Attached files
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| 8-K - FORM 8-K - HomeTown Bankshares Corp | hmta20160502_8k.htm |
Exhibit 99.1
Thursday, April 28, 2016
HomeTown Bankshares Corporation Reports Strong Growth for
First Quarter
2016 YTD Revenue Up 9% over 2015
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Solid Operating Performance |
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Revenue of $5.2 million in Q1 2016, up 9% from $4.8 million in Q1 2015 |
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Net Income of $801,000 for first quarter 2016, compared with $776,000 in first quarter 2015, including first full quarter of interest expense associated with a $7.5 million capital raise via subordinated debt offer in December, 2015 |
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Fully diluted Earnings per Share of $.14 for first quarter of 2016, compared with $0.14 per share for 2015 |
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Net Interest Income up 5% in Q1 2016 over prior year with Net Interest Margin of 3.62%, including $121,000 in additional interest expense associated with above capital raise |
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Noninterest Income for first quarter 2016 up 22% over prior year, net of securities gain |
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Strong Loan and Deposit Growth |
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Total Loans of $381 Million at March 31, 2016 |
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Up $42 million or 12% year-over year for Q1 2016 over 2015 and 15% annualized |
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Total Deposits of $414 Million, Up $47 million or 13% for Q1 2016 over 2015 |
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Core Deposits up 18% to $374 Million due to Non-Interest Bearing Deposits increasing $27 Million or 51% for Q1 2016 over 2015 |
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Credit Quality Remains Strong |
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YTD net charge-offs for Q1 2016 of $11,000 or 0.01% of average loans vs. $3,000 for Q1 2015 |
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Non-performing assets of 1.24% of total assets at March 31, 2016 vs. 1.90% in 2015 |
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Nonaccrual loans remained low at .11% of total loans at March 31, 2016 and .41% of total loans at March 31, 2015 |
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Past due accruing loans remained at historically low levels of 0.49% of total loans at March 31, 2016 vs. 0.35% at March 31, 2015 |
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Well-Capitalized with Solid Capital Ratios |
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Total Risk-Based Capital amounted to 13.61% at March 31, 2016 |
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Tier 1 Risk-Based Capital amounted to 12.80% at March 31, 2016 |
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Bank’s Tier 1 Leverage Ratio of 10.86% at March 31, 2016 |
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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 2016
Revenue Up 9% Over 2015
ROANOKE, Va., April 28, 2016 - HomeTown Bankshares Corporation, the parent company of HomeTown Bank, reported strong balance sheet growth and solid operating performance for the first quarter of 2016. Total revenue was up 9% from strong loan and core deposit growth of 12% and 18 %, respectively, for the first quarter of 2016 vs. the first quarter of 2015.
"We are delighted with the continued growth in market share for loans and core deposits as well as our 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 and earnings as well as strong asset quality,” she continued.
Financial Highlights
Revenues increased 9% to $5.2 million during the first quarter and a 22% increase in non-interest income, net of gains on securities sales. Service charge income related to strong core deposit growth and the continued increase in mortgage origination income were major contributors to the sizable increase in non-interest income during the first quarter of 2016. Net earnings were up 3% from $776,000 in Q1 2015 to $801,000 in Q1 2016 which included a $134,000 increase in interest expense in Q1 2016 associated with a $7.5 million capital raise in December, 2015. The capital raise in the form of subordinated notes was initiated to support continued, strong loan growth, and was the primary cause of the decline in the net interest margin from 3.84% in Q1 2015 to 3.62% in Q1 2016. Net income available to common shareholders amounted to $597,000 for the first quarter of 2016 vs. $566,000 during the prior year after preferred stock dividend payments of $204,000 in Q1 2016 and $210,000 in Q1 2015. Fully diluted earnings per share amounted to $0.14 per share for the first quarter of 2016 compared to $0.14 per share for the comparative period of 2015.
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At March 31, 2016, total assets reached $493 million, an increase of $56 million or 13%, over 2015. The loan portfolio ended the period at $381 million, representing a year-over- year increase of 12% (15% on an annualized basis), or $42 million, over the prior year.
Total deposits increased $47 million to $414 million in Q1 of 2016, a 13% increase over 2015. Core deposits grew 18% in Q1 2016 over 2015 due to a strong increase in noninterest bearing demand deposits over Q1 2015.
The expansion of our Private Wealth Group in December, 2015, also contributed to the strong growth in loans and deposits during the first quarter of 2016, offsetting related salary and benefit expense during the first quarter of 2016. In addition, higher mortgage originations resulted in a 46% increase in mortgage revenue for the first quarter of 2016 over 2015.
The Company raised $7.5 million in the form of subordinated debt in December, 2015 to support future loan growth anticipated with the sale of Valley Bank in July, 2015, and the exit of Bank of America in late 2014. Interest expense and bank franchise taxes increased accordingly for the quarter, offset partially by income from the strong loan growth of 12% during the first quarter of 2016 over 2015.
The Company’s asset quality improved and remains strong at March 31, 2016. Nonperforming assets, excluding performing restructured loans, improved from 1.90% of Company assets at March 31, 2015 to 1.24% at March 31, 2016, and non-performing loans decreased during the current quarter. In addition, net charge-offs were minimal at $11,000 during the first quarter of 2016. The allowance for loan losses increased slightly to $3.35 million at March 31, 2016 vs. $3.33 million in 2015 due to a $60,000 provision for loan losses in 2016 due to the continued, strong loan growth.
The Company remains well-capitalized with total equity at March 31, 2016 rising to $47 million, an increase of $2.9 million, or 7%, from March 31, 2015. Total risk-based capital, Tier 1 capital, Tier 1 leverage, and Common Equity Tier 1 ratios were 13.61%, 12.80%, 10.86% and 12.79%, respectively. All ratios exceed the current regulatory standards for well capitalized status.
“While we are now the largest community bank headquartered in the Roanoke Valley, our focus will continue to be on being the best bank we can be for our customers in each market we serve, “Still said.
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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, 2016)
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HomeTown Bankshares Corporation | ||||||||
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Consolidated Condensed Balance Sheets | ||||||||
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March 31, 2016; December 31, 2015; and March 31, 2015 |
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March 31, |
December 31 |
March 31, |
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In Thousands |
2016 |
2015 |
2015 |
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Assets |
(Unaudited) |
(Unaudited) |
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Cash and due from banks |
$ | 27,890 | $ | 28,745 | $ | 14,955 | ||||||
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Federal funds sold |
1,082 | 1,329 | 1,370 | |||||||||
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Securities available for sale, at fair value |
54,757 | 52,544 | 51,158 | |||||||||
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Restricted equity securities, at cost |
2,765 | 2,535 | 2,680 | |||||||||
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Loans held for sale |
289 | 1,643 | 539 | |||||||||
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Total loans |
381,063 | 367,358 | 339,357 | |||||||||
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Allowance for loan losses |
(3,347 | ) | (3,298 | ) | (3,329 | ) | ||||||
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Net loans |
377,716 | 364,060 | 336,028 | |||||||||
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Property and equipment, net |
13,864 | 14,008 | 14,901 | |||||||||
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Other real estate owned |
5,686 | 5,237 | 6,917 | |||||||||
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Other assets |
9,273 | 9,284 | 8,821 | |||||||||
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Total assets |
$ | 493,322 | $ | 479,385 | $ | 437,369 | ||||||
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Liabilities and Stockholders’ Equity |
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Deposits: |
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Noninterest-bearing |
$ | 80,060 | $ | 77,268 | $ | 52,882 | ||||||
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Interest-bearing |
333,558 | 322,278 | 313,713 | |||||||||
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Total deposits |
413,618 | 399,546 | 366,595 | |||||||||
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Federal Home Loan Bank borrowings |
22,000 | 22,000 | 24,000 | |||||||||
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Subordinated notes |
7,202 | 7,194 | - | |||||||||
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Other borrowings |
1,072 | 2,361 | 814 | |||||||||
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Other liabilities |
2,190 | 1,893 | 1,625 | |||||||||
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Total liabilities |
446,082 | 432,994 | 393,034 | |||||||||
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Stockholders’ Equity: |
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Preferred stock |
12,893 | 12,893 | 13,293 | |||||||||
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Common stock |
16,801 | 16,801 | 16,481 | |||||||||
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Surplus |
15,521 | 15,484 | 15,300 | |||||||||
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Retained surplus (deficit) |
1,040 | 443 | (1,705 | ) | ||||||||
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Accumulated other comprehensive income |
597 | 396 | 635 | |||||||||
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Total HomeTown Bankshares Corporation stockholders’ equity |
46,852 | 46,017 | 44,004 | |||||||||
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Noncontrolling interest in consolidated subsidiary |
388 | 374 | 331 | |||||||||
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Total stockholders’ equity |
47,240 | 46,391 | 44,335 | |||||||||
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Total liabilities and stockholders’ equity |
$ | 493,322 | $ | 479,385 | $ | 437,369 | ||||||
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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, 2016 and 2015 |
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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 |
2016 |
2015 |
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(Unaudited) |
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Interest income: |
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Loans and fees on loans |
$ | 4,256 | $ | 3,899 | ||||
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Taxable investment securities |
204 | 206 | ||||||
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Nontaxable investment securities |
101 | 103 | ||||||
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Other interest income |
53 | 42 | ||||||
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Total interest income |
4,614 | 4,250 | ||||||
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Interest expense: |
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Deposits |
504 | 448 | ||||||
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Other borrowed funds |
231 | 92 | ||||||
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Total interest expense |
735 | 540 | ||||||
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Net interest income |
3,879 | 3,710 | ||||||
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Provision for loan losses |
60 | - | ||||||
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Net interest income after provision for loan losses |
3,819 | 3,710 | ||||||
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Noninterest income: |
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Service charges on deposit accounts |
154 | 110 | ||||||
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ATM and interchange income |
147 | 122 | ||||||
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Mortgage banking |
175 | 120 | ||||||
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Gains on sales of investment securities |
5 | 40 | ||||||
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Other income |
130 | 143 | ||||||
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Total noninterest income |
611 | 535 | ||||||
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Noninterest expense: |
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Salaries and employee benefits |
1,726 | 1,541 | ||||||
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Occupancy and equipment expense |
434 | 445 | ||||||
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Advertising and marketing expense |
94 | 242 | ||||||
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Professional fees |
101 | 112 | ||||||
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Other real estate owned expense |
22 | 30 | ||||||
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Other expense |
885 | 739 | ||||||
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Total noninterest expense |
3,262 | 3,109 | ||||||
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Net income before income taxes |
1,168 | 1,136 | ||||||
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Income tax expense |
353 | 346 | ||||||
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Net income |
815 | 790 | ||||||
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Less net income attributable to non-controlling interest |
14 | 14 | ||||||
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Net income attributable to HomeTown Bankshares Corporation |
801 | 776 | ||||||
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Effective dividends on preferred stock |
204 | 210 | ||||||
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Net income available to common stockholders |
$ | 597 | $ | 566 | ||||
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Basic earnings per common share |
$ | 0.18 | $ | 0.17 | ||||
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Diluted earnings per common share |
$ | 0.14 | $ | 0.14 | ||||
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Weighted average common shares outstanding |
3,366,778 | 3,291,517 | ||||||
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Diluted average common shares outstanding |
5,565,629 | 5,531,517 | ||||||
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HomeTown Bankshares Corporation |
Three |
Three |
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Financial Highlights |
Months |
Months |
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In Thousands, Except Share and Per Share Data |
Ended |
Ended |
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Mar 31 |
Mar 31 |
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2016 |
2015 |
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(Unaudited) |
(Unaudited) |
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| PER SHARE INFORMATION | ||||||||
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Book value per share, basic |
$ | 10.07 | $ | 9.32 | ||||
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Book value per share, diluted |
$ | 8.44 | $ | 7.95 | ||||
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Earnings per share, basic |
$ | 0.18 | $ | 0.17 | ||||
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Earnings per share, diluted |
$ | 0.14 | $ | 0.14 | ||||
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PROFITABILITY |
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Return on average assets |
0.67 | % | 0.73 | % | ||||
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Return on average shareholders' equity |
6.92 | % | 7.18 | % | ||||
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Net interest margin |
3.62 | % | 3.84 | % | ||||
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Efficiency |
72.23 | % | 73.23 | % | ||||
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BALANCE SHEET RATIOS |
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Total loans to deposits |
92.13 | % | 92.57 | % | ||||
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Securities to total assets |
11.66 | % | 12.31 | % | ||||
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Tier 1 leverage ratio BANK ONLY |
10.9 | % | 10.0 | % | ||||
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ASSET QUALITY |
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Nonperforming assets to total assets |
1.24 | % | 1.90 | % | ||||
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Nonperforming assets, including restructured loans, to total assets |
2.53 | % | 3.28 | % | ||||
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Net charge-offs to average loans (annualized) |
0.01 | % | 0.00 | % | ||||
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Composition of risk assets: (in thousands) |
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Nonperforming assets: |
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Nonaccrual loans |
$ | 415 | $ | 1,406 | ||||
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Other real estate owned |
5,686 | 6,917 | ||||||
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Total nonperforming assets, excluding performing restructured loans |
6,101 | 8,323 | ||||||
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Restructured loans, performing in accordance with their modified terms |
6,378 | 6,011 | ||||||
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Total nonperforming assets, including performing restructured loans |
$ | 12,479 | $ | 14,334 | ||||
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Allowance for loan losses: (in thousands) |
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Beginning balance |
$ | 3,298 | $ | 3,332 | ||||
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Provision for loan losses |
60 | - | ||||||
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Charge-offs |
(15 | ) | (15 | ) | ||||
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Recoveries |
4 | 12 | ||||||
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Ending balance |
$ | 3,347 | $ | 3,329 | ||||
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