NASDAQ Listing HomeTown Bankshares
Corporation listed with the NASDAQ Capital Markets under the
trading symbol “HMTA” on October 12, 2016 when the stock price
closed at $8.95. Since listing, the Company’s stock has received
enhanced exposure, increased trading volume, and higher closing
prices with a high of $11.25, an average close of $9.83, and most
recent closing price of $10.75 as of August 2, 2017.
HomeTown Bankshares Corporation, (NASDAQ:HMTA), the parent company
of HomeTown Bank, reached $548 million in assets with strong growth
in both loans and core deposits. The Company reported net
income of $434,000 for the second quarter ended June 30, 2017 vs.
$224,000 in net income for the comparative period in 2016.
Net Income for the first six months of 2017 was $1.2 million vs.
$1.0 million for the first six months of 2016. Earnings per
share on a fully diluted basis were $0.08 for the second quarter of
2017 and $0.21 per share for the six months ended June 30, 2017 vs.
$0.00 and $0.11 per share, respectively, for similar periods in
2016.
Profitability, excluding non-recurring income, was
higher in the second quarter of 2017 and the first six months of
2017 vs. 2016. The increased profitability in 2017 was due to
double digit growth in net interest income (11%) and non-interest
income (25%) as well as a reduction ($343,000) in the provision for
loan losses. Non-interest expenses were higher due to
continued reduction in the OREO portfolio ($380,000), higher
professional fees, data processing costs and software expenses due
to an increased customer base and a core upgrade. The
provision for loan losses and the OREO expenses were offset by a
$173,000 non-recurring gain realized in the second quarter of 2017
while the tax expense was lower due to the additional tax expense
($240,000) incurred in the second quarter of 2016 from the
expiration of stock options.
“During the second quarter and the first six months
of 2017, we continued to experience strong balance sheet growth in
both loans and core deposits that resulted in a solid increase in
core revenues," said President and CEO Susan Still. "We realized
solid gains in market share for another quarter in both loans and
deposits while maintaining a sound loan portfolio and reducing our
OREO portfolio by 27% during Q2 and 36% since the first half of
2016,” she said.
RevenueTotal core revenue for the
six months ended June 30, 2017 was $11.7 million, up $1.1 million
or 10% over 2016, which included $5.9 million in core revenues
realized during the second quarter of 2017, 11% higher than 2016.
Higher core revenues reflected increases in both net interest
income and non-interest income and excludes gains on sales of
investments and other non-recurring income during the first half of
2017. Growth in commercial lines and loans, commercial real estate
loans, personal lines and loans, as well as in non-interest income
from treasury and merchant services, title insurance, mortgage,
brokerage, and credit card/interchange services contributed to the
increase in total revenue.
Net Interest IncomeNet interest
income in the second quarter 2017 increased $415,000 or 10.5% to
$4.4 million from the second quarter of 2016. Net interest
income was up $820,000 to $8.7 million or 10.5% for the first half
of 2017 vs. $7.8 million over a comparable period in 2016.
Higher loan volume helped to offset lower interest rates on loans
which resulted in higher net interest income, facilitated by a
reduction in total interest expense for the first half of
2017. Due to the continued growth in competitors in our
market(s), our net interest margin experienced a 6-basis point
year-over-year decline at June 30, 2017 from 3.55% for the first
half of 2016 to 3.49% at June 30, 2017.
Noninterest IncomeNoninterest
income increased 25% to $831,000, net of securities gains and
non-recurring income, in the second quarter 2017 while noninterest
income of $1.5 million was realized for the first half of 2017, up
19% from $1.3 million realized for the second half of 2016. The
primary increase for 2017 was strong growth in ATM and interchange
income as well as mortgage income, title insurance fees, and
merchant income.
Noninterest ExpenseNoninterest
expense increased $938,000 in the second quarter of 2017 over the
second quarter of 2016 due primarily to a loss of $380,000 on the
sale of a foreclosed property, contributing to a 27% or $1.0
million reduction in the OREO portfolio during 2017. Noninterest
expense also increased during the first half of 2017 compared to
2016 due to higher professional fees, higher mortgage commissions
and incentive accruals, data processing costs and software expenses
due to an increased customer base and core upgrade.
LoansTotal loans were $435 million
at June 30, 2017, up $15.9 million or 8% on an annualized basis for
the first half of 2017 and up $41.3 million or 10% over the prior
year ended June 30, 2016. Loan growth was driven by
commercial real estate, commercial and industrial lines and term
loans as well as private banking and consumer lines and loans.
DepositsCore deposits were up
$20.1 million or 10% on an annualized basis for the first half of
2017 while core deposit growth was up $49.8 million or 13% over
June 30, 2016. Strong core deposit growth continued by increased
market share growth in both commercial, private banking and
consumer banking relationships.
CapitalCapital levels remained
strong in the second quarter, with total stockholders’ equity
increasing $2.4 million through June 30, 2017 over the previous
year. HomeTown Bank Common equity tier 1 capital, Total
risk-based capital, Tier 1 risk-based capital and Tier 1 leverage
ratios were 11.4%, 12.2%, 11.4% and 10.5%, respectively, at June
30, 2017. All ratios continue to exceed the current regulatory
standards for well-capitalized institutions. Book value per
common share amounted to $8.56 at June 30, 2017 vs. $8.36 at June
30, 2016.
Credit QualityCredit quality
improved over the prior year and remained sound thru June 30, 2017.
Nonperforming AssetsOREO balances
decreased significantly - $1.0 million or 27% during the first half
of 2017 and $1.6 million or 36% since June 30, 2016.
Non-performing loans increased $2.1 million in the second quarter,
pending a third quarter settlement of a $2.43 million
non-performing loan. Non-performing assets, excluding
performing restructured loans, amounted to 1.07% of total assets at
June 30, 2017 vs. 1.30% at June 30, 2016. Non-performing
assets, including restructured loans, also improved from 2.55% of
total assets at June 30, 2016 to 1.95% at June 30, 2017.
Past Due and Nonaccrual LoansDue
to the settlement of the non-performing loan in Q3, past due
accruing loans increased to 0.65% of total loans at June 30, 2017
vs. 0.24% in 2016 while nonaccruals increased to 0.77% of total
loans during the second quarter of 2017 from 0.57% of total loans
at June 30, 2016.
Allowance for Loan LossesThe
allowance for loan losses totaled $3.7 million at June 30, 2017
compared to $3.4 million at June 30, 2016. Provisions for
loan losses were $465,000 for the second quarter of 2017 vs.
$808,000 for the second quarter of 2016. Year-to-date provisions
for loan losses were $535,000 for the six months ended June 30,
2017 vs. $868,000 at June 30, 2016.
About HomeTown Bankshares
CorporationHomeTown Bankshares Corporation is the parent
company of HomeTown Bank, which officially opened for business on
November 14, 2005. HomeTown Bank offers a full range of
banking services to small and medium-size businesses, real estate
investors and developers, private investors, professionals and
individuals. The Bank serves three markets including the
Roanoke Valley, the New River Valley and Smith Mountain Lake
through six branches, seven ATMs, HomeTown Mortgage and HomeTown
Investments. A high level of responsive and personal service
coupled with local decision-making is the hallmark of its banking
strategy. For more information, please visit
www.hometownbank.com.
Forward-Looking Statements:Certain
statements in this press release may be “forward-looking
statements.” Forward-looking statements are statements that
include projections, predictions, expectations or beliefs about
future events or results that are not statements of historical fact
and that involve significant risks and uncertainties.
Although the Company believes that its expectations with regard to
forward-looking statements are based upon reasonable assumptions
within the bounds of its existing knowledge of its business and
operations, there can be no assurance that actual results will not
differ materially from any future results implied by the
forward-looking statements. Actual results may be materially
different from past or anticipated results because of many factors,
some of which may include changes in economic conditions, the
interest rate environment, legislative and regulatory requirements,
new products, and competition, changes in the stock and bond
markets and technology. The Company does not update any
forward-looking statements that it may make.
(See Attached Financial Statements for quarter ending June 30,
2017)
HomeTown Bankshares Corporation |
Consolidated Condensed Balance Sheets |
June 30, 2017; December 31, 2016; and June 30,
2016 |
|
|
June 30, |
|
|
December 31 |
|
|
June 30, |
In
Thousands |
|
2017 |
|
|
|
2016 |
|
|
|
2016 |
|
Assets |
|
(Unaudited) |
|
|
|
|
|
(Unaudited) |
Cash and due from
banks |
$ |
37,618 |
|
|
$ |
18,229 |
|
|
$ |
28,101 |
|
Federal funds sold |
|
93 |
|
|
|
42 |
|
|
|
954 |
|
Securities available
for sale, at fair value |
|
48,665 |
|
|
|
52,975 |
|
|
|
54,498 |
|
Restricted equity
securities, at cost |
|
2,371 |
|
|
|
2,213 |
|
|
|
2,479 |
|
Loans held for
sale |
|
1,108 |
|
|
|
678 |
|
|
|
915 |
|
Total loans |
|
434,501 |
|
|
|
418,991 |
|
|
|
393,668 |
|
Allowance for loan
losses |
|
(3,700 |
) |
|
|
(3,636 |
) |
|
|
(3,449 |
) |
Net loans |
|
430,801 |
|
|
|
415,355 |
|
|
|
390,219 |
|
Property and equipment,
net |
|
13,177 |
|
|
|
13,371 |
|
|
|
13,726 |
|
Other real estate
owned |
|
2,768 |
|
|
|
3,794 |
|
|
|
4,337 |
|
Other assets |
|
11,349 |
|
|
|
10,633 |
|
|
|
10,160 |
|
Total
assets |
$ |
547,950 |
|
|
$ |
517,290 |
|
|
$ |
505,389 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
116,538 |
|
|
$ |
91,354 |
|
|
$ |
83,414 |
|
Interest-bearing |
|
359,818 |
|
|
|
359,494 |
|
|
|
349,861 |
|
Total
deposits |
|
476,356 |
|
|
|
450,848 |
|
|
|
433,275 |
|
Federal Home Loan Bank
borrowings |
|
11,694 |
|
|
|
8,000 |
|
|
|
14,650 |
|
Subordinated notes |
|
7,239 |
|
|
|
7,224 |
|
|
|
7,209 |
|
Other borrowings |
|
1,100 |
|
|
|
1,117 |
|
|
|
896 |
|
Other liabilities |
|
1,726 |
|
|
|
1,876 |
|
|
|
1,923 |
|
Total
liabilities |
|
498,115 |
|
|
|
469,065 |
|
|
|
457,953 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity: |
|
|
|
|
|
|
|
|
Common stock |
|
28,766 |
|
|
|
28,765 |
|
|
|
28,116 |
|
Surplus |
|
17,901 |
|
|
|
17,833 |
|
|
|
17,774 |
|
Common stock
distributable |
|
- |
|
|
|
- |
|
|
|
665 |
|
Retained surplus
(deficit) |
|
2,446 |
|
|
|
1,247 |
|
|
|
(247 |
) |
Accumulated other
comprehensive income |
|
252 |
|
|
|
(56 |
) |
|
|
738 |
|
Total
HomeTown Bankshares Corporation stockholders’ equity |
|
49,365 |
|
|
|
47,789 |
|
|
|
47,046 |
|
Noncontrolling interest
in consolidated subsidiary |
|
470 |
|
|
|
436 |
|
|
|
390 |
|
Total
stockholders’ equity |
|
49,835 |
|
|
|
48,225 |
|
|
|
47,436 |
|
Total
liabilities and stockholders’ equity |
$ |
547,950 |
|
|
$ |
517,290 |
|
|
$ |
505,389 |
|
HomeTown Bankshares Corporation |
Consolidated Condensed Statements of
Income |
For the Three and Six Months Ended June 30, 2017 and
2016 |
|
For the Three Months |
|
For the Six Months |
|
Ended June 30, |
|
Ended June 30, |
In
Thousands, Except Share and Per Share Data |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
Loans and
fees on loans |
$ |
4,702 |
|
$ |
4,337 |
|
$ |
9,327 |
|
$ |
8,593 |
Taxable
investment securities |
|
260 |
|
|
201 |
|
|
500 |
|
|
405 |
Nontaxable investment securities |
|
76 |
|
|
101 |
|
|
164 |
|
|
202 |
Other
interest income |
|
84 |
|
|
62 |
|
|
156 |
|
|
115 |
Total
interest income |
|
5,122 |
|
|
4,701 |
|
|
10,147 |
|
|
9,315 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
552 |
|
|
537 |
|
|
1,106 |
|
|
1,041 |
Subordinated notes |
|
134 |
|
|
134 |
|
|
268 |
|
|
268 |
Other
borrowed funds |
|
60 |
|
|
70 |
|
|
114 |
|
|
167 |
Total
interest expense |
|
746 |
|
|
741 |
|
|
1,488 |
|
|
1,476 |
Net
interest income |
|
4,376 |
|
|
3,960 |
|
|
8,660 |
|
|
7,839 |
Provision for loan losses |
|
465 |
|
|
808 |
|
|
535 |
|
|
868 |
Net
interest income after provision for loan losses |
|
3,911 |
|
|
3,152 |
|
|
8,125 |
|
|
6,971 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
146 |
|
|
164 |
|
|
296 |
|
|
318 |
ATM and
interchange income |
|
228 |
|
|
168 |
|
|
406 |
|
|
315 |
Mortgage
banking |
|
255 |
|
|
181 |
|
|
462 |
|
|
356 |
Gains on
sales of investment securities |
|
29 |
|
|
209 |
|
|
42 |
|
|
214 |
Other
income |
|
375 |
|
|
151 |
|
|
525 |
|
|
281 |
Total
noninterest income |
|
1,033 |
|
|
873 |
|
|
1,731 |
|
|
1,484 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits |
|
2,064 |
|
|
1,597 |
|
|
4,053 |
|
|
3,323 |
Occupancy
and equipment expense |
|
439 |
|
|
444 |
|
|
854 |
|
|
878 |
Advertising and marketing expense |
|
142 |
|
|
124 |
|
|
272 |
|
|
218 |
Professional fees |
|
132 |
|
|
116 |
|
|
365 |
|
|
217 |
Losses on
sales, write-downs of other real estate owned, net |
|
380 |
|
|
91 |
|
|
380 |
|
|
91 |
Other
real estate owned expense |
|
24 |
|
|
25 |
|
|
37 |
|
|
47 |
Other
expense |
|
1,131 |
|
|
968 |
|
|
2,144 |
|
|
1,853 |
Total
noninterest expense |
|
4,312 |
|
|
3,365 |
|
|
8,105 |
|
|
6,627 |
Net
income before income taxes |
|
632 |
|
|
660 |
|
|
1,751 |
|
|
1,828 |
Income
tax expense |
|
176 |
|
|
434 |
|
|
518 |
|
|
787 |
Net
income |
|
456 |
|
|
226 |
|
|
1,233 |
|
|
1,041 |
Less net
income attributable to non-controlling interest |
|
22 |
|
|
2 |
|
|
34 |
|
|
16 |
Net
income attributable to HomeTown Bankshares Corporation |
|
434 |
|
|
224 |
|
|
1,199 |
|
|
1,025 |
Effective
dividends on preferred stock |
|
- |
|
|
204 |
|
|
- |
|
|
408 |
Net
income available to common stockholders |
$ |
434 |
|
$ |
20 |
|
$ |
1,199 |
|
$ |
617 |
Basic earnings per common share |
$ |
0.08 |
|
$ |
0.00 |
|
$ |
0.21 |
|
$ |
0.17 |
Diluted earnings per common share |
$ |
0.08 |
|
$ |
0.00 |
|
$ |
0.21 |
|
$ |
0.11 |
Weighted average common shares outstanding |
|
5,768,670 |
|
|
3,557,763 |
|
|
5,766,041 |
|
|
3,529,605 |
Diluted average common shares outstanding |
|
5,789,905 |
|
|
5,780,120 |
|
|
5,787,276 |
|
|
5,776,832 |
HomeTown Bankshares Corporation |
|
Three |
|
|
Three |
|
|
Six |
|
|
Six |
Financial Highlights |
|
Months |
|
|
Months |
|
|
Months |
|
|
Months |
In
Thousands, Except Share and Per Share Data |
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
|
Jun 30 |
|
|
Jun 30 |
|
|
Jun 30 |
|
|
Jun 30 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
PER
SHARE INFORMATION |
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
Book value
per share, basic |
$ |
8.56 |
|
|
$ |
8.36 |
|
|
$ |
8.56 |
|
|
$ |
8.36 |
|
|
Book value
per share, diluted |
$ |
8.56 |
|
|
$ |
8.36 |
|
|
$ |
8.56 |
|
|
$ |
8.36 |
|
|
Earnings
(loss) per share, basic |
$ |
0.08 |
|
|
$ |
0.00 |
|
|
$ |
0.21 |
|
|
$ |
0.17 |
|
|
Earnings
(loss) per share, diluted |
$ |
0.08 |
|
|
$ |
0.00 |
|
|
$ |
0.21 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFITABILITY |
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
0.45 |
|
|
|
0.18 |
% |
|
|
0.53 |
% |
|
|
0.42 |
% |
|
Return on
average shareholders' equity |
|
4.90 |
% |
|
|
1.91 |
% |
|
|
5.72 |
% |
|
|
4.39 |
% |
|
Net
interest margin |
|
3.48 |
% |
|
|
3.55 |
% |
|
|
3.49 |
% |
|
|
3.59 |
% |
|
Efficiency |
|
70.44 |
% |
|
|
70.28 |
% |
|
|
72.95 |
% |
|
|
71.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
to deposits |
|
91.21 |
% |
|
|
90.86 |
% |
|
|
91.21 |
% |
|
|
90.86 |
% |
|
Securities
to total assets |
|
9.31 |
% |
|
|
11.27 |
% |
|
|
9.31 |
% |
|
|
11.27 |
% |
|
Common
equity tier 1 ratio BANK ONLY |
|
11.4 |
% |
|
|
12.2 |
% |
|
|
11.4 |
% |
|
|
12.2 |
% |
|
Tier 1
capital ratio BANK ONLY |
|
11.4 |
% |
|
|
12.2 |
% |
|
|
11.4 |
% |
|
|
12.2 |
% |
|
Total
capital ratio BANK ONLY |
|
12.2 |
% |
|
|
13.0 |
% |
|
|
12.2 |
% |
|
|
13.0 |
% |
|
Tier 1
leverage ratio BANK ONLY |
|
10.5 |
% |
|
|
10.6 |
% |
|
|
10.5 |
% |
|
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY |
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets |
|
1.12 |
% |
|
|
1.30 |
% |
|
|
1.12 |
% |
|
|
1.30 |
% |
|
Nonperforming assets, including restructured loans, to total
assets |
|
1.84 |
% |
|
|
2.55 |
% |
|
|
1.84 |
% |
|
|
2.55 |
% |
|
Net
charge-offs to average loans (annualized) |
|
0.46 |
% |
|
|
0.74 |
% |
|
|
0.22 |
% |
|
|
0.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of risk assets: (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
3,352 |
|
|
$ |
2,248 |
|
|
$ |
3,352 |
|
|
$ |
2,248 |
|
|
|
Other real estate
owned |
|
2,768 |
|
|
|
4,337 |
|
|
|
2,768 |
|
|
|
4,337 |
|
|
Total
nonperforming assets, excluding performing restructured loans |
|
6,120 |
|
|
|
6,585 |
|
|
|
6,120 |
|
|
|
6,585 |
|
|
Restructured loans, performing in accordance with their modified
terms |
|
3,953 |
|
|
|
6,315 |
|
|
|
3,953 |
|
|
|
6,315 |
|
|
Total
nonperforming assets, including performing restructured loans |
$ |
10,073 |
|
|
$ |
12,900 |
|
|
$ |
10,073 |
|
|
$ |
12,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses: (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance |
$ |
3,726 |
|
|
$ |
3,347 |
|
|
$ |
3,636 |
|
|
$ |
3,298 |
|
|
|
Provision for loan
losses |
|
465 |
|
|
|
808 |
|
|
|
535 |
|
|
|
868 |
|
|
|
Charge-offs |
|
(510 |
) |
|
|
(771 |
) |
|
|
(526 |
) |
|
|
(785 |
) |
|
|
Recoveries |
|
19 |
|
|
|
65 |
|
|
|
55 |
|
|
|
68 |
|
|
Ending
balance |
$ |
3,700 |
|
|
$ |
3,449 |
|
|
$ |
3,700 |
|
|
$ |
3,449 |
|
For more information contact:
Susan K. Still, President and CEO, 540-278-1705
Vance W. Adkins, Executive Vice President and CFO, 540-278-1702
HomeTown Bankshares Corporation (NASDAQ:HMTA)
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HomeTown Bankshares Corporation (NASDAQ:HMTA)
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