FORT WAYNE, Ind., Jan. 27, 2011 (GLOBE NEWSWIRE) -- Tower Financial Corporation (Nasdaq:TOFC) reported net income of $884,000 or $0.18 per diluted share for the fourth quarter of 2010, compared with a net loss of $1.2 million, or ($0.29) per diluted share, reported for the fourth quarter 2009. This brings year to date net income to $3.2 million, or $0.69 per diluted share, compared to a year to date net loss of $5.6 million, or ($1.37) per diluted share at December 31, 2009.
Our fourth quarter and annual highlights include:
-
Record "Core" earnings of $9.6 million for 2010 which was an increase of $3.1 from 2009. Core earnings are defined as income before taxes, loan loss provision, and unusual items not related to day to day operations (primarily securities sales and OREO (other real estate owned) related expenses). Our 2010 Core earnings represent the best year in our history for this measurement, exceeding our previous best year (2005) by $1.6 million.
-
Net interest margin of 3.70 percent for the fourth quarter and year to date, representing a significant improvement from the 3.47 percent and 3.15 percent reported for the fourth quarter 2009 and year to date 2009, respectively.
-
Capital ratios continue to increase and remain well above the regulatory standards necessary to be considered "well-capitalized." As of December 31, 2010, our leverage ratio was 10.6 percent and our Total Risked Based Capital ratio was 14.3 percent, compared to regulatory requirements of 5.0 percent and 10.0 percent, respectively.
- Record net income of $738,000 reported for our Trust subsidiary which was a 5.6 percent increase from 2009.
Mike Cahill, our President and Chief Executive Officer, stated: "In the face of a challenging economy and uncertain banking environment, we were pleased by the progress we made in our earnings, capital, and asset quality in 2010. The significant turnaround experienced in 2010 is indicative of the planning and hard work of our board, our management team, and all of my fellow team members. Our work is not done, and we will continue to focus on our efforts to deliver the consistent level of earnings our shareholders expect."
Capital
The Company's regulatory capital ratios continue to remain above the "well-capitalized" levels of 6 percent for Tier 1 capital and 10 percent for risked-based capital. Tier 1 capital at December 31, 2010, increased to 13.1 percent, compared to 12.7 percent at September 30, 2010 and 10.9 percent at December 31, 2009. Total risked-based capital at December 31, 2010, increased to 14.3 percent, compared to 14.0 percent at September 30, 2010 and 12.5 percent at December 31, 2009. Leverage capital increased to 10.6 percent at December 31, 2010, more than double the regulatory requirement of 5 percent to be considered "well-capitalized".
The following table shows the current capital position as of December 31, 2010 in both dollars and percentages, compared to the minimum amounts required per regulatory standards for "well-capitalized" institutions.
| Minimum Dollar Requirements | Regulatory | Tower | |
| ($000's omitted) | Minimum (Well-Capitalized) | 12/31/10 | Excess |
| Tier 1 Capital / Risk Assets | $31,871 | $69,418 | $37,547 |
| Total Risk Based Capital / Risk Assets | $53,119 | $75,759 | $22,640 |
| Tier 1 Capital / Average Assets (Leverage) | $32,889 | $69,418 | $36,529 |
| Minimum Percentage Requirements | Regulatory | Tower | |
| Minimum (Well-Capitalized) | 12/31/10 | ||
| Tier 1 Capital / Risk Assets | 6% or more | 13.10% | |
| Total Risk Based Capital / Risk Assets | 10% or more | 14.30% | |
| Tier 1 Capital / Quarterly Average Assets | 5% or more | 10.55% |
Asset Quality
Nonperforming assets plus delinquencies were $27.8 million, or 4.2 percent of total assets as of December 31, 2010. This compares with $20.0 million, or 3.1 percent of total assets at September 30, 2010 and $21.1 million, or 3.0 percent of assets at December 31, 2009. Net charge-offs were $49,000 for the fourth quarter 2010, bringing year to date net charge-offs to $3.9 million, or 0.96 percent of average loans. This compares to net charge-offs of $9.8 million, or 1.8 percent of average loans for calendar year 2009. Loan loss provision through December 31, 2010 was $4.8 million compared to $10.7 million for calendar year 2009.
The current and historical breakdown of non-performing assets is as follows:
| ($000's omitted) | 12/31/10 | 9/30/10 | 6/30/10 | 3/31/10 | 12/31/09 |
| Non-Accrual loans | |||||
| Commercial | 6,859 | 6,924 | 5,364 | 5,463 | 6,667 |
| Acquisition & Development | 3,566 | 1,855 | 2,028 | 5,486 | 4,627 |
| Commercial Real Estate | 1,671 | 790 | 1,905 | 1,905 | 1,030 |
| Residential Real Estate | 843 | 1,093 | 1,063 | 1,120 | 1,142 |
| Total Non-accrual loans | 12,939 | 10,662 | 10,360 | 13,974 | 13,466 |
| Trouble-debt restructured (TDR) | 7,502 | 1,761 | 1,862 | 1,997 | 1,915 |
| OREO | 4,284 | 3,843 | 6,477 | 4,443 | 4,634 |
| Deliquencies greater than 90 days | 2,688 | 3,281 | 2,213 | 3,223 | 561 |
| Impaired Securities | 422 | 437 | 489 | 440 | 479 |
| Total Non-Performing Assets | 27,835 | 19,984 | 21,401 | 24,077 | 21,055 |
| Allowance for Loan Losses (ALLL) | 12,489 | 12,016 | 12,718 | 12,150 | 11,598 |
| ALLL / Non-accrual loans | 96.5% | 112.7% | 122.8% | 86.9% | 86.1% |
| Classified Assets | 50,115 | 51,409 | 55,688 | 56,297 | 55,406 |
The trouble-debt restructured ("TDR") category consists of three loans, which account for 27 percent of our total non-performing assets. All three loans have had certain terms modified that cause these loans to be considered trouble-debt restructured under new accounting standards being proposed for adoption in 2011. The new, more stringent rules, once formally implemented by the Financial Accounting Standards Board ("FASB"), are retroactive to any loans restructured within one year of implementation. Therefore, we have elected to be proactive and classify these loans using the new standards. One loan, of approximately $1.8 million was modified to allow for the sale of the mortgaged property to occur. The sale is currently being negotiated between the borrower and the leasee of the facility and we expect resolution to occur sometime in 2011. The second loan has a balance of approximately $2.1 million and is considered a TDR because the loan was modified to take additional collateral of approximately $900,000. The third loan is for approximately $3.6 million and is considered a TDR because the amortization period for the loan was lengthened from 15 years to 17 years. The total impairment on these loans that is accounted for in our Allowance for Loan Losses is $500,000. As of December 31, 2010, all three loans were current and paying according to the modified terms.
Included in Delinquencies greater than 90 days is an accruing $1.8 million loan that has matured. The Bank has elected not to renew the loan and is seeking collection via legal process. The loan remains in accruing status because it is further supported by the unlimited guaranty of a third party whose guaranty is fully secured by a mortgage on a performing commercial real estate property that is unrelated to the borrower's enterprise. This loan is expected to remain technically nonperforming during the pendency of our legal collection efforts but ultimate collection from the guarantor is not currently in doubt. The decrease from the third quarter relates to one loan relationship totaling $971,000 moving to non-accrual status. There are six relationships that comprise delinquencies, with two relationships making up 85 percent of the total amount past due.
Our commercial and industrial loan category remained relatively flat from the third quarter. Three loans totaling $422,000 were brought to resolution along with another $476,000 in partial reductions, however were replaced with three new loan relationships totaling 833,000. In total, nineteen relationships comprise this category, with six relationships making up $5.8 million, or 85 percent of the balance.
Our commercial real estate category increased by $881,000 during the fourth quarter, the net result of the addition of one relationship totaling $961,000 moving to non-accrual status from the 90 day delinquency category, offset by a small paydown on the only other loan in the commercial real estate category. Two loans totaling $981,000 were moved to OREO, while the third loan that made up the second quarter balance was paid off. These reductions were offset by a new relationship totaling $790,000 that was taken to non-accrual status at the end of the quarter. Our acquisition and development category increased by $1.7 million during the fourth quarter, the net result of the addition of one large, $2.1 million relationship, offset by the paydown of a portion of another non-accrual loan. A total of four relationships comprise the acquisition and development category. Our residential category had minimal changes during the fourth quarter, with the exception on one payoff in the amount of $300,000. There are nine loans within the residential category.
Classified assets are comprised of substandard and non-accrual loans, along with impaired investments and OREO. Classified assets reached their peak at the end of the second quarter of 2009 at $63.0 million. We have made steady progress over the past eighteen months to reduce these assets by $12.9 million, or 20.4 percent. As of December 31, 2010, classified assets comprised 63.4 percent of Tier 1 capital plus the Allowance for Loan Losses ("ALLL").
The allowance for loan losses increased $473,000 during the fourth quarter of 2010 and was 2.56 percent of total loans at December 31, 2010, an increase from 2.43 percent at September 30, 2010 and an increase from 2.20 percent at December 31, 2009. The allowance for loan losses has increased by $1.2 million from December 31, 2009, as a result of loan provision of $4.8 million, offset by $3.9 million of net charge-offs.
Balance Sheet
Company assets were $659.9 million at December 31, 2010, a decrease of $20.2 million, or 3.0 percent from December 31, 2009. The decrease in assets was primarily attributable to decreases in total loans of $40.1 million, partially offset by an increase in securities of $20.3 million.
Total loans at December 31, 2010 were $486.9 million, compared to $527.3 million at December 31, 2009. We experienced decreases in all major loan categories with commercial and industrial loans decreasing by $19.7 million, residential mortgage loans by $6.6 million, commercial real estate by $11.9 million, consumer loans by $0.7 million and home equity loans by $1.7 million. This is consistent with the limited loan demand in our markets, along with purposeful reduction of our classified loans.
Long term investments at December 31, 2010 were $114.2 million, an increase of $20.3 million from December 31, 2009. Long-term investment now comprise 17.3 percent of total assets as we continue to expand our investment portfolio to enhance liquidity and yield opportunities in light of the planned reduction in our loan portfolio and recognition of fewer lending opportunities in the local economy. This is a continued purposeful change in asset allocation driven by profitability and liquidity targets, current economic conditions, and capital management guidelines.
Total deposits at December 31, 2010 were $576.4 million compared to $568.4 million at December 31, 2009, an increase of $8.0 million, or 1.4 percent. Core deposits declined slightly by $0.8 million, led by decreases in certificates of deposit less than $100,000 of $21.8 million, non-interest bearing checking accounts balances of $2.2 million, which were offset by growth in money market account balances of $7.2 million, interest bearing checking accounts of $11.4 million and $4.4 million in savings accounts. Certificates of deposit greater than $100,000 have decreased by $28.0 million since year end. Offsetting these decreases was an increase in brokered deposits totaling $36.8 million, which include both money market accounts and certificate of deposits. The growth in brokered deposits was purposeful as we took advantage of the favorable long term interest rate environment to lock in these favorable rates for an extended period of time. Terms for new brokered CD purchases ranged from two years to ten years, with an average life of just more than four years. The average rate on our brokered CD purchases was 1.9 percent and the average rate on brokered money market accounts was approximately 0.6 percent. Additionally, we have "put" options on $13.9 million of our longer termed, greater than five years, brokered CD's in order to provide additional flexibility to interest rate changes and funding needs. $5.5 million of these brokered CD's can be "put" as early as 2011 and carry an average interest rate of 3.5 percent. This increase in brokered deposits has also allowed us to reduce FHLB borrowings by $35.7 million since December 31, 2009. At December 31, 2010, FHLB borrowings totaled $7.5 million, which were fixed rate borrowings with specific maturity dates. $3.5 million of our FHLB borrowings, carrying a rate of 3.7 percent, mature during the first quarter of 2011 and our current expectations are to pay that debt off upon maturity.
Shareholders' equity was $53.1 million at December 31, 2010, an increase of 13.2 percent from the $46.9 million reported at December 31, 2009. Affecting the increase in stockholders' equity was net income of $3.2 million, $47,000 of additional paid in capital from the FAS123R accounting treatment for stock options, $2.8 million net after expenses from the sale of 458,342 shares of common stock, and an increase of $155,000 in unrealized gains, net of tax, on securities available for sale. Current common shares outstanding are 4,724,023.
Operating Statement
Total revenue, consisting of net interest income and noninterest income, was $7.3 million for the fourth quarter 2010, a decrease of $891,000 from the third quarter 2010 and an increase of $475,000 from the fourth quarter 2009. The decrease from the third quarter of 2010 was due to a one-time extraordinary gain on investment sale of $888,000 that was recorded in the third quarter. Fourth quarter 2010 net interest income was $5.5 million a slight decrease of $60,000, or 1.1 percent from the third quarter 2010 and an increase of $140,000, or 2.6 percent compared to the fourth quarter 2009. The relatively flat quarter for net interest income was attributable to an increase of one basis point in our net interest margin, offset by a decrease in average earning assets of $6.8 million. The fourth quarter 2010 net interest margin of 3.70 percent represents a 23 basis point increase from the net interest margin of 3.47 percent posted for the fourth quarter 2009. Year to date net interest margin through December 31, 2010 was 3.70 percent compared to 3.15 percent for 2009.
Non-interest income was $1.8 million for the fourth quarter 2010, which represented 24.8 percent of total revenue. This is a decrease of 832,000 from the third quarter 2010 and an increase of $335,000 from the fourth quarter of 2009. The third quarter fee income includes an extraordinary gain on the sale of investment securities in the amount of $888,000 ($575,000 net of taxes). Taking out the extraordinary gain, non-interest income increased slightly, by $56,000, from the third quarter of 2010. The increase came primarily from trust and brokerage fees, which increased by $59,000, lead by brokerage fees. All other non-interest income categories remained relatively flat from the third quarter.
The increase from the fourth quarter of 2009 relates to various categories. Trust and brokerage fees increase by $59,000, mortgage origination fees increased by $48,000, and "other than temporary impairment" ("OTTI") charges decreased by $98,000. The company has incurred OTTI charge on two investment securities. One is a trust preferred investment, which has now been written down to a book value of $110,000. Life to date OTTI on the trust preferred security is $850,000 through December 31, 2010. The other is a private label collateralized mortgage obligation (CMO) that has a current book value of $586,000. Life to date OTTI on the CMO is $58,000 through December 31, 2010.
Non-interest expenses were $5.3 million, unchanged from the third quarter of 2010 and a decrease of $733,000 from the fourth quarter of 2009.
The decrease from the fourth quarter of 2009 represents a 12.1 percent reduction in total non-interest expense. The majority of the reductions came in the following categories: employment expenses, $440,000; occupancy and equipment, $91,000; legal and professional, $97,000; and OREO, $317,000. The savings in employment expenses relates primarily to one-time costs associated with the former Chairman's retirement on December 31, 2009. Occupancy expenses were reduced primarily due to a rent reduction achieved through renegotiating our lease on our headquarters facility. The savings were offset by increases in processing expense of $76,000, business development expenses of $27,000, and FDIC insurance premiums of $160,000. The increase in processing expenses relates to a migration of our core operating system to a new provider in early 2010, which provides for enhanced functionality and efficiency. The increase in FDIC premiums relates to the increases in assessment rates from 2009.
Year to date, non-interest expenses are $1.8 million lower than 2009. The savings comes primarily in our employment expense category, which was reduced by $1.4 million. The savings was the result of the down sizing that took place in the fall of 2009.
ABOUT THE COMPANY
Headquartered in Fort Wayne, Indiana, Tower Financial Corporation is a financial services holding company with one subsidiary; Tower Bank & Trust Company, a community bank headquartered in Fort Wayne. Tower Bank provides a wide variety of financial services to businesses and consumers through its six full-service financial centers in Fort Wayne, and one in Warsaw, Indiana. Tower Bank has a wholly-owned subsidiary, Tower Trust Company, which is a state-chartered wealth services firm doing business as Tower Private Advisors. Tower Financial Corporation's common stock is listed on the NASDAQ Global Market under the symbol "TOFC." For further information, visit Tower's web site at www.towerbank.net
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about the Corporation and the Bank.
These forward-looking statements are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Actual results and outcomes may differ materially from what may be expressed or forecasted in the forward-looking statements. Future factors include changes in banking regulation; changes in governmental and regulatory policy or enforcement; changes in the national and local economy; changes in interest rates and interest-rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in tax laws; changes in prices; the impact of technological advances; the outcomes of contingencies, trends in customer behavior and their ability to repay loans; changes in local real estate values; and other factors, including various risk factors identified and described in the Corporation's Annual Report on Form 10-K, quarterly reports of Form 10-Q and in other periodic reports we file from time to time with the Securities and Exchange Commission. These reports are available on the Commission's website at www.sec.gov, as well as on our website at www.towerbank.net
| Tower Financial Corporation | ||
| Consolidated Balance Sheets | ||
| At December 31, 2010 and December 31, 2009 | ||
| (unaudited) | ||
| December 31 | December 31 | |
| 2010 | 2009 | |
| ASSETS | ||
| Cash and due from banks | $ 24,717,935 | $ 19,861,434 |
| Short-term investments and interest-earning deposits | 4,309,006 | 1,259,197 |
| Federal funds sold | 1,648,441 | 3,543,678 |
| Total cash and cash equivalents | 30,675,382 | 24,664,309 |
| Securities available for sale, at fair value | 110,108,656 | 85,179,160 |
| Securities held to maturity, at cost | -- | 4,495,977 |
| FHLBI and FRB stock | 4,075,100 | 4,250,800 |
| Loans Held for Sale | 2,140,872 | 3,842,089 |
| Loans | 486,914,115 | 527,333,461 |
| Allowance for loan losses | (12,489,400) | (11,598,389) |
| Net loans | 474,424,715 | 515,735,072 |
| Premises and equipment, net | 8,329,718 | 8,011,574 |
| Accrued interest receivable | 2,391,953 | 2,439,859 |
| Bank Owned Life Insurance | 13,516,789 | 13,046,573 |
| Other Real Estate Owned | 4,284,263 | 4,634,089 |
| Prepaid FDIC Insurance | 2,864,527 | 4,777,797 |
| Other assets | 7,116,280 | 9,081,759 |
| Total assets | $ 659,928,255 | $ 680,159,058 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| LIABILITIES | ||
| Deposits: | ||
| Noninterest-bearing | $ 92,872,957 | $ 95,027,233 |
| Interest-bearing | 483,483,179 | 473,353,118 |
| Total deposits | 576,356,136 | 568,380,351 |
| Federal Home Loan Bank advances | 7,500,000 | 43,200,000 |
| Junior subordinated debt | 17,527,000 | 17,527,000 |
| Accrued interest payable | 1,415,713 | 480,885 |
| Other liabilities | 4,000,654 | 3,634,713 |
| Total liabilities | 606,799,503 | 633,222,949 |
| STOCKHOLDERS' EQUITY | ||
| Preferred stock, no par value, 4,000,000 shares authorized; | ||
| 7,750 shares issued and outstanding | 757,213 | 1,788,000 |
| Common stock and paid-in-capital, no par value, 6,000,000 | ||
| shares authorized;4,789,023 and 4,155,432 shares issued; | ||
| and 4,724,023 shares outstanding at December 31, 2010 | ||
| and 4,090,432 shares outstanding at December 31, 2009 | 43,740,155 | 39,835,648 |
| Treasury stock, at cost, 65,000 shares at December 31, 2010 and | ||
| December 31, 2009 | (884,376) | (884,376) |
| Retained earnings | 8,450,579 | 5,286,808 |
| Accumulated other comprehensive income (loss), net of tax | ||
| of $548,730 at December 31, 2010 and $468,803 | ||
| at December 31, 2009 | 1,065,181 | 910,029 |
| Total stockholders' equity | 53,128,752 | 46,936,109 |
| Total liabilities and stockholders' equity | $ 659,928,255 | $ 680,159,058 |
| Tower Financial Corporation | ||||
| Consolidated Statements of Operations | ||||
| For the year ended December 31, 2010 and 2009 | ||||
| (unaudited) | ||||
| For the Three Months Ended | For the Year ended | |||
| December 31 | December 31 | |||
| 2010 | 2009 | 2010 | 2009 | |
| Interest income: | ||||
| Loans, including fees | $ 6,466,670 | $ 6,928,347 | $ 26,847,111 | $ 28,035,871 |
| Securities - taxable | 606,566 | 825,731 | 2,502,200 | 3,066,247 |
| Securities - tax exempt | 301,658 | 241,174 | 1,071,876 | 951,942 |
| Other interest income | 12,781 | 1,859 | 31,334 | 13,363 |
| Total interest income | 7,387,675 | 7,997,111 | 30,452,521 | 32,067,423 |
| Interest expense: | ||||
| Deposits | 1,502,196 | 2,176,852 | 6,566,581 | 10,315,149 |
| Fed Funds Purchased | 8 | 83 | 138 | 1,656 |
| FHLB advances | 68,902 | 158,026 | 465,756 | 801,803 |
| Trust preferred securities | 296,349 | 281,648 | 1,158,956 | 1,128,017 |
| Total interest expense | 1,867,455 | 2,616,609 | 8,191,431 | 12,246,625 |
| Net interest income | 5,520,220 | 5,380,502 | 22,261,090 | 19,820,798 |
| Provision for loan losses | 805,000 | 1,230,000 | 4,745,000 | 10,735,000 |
| Net interest income after provision | ||||
| for loan losses | 4,715,220 | 4,150,502 | 17,516,090 | 9,085,798 |
| Noninterest income: | ||||
| Trust and brokerage fees | 939,864 | 880,841 | 3,604,907 | 3,373,635 |
| Service charges | 281,103 | 294,468 | 1,125,707 | 1,121,446 |
| Loan broker fees | 181,373 | 133,081 | 720,615 | 685,632 |
| Gain/(Loss) on sale of securities | 175,136 | 54,220 | 1,109,743 | 264,112 |
| Impairment on AFS securities | (128,169) | (225,770) | (158,303) | (750,770) |
| Other fees | 376,054 | 352,896 | 1,411,435 | 1,393,777 |
| Total noninterest income | 1,825,361 | 1,489,736 | 7,814,104 | 6,087,832 |
| Noninterest expense: | ||||
| Salaries and benefits | 2,509,822 | 2,927,892 | 9,578,932 | 10,947,014 |
| Occupancy and equipment | 644,037 | 735,483 | 2,533,688 | 2,905,929 |
| Marketing | 55,689 | 85,330 | 423,443 | 451,862 |
| Data processing | 369,669 | 293,199 | 1,128,096 | 1,172,625 |
| Loan and professional costs | 411,701 | 508,825 | 1,629,582 | 1,649,511 |
| Office supplies and postage | 53,190 | 90,681 | 245,938 | 348,230 |
| Courier service | 55,222 | 58,973 | 221,756 | 236,928 |
| Business Development | 128,695 | 101,879 | 406,775 | 456,483 |
| Communication Expense | 46,067 | 49,935 | 186,164 | 181,393 |
| FDIC Insurance Premiums | 525,878 | 365,926 | 2,059,524 | 1,681,862 |
| OREO Expenses | 293,221 | 609,282 | 1,703,791 | 1,724,626 |
| Other expense | 251,894 | 251,160 | 1,125,007 | 1,241,141 |
| Total noninterest expense | 5,345,085 | 6,078,565 | 21,242,696 | 22,997,604 |
| Income/(loss) before income taxes/(benefit) | 1,195,496 | (438,327) | 4,087,498 | (7,823,974) |
| Income taxes expense/(benefit) | 311,917 | 763,180 | 923,727 | (2,216,637) |
| Net income/(loss) | $ 883,579 | $ (1,201,507) | $ 3,163,771 | $ (5,607,337) |
| Less: Preferred Stock Dividends | -- | -- | -- | 1,579 |
| Net income/(loss) available to common shareholders | $ 883,579 | $ (1,201,507) | $ 3,163,771 | $ (5,608,916) |
| Basic earnings/(loss) per common share | $ 0.19 | $ (0.29) | $ 0.73 | $ (1.37) |
| Diluted earnings/(loss) per common share | $ 0.18 | $ (0.29) | $ 0.69 | $ (1.37) |
| Average common shares outstanding | 4,720,159 | 4,090,432 | 4,334,084 | 4,090,416 |
| Average common shares and dilutive | ||||
| potential common shares outstanding | 4,852,759 | 4,090,432 | 4,558,918 | 4,090,416 |
| Total Shares outstanding at end of period | 4,714,887 | 4,090,432 | 4,724,023 | 4,090,432 |
| Dividends declared per common share | $ -- | $ -- | $ -- | $ -- |
| Tower Financial Corporation | ||||||||||
| Consolidated Financial Highlights | ||||||||||
| (unaudited) | ||||||||||
| Quarterly | Year-To-Date | |||||||||
| 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||
| ($ in thousands except for share data) | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2010 | 2009 |
| EARNINGS | ||||||||||
| Net interest income | $5,521 | 5,580 | 5,597 | 5,563 | 5,381 | 5,077 | 4,822 | 4,541 | 22,261 | 19,821 |
| Provision for loan loss | $805 | 1,500 | 1,100 | 1,340 | 1,230 | 1,995 | 6,550 | 960 | 4,745 | 10,735 |
| NonInterest income | $1,825 | 2,657 | 1,734 | 1,598 | 1,490 | 1,210 | 1,599 | 1,789 | 7,814 | 6,088 |
| NonInterest expense | $5,345 | 5,350 | 5,642 | 4,905 | 6,079 | 5,468 | 6,458 | 4,993 | 21,242 | 22,998 |
| Net income/(loss) | $884 | 1,045 | 514 | 721 | (1,202) | (721) | (4,095) | 410 | 3,164 | (5,608) |
| Basic earnings per share | $0.19 | 0.24 | 0.13 | 0.18 | (0.29) | (0.18) | (1.00) | 0.10 | 0.73 | (1.37) |
| Diluted earnings per share | $0.18 | 0.22 | 0.12 | 0.17 | (0.29) | (0.18) | (1.00) | 0.10 | 0.69 | (1.37) |
| Average shares outstanding | 4,720,159 | 4,427,370 | 4,090,432 | 4,090,432 | 4,090,432 | 4,090,432 | 4,090,432 | 4,090,365 | 4,334,084 | 4,090,416 |
| Average diluted shares outstanding | 4,852,759 | 4,669,965 | 4,394,419 | 4,394,419 | 4,090,432 | 4,090,432 | 4,090,432 | 4,090,365 | 4,558,918 | 4,090,416 |
| PERFORMANCE RATIOS | ||||||||||
| Return on average assets * | 0.53% | 0.63% | 0.31% | 0.43% | -0.70% | -0.42% | -2.32% | 0.24% | 0.48% | -0.81% |
| Return on average common equity * | 6.56% | 8.17% | 4.26% | 6.17% | -9.83% | -6.13% | -32.65% | 3.33% | 6.33% | -11.48% |
| Net interest margin (fully-tax equivalent) * | 3.72% | 3.69% | 3.72% | 3.66% | 3.47% | 3.24% | 3.02% | 2.85% | 3.70% | 3.14% |
| Efficiency ratio | 72.76% | 64.95% | 76.96% | 68.50% | 88.47% | 86.97% | 100.58% | 78.88% | 70.63% | 88.76% |
| Full-time equivalent employees | 150.75 | 149.25 | 145.75 | 150.25 | 146.25 | 159.25 | 172.75 | 176.50 | 150.75 | 146.25 |
| CAPITAL | ||||||||||
| Equity to assets | 8.05% | 8.09% | 7.44% | 7.12% | 6.90% | 7.14% | 6.70% | 7.03% | 8.05% | 6.90% |
| Regulatory leverage ratio | 10.55% | 10.35% | 9.50% | 9.20% | 9.05% | 9.04% | 8.56% | 9.52% | 10.55% | 9.05% |
| Tier 1 capital ratio | 13.10% | 12.73% | 11.62% | 11.14% | 10.90% | 11.00% | 10.38% | 11.47% | 13.10% | 10.90% |
| Total risk-based capital ratio | 14.30% | 13.98% | 13.11% | 12.66% | 12.46% | 12.53% | 11.96% | 12.77% | 14.30% | 12.46% |
| Book value per share | $11.09 | 11.15 | 11.53 | 11.30 | 11.04 | 11.87 | 11.24 | 12.29 | 11.09 | 11.04 |
| Cash dividend per share | $0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 |
| ASSET QUALITY | ||||||||||
| Net charge-offs | $332 | 2,202 | 531 | 789 | 4,537 | 2,045 | 3,092 | 117 | 3,854 | 9,791 |
| Net charge-offs to average loans * | 0.27% | 1.74% | 0.41% | 0.61% | 3.38% | 1.49% | 2.21% | 0.08% | 0.76% | 1.78% |
| Allowance for loan losses | $12,489 | 12,016 | 12,718 | 12,150 | 11,598 | 14,905 | 14,105 | 11,498 | 12,489 | 11,598 |
| Allowance for loan losses to total loans | 2.56% | 2.43% | 2.50% | 2.32% | 2.20% | 2.78% | 2.53% | 2.06% | 2.56% | 2.20% |
| Other real estate owned (OREO) | $4,284 | 3,843 | 6,477 | 4,443 | 4,634 | 3,990 | 4,060 | 5,080 | 4,284 | 4,634 |
| Non-accrual Loans | $12,939 | 10,768 | 10,360 | 13,974 | 13,466 | 20,219 | 19,016 | 11,708 | 4,284 | 13,466 |
| 90+ Day delinquencies | $2,688 | 3,175 | 2,213 | 3,223 | 561 | 1,477 | 2,509 | 1,304 | 12,939 | 561 |
| Restructured Loans | $7,502 | 1,761 | 1,862 | 1,997 | 1,915 | 163 | 184 | 191 | 7,502 | 1,915 |
| Total Nonperforming Loans | 23,129 | 15,704 | 14,435 | 19,194 | 15,942 | 21,859 | 21,709 | 13,203 | 23,129 | 15,942 |
| Impaired Securities (Market Value) | 422 | 437 | 489 | 440 | 479 | 779 | -- | -- | 422 | 479 |
| Total Nonperforming Assets | 27,835 | 19,984 | 21,401 | 24,077 | 21,055 | 26,628 | 25,769 | 18,283 | 27,835 | 21,055 |
| NPLs to Total loans | 4.75% | 3.17% | 2.83% | 3.67% | 3.02% | 4.08% | 3.89% | 2.37% | 4.75% | 3.02% |
| NPAs (w/o 90+) to Total assets | 3.81% | 2.55% | 2.91% | 3.09% | 3.01% | 3.70% | 3.39% | 2.37% | 3.81% | 3.01% |
| NPAs+90 to Total assets | 4.22% | 3.03% | 3.25% | 3.57% | 3.10% | 3.92% | 3.75% | 2.55% | 4.22% | 3.10% |
| END OF PERIOD BALANCES | ||||||||||
| Total assets | $659,928 | 660,141 | 658,327 | 674,152 | 680,159 | 679,394 | 686,307 | 715,634 | 659,928 | 680,159 |
| Total earning assets | $609,196 | 613,286 | 611,996 | 626,197 | 629,904 | 633,742 | 651,946 | 681,688 | 609,196 | 629,904 |
| Total loans | $486,914 | 494,818 | 509,656 | 523,437 | 527,333 | 536,074 | 557,530 | 558,148 | 486,914 | 527,333 |
| Total deposits | $576,356 | 577,094 | 564,988 | 559,291 | 568,380 | 592,731 | 594,594 | 618,705 | 576,356 | 568,380 |
| Stockholders' equity | $53,129 | 53,382 | 48,950 | 48,002 | 46,936 | 48,541 | 45,962 | 50,280 | 53,129 | 46,936 |
| AVERAGE BALANCES | ||||||||||
| Total assets | $657,397 | 658,898 | 663,825 | 677,967 | 678,445 | 686,752 | 708,282 | 696,431 | 664,522 | 692,478 |
| Total earning assets | $605,306 | 614,742 | 617,060 | 629,582 | 628,983 | 636,503 | 657,539 | 662,712 | 616,673 | 646,434 |
| Total loans | $485,125 | 503,334 | 514,962 | 526,814 | 532,627 | 542,921 | 561,828 | 559,607 | 507,559 | 549,246 |
| Total deposits | $574,072 | 561,966 | 569,759 | 564,238 | 581,018 | 597,792 | 612,649 | 598,807 | 567,509 | 597,567 |
| Stockholders' equity | $53,438 | 50,744 | 48,404 | 47,421 | 48,507 | 46,678 | 50,303 | 49,942 | 50,002 | 48,858 |
| * annualized for quarterly data | ||||||||||