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Integrated Financial Holdings, Inc. (“Integrated Financial” or “IFH, Inc.”) is a Raleigh, NC based
financial holding company. The Company is the holding company for West Town Bank & Trust, an
Illinois state-chartered bank. West Town Bank & Trust provides banking services through its full-service
office located in the greater Chicago area….
Integrated Financial Holdings, Inc. (“Integrated Financial” or “IFH, Inc.”) is a Raleigh, NC based
financial holding company. The Company changed its name from West Town Bancorp, Inc. in the
third quarter 2020 after a successful shareholder vote approving the action on July 23, 2020. The
Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West
Town Bank & Trust provides banking services through its full-service office located in the greater
Chicago area….
CEOCFO: Mr. Bergevin, West Town Bancorp, Inc. is now Integrated Financial Holdings, Inc. What is included under the rebranded Company?
Mr. Bergevin: Integrated Financial Holdings, or IFH, is the parent company of six wholly owned subsidiaries…
Background Integrated Financial Holdings, Inc. (“Integrated Financial”) is the Raleigh, NC based holding company for West Town Bank & Trust, a North Riverside, IL based state-chartered bank. (The name was recently changed to reflect the fact that its scope of services is much broader than a typical bank’s.) The Company is also the parent company of several subsidiaries, two of which are Windsor Advantage, LLC, (“Windsor”) a loan servicing company, and West Town Insurance Agency, Inc., an insurance agency. The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC…
Background West Town Bancorp, Inc. (“West Town”) is the Raleigh, NC based holding company for West Town Bank & Trust, a North Riverside, IL based state-chartered bank. The Company is also the parent company of several subsidiaries, two of which are Windsor Advantage, LLC, (“Windsor”) a loan servicing company, and West Town Insurance Agency, Inc., an insurance agency. (We will discuss more about the other subsidiaries in our next report.) The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC….
RALEIGH, N.C., May 08, 2020 (GLOBE NEWSWIRE) — West Town Bancorp, Inc. (OTC PINK: WTWB) (the “Company” or “West Town”), the financial holding company for West Town Bank & Trust (“the Bank”), announced today its financial results for the three months ended March 31, 2020, reflecting a $3.3 million year-over-year increase in the provision for loan losses which was impacted by the global spread of the coronavirus (“COVID-19”) and its effects on the economic environment. Highlights include the following:
As previously announced, on May 6, 2019, Sound Bank, formerly a wholly owned subsidiary of West Town, completed a recapitalization that resulted in a significant reduction in West Town’s ownership position in the bank. Sound Bank, effective October 1, 2019, changed its name to Dogwood State Bank. Due to the reduction in West Town’s ownership position, the financial results for Sound Bank beginning on May 6, 2019 are deconsolidated from the financial results of the Company. Therefore, on a comparative basis, the Company’s financial results for the first quarter of 2020 do not include any operating impact from Sound Bank whereas the financial results for the first quarter of 2019 are impacted by the performance of Sound Bank.
“The COVID-19 pandemic has created never-before-seen challenges for our nation, our communities and the businesses West Town Bank & Trust serves. In late March, we built a technology centric framework that enabled our organization to accept and seamlessly process Paycheck Protection Program (PPP) loan applications in accordance with the U.S. Small Business Administration’s guidelines and the related CARES Act signed into law on March 27, 2020. As of May 5, 2020, WTBT closed and funded 200 loan applications in excess of $21.5 million. I want to thank our dedicated staff members for their commitment to provide the expertise needed to help our small business clients navigate these difficult times,” said Eric Bergevin, President and CEO of West Town Bancorp, Inc. “The way our partners at Windsor Advantage, LLC and SBA Loan Documentation Services, LLC responded to the situation was nothing short of incredible. During this same period, Windsor’s team of 35 full-time employees helped authorize over 10,600 applications totaling more than $2.0 billion for approximately 40 of its institutional lender clients, helping create and preserve jobs for roughly 350,000 employees across the U.S. In addition, the team at SBA Loan Documentation Services helped to document and review over 580 PPP loan closing packages on behalf of its numerous bank clients to ensure that PPP loan closings complied with the CARES Act and the SBA’s guidelines. My extreme gratitude goes out to all of those employees within our family of companies that made it possible for small businesses and their employees, most in need of funds, to gain access to the PPP program and obtain funds needed to sustain their viability.”
At March 31, 2020, the Company’s total assets were $312.2 million, net loans held for investment were $211.5 million, loans held for sale were $11.8 million, total deposits were $221.4 million and total shareholders’ equity was $67.0 million. Compared with December 31, 2019, total assets decreased $1.9 million or 1%, net loans held for investment decreased $8.1 million or 4%, loans held for sale decreased $729,000 or 6%, total deposits increased $977,000 or 0.4%, and total shareholders’ equity decreased $715,000 or 1%. The decreases in assets and loans are reflective of an overall slowdown in the economy as a result of the COVID-19 pandemic. The decrease in total shareholders’ equity was primarily a result of the loss posted for the quarter.
During the first quarter of 2020, the Company issued 40,217 shares associated with various stock-based compensation program and repurchased 25,000 shares of its voting common stock.
At March 31, 2020, the regulatory capital ratios of West Town Bank & Trust exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.
| “Well Capitalized” Minimums | Basel III Fully Phased-In | West Town Bank & Trust | |
| Tier 1 common equity ratio | 6.50% | 7.00% | 14.47% |
| Tier 1 risk-based capital ratio | 8.00% | 8.50% | 14.47% |
| Total risk-based capital ratio | 10.00% | 10.50% | 15.73% |
| Tier 1 leverage ratio | 5.00% | 4.00% | 12.18% |
The Company’s book value per common share increased from $25.70 at March 31, 2019 to $30.25 at March 31, 2020. The Company’s tangible book value per common share (a non-GAAP financial measure) increased from $16.17 at March 31, 2019 to $20.88 at March 31, 2020 primarily due to the gain on deconsolidation of Sound Bank and the subsequent removal of the intangible assets associated with Sound Bank from the consolidated financial statements.
The Company’s nonperforming assets to total assets ratio increased from 3.99% at December 31, 2019 to 4.16% at March 31, 2020, primarily due to the Company’s efforts to address credit concerns surrounding the potential economic impact of COVID-19 and the widespread societal responses to the pandemic. Nonaccrual loans decreased $1.5 million as of March 31, 2020 as compared to the prior year end while foreclosed assets increased $1.9 million from December 31, 2019 to March 31, 2020. During the fourth quarter of 2019, the Company formed Patriarch, LLC as a subsidiary to expedite the liquidation and recovery of certain Bank assets and as of March 31, 2020, Patriarch held $3.8 million in foreclosed assets. The Bank regularly conducts impairment analyses on all nonperforming assets with updated appraisals to ensure the assets are carried at the lower of fair market value or book value with any deficits charged off immediately versus carrying specific reserves.
The Company recorded a $3.5 million provision for loan losses during the first quarter of 2020 as compared to a provision of $173,000 in first quarter 2019 in response to the increasing nonperforming asset ratios, increased levels of charge-offs and forecasted credit weaknesses due to deteriorating economic conditions driven by the current COVID-19 pandemic. Expected loss estimates consider the impacts of decreased economic activity and higher unemployment and the mitigating benefits of government stimulus and industry wide loan modification efforts. The Company recorded $2.4 million in net charge-offs during the first quarter 2020. Most of the charge-offs were in the hospitality industry.
| (Dollars in thousands) | 3/31/20 | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | ||||||||||
| Nonaccrual loans – originated | $ | 7,732 | $ | 9,200 | $ | 4,813 | $ | 3,290 | $ | 4,666 | |||||
| Nonaccrual loans – acquired | – | – | – | – | 262 | ||||||||||
| Foreclosed assets | 5,243 | 3,370 | 2,028 | 2,069 | 2,493 | ||||||||||
| 90 days past due and still accruing – originated | – | – | – | – | 407 | ||||||||||
| 90 days past due and still accruing – acquired | – | – | – | – | 421 | ||||||||||
| Total nonperforming assets | 12,975 | 12,570 | 6,841 | 5,359 | 8,249 | ||||||||||
| Total nonperforming assets – originated | 12,975 | 12,570 | 6,841 | 5,359 | 7,566 | ||||||||||
| Net charge-offs | $ | 2,390 | $ | 779 | $ | 138 | $ | 200 | $ | 58 | |||||
| Annualized net charge-offs to total average portfolio loans | 4.39 | % | 1.36 | % | 0.25 | % | 0.27 | % | 0.05 | % | |||||
| Ratio of total nonperforming assets to total assets | 4.16 | % | 3.99 | % | 2.21 | % | 1.77 | % | 1.40 | % | |||||
| Ratio of total nonperforming loans to total loans | 3.66 | % | 4.19 | % | 2.31 | % | 1.57 | % | 1.38 | % | |||||
| Ratio of total allowance for loan losses to total loans | 2.27 | % | 1.72 | % | 1.64 | % | 1.62 | % | 0.98 | % |
Net interest income for the three months ended March 31, 2020 decreased $2.1 million or 36% in comparison to the first quarter 2019, primarily due to the deconsolidation of Sound Bank from the consolidated financial statements as of May 6, 2019. The net interest margin increased from 4.61% for the first quarter 2019 to 5.72% for the first quarter 2020. The margin improvement is largely related to the increase in loan yield from 6.56% to 8.16%, due in part to a change in the makeup of the loan portfolio as the percentage of consumer-related loans decreased while higher yielding commercially-focused loans associated with the Government Guaranteed Lending (“GGL”) department became a larger portion of the portfolio with the deconsolidation of Sound Bank loans. In addition, the annualized impact of several large loan pay-offs in the first quarter of 2020 which had associated loan discounts that were brought into income during the period helped to increase loan yield.
| Three Months Ended | ||||||||||
| (Dollars in thousands) | 3/31/20 | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | |||||
| Average balances: | ||||||||||
| Loans | $ | 226,683 | $ | 229,941 | $ | 220,939 | $ | 297,501 | $ | 435,583 |
| Investment securities | 23,861 | 21,572 | 21,111 | 20,960 | 21,119 | |||||
| Interest-bearing balances and other | 17,046 | 16,259 | 16,801 | 47,025 | 54,690 | |||||
| Total interest-earning assets | 267,590 | 267,772 | 258,851 | 365,486 | 511,392 | |||||
| Noninterest deposits | 56,329 | 52,456 | 47,199 | 75,643 | 112,836 | |||||
| Interest-bearing liabilities: | ||||||||||
| Interest-bearing deposits | 166,567 | 179,195 | 170,390 | 234,603 | 338,682 | |||||
| Borrowed funds | 16,475 | 6,129 | 6,452 | 17,204 | 37,852 | |||||
| Total interest-bearing liabilities | 183,042 | 185,324 | 176,842 | 251,807 | 376,534 | |||||
| Total assets | 313,476 | 311,312 | 300,011 | 416,840 | 576,640 | |||||
| Common shareholders’ equity | 68,445 | 67,172 | 68,448 | 82,090 | 78,698 | |||||
| Tangible common equity (1) | 47,570 | 46,448 | 47,636 | 57,825 | 48,918 | |||||
| Interest income/expense: | ||||||||||
| Loans | $ | 4,559 | $ | 4,139 | $ | 4,315 | $ | 5,218 | $ | 7,122 |
| Investment securities | 95 | 82 | 76 | 100 | 167 | |||||
| Interest-bearing balances and other | 76 | 83 | 105 | 241 | 356 | |||||
| Total interest income | 4,730 | 4,304 | 4,496 | 5,559 | 7,645 | |||||
| Deposits | 845 | 979 | 942 | 1,104 | 1,432 | |||||
| Borrowings | 109 | 56 | 72 | 172 | 330 | |||||
| Total interest expense | 954 | 1,035 | 1,014 | 1,276 | 1,762 | |||||
| Net interest income | $ | 3,776 | $ | 3,269 | $ | 3,482 | $ | 4,283 | $ | 5,883 |
| (1) Non-GAAP financial measure. Tangible common equity is calculated by subtracting intangible assets from common shareholders’ equity |
| Three Months Ended | |||||
| 3/31/20 | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | |
| Average yields and costs: | |||||
| Loans | 8.16% | 7.14% | 7.75% | 7.04% | 6.56% |
| Investment securities | 1.59% | 1.52% | 1.44% | 1.91% | 3.16% |
| Interest-bearing balances and other | 1.81% | 2.03% | 2.48% | 2.06% | 2.61% |
| Total interest-earning assets | 7.17% | 6.38% | 6.89% | 6.10% | 6.00% |
| Interest-bearing deposits | 2.06% | 2.17% | 2.19% | 1.89% | 1.70% |
| Borrowed funds | 2.68% | 3.62% | 4.43% | 4.01% | 3.50% |
| Total interest-bearing liabilities | 2.11% | 2.22% | 2.27% | 2.03% | 1.88% |
| Cost of funds | 1.62% | 1.73% | 1.80% | 1.56% | 1.44% |
| Net interest margin | 5.72% | 4.84% | 5.34% | 4.70% | 4.61% |
Noninterest income for the three months ended March 31, 2020 was $4.6 million, an increase of $1.4 million or 45% as compared to the same prior year period. Specific items to note include:
Noninterest expense for the first quarter 2020 was $6.0 million, a decrease of $1.4 million or 19%, from $7.5 million for the first quarter 2019. The decreases in all noninterest expense categories, including compensation, occupancy, data processing, communications and other operating expenses are primarily related to the deconsolidation of Sound Bank from the consolidated financial statements as of May 6, 2019.
West Town Bancorp, Inc. is a financial holding company based in Raleigh, NC. The Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its two full-service offices located in the greater Chicago area. The Company is also the parent company of: Windsor Advantage, LLC, a loan servicing company; West Town Insurance Agency, Inc., an insurance agency; Patriarch, LLC, a real estate management company; SBA Loan Documentation Services, LLC, a loan documentation origination company; and Glenwood Structured Finance, LLC, a loan broker and large loan syndication company. The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.
For more information, visit https://www.westtownbank.com/
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Company’s acquisition and divesture activities; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees, and the impact of competition from traditional or new sources. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.
| Ending Balance | |||||||||||||||
| (Dollars in thousands, unaudited) | 3/31/20 | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 5,928 | $ | 5,021 | $ | 4,085 | $ | 2,665 | $ | 5,433 | |||||
| Interest-bearing deposits | 8,518 | 9,849 | 16,068 | 14,450 | 69,636 | ||||||||||
| Total cash and cash equivalents | 14,446 | 14,870 | 20,153 | 17,115 | 75,069 | ||||||||||
| Interest-bearing time deposits | 2,746 | 2,746 | 2,746 | 2,746 | 2,746 | ||||||||||
| Securities, at fair value | 24,946 | 21,087 | 21,804 | 20,716 | 21,031 | ||||||||||
| Loans held for sale | 11,839 | 12,568 | 13,965 | 14,902 | 11,037 | ||||||||||
| Loans held for investment: | |||||||||||||||
| Originated loans | 216,423 | 223,470 | 211,647 | 209,492 | 336,505 | ||||||||||
| Acquired loans, net | – | – | – | – | 81,978 | ||||||||||
| Allowance for loan and lease losses | (4,907 | ) | (3,837 | ) | (3,462 | ) | (3,400 | ) | (4,115 | ) | |||||
| Loans held for investment, net | 211,516 | 219,633 | 208,185 | 206,092 | 414,368 | ||||||||||
| Premises and equipment, net | 4,740 | 4,761 | 4,795 | 4,832 | 12,099 | ||||||||||
| Foreclosed assets | 5,243 | 3,370 | 2,028 | 2,069 | 2,493 | ||||||||||
| Loan servicing assets | 3,528 | 3,358 | 3,053 | 3,220 | 3,619 | ||||||||||
| Bank owned life insurance | 5,048 | 5,021 | 4,993 | 4,964 | 9,090 | ||||||||||
| Accrued interest receivable | 1,067 | 1,116 | 1,079 | 1,196 | 1,637 | ||||||||||
| Goodwill | 13,161 | 13,150 | 12,721 | 12,721 | 19,737 | ||||||||||
| Other intangible assets, net | 7,596 | 7,782 | 7,968 | 8,154 | 9,827 | ||||||||||
| Other assets | 6,370 | 4,729 | 5,779 | 4,638 | 8,066 | ||||||||||
| Total assets | $ | 312,246 | $ | 314,191 | $ | 309,269 | $ | 303,365 | $ | 590,819 | |||||
| Liabilities and Shareholders’ Equity | |||||||||||||||
| Liabilities | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing | $ | 59,360 | $ | 49,573 | $ | 54,380 | $ | 46,068 | $ | 128,435 | |||||
| Interest-bearing | 162,059 | 170,869 | 177,472 | 164,619 | 345,581 | ||||||||||
| Total deposits | 221,419 | 220,442 | 231,852 | 210,687 | 474,016 | ||||||||||
| Borrowings | 17,649 | 19,295 | 2,382 | 5,868 | 26,294 | ||||||||||
| Accrued interest payable | 433 | 429 | 424 | 433 | 927 | ||||||||||
| Other liabilities | 5,735 | 6,300 | 8,092 | 7,562 | 9,860 | ||||||||||
| Total liabilities | 245,236 | 246,466 | 242,750 | 224,550 | 511,097 | ||||||||||
| Shareholders’ equity: | |||||||||||||||
| Common stock, voting | 2,193 | 2,166 | 2,206 | 2,674 | 2,749 | ||||||||||
| Common stock, non-voting | 22 | 22 | 22 | 129 | 329 | ||||||||||
| Additional paid in capital | 24,162 | 24,245 | 24,771 | 38,557 | 45,287 | ||||||||||
| Retained earnings | 40,371 | 41,203 | 39,446 | 37,375 | 31,273 | ||||||||||
| Accumulated other comprehensive income | 262 | 89 | 74 | 80 | 84 | ||||||||||
| Total shareholders’ equity | 67,010 | 67,725 | 66,519 | 78,815 | 79,722 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 312,246 | $ | 314,191 | $ | 309,269 | $ | 303,365 | $ | 590,819 |
| (Dollars in thousands except share | Three Months Ended | |||||||||||
| and per share data; unaudited) | 3/31/20 | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | |||||||
| Interest income | ||||||||||||
| Loans | $ | 4,559 | $ | 4,139 | $ | 4,315 | $ | 5,218 | $ | 7,122 | ||
| Investment securities and deposits | 171 | 165 | 181 | 341 | 523 | |||||||
| Total interest income | 4,730 | 4,304 | 4,496 | 5,559 | 7,645 | |||||||
| Interest expense | ||||||||||||
| Interest on deposits | 845 | 979 | 942 | 1,104 | 1,432 | |||||||
| Interest on borrowed funds | 109 | 56 | 72 | 172 | 330 | |||||||
| Total interest expense | 954 | 1,035 | 1,014 | 1,276 | 1,762 | |||||||
| Net interest income | 3,776 | 3,269 | 3,482 | 4,283 | 5,883 | |||||||
| Provision for loan losses | 3,460 | 1,155 | 200 | 477 | 173 | |||||||
| Noninterest income | ||||||||||||
| Windsor processing and servicing revenue | 1,713 | 2,256 | 1,774 | 1,970 | 1,487 | |||||||
| Government lending | 755 | 2,288 | 983 | 1,754 | 880 | |||||||
| Mortgage | 1,418 | 716 | 975 | 1,113 | 435 | |||||||
| Bank-owned life insurance | 27 | 28 | 29 | 44 | 56 | |||||||
| Service charge | 19 | 29 | 23 | 99 | 226 | |||||||
| Gain on deconsolidation of Sound Bank | – | – | – | 6,425 | – | |||||||
| Other noninterest | 709 | 98 | 153 | 92 | 122 | |||||||
| Total noninterest income | 4,641 | 5,415 | 3,937 | 11,497 | 3,206 | |||||||
| Noninterest expense | ||||||||||||
| Compensation | 3,753 | 3,750 | 3,199 | 3,385 | 4,261 | |||||||
| Occupancy and equipment | 256 | 221 | 343 | 338 | 506 | |||||||
| Loan and special asset expenses | 242 | 318 | (523 | ) | 510 | 179 | ||||||
| Professional services | 490 | 359 | 432 | 569 | 582 | |||||||
| Data processing | 148 | 109 | 161 | 198 | 345 | |||||||
| Software | 249 | 172 | 160 | 199 | 226 | |||||||
| Communications | 89 | 80 | 33 | 110 | 226 | |||||||
| Advertising | 55 | 86 | 51 | 109 | 112 | |||||||
| Transaction-related | 17 | 16 | 1 | 916 | 43 | |||||||
| Amortization of intangibles | 186 | 186 | 186 | 233 | 330 | |||||||
| Other operating expenses | 545 | 464 | 335 | 643 | 644 | |||||||
| Total noninterest expense | 6,030 | 5,761 | 4,378 | 7,210 | 7,454 | |||||||
| Income (loss) before income taxes | (1,073 | ) | 1,768 | 2,841 | 8,093 | 1,462 | ||||||
| Income tax expense (benefit) | (241 | ) | 37 | 687 | 2,174 | 397 | ||||||
| Net income (loss) | $ | (832 | ) | $ | 1,731 | $ | 2,154 | $ | 5,919 | $ | 1,065 | |
| Basic earnings (loss) per common share | $ | (0.38 | ) | $ | 0.79 | $ | 0.93 | $ | 1.97 | $ | 0.35 | |
| Diluted earnings (loss) per common share | $ | (0.37 | ) | $ | 0.78 | $ | 0.91 | $ | 1.94 | $ | 0.34 | |
| Weighted average common shares outstanding | 2,193 | 2,196 | 2,328 | 2,997 | 3,054 | |||||||
| Diluted average common shares outstanding | 2,232 | 2,234 | 2,369 | 3,045 | 3,115 | |||||||
| Three Months Ended | |||||||||||||||
| 3/31/20 | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | |||||||||||
| PER COMMON SHARE | |||||||||||||||
| Basic earnings (loss) per common share | $ | (0.38 | ) | $ | 0.79 | $ | 0.93 | $ | 1.97 | $ | 0.35 | ||||
| Diluted earnings (loss) per common share | $ | (0.37 | ) | $ | 0.77 | $ | 0.91 | $ | 1.94 | $ | 0.34 | ||||
| Book value per common share | $ | 30.25 | $ | 30.78 | $ | 29.86 | $ | 28.12 | $ | 25.70 | |||||
| Tangible book value per common share | $ | 20.88 | $ | 21.27 | $ | 20.57 | $ | 20.67 | $ | 16.17 | |||||
| FINANCIAL RATIOS (ANNUALIZED) | |||||||||||||||
| Return on average assets | -1.08 | % | 2.21 | % | 2.85 | % | 5.70 | % | 0.74 | % | |||||
| Return on average common shareholders’ equity | -4.93 | % | 10.22 | % | 12.49 | % | 28.92 | % | 5.43 | % | |||||
| Return on average tangible common equity | -7.09 | % | 14.79 | % | 17.94 | % | 41.06 | % | 8.73 | % | |||||
| Net interest margin | 5.72 | % | 4.84 | % | 5.34 | % | 4.70 | % | 4.61 | % | |||||
| Efficiency ratio (1) | 71.4 | % | 66.2 | % | 59.0 | % | 67.3 | % | 81.5 | % |
Contact: Eric Bergevin, 252-482-4400
RALEIGH, N.C., Feb. 18, 2020 (GLOBE NEWSWIRE) — West Town Bancorp, Inc. (OTC PINK: WTWB) (the “Company” or “West Town”), the financial holding company for West Town Bank & Trust (“the Bank”), announced today its financial results for the three months ended December 31, 2019. Highlights include the following:
Fourth quarter net income of $1.73 million or $0.83 per diluted share, compared to $956,000 or $0.30 per diluted share for the fourth quarter of 2018.
As previously announced, on May 6, 2019, Sound Bank, formerly a wholly owned subsidiary of West Town, completed a recapitalization that resulted in a significant reduction in West Town’s ownership position in the bank, which, effective October 1, 2019, changed its name to Dogwood State Bank. Due to the reduction in West Town’s ownership position, the financial results for the Company beginning on May 6, 2019 are deconsolidated from the financial results of Sound Bank. Therefore, on a comparative basis, the Company’s financial results for the fourth quarter of 2019 do not include any operating impact from Sound Bank whereas the financial results for the fourth quarter of 2018 are impacted by the performance of Sound Bank.
Eric Bergevin, President and CEO commented, “We are pleased with our fourth quarter results and 2019 overall. The Company went through transformational changes in 2019 by divesting our controlling interest in Sound Bank, repurchasing upwards of a third of our shares outstanding, launching new intuitive deposit programs and expanding our product offerings that are synergistic with our core government guaranteed lending (“GGL”) focus. The Company was able to deliver strong fourth quarter results, including a 7th consecutive quarter of increased servicing revenue from Windsor Advantage and enhanced revenues from GGL loans of $2.3 million in revenue on $22.9 million of originated loan commitments. The strong fourth quarter resulted in one of our most profitable years to date with total after tax income exceeding $11 million dollars and over $4.00 per share in earnings. Our new deposit initiatives for West Town Bank & Trust (excluding Sound Bank) have resulted in a one-year growth in core deposits of over 21% and growth in noninterest-bearing deposits of over 53%. These funding strategies, coupled with strong capital levels, will allow for future growth. We are optimistic that 2020 will yield modestly enhanced core earnings, with accretive core earnings per share, as we keep our focus on our core competencies.”
During the fourth quarter of 2019, the Company repurchased 27,500 shares of its voting common stock.
At December 31, 2019, the Company’s total assets were $314.9 million, net loans held for investment were $223.5 million, loans held for sale were $12.6 million, total deposits were $220.4 million and total shareholders’ equity was $67.7 million. Compared with December 31, 2018, total assets decreased $240.4 million or 43%, loans held for investment decreased $187.1 million or 58%, loans held for sale decreased $4.0 million or 24%, total deposits decreased $212.5 million or 49%, and total shareholders’ equity decreased $9.8 million or 13%. The decreases in assets, loans and deposits were a result of the Sound Bank recapitalization and deconsolidation of Sound Bank from the consolidated financials as of May 6, 2019. The decrease in total shareholders’ equity resulted from the Company’s stock repurchase program, partially offset by an increase in retained earnings.
At December 31, 2019, the regulatory capital ratios of West Town Bank & Trust exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.
| “Well Capitalized” Minimums | West Town Bank & Trust | |
| Tier 1 common equity ratio | 6.50% | 14.95% |
| Tier 1 risk-based capital ratio | 8.00% | 14.95% |
| Total risk-based capital ratio | 10.00% | 16.21% |
| Tier 1 leverage ratio | 5.00% | 12.65% |
The Company’s book value per common share increased from $25.52 at December 31, 2018 to $30.78 at December 31, 2019. The Company’s tangible book value per common share (a non-GAAP financial measure) increased from $15.68 at December 31, 2018 to $21.27 at December 31, 2019 due primarily to the gain on deconsolidation of Sound Bank and the subsequent removal of the intangible assets associated with Sound Bank from the consolidated financial statements.
The Company’s nonperforming assets to total assets ratio increased from 1.41% at December 31, 2018 to 3.99% at December 31, 2019 primarily due to the removal of Sound Bank from the consolidated financial statements. Nonaccrual loans increased $2.4 million as of December 31, 2019 as compared to the prior year while foreclosed assets increased $2.6 million compared to December 31, 2018. The Company has formed Patriarch, LLC as a subsidiary to expedite the liquidation and recovery of certain Bank assets and as of December 31, 2019 Patriarch held $1.8 million in assets (included in the foreclosed assets number) while the Bank also held $1.3 million of guaranteed portions of GGL loans both of which are included in the Company’s nonperforming ratio. The Bank also regularly conducts impairment analyses on all nonperforming assets with updated appraisals, less cost to sell, to ensure the assets are carried at fair market value with any deficits charged off immediately versus carrying specific reserves.
The Company recorded a $1.2 million provision for loan losses during the fourth quarter of 2019 as compared to a provision of $434,000 in fourth quarter 2018 in response to the increasing nonperforming asset ratios. The Company recorded $779,000 in net charge-offs during the fourth quarter 2019 with the remaining provision expense due to volume growth.
| (Dollars in thousands) | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | ||||||||||
| Nonaccrual loans – originated | $ | 9,200 | $ | 4,813 | $ | 3,290 | $ | 4,666 | $ | 6,538 | |||||
| Nonaccrual loans – acquired | – | – | – | 262 | 272 | ||||||||||
| Foreclosed assets | 3,370 | 2,028 | 2,069 | 2,493 | 723 | ||||||||||
| 90 days past due and still accruing – originated | – | – | – | 407 | 67 | ||||||||||
| 90 days past due and still accruing – acquired | – | – | – | 421 | 251 | ||||||||||
| Total nonperforming assets | 12,570 | 6,841 | 5,359 | 8,249 | 7,851 | ||||||||||
| Total nonperforming assets – originated | 12,570 | 6,841 | 5,359 | 7,566 | 7,328 | ||||||||||
| Net charge-offs | $ | 779 | $ | 138 | $ | 200 | $ | 58 | $ | 334 | |||||
| Annualized net charge-offs to total average portfolio loans | 1.36 | % | 0.25 | % | 0.27 | % | 0.05 | % | 0.31 | % | |||||
| Ratio of total nonperforming assets to total assets | 3.99 | % | 2.21 | % | 1.77 | % | 1.40 | % | 1.41 | % | |||||
| Ratio of total nonperforming loans to total net portfolio loans | 4.19 | % | 2.31 | % | 1.57 | % | 1.38 | % | 1.74 | % | |||||
| Ratio of total allowance for loan losses to total portfolio loans | 1.72 | % | 1.64 | % | 1.62 | % | 0.98 | % | 0.97 | % |
Net interest income for the three months ended December 31, 2019 decreased $2.6 million or 49% in comparison to the fourth quarter 2018, primarily due to the deconsolidation of Sound Bank from the consolidated financial statements as of May 6, 2019. The net interest margin increased from 4.77% for the fourth quarter 2018 to 4.84% for the fourth quarter 2019. The margin improvement is largely related to the increase in loan yield from 6.54% to 7.14%, due primarily to a change in the makeup of the loan portfolio as the percentage of consumer-related loans decreased while the higher yielding commercially focused loan associated with the GGL department became a larger portion of the portfolio with the deconsolidation of Sound Bank.
| Three Months Ended | Year-to-Date | |||||||||||||||||||
| (Dollars in thousands) | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | |||||||||||||
| Average balances: | ||||||||||||||||||||
| Loans | $ | 229,941 | $ | 220,939 | $ | 297,501 | $ | 435,583 | $ | 424,758 | $ | 295,228 | $ | 433,308 | ||||||
| Investment securities | 21,572 | 21,111 | 20,960 | 21,119 | 21,060 | 21,192 | 15,461 | |||||||||||||
| Interest-bearing balances and other | 16,259 | 16,801 | 47,025 | 54,690 | 41,472 | 33,537 | 29,546 | |||||||||||||
| Total interest-earning assets | 267,772 | 258,851 | 365,486 | 511,392 | 487,290 | 349,957 | 478,315 | |||||||||||||
| Noninterest deposits | 52,456 | 47,199 | 75,643 | 112,836 | 96,068 | 71,802 | 88,032 | |||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits | 179,195 | 170,390 | 234,603 | 338,682 | 319,900 | 230,107 | 302,260 | |||||||||||||
| Borrowed funds | 6,129 | 6,452 | 17,204 | 37,852 | 50,792 | 16,803 | 67,176 | |||||||||||||
| Total interest-bearing liabilities | 185,324 | 176,842 | 251,807 | 376,534 | 370,692 | 246,910 | 369,436 | |||||||||||||
| Total assets | 311,312 | 300,011 | 416,840 | 576,640 | 553,855 | 400,199 | 541,150 | |||||||||||||
| Common shareholders’ equity | 67,172 | 68,448 | 82,090 | 78,698 | 77,817 | 74,064 | 73,959 | |||||||||||||
| Tangible common equity (1) | 43,486 | 47,636 | 57,825 | 48,918 | 47,695 | 46,836 | 50,472 | |||||||||||||
| Interest income/expense: | ||||||||||||||||||||
| Loans | $ | 4,139 | $ | 4,315 | $ | 5,218 | $ | 7,122 | $ | 7,002 | $ | 20,794 | $ | 27,005 | ||||||
| Investment securities | 82 | 76 | 100 | 167 | 171 | 343 | 450 | |||||||||||||
| Interest-bearing balances and other | 83 | 105 | 241 | 356 | 248 | 867 | 665 | |||||||||||||
| Total interest income | 4,304 | 4,496 | 5,559 | 7,645 | 7,421 | 22,004 | 28,120 | |||||||||||||
| Deposits | 979 | 942 | 1,104 | 1,432 | 1,169 | 4,457 | 3,661 | |||||||||||||
| Borrowings | 56 | 72 | 172 | 330 | 396 | 630 | 1,679 | |||||||||||||
| Total interest expense | 1,035 | 1,014 | 1,276 | 1,762 | 1,565 | 5,087 | 5,340 | |||||||||||||
| Net interest income | $ | 3,269 | $ | 3,482 | $ | 4,283 | $ | 5,883 | $ | 5,856 | $ | 16,917 | $ | 22,780 | ||||||
| (1) Non-GAAP financial measure. Tangible common equity is calculated by subtracting intangible assets from common shareholders’ equity |
| Three Months Ended | Year-to-Date | ||||||||||||||
| 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | |||||||||
| Average yields and costs: | |||||||||||||||
| Loans | 7.14 | % | 7.75 | % | 7.04 | % | 6.63 | % | 6.54 | % | 7.04 | % | 6.23 | % | |
| Investment securities | 1.52 | % | 1.44 | % | 1.91 | % | 3.16 | % | 3.25 | % | 1.62 | % | 2.91 | % | |
| Interest-bearing balances and other | 2.03 | % | 2.48 | % | 2.06 | % | 2.64 | % | 2.37 | % | 2.59 | % | 2.25 | % | |
| Total interest-earning assets | 6.38 | % | 6.89 | % | 6.10 | % | 6.06 | % | 6.04 | % | 6.28 | % | 5.87 | % | |
| Interest-bearing deposits | 2.17 | % | 2.19 | % | 1.89 | % | 1.71 | % | 1.45 | % | 1.94 | % | 1.21 | % | |
| Borrowed funds | 3.62 | % | 4.43 | % | 4.01 | % | 3.54 | % | 3.09 | % | 3.75 | % | 2.50 | % | |
| Total interest-bearing liabilities | 2.22 | % | 2.27 | % | 2.03 | % | 1.90 | % | 1.67 | % | 2.06 | % | 1.45 | % | |
| Cost of funds | 1.73 | % | 1.80 | % | 1.56 | % | 1.46 | % | 1.33 | % | 1.60 | % | 1.17 | % | |
| Net interest margin | 4.84 | % | 5.34 | % | 4.70 | % | 4.67 | % | 4.77 | % | 4.83 | % | 4.76 | % |
Noninterest income for the three months ended December 31, 2019 was $5.4 million, an increase of $697,000 as compared to the same prior year period. Specific items to note include:
Noninterest expense for the fourth quarter 2019 was $5.8 million, a decrease of $2.4 million or 30%, from $8.2 million for the fourth quarter 2018. The decreases in all noninterest expense categories, including compensation, occupancy, data processing, communications and other operating expenses are primarily related to the deconsolidation of Sound Bank from the consolidated financial statements as of May 6, 2019.
West Town Bancorp, Inc. is a financial holding company based in Raleigh, NC. The Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its two full-service offices located in the greater Chicago area. The Company is also the parent company of: Windsor Advantage, LLC, a loan servicing company; West Town Insurance Agency, Inc., an insurance agency; Patriarch, LLC, a real estate management company; SBA Loan Documentation Services, LLC, a loan documentation origination company; and Glenwood Structured Finance, LLC, a loan broker and large loan syndication company. The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.
For more information, visit https://www.westtownbank.com/
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Company’s acquisition and divesture activities; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees, and the impact of competition from traditional or new sources. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.
| Ending Balance | |||||||||||||||
| (Dollars in thousands, unaudited) | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 5,021 | $ | 4,085 | $ | 2,665 | $ | 5,433 | $ | 5,005 | |||||
| Interest-bearing deposits | 12,595 | 18,814 | 17,196 | 72,382 | 43,448 | ||||||||||
| Total cash and cash equivalents | 17,616 | 22,899 | 19,861 | 77,815 | 48,453 | ||||||||||
| Securities, at fair value | 21,087 | 21,804 | 20,716 | 21,031 | 21,332 | ||||||||||
| Loans held for sale | 12,568 | 13,965 | 14,902 | 11,037 | 16,552 | ||||||||||
| Loans held for investment: | |||||||||||||||
| Originated loans | 223,470 | 211,647 | 209,492 | 336,505 | 322,038 | ||||||||||
| Acquired loans, net | – | – | – | 81,978 | 88,556 | ||||||||||
| Allowance for loan and lease losses | (3,837 | ) | (3,462 | ) | (3,400 | ) | (4,115 | ) | (4,000 | ) | |||||
| Net loans held for investment | 219,633 | 208,185 | 206,092 | 414,368 | 406,594 | ||||||||||
| Premises and equipment, net | 4,762 | 4,795 | 4,832 | 12,099 | 12,166 | ||||||||||
| Foreclosed assets | 3,370 | 2,028 | 2,069 | 2,493 | 723 | ||||||||||
| Servicing assets | 3,358 | 3,053 | 3,220 | 3,619 | 3,952 | ||||||||||
| Bank owned life insurance | 5,021 | 4,993 | 4,964 | 9,090 | 9,034 | ||||||||||
| Accrued interest receivable | 1,116 | 1,079 | 1,196 | 1,637 | 1,637 | ||||||||||
| Goodwill | 13,150 | 12,721 | 12,721 | 19,737 | 19,745 | ||||||||||
| Other intangible assets, net | 7,782 | 7,968 | 8,154 | 9,827 | 10,157 | ||||||||||
| Other assets | 5,428 | 5,779 | 4,638 | 8,066 | 4,979 | ||||||||||
| Total assets | $ | 314,891 | $ | 309,269 | $ | 303,365 | $ | 590,819 | $ | 555,324 | |||||
| Liabilities and Shareholders’ Equity | |||||||||||||||
| Liabilities | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest bearing | $ | 49,573 | $ | 54,380 | $ | 46,068 | $ | 128,435 | $ | 97,777 | |||||
| Interest-bearing | 170,869 | 177,472 | 164,619 | 345,581 | 335,140 | ||||||||||
| Total deposits | 220,442 | 231,852 | 210,687 | 474,016 | 432,917 | ||||||||||
| Borrowings | 19,295 | 2,382 | 5,868 | 26,294 | 33,781 | ||||||||||
| Accrued interest payable | 429 | 424 | 433 | 927 | 868 | ||||||||||
| Other liabilities | 7,000 | 8,092 | 7,562 | 9,860 | 10,189 | ||||||||||
| Total liabilities | 247,166 | 242,750 | 224,550 | 511,097 | 477,755 | ||||||||||
| Shareholders’ equity: | |||||||||||||||
| Common stock, voting | 2,178 | 2,206 | 2,674 | 2,749 | 2,686 | ||||||||||
| Common stock, non-voting | 22 | 22 | 129 | 329 | 329 | ||||||||||
| Additional paid in capital | 24,233 | 24,771 | 38,557 | 45,287 | 44,760 | ||||||||||
| Retained earnings | 41,203 | 39,446 | 37,375 | 31,273 | 29,928 | ||||||||||
| Accumulated other comprehensive income (loss) | 89 | 74 | 80 | 84 | (134 | ) | |||||||||
| Total shareholders’ equity | 67,725 | 66,519 | 78,815 | 79,722 | 77,569 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 314,891 | $ | 309,269 | $ | 303,365 | $ | 590,819 | $ | 555,324 |
| (Dollars in thousands except share | Three Months Ended | Twelve Months Ended | ||||||||||||||
| and per share data; unaudited) | 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | |||||||||
| Interest income | ||||||||||||||||
| Loans | $ | 4,139 | $ | 4,315 | $ | 5,218 | $ | 7,122 | $ | 7,002 | $ | 20,794 | $ | 27,005 | ||
| Investment securities and deposits | 165 | 181 | 341 | 523 | 419 | 1,210 | 1,115 | |||||||||
| Total interest income | 4,304 | 4,496 | 5,559 | 7,645 | 7,421 | 22,004 | 28,120 | |||||||||
| Interest expense | ||||||||||||||||
| Interest on deposits | 979 | 942 | 1,104 | 1,432 | 1,169 | 4,457 | 3,661 | |||||||||
| Interest on borrowed funds | 56 | 72 | 172 | 330 | 396 | 630 | 1,679 | |||||||||
| Total interest expense | 1,035 | 1,014 | 1,276 | 1,762 | 1,565 | 5,087 | 5,340 | |||||||||
| Net interest income | 3,269 | 3,482 | 4,283 | 5,883 | 5,856 | 16,917 | 22,780 | |||||||||
| Provision for loan losses | 1,155 | 200 | 477 | 173 | 434 | 2,005 | 1,953 | |||||||||
| Noninterest income | ||||||||||||||||
| Windsor processing and servicing | ||||||||||||||||
| revenue | 2,256 | 1,774 | 1,970 | 1,487 | 1,493 | 7,487 | 3,906 | |||||||||
| Government lending | 2,288 | 983 | 1,754 | 880 | 1,793 | 5,905 | 10,209 | |||||||||
| Mortgage | 716 | 975 | 1,113 | 435 | 359 | 3,239 | 2,173 | |||||||||
| Bank-owned life insurance | 28 | 29 | 44 | 56 | 58 | 157 | 238 | |||||||||
| Service charge | 29 | 23 | 99 | 226 | 228 | 377 | 865 | |||||||||
| Gain on deconsolidation of Sound Bank | – | – | 6,635 | – | – | 6,635 | – | |||||||||
| Gain on consolidation of Windsor | – | – | – | – | – | – | 4,776 | |||||||||
| Other noninterest | 97 | 153 | 92 | 122 | 163 | 464 | 1,612 | |||||||||
| Total noninterest income | 5,414 | 3,937 | 11,707 | 3,206 | 4,094 | 24,264 | 23,779 | |||||||||
| Noninterest expense | ||||||||||||||||
| Compensation | 3,750 | 3,199 | 3,385 | 4,261 | 4,689 | 14,595 | 16,250 | |||||||||
| Occupancy and equipment | 221 | 343 | 338 | 506 | 536 | 1,408 | 1,933 | |||||||||
| Loan and special assets | 318 | (523 | ) | 510 | 179 | 437 | 484 | 1,273 | ||||||||
| Professional services | 360 | 432 | 569 | 582 | 511 | 1,943 | 1,539 | |||||||||
| Data processing | 109 | 161 | 198 | 345 | 381 | 813 | 1,345 | |||||||||
| Communications | 80 | 33 | 110 | 226 | 208 | 449 | 837 | |||||||||
| Advertising | 86 | 51 | 109 | 112 | 135 | 358 | 754 | |||||||||
| Loss on sale of foreclosed assets | – | – | 35 | 21 | – | 56 | 41 | |||||||||
| Transaction-related expenses | 16 | 1 | 916 | 43 | 31 | 976 | 124 | |||||||||
| Other operating expenses | 820 | 681 | 1,040 | 1,179 | 1,259 | 3,720 | 4,254 | |||||||||
| Total noninterest expense | 5,760 | 4,378 | 7,210 | 7,454 | 8,187 | 24,802 | 28,350 | |||||||||
| Income before income taxes | 1,768 | 2,841 | 8,303 | 1,462 | 1,329 | 14,374 | 16,256 | |||||||||
| Income tax expense | 37 | 687 | 2,174 | 397 | 373 | 3,295 | 4,120 | |||||||||
| Net income | $ | 1,731 | $ | 2,154 | $ | 6,129 | $ | 1,065 | $ | 956 | $ | 11,079 | $ | 12,136 | ||
| Basic earnings per common share | $ | 0.85 | $ | 0.97 | $ | 2.03 | $ | 0.35 | $ | 0.31 | $ | 4.20 | $ | 4.07 | ||
| Diluted earnings per common share | $ | 0.83 | $ | 0.95 | $ | 2.00 | $ | 0.34 | $ | 0.30 | $ | 4.12 | $ | 3.90 | ||
| Weighted average common shares | ||||||||||||||||
| outstanding | 2,196 | 2,328 | 2,997 | 3,054 | 3,008 | 2,639 | 2,984 | |||||||||
| Diluted average common shares | ||||||||||||||||
| outstanding | 2,234 | 2,369 | 3,045 | 3,115 | 3,124 | 2,688 | 3,110 |
| Three Months Ended | Year-to-Date | |||||||||||||||||||||
| 12/31/19 | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | ||||||||||||||||
| PER COMMON SHARE | ||||||||||||||||||||||
| Basic earnings per common share | $ | 0.85 | $ | 0.97 | $ | 2.03 | $ | 0.35 | $ | 0.31 | $ | 4.20 | $ | 4.07 | ||||||||
| Diluted earnings per common share | $ | 0.83 | $ | 0.95 | $ | 2.00 | $ | 0.34 | $ | 0.30 | $ | 4.12 | $ | 3.90 | ||||||||
| Book value per common share | $ | 30.78 | $ | 29.86 | $ | 28.12 | $ | 25.70 | $ | 25.52 | $ | 30.78 | $ | 25.52 | ||||||||
| Tangible book value per common share | $ | 21.27 | $ | 20.57 | $ | 20.67 | $ | 16.17 | $ | 15.68 | $ | 21.27 | $ | 15.68 | ||||||||
| FINANCIAL RATIOS (ANNUALIZED) | ||||||||||||||||||||||
| Return on average assets | 2.21 | % | 2.85 | % | 5.90 | % | 0.75 | % | 0.68 | % | 2.77 | % | 2.24 | % | ||||||||
| Return on average common shareholders’ | ||||||||||||||||||||||
| equity | 10.22 | % | 12.49 | % | 29.95 | % | 5.49 | % | 4.87 | % | 14.96 | % | 16.41 | % | ||||||||
| Return on average tangible common | ||||||||||||||||||||||
| equity | 15.79 | % | 17.94 | % | 42.51 | % | 8.83 | % | 7.95 | % | 23.65 | % | 24.05 | % | ||||||||
| Net interest margin (FTE) | 4.84 | % | 5.34 | % | 4.70 | % | 4.67 | % | 4.77 | % | 4.83 | % | 4.76 | % | ||||||||
| Efficiency ratio (1) | 66.2 | % | 59.0 | % | 67.3 | % | 81.5 | % | 82.0 | % | 69.0 | % | 67.6 | % | ||||||||
| (1) Efficiency ratio is calculated by dividing noninterest expense less transaction-related costs by the sum of net interest income and noninterest income, less gains or losses on sale of securities and consolidation and the fair value adjustment on the equity investment in Sound Bank |
Contact: Eric Bergevin, 252-482-4400
RALEIGH, N.C., Nov. 01, 2019 (GLOBE NEWSWIRE) — West Town Bancorp, Inc. (OTC PINK: WTWB) (the “Company” or “West Town”), the financial holding company for West Town Bank & Trust, announced today its financial results for the three months ended September 30, 2019. Highlights include the following:
Third quarter net income of $2.15 million or $0.95 per diluted share, compared to $1.03 million or $0.33 per diluted share for the third quarter of 2018.
As previously announced, on May 6, 2019 Sound Bank, formerly a wholly owned subsidiary of West Town, completed a recapitalization that resulted in a significant reduction in West Town’s ownership position in the bank, which, effective October 1, 2019, changed its name to Dogwood State Bank. Due to the reduction in West Town’s ownership position, the financial results for the Company for the third quarter of 2019 are deconsolidated from the financial results of Sound Bank. Therefore, on a comparative basis, the Company’s financial results for the third quarter of 2019 do not include any operating impact from Sound Bank whereas the financial results for the third quarter of 2018 are impacted by the performance of Sound Bank.
Eric Bergevin, President and CEO, commented, “We are pleased with the results of our first full quarter since the Sound Bank recapitalization. The Company was able to deliver net income which, excluding past fair value adjustments and gains on consolidation, showed significant improvement over previous pre-recapitalization quarters, and we were able to do so with a smaller asset base and reduced outstanding share levels as a result of our recent stock repurchase program. This resulted in a strong improvement in our earnings per share. Windsor had another good quarter with $2.4 million in revenue, driven by a 6th consecutive quarter of increased servicing revenue. In addition, our government guaranteed lending department originated loan commitments of $22.9 million and earned $983,000 in revenue for the third quarter. Finally, given the strong liquidity position of the Company following the divestiture of our controlling interest in Sound Bank, we believe the share repurchases we made were an effective use of our excess cash, resulting in an accretive impact on our earnings per share this quarter and, we anticipate, in future periods.”
During the third quarter of 2019, the Company repurchased 574,919 shares of its voting and nonvoting common stock and all of its outstanding warrants. In addition, the Company paid off a $1.9 million line of credit balance while keeping the line available for future use if needed.
At September 30, 2019, the Company’s total assets were $309.3 million, net loans held for investment were $211.8 million, loans held for sale were $14.0 million, total deposits were $231.9 million and total shareholder’s equity was $66.5 million. Compared with September 30, 2018, total assets decreased $242.2 million or 44%, loans held for investment decreased $95.5 million or 31%, loans held for sale decreased $1.9 million or 12%, total deposits decreased $168.2 million or 42%, and total shareholders’ equity decreased $9.9 million or 13%. The decreases in assets, loans and deposits were a result of the Sound Bank recapitalization and elimination of Sound Bank from the consolidated financials as of May 6, 2019. The decrease in total shareholders’ equity resulted from the Company’s stock repurchase program partially offset by an increase in retained earnings.
At September 30, 2019, the regulatory capital ratios of West Town Bank & Trust exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.
| “Well Capitalized” Minimums | West Town Bank & Trust | |||
| Tier 1 common equity ratio | 6.50 | % | 15.32 | % |
| Tier 1 risk-based capital ratio | 8.00 | % | 15.32 | % |
| Total risk-based capital ratio | 10.00 | % | 16.58 | % |
| Tier 1 leverage ratio | 5.00 | % | 13.09 | % |
The Company’s book value per common share increased from $25.31 at September 30, 2018 to $29.86 at September 30, 2019. The Company’s tangible book value per common share (a non-GAAP financial measure) increased from $15.30 at September 30, 2018 to $20.57 at September 30, 2019 due primarily to the gain on deconsolidation of Sound Bank and the subsequent removal of the intangible assets associated with Sound Bank from the consolidated financial statements.
The Company’s nonperforming assets to total assets ratio increased 91 basis points from 1.30% at September 30, 2018 to 2.21% at September 30, 2019 primarily due to the removal of Sound Bank from the consolidated financial statements. Nonaccrual loans decreased $993,000 as of September 30, 2019 as compared to the prior year while foreclosed assets increased $1.2 million compared to September 30, 2018.
The Company recorded a $200,000 provision for loan losses during the third quarter of 2019 as compared to a provision of $789,000 in third quarter 2018. The Company recorded $138,000 in net charge-offs during the third quarter 2019 with the remaining provision expense due to volume growth.
| (Dollars in thousands) | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | ||||||||||
| Nonaccrual loans – originated | $ | 4,813 | $ | 3,290 | $ | 4,666 | $ | 6,538 | $ | 5,806 | |||||
| Nonaccrual loans – acquired | – | – | 262 | 272 | 280 | ||||||||||
| Foreclosed assets – originated | 2,028 | 2,069 | 2,493 | 723 | 796 | ||||||||||
| 90 days past due and still accruing – originated | – | – | 407 | 67 | 3 | ||||||||||
| 90 days past due and still accruing – acquired | – | – | 421 | 251 | 280 | ||||||||||
| Total nonperforming assets | 6,841 | 5,359 | 8,249 | 7,851 | 7,165 | ||||||||||
| Total nonperforming assets – originated | 6,841 | 5,359 | 7,566 | 7,328 | 6,605 | ||||||||||
| Net charge-offs | $ | 138 | $ | 200 | $ | 58 | $ | 334 | $ | 725 | |||||
| Annualized net charge-offs to total average portfolio loans | 0.25 | % | 0.27 | % | 0.05 | % | 0.31 | % | 0.68 | % | |||||
| Ratio of total nonperforming assets to total assets | 2.21 | % | 1.77 | % | 1.40 | % | 1.41 | % | 1.30 | % | |||||
| Ratio of total nonperforming loans to total net portfolio loans | 2.31 | % | 1.57 | % | 1.38 | % | 1.74 | % | 1.56 | % | |||||
| Ratio of total allowance for loan losses to total portfolio loans | 1.64 | % | 1.62 | % | 0.98 | % | 0.97 | % | 0.95 | % |
Net interest income for the three months ended September 30, 2019 decreased $2.4 million or 46% in comparison to the third quarter 2018, primarily due to the deconsolidation of Sound Bank from the consolidated financial statements as of May 6, 2019. The net interest margin decreased from 4.45% for the third quarter 2018 to 4.39% for the third quarter 2019. The margin compression is largely related to the increase in the cost of funds from 1.18% to 1.80%, due primarily to the deconsolidation of Sound Bank from the Company’s consolidated financial statements and the inclusion of the $9,990,000 resulting equity investment in Sound Bank in the Company’s investment portfolio, which reduced the Company’s average yield on assets and net interest margin by approximately 23 basis points and 18 basis points, respectively, due to the lack of dividend income.
| Three Months Ended | Year-to-Date | ||||||||||||||
| (Dollars in thousands) | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 9/30/19 | 9/30/18 | ||||||||
| Average balances: | |||||||||||||||
| Loans | $ | 220,939 | $ | 297,501 | $ | 435,583 | $ | 424,758 | $ | 426,160 | $ | 317,221 | $ | 436,189 | |
| Investment securities | 21,111 | 20,960 | 21,119 | 21,060 | 15,377 | 21,063 | 13,575 | ||||||||
| Interest-bearing balances and other | 16,801 | 47,025 | 54,690 | 41,472 | 28,481 | 39,367 | 25,527 | ||||||||
| Total interest-earning assets | 258,851 | 365,486 | 511,392 | 487,290 | 470,018 | 377,651 | 475,291 | ||||||||
| Noninterest deposits | 47,199 | 75,643 | 112,836 | 96,068 | 90,073 | 78,319 | 85,324 | ||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Interest-bearing deposits | 170,390 | 234,603 | 338,682 | 319,900 | 294,502 | 247,275 | 296,315 | ||||||||
| Borrowed funds | 6,452 | 17,204 | 37,852 | 50,792 | 63,356 | 20,387 | 72,697 | ||||||||
| Total interest-bearing liabilities | 176,842 | 251,807 | 376,534 | 370,692 | 357,858 | 267,662 | 369,012 | ||||||||
| Total assets | 300,011 | 416,840 | 576,640 | 553,855 | 536,172 | 430,151 | 536,869 | ||||||||
| Common shareholders’ equity | 68,448 | 82,090 | 78,698 | 77,817 | 77,129 | 76,375 | 72,659 | ||||||||
| Tangible common equity (1) | 47,636 | 57,825 | 48,918 | 47,695 | 46,667 | 51,456 | 51,408 | ||||||||
| Interest income/expense: | |||||||||||||||
| Loans | $ | 3,698 | $ | 4,607 | $ | 6,523 | $ | 6,379 | $ | 6,329 | $ | 14,828 | $ | 18,942 | |
| Investment securities | 76 | 100 | 167 | 171 | 111 | 343 | 280 | ||||||||
| Interest-bearing balances and other | 105 | 241 | 356 | 248 | 170 | 702 | 416 | ||||||||
| Total interest income | 3,879 | 4,948 | 7,046 | 6,798 | 6,610 | 15,873 | 19,638 | ||||||||
| Deposits | 942 | 1,104 | 1,432 | 1,169 | 906 | 3,478 | 2,492 | ||||||||
| Borrowings | 72 | 172 | 330 | 396 | 431 | 574 | 1,283 | ||||||||
| Total interest expense | 1,014 | 1,276 | 1,762 | 1,565 | 1,337 | 4,052 | 3,775 | ||||||||
| Net interest income | $ | 2,865 | $ | 3,672 | $ | 5,284 | $ | 5,233 | $ | 5,273 | $ | 11,821 | $ | 15,863 | |
| (1) Non-GAAP financial measure. Tangible common equity is calculated by subtracting intangible assets from common shareholders’ equity |
| Three Months Ended | Year-to-Date | ||||||||||||||
| 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 9/30/19 | 9/30/18 | |||||||||
| Average yields and costs: | |||||||||||||||
| Loans | 6.64 | % | 6.21 | % | 6.07 | % | 5.96 | % | 5.89 | % | 6.25 | % | 5.76 | % | |
| Investment securities | 1.44 | % | 1.91 | % | 3.16 | % | 3.25 | % | 2.89 | % | 2.17 | % | 2.65 | % | |
| Interest-bearing balances and other | 2.48 | % | 2.06 | % | 2.64 | % | 2.37 | % | 2.37 | % | 2.38 | % | 2.07 | % | |
| Total interest-earning assets | 5.95 | % | 5.43 | % | 5.59 | % | 5.53 | % | 5.58 | % | 5.61 | % | 5.50 | % | |
| Interest-bearing deposits | 2.19 | % | 1.89 | % | 1.71 | % | 1.45 | % | 1.22 | % | 1.88 | % | 1.08 | % | |
| Borrowed funds | 4.43 | % | 4.01 | % | 3.54 | % | 3.09 | % | 2.70 | % | 3.76 | % | 2.22 | % | |
| Total interest-bearing liabilities | 2.27 | % | 2.03 | % | 1.90 | % | 1.67 | % | 1.48 | % | 2.02 | % | 1.31 | % | |
| Cost of funds | 1.80 | % | 1.56 | % | 1.46 | % | 1.33 | % | 1.18 | % | 1.57 | % | 1.07 | % | |
| Net interest margin | 4.39 | % | 4.03 | % | 4.19 | % | 4.26 | % | 4.45 | % | 4.18 | % | 4.47 | % |
Noninterest income for the three months ended September 30, 2019 was $4.6 million, an increase of $685,000 as compared to the same prior year period. Specific items to note include:
Noninterest expense for the third quarter 2019 was $4.4 million, a decrease of $2.6 million or 37%, from $7.0 million for the third quarter 2018. The decreases in compensation, occupancy, data processing, communications and other operating expenses are primarily related to the deconsolidation of Sound Bank from the consolidated financial statements as of May 6, 2019. Also impacting noninterest expenses for the quarter were decreased loan and legal related expenses pertaining to the guaranteed loan portfolio as the Company was able to recapture some of its previously expensed costs due to pari passu loss sharing and expense sharing agreements resulting in a negative expense for the quarter, which is nonrecurring.
West Town Bancorp, Inc. is a financial holding company based in Raleigh, NC. The Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its two full-service offices located in the greater Chicago area. The Company is also the parent company of: Windsor Advantage, LLC, a loan servicing company; West Town Insurance Agency, Inc., an insurance agency; Patriarch, LLC, a real estate management company; SBA Loan Documentation Services, LLC, a loan documentation origination company; and Glenwood Structured Finance, LLC, a loan broker and large loan syndication company. The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.
For more information, visit https://www.westtownbank.com/
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Company’s acquisition and divesture activities; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees, and the impact of competition from traditional or new sources. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.
| Ending Balance | ||||||||||||||||||
| (Dollars in thousands, unaudited) | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | |||||||||||||
| Assets | ||||||||||||||||||
| Cash and due from banks | $ | 4,085 | $ | 2,665 | $ | 5,433 | $ | 5,005 | 5,292 | |||||||||
| Interest-bearing deposits | 18,814 | 17,196 | 72,382 | 43,448 | 38,779 | |||||||||||||
| Total cash and cash equivalents | 22,899 | 19,861 | 77,815 | 48,453 | 44,071 | |||||||||||||
| Securities, at fair value | 21,804 | 20,716 | 21,031 | 21,332 | 20,615 | |||||||||||||
| Loans held for sale | 13,965 | 14,902 | 11,037 | 16,552 | 15,819 | |||||||||||||
| Loans held for investment: | ||||||||||||||||||
| Originated loans | 211,647 | 209,492 | 336,505 | 322,038 | 307,166 | |||||||||||||
| Acquired loans, net | – | – | 81,978 | 88,556 | 101,311 | |||||||||||||
| Allowance for loan and lease losses | (3,462 | ) | (3,400 | ) | (4,115 | ) | (4,000 | ) | (3,900 | ) | ||||||||
| Net loans held for investment | 208,185 | 206,092 | 414,368 | 406,594 | 404,577 | |||||||||||||
| Premises and equipment, net | 4,795 | 4,832 | 12,099 | 12,166 | 12,263 | |||||||||||||
| Foreclosed assets | 2,028 | 2,069 | 2,493 | 723 | 796 | |||||||||||||
| Servicing assets | 3,053 | 3,220 | 3,619 | 3,952 | 4,280 | |||||||||||||
| Bank owned life insurance | 4,993 | 4,964 | 9,090 | 9,034 | 8,977 | |||||||||||||
| Accrued interest receivable | 1,079 | 1,196 | 1,637 | 1,637 | 1,758 | |||||||||||||
| Goodwill | 12,721 | 12,721 | 19,737 | 19,745 | 19,745 | |||||||||||||
| Other intangible assets, net | 7,968 | 8,154 | 9,827 | 10,157 | 10,493 | |||||||||||||
| Other assets | 5,779 | 4,638 | 8,066 | 4,979 | 8,100 | |||||||||||||
| Total assets | $ | 309,269 | $ | 303,365 | $ | 590,819 | $ | 555,324 | $ | 551,494 | ||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||
| Liabilities | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Noninterest bearing | $ | 54,380 | $ | 46,068 | $ | 128,435 | $ | 97,777 | $ | 94,829 | ||||||||
| Interest-bearing | 177,472 | 164,619 | 345,581 | 335,140 | 305,257 | |||||||||||||
| Total deposits | 231,852 | 210,687 | 474,016 | 432,917 | 400,086 | |||||||||||||
| Borrowings | 2,382 | 5,868 | 26,294 | 33,781 | 65,667 | |||||||||||||
| Accrued interest payable | 424 | 433 | 927 | 868 | 550 | |||||||||||||
| Other liabilities | 8,092 | 7,562 | 9,860 | 10,189 | 8,746 | |||||||||||||
| Total liabilities | 242,750 | 224,550 | 511,097 | 477,755 | 475,049 | |||||||||||||
| Shareholders’ equity: | ||||||||||||||||||
| Common stock, voting | 2,206 | 2,674 | 2,749 | 2,686 | 2,666 | |||||||||||||
| Common stock, non-voting | 22 | 129 | 329 | 329 | 329 | |||||||||||||
| Additional paid in capital | 24,771 | 38,557 | 45,287 | 44,760 | 44,576 | |||||||||||||
| Retained earnings | 39,446 | 37,375 | 31,273 | 29,928 | 29,154 | |||||||||||||
| Accumulated other comprehensive income (loss) | 74 | 80 | 84 | (134 | ) | (280 | ) | |||||||||||
| Total shareholders’ equity | 66,519 | 78,815 | 79,722 | 77,569 | 76,445 | |||||||||||||
| Total liabilities and shareholders’ equity | $ | 309,269 | $ | 303,365 | $ | 590,819 | $ | 555,324 | $ | 551,494 |
| (Dollars in thousands except share | Three Months Ended | Nine Months Ended | ||||||||||||||
| and per share data; unaudited) | 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 9/30/19 | 9/30/18 | |||||||||
| Interest income | ||||||||||||||||
| Loans | $ | 3,698 | $ | 4,607 | $ | 6,523 | $ | 6,379 | $ | 6,329 | $ | 14,828 | $ | 18,942 | ||
| Invesment securities and deposits | 181 | 341 | 523 | 419 | 281 | 1,045 | 696 | |||||||||
| Total interest income | 3,879 | 4,948 | 7,046 | 6,798 | 6,610 | 15,873 | 19,638 | |||||||||
| Interest expense | ||||||||||||||||
| Interest on deposits | 942 | 1,104 | 1,432 | 1,169 | 906 | 3,478 | 2,492 | |||||||||
| Interest on borrowed funds | 72 | 172 | 330 | 396 | 431 | 574 | 1,283 | |||||||||
| Total interest expense | 1,014 | 1,276 | 1,762 | 1,565 | 1,337 | 4,052 | 3,775 | |||||||||
| Net interest income | 2,865 | 3,672 | 5,284 | 5,233 | 5,273 | 11,821 | 15,863 | |||||||||
| Provision for loan losses | 200 | 477 | 173 | 434 | 789 | 850 | 1,519 | |||||||||
| Noninterest income | ||||||||||||||||
| Windsor processing and servicing | ||||||||||||||||
| revenue | 2,391 | 2,581 | 2,086 | 2,116 | 1,791 | 7,058 | 3,474 | |||||||||
| Government lending | 983 | 1,754 | 880 | 1,793 | 1,121 | 3,617 | 8,416 | |||||||||
| Mortgage | 975 | 1,113 | 435 | 359 | 491 | 2,523 | 1,814 | |||||||||
| Bank-owned life insurance | 29 | 44 | 56 | 58 | 59 | 129 | 180 | |||||||||
| Service charge | 23 | 99 | 226 | 228 | 196 | 348 | 637 | |||||||||
| Gain on deconsolidation of Sound Bank | – | 6,635 | – | – | – | 6,635 | – | |||||||||
| Gain on consolidation of Windsor | – | – | – | – | – | – | 4,776 | |||||||||
| Income from Windsor investment | – | – | – | – | – | – | 933 | |||||||||
| Other noninterest | 153 | 92 | 122 | 163 | 211 | 367 | 516 | |||||||||
| Total noninterest income | 4,554 | 12,318 | 3,805 | 4,717 | 3,869 | 20,677 | 20,746 | |||||||||
| Noninterest expense | ||||||||||||||||
| Compensation | 3,199 | 3,385 | 4,261 | 4,689 | 4,245 | 10,845 | 11,561 | |||||||||
| Occupancy and equipment | 343 | 338 | 506 | 536 | 522 | 1,187 | 1,397 | |||||||||
| Loan and special assets | (523 | ) | 510 | 179 | 437 | 67 | 166 | 836 | ||||||||
| Professional services | 432 | 569 | 582 | 511 | 437 | 1,583 | 1,028 | |||||||||
| Data processing | 161 | 198 | 345 | 381 | 326 | 704 | 964 | |||||||||
| Communications | 33 | 110 | 226 | 208 | 191 | 369 | 629 | |||||||||
| Advertising | 51 | 109 | 112 | 135 | 147 | 272 | 619 | |||||||||
| Loss on sale of foreclosed assets | – | 35 | 21 | – | – | 56 | 41 | |||||||||
| Transaction-related expenses | 1 | 916 | 43 | 31 | 5 | 960 | 93 | |||||||||
| Other operating expenses | 681 | 1,040 | 1,179 | 1,259 | 1,013 | 2,900 | 2,995 | |||||||||
| Total noninterest expense | 4,378 | 7,210 | 7,454 | 8,187 | 6,953 | 19,042 | 20,163 | |||||||||
| Income before income taxes | 2,841 | 8,303 | 1,462 | 1,329 | 1,400 | 12,606 | 14,927 | |||||||||
| Income tax expense | 687 | 2,174 | 397 | 373 | 372 | 3,258 | 3,747 | |||||||||
| Net income | $ | 2,154 | $ | 6,129 | $ | 1,065 | $ | 956 | $ | 1,028 | $ | 9,348 | $ | 11,180 | ||
| Basic earnings per common share | $ | 0.97 | $ | 2.03 | $ | 0.35 | $ | 0.31 | $ | 0.34 | $ | 2.58 | $ | 3.76 | ||
| Diluted earnings per common share | $ | 0.95 | $ | 2.00 | $ | 0.34 | $ | 0.30 | $ | 0.33 | $ | 2.47 | $ | 3.60 | ||
| Weighted average common shares | ||||||||||||||||
| outstanding | 2,328 | 2,997 | 3,054 | 3,008 | 2,996 | 2,980 | 2,976 | |||||||||
| Diluted average common shares | ||||||||||||||||
| outstanding | 2,369 | 3,045 | 3,115 | 3,124 | 3,127 | 3,115 | 3,106 |
| Three Months Ended | Year-to-Date | ||||||||||||||||||||||
| 9/30/19 | 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 9/30/19 | 9/30/18 | |||||||||||||||||
| PER COMMON SHARE | |||||||||||||||||||||||
| Basic earnings per common share | $ | 0.97 | $ | 2.03 | $ | 0.35 | $ | 0.31 | $ | 0.34 | $ | 2.58 | $ | 3.76 | |||||||||
| Diluted earnings per common share | $ | 0.95 | $ | 2.00 | $ | 0.34 | $ | 0.30 | $ | 0.33 | $ | 2.47 | $ | 3.60 | |||||||||
| Book value per common share | $ | 29.86 | $ | 28.12 | $ | 25.70 | $ | 25.52 | $ | 25.31 | $ | 29.86 | $ | 25.31 | |||||||||
| Tangible book value per common share | $ | 20.57 | $ | 20.67 | $ | 16.17 | $ | 15.68 | $ | 15.30 | $ | 20.57 | $ | 15.30 | |||||||||
| FINANCIAL RATIOS (ANNUALIZED) | |||||||||||||||||||||||
| Return on average assets | 2.93 | % | 5.98 | % | 0.75 | % | 0.68 | % | 0.76 | % | 2.91 | % | 2.78 | % | |||||||||
| Return on average common shareholders’ equity | 12.49 | % | 30.35 | % | 5.48 | % | 4.87 | % | 5.29 | % | 16.36 | % | 20.56 | % | |||||||||
| Return on tangible common equity | 17.94 | % | 42.51 | % | 8.83 | % | 7.95 | % | 8.40 | % | 24.29 | % | 29.08 | % | |||||||||
| Net interest margin (FTE) | 4.39 | % | 4.03 | % | 4.19 | % | 4.26 | % | 4.45 | % | 4.18 | % | 4.46 | % | |||||||||
| Efficiency ratio (1) | 59.0 | % | 77.1 | % | 82.0 | % | 82.3 | % | 76.1 | % | 69.9 | % | 63.0 | % | |||||||||
| (1) Efficiency ratio is calculated by dividing noninterest expense less transaction-related costs by the sum of net interest income and noninterest income, less gains or losses on sale of securities and consolidation and the fair value adjustment on the equity investment in Sound Bank |
Contact: Eric Bergevin, 252-482-4400
RALEIGH, N.C., July 29, 2019 (GLOBE NEWSWIRE) — West Town Bancorp, Inc. (OTC PINK: WTWB) (the “Company” or “West Town”), the financial holding company for West Town Bank & Trust, announced today its financial results for the three months ended June 30, 2019. Highlights include the following:
Second quarter net income of $6,129,000 or $2.00 per diluted share, compared to $7,671,000 or $2.47 per diluted share for the second quarter of 2018.
As previously announced, on May 6, 2019 Sound Bank, formerly a wholly-owned subsidiary of West Town, completed a recapitalization that resulted in West Town’s ownership position in the bank being significantly diluted. As part of the recapitalization, West Town sold a substantial portion of its interest in Sound Bank through a series of concurrent secondary sales of shares of Sound Bank common stock, which resulted in gross proceeds to West Town of $28,010,000 and a pre-tax gain of approximately $6.6 million. West Town retains an ownership interest in Sound Bank’s voting common stock of approximately 4.9% and a 9.9% total equity interest in Sound Bank.
Eric Bergevin, President and CEO commented, “We are pleased with the positive financial impact of the Sound Bank recapitalization, whereby West Town successfully monetized its investment with an over 20% return on investment in just over one and a half years. The $6.6 million pre-tax gain obviously impacted our financial performance for the second quarter; however, at the same time, we continue to perform on all cylinders. Our government guaranteed lending department originated loan commitments of $65.9 million and earned $1.8 million in revenue for the second quarter, while Windsor turned in a record quarter of $2.6 million in revenue, driven by a 5th consecutive quarter of increased servicing revenue. Additionally, we paid off the Company’s outstanding $1.9 million line of credit balance while keeping the line available and deployed capital from the Sound Bank transaction into a stock repurchase program. As of June 30, 2019, we had completed the repurchase of 103,793 shares of the Company’s voting common stock and 200,000 shares of non-voting common stock.”
At June 30, 2019, the Company’s total assets were $303,365,000, net loans held for investment were $206,092,000, loans held for sale were $14,902,000, total deposits were $210,687,000 and total shareholder’s equity was $78,815,000. Compared with June 30, 2018, total assets decreased $241,123,000 or 44%, loans held for investment decreased $194,983,000 or 49%, loans held for sale decreased $17,092,000 or 53%, total deposits decreased $166,901,000 or 44%, and total shareholders’ equity increased $3,135,000 or 4%. The decreases in assets, loans and deposits were a result of the Sound Bank recapitalization and elimination from the consolidated financials as of May 6, 2019. The increase in total shareholders’ equity resulted from retained earnings, partially offset by the Company’s stock repurchase program.
At June 30, 2019, the regulatory capital ratios of West Town Bank & Trust exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.
“Well Capitalized” Minimums | West Town Bank & Trust | |||
| Tier 1 common equity ratio | 6.5 | % | 15.37 | % |
| Tier 1 risk-based capital ratio | 8.0 | % | 15.37 | % |
| Total risk-based capital ratio | 10.0 | % | 16.62 | % |
| Tier 1 leverage ratio | 5.0 | % | 12.64 | % |
The Company’s book value per common share increased from $25.11 at June 30, 2018 to $28.12 at June 30, 2019. The Company’s tangible book value per common share (a non-GAAP financial measure) increased from $14.96 at June 30, 2018 to $20.67 at June 30, 2019 due primarily to the gain on sale of Sound Bank and the subsequent removal of the intangible assets associated with Sound Bank from the consolidated financial statements.
The Company’s nonperforming assets to total assets ratio increased 46 basis points from 1.31% at June 30, 2018 to 1.77% at June 30, 2019 primarily due to the removal of Sound Bank from the consolidated financial statements. Non-acquired nonaccrual loans decreased $2,943,000 as of June 30, 2019 as compared to the prior year while foreclosed assets increased $2,015,000.
The Company recorded a $477,000 provision for loan losses during the second quarter of 2019 as compared to a provision of $261,000 in second quarter 2018. The Company recorded $200,000 in net charge-offs during the second quarter 2019 with the remaining provision expense due to volume growth.
| Dollars in thousands | Ending Balance | ||||||||||||||
| 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 6/30/18 | |||||||||||
| Nonaccrual loans – originated | $ | 3,290 | $ | 4,666 | $ | 6,538 | $ | 5,806 | $ | 6,233 | |||||
| Nonaccrual loans – acquired | 0 | 262 | 272 | 280 | 292 | ||||||||||
| Foreclosed assets – originated | 2,069 | 2,493 | 723 | 796 | 54 | ||||||||||
| 90 days past due – originated | 0 | 407 | 67 | 3 | 8 | ||||||||||
| 90 days past due – acquired | 0 | 421 | 251 | 280 | 553 | ||||||||||
| Total nonperforming assets | 5,359 | 8,249 | 7,851 | 7,165 | 7,140 | ||||||||||
| Total nonperforming assets – originated | 5,359 | 7,566 | 7,328 | 6,605 | 6,295 | ||||||||||
| Net charge-offs | $ | 200 | $ | 58 | $ | 334 | $ | 725 | $ | 216 | |||||
| Annualized net charge-offs to total average portfolio loans | 0.27 | % | 0.05 | % | 0.31 | % | 0.68 | % | 0.20 | % | |||||
| Ratio of total nonperforming assets to total assets | 1.77 | % | 1.40 | % | 1.41 | % | 1.30 | % | 1.31 | % | |||||
| Ratio of total nonperforming loans to total portfolio loans | 1.57 | % | 1.38 | % | 1.74 | % | 1.56 | % | 1.75 | % | |||||
| Ratio of total allowance for loan losses to total portfolio loans | 1.62 | % | 0.98 | % | 0.97 | % | 0.95 | % | 0.95 | % |
Net interest income for the three months ended June 30, 2019 decreased $1,847,000 or 33% in comparison to the second quarter 2018, primarily due to the removal of Sound Bank from the consolidated financial statements as of May 6, 2019. The net interest margin decreased from 4.68% for the second quarter 2018 to 4.03% for the second quarter 2019. The margin compression is largely related to the increase in the cost of funds from 1.14% to 1.56%, due primarily to the deconsolidation of Sound Bank from the Company’s consolidated financial statements and the inclusion of the $9,990,000 resulting equity investment in Sound Bank in the Company’s investment portfolio, which reduced the Company’s average yield on assets by approximately 10 basis points due to it not earning dividend income.
| Dollars in thousands | Three Months Ended | Year-to-Date | |||||||||||||
| 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 6/30/18 | 6/30/19 | 6/30/18 | |||||||||
| Quarterly average balances: | |||||||||||||||
| Loans | $ | 297,501 | $ | 435,583 | $ | 424,758 | $ | 426,160 | $ | 435,778 | $ | 366,161 | $ | 441,287 | |
| Investment securities | 20,960 | 21,119 | 21,060 | 15,377 | 13,949 | 21,039 | 12,658 | ||||||||
| Interest-bearing balances and other | 47,025 | 54,690 | 41,472 | 28,481 | 23,258 | 50,836 | 24,026 | ||||||||
| Total interest-earning assets | 365,486 | 511,392 | 487,290 | 470,018 | 472,985 | 438,036 | 477,971 | ||||||||
| Noninterest-bearing deposits | 75,643 | 112,836 | 96,068 | 90,073 | 82,971 | 94,137 | 82,910 | ||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Interest-bearing deposits | 234,603 | 338,682 | 319,900 | 294,502 | 292,409 | 286,355 | 297,237 | ||||||||
| Borrowed funds | 17,204 | 37,852 | 50,792 | 63,356 | 78,457 | 27,470 | 77,445 | ||||||||
| Total interest-bearing liabilities | 251,807 | 376,534 | 370,692 | 357,858 | 370,866 | 313,825 | 374,682 | ||||||||
| Total assets | 416,840 | 576,640 | 553,855 | 536,172 | 538,249 | 496,299 | 537,222 | ||||||||
| Common shareholders’ equity | 82,090 | 78,698 | 77,817 | 77,129 | 73,725 | 80,403 | 70,387 | ||||||||
| Tangible common equity (1) | 57,825 | 48,918 | 47,695 | 46,667 | 49,882 | 53,396 | 53,818 |
(1) Non-GAAP financial measure. Tangible common equity is calculated by subtracting intangible assets from common shareholders’ equity.
| Dollars in thousands | Three Months Ended | Year-to-Date | ||||||||||||||||||||
| 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 6/30/18 | 6/30/19 | 6/30/18 | ||||||||||||||||
| Interest Income/Expense: | ||||||||||||||||||||||
| Loans | $ | 4,607 | $ | 6,523 | $ | 6,379 | $ | 6,329 | $ | 6,577 | $ | 11,130 | $ | 12,613 | ||||||||
| Investment securities | 100 | 167 | 171 | 111 | 105 | 267 | 168 | |||||||||||||||
| Interest-bearing balances and other | 241 | 356 | 248 | 170 | 126 | 597 | 247 | |||||||||||||||
| Total interest income | 4,948 | 7,046 | 6,798 | 6,610 | 6,808 | 11,994 | 13,028 | |||||||||||||||
| Deposits | 1,104 | 1,432 | 1,169 | 906 | 815 | 2,536 | 1,586 | |||||||||||||||
| Borrowings | 172 | 330 | 396 | 431 | 474 | 502 | 852 | |||||||||||||||
| Total interest expense | 1,276 | 1,762 | 1,565 | 1,337 | 1,289 | 3,038 | 2,438 | |||||||||||||||
| Net interest income | $ | 3,672 | $ | 5,284 | $ | 5,233 | $ | 5,273 | $ | 5,519 | $ | 8,956 | $ | 10,590 | ||||||||
| Average Yields and Costs: | ||||||||||||||||||||||
| Loans | 6.21 | % | 6.07 | % | 5.96 | % | 5.89 | % | 6.05 | % | 6.13 | % | 5.76 | % | ||||||||
| Investment securities | 1.91 | % | 3.16 | % | 3.25 | % | 2.89 | % | 3.01 | % | 2.54 | % | 2.65 | % | ||||||||
| Interest-bearing balances and other | 2.06 | % | 2.64 | % | 2.37 | % | 2.37 | % | 2.17 | % | 2.37 | % | 2.07 | % | ||||||||
| Total interest-earning assets | 5.43 | % | 5.59 | % | 5.53 | % | 5.58 | % | 5.77 | % | 5.51 | % | 5.50 | % | ||||||||
| Total interest-bearing deposits | 1.89 | % | 1.71 | % | 1.45 | % | 1.22 | % | 1.12 | % | 1.79 | % | 1.08 | % | ||||||||
| Borrowed funds | 4.01 | % | 3.54 | % | 3.09 | % | 2.70 | % | 2.42 | % | 3.69 | % | 2.22 | % | ||||||||
| Total interest-bearing liabilities | 2.03 | % | 1.90 | % | 1.67 | % | 1.48 | % | 1.39 | % | 1.95 | % | 1.31 | % | ||||||||
| Cost of funds | 1.56 | % | 1.46 | % | 1.33 | % | 1.18 | % | 1.14 | % | 1.50 | % | 1.07 | % | ||||||||
| Net interest margin | 4.03 | % | 4.19 | % | 4.26 | % | 4.45 | % | 4.68 | % | 4.12 | % | 4.47 | % |
Noninterest income for the three months ended June 30, 2019 was $12,318,000, a decrease of $38,000 as compared to the same prior year period. Specific items to note include:
Noninterest expense for the second quarter 2019 was $7,210,000, a decrease of $205,000 or 3%, from $7,415,000 for the second quarter 2018. The decreases in compensation, occupancy, data processing, communications and other operating expenses are primarily related to the removal of Sound Bank from the consolidated financial statements as of May 6, 2019. Also impacting noninterest expenses for the quarter were increased legal fees and transaction-related expenses pertaining to the Sound Bank recapitalization.
Following the close of the 2019 second quarter, the Company received approval from the Federal Reserve Bank of Chicago to expand its current stock repurchase program and has since repurchased an additional 436,014 of the Company’s voting common shares and 107,380 of the Company’s non-voting common shares. These most recent share repurchases occurred subsequent to June 30th and are not reflected in the Company’s reported June 30, 2019 financial information. In commenting on the Company’s repurchase activity, Mr. Bergevin said, “We are pleased with the participation in the repurchase program to date and still have capacity to repurchase about an additional $2 million of common stock. Given the strong liquidity position of the Company following the divestiture of our controlling interest in Sound Bank, we believe the share repurchases are an effective use of our excess cash, while also offering additional liquidity options to our shareholders. With the reduction in the number of outstanding shares of Company common stock, we expect the repurchases will be accretive to our earnings per share in future periods.”
West Town Bancorp, Inc. is the financial holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its two full-service offices located in the greater Chicago area. Primary deposit products are checking, savings, and certificate of deposit accounts, and primary lending products are government guaranteed lending, residential mortgage, commercial, and installment loans. The Company is also the parent company of Windsor Advantage, LLC, a loan servicing company, and West Town Insurance Agency, Inc., an insurance agency. The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.
For more information, visit https://www.westtownbank.com/
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Company’s acquisition and divesture activities; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees, and the impact of competition from traditional or new sources. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.
| Dollars in thousands; unaudited | Ending Balance | ||||||||||||||
| 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 6/30/18 | |||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 2,665 | $ | 5,433 | $ | 5,005 | $ | 5,292 | $ | 4,961 | |||||
| Interest-bearing deposits | 17,196 | 72,382 | 43,448 | 38,779 | 27,532 | ||||||||||
| Total cash and cash equivalents | 19,861 | 77,815 | 48,453 | 44,071 | 32,493 | ||||||||||
| Securities available for sale, at fair value | 20,716 | 21,031 | 21,332 | 20,615 | 13,769 | ||||||||||
| Loans held for sale | 14,902 | 11,037 | 16,552 | 15,819 | 31,994 | ||||||||||
| Loans held for investment: | |||||||||||||||
| Originated loans | 209,492 | 336,505 | 322,038 | 307,166 | 294,471 | ||||||||||
| Acquired loans, net | 0 | 81,978 | 88,556 | 101,311 | 110,439 | ||||||||||
| Allowance for loan losses | (3,400 | ) | (4,115 | ) | (4,000 | ) | (3,900 | ) | (3,835 | ) | |||||
| Net loans held for investment | 206,092 | 414,368 | 406,594 | 404,577 | 401,075 | ||||||||||
| Premises and equipment, net | 4,832 | 12,099 | 12,166 | 12,263 | 11,586 | ||||||||||
| Foreclosed assets | 2,069 | 2,493 | 723 | 796 | 54 | ||||||||||
| Servicing assets | 3,220 | 3,619 | 3,952 | 4,280 | 4,598 | ||||||||||
| Bank owned life insurance | 4,964 | 9,090 | 9,034 | 8,977 | 8,917 | ||||||||||
| Accrued interest receivable | 1,196 | 1,637 | 1,637 | 1,758 | 1,776 | ||||||||||
| Goodwill | 12,721 | 19,737 | 19,745 | 19,745 | 19,745 | ||||||||||
| Other intangible assets, net | 8,154 | 9,827 | 10,157 | 10,493 | 10,837 | ||||||||||
| Other assets | 4,638 | 8,066 | 4,979 | 8,100 | 7,644 | ||||||||||
| Total assets | $ | 303,365 | $ | 590,819 | $ | 555,324 | $ | 551,494 | $ | 544,488 | |||||
| Liabilities and Shareholders’ Equity | |||||||||||||||
| Liabilities | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing | $ | 46,068 | $ | 128,435 | $ | 97,777 | $ | 94,829 | $ | 88,172 | |||||
| Interest-bearing | 164,619 | 345,581 | 335,140 | 305,257 | 289,416 | ||||||||||
| Total deposits | 210,687 | 474,016 | 432,917 | 400,086 | 377,588 | ||||||||||
| Short term borrowings | 1,968 | 20,000 | 27,000 | 58,400 | 73,400 | ||||||||||
| Long term borrowings | 3,900 | 6,294 | 6,781 | 7,267 | 7,754 | ||||||||||
| Accrued interest payable | 433 | 927 | 868 | 550 | 466 | ||||||||||
| Other liabilities | 7,562 | 9,860 | 10,189 | 8,746 | 9,600 | ||||||||||
| Total liabilities | 224,550 | 511,097 | 477,755 | 475,049 | 468,808 | ||||||||||
| Shareholders’ equity | |||||||||||||||
| Preferred stock | 0 | 0 | 0 | 0 | 0 | ||||||||||
| Common stock, voting | 2,674 | 2,749 | 2,686 | 2,666 | 2,660 | ||||||||||
| Common stock, non-voting | 129 | 329 | 329 | 329 | 329 | ||||||||||
| Additional paid-in capital | 38,557 | 45,287 | 44,760 | 44,576 | 44,429 | ||||||||||
| Retained earnings | 37,375 | 31,273 | 29,928 | 29,154 | 28,436 | ||||||||||
| Accumulated other comprehensive income (loss) | 80 | 84 | (134 | ) | (280 | ) | (174 | ) | |||||||
| Total shareholders’ equity | 78,815 | 79,722 | 77,569 | 76,445 | 75,680 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 303,365 | $ | 590,819 | $ | 555,324 | $ | 551,494 | $ | 544,488 |
| Dollars in thousands, except per share data; unaudited | Three Months Ended | Year-to-Date | ||||||||||||||
| 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 6/30/18 | 6/30/19 | 6/30/18 | ||||||||||
| Interest income | ||||||||||||||||
| Interest and fees on loans | $ | 4,607 | $ | 6,523 | $ | 6,379 | $ | 6,329 | $ | 6,577 | $ | 11,130 | $ | 12,613 | ||
| Investment securities & deposits | 341 | 523 | 419 | 281 | 231 | 864 | 415 | |||||||||
| Total interest income | 4,948 | 7,046 | 6,798 | 6,610 | 6,808 | 11,994 | 13,028 | |||||||||
| Interest expense | ||||||||||||||||
| Interest on deposits | 1,104 | 1,432 | 1,169 | 906 | 815 | 2,536 | 1,586 | |||||||||
| Interest on borrowed funds | 172 | 330 | 396 | 431 | 474 | 502 | 852 | |||||||||
| Total interest expense | 1,276 | 1,762 | 1,565 | 1,337 | 1,289 | 3,038 | 2,438 | |||||||||
| Net interest income | 3,672 | 5,284 | 5,233 | 5,273 | 5,519 | 8,956 | 10,590 | |||||||||
| Provision for loan losses | 477 | 173 | 434 | 789 | 261 | 650 | 730 | |||||||||
| Noninterest income | ||||||||||||||||
| Government lending revenue | 1,754 | 880 | 1,793 | 1,121 | 4,241 | 2,634 | 7,295 | |||||||||
| Mortgage revenue | 1,113 | 435 | 359 | 491 | 868 | 1,548 | 1,323 | |||||||||
| Service charge revenue | 99 | 226 | 228 | 196 | 222 | 325 | 441 | |||||||||
| Bank owned life insurance income | 44 | 56 | 58 | 59 | 64 | 100 | 121 | |||||||||
| Windsor revenue | 2,581 | 2,086 | 2,116 | 1,791 | 1,683 | 4,667 | 2,616 | |||||||||
| Income from Windsor investment | 0 | 0 | 0 | 0 | 369 | 0 | 0 | |||||||||
| Fair value adjustment on equity investment | 6,635 | 0 | 0 | 0 | 0 | 6,635 | 0 | |||||||||
| Gain on consolidation of Windsor | 0 | 0 | 0 | 0 | 4,776 | 0 | 4,776 | |||||||||
| Other noninterest income | 92 | 122 | 163 | 211 | 133 | 214 | 305 | |||||||||
| Total noninterest income | 12,318 | 3,805 | 4,717 | 3,869 | 12,356 | 16,123 | 16,877 | |||||||||
| Noninterest expense | ||||||||||||||||
| Compensation | 3,385 | 4,261 | 4,689 | 4,245 | 4,050 | 7,646 | 7,316 | |||||||||
| Occupancy and equipment | 338 | 506 | 536 | 522 | 462 | 844 | 875 | |||||||||
| Loan and special assets | 510 | 179 | 437 | 67 | 407 | 689 | 769 | |||||||||
| Professional services | 569 | 582 | 511 | 437 | 317 | 1,151 | 591 | |||||||||
| Data processing | 198 | 345 | 381 | 326 | 325 | 543 | 638 | |||||||||
| Communication | 110 | 226 | 208 | 191 | 203 | 336 | 438 | |||||||||
| Advertising | 109 | 112 | 135 | 147 | 418 | 221 | 472 | |||||||||
| Loss on sale of foreclosed assets | 35 | 21 | 0 | 0 | 41 | 56 | 41 | |||||||||
| Transaction-related expenses | 916 | 43 | 31 | 5 | 74 | 959 | 88 | |||||||||
| Other operating expense | 1,040 | 1,179 | 1,259 | 1,013 | 1,118 | 2,219 | 1,982 | |||||||||
| Total noninterest expense | 7,210 | 7,454 | 8,187 | 6,953 | 7,415 | 14,664 | 13,210 | |||||||||
| Income before income taxes | 8,303 | 1,462 | 1,329 | 1,400 | 10,199 | 9,765 | 13,527 | |||||||||
| Income tax expense | 2,174 | 397 | 373 | 372 | 2,528 | 2,571 | 3,375 | |||||||||
| Net income | $ | 6,129 | $ | 1,065 | $ | 956 | $ | 1,028 | $ | 7,671 | $ | 7,194 | $ | 10,152 | ||
| Basic earnings per common share | $ | 2.03 | $ | 0.35 | $ | 0.31 | $ | 0.34 | $ | 2.58 | $ | 2.38 | $ | 3.42 | ||
| Diluted earnings per common share | $ | 2.00 | $ | 0.34 | $ | 0.30 | $ | 0.33 | $ | 2.47 | $ | 2.34 | $ | 3.27 | ||
| Weighted average common shares outstanding | 2,997 | 3,054 | 3,008 | 2,996 | 2,980 | 3,025 | 2,966 | |||||||||
| Diluted average common shares outstanding | 3,045 | 3,115 | 3,124 | 3,127 | 3,115 | 3,080 | 3,101 |
| Three Months Ended | Year-to-Date | |||||||||||||||||||||
| 6/30/19 | 3/31/19 | 12/31/18 | 9/30/18 | 6/30/18 | 6/30/19 | 6/30/18 | ||||||||||||||||
| PER COMMON SHARE | ||||||||||||||||||||||
| Basic earnings per common share | $ | 2.03 | $ | 0.35 | $ | 0.31 | $ | 0.34 | $ | 2.58 | $ | 2.38 | $ | 3.42 | ||||||||
| Diluted earnings per common share | $ | 2.00 | $ | 0.34 | $ | 0.30 | $ | 0.33 | $ | 2.47 | $ | 2.34 | $ | 3.27 | ||||||||
| Book value per common share | $ | 28.12 | $ | 25.70 | $ | 25.52 | $ | 25.31 | $ | 25.11 | $ | 28.12 | $ | 25.11 | ||||||||
| Tangible book value per common share | $ | 20.67 | $ | 16.17 | $ | 15.68 | $ | 15.30 | $ | 14.96 | $ | 20.67 | $ | 14.96 | ||||||||
| FINANCIAL RATIOS (ANNUALIZED) | ||||||||||||||||||||||
| Return on average assets | 5.98 | % | 0.75 | % | 0.68 | % | 0.76 | % | 5.72 | % | 2.96 | % | 3.81 | % | ||||||||
| Return on average common shareholders’ equity | 30.35 | % | 5.48 | % | 4.87 | % | 5.29 | % | 41.73 | % | 18.25 | % | 29.08 | % | ||||||||
| Return on tangible common equity | 42.51 | % | 8.83 | % | 7.95 | % | 8.74 | % | 61.68 | % | 27.17 | % | 38.04 | % | ||||||||
| Net interest margin (FTE) | 4.03 | % | 4.19 | % | 4.26 | % | 4.45 | % | 4.68 | % | 4.12 | % | 4.47 | % | ||||||||
| Efficiency ratio(1) | 77.1 | % | 82.0 | % | 82.3 | % | 76.1 | % | 56.6 | % | 79.5 | % | 58.2 | % |
(1) Efficiency ratio is calculated by dividing noninterest expense by the sum of net interest income and noninterest income, less gains or losses on sale of securities or consolidation.
Contact: Eric Bergevin, 252-482-4400
RALEIGH, N.C., May 17, 2019 (GLOBE NEWSWIRE) — West Town Bancorp, Inc. (OTC PINK: WTWB) (the “Company”), parent company of West Town Bank & Trust, announced today that its Board of Directors has authorized a new stock repurchase program under which the Company may repurchase up to 9.9% of its currently issued and outstanding common stock, or approximately 307,079 shares based on the 3,101,810 shares of Company common stock currently outstanding.
Purchases made pursuant to the program will be made in either the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price, and amount of any repurchase will be determined by the Company in its discretion and will be subject to economic and market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, applicable legal requirements, and other factors. The Company has no obligation to repurchase any shares under this program, and the program may be terminated, suspended, or discontinued at any time.
In commenting on the repurchase program, Eric Bergevin, President and CEO of the Company, said, “The Board of Directors believes the repurchase program is an important option within the Company’s overall capital management strategy and reflects their commitment to maximize shareholder returns and proactively manage capital. The action reaffirms the confidence the Board of Directors has in the Company’s financial strength and gives the Company additional opportunity to provide liquidity to shareholders and increase shareholder value.”
West Town Bancorp, Inc. is the financial holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its two full-service offices located in the greater Chicago area. Primary deposit products are checking, savings, and certificate of deposit accounts, and primary lending products are government guaranteed, residential mortgage, commercial, and installment loans. The Company is also the parent company of Windsor Advantage, LLC, a loan servicing company, and West Town Insurance Agency, Inc., an insurance agency. The Company is registered with, and supervised by, the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.
For more information, visit https://www.westtownbank.com/
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; fluctuations in the Company’s stock price that may make purchases under the repurchase program less desirable; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values that affect the Company’s financial condition; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Company’s acquisition and divesture activities; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees, and the impact of competition from traditional or new sources. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.
Contact: Eric Bergevin, (252) 482-4400
