NORTH CONWAY, NH — (Marketwired) — 07/26/13 — Northway Financial, Inc. (the “Company”) (OTCQB: NWYF) reported net income for the quarter ended June 30, 2013 of $1,667,000 compared to net income of $923,000 for the quarter ended June 30, 2012, an increase of $744,000, or 81%. For the six months ended June 30, 2013, the Company reported net income of $3,695,000 compared to $2,406,000 for the same period in 2012, an increase of $1,289,000, or 54%.
CEO William J. Woodward said, “I am pleased to report that the Company-s performance for both the second quarter and the first half of the year represent a continuation of the strong earnings I have reported to you for the past four years. We believe that our growth strategy is, indeed, working, and working well. One standout indicator of that is the sustained loan growth, which produced an increase of 22.5% in loan balances over the past twelve months.
“Another indicator is the series of actions taken to control expenses, which include the upcoming consolidation of our Franklin Branch into our Tilton Branch, and the soon-to-be-completed consolidation of our Intervale Branch into the nearby Lending Center building in North Conway. These consolidations are being done with great sensitivity for the concerns of both our customers and employees.
“On another note, our strategy to continue our expansion into southern New Hampshire moved forward with the opening of our newest branch located at 29 Cilley Road, Manchester, New Hampshire. This branch was opened on June 3rd and we are excited about our presence in this market.”
Net loans increased $115,455,000, or 22.5%, to $628,718,000 at June 30, 2013, compared to $513,263,000 at June 30, 2012. For the quarter ended June 30, 2013, commercial and industrial loans increased $48,144,000, which is an annualized growth rate of 55%. This growth is reflective of our efforts to increase small business lending throughout the state.
Total deposits increased $18,884,000, or 2.9%, to $666,124,000 at June 30, 2013, compared to $647,240,000 at June 30, 2012. For the quarter ended June 30, 2013, total deposits increased $9,155,000, which is an annualized growth rate of 5.57%.
The Company-s returns on average assets and average equity for the six months ended June 30, 2013 were 0.86% and 9.08%, respectively, compared to 0.59% and 6.29% for the same period last year.
The efficiency ratio for the six months ended June 30, 2013, was 72.44% compared to 77.04% for the same period last year. This improvement was driven by an increase in both net interest and dividend income and gains on sales of loans partially offset by an increase in noninterest expense.
Regulatory capital ratios exceed minimum requirements. The Company-s total risk-based capital ratio is 16.82% compared to a regulatory requirement of 10.0%; Tier 1 risk-based capital is 15.51% compared to a regulatory requirement of 6.0% and Tier 1 capital to average assets is 10.98% compared to a regulatory requirement of 5.0%.
As noted above, the Company recorded net income of $3,695,000 for the six months ended June 30, 2013 compared to $2,406,000 for the same period in 2012. For the six months ended June 30, 2013, $3,548,000, or $1.34 per common share, was available to common stockholders compared to $2,103,000, or $0.80 per common share, for the same period last year.
For the quarter ended June 30, 2013, the Company recorded net income of $1,667,000 compared to $923,000 for the same period in 2012. For the quarter ended June 30, 2013, $1,600,000, or $0.60 per common share, was available to common stockholders compared to $763,000, or $0.29 per common share, for the same period last year.
Net interest and dividend income for the quarter ended June 30, 2013, increased $508,000 to $6,791,000 compared to $6,283,000 for the same period last year. The provision for loan losses for the quarter ended June 30, 2013 decreased $58,000 to $680,000 compared to $738,000 for the same period in 2012. Net gains on sales of securities were $1,025,000 compared to $335,000 for the quarter ended June 30, 2012, an increase of $690,000. Gains on sales of loans increased $290,000 to $671,000 for the quarter ended June 30, 2013 compared to $381,000 for the same period last year. All other noninterest income increased $90,000 to $1,361,000 compared to $1,271,000 for the same period last year due primarily to an increase in commissions on alternative investments and NSF fees. Total noninterest expense increased $314,000 to $6,888,000 for the quarter ended June 30, 2013, compared to $6,574,000 for the same period last year. Total noninterest expense increased $430,000 to $13,328,000 for the six months ended June 30, 2013, compared to $12,898,000 for the same period last year. This increase resulted primarily from an increase in salaries and employee benefits relating to normal salary increases, as well as increases in legal expenses and loan workout expenses. Income tax expense increased $578,000 to $613,000 for the quarter ended June 30, 2013, compared to $35,000 for the same period last year.
Net interest and dividend income for the six months ended June 30, 2013, increased $694,000 to $13,328,000 compared to $12,634,000 for the same period last year. The provision for loan losses for the six months ended June 30, 2013 increased $124,000 to $1,600,000 compared to $1,476,000 for the same period in 2012. This increase is due to both an increase in net loans and a target reserve on a significant commercial credit. Net gains on sales of securities were $2,641,000 compared to $1,395,000 for the six months ended June 30, 2012, an increase of $1,246,000. Gains on sales of loans increased $728,000 to $1,313,000 for the six months ended June 30, 2013 compared to $585,000 for the same period last year. All other noninterest income increased $223,000 to $2,698,000 compared to $2,475,000 for the same period last year due primarily increases in NSF fees, alternative investment income, debit card fees, and income on serviced loans. This increase resulted primarily from an increase in salaries and employee benefits relating to normal salary increases, increases in incentive compensation and health insurance expenses as well as increases in lease and legal expenses. Income tax expense for the six months ended June 30, 2013, increased $1,048,000 from the same period last year.
At June 30, 2013, the Company had total assets of $883,743,000 compared to $842,105,000 at June 30, 2012, an increase of $41,638,000, or 4.9%. Net loans at June 30, 2013, increased $115,455,000, or 22.5%, to $628,718,000 compared to $513,263,000 at June 30, 2012. Securities available-for-sale decreased $59,089,000 to $181,624,000 at June 30, 2013, compared to $240,713,000 at June 30, 2012. Cash and due from banks and interest-bearing deposits decreased $ 20,441,000 to $19,902,000 at June 30, 2013, compared to $40,343,000 at June 30, 2012. These decreases were used to fund the significant loan growth.
Total deposits were $666,124,000 at June 30, 2013, compared to $647,240,000 at June 30, 2012, an increase of $18,884,000, or 2.90%. Securities sold under agreements to repurchase increased $7,632,000 to $30,093,000 at June 30, 2013 compared to $22,461,000 at June 30, 2012. Other borrowings increased $13,348,000 to $101,426,000 at June 30, 2013, compared to $88,078,000 at June 30, 2012.
Total stockholders- equity increased $832,000 to $78,738,000 at June 30, 2013 compared to $77,906,000 at June 30, 2012. Stockholders- equity available to common stockholders totaled $55,230,000, resulting in a book value per common share of $20.07 per share at June 30, 2013, based on 2,751,650 shares of common stock outstanding, a decrease of $0.70, or 3.4% per share, from June 30, 2012. Tangible book value per common share decreased $0.75, or 4.5%, to $15.79 at June 30, 2013 compared to $16.54 at June 30, 2012. The decrease in book value per common share and tangible book value per common share was attributable to the payment of a 5% stock dividend resulting in a decrease in book value per share of $1.00 and tangible book value of $0.79 per share.
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 18 full-service banking offices and its loan production offices located in Bedford and Portsmouth, New Hampshire.
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.
Contact:
Russell A. Cronin, Jr.
Senior Vice President and Chief Financial Officer
603-326-7398