Northway Financial, Inc. (the "Company") (OTCBB: NWYF) reported net
income for the quarter ended September 30, 2012 of $2,229,000
compared to net income of $1,030,000 for the quarter ended
September 30, 2011. For the nine months ended September 30, 2012,
the Company reported net income of $4,635,000 compared to
$4,777,000 for the same period in 2011. For the quarter ended
September 30, 2012, net income available to common stockholders was
$2,033,000, or $0.78 per common share and for the nine months ended
September 30, 2012, net income available to common stockholders was
$4,136,000, or $1.58 per common share.
CEO William J. Woodward said, "Our strategy to expand our market
area continues to show positive results in that loans and deposits
have increased 13.8% and 11.4%, respectively, over the prior year.
Our sustained aggressive management of troubled assets has resulted
in a decline of $4 million in the level of nonperforming loans from
one year ago. I am pleased by the progress made by the Company over
the last year. I am also pleased to report that our subsidiary,
Northway Bank, has once again been recognized as a leading SBA
lender in New Hampshire."
Financial Highlights
- Taking into account the level of net income for the nine months
ended September 30, 2012, the Company's returns on average assets
and average equity for this period were 0.74% and 7.96%,
respectively, compared to 0.78% and 10.50% for the same period last
year.
- For the nine months ended September 30, 2012, the Net Interest
Margin was 3.45%, an increase of 11 basis points over the same
period last year. This improvement is driven by a 22 basis point
decrease in the Company's cost of interest-bearing liabilities year
over year partially offset by a 12 basis point decrease in the tax
equivalent yield on earning assets.
- As a result of our continued focused effort to resolve problem
loans, the level of nonperforming loans decreased $4,087,000, or
22.8%, to $13,807,000 at September 30, 2012 from $17,894,000 at
September 30, 2011. Nonperforming loans as a percentage of total
loans at September 30, 2012 were 2.46% compared to 3.61% as of
September 30, 2011.
- Net loans increased $66,912,000, or 13.8%, to $551,975,000 at
September 30, 2012, compared to $485,063,000 at September 30, 2011.
For the quarter ended September 30, 2012, commercial and industrial
loans increased $44,895,000, which is an annualized growth rate of
65.0%. This growth is reflective of our efforts to increase small
business lending throughout the state.
- Total deposits increased $67,901,000, or 11.4%, to $663,022,000
at September 30, 2012, compared to $595,121,000 at September 30,
2011. For the quarter ended September 30, 2012, core deposit growth
was $10,475,000, an annualized growth rate of 8.5%
- Total stockholders' equity increased $3,850,000, or 5.0%, to
$80,352,000 at September 30, 2012, compared to $76,502,000 at
September 30, 2011. Equity increased as a result of net income for
the twelve-month period ended September 30, 2012 of $4,969,000 as
well as an increase in other comprehensive net income of $552,000,
which was partially offset by dividend payments to common and
preferred stockholders of $1,631,000.
- Regulatory capital ratios exceed requirements. The Company's
total risk-based capital ratio is 18.06% compared to a regulatory
requirement of 10.00%.
Earnings Summary
As noted above, the Company recorded net income of $4,635,000
for the nine months ended September 30, 2012 compared to $4,777,000
for the same period in 2011. For the nine months ended September
30, 2012, $4,136,000, or $1.58 per common share, was available to
common stockholders compared to $4,048,000, or $1.55 per common
share, for the same period last year.
For the quarter ended September 30, 2012, the Company recorded
net income of $2,229,000 compared to $1,030,000 for the same period
in 2011. For the quarter ended September 30, 2012, $2,033,000, or
$0.78 per common share, was available to common stockholders
compared to $623,000, or $0.24 per common share, for the same
period last year.
Net interest and dividend income for the quarter ended September
30, 2012, increased $526,000 to $6,457,000 compared to $5,931,000
for the same period last year. The provision for loan losses for
the quarter ended September 30, 2012 decreased $297,000 to $318,000
compared to $615,000 for the same period in 2011. Net gains on
sales of securities were $1,141,000 compared to $941,000 for the
quarter ended September 30, 2011, an increase of $200,000. Gains on
sales of loans increased $782,000 as of September 30, 2012 compared
to the same period last year; the 2012 quarterly gain included a
one-time gain of $366,000 related to the sale of portfolio fixed
rate loans totaling approximately $10,500,000. All other
noninterest income increased $614,000 to $1,504,000 compared to
$890,000 for the same period last year due primarily to a net gain
on the cash surrender value of life insurance, an increase in gain
on sale of OREO, and a reduction in the impairment on mortgage
servicing assets. Total noninterest expense increased $604,000 to
$6,639,000 for the quarter ended September 30, 2012, compared to
$6,035,000 for the same period last year. This increase resulted
primarily from an increase in pension expense and higher staffing
levels. Income tax expense for the quarter ended September 30,
2012, increased $616,000 from the same period last year.
Net interest and dividend income for the nine months ended
September 30, 2012, increased $1,144,000 to $19,091,000 compared to
$17,947,000 for the same period last year. The provision for loan
losses for the nine months ended September 30, 2012 decreased
$1,451,000 to $1,794,000 compared to $3,245,000 for the same period
in 2011. Net gains on sales of securities were $2,536,000 compared
to $1,893,000 for the nine months ended September 30, 2011, an
increase of $643,000. Gains on sales of loans increased $862,000 to
$1,502,000 for the nine months ended September 30, 2012 compared to
$640,000 for the same period last year. As mentioned above, the
Company sold approximately $10,500,000 in fixed rate portfolio
loans for a gain of $366,000. In May 2011, the Company recorded a
$3,772,000 net gain on the sale of three banking centers. All other
noninterest income increased $160,000 to $3,979,000 compared to
$3,819,000 for the same period last year due primarily an increase
in the net gain on the cash surrender value of life insurance
partially offset by a decrease in service charges and fees on
deposit accounts. Total noninterest expense increased $838,000 to
$19,537,000 for the nine months ended September 30, 2012, compared
to $18,699,000 for the same period last year. This increase
resulted primarily from an increase in pension expense and higher
staffing levels and advertising expense to support our expansion
strategy which was partially offset by lower FDIC insurance, OREO
write-down, consulting fees and legal fees. Income tax expense for
the nine months ended September 30, 2012, decreased $208,000 from
the same period last year.
Balance Sheet Summary
At September 30, 2012, the Company had total assets of
$863,064,000 compared to $806,364,000 at September 30, 2011, an
increase of $56,700,000, or 7.00%. Net loans at September 30, 2012,
increased $66,912,000 to $551,975,000 compared to $485,063,000 at
September 30, 2011. Securities available-for-sale increased
$17,489,000 to $225,368,000 at September 30, 2012, compared to
$207,879,000 at September 30, 2011. Cash and due from banks and
interest-bearing deposits decreased $28,146,000 to $38,604,000 at
September 30, 2012, compared to $66,750,000 at September 30,
2011.
Total deposits were $663,022,000 at September 30, 2012, compared
to $595,121,000 at September 30, 2011, an increase of $67,901,000,
or 11.40%. Securities sold under agreements to repurchase decreased
$1,673,000 to $22,615,000 at September 30, 2012 compared to
$24,288,000 at September 30, 2011. Other borrowings decreased
$15,632,000 to $90,618,000 at September 30, 2012, compared to
$106,250,000 at September 30, 2011.
Total stockholders' equity increased $3,850,000 to $80,352,000
at September 30, 2012 compared to $76,502,000 at September 30,
2011. Stockholders' equity available to common stockholders totaled
$56,869,000, resulting in a book value per common share of $21.70
per share at September 30, 2012, based on 2,620,755 shares of
common stock outstanding, an increase of $1.51, or 7.48% per share,
from September 30, 2011. Tangible book value per common share
increased $1.53, or 9.64%, to $17.40 at September 30, 2012 compared
to $15.87 at September 30, 2011.
About Northway Financial, Inc.
Northway Financial, Inc., headquartered in North Conway, New
Hampshire, is a bank holding company. Through its subsidiary bank,
Northway Bank, the Company offers a broad range of financial
products and services to individuals, businesses and the public
sector from its 17 full-service banking offices and its loan
production offices located in Bedford and Portsmouth, New
Hampshire.
Forward-looking Statements
Statements included in this press release that are not
historical or current fact are "forward-looking statements" made
pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995, and are subject to certain risks and
uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or
projected. Northway Financial, Inc. disclaims any obligation to
subsequently revise any forward-looking statements to reflect
events or circumstances after the date of such statements, or to
reflect the occurrence of anticipated or unanticipated events or
circumstances.
Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)
(Dollars in thousands, except
per share data) Three Months Ended Nine Months Ended
--------------------- ---------------------
9/30/2012 9/30/2011 9/30/2012 9/30/2011
---------- ---------- ---------- ----------
Interest and Dividend Income $ 8,052 $ 7,994 $ 24,352 $ 24,356
Interest Expense 1,595 2,063 5,261 6,409
Net Interest and Dividend Income 6,457 5,931 19,091 17,947
Provision for Loan Losses 318 615 1,794 3,245
Net Gain on Sale of Banking
Centers - - - 3,772
All Other Noninterest Income 3,562 1,966 8,017 6,352
Noninterest Expense 6,639 6,035 19,537 18,699
Provision for Income Tax 833 217 1,142 1,350
Net Income 2,229 1,030 4,635 4,777
Net Income Available to Common
Stockholders 2,033 623 4,136 4,048
Earnings per Common Share, Basic 0.78 0.24 1.58 1.55
Dividends Declared per Common
Share 0.18 0.15 0.33 0.27
9/30/2012 6/30/2012 9/30/2011
---------- ---------- ----------
Total Assets $ 863,064 $ 842,105 $ 806,364
Cash and Due from Banks and Interest-
Bearing Deposits 38,604 40,343 66,750
Securities Available-for-Sale, at Fair
Value 225,368 240,713 207,879
Loans, Net 551,975 513,263 485,063
Total Deposits 663,022 647,240 595,121
Federal Home Loan Bank Advances 69,998 67,458 85,630
Securities Sold Under Agreements to
Repurchase 22,615 22,461 24,288
Junior Subordinated Debentures 20,620 20,620 20,620
Stockholders' Equity 80,352 77,906 76,502
Net Interest Margin 3.45% 3.49% 3.34%
Yield on Earning Assets 4.34 4.44 4.46
Cost of Interest Bearing Liabilities 1.03 1.09 1.25
Efficiency Ratio 74.90 77.04 78.79
Book Value Per Share of Common Shares
Outstanding $ 21.70 $ 20.77 $ 20.19
Tangible Book Value Per Share of Common
Shares Outstanding 17.40 16.54 15.87
Tier 1 Core Capital to Average Assets 10.25% 10.68% 10.59%
Tier 1 Risk-Based Capital 16.76 17.89 18.14
Total Risk-Based Capital 18.06 19.18 19.40
Common Shares Outstanding 2,620,755 2,620,755 2,620,755
Return on Average Assets 0.74% 0.59% 0.78%
Return on Average Equity 7.96 6.29 10.50
Nonperforming Loans as a % of Total
Loans 2.46 2.95 3.61
Allowance for Loan Losses as a % of
Nonperforming Loans 75.07 70.33 57.07
Contact: Richard P. Orsillo Senior Vice President and Chief
Financial Officer 603-752-1171
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