Northway Financial, Inc. Announces Second Quarter Results and
Declares Quarterly Dividend BERLIN, N.H., July 26
/PRNewswire-FirstCall/ -- Northway Financial, Inc. (the "Company")
(NASDAQ:NWFI) reported net income for the quarter ended June 30,
2005 of $904,000, or $0.60 per share, compared to $748,000, or
$0.50 per share, for the same quarter in 2004, an increase of
$156,000 or 21%. Net income for the six months ended June 30, 2005
was $1,727,000, or $1.15 per share, compared to $1,477,000, or
$0.99 per share, for the six months ended June 30, 2004, an
increase of $250,000 or 17%. Commenting on the second quarter
results, William J. Woodward, President and Chief Executive Officer
of the Company stated: "The second quarter results are encouraging.
The 21% improvement in earnings over the second quarter of 2004
continues the improvement achieved in the first quarter of 2005.
This earnings enhancement reflects our emphasis on increasing the
amounts of other noninterest income." In addition, Mr. Woodward
commented, "To improve service to our New Hampshire customers, the
Boards of Directors of the Berlin City Bank and The Pemigewasset
National Bank of Plymouth, NH voted to consolidate these two
operating subsidiaries of Northway Financial, Inc. effective
October 1, 2005 under the name Northway Bank. The regulatory
approval process is underway. This consolidation is the latest in a
series of steps that have been taken over the last several years to
optimize the competitiveness of our Company. We believe that this
consolidation offers the customers of BCB and Pemi the convenience
of an expanded branch network, and through consolidated resources,
the ability to provide enhanced products and services. Northway
Bank will be one of the largest independent commercial community
banks in New Hampshire." The Company declared a quarterly dividend
on July 26, 2005 of $0.18 per share payable August 10, 2005 to
shareholders of record on August 5, 2005. Net interest and dividend
income for the second quarter of 2005 was $5,674,000 compared to
$5,698,000 for the second quarter of 2004, a decrease of $24,000.
There was no provision for loan losses for the second quarter of
2005, compared to $120,000 for the second quarter of last year. The
provision is established based upon a review of the adequacy of the
allowance for loan losses. This review includes consideration of,
among other factors, the Company's loan loss experience and takes
into consideration the Company's decision to terminate indirect
auto lending. At June 30, 2005 the allowance for loan losses was
1.14% of total loans, compared to 1.01% at June 30, 2004. Net
securities gains for the quarter decreased $163,000 to $98,000,
compared to $261,000 for the same period last year. Other
noninterest income for the quarter increased $194,000 to $1,197,000
compared to $1,003,000 for the same period last year. Other
operating expense was $5,752,000 for the quarter, compared to
$5,702,000 for the same period last year, an increase of $50,000.
Net interest and dividend income for the six months ended June 30,
2005 increased $369,000 to $11,611,000, compared to $11,242,000 for
the same period last year. The provision for loan losses for the
first six months of 2005 decreased $195,000 to $75,000, compared to
$270,000 for the first six months of 2004. Securities gains for the
first six months of 2005 decreased $551,000 to $169,000, compared
to $720,000 for the same period last year. Other noninterest income
year-to-date increased $273,000 to $2,113,000, compared to
$1,840,000 for the same period last year. Other operating expense
increased $54,000 to $11,364,000 for the first six months of 2005,
compared to $11,310,000 for the same period last year. At June 30,
2005, Northway Financial had total assets of $629,225,000 compared
to $638,003,000 at June 30, 2004, a decrease of $8,778,000. Loans,
including loans held-for-sale, at June 30, 2005 decreased
$34,585,000 to $459,933,000, compared to June 30, 2004.
Investments, including federal funds sold, increased $27,161,000 to
$114,520,000. Total deposits were $462,037,000 at June 30, 2005, a
decrease of $11,621,000 compared to June 30, 2004. Total borrowings
decreased $932,000 to $112,807,000. Total stockholders' equity
increased $3,272,000 to $50,355,000. Northway Financial, Inc.,
headquartered in Berlin, New Hampshire, is a multi-bank holding
company. Through its subsidiary banks, The Berlin City Bank and The
Pemigewasset National Bank of Plymouth, New Hampshire, the Company
offers a broad range of financial products and services to
individuals, businesses and the public sector from its full service
banking offices. Certain statements in this press release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements can be identified by the use of the words "expect,"
"believe," "estimate," "will" and other expressions which predict
or indicate future trends and which do not relate to historical
matters. Forward-looking statements may include, but are not
limited to, expectations for impact of new products on noninterest
income and expense, projections of revenue, income or loss, and
plans related to products or services of the Company and its
subsidiaries. Such forward-looking statements are subject to known
and unknown risks, uncertainties and contingencies, many of which
are beyond the control of the Company. The Company's actual results
could differ materially from those projected in the forward-looking
statements as the result of, among other factors, changes in
interest rates, changes in the securities or financial markets, a
deterioration in general economic conditions on a national basis or
in the local markets in which the Company operates, including
changes in local business conditions resulting in rising
unemployment and other circumstances which adversely affect
borrowers' ability to service and repay our loans, changes in loan
defaults and charge-off rates, reduction in deposit levels
necessitating increased borrowing to fund loans and investments,
the passing of adverse government regulation, and changes in
assumptions used in making such forward-looking statements. These
forward- looking statements were based on information, plans and
estimates at the date of this press release, and the Company does
not promise to update any forward- looking statements to reflect
changes in underlying assumptions or factors, new information,
future events or other changes. Northway Financial, Inc. Selected
Consolidated Financial Data (Unaudited) (In thousands, except for
ratios and per share amounts) Period end balance sheet data: June
30, 2005 2004 Total assets $629,225 $638,003 Loans, net (1) 459,933
494,518 Investments (2) 114,520 87,359 Deposits 462,037 473,658
Borrowings 112,807 113,739 Stockholders' equity 50,355 47,083 Book
value per share $33.45 $31.40 Tangible book value per share (3)
24.89 22.12 Leverage ratio 9.04% 8.12% Shares outstanding 1,505,574
1,499,574 For the Three Months For the Six Months Ended June 30,
Ended June 30, Operating results: 2005 2004 2005 2004 Net interest
and dividend income $5,674 $5,698 $11,611 $11,242 Securities gains,
net 98 261 169 720 Other noninterest income 1,197 1,003 2,113 1,840
Loan loss provision - 120 75 270 Other operating expense 5,752
5,702 11,364 11,310 Income before tax 1,217 1,140 2,454 2,222
Income tax expense 313 392 727 745 Net income $904 $748 $1,727
$1,477 Earnings per share $0.60 $0.50 $1.15 $0.99 Return on average
assets 0.59% 0.48% 0.56% 0.48% Return on average equity 7.24% 6.24%
6.95% 6.15% (1) Net of unearned income and the allowance for loan
losses. Includes loans held-for-sale. (2) Includes federal funds
sold, Federal Home Loan Bank stock, Federal Reserve Bank stock and
investment securities available-for-sale. (3) Includes a deduction
of $12,887 and $13,914 for goodwill, core deposit intangible and
mortgage servicing assets for 2005 and 2004, respectively.
DATASOURCE: Northway Financial, Inc. CONTACT: Richard P. Orsillo,
Senior Vice President and Chief Financial Officer of Northway
Financial, Inc., +1-603-752-1171
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