West Town Bank & Trust (WTWB) Announces Fourth Quarter 2015 Financial Results

08 Feb, 2016, 13:09 ET from West Town Bank & Trust

NORTH RIVERSIDE, Ill., Feb. 8, 2016 /PRNewswire/ -- West Town Bank & Trust (WTWB) announced today its financial results for the year ended December 31, 2015 and reported the Bank earned net income of $4,001,000, or $2.83 per diluted common share, a decrease of $24,000 as compared to the year ended December 31, 2014.  Return on average total assets was 2.01% and return on average shareholder's equity was 18.24% for the year ended December 31, 2015 as compared to 2.47% and 22.94% respectively for the prior year-end.

Eric Bergevin, President and Chief Executive Officer stated, "We finished 2015 with strong 4th quarter results and expect to carry this momentum into 2016.  Our areas of strengths continue to be our SBA/USDA and Community Banking sectors with the mortgage sector recognizing decreased volume and increased cost due to a volatile rate environment and the implementation of TRID (Truth in Lending and Real Estate Settlement Procedures Act integrated disclosure requirements based on Dodd-Frank Act).  In 2016 we will continue to focus on our lending strengths while enhancing our efforts to increase core deposits which recognized positive results in 2015.  We are proud of our continued earnings result which directly translates into increased shareholder value.  Our superior earnings outpaces our asset growth and organically generates enough capital to continue to support the bank's growth goals well into 2016 and coming years."

Select financial highlights for 2015:

  • Increase in net interest income of $1,853,000 or 29.4% as compared to 2014.
  • Increase in loans, net of unearned income outstanding of $38,120,000 or 30.5% as compared to 2014.
  • Increase in total deposits of $35,927,000 or 25.3% as compared to 2014.
  • Total nonperforming assets (NPAs) decreased 106 basis points from 3.08% at December 31, 2014 to 2.02% at December 31, 2015. Total NPAs increased 26 basis points from the 1.76% reported at September 30, 2015.
  • The Bank's Allowance for Loan and Lease Losses ("ALLL") to total loans decreased 15 basis points from 1.28% at December 31, 2014 to 1.13% at December 31, 2015.

For the three-month period ending December 31, 2015, the Bank earned net income of $966,000, a decrease of $43,000 or 4.2% as compared to the $1,009,000 net income earned for the fourth quarter of 2014.  The quarter-to-date earnings produced an annualized return on average earning assets of 1.80% and an annualized return on average shareholder's equity of 16.58% as compared to 2.50% and 22.85% respectively for the quarter ended December 31, 2014.

STRONG LOAN AND DEPOSIT GROWTH

At December 31, 2015, the Bank's total assets were $214,663,000, total loans stood at $162,917,000 (not including mortgage loans held for sale), total deposits were $178,054,000 and total shareholder's equity was $24,147,000.  Compared with December 31, 2014, total assets increased $31,210,000 or 17.0%, total loans increased $38,120,000 or 30.5%, total deposits increased $35,927,000 or 25.3% and total shareholder's equity increased $4,046,000 or 20.1%.

Total loan originations for the bank across all sectors in 2015 totaled $441,143,000, an increase of 23.6% as compared 2014 of $356,847,000.  Total loans sold for the bank across all sectors in 2015 was $416,168,000, an increase of 35.8% as compared 2014 of $308,720,000.  The Bank's loan portfolio grew by 30.5% due mainly to the SBA/USDA and community bank sectors while the mortgage sector decreased loans held for sale by 50.6% to $14,194,000 at year end 2015 from $28,718,000 at year end 2014.

CAPITAL LEVELS

West Town Bank & Trust continued to exceed "well capitalized" requirements for each of the four primary capital levels monitored by state and federal regulators. As of December 31, 2015, Common equity tier 1 capital ratio was 13.59%; Tier 1 capital ratio was 13.59%; Risk based capital ratio was 14.63%; and Tier 1 leverage ratio was 11.24%.  The minimum levels to be considered well capitalized for each of these ratios are 10.0%, 8.0%, 6.5%, and 5.0%, respectively.  Book value per common share increased to $17.69 from $17.09 the previous quarter and from $15.29 at December 31, 2014.

ASSET QUALITY

The Bank's NPAs increased 26 basis points during the fourth quarter of 2015 from 1.76% at September 30, 2015 to 2.02% at December 31, 2015.  The increase is due to one loan that moved into the 90 days and accruing interest category during the quarter.  The Bank expects to collect all interest and principal due on this note.   

In comparison to December 31, 2014, the Bank's NPAs decreased 106 basis points from 3.08% to 2.02% at December 31, 2015.  The reduction is due to an overall reduction in non-accrual loans during the year, offset slightly by an increase in OREO and 90 days and accruing interest categories.

The Bank recorded a $64,000 provision for loan losses during the fourth quarter of 2015, as compared to a provision of $3,000 during the same period last year.  For the year, the Bank's provision for loan loss was $481,000, a $390,000 reduction from the amount recorded for the year ended December 31, 2014.

The ratio of allowance for loan and lease losses as a percentage of total loans decreased from 1.28% at December 31, 2014 to 1.13% at December 31, 2015.  Total reserves represented 55% of the non-accrual loan balances as of December 31, 2015 as compared to 28% reported at December 31, 2014.

NET INTEREST INCOME IMPROVES YEAR OVER YEAR

Net interest income for the year ended December 31, 2015 was $8,166,000, an increase of $1,853,000 or 29.4% as compared to $6,313,000 reported for the year ended December 31, 2014. The increase was fueled by a 31.5% increase in interest and fee income earned on the bank's loan portfolio. 

Net interest income was $2,355,000 for the fourth quarter of 2015, an increase of 25.4% or $477,000 as compared to the fourth quarter of 2014.  As with the year over year increase, the increase in net interest income was driven by the increase in interest and fee income earned on the bank's loan portfolio. 

The Bank's net interest margin was 4.96%, up 24 basis points as compared to the 4.72% reported for the fourth quarter of 2014 and up 74 basis points from the 4.22% reported for the last quarter.

NONINTEREST INCOME

Noninterest income for the year ended December 31, 2015 was $22,198,000, a slight decrease of $36,000 or (0.2%) as compared to the year ended December 31, 2014.  Noninterest income was $4,793,000 for the fourth quarter of 2015, a decrease of $398,000 or (7.7%) as compared to the fourth quarter of 2014.  The reduction in the quarter over quarter comparison is driven by a reduction in mortgage fees of $1.9 million which was partially offset by an increase in SBA loan fees of $1.5 million.

NONINTEREST EXPENSE

Noninterest expense for the year ended December 31, 2015 totaled $23,426,000, up $2,322,000 or 11% as compared to the $21,104,000 recorded for the year ended December 31, 2014. The increase in non-interest expense is a result of increased loan originations at a rate of 30.5%, with specific items to note as follows:

  • Variable compensation expense increased $1.8 million or 13.1% in comparison to 2014 as the result of increased loan originations.
  • Loan expenses increased $535,000 or 27.9% once again, due to the 30.5% increase in the loans portfolio year over year.

About West Town Bank & Trust

West Town Bank & Trust is a North Riverside, IL based state chartered bank. The Bank provides banking services through its offices in Illinois and North Carolina and also maintains loan production offices in North Carolina, New York, Maryland, Pennsylvania, Florida, Idaho and New Jersey. Its primary deposit products are checking, savings, and time certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Additionally, the Bank engages in mortgage banking activities and, as such, originates and sells one-to-four family residential mortgage loans in multiple states. The Bank's primary regulator is the Illinois Department of Financial and Professional Regulation.

For more information, visit 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 management of the Company and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like "expect," "anticipate," "estimate" and "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 banking regulations and accounting principles, policies or guidelines; 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. West Town Bank & trust takes no obligation to revise, update, or clarify forward looking statements to reflect events or conditions after the date of this release.

                                                                                                                                               

 

West Town Bank & Trust

Balance Sheet Comparison

Dollars in thousands


Unaudited

Audited


Actual

Actual

Actual

Actual

Actual


12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

Assets






Cash and due from banks

$1,103

$1,107

$1,200

$1,216

$1,182

Interest bearing deposits with banks

11,243

13,377

7,152

6,064

5,832

Investment securities – taxable

6,371

5,807

6,066

6,379

5,689

Mortgage loans held for sale

14,194

13,115

21,242

35,384

28,718

Loans, net of unearned income

162,917

151,827

149,402

139,356

124,797

Less:  Allowance for loan losses

-1,834

-1,770

-1,750

-1,750

-1,600

Premises and equipment, net

6,092

6,008

6,009

6,097

6,206

Other real estate

270

333

270

55

0

Other assets

14,307

13,604

13,494

13,222

12,629

Total Assets

$214,663

$203,408

$203,085

$206,023

$183,453







Liabilities






Total Deposits

178,054

165,694

162,254

162,212

142,127

Accrued expenses and other liabilities

3,562

3,646

3,793

3,092

2,225

FHLB advances

8,900

11,000

15,000

20,000

19,000

Total Liabilities

190,516

180,340

181,047

185,304

163,352







Equity






Common stock

1,365

1,350

1,353

1,320

1,314

Capital surplus

8,970

8,847

8,835

8,607

8,553

Retained earnings

9,755

9,755

9,755

9,755

6,125

Accumulated other comprehensive income (loss)

56

81

80

89

84

Net Income

4,001

3,035

2,015

949

4,028

Total Equity

24,147

23,068

22,038

20,719

20,101

Total Liabilities and Equity

$214,663

$203,408

$203,085

$206,023

$183,453

 

 

 

West Town Bank & Trust

Income Statement Annual Comparison

Dollars in thousands


Unaudited

Audited




Actual

Actual

Variance

Variance


12/31/2015

12/31/2014

$

%

Interest Income





Interest and fee income on loans

$10,016

$7,615

$2,401

31.50%

Interest income on securities

131

146

-15

-10.30%

Other interest income

18

11

7

63.60%

Total Interest Income

10,165

7,772

2,393

30.80%






Interest Expense





Interest on deposits

1,981

1,441

540

37.50%

Interest on borrowings

18

18

0

0.00%

Total Interest Expense

1,999

1,459

540

37.00%

Net Interest Income

8,166

6,313

1,853

29.40%






Provision for loan loses

481

871

-390

-44.80%

Net Interest Income After
Provision for Loan Losses

7,685

5,442

2,243

41.20%






Total Noninterest Income

22,198

22,234

-36

-0.20%

Total Noninterest Expense

23,426

21,104

2,322

11.00%

Income Before Taxes

6,457

6,572

-115

-1.70%

Income Taxes

2,456

2,547

-91

-3.60%

Net Income

$4,001

$4,025

($24)

-0.60%

 

 

West Town Bank & Trust

Income Statement Quarterly Comparison

Dollars in thousands


Unaudited

Audited


Actual

Actual

Actual

Actual

Actual


12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

Interest Income






Interest and fee income on loans

$2,846

$2,341

$2,561

$2,268

$2,244

Interest income on securities

42

30

30

26

37

Other interest income

0

8

8

5

5

Total Interest Income

2,888

2,379

2,599

2,299

2,286







Interest Expense






Interest on deposits

526

499

514

442

404

Interest on borrowings

7

2

5

4

4

Total Interest Expense

533

501

519

446

408

Net Interest Income

2,355

1,878

2,080

1,853

1,878







Provision for loan loses

64

188

18

211

3

Net Interest Income After
Provision for Loan Losses

2,291

1,690

2,062

1,642

1,875







Total Noninterest Income

4,793

5,053

5,867

6,485

5,191

Total Noninterest Expense

5,697

5,030

6,145

6,554

5,428

Income Before Taxes

1,387

1,713

1,784

1,573

1,638

Income Taxes

421

693

718

624

629

Net Income

$966

$1,020

$1,066

$949

$1,009

 

 

SOURCE West Town Bank & Trust



RELATED LINKS

http://www.westtownbank.com