Portsmouth, VA April 16, 2004Quarterly Results:
Celebrating its fifth anniversary, Hampton Roads based TowneBank (OTC Bulletin Board: TOWN) reported total assets of $1.310 billion at March 31, 2004, reflecting growth of $491.9 million or 60.17% over March 31, 2003. Total deposits grew 59.39% or $402.5 million over March 31, 2003, reaching $1.080 billion. Average noninterest bearing deposits were 26.77% of average total deposits for the 2004 first quarter reflecting solid growth in the Bank’s core funding.
G. Robert Aston, Jr., Chairman and Chief Executive Officer of TowneBank, stated, “Surpassing the $1.3 billion mark in total assets is a new milestone for TowneBank, and we are pleased with our progress for this quarter. We are also pleased to share this milestone with our new members and employees joining us from Harbor Bank. With the completion of our merger with Harbor Bank, we look forward to continuing the tradition of ‘Hometown’ service to our members throughout Hampton Roads.”
Net income for the first quarter of 2004 increased 24.91% to $1.805 million compared to $1.445 million in the first quarter of 2003. Net interest income and noninterest income increased 37.00% and 6.77%, respectively, while noninterest expense increased 21.84% as compared to the quarter ended March 31, 2003. The growth in noninterest income reflects growth in the mortgage and insurance operations and significant growth in service fee income as well as earnings provided by the newly formed Towne Investment Group.
Net income per share on a basic basis increased to $0.17 for March 31, 2004, from $0.14 for 2003, while net income per share on a diluted basis was $0.16 for a 14.29% increase over the three months ended March 31, 2003.
Fifth Year Anniversary of Operations
TowneBank opened in April 1999 and celebrated its fifth full year of operation on April 8, 2004. “With the beginning of 2004 well on its way, we are excited not only by the financial prospects of the upcoming year but also by the realization of our achievements in building our franchise. The construction of the Pembroke Financial Center in the Town Center area of Virginia Beach is progressing quickly, and the renovation of our new Portsmouth headquarters at the corner of High Street and Crawford Parkway has begun. With hometown 16 banking offices, TowneBank is the largest independent bank headquartered in Hampton Roads. We have also declared and paid our second annual cash dividend of $0.10 per common share. We are grateful for the loyalty and support of all associated with this institution, and look forward to the opportunity to welcome others to our TowneBank family,” said Aston.
Annual Meeting Date
TowneBank also announced that its 2003 Annual Meeting of Shareholders will be held on Thursday, May 20, 2004 at 11:30a.m. at the Chesapeake Conference Center, 900 Greenbrier Circle in Chesapeake, Virginia.
Cautionary Statement
This news release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections or historical results. Interim results are not indicative of future results and amounts could vary.
- Selected Financial Highlights (unaudited)
TOWNEBANK
March 31, 2004
(Dollars in thousands, except share data)
- Increase/ % Increase/
Three-Months Ended March 31, 2004 2003 (Decrease) (Decrease)
Results of Operations:
Net interest income 7,813 $ 5,703 $ 2,110 $ 37.00%
Noninterest income 4,180 3,915 265 6.77%
Noninterest expense 8,691 7,133 1,558 21.84%
Provision for loan losses 543 296 247 83.45%
Pretax Income 2,759 2,189 570 26.04%
Provision for income tax expense 954 744 210 28.23%
Net income 1,805 1,445 360 24.91%
Net income per common share - basic 0.17 0.14 0.03 21.43%
Net income per common share - diluted 0.16 0.14 0.02 14.38%
Period End Data:
Total assets 1,309,574 $ 817,628 $ 491,946 $ 60.17%
Earning assets 1,167,311 744,039 423,272 56.89%
Loans (net of unearned income) 936,675 528,694 407,981 77.17%
Allowance for loan losses 13,356 7,137 6,219 87.14%
Noninterest bearing deposits 308,857 181,230 127,627 70.42%
Interest bearing deposits 771,262 496,415 274,847 55.37%
Total deposits 1,080,119 677,645 402,474 59.39%
Advances from the FHLB 41,030 37,700 3,330 8.83%
Convertible subordinated capital notes 28,493 22,498 5,995 26.65%
Shareholders' equity 143,610 72,907 70,703 96.98%
Shares outstanding 13,338,126 10,155,929 3,182,197 31.33%
Book value per share - tangible 6.95 7.03 (0.08) (1.14%)
Book value per share 10.77 7.18 3.59 50.00%
Daily Average Balances:
Total assets 979,669 $ 761,751 $ 217,918 $ 28.61%
Earning assets 905,540 705,754 199,786 28.31%
Loans (net of unearned income) 707,745 520,927 186,818 35.86%
Allowance for loan losses 9,579 7,089 2,490 35.12%
Noninterest bearing deposits 214,370 142,509 71,861 50.43%
Interest bearing deposits 586,280 479,828 106,452 22.19%
Total deposits 800,650 622,337 178,313 28.65%
Shareholders' equity 89,470 72,108 17,362 24.08%
Shares outstanding - basic 10,606,848 10,098,881 507,967 5.03%
Key Ratios:
Return on average assets 0.74% 0.77% (0.03%) (3.90%)
Return on average equity 8.07% 8.13% (0.06%) (0.74%)
Net interest margin 3.46% 3.28% 0.18% 5.49%
Average earning assets/total assets 92.43% 92.65% (0.22%) (0.24%)
Average loans/deposits 88.40% 83.70% 4.70% 5.62%
Average noninterest deposits/
total deposits 26.77% 22.90% 3.87% 16.90%
Allowance for loan losses/
period end loans 1.43% 1.35% 0.08% 5.93%
Shareholders' equity to period
end total assets 10.97% 8.92% 2.05% 22.96%
Note: Per share data is restated for the February 2002, 2-for-1 stock split.
Contact:
G. Robert Aston, Jr. (757) 638-6781
R. Scott Morgan (757) 638-6783
Clyde E. McFarland, Jr. (757) 638-6801