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TowneBank Reports Record Annual Earnings

Stocks in this article: TOWN

SUFFOLK, Va., Feb. 1, 2013 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank (the "Bank") (Nasdaq:TOWN) reported record earnings of $37.93 million for the year ended December 31, 2012, a 13.84% increase, or $4.61 million, over the $33.32 million reported for 2011. Net income available to common shareholders for 2012 increased 38.53% to $31.71 million after preferred dividend payments of $6.23 million. Fully diluted earnings of $1.03 per share grew 35.53%, as compared to $0.76 in 2011.

For the fourth quarter, earnings increased 7.0% to $9.62 million from $8.99 million in the comparative period of 2011. Net income available to common shareholders increased 20.81% to $8.26 million after preferred dividend payments of $1.35 million. Fully diluted earnings per share increased 17.39% to $0.27 per share compared to $0.23 per share for the comparative period of 2011.

The Bank's common dividend rose to $0.33 per share for the year with the common dividend totaling $10.42 million.

Earnings Highlights

The growth in annual earnings was positively affected by a 5.92% increase in net interest income to $144.28 million, an $8.06 million improvement from 2011.  The improvement in net interest income was fueled by growth in the Bank's loan portfolio, which ended the period at $3.13 billion, representing an increase of 12.18%, or $340.31 million, from the prior year. The Bank's net interest margin on a fully tax equivalent basis was 3.92%, compared to 3.94% in 2011. The change reflects a decline in yields on earning assets that was mostly offset by continued reduction in the Bank's funding costs. For the fourth quarter of 2012, net interest income increased $2.33 million, or 6.81%, compared to the fourth quarter of 2011.

Noninterest income, excluding gains on investment securities, increased by $17.13 million, or 26.75%, to $81.18 million in 2012. In the fourth quarter of 2012, noninterest income, excluding gains on investment securities, increased by $3.03 million, or 18.94%, compared to the same quarter of 2011. The improvement in both the annual and quarterly periods was primarily attributable to continued growth in residential mortgage banking income as we have expanded our mortgage operations into new markets in Virginia and North Carolina. The expansion resulted in additional residential mortgage banking income of $10.38 million for the annual period and an increase of $2.32 million in the comparative quarterly period.

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