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TowneBank Reports Record First Quarter Earnings

Stocks in this article: TOWN

SUFFOLK, Va., April 25, 2013 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank (the "Bank") (Nasdaq:TOWN) reported record earnings of $10.47 million for the quarter ended March 31, 2013, a 10.97% increase, or $1.04 million, over the $9.44 million reported for the comparative period in 2012.

Net income available to common shareholders increased 21.26% to $9.12 million after preferred dividend payments of $1.35 million. Fully diluted earnings per share increased 16.0% to $0.29 per share compared to $0.25 per share for the comparative period of 2012.

The Bank's common dividend was $0.09 per share for the quarter with the common dividend totaling $2.89 million. The current dividend represents an increase of 12.5% over the dividend paid during the same quarter of 2012.

Earnings Highlights

Net interest income increased to $35.21 million, a $425,000, or 1.22%, improvement over the first quarter of 2012. The improvement in net interest income was driven by a combination of the growth in the Bank's earning assets and the continued reduction in funding costs. The Bank's loan portfolio ended the period at $3.16 billion representing an increase of 9.82%, or $282.41 million, from the prior year, while earning assets increased to $4.02 billion, a 6.42%, or $242.19 million, increase over the same period.  The Bank's net interest margin on a fully tax equivalent basis decreased to 3.72%, down from 3.93% in the same period in 2012, and 3.82% in the fourth quarter of 2012. The decrease reflects lower yields on earning assets, which was partially offset by the reduction in rate on interest-bearing liabilities.

Noninterest income, excluding gains on investment securities, increased by $3.98 million, or 20.15%, to $23.76 million for the first quarter of 2013, compared to the first quarter of 2012. The majority of the increase is attributable to residential mortgage banking income, which increased $2.10 million or 36.73% from the comparative period in 2012 and insurance commissions, which increased $1.60 million, or 24.97%, from the comparative period in 2012. The increase in residential mortgage banking income was due to the continued expansion of our mortgage operations, while the increase in insurance commissions is due to across-the-board improvements in our property and casualty, benefits, and trip insurance lines of business and the acquisition of an insurance agency in December 2012.

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