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Tower Financial Corporation Reports Annual Net Income Of $5.7 Million

Non-interest income was $2.2 million for the fourth quarter of 2012, which represented 28.4 percent of total revenue. This is a slight decrease of $32,000 from the third quarter of 2012 and an increase of $111,000 from the fourth quarter of 2011. The quarter over quarter decrease relates primarily to a $37,000 decrease in trust and brokerage fees related primarily to brokerage volume. Mortgage loan fees were negatively impacted by a reduction of $106,000 in the fair value of rate locks on mortgage loans with the intention of selling in the secondary market. These decreases were offset by an increase of $64,000 in gains on securities sales and an increase in mortgage loan fees on closed loans of $24,000. All other fee categories remained relatively flat quarter over quarter. 

Non-interest income for 2012 was $8.5 million, an increase of 4.5 percent from the $8.2 million we reported for 2011. The $363,000 increase was primarily the net result of increases in trust & brokerage fees of $274,000, mortgage brokerage fees of $452,000, and interchange income of $113,000, offset by a reduction in gains on securities sales of $628,000. In 2012, the mortgage department topped the $100 million mark in loans closed for the first time in our history.

Non-interest expenses were $5.6 million for the fourth quarter 2012, compared to $5.0 million for the third quarter 2012 and $5.8 million for the fourth quarter 2011. The increase from the third quarter of $556,000 relates primarily to business development expenses, processing expenses and legal & professional expenses which increased by $101,000, $151,000 and $136,000 respectively. More than 50 percent, $55,000, of the increase in business development expenses relates to year-end contributions, while another $6,000 relates to annual membership dues normally paid in the fourth quarter. The remainder relates to increase business development efforts by our calling officers. Of the $151,000 increase in data processing from the prior quarter, approximately $65,000 relates to projects specific to 2012 for increasing efficiency and enhancing revenue in the future. Of the remaining increase, approximately $32,000 was related to the timing of the bulk purchase of debit cards plastics that are typically purchased once or twice a year for deployment to new and existing customers as needed. Legal & professional expenses increased from the prior quarter as a result of additional costs of approximately $55,000 associated with increased loan closings, costs of approximately $76,000 associated with miscellaneous consulting and advisory services.

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