HomeTown Bankshares Corporation is listed with
the NASDAQ Capital Markets under the trading symbol “HMTA”. During
the Q3 of 2017, the stock closed as high as $11.25 with an average
close of $10.80 and most recent closing price of $11.04 on October
27, 2017.
HomeTown Bankshares Corporation, (NASDAQ:HMTA), the parent company
of HomeTown Bank generated a 10% increase in net income to $2.1
million on a 10% increase in total revenues for the first nine
months of 2017. For the third quarter of 2017, net income amounted
to $917,000, a 6% annualized increase on a 5% increase in total
core revenues from the third quarter of 2016. Net earnings were
$0.16 per diluted common share for the third quarter and $0.37 per
diluted common share for the first nine months of 2017 vs. $0.16
and $0.26 per diluted share, respectively, in 2016.
“We are very pleased with the continued solid growth in revenues
and net income for the first nine months of 2017,” stated Susan
Still, President and CEO. “Strong growth in low-cost core deposits
and solid loan portfolio growth along with increases in our
non-interest income sources contributed to the improved operations
at September 30,” she continued.
RevenueTotal core revenue for
the first nine months of 2017 was up 9% to $17.8 million while
total core revenue for the three months ended September 30, 2017
was up 5% to $6.0 million, from $5.7 million in the third quarter
of 2016. Higher core revenues reflected increases in both interest
income from the loan portfolio and non-interest income sources,
excluding gains on sales of investments. Growth in commercial lines
and loans, commercial real estate loans, personal lines and loans
and credit cards, as well as non-interest income from treasury and
merchant services as well as growth in mortgage income contributed
to the increase in total revenue.
Net Interest IncomeNet interest
income in the third quarter of 2017 increased 8% or $323,000 to
$4.4 million over the third quarter of 2016. Net interest income
was up $1.1 million to $13.1million or 10% for the first nine
months of 2017 vs. $12.0 million over the same period in
2016. Income from higher loan volume and a significant
reduction in wholesale funding costs for the first nine months of
2017 contributed to the growth in net interest income. Continued
competitive pressure resulted in a 3-basis point decline in the net
interest margin during the third quarter of 2017 to 3.46% vs. 3.49%
at September 30, 2016 with a year-over-year decline of 7 basis
points to 3.48% for the first nine months of 2017 vs. 3.55% at
September 30, 2016.
Noninterest IncomeCore
non-interest income increased 18% to $2.4 million for the nine
months ended September 30, 2017 vs. $2.1 million during the same
period of 2016. The primary growth in non-interest income was
ATM and interchange income as well as a strong increase in mortgage
lending and merchant services during the third quarter and the
first nine months of 2017.
Noninterest ExpenseNoninterest
expense increased $318,000 in the third quarter 2017 vs. 2016 and
$1.8 million year-to-date due to additional staffing costs to
support increased growth as well as the successful completion of a
core conversion during the third quarter of 2017. Noninterest
expense also increased during the first nine months of 2017 due to
increased staffing for growth and non-recurring conversion costs as
well as professional fees related to outsourced internal audit
activities prior to bringing the internal audit and risk management
activities in-house.
Balance Sheet
Total assets grew at a 9% annualized rate to $551 million at
September 30, 2017 from $517 million at December 31, 2016. The
capital ratios remained well above regulatory standards for
well-capitalized banks through September 30, 2017.
LoansLoan growth increased 8%
to $435 million or $31 million over the twelve months ended
September 30, 2017. Annualized loan growth was 5% for the first
nine months of 2017 due to strong loan growth offset somewhat by
increased deleveraging by certain opportunities in the commercial
sector. Overall loan growth was driven by commercial real
estate, commercial and industrial lines and term loans as well as
consumer lines and loans.
DepositsTotal core deposits
were up $24 million or 8% on an annualized basis for the first nine
months of 2017 while core deposit growth was up $39 million or 10%
over September 30, 2016. Strong core deposit growth was achieved
again in 2017 by strong growth in commercial, private banking and
consumer banking relationships, especially lower cost demand
deposits.
CapitalTotal stockholders’
equity increased $2.4 million through September 30, 2017 over the
previous year. HomeTown Bank’s Total capital ratio, Common
equity tier 1 capital, Total risk-based capital, Tier 1 risk-based
capital and Tier 1 leverage ratios were 11.8%, 12.5%, 11.8%, and
10.6%, respectively. All ratios continue to exceed the current
regulatory standards for well-capitalized institutions. Book
value per common share amounted to $8.66 at September 30, 2017 vs.
$8.30 at September 30, 2016, on a fully diluted basis.
Asset QualityLoan quality
remained solid thru the first nine months ended September 30,
2017.
Nonperforming AssetsOREO
balances decreased $232,000 or 6% during the first nine months 2017
and $712,000 or 17% since September 30, 2016. This resulted
in a decline in non-performing assets, excluding performing
restructured loans, to 0.77% of total assets at September 30, 2017
vs. 1.03% at September 30, 2016. Non-performing assets,
including restructured loans, were also down from 2.25% of total
assets at September 30, 2016 to 1.49% at September 30,
2017.
Past Due and Nonaccrual
LoansNonperforming loans, excluding performing,
restructured loans, of $700,000 were 0.16% of total loans at
September 30, 2017 vs. $935,000 or 0.23% of total loans at
September 30, 2016. Past due accruing loans amounted to 0.70% of
total loans at September 30, 2017 vs. 0.12% in 2016 while
nonaccruals decreased to 0.16% of total loans during the third
quarter of 2017 from 0.23% of total loans at September 30, 2016.
Net charge-offs to average loans outstanding at September 30, 2017
were 0.03% for the quarter and 0.16% for the first nine months of
2017 vs. 0.02% and 0.25% in 2016.
Allowance for Loan LossesThe
Company’s Allowance for Loan Losses amounted to $3.71 million or
0.85% of total loans at September 30, 2017 vs. $3.64 million and
0.87% of total loans at December 31, 2016.
“The level of bank owned real estate was reduced significantly
during the first nine months of 2017 and over the past year,”
stated Still. “Our ongoing focus will remain on maintaining
low levels of non-performing loans and past dues and continuing to
reduce the level of bank owned real estate prudently,” she
said.
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, 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 September 30, 2017)
HomeTown Bankshares Corporation |
Consolidated Condensed Balance Sheets |
September 30, 2017; December 31, 2016; and September 30,
2016 |
|
September 30 |
|
December 31 |
|
September 30 |
In
Thousands |
2017 |
|
2016 |
|
2016 |
Assets |
(Unaudited) |
|
|
|
(Unaudited) |
Cash and
due from banks |
$ |
34,755 |
|
$ |
18,229 |
|
$ |
21,264 |
Federal
funds sold |
|
132 |
|
|
42 |
|
|
1,033 |
Securities
available for sale, at fair value |
|
53,594 |
|
|
52,975 |
|
|
54,085 |
Restricted
equity securities, at cost |
|
2,371 |
|
|
2,213 |
|
|
2,213 |
Loans held
for sale |
|
1,013 |
|
|
678 |
|
|
294 |
Total
loans |
|
434,810 |
|
|
418,991 |
|
|
403,915 |
Allowance
for loan losses |
|
(3,706) |
|
|
(3,636) |
|
|
(3,544) |
Net
loans |
|
431,104 |
|
|
415,355 |
|
|
400,371 |
Property
and equipment, net |
|
13,098 |
|
|
13,371 |
|
|
13,543 |
Other real
estate owned |
|
3,562 |
|
|
3,794 |
|
|
4,274 |
Other
assets |
|
11,818 |
|
|
10,633 |
|
|
10,635 |
Total assets |
$ |
551,447 |
|
$ |
517,290 |
|
$ |
507,712 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
110,249 |
|
$ |
91,354 |
|
$ |
88,716 |
Interest-bearing |
|
368,695 |
|
|
359,494 |
|
|
351,278 |
Total deposits |
|
478,944 |
|
|
450,848 |
|
|
439,994 |
Federal
Home Loan Bank borrowings |
|
11,361 |
|
|
8,000 |
|
|
9,000 |
Subordinated notes |
|
7,247 |
|
|
7,224 |
|
|
7,217 |
Other
borrowings |
|
992 |
|
|
1,117 |
|
|
1,126 |
Other
liabilities |
|
2,225 |
|
|
1,876 |
|
|
2,093 |
Total liabilities |
|
500,769 |
|
|
469,065 |
|
|
459,430 |
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Common
stock |
|
28,776 |
|
|
28,765 |
|
|
28,781 |
Surplus |
|
17,942 |
|
|
17,833 |
|
|
17,810 |
Retained
surplus |
|
3,363 |
|
|
1,247 |
|
|
657 |
Accumulated other comprehensive income |
|
107 |
|
|
(56) |
|
|
611 |
Total HomeTown Bankshares Corporation stockholders’
equity |
|
50,188 |
|
|
47,789 |
|
|
47,859 |
Noncontrolling interest in consolidated subsidiary |
|
490 |
|
|
436 |
|
|
423 |
Total stockholders’ equity |
|
50,678 |
|
|
48,225 |
|
|
48,282 |
Total liabilities and stockholders’ equity |
$ |
551,447 |
|
$ |
517,290 |
|
$ |
507,712 |
|
|
|
|
|
|
|
|
|
HomeTown Bankshares Corporation |
Consolidated Condensed Statements of Income |
For the Three and Nine Months Ended September 30, 2017 and
2016 |
|
For the Three Months |
|
For the Nine Months |
|
Ended September 30, |
|
Ended September 30, |
In Thousands,
Except Share and Per Share Data |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
Loans and
fees on loans |
$ |
4,797 |
|
$ |
4,523 |
|
$ |
14,123 |
|
$ |
13,116 |
Taxable
investment securities |
|
244 |
|
|
209 |
|
|
744 |
|
|
614 |
Nontaxable
investment securities |
|
75 |
|
|
93 |
|
|
239 |
|
|
295 |
Other
interest income |
|
101 |
|
|
65 |
|
|
258 |
|
|
180 |
Total
interest income |
|
5,217 |
|
|
4,890 |
|
|
15,364 |
|
|
14,205 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
588 |
|
|
588 |
|
|
1,694 |
|
|
1,629 |
Subordinated
notes |
|
134 |
|
|
134 |
|
|
402 |
|
|
402 |
Other
borrowed funds |
|
58 |
|
|
54 |
|
|
171 |
|
|
221 |
Total
interest expense |
|
780 |
|
|
776 |
|
|
2,267 |
|
|
2,252 |
Net interest
income |
|
4,437 |
|
|
4,114 |
|
|
13,097 |
|
|
11,953 |
Provision for loan losses |
|
40 |
|
|
111 |
|
|
575 |
|
|
979 |
Net interest
income after provision for loan losses |
|
4,397 |
|
|
4,003 |
|
|
12,522 |
|
|
10,974 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
120 |
|
|
178 |
|
|
415 |
|
|
496 |
ATM and
interchange income |
|
206 |
|
|
176 |
|
|
612 |
|
|
491 |
Mortgage
banking |
|
263 |
|
|
251 |
|
|
725 |
|
|
607 |
Gains on
sales of investment securities |
|
18 |
|
|
43 |
|
|
60 |
|
|
257 |
Other
income |
|
150 |
|
|
187 |
|
|
675 |
|
|
468 |
Total
noninterest income |
|
757 |
|
|
835 |
|
|
2,487 |
|
|
2,319 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
Salaries and
employee benefits |
|
2,099 |
|
|
1,772 |
|
|
6,153 |
|
|
5,095 |
Occupancy and
equipment expense |
|
391 |
|
|
439 |
|
|
1,245 |
|
|
1,317 |
Advertising
and marketing expense |
|
112 |
|
|
127 |
|
|
383 |
|
|
345 |
Professional
fees |
|
89 |
|
|
135 |
|
|
454 |
|
|
352 |
Losses on
sales, write-downs of other real estate owned, net |
|
- |
|
|
- |
|
|
380 |
|
|
91 |
Other real
estate owned expense |
|
28 |
|
|
25 |
|
|
66 |
|
|
72 |
Other
expense |
|
1,085 |
|
|
988 |
|
|
3,228 |
|
|
2,841 |
Total
noninterest expense |
|
3,804 |
|
|
3,486 |
|
|
11,909 |
|
|
10,113 |
Net income
before income taxes |
|
1,350 |
|
|
1,352 |
|
|
3,100 |
|
|
3,180 |
Income tax
expense |
|
413 |
|
|
416 |
|
|
930 |
|
|
1,203 |
Net
income |
|
937 |
|
|
936 |
|
|
2,170 |
|
|
1,977 |
Less net
income attributable to non-controlling interest |
|
20 |
|
|
33 |
|
|
54 |
|
|
49 |
Net income
attributable to HomeTown Bankshares Corporation |
|
917 |
|
|
903 |
|
|
2,116 |
|
|
1,928 |
Effective
dividends on preferred stock |
|
- |
|
|
- |
|
|
- |
|
|
408 |
Net income
available to common stockholders |
$ |
917 |
|
$ |
903 |
|
$ |
2,116 |
|
$ |
1,520 |
Basic
earnings per common share |
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.37 |
|
$ |
0.36 |
Diluted earnings per common share |
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.37 |
|
$ |
0.26 |
Weighted average common shares outstanding |
|
5,770,175 |
|
|
5,763,944 |
|
|
5,762,602 |
|
|
4,279,821 |
Diluted average common shares outstanding |
|
5,794,777 |
|
|
5,774,086 |
|
|
5,792,204 |
|
|
5,776,632 |
|
|
|
|
|
|
|
|
|
|
|
|
HomeTown Bankshares Corporation |
Three |
|
Three |
|
Nine |
|
Nine |
Financial Highlights |
Months |
|
Months |
|
Months |
|
Months |
In
Thousands, Except Share and Per Share Data |
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
Sep 30 |
|
Sep 30 |
|
Sep 30 |
|
Sep 30 |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
PER
SHARE INFORMATION |
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
Book value
per share, basic |
$ |
8.70 |
|
|
$ |
8.30 |
|
|
$ |
8.70 |
|
|
$ |
8.30 |
|
|
Book value
per share, diluted |
$ |
8.66 |
|
|
$ |
8.30 |
|
|
$ |
8.66 |
|
|
$ |
8.30 |
|
|
Earnings
(loss) per share, basic |
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.37 |
|
|
$ |
0.36 |
|
|
Earnings
(loss) per share, diluted |
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.37 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFITABILITY |
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
0.67 |
% |
|
|
0.70 |
% |
|
|
0.53 |
% |
|
|
0.52 |
% |
|
Return on
average shareholders' equity |
|
7.25 |
% |
|
|
7.54 |
% |
|
|
5.73 |
% |
|
|
5.45 |
% |
|
Net
interest margin |
|
3.46 |
% |
|
|
3.49 |
% |
|
|
3.48 |
% |
|
|
3.55 |
% |
|
Efficiency |
|
72.95 |
% |
|
|
70.54 |
% |
|
|
73.84 |
% |
|
|
71.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
to deposits |
|
90.79 |
% |
|
|
91.80 |
% |
|
|
90.79 |
% |
|
|
91.80 |
% |
|
Securities
to total assets |
|
10.15 |
% |
|
|
11.09 |
% |
|
|
10.15 |
% |
|
|
11.09 |
% |
|
Common
equity tier 1 ratio BANK ONLY |
|
11.8 |
% |
|
|
12.1 |
% |
|
|
11.8 |
% |
|
|
12.1 |
% |
|
Tier 1
capital ratio BANK ONLY |
|
11.8 |
% |
|
|
12.1 |
% |
|
|
11.8 |
% |
|
|
12.1 |
% |
|
Total
capital ratio BANK ONLY |
|
12.5 |
% |
|
|
12.9 |
% |
|
|
12.5 |
% |
|
|
12.1 |
% |
|
Tier 1
leverage ratio BANK ONLY |
|
10.6 |
% |
|
|
10.6 |
% |
|
|
10.6 |
% |
|
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY |
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets |
|
0.77 |
% |
|
|
1.03 |
% |
|
|
0.77 |
% |
|
|
1.03 |
% |
|
Nonperforming assets, including restructured loans, to total
assets |
|
1.49 |
% |
|
|
2.25 |
% |
|
|
1.49 |
% |
|
|
2.25 |
% |
|
Net
charge-offs to average loans (annualized) |
|
0.03 |
% |
|
|
0.02 |
% |
|
|
0.16 |
% |
|
|
0.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of risk assets: (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
700 |
|
|
$ |
935 |
|
|
$ |
700 |
|
|
$ |
935 |
|
|
|
Other real estate
owned |
|
3,562 |
|
|
|
4,274 |
|
|
|
3,562 |
|
|
|
4,274 |
|
|
Total
nonperforming assets, excluding performing restructured loans |
|
4,262 |
|
|
|
5,209 |
|
|
|
4,262 |
|
|
|
5,209 |
|
|
Restructured loans, performing in accordance with their modified
terms |
|
3,930 |
|
|
|
6,237 |
|
|
|
3,930 |
|
|
|
6,237 |
|
|
Total
nonperforming assets, including performing restructured loans |
$ |
8,192 |
|
|
$ |
11,446 |
|
|
$ |
8,192 |
|
|
$ |
11,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses: (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance |
$ |
3,700 |
|
|
$ |
3,449 |
|
|
$ |
3,636 |
|
|
$ |
3,298 |
|
|
|
Provision for loan
losses |
|
40 |
|
|
|
111 |
|
|
|
575 |
|
|
|
979 |
|
|
|
Charge-offs |
|
(37 |
) |
|
|
(21 |
) |
|
|
(563 |
) |
|
|
(806 |
) |
|
|
Recoveries |
|
3 |
|
|
|
5 |
|
|
|
58 |
|
|
|
73 |
|
|
Ending
balance |
$ |
3,706 |
|
|
$ |
3,544 |
|
|
$ |
3,706 |
|
|
$ |
3,544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information contact:
Susan K. Still, President and CEO, (540) 278-1705
Vance W. Adkins, Executive Vice President & CFO, (540) 278-1702
HomeTown Bankshares Corporation (NASDAQ:HMTA)
Historical Stock Chart
From Jun 2024 to Jul 2024
HomeTown Bankshares Corporation (NASDAQ:HMTA)
Historical Stock Chart
From Jul 2023 to Jul 2024