Northway Financial (NASDAQ:NWFI)
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Northway Financial, Inc. Announces Third Quarter Results And
Declares Quarterly Dividend
BERLIN, N.H., Oct. 26 /PRNewswire-FirstCall/ -- Northway Financial, Inc. (the
"Company") (NASDAQ:NWFI) reported net income for the quarter ended September
30, 2004 of $977,000, or $0.65 per share, compared to $978,000, or $0.65 per
share, for the same quarter in 2003. Net income for the nine months ended
September 30, 2004 was $2,454,000, or $1.64 per share, compared to $2,613,000,
or $1.74 per share, for the nine months ended September 30, 2003, a decrease of
$159,000.
William J. Woodward, President and Chief Executive Officer commented, "On
August 31, 2004, Northway Financial, Inc. implemented its decision to exit from
the indirect automobile lending line of business. This decision was predicated
on the low interest rate environment and competitive pressures of the last
eighteen months. Over the next twenty-four months we expect cash flows from
the remaining indirect automobile portfolio to be redeployed into commercial
loans, residential mortgage loans, consumer loans such as home equity loans and
automobile loans, and the Company's investment portfolio, which in recent years
have generated higher yields for the Company. In addition, management
continues to take steps to reduce overhead expense."
The Company declared a quarterly dividend on October 26, 2004 of $0.17 per
share payable November 10, 2004 to shareholders of record on November 5, 2004.
Net interest and dividend income for the third quarter of 2004 was $5,728,000
compared to $5,629,000 for the third quarter of 2003, an increase of $99,000.
The provision for loan losses for the third quarter of 2004 decreased $90,000
to $120,000, compared to $210,000 for the third quarter of the previous year.
Net securities gains for the quarter decreased $594,000 to $20,000, compared to
$614,000 for the same period last year. Other noninterest income for the
quarter increased $314,000 to $1,423,000 compared to $1,109,000 for the same
period last year. There was no write-down of equity securities for the third
quarter of 2004 compared to a write-down of $65,000 for the same period last
year. Other operating expense was $5,567,000 for the quarter, compared to
$5,541,000 for the same period last year, an increase of $26,000.
Net interest income for the nine months ended September 30, 2004 decreased
$444,000 to $16,970,000, compared to $17,414,000 for the same period last year.
The provision for loan losses for the first nine months of 2004 decreased
$265,000 to $390,000, compared to $655,000 for the first nine months of 2003.
The provision for 2004 was established based upon a review of the adequacy of
the allowance for loan losses. At September 30, 2004 the allowance for loan
losses was 1.08% of total loans, compared to 1.06% at September 30, 2003.
Securities gains for the first nine months of 2004 decreased $111,000 to
$740,000, compared to $851,000 for the same period last year. Other noninterest
income year-to-date increased $354,000 to $3,263,000, compared to $2,909,000
for the same period last year. There was no write-down of equity securities
for the first nine months of 2004 compared to a write- down of $184,000 for the
same period last year. Other operating expense increased $644,000 to
$16,877,000 for the first nine months of 2004, compared to $16,233,000 for the
same period last year.
At September 30, 2004, Northway Financial had total assets of $631,143,000
compared to $620,611,000 at September 30, 2003, an increase of $10,532,000.
Loans, including loans held-for-sale, at September 30, 2004 increased
$11,653,000 to $478,851,000, compared to September 30, 2003. Investments,
including federal funds sold, decreased $354,000 to $100,512,000. Total
deposits were $465,863,000 at September 30, 2004, a decrease of $8,012,000
compared to September 30, 2003. Total borrowings increased $13,002,000 to
$109,255,000. Total equity increased $2,194,000 to $48,864,000.
Northway Financial, Inc., headquartered in Berlin, New Hampshire, is a
multi-bank holding company. Through its subsidiary banks, The Berlin City Bank
and The Pemigewasset National Bank of Plymouth, New Hampshire, the Company
offers a broad range of financial products and services to individuals,
businesses and the public sector from its full service banking offices.
Certain statements in this press release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements can be identified by the use of the words
"expect," "believe," "estimate," "will" and other expressions which predict or
indicate future trends and which do not relate to historical matters.
Forward-looking statements may include, but are not limited to, expectations
regarding the impact on net income of withdrawing from the indirect automobile
lending line of business, expectations for impact of new products on
noninterest income and expense, projections of revenue, income or loss, and
plans related to products or services of the Company and its subsidiaries. Such
forward-looking statements are subject to known and unknown risks,
uncertainties and contingencies, many of which are beyond the control of the
Company. The Company's actual results could differ materially from those
projected in the forward-looking statements as the result of, among other
factors, changes in interest rates, changes in the securities or financial
markets, a deterioration in general economic conditions on a national basis or
in the local markets in which the Company operates, including changes in local
business conditions resulting in rising unemployment and other circumstances
which adversely affect borrowers' ability to service and repay our loans,
changes in loan defaults and charge-off rates, reduction in deposit levels
necessitating increased borrowing to fund loans and investments, the passing of
adverse government regulation, and changes in assumptions used in making such
forward-looking statements. These forward-looking statements were based on
information, plans and estimates at the date of this press release, and the
Company does not promise to update any forward-looking statements to reflect
changes in underlying assumptions or factors, new information, future events or
other changes.
Northway Financial, Inc.
Selected Consolidated Financial Data
(Unaudited)
(In thousands, except for ratios and per share amounts)
Period end balance sheet data: September 30,
2004 2003
Total assets $631,143 $620,611
Loans, net (1) 478,851 467,198
Investments (2) 100,512 100,866
Deposits 465,863 473,875
Borrowings 109,255 96,253
Stockholders' equity 48,864 46,670
Book value per share $32.59 $31.12
Tangible book value per share (3) 23.48 21.34
Leverage ratio 8.22% 7.69%
Shares outstanding 1,499,574 1,499,574
For the Three Months For the Nine Months
Ended Sept. 30, Ended Sept. 30,
Operating results: 2004 2003 2004 2003
Net interest income $5,728 $5,629 $16,970 $17,414
Securities gains, net 20 614 740 851
Other noninterest income 1,423 1,109 3,263 2,909
Loan loss provision 120 210 390 655
Write-down of equity
securities - 65 - 184
Other operating expense 5,567 5,541 16,877 16,233
Income before tax 1,484 1,536 3,706 4,102
Income tax expense 507 558 1,252 1,489
Net income $977 $978 $2,454 $2,613
Earnings per share $0.65 $0.65 $1.64 $1.74
Return on average assets 0.61% 0.62% 0.53% 0.58%
Return on average equity 8.03% 8.26% 6.79% 7.61%
(1) Net of unearned income and the allowance for loan losses. Includes
loans held-for-sale.
(2) Includes federal funds sold, Federal Home Loan Bank stock, Federal
Reserve Bank stock and investment securities available-for-sale.
(3) Includes a deduction of $13,655 and $14,676 for goodwill, core deposit
intangible and mortgage servicing assets for 2004 and 2003,
respectively.
DATASOURCE: Northway Financial, Inc.
CONTACT: Richard P. Orsillo, Senior Vice President and Chief Financial
Officer of Northway Financial, +1-603-752-1171