Attached files
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| 8-K - FORM 8-K - HomeTown Bankshares Corp | hmta20170501_8k.htm |
Exhibit 99.1
Friday, April 28, 2017
HomeTown Bankshares Corporation
Reports Continued, Strong Market Share Growth for First Quarter
2017 YTD Revenue Up 10% over 2016
NASDAQ Listing
HomeTown Bankshares Corporation listed with the NASDAQ Capital Markets under the trading symbol “HMTA” on October 12, 2016 when the stock price closed at $8.95. Since listing, the Company’s stock has received enhanced exposure, increased trading volume, and higher closing prices with a high of $11.00, an average of $9.53, and most recent closing price of $9.80 as of April 27, 2017.
Operating Performance Highlights
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Revenue of $5.7 million in Q1 2017, up 10% from $5.2 million in Q1 2016 |
| ● |
Net Interest Income up 10% in Q1 2017 over prior year with Net Interest Margin of 3.54% |
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Noninterest Income for first quarter 2017 up 13% over prior year, net of securities gains |
| ● |
Net Income was $765,000 for first quarter 2017 compared to $801,000 in Q1 2016 |
| ● |
Net Income Available to Shareholders was $765,000 in Q1 2017 vs. $597,000 in 2016 after $204,000 in preferred dividends; the preferred stock converted to common stock in June, 2016 |
| ● |
Fully diluted Earnings per Share of $0.13 for first quarter of 2017, compared with $0.14 per share for 2016 |
Continued Strong Loan and Core Deposit Growth
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Total assets of $534 million at March 31, 2017, increasing by $41 million or 8% over Q1 2016. |
| ● |
Total Loans of $428 million at March 31, 2017 |
| o |
Up $47 million or 12% for Q1 2017 over 2016 |
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Total Deposits of $465 million, up $51 million or 12% for Q1 2017 over 2016 |
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Core Deposits up 14% to $425 million due to Demand Deposits increasing $27 Million or 25% for Q1 2017 over 2016 |
| o |
32% decrease in wholesale deposits in Q1 2017 vs. the prior year |
Credit Quality Remains Strong
| ● |
YTD net recoveries for Q1 2017 were $20,000 or -0.02% of average loans due to recoveries totaling $36,000 exceeding charge-offs vs. net charge-offs of $11,000 or 0.01% of average loans for Q1 2016 |
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Non-performing assets improved significantly to 0.76% of total assets at March 31, 2017 vs. 1.24% in 2016 |
| ● |
Nonperforming assets, including restructured loans, of 1.51% to total assets at March 31, 2017 vs. 2.53% in Q1 2016 |
| ● |
Nonaccrual loans remained low at .22% of total loans at March 31, 2017 and .11% of total loans at March 31, 2016; OREO improved 45% to $3.1 Million at Q1 2017 from $5.7 million at Q1 2016 |
| ● |
Past due accruing loans improved and remained at historically low levels of 0.33% of total loans at March 31, 2017 vs. 0.49% at March 31, 2016 |
News Release
FOR IMMEDIATE RELEASE
For more information contact:
Susan K. Still, President and CEO, (540) 278-1705
Vance W. Adkins, Executive Vice President and CFO, (540) 278-1702
HomeTown Bankshares Reports Continued, Strong Market Share Growth for the First Quarter of 2017
Revenue Up 10% Over 2016
ROANOKE, Va., April 28, 2017 - HomeTown Bankshares Corporation, NASDAQ: HMTA, the parent company of HomeTown Bank, reported strong revenue growth of 10% for the first quarter of 2017 over the prior year. Net income available to common shareholders amounted to $765,000 for the first quarter of 2017 vs. $597,000 during the prior year after preferred stock dividend payments of $204,000 in Q1 2016. Net Income was $765,000 for Q1 2017 due to certain nonrecurring charges vs. $801,000 in 2016. Fully diluted earnings per share amounted to $0.13 per share for the first quarter of 2017 compared to $0.14 per share for the comparative period of 2016. The net interest margin increased for the past two consecutive quarters to 3.54% at March 31, 2017.
"We are delighted with the strong growth in market share in both loans and core deposits reflecting our continued ability to capitalize on the recent, competitive changes in our markets,” said Susan K. Still, President and CEO. “This expansion in market share is coupled with solid revenue growth, an improving quarter-to-quarter net interest margin and strong asset quality,” she continued.
Financial Highlights
Revenues increased 10% to $5.7 million during the first quarter due to strong loan and core deposit growth system-wide and a 13% increase in non-interest income, net of gain(s) on securities sales. Service charge and ATM and interchange income related to strong core deposit growth and the continued increase in mortgage origination income were the major contributors to the sizable increase in non-interest income during the first quarter of 2017 vs. 2016.
At March 31, 2017, total assets reached $534 million, an increase of $41 million or 8%, over 2016. The loan portfolio ended the period at $428 million, representing an increase of 12%, or $47 million over the prior year, supported by strong core deposit growth of 14% or $51 million in Q1 2017 over 2016. Another year of strong core deposit growth was due to another strong increase in demand deposits accounts over the prior year. Total deposits increased $51 million or 12% to $465 million at Q1 of 2017, with a 32% reduction in wholesale deposits since Q1 2016.
The expansion of our Private Banking Group in early 2016 continued to be a strong contributor to growth in both loans and deposits during the first quarter of 2017. In addition, higher mortgage originations resulted in an 18% increase in mortgage revenue for the first quarter of 2017 over 2016.
The Company’s asset quality improved and remains strong at March 31, 2017. Nonperforming assets, excluding performing restructured loans, improved to 0.76% at March 31, 2017 from 1.24% of Company assets at March 31, 2016. Both non-performing loans and Bank Owned Real Estate improved significantly with a combined 33% decrease in Q1 2017 over the prior year. In addition, recoveries exceeded charge-offs by $20,000 during the first quarter of 2017. The allowance for loan losses increased to $3.73 million at March 31, 2017 from $3.35 million in 2016 to support the strong loan growth.
The Bank remains well-capitalized with total equity at March 31, 2017 rising to $49 million with all ratios exceeding the current regulatory standards for well-capitalized status. The Common equity tier 1 ratio, Tier 1 capital ratio, Total capital ratio, and Tier 1 leverage ratio were 11.7%, 11.7%, 12.5% and 10.5%, respectively, for the Bank at March 31, 2017.
“While we are now the largest community bank headquartered in the Roanoke Valley, we have also been selected as the “Best Regional/Local Bank” by readers of the Roanoker Magazine for 2017 - the sixth consecutive year. Our strategic initiatives will continue to focus on being the best bank we can be in providing value for our shareholders as well as all of our customers and our employees in each market we serve, “Still said.
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, 2017)
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HomeTown Bankshares Corporation |
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Consolidated Condensed Balance Sheets |
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March 31, 2017; December 31, 2016; and March 31, 2016 |
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March 31, |
December 31 |
March 31 |
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In Thousands |
2017 |
2016 |
2016 |
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Assets |
(Unaudited) |
(Unaudited) |
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Cash and due from banks |
$ | 28,005 | $ | 18,229 | $ | 27,890 | ||||||
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Federal funds sold |
51 | 42 | 1,082 | |||||||||
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Securities available for sale, at fair value |
52,159 | 52,975 | 54,757 | |||||||||
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Restricted equity securities, at cost |
2,290 | 2,213 | 2,765 | |||||||||
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Loans held for sale |
123 | 678 | 289 | |||||||||
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Total loans |
428,043 | 418,991 | 381,063 | |||||||||
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Allowance for loan losses |
(3,726 | ) | (3,636 | ) | (3,347 | ) | ||||||
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Net loans |
424,317 | 415,355 | 377,716 | |||||||||
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Property and equipment, net |
13,274 | 13,371 | 13,864 | |||||||||
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Other real estate owned, net |
3,148 | 3,794 | 5,686 | |||||||||
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Other assets |
10,946 | 10,633 | 9,273 | |||||||||
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Total assets |
$ | 534,313 | $ | 517,290 | $ | 493,322 | ||||||
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Liabilities and Stockholders’ Equity |
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Deposits: |
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Noninterest-bearing |
$ | 106,585 | $ | 91,354 | $ | 80,060 | ||||||
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Interest-bearing |
358,060 | 359,494 | 333,558 | |||||||||
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Total deposits |
464,645 | 450,848 | 413,618 | |||||||||
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Federal Home Loan Bank borrowings |
9,917 | 8,000 | 22,000 | |||||||||
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Subordinated notes |
7,232 | 7,224 | 7,202 | |||||||||
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Other borrowings |
1,121 | 1,117 | 1,072 | |||||||||
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Other liabilities |
2,335 | 1,876 | 2,190 | |||||||||
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Total liabilities |
485,250 | 469,065 | 446,082 | |||||||||
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Stockholders’ Equity: |
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Preferred stock |
- | - | 12,893 | |||||||||
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Common stock |
28,756 | 28,765 | 16,801 | |||||||||
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Surplus |
17,861 | 17,833 | 15,521 | |||||||||
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Retained surplus |
2,012 | 1,247 | 1,040 | |||||||||
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Accumulated other comprehensive (loss) income |
(14 | ) | (56 | ) | 597 | |||||||
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Total HomeTown Bankshares Corporation stockholders’ equity |
48,615 | 47,789 | 46,852 | |||||||||
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Noncontrolling interest in consolidated subsidiary |
448 | 436 | 388 | |||||||||
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Total stockholders’ equity |
49,063 | 48,225 | 47,240 | |||||||||
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Total liabilities and stockholders’ equity |
$ | 534,313 | $ | 517,290 | $ | 493,322 | ||||||
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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, 2017 and 2016 |
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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 |
2017 |
2016 |
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(Unaudited) |
(Unaudited) |
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Interest income: |
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Loans and fees on loans |
$ | 4,624 | $ | 4,256 | ||||
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Taxable investment securities |
240 | 204 | ||||||
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Nontaxable investment securities |
87 | 101 | ||||||
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Other interest income |
74 | 53 | ||||||
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Total interest income |
5,025 | 4,614 | ||||||
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Interest expense: |
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Deposits |
554 | 504 | ||||||
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Subordinated notes |
134 | 134 | ||||||
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Other borrowed funds |
53 | 97 | ||||||
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Total interest expense |
741 | 735 | ||||||
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Net interest income |
4,284 | 3,879 | ||||||
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Provision for loan losses |
70 | 60 | ||||||
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Net interest income after provision for loan losses |
4,214 | 3,819 | ||||||
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Noninterest income: |
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Service charges on deposit accounts |
149 | 154 | ||||||
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ATM and interchange income |
178 | 147 | ||||||
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Mortgage banking |
207 | 175 | ||||||
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Gains on sales of investment securities |
13 | 5 | ||||||
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Other income |
150 | 130 | ||||||
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Total noninterest income |
697 | 611 | ||||||
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Noninterest expense: |
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Salaries and employee benefits |
1,989 | 1,726 | ||||||
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Occupancy and equipment expense |
428 | 434 | ||||||
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Advertising and marketing expense |
130 | 94 | ||||||
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Professional fees |
233 | 101 | ||||||
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Losses on sales, and writedowns of other real estate owned, net |
- | - | ||||||
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Other real estate owned expense |
13 | 22 | ||||||
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Other expense |
999 | 885 | ||||||
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Total noninterest expense |
3,792 | 3,262 | ||||||
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Net income before income taxes |
1,119 | 1,168 | ||||||
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Income tax expense |
342 | 353 | ||||||
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Net income |
777 | 815 | ||||||
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Less net income attributable to non-controlling interest |
12 | 14 | ||||||
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Net income attributable to HomeTown Bankshares Corporation |
765 | 801 | ||||||
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Effective dividends on preferred stock |
- | 204 | ||||||
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Net income available to common stockholders |
$ | 765 | $ | 597 | ||||
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Basic earnings per common share |
$ | 0.13 | $ | 0.17 | * | |||
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*Diluted earnings per common share |
$ | 0.13 | $ | 0.14 | * | |||
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Weighted average common shares outstanding |
5,763,383 | 3,501,446 | * | |||||
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Diluted average common shares outstanding |
5,783,573 | 5,787,337 | * | |||||
| HomeTown Bankshares Corporation | Three | Three | ||||||
| Financial Highlights | Months | Months | ||||||
| In Thousands, Except Share and Per Share Data | Ended | Ended | ||||||
| Mar 31 | Mar 31 | |||||||
| 2017 | 2016 | |||||||
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PER SHARE INFORMATION |
(Unaudited) |
(Unaudited) |
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Book value per share, basic |
$ | 8.43 | $ | 9.68 | * | |||
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Book value per share, diluted |
$ | 8.43 | $ | 8.12 | * | |||
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Earnings per share, basic |
$ | 0.13 | $ | 0.17 | * | |||
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Earnings per share, diluted |
$ | 0.13 | $ | 0.14 | * | |||
| * Restated for the 4% stock dividend distributed July 11, 2016 | ||||||||
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PROFITABILITY |
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Return on average assets |
0.59 | % | 0.67 | % | ||||
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Return on average shareholders' equity |
6.40 | % | 6.92 | % | ||||
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Net interest margin |
3.54 | % | 3.62 | % | ||||
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Efficiency |
76.06 | % | 72.23 | % | ||||
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BALANCE SHEET RATIOS |
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Total loans to deposits |
92.12 | % | 92.13 | % | ||||
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Securities to total assets |
10.19 | % | 11.66 | % | ||||
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Common equity tier 1 ratio BANK ONLY |
11.7 | % | 12.5 | % | ||||
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Tier 1 capital ratio BANK ONLY |
11.7 | % | 12.5 | % | ||||
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Total capital ratio BANK ONLY |
12.5 | % | 13.3 | % | ||||
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Tier 1 leverage ratio BANK ONLY |
10.5 | % | 10.9 | % | ||||
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ASSET QUALITY |
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Nonperforming assets to total assets |
0.76 | % | 1.24 | % | ||||
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Nonperforming assets, including restructured loans, to total assets |
1.51 | % | 2.53 | % | ||||
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Net (recoveries) charge-offs to average loans (annualized) |
(0.02 | )% | 0.01 | % | ||||
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Composition of risk assets: (in thousands) |
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Nonperforming assets: |
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Nonaccrual loans |
$ | 936 | $ | 415 | ||||
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Other real estate owned |
3,148 | 5,686 | ||||||
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Total nonperforming assets, excluding performing restructured loans |
4,084 | 6,101 | ||||||
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Restructured loans, performing in accordance with their modified terms |
3,980 | 6,378 | ||||||
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Total nonperforming assets, including performing restructured loans |
$ | 8,064 | $ | 12,479 | ||||
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Allowance for loan losses: (in thousands) |
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Beginning balance |
$ | 3,636 | $ | 3,298 | ||||
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Provision for loan losses |
70 | 60 | ||||||
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Charge-offs |
(16 | ) | (15 | ) | ||||
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Recoveries |
36 | 4 | ||||||
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Ending balance |
$ | 3,726 | $ | 3,347 | ||||
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