Exhibit 99.1
Tuesday, February 16, 2016
HomeTown Bankshares Corporation Reports
Strong Growth and SolidOperatingPerformance
Q4 2015 Earnings up6% over 2014
● | ContinuedSolid Operating Performance |
o | Net Income of $1.1 million for fourth quarter 2015, up 6% over $1.0 million in 2014 |
o | EPS of $0.19 for fourth quarter of 2015 vs. $.18 per share for fourth quarter of 2014 (fully diluted) |
o | YTD Earnings of $3.6 million, up 4% from $3.4 million in 2014 |
o | Fourth quarter revenue of $5.7 million, up $812,000 or 17% over 2014 |
o | YTD revenue of $20.7 million, up $2.0 million or 11% increase over 2014 |
o | Noninterest Income for fourth quarter 2014 up 94% over prior year |
o | YTD Noninterest Income for 2014 up 58% over prior year 2014 |
● | Well-CapitalizedwithOperating Ratios reflecting Q4 Sub-Debt Issue |
o | Tier 1 Leverage Ratio for HomeTown Bank improved to 10.8% at December 31, 2015 vs. 10.00% in 2014 |
o | Return on Assets (ROA) was 0.88% for Q4 and 0.78% for 2015 FYE vs. 0.94% for Q4 and 0.82% for 2014 FYE |
o | Return on Equity (ROE) of 9.15% for Q4 and 7.94% for 2015 FYE vs. 9.28% for Q4 and 8.20% for 2014 FYE |
o | Efficiency Ratio of 68.93% for Q4 and 70.48% for the 2015 fiscal year vs. 69.10% for Q4 and 69.04% for 2014 FYE |
● | Strong Loan and Deposit Growth |
o | Total Loans of $367 Million at December 31, 2015 |
■ | Up $36 million or 11% for the 2015 fiscal year over 2014 |
o | Total Deposits of $400 Million at December 31, 2015 |
■ | Core Deposits Up $45 million or 14% for the 2015 fiscal year over 2014 with Non-Interest Bearing Checking Deposits up 51% |
● | Credit Quality Remains Strong |
o | YTD net charge-offs of $34,000 were .01% of average total loans for 2015 vs .12% of average total loans for 2014 |
o | Non-performing assets were 1.18% of total assets at December 31, 2015 vs. 1.92% in 2014 |
o | Nonaccrual loans remained low at 0.12% of total loans at December 31, 2015 and 0.38% of total loans at December 31, 2014 |
o | Past due accruing loans remained at historically low levels of 0.39% of total loans at December 31, 2015 and 0.15% at December 31, 2014 |
News Release
FOR IMMEDIATE RELEASE
For more information contact:
Susan K. Still, President and CEO, (540) 278-1705
Charles W. Maness, Jr., Executive Vice President & CFO, (540) 278-1702
HomeTown Bankshares Corporation Strong Operating Performance for 2015
Roanoke, VA (February 16, 2016)– HomeTown Bankshares Corporation, the parent company of HomeTown Bank, generated a net profit of $1.1 million or $0.19 per diluted common share for the fourth quarter of 2015, up 6% from the net profit of $1.0 million or $0.18 per diluted common share for the fourth quarter of 2014. Net income for the 2015 fiscal year increased 4% to $3.6 million or $0.64 per diluted common share vs. $3.4 million and $0.62, respectively, for the 2014 fiscal year.
Net Interest income increased 6% for the fourth quarter and 5% for 2015 while non-interest income almost doubled in the fourth quarter and increased 58% for 2015. Non-interest income amounted to $1.1 million in the fourth quarter and $3.0 million for the year vs. $546,000 in the fourth quarter of 2014, and $1.9 million for 2014. The primary growth in non-interest income during 2015 came from a strong resurgence in mortgage lending, a non-recurring gain on the sale of real estate, as well as an overall increase in income associated with strong core deposit growth.
“We are very pleased with another excellent year of loan and core deposit growth in 2015,” stated Susan Still, President and CEO. “The strong increase in loan volume helped to offset some of the margin compression that our Bank and the industry continue to experience,” Still said. “We are also excited about the performance of our new branch in Salem that opened in mid-2014, which contributed to the strong growth and operating performance of the Bank,” she continued.
Balance Sheet
Total loan growth for 2015 was $36 million or 11% and was the major contributor to the $51 million increase in total assets to $479 million at December 31, 2015. Growth in total deposits was also strong with a 10% increase to $400 million at December 31, 2015. This increase was net of a 23% decrease in wholesale deposits of $8.3 million during 2015. Core deposit growth remained particularly strong at 14% during 2015, including a 51% increase in non-interest bearing checking deposits.
The Tier 1 Leverage ratio of HomeTown Bank improved to 10.8% at December 31, 2015 vs. 10.0% at December 31, 2014. Capital levels at the Bank improved due to earnings and proceeds from a $7.5 million sub-debt issue in December, 2015, which will support continued growth in the future. The Company’s capital ratios remained well above regulatory standards for well-capitalized banks in 2015.
Asset Quality
Loan quality improved further and remained strong during 2015 with nonperforming assets, excluding performing, restructured loans, of 1.18% of total loans at December 31, 2015 vs. 1.92% at December 31, 2014. Net charge-offs remained at historically low levels at 0.01% of average total loans during 2015 vs. 0.12% in net charge-offs during 2014.
Past due and nonaccrual loans also remained at historically low levels. Past due accruing loans were 0.39% of total loans with nonaccrual loans of 0.12% of total loans at December 31, 2015. This compares to 0.15% and 0.38%, respectively, at December 31, 2014. The Company’s Allowance for Loan Losses dropped $34,000 to $3.30 million and .90% of Total Loans at December 31, 2015 vs. $3.33 million and 1.00% of Total Loans at December 31, 2014.
“Maintaining strong loan quality remains a major focus of our Company,” stated Still. “We also reduced our bank owned real estate over 20% during 2015 which remains a key initiative for 2016 as well,” she said.
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 the Roanoke and New River Valleys and Smith Mountain Lake through six full-service branches and seven ATM’s. A high level of responsive and professional service coupled with local decision-making is the hallmark of its banking strategy.
* * *
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 and fiscal year endingDecember 31, 2015)
HomeTown Bankshares Corporation |
Consolidated Condensed Balance Sheets |
December 31, 2015; and December 31, 2014 |
December 31, | December 31 | |||||||
| 2015 | 2014 | ||||||
In Thousands | (Unaudited) | |||||||
| Assets | ||||||||
Cash and due from banks | $ | 28,745 | $ | 13,795 | ||||
Federal funds sold | 1,329 | 649 | ||||||
Securities available for sale, at fair value | 52,544 | 54,603 | ||||||
Restricted equity securities, at cost | 2,535 | 2,476 | ||||||
Loans held for sale | 1,643 | 242 | ||||||
Total loans | 367,358 | 331,679 | ||||||
Allowance for loan losses | (3,298 | ) | (3,332 | ) | ||||
Net loans | 364,060 | 328,347 | ||||||
Property and equipment, net | 14,008 | 14,900 | ||||||
Other real estate owned | 5,237 | 6,986 | ||||||
Other assets | 9,284 | 6,211 | ||||||
Total assets | $ | 479,385 | $ | 428,209 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 77,268 | $ | 51,226 | ||||
Interest-bearing | 322,278 | 311,369 | ||||||
Total deposits | 399,546 | 362,595 | ||||||
Federal Home Loan Bank borrowings | 22,000 | 20,000 | ||||||
Subordinated notes | 7,194 | - | ||||||
Other borrowings | 2,361 | 422 | ||||||
Other liabilities | 1,893 | 1,967 | ||||||
Total liabilities | 432,994 | 384,984 | ||||||
Stockholders’ Equity: | ||||||||
Preferred stock | 12,893 | 13,293 | ||||||
Common stock | 16,801 | 16,438 | ||||||
Surplus | 15,484 | 15,310 | ||||||
Retained surplus (deficit) | 443 | (2,271 | ) | |||||
Accumulated other comprehensive income | 396 | 455 | ||||||
Total HomeTown Bankshares Corporation stockholders’ equity | 46,017 | 43,225 | ||||||
Noncontrolling interest in consolidated subsidiary | 374 | - | ||||||
Total stockholders’ equity | 46,391 | 43,225 | ||||||
Total liabilities and stockholders’ equity | $ | 479,385 | $ | 428,209 | ||||
HomeTown Bankshares Corporation | ||||||||
Consolidated Condensed Statements of Income | ||||||||
For the Threeand TwelveMonths EndedDecember 31, 2015 and 2014 |
For theThree Months | For theTwelve Months | |||||||||||||||
EndedDecember 31, | EndedDecember 31, | |||||||||||||||
In Thousands, Except Share and Per Share Data | 2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Interest income: | ||||||||||||||||
Loans and fees on loans | $ | 4,255 | $ | 3,916 | $ | 16,374 | $ | 15,230 | ||||||||
Taxable investment securities | 189 | 230 | 741 | 1,000 | ||||||||||||
Nontaxable investment securities | 102 | 107 | 405 | 400 | ||||||||||||
Other interest income | 49 | 44 | 181 | 168 | ||||||||||||
Total interest income | 4,595 | 4,297 | 17,701 | 16,798 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 495 | 438 | 1,898 | 1,746 | ||||||||||||
Other borrowed funds | 119 | 86 | 413 | 372 | ||||||||||||
Total interest expense | 614 | 524 | 2,311 | 2,118 | ||||||||||||
Net interest income | 3,981 | 3,773 | 15,390 | 14,680 | ||||||||||||
Provision for loan losses | - | (202 | ) | - | - | |||||||||||
Net interest income after provision for loan losses | 3,981 | 3,975 | 15,390 | 14,680 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges on deposit accounts | 161 | 126 | 523 | 452 | ||||||||||||
ATM and interchange income | 159 | 127 | 575 | 443 | ||||||||||||
Mortgage banking | 164 | 82 | 703 | 231 | ||||||||||||
Gains on sales of investment securities | - | 20 | 52 | 128 | ||||||||||||
Gain on sale of building and land | 348 | - | 348 | - | ||||||||||||
Other income | 228 | 191 | 770 | 632 | ||||||||||||
Total noninterest income | 1,060 | 546 | 2,971 | 1,886 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | 1,728 | 1,499 | 6,529 | 5,802 | ||||||||||||
Occupancy and equipment expense | 432 | 407 | 1,757 | 1,535 | ||||||||||||
Advertising and marketing expense | 84 | 167 | 691 | 598 | ||||||||||||
Professional fees | 83 | 149 | 386 | 581 | ||||||||||||
(Gains), losses on sales, writedowns of other real estate owned, net | 206 | (5 | ) | 346 | (10 | ) | ||||||||||
Other real estate owned expense | 46 | 51 | 151 | 224 | ||||||||||||
Other expense | 908 | 750 | 3,295 | 2,834 | ||||||||||||
Total noninterest expense | 3,487 | 3,018 | 13,155 | 11,564 | ||||||||||||
Net income before income taxes | 1,554 | 1,503 | 5,206 | 5,002 | ||||||||||||
Income tax expense | 487 | 501 | 1,595 | 1,587 | ||||||||||||
Net income | 1,067 | 1,002 | 3,611 | 3,415 | ||||||||||||
Less net income attributable to non-controlling interest | 7 | - | 57 | - | ||||||||||||
Net income attributable to HomeTown Bankshares Corporation | 1,060 | 1,002 | 3,554 | 3,415 | ||||||||||||
Effective dividends on preferred stock | 210 | 210 | 840 | 840 | ||||||||||||
Net income available to common stockholders | $ | 850 | $ | 792 | $ | 2,714 | $ | 2,575 | ||||||||
Basic earnings per common share | $ | 0.25 | $ | 0.24 | $ | 0.82 | $ | 0.78 | ||||||||
Diluted earnings per common share | $ | 0.19 | $ | 0.18 | $ | 0.64 | $ | 0.62 | ||||||||
Weighted average common shares outstanding | 3,317,531 | 3,287,567 | 3,300,440 | 3,284,870 | ||||||||||||
Diluted average common shares outstanding | 5,536,662 | 5,527,567 | 5,535,180 | 5,524,870 | ||||||||||||
HomeTown Bankshares Corporation | Three | Three | Twelve | Twelve | ||||||||||||
Financial Highlights | Months | Months | Months | Months | ||||||||||||
In Thousands, Except Share and Per Share Data | Ended | Ended | Ended | Ended | ||||||||||||
Dec 31 | Dec 31 | Dec 31 | Dec 31 | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| PER SHARE INFORMATION | ||||||||||||||||
Book value per share, basic | $ | 9.86 | $ | 9.10 | $ | 9.86 | $ | 9.10 | ||||||||
Book value per share, diluted | $ | 8.32 | $ | 7.82 | $ | 8.32 | $ | 7.82 | ||||||||
Earnings per share, basic | $ | 0.25 | $ | 0.24 | $ | 0.82 | $ | 0.78 | ||||||||
Earnings per share, diluted | $ | 0.19 | $ | 0.18 | $ | 0.64 | $ | 0.62 | ||||||||
PROFITABILITY | ||||||||||||||||
Return on average assets | 0.88 | % | 0.94 | % | 0.78 | % | 0.82 | % | ||||||||
Return on average shareholders' equity | 9.15 | % | 9.28 | % | 7.94 | % | 8.20 | % | ||||||||
Net interest margin | 3.77 | % | 3.91 | % | 3.79 | % | 3.90 | % | ||||||||
Efficiency | 68.93 | % | 69.10 | % | 70.48 | % | 69.04 | % | ||||||||
BALANCE SHEET RATIOS | ||||||||||||||||
Total loans to deposits | 91.94 | % | 91.47 | % | 91.94 | % | 91.47 | % | ||||||||
Securities to total assets | 11.49 | % | 13.33 | % | 11.49 | % | 13.33 | % | ||||||||
Tier 1 leverage ratio BANK ONLY | 10.8 | % | 10.0 | % | 10.8 | % | 10.0 | % | ||||||||
ASSET QUALITY | ||||||||||||||||
Nonperforming assets to total assets | 1.18 | % | 1.92 | % | 1.18 | % | 1.92 | % | ||||||||
Nonperforming assets, including restructured loans, to total assets | 2.52 | % | 3.34 | % | 2.52 | % | 3.34 | % | ||||||||
Net charge-offs to average loans (annualized) | 0.02 | % | (0.01 | )% | 0.01 | % | 0.12 | % | ||||||||
Composition of risk assets:(in thousands) | ||||||||||||||||
Nonperforming assets: | ||||||||||||||||
Nonaccrual loans | $ | 426 | $ | 1,254 | $ | 426 | $ | 1,254 | ||||||||
Other real estate owned | 5,237 | 6,986 | 5,237 | 6,986 | ||||||||||||
Total nonperforming assets, excluding performing restructured loans | 5,663 | 8,240 | 5,663 | 8,240 | ||||||||||||
Restructured loans, performing in accordance with their modified terms | 6,398 | 6,052 | 6,398 | 6,052 | ||||||||||||
Total nonperforming assets, including performing restructured loans | $ | 12,061 | $ | 14,292 | $ | 12,061 | $ | 14,292 | ||||||||
Allowance for loan losses:(in thousands) | ||||||||||||||||
Beginning balance | $ | 3,313 | $ | 3,522 | $ | 3,332 | $ | 3,721 | ||||||||
Provision for loan losses | - | (202 | ) | - | - | |||||||||||
Charge-offs | (18 | ) | (18 | ) | (80 | ) | (464 | ) | ||||||||
Recoveries | 3 | 30 | 46 | 75 | ||||||||||||
Ending balance | $ | 3,298 | $ | 3,332 | $ | 3,298 | $ | 3,332 | ||||||||
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