HomeTown Bankshares Corporation Reports Continued, Strong Market Share Growth for First Quarter
29 April 2017 - 9:14AM
NASDAQ ListingHomeTown 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.
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)
HomeTown Bankshares Corporation |
Consolidated Condensed Balance Sheets |
March 31, 2017; December 31, 2016; and March 31,
2016 |
|
|
March 31, |
|
December 31 |
|
March 31 |
In
Thousands |
|
2017 |
|
2016 |
|
2016 |
Assets |
|
(Unaudited) |
|
|
|
(Unaudited) |
Cash and due from
banks |
|
$ |
28,005 |
|
|
$ |
18,229 |
|
|
$ |
27,890 |
|
Federal funds sold |
|
|
51 |
|
|
|
42 |
|
|
|
1,082 |
|
Securities available
for sale, at fair value |
|
|
52,159 |
|
|
|
52,975 |
|
|
|
54,757 |
|
Restricted equity
securities, at cost |
|
|
2,290 |
|
|
|
2,213 |
|
|
|
2,765 |
|
Loans held for
sale |
|
|
123 |
|
|
|
678 |
|
|
|
289 |
|
Total loans |
|
|
428,043 |
|
|
|
418,991 |
|
|
|
381,063 |
|
Allowance for loan
losses |
|
|
(3,726 |
) |
|
|
(3,636 |
) |
|
|
(3,347 |
) |
Net loans |
|
|
424,317 |
|
|
|
415,355 |
|
|
|
377,716 |
|
Property and equipment,
net |
|
|
13,274 |
|
|
|
13,371 |
|
|
|
13,864 |
|
Other real estate
owned, net |
|
|
3,148 |
|
|
|
3,794 |
|
|
|
5,686 |
|
Other assets |
|
|
10,946 |
|
|
|
10,633 |
|
|
|
9,273 |
|
Total
assets |
|
$ |
534,313 |
|
|
$ |
517,290 |
|
|
$ |
493,322 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
106,585 |
|
|
$ |
91,354 |
|
|
$ |
80,060 |
|
Interest-bearing |
|
|
358,060 |
|
|
|
359,494 |
|
|
|
333,558 |
|
Total
deposits |
|
|
464,645 |
|
|
|
450,848 |
|
|
|
413,618 |
|
Federal Home Loan Bank
borrowings |
|
|
9,917 |
|
|
|
8,000 |
|
|
|
22,000 |
|
Subordinated notes |
|
|
7,232 |
|
|
|
7,224 |
|
|
|
7,202 |
|
Other borrowings |
|
|
1,121 |
|
|
|
1,117 |
|
|
|
1,072 |
|
Other liabilities |
|
|
2,335 |
|
|
|
1,876 |
|
|
|
2,190 |
|
Total
liabilities |
|
|
485,250 |
|
|
|
469,065 |
|
|
|
446,082 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity: |
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
- |
|
|
|
- |
|
|
|
12,893 |
|
Common stock |
|
|
28,756 |
|
|
|
28,765 |
|
|
|
16,801 |
|
Surplus |
|
|
17,861 |
|
|
|
17,833 |
|
|
|
15,521 |
|
Retained surplus |
|
|
2,012 |
|
|
|
1,247 |
|
|
|
1,040 |
|
Accumulated other
comprehensive (loss) income |
|
|
(14 |
) |
|
|
(56 |
) |
|
|
597 |
|
Total HomeTown
Bankshares Corporation stockholders’ equity |
|
|
48,615 |
|
|
|
47,789 |
|
|
|
46,852 |
|
Noncontrolling interest
in consolidated subsidiary |
|
|
448 |
|
|
|
436 |
|
|
|
388 |
|
Total
stockholders’ equity |
|
|
49,063 |
|
|
|
48,225 |
|
|
|
47,240 |
|
Total
liabilities and stockholders’ equity |
|
$ |
534,313 |
|
|
$ |
517,290 |
|
|
$ |
493,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HomeTown Bankshares Corporation |
Consolidated Condensed Statements of Income |
For the Three Months Ended March 31, 2017 and
2016 |
|
|
For the |
|
For the |
|
|
Three |
|
Three |
|
|
Months |
|
Months |
|
|
Ended |
|
Ended |
|
|
Mar 31 |
|
Mar 31 |
In Thousands, Except Share and Per Share Data |
|
2017 |
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
Interest income: |
|
|
|
|
|
|
Loans and fees on loans |
|
$ |
4,624 |
|
$ |
4,256 |
Taxable investment securities |
|
|
240 |
|
|
204 |
Nontaxable investment securities |
|
|
87 |
|
|
101 |
Other interest income |
|
|
74 |
|
|
53 |
Total interest income |
|
|
5,025 |
|
|
4,614 |
Interest expense: |
|
|
|
|
|
|
Deposits |
|
|
554 |
|
|
504 |
Subordinated notes |
|
|
134 |
|
|
134 |
Other borrowed funds |
|
|
53 |
|
|
97 |
Total interest expense |
|
|
741 |
|
|
735 |
Net interest income |
|
|
4,284 |
|
|
3,879 |
Provision for loan losses |
|
|
70 |
|
|
60 |
Net interest income after provision for loan losses |
|
|
4,214 |
|
|
3,819 |
Noninterest income: |
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
149 |
|
|
154 |
ATM and interchange income |
|
|
178 |
|
|
147 |
Mortgage banking |
|
|
207 |
|
|
175 |
Gains on sales of investment securities |
|
|
13 |
|
|
5 |
Other income |
|
|
150 |
|
|
130 |
Total noninterest income |
|
|
697 |
|
|
611 |
Noninterest expense: |
|
|
|
|
|
|
Salaries and employee benefits |
|
|
1,989 |
|
|
1,726 |
Occupancy and equipment expense |
|
|
428 |
|
|
434 |
Advertising and marketing expense |
|
|
130 |
|
|
94 |
Professional fees |
|
|
233 |
|
|
101 |
Losses on sales, and writedowns of other real estate owned,
net |
|
|
- |
|
|
- |
Other real estate owned expense |
|
|
13 |
|
|
22 |
Other expense |
|
|
999 |
|
|
885 |
Total noninterest expense |
|
|
3,792 |
|
|
3,262 |
Net income before income taxes |
|
|
1,119 |
|
|
1,168 |
Income tax expense |
|
|
342 |
|
|
353 |
Net income |
|
|
777 |
|
|
815 |
Less net income attributable to non-controlling interest |
|
|
12 |
|
|
14 |
Net income attributable to HomeTown Bankshares
Corporation |
|
|
765 |
|
|
801 |
Effective dividends on preferred stock |
|
|
- |
|
|
204 |
Net income available to common stockholders |
|
$ |
765 |
|
$ |
597 |
|
|
|
|
|
|
|
Basic earnings per common share |
|
$ |
0.13 |
|
$ |
0.17 |
*Diluted earnings per common share |
|
$ |
0.13 |
|
$ |
0.14 |
Weighted average common shares
outstanding |
|
|
5,763,383 |
|
|
3,501,446 |
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 |
|
PER
SHARE INFORMATION |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Book
value per share, basic |
|
$ |
8.43 |
|
|
$ |
9.68 |
|
* |
|
Book
value per share, diluted |
|
$ |
8.43 |
|
|
$ |
8.12 |
|
* |
|
Earnings
per share, basic |
|
$ |
0.13 |
|
|
$ |
0.17 |
|
* |
|
Earnings
per share, diluted |
|
$ |
0.13 |
|
|
$ |
0.14 |
|
* |
|
*
Restated for the 4% stock dividend distributed July 11, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFITABILITY |
|
|
|
|
|
|
|
Return on
average assets |
|
|
0.59 |
% |
|
0.67 |
% |
|
|
Return on
average shareholders' equity |
|
|
6.40 |
% |
|
6.92 |
% |
|
|
Net
interest margin |
|
|
3.54 |
% |
|
3.62 |
% |
|
|
Efficiency |
|
|
76.06 |
% |
|
72.23 |
% |
|
|
|
|
|
|
|
|
|
BALANCE SHEET RATIOS |
|
|
|
|
|
|
|
Total
loans to deposits |
|
|
92.12 |
% |
|
92.13 |
% |
|
|
Securities to total assets |
|
|
10.19 |
% |
|
11.66 |
% |
|
|
Common
equity tier 1 ratio BANK ONLY |
|
|
11.7 |
% |
|
12.5 |
% |
|
|
Tier 1
capital ratio BANK ONLY |
|
|
11.7 |
% |
|
12.5 |
% |
|
|
Total
capital ratio BANK ONLY |
|
|
12.5 |
% |
|
13.3 |
% |
|
|
Tier 1
leverage ratio BANK ONLY |
|
|
10.5 |
% |
|
10.9 |
% |
|
|
|
|
|
|
|
|
ASSET QUALITY |
|
|
|
|
|
|
|
Nonperforming assets to total assets |
|
|
0.76 |
% |
|
1.24 |
% |
|
|
Nonperforming assets, including restructured loans, to total
assets |
|
|
1.51 |
% |
|
2.53 |
% |
|
|
Net
(recoveries) charge-offs to average loans (annualized) |
|
|
(0.02 |
)% |
|
0.01 |
% |
|
Composition of risk assets: (in thousands) |
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
936 |
|
|
$ |
415 |
|
|
|
Other
real estate owned |
|
|
3,148 |
|
|
|
5,686 |
|
|
|
Total
nonperforming assets, excluding performing restructured loans |
|
|
4,084 |
|
|
|
6,101 |
|
|
|
Restructured loans, performing in accordance with their modified
terms |
|
|
3,980 |
|
|
|
6,378 |
|
|
|
Total
nonperforming assets, including performing restructured loans |
|
$ |
8,064 |
|
|
$ |
12,479 |
|
|
Allowance for loan losses: (in thousands) |
|
|
|
|
|
|
|
Beginning
balance |
|
$ |
3,636 |
|
|
$ |
3,298 |
|
|
|
Provision
for loan losses |
|
|
70 |
|
|
|
60 |
|
|
|
Charge-offs |
|
|
(16 |
) |
|
|
(15 |
) |
|
|
Recoveries |
|
|
36 |
|
|
|
4 |
|
|
|
Ending
balance |
|
$ |
3,726 |
|
|
$ |
3,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information contact:
Susan K. Still, President and CEO, (540) 278-1705
Vance W. Adkins, Executive Vice President and CFO, (540) 278-1702
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