More Business News:
TowneBank Reports Q2 Earnings Results
SUFFOLK, Va., July 29, 2010 -- Hampton Roads based TowneBank (Nasdaq:TOWN) reported net income of $6.88 million for the quarter ended June 30, 2010 representing a 8.72% increase over the $6.33 million earned in the comparative period of 2009. Earnings for the six month year to date period increased 15.30% to $14.91 million as compared to the $12.93 million earned in the same period last year.
For the second quarter, net income available to common shareholders increased 14.02% to $4.54 million after accretion and preferred dividend payments of $2.34 million. The bank's common dividend payments totaled $2.34 million or $0.08 per share. Fully diluted earnings of $0.16 per share were unchanged from the second quarter of 2009 due to the issuance of 3,874,684 new common shares since June 30, 2009.
Earnings performance was enhanced by a 23.66% increase in net interest income to $29.73 million, a sharp increase of $5.69 million over last year. The bank's net interest margin on a fully tax equivalent basis increased to 3.66%, up from 3.22% for the same period in 2009. This increase is largely reflective of the repricing of deposit liabilities along with continued loan growth.
Non-interest income, excluding gains on available for sale securities, increased 16.71% to $15.89 million. Insurance, mortgage and real estate revenues increased 39%, 12%, and 3% respectively for the period. The bank also recognized a gain on available for sale securities of $1.98 million for the quarter as compared to the $2.38 million recorded for the same period in 2009 as the bank continues to reposition the securities portfolio and shorten the portfolio duration.
"Considering the current operating environment, we are particularly pleased with the continued growth of our core revenue," said G. Robert Aston, Jr., Chairman and Chief Executive Officer. "Excluding securities gains, the bank's pre-tax, pre-provision revenue increased 21.1%, or $7.96 million, for the second quarter of 2010 and $1.65 million or 3.74% on a linked quarter basis."
Balance Sheet
Total bank assets reached $3.73 billion, an increase of $240.37 million over the second quarter 2009 reflecting a growth rate of 6.88%. Towne continued to reach out and meet the credit needs of the Hampton Roads community with loans outstanding increasing 7.81% or $193.76 million over last year in the same period. Total deposits climbed to $2.79 billion representing a 7.54% increase for the period.
Asset Quality
Asset quality remained favorable relative to our local, regional and national competitors during the quarter. Non-performing loans rose modestly by $5.39 million with total non-performing assets including OREO ending the quarter at 1.50% of total assets. OREO properties, in the process of sale, total $6.14 million consisting of 25 different residential properties and 2 commercial properties.
The bank's loan loss provision for the quarter was $7.33 million reflective of net loan losses of $5.81 million coupled with additional reserves covering loan growth and other portfolio changes. The bank's loan loss reserve at June 30, 2010 was 1.34% compared to 1.17% for the period ended June 30, 2009.
Subsequent Events
Subsequent to quarter end, on July 16, 2010 TowneBank announced the signing of a purchase and assumption agreement to acquire all of the deposit accounts totaling $173 million of The Bank of Currituck along with its six banking offices in Northeastern North Carolina including three banking offices on the Outer Banks.
The transaction also includes approximately $173 million in assets including approximately $96 million of performing loans. All non-performing loans, OREO, and selected other loans are being retained by The Bank of Currituck for liquidation.
"With this acquisition, it will enable Towne to offer full banking service to our media footprint stretching from Williamsburg to the Outer Banks," added G. Robert Aston, Jr., Chairman and Chief Executive Officer.
As one of Virginia's top community banks, TowneBank now operates 18 banking offices in Chesapeake, Hampton, Portsmouth, Newport News, Virginia Beach, Norfolk, Williamsburg and York County. Towne also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Insurance Agency, TFA Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Prudential Towne Realty, Towne 1031 Exchange, LLC, and Corolla Classic Vacations. Through its strategic partnership with William E. Wood and Associates, the bank also offers mortgage services in all of their offices in Hampton Roads and Northeastern North Carolina. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group's President and Board of Directors. With total assets of $3.73 billion as of June 30, 2010, TowneBank is one of the largest banks headquartered in Virginia.