UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 7, 2014
HOMETOWN BANKSHARES
CORPORATION
(Exact name of registrant as specified in its charter)
Virginia |
|
333-158525 |
|
26-4549960 |
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
202 S. Jefferson Street Roanoke, Virginia |
|
24011 | ||
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (540) 345-6000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
HomeTown Bankshares Corporation (the “Company”), the parent company for Roanoke, Virginia based HomeTown Bank, announced on February 7, 2014 its financial results for the three months and twelve months ended December 31, 2013. The financial results are detailed in the Company’s Press Release dated February 7, 2014, which is attached as Exhibit 99.1 to this Form 8-K.
The information in this Item 2.02, including Exhibit 99.1 to this Current Report, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document filed by the Company with the Securities and Exchange Commission, whether made before or after the date of this Current Report, regardless of any general incorporation language in such filing (or any reference to this Current Report generally), except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events
On February 7, 2014, HomeTown Bankshares Corporation (the Company) declared a 6% per annum quarterly dividend on its Series C Non-Cumulative Perpetual Convertible Preferred Stock, payable March 15, 2014 to shareholders of record on February 28, 2014.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit |
|
Description |
99.1 |
|
Press Release |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
HOMETOWN BANKSHARES CORPORATION | ||
Date: February 7, 2014 |
|
By: |
|
/s/ Charles W. Maness, Jr. |
|
|
Charles W. Maness, Jr., | ||
|
|
Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
|
Description |
99.1 |
|
Press Release |
Exhibit 99.1
News Release
FOR IMMEDIATE RELEASE
For more information contact:
Susan K. Still, President and CEO, (540) 278-1705
Charles W. Maness, Jr., Executive Vice President & CFO, (540) 278-1702
HomeTown Bankshares Reaches a Milestone in Asset Growth and Reports a 63% Increase in Earnings in 2013
Roanoke, VA (February 7, 2014) – HomeTown Bankshares Corporation, the parent company of HomeTown Bank, surpassed $400 Million in assets and achieved a third consecutive year of record earnings in 2013.
Net income from operations increased 63% to $2.7 million in 2013 vs. $1.7 million in 2012. For comparison purposes, the 2012 results exclude the one-time deferred tax benefit of $2.93 million realized on January 1, 2012. Deferred tax assets represent future potential tax deductions that result from timing differences between tax laws and generally accepted accounting principles (GAAP).
Profitability
A net profit of $790,000 or $0.14 per diluted common share was realized for the fourth quarter of 2013 compared to a net profit of $557,000 or $0.12 per diluted common share for the fourth quarter of 2012. Net income for the fiscal year ended December 31, 2013 grew 63% to $2.73 million or $0.48 per diluted common share vs. net income of $1.67 million or $0.32 per diluted common share earned during the 2012 fiscal year. The recognition of deferred tax assets added $.90 per share for total earnings of $1.22 per common share for the twelve months ended December 31, 2012.
“A strong net interest margin coupled with continued control of non-interest expenses and improved asset quality were the major contributors to our third consecutive year of record earnings,” cited Susan K. Still, President and CEO of HomeTown Bankshares Corporation.
The net interest margin increased during the year from 3.82% in 2012 to 3.92% in 2013. Maintaining an above average asset yield coupled with a 29% annual increase in average non-interest bearing deposits resulted in the continued improvement in the net interest margin during 2013. A corresponding increase of 34% in ATM and interchange revenue was also an important contributor to the record earnings for 2013 and offset a reduction in mortgage revenue due to a softer mortgage market during the second half of the year.
Balance Sheet Growth
Total assets grew $31.9 million to a record level of $402.4 million at December 31, 2013 from $370.5 million at December 31, 2012. Total loans alone grew 8.4% to $297.9 million from $274.9 million at December 31, 2012. Total Deposits grew 9.6% to $339.8 million from $310.0 million at December 31, 2012 with total non-interest bearing deposits increasing 42% to $46.2 million at December 31, 2013. Interest bearing deposits grew 5.8% to $293.5 million at December 31, 2013 vs. $277.4 million at December 31, 2012.
Total Equity increased $2.8 million during the year to $39.5 million at December 31, 2013. HomeTown Bankshares’ Tier 1 leverage ratio amounted to 10.21% at December 31, 2013 vs. 9.49% at December 31, 2012, remaining consistently above regulatory standards for well-capitalized banks.
“We are very pleased with the overall growth in both loans and core deposits during 2013,” stated Still. “We are particularly pleased with the significant increase in loan and deposit activity associated with the opening of our new branch in the New River Valley during the 4th quarter of 2013,” she continued.
Asset Quality
Asset quality continued to improve significantly with non-performing assets to Total Assets decreasing from 3.14% in 2012 to 2.27% during 2013. Loan quality also continued to stabilize during 2013 with the level of nonperforming loans amounting to .54% of total loans at December 31, 2013 vs. 0.98% of total loans at December 31, 2012. The Bank’s Other Real Estate Owned (OREO) portfolio decreased an additional $795 thousand during 2013. Net charge-offs amounted to only $194 thousand or 0.07% of average loans for the year ending December 31, 2013 vs. $1.6 million or .61% of average loans for the year ended December 31, 2012. The Company’s Allowance for Loan Losses at December 31, 2013 amounted to $3.72 million or 1.25% of Total Loans vs. $3.79 million and 1.38% of Total Loans at December 31, 2012.
“Significant progress was made with our asset quality throughout 2013,” stated Still. “Strong asset quality coupled with solid loan and deposit growth at acceptable margins will continue to be our focus during 2014 as we proactively serve our growing customer base and the needs of our communities,” Still continued.
HomeTown Bank offers a full range of banking services to small and medium-size businesses, real estate investors and developers, private investors, professionals and individuals. The Bank serves the Roanoke and New River Valleys and Smith Mountain Lake through five branches and a loan production office. A high level of responsive and professionalized service coupled with local decision-making is the hallmark of its banking strategy.
* * *
Forward-Looking Statements:
Certain statements in this press release may be “forward-looking statements.” Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.
(See Attached Financial Statements for the year-to-date and quarter ending December 31, 2013)
HomeTown Bankshares Corporation
Consolidated Condensed Balance Sheets
December 31, 2013 and December 31, 2012
Unaudited |
||||||||
In Thousands, Except Share and Per Share Data |
12/31/2013 |
12/31/2012 |
||||||
Assets |
||||||||
Cash and due from banks |
$ | 19,537 | $ | 9,812 | ||||
Federal funds sold |
738 | 196 | ||||||
Securities available for sale, at fair value |
57,922 | 63,466 | ||||||
Restricted equity securities, at cost |
2,564 | 2,591 | ||||||
Loans, net of allowance for loan losses |
||||||||
of $3,721 in 2013 and $3,790 in 2012 |
294,212 | 271,147 | ||||||
Property and equipment, net |
12,155 | 9,754 | ||||||
Other real estate owned, net of valuation |
||||||||
allowance of $935 in 2013 and $575 in 2012 |
8,143 | 8,938 | ||||||
Other assets |
7,166 | 4,547 | ||||||
Total assets |
$ | 402,437 | $ | 370,451 | ||||
Liabilities and Stockholders’ Equity |
||||||||
Deposits: |
||||||||
Noninterest-bearing |
$ | 46,232 | $ | 32,627 | ||||
Interest-bearing |
293,538 | 277,370 | ||||||
Total deposits |
339,770 | 309,997 | ||||||
Short term borrowings |
258 | 216 | ||||||
Federal Home Loan Bank borrowings |
22,000 | 22,000 | ||||||
Other liabilities |
871 | 1,519 | ||||||
Total liabilities |
362,899 | 333,732 | ||||||
Stockholders’ Equity: |
||||||||
Preferred stock |
13,293 | 10,232 | ||||||
Common stock |
16,351 | 16,167 | ||||||
Surplus |
15,339 | 15,487 | ||||||
Retained deficit |
(4,846 | ) | (6,587 | ) | ||||
Accumulated other comprehensive (loss) income |
(599 | ) | 1,420 | |||||
Total stockholders’ equity |
39,538 | 36,719 | ||||||
Total liabilities and stockholders’ equity |
$ | 402,437 | $ | 370,451 |
HomeTown Bankshares Corporation
Consolidated Condensed Statements of Income
For the Three and Twelve Months Ended December 31, 2013 and 2012
For the Three Months |
For the Twelve Months |
|||||||||||||||
Ended December 31, |
Ended December 31, |
|||||||||||||||
In Thousands, Except Share and Per Share Data |
2013 |
2012 |
2013 |
2012 | ||||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||||||||
Interest income: |
||||||||||||||||
Loans and fees on loans |
$ | 3,716 | $ | 3,517 | $ | 14,403 | $ | 13,797 | ||||||||
Taxable investment securities |
298 | 349 | 1,277 | 1,631 | ||||||||||||
Nontaxable investment securities |
85 | 20 | 206 | 50 | ||||||||||||
Other interest income |
38 | 39 | 144 | 141 | ||||||||||||
Total interest income |
4,137 | 3,925 | 16,030 | 15,619 | ||||||||||||
Interest expense: |
||||||||||||||||
Deposits |
443 | 520 | 1,845 | 2,299 | ||||||||||||
Preferred stock dividends |
- | - | - | 38 | ||||||||||||
Other borrowed funds |
96 | 96 | 377 | 402 | ||||||||||||
Total interest expense |
539 | 616 | 2,222 | 2,739 | ||||||||||||
Net interest income |
3,598 | 3,309 | 13,808 | 12,880 | ||||||||||||
Provision for loan losses |
- | - | 125 | 1,408 | ||||||||||||
Net interest income after provision for loan losses |
3,598 | 3,309 | 13,683 | 11,472 | ||||||||||||
Noninterest income: |
||||||||||||||||
Service charges on deposit accounts |
87 | 77 | 314 | 283 | ||||||||||||
ATM and interchange income |
77 | 66 | 310 | 231 | ||||||||||||
Mortgage loan brokerage fees |
57 | 106 | 282 | 368 | ||||||||||||
Gains on sales of investment securities |
36 | 4 | 152 | 131 | ||||||||||||
Other income |
99 | 170 | 386 | 389 | ||||||||||||
Total noninterest income |
356 | 423 | 1,444 | 1,402 | ||||||||||||
Noninterest expense: |
||||||||||||||||
Salaries and employee benefits |
1,170 | 1,265 | 5,242 | 4,894 | ||||||||||||
Occupancy and equipment expense |
345 | 317 | 1,317 | 1,259 | ||||||||||||
Advertising and marketing expense |
93 | 95 | 457 | 392 | ||||||||||||
Professional fees |
103 | 72 | 458 | 343 | ||||||||||||
Loss on sales and writedowns of other real estate owned |
231 | 420 | 582 | 566 | ||||||||||||
Other real estate owned expense |
58 | 65 | 250 | 314 | ||||||||||||
Other expense |
782 | 648 | 2,752 | 2,583 | ||||||||||||
Total noninterest expense |
2,782 | 2,882 | 11,058 | 10,351 | ||||||||||||
Net income before income taxes |
1,172 | 850 | 4,069 | 2,523 | ||||||||||||
Income tax expense (benefit) |
382 | 293 | 1,340 | (2,073 | ) | |||||||||||
Net income |
790 | 557 | 2,729 | 4,596 | ||||||||||||
Effective dividends on preferred stock |
207 | 134 | 846 | 534 | ||||||||||||
Accretion of discount on preferred stock |
- | 19 | 142 | 75 | ||||||||||||
Net income available to common stockholders |
$ | 583 | $ | 404 | $ | 1,741 | $ | 3,987 | ||||||||
Basic earnings per common share |
$ | 0.18 | $ | 0.12 | $ | 0.53 | $ | 1.22 | ||||||||
Diluted earnings per common share |
$ | 0.14 | $ | 0.12 | $ | 0.48 | $ | 1.22 | ||||||||
Weighted average common shares outstanding |
3,270,299 | 3,262,518 | 3,269,063 | 3,259,424 | ||||||||||||
Diluted average common shares outstanding |
5,510,299 | 3,262,518 | 4,416,679 | 3,259,424 |
HOMETOWN BANKSHARES CORPORATION
Financial Highlights
(Unaudited) Three Three Twelve Twelve Months Months Months Months Ended Ended Ended Ended December 31 December 31 December 31 December 31 2013 2012 2013 2012 PER SHARE INFORMATION Book value Earnings per share, basic Earnings per share, diluted PROFITABILITY Return on average assets Return on average shareholders' equity Net interest margin Efficiency BALANCE SHEET RATIOS Loans to deposits Securities total assets Tier 1 leverage ratio ASSET QUALITY Nonperforming assets to total assets Nonperforming assets, including restructured loans, to total assets Net charge-offs to average loans (annualized) Composition of risk assets: (in thousands) Nonperforming assets: Nonaccrual loans Other real estate owned Total nonperforming assets, excluding performing restructured loans Performing restructured loans Total nonperforming assets, including restructured loans Allowance for loan losses: (in thousands) Beginning balance Provision for loan losses Charge-offs Recoveries Ending balance
$
8.03
$
8.12
$
0.18
$
0.12
$
0.53
$
1.22
$
0.14
$
0.12
$
0.48
$
1.22
0.80
%
0.59
%
0.71
%
1.25
%
7.89
%
6.04
%
6.68
%
12.69
%
3.97
%
3.84
%
3.92
%
3.82
%
63.62
%
64.29
%
67.72
%
66.93
%
87.69
%
88.69
%
15.03
%
17.83
%
10.21
%
9.49
%
2.27
%
3.14
%
3.83
%
4.90
%
-0.05
%
0.16
%
0.07
%
0.61
%
$
989
$
2,689
8,143
8,938
$
9,132
$
11,627
6,278
6,543
$
15,410
$
18,170
$
3,684
$
3,901
$
3,790
$
3,979
-
-
125
1,408
(11
)
(129
)
(575
)
(1,616
)
48
18
381
19
$
3,721
$
3,790
$
3,721
$
3,790
6S237L3J'9D.1L4`[0<'GDD#`.E\8/$]YX/\`A!X@UW3F*7L4`B@<
M=4>1@@;\-V?PH+YU9R[#;OXD177BVY\*>#M'F\2:I98^W21RB&TL2?X9)B#\
MW^RH8_2K/AGQAK.J>,M9\*Z]X;72;S3((;E9HKOSXKF.0L%*G:I'*,#D=153
MX.>%;7PG\)M$M85!NKRW6^O)NK332J'9B>^,@?05I^/O%FF^`?"=YXIN;'[5
M=`);00Q@"2YE9L1Q`^FXD^W)H)3E;GDSK:*\BU+Q+X\\'P>%=7\5:I87,FMZ
MK!I]UI%M:[4MA-G'E29+,R$#)/#<\#BJ=WXT^(U_\7-:\%:(NF6\BZ4)[=)X
MS(+%RY"RS./O$J`0@X^=>N&-`>U2Z'M-%>`C4/'WC'XMZ'H,=[_85[X:TEKN
M_N)82\5S/+B+>(5<<9#L@<].=O2ET?XO>*K+P/>)JEK:Z[XGD\13>'](\E/(
MBOG4@>8P'W47G)'H![T"]LNJ/?:*\MD\1>+/"?CKPCH/B'6+;7CXC6YCDBM[
M1;