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."
Financial Highlights
- 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%.
Earnings Summary
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.
Balance Sheet Summary
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.
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 18 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 Six Months Ended
6/30/2013 6/30/2012 6/30/2013 6/30/2012
Interest and Dividend Income $ 8,003 $ 8,093 $ 15,811 $ 16,300
Interest Expense 1,212 1,810 2,483 3,666
Net Interest and Dividend Income 6,791 6,283 13,328 12,634
Provision for Loan Losses 680 738 1,600 1,476
Securities gains, net 1,025 335 2,641 1,395
Gains on sales of loans, net 671 381 1,313 585
All Other Noninterest Income 1,361 1,271 2,698 2,475
Noninterest Expense 6,888 6,574 13,328 12,898
Provision for Income Tax 613 35 1,357 309
Net Income 1,667 923 3,695 2,406
Net Income Available to Common
Stockholders 1,600 763 3,548 2,103
Earnings per Common Share, Basic 0.60 0.29 1.34 0.80
6/30/2013 6/30/2012
Total Assets $ 883,743 $ 842,105
Cash and Due from Banks and Interest-Bearing
Deposits 19,902 40,343
Securities Available-for-Sale, at Fair Value 181,624 240,713
Loans, Net 628,718 513,263
Total Deposits 666,124 647,240
Federal Home Loan Bank Advances 80,806 67,458
Securities Sold Under Agreements to Repurchase 30,093 22,461
Junior Subordinated Debentures 20,620 20,620
Stockholders' Equity 78,738 77,906
Net Interest Margin 3.47% 3.49%
Yield on Earning Assets 4.08 4.44
Cost of Interest Bearing Liabilities 0.72 1.09
Efficiency Ratio 72.44 77.04
Book Value Per Share of Common Shares Outstanding $ 20.07 $ 20.77
Tangible Book Value Per Share of Common Shares
Outstanding 15.79 16.54
Tier 1 Core Capital to Average Assets 10.98% 10.68%
Tier 1 Risk-Based Capital 15.51 17.89
Total Risk-Based Capital 16.82 19.18
Common Shares Outstanding 2,751,650 2,620,755
Return on Average Assets 0.86% 0.59%
Return on Average Equity 9.08 6.29
Nonperforming Loans as a % of Total Loans 2.47 2.95
Allowance for Loan Losses as a % of Nonperforming
Loans 67.94 70.33
Contact: Russell A. Cronin, Jr. Senior Vice President and Chief
Financial Officer 603-326-7398
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