Q1 2014 due to accelerated marketing expenses incurred to take advantage of unique competitive opportunities in the local banking market
"We are very pleased to report another quarter of solid operating results and asset quality”, said Susan K. Still, President and CEO. “Strong growth in both loans and core deposits as well as continued improvement in our non-interest income contributed to solid revenue growth and earnings performance,” she continued.
Financial Highlights
Revenues increased 8% to $4.8 million during the first quarter due to strong loan and core deposit growth system-wide and a 49% increase in non-interest income, net of gain on securities sale. Non-interest income increased significantly due to continued growth in core deposit related revenue and mortgage origination gains.
At March 31, 2015, total assets reached $437 million, an increase of $27 million and 6%, over 2014. The loan portfolio ended the period at $339 million, representing an increase of 9%, or $27 million, over the prior year.
Total deposits increased $18 million to $367 million Q1 of 2015, a 5% increase over 2014. Continued strong growth in noninterest bearing demand deposits resulted in a 18% increase in Q1 2015 over 2014.
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The opening of our Salem office in late July, 2014 contributed to the strong growth in loans and deposits as well as non-interest income. Non-interest expenses were also higher during the first quarter of 2015 compared to 2014 due to the opening of our new Salem branch in late July, 2014, higher mortgage origination expenses associated with higher mortgage originations, as well as higher marketing and advertising costs.
Higher marketing costs were realized earlier in 2015 than in prior years to take advantage of recent competitive opportunities that have developed in the local banking market. During late 2014, Bank of America sold all of its branches in both the Roanoke and New River Valleys; and Valley Bank announced its sale to the Bank of North Carolina with a mid-2015 closing. This should provide unique opportunities for HomeTown Bank, which will become the largest community bank headquartered in the Roanoke Valley with the sale of Valley Bank.
The Company’s asset quality improved and is strong at March 31, 2015. Nonperforming assets, excluding performing restructured loans, totaled 1.90% of Company assets at March 31, 2015, as compared to 1.97% at March 31, 2014. Both non-performing loans and Bank Owned Real Estate decreased during the current quarter with no additions of non-performing loans to foreclosed property. In addition, net charge-offs were just $3,000 during the first quarter of 2015 and the allowance for loan losses remained unchanged at $3.3 million
The Company remains well-capitalized with total equity at March 31, 2015 rising to $44 million, an increase of $3.3 million, or 8.2%, from March 31, 2014. Total risk-based capital, Tier 1 capital, Tier 1 leverage, and Common Equity Tier1 ratios were 12.46%, 11.60%, 10.00% and 8.04%, respectively. All ratios exceed the current regulatory standards for well capitalized status.
“Our focus will continue to be on being the best bank we can be in each community we serve, “Still said. “This means taking care of the local banking needs of the Roanoke and New River Valleys. It involves keeping our customer deposits local to provide funding for the local capital needs of our residents and businesses in our communities. This focus and commitment will ultimately enhance the quality of life in our communities and the prosperity of our customers and shareholders,” she continued.
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About HomeTown Bankshares Corporation
HomeTown Bankshares Corporation is the parent company of HomeTown Bank, which officially opened for business on November 14, 2005. HomeTown Bank offers a full range of banking services to small and medium-size businesses, real estate investors and developers, private investors, professionals and individuals. The Bank serves three markets including the Roanoke Valley, the New River Valley and Smith Mountain Lake through six branches, seven ATMs, HomeTown Mortgage and HomeTown Investments. A high level of responsive and personal service coupled with local decision-making is the hallmark of its banking strategy. For more information, please visit www.hometownbank.com.
Forward-Looking Statements:
Certain statements in this press release may be “forward-looking statements.” Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, and competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.
(See Attached Financial Statements for the year-to-date and quarter ending March 31, 2015)
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| HomeTown Bankshares Corporation | ||||||||||||
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Consolidated Condensed Balance Sheets |
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March 31, 2015, December 31, 2014, and March 31, 2014 |
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March 31, |
December 31 |
March 31 |
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In Thousands, Except Share and Per Share Data |
2015 |
2014 |
2014 |
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Assets |
(Unaudited) |
(Unaudited) |
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Cash and due from banks |
$ | 14,955 | $ | 13,795 | $ | 15,784 | ||||||
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Federal funds sold |
1,370 | 649 | 498 | |||||||||
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Securities available for sale, at fair value |
51,158 | 54,603 | 57,350 | |||||||||
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Restricted equity securities, at cost |
2,680 | 2,476 | 2,363 | |||||||||
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Loans held for sale |
539 | 242 | 509 | |||||||||
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Total loans |
339,357 | 331,679 | 311,777 | |||||||||
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Allowance for loan losses |
(3,329 | ) | (3,332 | ) | (3,789 | ) | ||||||
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Net loans |
336,028 | 328,347 | 307,988 | |||||||||
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Property and equipment, net |
14,901 | 14,900 | 12,435 | |||||||||
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Other real estate owned |
6,917 | 6,986 | 7,175 | |||||||||
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Other assets |
8,821 | 6,211 | 6,641 | |||||||||
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Total assets |
$ | 437,369 | $ | 428,209 | $ | 410,743 | ||||||
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Liabilities and Stockholders’ Equity |
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Deposits: |
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Noninterest-bearing |
$ | 52,882 | $ | 51,226 | $ | 44,888 | ||||||
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Interest-bearing |
313,713 | 311,369 | 303,757 | |||||||||
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Total deposits |
366,595 | 362,595 | 348,645 | |||||||||
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Short term borrowings |
814 | 422 | 1,001 | |||||||||
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Federal Home Loan Bank borrowings |
24,000 | 20,000 | 19,000 | |||||||||
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Other liabilities |
1,625 | 1,967 | 1,438 | |||||||||
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Total liabilities |
393,034 | 384,984 | 370,084 | |||||||||
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Stockholders’ Equity: |
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Preferred stock |
13,293 | 13,293 | 13,293 | |||||||||
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Common stock |
16,481 | 16,438 | 16,438 | |||||||||
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Surplus |
15,300 | 15,310 | 15,263 | |||||||||
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Retained deficit |
(1,705 | ) | (2,271 | ) | (4,253 | ) | ||||||
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Accumulated other comprehensive income (loss) |
635 | 455 | (82 | ) | ||||||||
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Total HomeTown Bankshares Corporations stockholders’ equity |
44,004 | 43,225 | 40,659 | |||||||||
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Noncontrolling interest in consolidated subsidiary |
331 | - | - | |||||||||
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Total stockholders’ equity |
44,335 | 43,225 | 40,659 | |||||||||
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Total liabilities and stockholders’ equity |
$ | 437,369 | $ | 428,209 | $ | 410,743 | ||||||
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HomeTown Bankshares Corporation |
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Consolidated Condensed Statements of Income |
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For the Three Months Ended March 31, 2015 and 2014 |
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For the Three Months |
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Ended March 31, |
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In Thousands, Except Share and Per Share Data |
2015 |
2014 |
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Interest income: |
(Unaudited) | (Unaudited) | ||||||
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Loans and fees on loans |
$ | 3,899 | $ | 3,695 | ||||
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Taxable investment securities |
206 | 263 | ||||||
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Nontaxable investment securities |
103 | 94 | ||||||
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Other interest income |
42 | 41 | ||||||
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Total interest income |
4,250 | 4,093 | ||||||
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Interest expense: |
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Deposits |
448 | 440 | ||||||
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Other borrowed funds |
92 | 94 | ||||||
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Total interest expense |
540 | 534 | ||||||
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Net interest income |
3,710 | 3,559 | ||||||
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Provision for loan losses |
- | 70 | ||||||
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Net interest income after provision for loan losses |
3,710 | 3,489 | ||||||
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Noninterest income: |
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Service charges on deposit accounts |
110 | 91 | ||||||
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ATM and interchange income |
122 | 94 | ||||||
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Mortgage loan brokerage fees |
120 | 30 | ||||||
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Gains on sales of investment securities |
40 | - | ||||||
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Other income |
143 | 118 | ||||||
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Total noninterest income |
535 | 333 | ||||||
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Noninterest expense: |
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Salaries and employee benefits |
1,541 | 1,412 | ||||||
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Occupancy and equipment expense |
445 | 366 | ||||||
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Advertising and marketing expense |
242 | 103 | ||||||
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Professional fees |
112 | 73 | ||||||
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(Gains), losses on sales, writedowns of other real estate owned, net |
- | (5 | ) | |||||
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Other real estate owned expense |
30 | 64 | ||||||
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Other expense |
739 | 644 | ||||||
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Total noninterest expense |
3,109 | 2,657 | ||||||
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Net income before income taxes |
1,136 | 1,165 | ||||||
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Income tax expense |
346 | 362 | ||||||
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Net income |
790 | 803 | ||||||
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Less net income attributable to non-controlling interest |
14 | - | ||||||
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Net income attributable to HomeTown Bankshares Corporation |
776 | 803 | ||||||
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Effective dividends on preferred stock |
210 | 210 | ||||||
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Net income available to common stockholders |
$ | 566 | $ | 593 | ||||
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Basic earnings per common share |
$ | 0.17 | $ | 0.18 | ||||
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Diluted earnings per common share |
$ | 0.14 | $ | 0.15 | ||||
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Weighted average common shares outstanding |
3,291,517 | 3,276,631 | ||||||
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Diluted average common shares outstanding |
5,531,517 | 5,516,631 | ||||||
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HomeTown Bankshares Corporation |
Three |
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Financial Highlights |
Months |
Months |
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Ended |
Ended |
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Mar 31 |
Mar 31 |
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2015 |
2014 |
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PER SHARE INFORMATION |
(Unaudited) |
(Unaudited) |
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| Book value | $ | 9.32 | $ | 8.32 | ||||
| Earnings per share, basic | $ | 0.17 | $ | 0.18 | ||||
| Earnings per share, diluted | $ | 0.14 | $ | 0.15 | ||||
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PROFITABILITY |
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| Return on average assets | 0.74 | % | 0.81 | % | ||||
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Return on average shareholders' equity |
7.31 | % | 8.09 | % | ||||
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Net interest margin |
3.84 | % | 3.94 | % | ||||
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Efficiency |
73.23 | % | 66.75 | % | ||||
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BALANCE SHEET RATIOS |
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Total loans to deposits |
92.57 | % | 89.43 | % | ||||
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Securities to total assets |
12.31 | % | 14.54 | % | ||||
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Tier 1 leverage ratio |
10.1 | % | 10.2 | % | ||||
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ASSET QUALITY |
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Nonperforming assets to total assets |
1.90 | % | 1.97 | % | ||||
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Nonperforming assets, including restructured loans, to total assets |
3.28 | % | 3.50 | % | ||||
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Net charge-offs to average loans (annualized) |
0.00 | % | 0.00 | % | ||||
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Composition of risk assets: (in thousands) |
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Nonperforming assets: |
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Nonaccrual loans |
$ | 1,406 | $ | 937 | ||||
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Other real estate owned |
6,917 | 7,175 | ||||||
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Total nonperforming assets, excluding performing restructured loans |
$ | 8,323 | $ | 8,112 | ||||
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Restructured loans, performing in accordance with their modified terms |
6,011 | 6,266 | ||||||
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Total nonperforming assets, including performing restructured loans |
$ | 14,334 | $ | 14,378 | ||||
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Allowance for loan losses: (in thousands) |
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Beginning balance |
$ | 3,332 | $ | 3,721 | ||||
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Provision for loan losses |
- | 70 | ||||||
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Charge-offs |
(15 | ) | (36 | ) | ||||
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Recoveries |
12 | 34 | ||||||
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Ending balance |
$ | 3,329 | $ | 3,789 | ||||
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