Gateway Financial (NASDAQ:GBTS)
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Gateway Financial Holdings Reports Operating Results for the Quarter and Nine
Months Ended September 30, 2003
ELIZABETH CITY, N.C., Oct. 27 /PRNewswire-FirstCall/ -- Gateway Financial
Holdings, Inc. , the holding company for Gateway Bank & Trust Co. reported
financial results today for the quarter and nine months ended September 30,
2003. Net income for the third quarter of 2003 totaled $330 thousand compared
to $180 thousand for the third quarter of 2002, an increase of $150 thousand or
83.3%.
Other significant events during the quarter include:
-- Recorded its eleventh consecutive quarter of profitable operations;
-- Earned $0.10 per share (diluted) for the quarter, a 67% increase over
the prior year's quarter;
-- Exceeded $300 million in total assets, ending the quarter at
$303.0 million;
-- Opened our tenth financial center on August 15, 2003 via the
acquisition of the Elizabeth City-Southgate banking office of Central
Carolina Bank which included $16.5 million in deposits; and
-- Completed the issuance of $8.0 million trust preferred securities on
August 1, 2003.
Net income for the first nine months of 2003 was $764 thousand or $0.24 per
share (diluted) compared to $454 thousand and $0.14 per share (diluted) for the
first nine months of 2002. Earnings per share (diluted) increased 71.4% over
the prior year period.
Net interest income for the quarter ended September 30, 2003 totaled $2.1
million, an increase of $672 thousand or 46.1% over $1.5 million reported for
the quarter ended September 30, 2002. Non-interest income for the three months
ended September 30, 2003 was $1.2 million, an increase of $519 thousand or 71.5%
over $726 thousand reported for the three months ended September 30, 2002.
These were partially offset by a 47.1% increase in Non-interest expense.
Non-interest expense for the quarter ended September 30, 2003 totaled $2.7
million, an increase of $871 thousand over $1.8 million reported for the quarter
ended September 30, 2002.
Net interest income for the nine months ended September 30, 2003 totaled $5.8
million, an increase of $1.9 million or 47.6% over $3.9 million reported for the
nine months ended September 30, 2002. Non-interest income for the three
quarters ended September 30, 2003 was $3.3 million, an increase of $1.4 million
or 72.7% over $1.9 million reported for the three quarters ended September 30,
2002. These were partially offset by a 47.9% increase in Non- interest expense.
Non-interest expense for the nine months ended September 30, 2003 totaled $7.5
million, an increase of $2.4 million over $5.0 million reported for the nine
months ended September 30, 2002.
At September 30, 2003 total assets were $303.0 million, an increase of $91.9
million or 43.5% over $211.2 million reported for September 30, 2002. Loans
increased $75.4 million or 52.5% to $218.9 million at September 30, 2003 from
$143.6 million at September 30, 2002. Deposits were reported at $216.1 million
on September 30, 2003, up $57.9 million or 36.6% from a year earlier. Borrowings
totaled $53.2 million on September 30, 2003, an increase of $24.8 million or
87.3% from September 30, 2002.
At quarter-end, the bank's allowance for loan losses equaled $2.6 million or
1.18% of total loans and 205% of non-performing loans. At quarter-end,
non-performing loans and non-performing assets totaled $1.3 million or 0.58% of
total loans 0.42% of total assets.
Stockholders' equity increased $719 thousand or 3.0% from $23.8 million reported
on September 30, 2002 to $24.5 million. Stockholders' equity equaled 8.1% of
total assets on September 30, 2003. Regulatory capital ratios are all well in
excess of the "well-capitalized" threshold.
D. Ben Berry, Chairman, President and CEO stated, "We are pleased that Gateway
Financial Holdings continues to post improved financial performance while making
significant investments in our franchise. Our increased net interest income is
due to both growth and an improving net interest margin. Our non-interest income
is benefiting from significant increases in service changes, insurance
operations and mortgage banking. Non-interest expense increases are primarily
a result of our continued branch expansion. We expect these "investments" to
benefit earnings in future periods. Despite the costs associated with these
franchise enhancements, we believe our continued expansion is the best way to
build shareholder value."
Gateway Financial Holdings, Inc. is the parent company of Gateway Bank & Trust
Co. Gateway Bank & Trust Co. is a full-service community bank with offices in
Elizabeth City, Edenton, Kitty Hawk, Plymouth and Roper, North Carolina, and in
Chesapeake and Virginia Beach, Virginia. The bank also provides insurance
through its Gateway Insurance Services, Inc. subsidiary and brokerage services
through its Gateway Investment Services, Inc. subsidiary.
Statements contained in this news release, which are not historical facts, are
forward looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. Amounts herein could vary as a result of market
and other factors. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially from those
currently anticipated due to a number of factors, which include, but are not
limited to, factors discussed in documents filed by the Company with the
Securities and Commission from time to time. Such forward- looking statements
may be identified by the use of such words as "believe," "expect," "anticipate,"
"should," "planned," "estimated," and "potential." Examples of forward-looking
statements include, but are not limited to, estimates with respect to the
financial condition, expected or anticipated revenue, results of operations and
business of the Company that are subject to various factors which could cause
actual results to differ materially from these estimates. These factors
include, but are not limited to, general economic conditions, changes in
interest rates, deposit flows, loan demand, real estate values, and competition;
changes in accounting principals, policies, or guidelines; changes in
legislation or regulation; and other economic, competitive, governmental,
regulatory, and technological factors affecting the Company's operations,
pricing, products and services.
Gateway Financial Holdings, Inc.
Consolidated Condensed Balance Sheets (unaudited) September 30,
2003 2002
Assets (Dollars in thousands)
Cash and cash equivalents:
Cash and due from banks $ 8,170 $ 4,710
Interest-earning deposits with
banks - 2,935
Total cash and cash
equivalents 8,170 7,645
Investment securities available for
sale, at fair value 50,352 45,735
Loans receivable 218,917 143,560
Allowance for loan losses 2,583 1,639
Net loans receivable 216,334 141,921
Bank premises & equipment, net 11,859 9,449
Cash surrender value life insurance 7,018 -
Goodwill & Intangibles 3,672 2,274
Other assets 5,628 4,163
Total assets $303,033 $211,187
Liabilities and Shareholders' Equity
Deposits:
Demand deposits $ 27,869 $ 18,195
Savings, Money market & NOW 66,483 32,683
Time deposits over $100,000 37,554 41,087
Other time deposits 84,170 66,216
Total deposits 216,076 158,181
Federal Home Loan Bank Advances 41,000 28,400
Federal funds purchased 12,206 -
Trust preferred securities 8,000 -
Accrued interest payable and other
liabilities 1,245 791
Total liabilities 278,527 187,372
Shareholders' Equity
Common stock, $-0- par,
10,000,000 authorized,
3,166,965 issued and
outstanding at 9/30/03
3,155,880 issued and
outstanding at 9/30/02 - -
Paid-in capital 24,890 24,788
Retained earnings (538) (1,475)
Accumulated other comprehensive
income (loss) 154 502
Total shareholders' equity 24,506 23,815
Total liabilities and
shareholders' equity $303,033 $211,187
Gateway Financial Holdings, Inc.
Consolidated Condensed Statement of Operations (unaudited)
Nine Months Ended, September 30,
2003 2002
(Dollars in thousands, except per share data)
Interest Income 9,724 7,438
Interest Expense 3,946 3,524
Net Interest Income 5,778 3,914
Provision for loan losses 900 355
Net Int Income After Provision 4,878 3,559
Service charges on deposit
accounts 636 410
Insurance operations 1,113 954
Mortgage banking operations 712 242
Brokerage operations 147 157
Gain sale of securities 244 166
Other 496 11
Total noninterest Income 3,348 1,940
Personnel costs 4,055 3,006
Occupancy and equipment 1,265 676
Data processing fees 309 366
Other 1,833 997
Total noninterest expense 7,462 5,045
Income Before Income taxes 764 454
Income taxes - -
Net Income 764 454
Net income per common share
Basic and diluted $ 0.24 $ 0.14
Market value per share $10.95 $ 7.20
Book value per share $ 7.74 $ 7.55
Gateway Financial Holdings, Inc.
Consolidated Condensed Statement of Operations (unaudited)
Three Months Ended, September 30,
2003 2002
(Dollars in thousands, except per share data)
Interest Income 3,499 2,708
Interest Expense 1,370 1,251
Net Interest Income 2,129 1,457
Provision for loan losses 325 155
Net Int Income After Provision 1,804 1,302
Service charges on deposit
accounts 243 157
Insurance operations 408 323
Mortgage banking operations 260 104
Brokerage operations 59 37
Gain sale of securities 124 88
Other 151 17
Total noninterest Income 1,245 726
Personnel costs 1,503 1,083
Occupancy and equipment 471 255
Data processing fees 86 135
Other 659 375
Total noninterest expense 2,719 1,848
Income Before Income taxes 330 180
Income taxes - -
Net Income 330 180
Net income per common share
Basic and diluted $ 0.10 $ 0.06
DATASOURCE: Gateway Financial Holdings, Inc.
CONTACT: D. Ben Berry, Chairman, President and CEO, or Mark A. Holmes,
Senior Executive Vice President and CFO, both of Gateway Financial Holdings,
+1-252-334-1511