Towne Bancorp Inc. Reports Record First Quarter Earnings

  
    
  
  
    
      Towne Bancorp, the parent company of Towne Bank of Arizona 
      (OTCBB: TWNE), today reported that continued strong loan growth led to 
      first quarter profits of $553,000, or $.31 per diluted share, compared 
      to a gain of $53,000, or $.03 per diluted share in 2006.
    
    
      Net interest income before provision for loan losses grew by 33% to 
      $2,391,000 in the first quarter of ’07 
      compared to the first quarter of ’06. Total 
      non-interest expense increased to $1,251,000 at 3/31/07 from $947,000 at 
      3/31/06. The company was able to report a very strong return on average 
      assets (ROAA) of 1.41% for the first quarter of ’07 
      compared to 0.22% for the like quarter in ’06.
    
    
      Net loans increased 53% to $167.1 million at the end of the first 
      quarter 2007, compared to $109.0 million a year earlier. Net interest 
      margin (NIM) remains a very strong 6.11% for the first quarter of ’07 
      compared to 7.53% in the first quarter a year earlier.
    
    
      Credit quality remains very good with $-0- in net charge-offs for the 
      first quarter. “The one non performing asset 
      reported at 12/31/06 has been paid in full and we are pleased to report 
      that we have no NPA’s as of 3/31/07,” 
      said S. Rick Meikle, CEO. “Furthermore, the 
      company’s allowance for loan losses stands at 
      a very healthy 1.42% of gross loans compared to 1.33% at 3/31/06,” 
      remarked Mr. Meikle.
    
    
      Total deposits increased 71% to $140.2 million at 3/31/07, compared to 
      $81.8 million at 3/31/06. Non-interest bearing deposits increased 41% to 
      $9.3 million at 3/31/07, compared to $6.6 million at 3/31/06. Interest 
      bearing deposits increased 43% to $9.3 million at 3/31/07, compared to 
      $6.5 million. Time deposits increased 80% to $121.6 million at 3/31/07, 
      compared to $67.5 million at 3/31/07.
    
    
      “At the end of April the bank will have five 
      full time, seasoned, in market business development officers in the 
      field gathering local core deposits and insuring that our borrowing 
      customers are also using the bank as their primary deposit institution,” 
      Meikle said.
    
    
      “We are very happy with the results of the 
      Payson loan production office managed by Pat Willis and we have 
      submitted an application to convert the LPO to a full service branch. 
      The Scottsdale loan production office is currently being built out and 
      the majority of the personnel for the facility are already working for 
      the bank,” said Mr. Meikle.
    
    
      “All the preceding high performance financial 
      results have been achieved by the bank after only just celebrating its 
      3rd year anniversary on 3/31/07 and are a direct reflection of the 
      professional and significant contribution by the entire staff and board 
      of the bank,” said Mr. Meikle.
    
    
      Statements concerning future performance, developments or events, 
      expectations for earnings, growth and market forecasts, and any other 
      guidance on future periods, constitute forward-looking statements, which 
      are subject to a number of risks and uncertainties that are beyond Towne 
      Bancorp's control and might cause actual results to differ materially 
      from the expectations and stated objectives. Factors which could cause 
      actual results to differ materially include, but are not limited to, 
      regional and general economic conditions, management's ability to 
      generate continued improvement in asset quality and profitability, 
      changes in interest rates, deposit flows, real estate values, 
      competition, loan delinquency rates, the successful operation of the 
      newly opened branches and loan offices, changes in accounting 
      principles, practices, policies or guidelines, changes in legislation or 
      regulation, other economic, competitive, governmental, regulatory and 
      technological factors affecting operations, pricing, products and 
      services. Accordingly, these factors should be considered in evaluating 
      the forward-looking statements, and undue reliance should not be placed 
      on such statements. Towne Bancorp undertakes no responsibility to update 
      or revise any forward-looking statements.
    
    
      
        
          (All dollars in thousands except per share data)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          QUARTERLY TRENDS
        
        
        
        
          YEAR-TO-DATE
        
        
        
      
      
        
          Income Statement Data (unaudited)
        
        
          1st Qtr 2007
        
        
          1st Qtr 2006
        
        
          2007 Change 
        
        
        
        
          Mar 2007
        
        
          Mar 2006
        
        
          2007 Change 
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net interest income
        
        
          $2,391 
        
        
          $1,800 
        
        
          32.83%
        
        
        
        
          $2,391 
        
        
          $1,800 
        
        
          32.83%
        
        
        
      
      
        
          Provision for loan losses
        
        
          $244 
        
        
          $753 
        
        
          -67.56%
        
        
        
        
          $244 
        
        
          $753 
        
        
          -67.56%
        
        
        
      
      
        
          Total non-interest income
        
        
          $12 
        
        
          ($11)
        
        
          210.82%
        
        
        
        
          $12 
        
        
          ($11)
        
        
          210.82%
        
        
        
      
      
        
          Total non-interest expense
        
        
          $1,251 
        
        
          $947 
        
        
          32.10%
        
        
        
        
          $1,251 
        
        
          $947 
        
        
          32.10%
        
        
        
      
      
        
          Federal and State taxes
        
        
          $355 
        
        
          $36 
        
        
          888.83%
        
        
        
        
          $355 
        
        
          $36 
        
        
          888.83%
        
        
        
      
      
        
          Net income
        
        
          $553 
        
        
          $53 
        
        
          938.90%
        
        
        
        
          $553 
        
        
          $53 
        
        
          938.90%
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Selected Balance Sheet Data (unaudited)
        
        
          Mar 2007
        
        
          Dec 2006
        
        
          1st Quarter 2007 Change
        
        
        
        
          Dec 2006
        
        
          YTD 2007 Change
        
        
          Mar 2006
        
        
          
            Year OverYear Change
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total assets
        
        
          $177,374 
        
        
          $154,945 
        
        
          $22,429 
        
        
        
        
          $154,945 
        
        
          $22,429 
        
        
          $116,140 
        
        
          $61,234 
        
      
      
        
          Net Loans
        
        
          $167,143 
        
        
          $147,924 
        
        
          $19,219 
        
        
        
        
          $147,924 
        
        
          $19,219 
        
        
          $108,996 
        
        
          $58,147 
        
      
      
        
          Total Deposits
        
        
          $140,181 
        
        
          $118,448 
        
        
          $21,733 
        
        
        
        
          $118,448 
        
        
          $21,733 
        
        
          $81,799 
        
        
          $58,382 
        
      
      
        
          Total borrowings
        
        
          $85 
        
        
          $85 
        
        
          $0 
        
        
        
        
          $85 
        
        
          $0 
        
        
          $0 
        
        
          n/a 
        
      
      
        
          Total Equity Cap
        
        
          $36,106 
        
        
          $35,553 
        
        
          $553 
        
        
        
        
          $35,553 
        
        
          $553 
        
        
          $34,081 
        
        
          $2,025 
        
      
      
        
          Book value per share
        
        
          $22.77 
        
        
          $22.42 
        
        
          $0.32 
        
        
        
        
          $22.42 
        
        
          $0.32 
        
        
          $21.51 
        
        
          $1.25 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          QUARTERLY TRENDS
        
        
        
        
          YEAR-TO-DATE
        
        
        
      
      
        
          Selected Ratios (unaudited)
        
        
          1st Qtr 2007
        
        
          1st Qtr 2006
        
        
          2007 Change 
        
        
        
        
          Mar 2007
        
        
          Mar 2006
        
        
          2007 Change 
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Interest Margin
        
        
          6.11%
        
        
          7.53%
        
        
          -18.84%
        
        
        
        
          6.11%
        
        
          7.53%
        
        
          -18.84%
        
        
        
      
      
        
          Return on avg assets
        
        
          1.41%
        
        
          0.22%
        
        
          540.14%
        
        
        
        
          1.41%
        
        
          0.22%
        
        
          540.14%
        
        
        
      
      
        
          Return on avg equity
        
        
          6.13%
        
        
          0.62%
        
        
          887.07%
        
        
        
        
          6.13%
        
        
          0.62%
        
        
          887.07%
        
        
        
      
      
        
          Efficiency Ratio
        
        
          52.07%
        
        
          52.94%
        
        
          -1.64%
        
        
        
        
          52.07%
        
        
          52.94%
        
        
          -1.64%
        
        
        
      
      
        
          Net charge-offs to Total Loans
        
        
          0.00%
        
        
          0.01%
        
        
          -100.00%
        
        
        
        
          0.00%
        
        
          0.01%
        
        
          -100.00%
        
        
        
      
      
        
          ALLL to Gross Loans %
        
        
          1.42%
        
        
          1.33%
        
        
          7.17%
        
        
        
        
          1.42%
        
        
          1.33%
        
        
          7.17%
        
        
        
      
      
        
          NPA to Total assets
        
        
          0.00%
        
        
          0.00%
        
        
          n/a 
        
        
        
        
          0.00%
        
        
          0.00%
        
        
          n/a 
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Per Share data (unaudited)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Net income per share
        
        
          $0.35 
        
        
          $0.03 
        
        
        
        
        
        
          $0.35 
        
        
          $0.03 
        
        
        
        
        
      
      
        
          Net income per share (diluted)
        
        
          $0.31 
        
        
          $0.03 
        
        
        
        
        
        
          $0.31 
        
        
          $0.03 
        
        
        
        
        
      
      
        
          Total Outstanding Shares
        
        
          1,586,002 
        
        
          1,584,156 
        
        
        
        
        
        
          1,586,002 
        
        
          1,584,156 
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Note 1:
        
        
          The data for March 2006 YTD and QTD do not include the holding 
          company.
        
      
      
        
        
        
          
            The 1st quarter Year 2007 performance of Towne Bank of Arizona, 
            without the inclusion of the Holding Company, is as follows; ROAA 
            1.43%, ROAE 6.23%, Efficiency Ratio 51.73%, NIM 6.11%, and Net 
            Income Per Share (diluted) $0.32.