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TheStreet Open House

TowneBank Reports Record Earnings For 2013

Stock quotes in this article: TOWN

SUFFOLK, Va., Feb. 4, 2014 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank (the "Bank") (Nasdaq:TOWN) reported record earnings of $41.76 million for the year ended December 31, 2013, a 10.10%, or $3.83 million, increase over the $37.93 million reported for 2012. Net income available to common shareholders for 2013 increased 18.39% after preferred dividend payments of $4.23 million. Fully diluted earnings per share reached the highest level in the Bank's 15-year history ending the year at $1.16 per share, an increase of 12.62% over 2012.

The Bank's common dividend totaled $0.38 per share for 2013, an increase of 15.15% over the dividend declared per share during 2012. The quarterly dividend was increased to $0.10 per share beginning in the third quarter of 2013, which represents an annualized dividend rate of $0.40 per share.

2013 Financial Highlights

Reflecting an industry-wide trend, net interest income for 2013 was essentially flat with 2012 due primarily to the extended period of historically low interest rates driven by the Federal Reserve's monetary policy. In spite of the Bank's loan portfolio increasing 3.27% to end the period at $3.24 billion, net interest income declined 0.27% to $143.90 million. "In simple terms, the monies received by the Bank from the repayment of existing loans is being reinvested in new loans carrying a lower rate of return than the loans being repaid," said G. Robert Aston, Jr., Chairman and Chief Executive Officer.

Noninterest income, excluding gains on investment securities, increased a robust $8.73 million, an increase of 10.76%, to $89.92 million. These results are largely due to the strategic decision made over a decade ago to diversify the Company's earnings by investing in the real estate, mortgage, investment, and insurance businesses the Bank owns today. During 2013, we continued to make additional investments in insurance agencies, vacation travel insurance operations, and the expansion of our mortgage production activities in numerous new markets.

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