Gateway Financial Holdings Reports Operating Results for the
Quarter and Nine Months Ended September 30, 2003 ELIZABETH CITY,
N.C., Oct. 27 /PRNewswire-FirstCall/ -- Gateway Financial Holdings,
Inc. , the holding company for Gateway Bank & Trust Co.
reported financial results today for the quarter and nine months
ended September 30, 2003. Net income for the third quarter of 2003
totaled $330 thousand compared to $180 thousand for the third
quarter of 2002, an increase of $150 thousand or 83.3%. Other
significant events during the quarter include: -- Recorded its
eleventh consecutive quarter of profitable operations; -- Earned
$0.10 per share (diluted) for the quarter, a 67% increase over the
prior year's quarter; -- Exceeded $300 million in total assets,
ending the quarter at $303.0 million; -- Opened our tenth financial
center on August 15, 2003 via the acquisition of the Elizabeth
City-Southgate banking office of Central Carolina Bank which
included $16.5 million in deposits; and -- Completed the issuance
of $8.0 million trust preferred securities on August 1, 2003. Net
income for the first nine months of 2003 was $764 thousand or $0.24
per share (diluted) compared to $454 thousand and $0.14 per share
(diluted) for the first nine months of 2002. Earnings per share
(diluted) increased 71.4% over the prior year period. Net interest
income for the quarter ended September 30, 2003 totaled $2.1
million, an increase of $672 thousand or 46.1% over $1.5 million
reported for the quarter ended September 30, 2002. Non-interest
income for the three months ended September 30, 2003 was $1.2
million, an increase of $519 thousand or 71.5% over $726 thousand
reported for the three months ended September 30, 2002. These were
partially offset by a 47.1% increase in Non-interest expense.
Non-interest expense for the quarter ended September 30, 2003
totaled $2.7 million, an increase of $871 thousand over $1.8
million reported for the quarter ended September 30, 2002. Net
interest income for the nine months ended September 30, 2003
totaled $5.8 million, an increase of $1.9 million or 47.6% over
$3.9 million reported for the nine months ended September 30, 2002.
Non-interest income for the three quarters ended September 30, 2003
was $3.3 million, an increase of $1.4 million or 72.7% over $1.9
million reported for the three quarters ended September 30, 2002.
These were partially offset by a 47.9% increase in Non- interest
expense. Non-interest expense for the nine months ended September
30, 2003 totaled $7.5 million, an increase of $2.4 million over
$5.0 million reported for the nine months ended September 30, 2002.
At September 30, 2003 total assets were $303.0 million, an increase
of $91.9 million or 43.5% over $211.2 million reported for
September 30, 2002. Loans increased $75.4 million or 52.5% to
$218.9 million at September 30, 2003 from $143.6 million at
September 30, 2002. Deposits were reported at $216.1 million on
September 30, 2003, up $57.9 million or 36.6% from a year earlier.
Borrowings totaled $53.2 million on September 30, 2003, an increase
of $24.8 million or 87.3% from September 30, 2002. At quarter-end,
the bank's allowance for loan losses equaled $2.6 million or 1.18%
of total loans and 205% of non-performing loans. At quarter-end,
non-performing loans and non-performing assets totaled $1.3 million
or 0.58% of total loans 0.42% of total assets. Stockholders' equity
increased $719 thousand or 3.0% from $23.8 million reported on
September 30, 2002 to $24.5 million. Stockholders' equity equaled
8.1% of total assets on September 30, 2003. Regulatory capital
ratios are all well in excess of the "well-capitalized" threshold.
D. Ben Berry, Chairman, President and CEO stated, "We are pleased
that Gateway Financial Holdings continues to post improved
financial performance while making significant investments in our
franchise. Our increased net interest income is due to both growth
and an improving net interest margin. Our non-interest income is
benefiting from significant increases in service changes, insurance
operations and mortgage banking. Non-interest expense increases are
primarily a result of our continued branch expansion. We expect
these "investments" to benefit earnings in future periods. Despite
the costs associated with these franchise enhancements, we believe
our continued expansion is the best way to build shareholder
value." Gateway Financial Holdings, Inc. is the parent company of
Gateway Bank & Trust Co. Gateway Bank & Trust Co. is a
full-service community bank with offices in Elizabeth City,
Edenton, Kitty Hawk, Plymouth and Roper, North Carolina, and in
Chesapeake and Virginia Beach, Virginia. The bank also provides
insurance through its Gateway Insurance Services, Inc. subsidiary
and brokerage services through its Gateway Investment Services,
Inc. subsidiary. Statements contained in this news release, which
are not historical facts, are forward looking statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995. Amounts herein could vary as a result of market and other
factors. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents
filed by the Company with the Securities and Commission from time
to time. Such forward- looking statements may be identified by the
use of such words as "believe," "expect," "anticipate," "should,"
"planned," "estimated," and "potential." Examples of
forward-looking statements include, but are not limited to,
estimates with respect to the financial condition, expected or
anticipated revenue, results of operations and business of the
Company that are subject to various factors which could cause
actual results to differ materially from these estimates. These
factors include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, loan demand,
real estate values, and competition; changes in accounting
principals, policies, or guidelines; changes in legislation or
regulation; and other economic, competitive, governmental,
regulatory, and technological factors affecting the Company's
operations, pricing, products and services. Gateway Financial
Holdings, Inc. Consolidated Condensed Balance Sheets (unaudited)
September 30, 2003 2002 Assets (Dollars in thousands) Cash and cash
equivalents: Cash and due from banks $ 8,170 $ 4,710
Interest-earning deposits with banks - 2,935 Total cash and cash
equivalents 8,170 7,645 Investment securities available for sale,
at fair value 50,352 45,735 Loans receivable 218,917 143,560
Allowance for loan losses 2,583 1,639 Net loans receivable 216,334
141,921 Bank premises & equipment, net 11,859 9,449 Cash
surrender value life insurance 7,018 - Goodwill & Intangibles
3,672 2,274 Other assets 5,628 4,163 Total assets $303,033 $211,187
Liabilities and Shareholders' Equity Deposits: Demand deposits $
27,869 $ 18,195 Savings, Money market & NOW 66,483 32,683 Time
deposits over $100,000 37,554 41,087 Other time deposits 84,170
66,216 Total deposits 216,076 158,181 Federal Home Loan Bank
Advances 41,000 28,400 Federal funds purchased 12,206 - Trust
preferred securities 8,000 - Accrued interest payable and other
liabilities 1,245 791 Total liabilities 278,527 187,372
Shareholders' Equity Common stock, $-0- par, 10,000,000 authorized,
3,166,965 issued and outstanding at 9/30/03 3,155,880 issued and
outstanding at 9/30/02 - - Paid-in capital 24,890 24,788 Retained
earnings (538) (1,475) Accumulated other comprehensive income
(loss) 154 502 Total shareholders' equity 24,506 23,815 Total
liabilities and shareholders' equity $303,033 $211,187 Gateway
Financial Holdings, Inc. Consolidated Condensed Statement of
Operations (unaudited) Nine Months Ended, September 30, 2003 2002
(Dollars in thousands, except per share data) Interest Income 9,724
7,438 Interest Expense 3,946 3,524 Net Interest Income 5,778 3,914
Provision for loan losses 900 355 Net Int Income After Provision
4,878 3,559 Service charges on deposit accounts 636 410 Insurance
operations 1,113 954 Mortgage banking operations 712 242 Brokerage
operations 147 157 Gain sale of securities 244 166 Other 496 11
Total noninterest Income 3,348 1,940 Personnel costs 4,055 3,006
Occupancy and equipment 1,265 676 Data processing fees 309 366
Other 1,833 997 Total noninterest expense 7,462 5,045 Income Before
Income taxes 764 454 Income taxes - - Net Income 764 454 Net income
per common share Basic and diluted $ 0.24 $ 0.14 Market value per
share $10.95 $ 7.20 Book value per share $ 7.74 $ 7.55 Gateway
Financial Holdings, Inc. Consolidated Condensed Statement of
Operations (unaudited) Three Months Ended, September 30, 2003 2002
(Dollars in thousands, except per share data) Interest Income 3,499
2,708 Interest Expense 1,370 1,251 Net Interest Income 2,129 1,457
Provision for loan losses 325 155 Net Int Income After Provision
1,804 1,302 Service charges on deposit accounts 243 157 Insurance
operations 408 323 Mortgage banking operations 260 104 Brokerage
operations 59 37 Gain sale of securities 124 88 Other 151 17 Total
noninterest Income 1,245 726 Personnel costs 1,503 1,083 Occupancy
and equipment 471 255 Data processing fees 86 135 Other 659 375
Total noninterest expense 2,719 1,848 Income Before Income taxes
330 180 Income taxes - - Net Income 330 180 Net income per common
share Basic and diluted $ 0.10 $ 0.06 DATASOURCE: Gateway Financial
Holdings, Inc. CONTACT: D. Ben Berry, Chairman, President and CEO,
or Mark A. Holmes, Senior Executive Vice President and CFO, both of
Gateway Financial Holdings, +1-252-334-1511
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