EXHIBIT 99.1
**PRESS RELEASE**
Contact:
Thomas F. Gibney, President and CEO
12 Main Street
Walden, NY 12586
(845) 778-2171
April 26, 2010
HOMETOWN BANCORP, INC. ANNOUNCES QUARTERLY DIVIDEND AND
FIRST QUARTER 2010 EARNINGS
Hometown Bancorp, Inc., (the "Company") (OTCBB: HTWC) the mid-tier holding
company for Walden Federal Savings and Loan Association (the "Bank"), announced
the approval by its Board of Directors of a cash dividend on its outstanding
common stock of $0.02 per share. The dividend will be payable to stockholders of
record as of May 7, 2010, and is expected to be paid on May 21, 2010. Hometown
Bancorp MHC, which holds 1,309,275 shares or approximately 56.3% of the
Company's total outstanding stock, will waive receipt of the dividend on its
shares.
The Company announced earnings of $231,000, for the three months ended
March 31, 2010 as compared to $193,000 for the same period in 2009. The increase
in the first quarter net income was primarily due to higher net interest income
and a decrease in the provision for loan losses partially offset by a decrease
in non-interest income for the quarter ended March 31, 2010.
Net interest income increased by $117,000 or 7.5%, to $1.7 million for the
three months ended March 31, 2010 compared to the prior year period. The primary
reason for the increase in net interest income during the quarter ended March
31, 2010, was the decrease in the cost of interest-bearing liabilities of 94
basis points to 1.11% when compared to the three months ended March 31, 2009,
partially offset by a decrease in the yield of interest-earning assets of 30
basis points to 5.68% for the three months ended March 31, 2010. The interest
rate spread increased by 64 basis points to 4.57% for the three months ended
March 31, 2010 from 3.93% for the three months ended March 31, 2009. The net
interest margin increased by 41 basis points to 4.77% for the three month period
ended March 31, 2010 as compared to the three month period ended March 31, 2009.
The provision for loan losses for the quarter ended March 31, 2010 was
$50,000, a decrease of $110,000 as compared to the quarter ended March 31, 2009.
The decrease was as a result of a reduction in higher risk construction and
commercial loans during the first quarter of 2010 compared to the increase in
nonperforming loans and weakening economic conditions in the first quarter of
2009. There were net recoveries of approximately $2,000 during the first quarter
of 2010 compared to net charge-offs of $37,000 during the prior year period.
Non-interest income was $412,000 for the quarter ended March 31, 2010
compared to $551,000 for the quarter ended March 31, 2009. The primary reason
for the decrease in non-interest income for the quarter ended March 31, 2010,
was mortgage banking income, net, which decreased by $125,000. This was a result
of decreased volume of loans sold and unfunded loans committed to be sold during
the first quarter of 2010. Rental income decreased by $9,000 as a result of an
unoccupied rental space in our Newburgh office during the first quarter of 2010
compared to the first quarter of 2009. These decreases were partially offset by
increases in banking fees and service charges of $5,000 in our core deposits
accounts.
Non-interest expense increased by $27,000 and was $1.7 million for the
quarter ended March 31, 2010, compared to $1.6 million for the quarter ended
March 31, 2009. Non-interest expense increased primarily due to increases in
other real estate owned expenses of $44,000, FDIC deposit insurance premiums
increases of $32,000 and data processing expense of $15,000. These increases
were partially offset by decreases in salaries and employee benefits and
occupancy and equipment expense of $18,000 and other expenses of $30,000.
Total assets declined $1.1 million, or 0.7%, to $155.2 million at March 31,
2010 from $156.3 million at December 31, 2009. The decrease was due primarily to
a decrease in cash and cash equivalents of $1.2 million and a decrease in loans
held for sale of $1.2 million, offset by an increase of $1.0 million in
securities available for sale. Loans net, decreased $37,000, from December 31,
2009 to $136.8 million at March 31, 2010. The primary reasons for the decline in
loans during the first quarter of 2010 were decreases of $2.3 million in
construction mortgages, decreases of $1.0 million in commercial business loans
and decreases of $632,000 in commercial real estate loans, offset by increases
of $3.8 million in residential mortgages.
Nonperforming loans totaled $5.5 million, or 4.0%, of total loans at March
31, 2010 compared to $5.6 million, or 4.0%, of total loans at December 31, 2009.
The $5.5 million in nonperforming loans at March 31, 2010 were comprised of $2.9
million in one-to four-family residential loans, $2.0 million of land loans
(which included $1.7 million of loans extended to two residential subdivisions)
and two loans to builders for construction of unsold homes totaling $599,000.
Other real estate owned totaled $1.8 million at March 31, 2010 compared to
$1.4 million at December 31, 2009. Other real estate owned consisted of two
residential properties, one residential building lot and three commercial
buildings. During the quarter ended March 31, 2010, we foreclosed on a
commercial building with a carrying value of $360,000.
Total deposits were $131.2 million at March 31, 2010 compared to $131.7
million at December 31, 2009, a decrease of $591,000 or 0.4%. The decrease in
deposits consisted primarily of declines in certificates of deposit which
decreased by $2.3 million and non-interest checking which decreased by $740,000.
This decrease was offset in part by an increase in savings accounts of $1.4
million, and an increase in money market and interest checking accounts of
approximately $1.0 million.
Total stockholders' equity increased $219,000 from $19.3 million at
December 31, 2009 to $19.5 million at March 31, 2010. Equity increased primarily
due to earnings of $231,000 for the quarter ended March 31, 2010, partially
offset by dividends declared of $21,000 during the first quarter of 2010.
Established in 1919, the Bank is a community-oriented financial institution
headquartered in Walden, New York. Through its six offices, the Bank offers a
full-range of financial services to individuals and businesses within its market
area. For more information on Hometown Bancorp, Inc. and Walden Federal Savings
and Loan Association go to our website www.waldenfederal.com.
This press release contains certain forward-looking statements that are
based on assumptions and may describe future plans, strategies and expectations
of the Company. Forward-looking statements can be identified by the fact that
they do not relate strictly to historical or current facts. They often include
words like "believe," "expect," "anticipate," "estimate" and "intend" or future
or conditional verbs such as "will," "would," "should," "could" or "may."
Certain factors that could cause actual results to differ materially from
expected results include changes in the interest rate environment, changes in
general economic conditions, legislative and regulatory changes that adversely
affect the business of the Company and the Bank, and changes in the securities
markets. Except as required by law, the Company does not undertake any
obligation to update any forward-looking statements to reflect changes in
belief, expectations or events.
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March 31, December 31,
(Dollars in thousands) 2010 2009
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Financial Condition Data:
Total assets $155,181 $156,267
Investment securities 2,233 1,290
Loans held for sale - 1,175
Loans receivable, net 136,756 136,793
Deposits 131,157 131,748
Borrowings 3,000 3,000
Total stockholders' equity 19,508 19,289
Capital Ratios:
Average equity to average assets 12.46% 12.50%
Equity to total assets at the end of the period 12.57 12.34
Asset Quality Ratios:
Allowance for loan losses as a percent of total
loans 1.42% 1.38%
Allowance for loan losses as a percent of
nonperforming loans 35.96 34.48
Net charge-offs to average outstanding loans
during the period (annualized) 0.00 0.06
Nonperforming loans as a percent of total loans 3.95 4.01
Nonperforming assets as a percent of total assets 4.69 4.48
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Three Months Ended March 31,
(Dollars in thousands, except earnings per share data) 2010 2009
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Operating Data:
Interest income $ 2,002 $ 2,146
Interest expense 320 581
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Net interest income 1,682 1,565
Provision for loan losses 50 160
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Net interest income after provision for loan
losses 1,632 1,405
Non-interest income 412 551
Non-interest expenses 1,668 1,641
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Income before taxes 376 315
Income tax expense 145 122
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Net income $ 231 $ 193
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Earnings Per Common Share:
Basic and diluted $ 0.10 $ 0.09
Weighted average shares outstanding 2,248 2,248
Performance Ratios (1):
Return on average assets 0.59% 0.51%
Return on average equity 4.73 4.09
Interest rate spread (2) 4.57 3.93
Net interest margin (3) 4.77 4.36
Non-interest income to average assets 1.05 1.47
Non-interest expense to average assets 4.26 4.37
Efficiency ratio (4) 79.66 77.55
Average interest-earning assets to average
interest-bearing liabilities 122.28 126.41
Dividends declared per share $ 0.02 -
Book value per share $ 8.38 $ 8.15
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(1) Quarterly performance ratios are annualized.
(2) Represents the difference between the weighted average yield on average
interest-earning assets and the weighted average cost of interest-bearing
liabilities.
(3) Represents net interest income as a percent of average interest-earning
assets.
(4) Represents noninterest expense divided by the sum of net
interest income and noninterest income.