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Northway Financial, Inc. Announces Second Quarter Earnings and Declares Semi-Annual Dividend

Northway Financial Inc.
·6 min read

NORTH CONWAY, N.H., July 31, 2020 (GLOBE NEWSWIRE) -- In a release issued under the same headline earlier today by Northway Financial, Inc. (OTCQB: NWYF), please note that the dividend dates in the second paragraph were changed from August 10, 2020 and August 3, 2020 to August 17, 2020 and August 10, 2020. The corrected release follows:

Northway Financial, Inc. (the “Company”) (OTCQB: NWYF), the parent company of Northway Bank (the “Bank”), today reported net income for the quarter ended June 30, 2020 of $2.3MM, or $0.84 per basic common share. Year-to-date, the Company reported net income of $923M, or $0.34 per basic common share.

The Board of Directors has declared a semi-annual cash dividend of $0.35 per share, payable on August 17, 2020, to common stockholders of record on August 10, 2020. Based on a share price of $23.35 on July 24, 2020, this semi-annual dividend, when annualized, results in a dividend yield of approximately 2.17%. The Company’s common stock is available through brokers and is quoted on the OTCQB under the stock symbol “NWYF”.

William J. Woodward, President and Chief Executive Officer, stated, “During these unprecedented times, the Bank remains steadfast in using all of our available resources to enhance shareholder value, which is why we are continuing our current level of dividend. We are overwhelmed by the loyalty that our customers have exhibited during the COVID-19 pandemic. To help our small business and commercial customers, we processed 670 loans through the Paycheck Protection Program, of which 144 loans were for new customers. Our deposit growth has been very significant, reflecting the faith our customers have in our financial institution. Handling this significant level of growth has required our dedicated staff to work at an incredible pace. All of us at Northway are proud of the role we play as an essential business in this pandemic.”

Financial Highlights

  • Included in year-to-date net income of $923M was $1.8MM in unrealized equity security losses, which accounting standards now require us to report in our income statement.

  • Excluding marketable equity securities gains, both realized and unrealized, year-to-date pretax net income was $2.8MM.

  • Total assets were $1.07B, total loans, net, were $692MM, and total deposits were $836MM at June 30, 2020.

  • Total loans, net, including loans held for sale, increased $63MM from December 31, 2019 to $692MM

  • The increase in loans was driven by the origination of $68MM in PPP loans which are 100% guaranteed by the Small Business Administration.

  • 670 Paycheck Protection Program loans were originated and funded, of which 144, or 22%, were for new customers to the Bank.

  • Total deposits at June 30, 2020 were $836MM, an increase of $105MM, or 14%, from December 31, 2019. The increase is primarily attributable to federal and state funds from COVID-19 economic relief and stimulus programs deposited into our customers’ accounts.

  • During the first six months of 2020, total originations of residential first mortgage loans were $57 MM, an 84% increase from the same period in 2019.

  • $35 MM of the residential first mortgage loan originations were sold for a realized gain on sale of $1.1MM.

  • The net interest margin at June 30, 2020 was 3.26%.

  • Nonperforming loans as a percentage of total loans stood at 0.48% at June 30, 2020.

  • Regulatory capital ratios at June 30, 2020 were 10.51% Tier 1 Core Capital to Average Assets, 17.51% Total Risk-Based Capital, and 13.10% Common Equity Risk-Based Capital.

  • The market price of our common stock, as of July 24, 2020, was $23.35.

Selected Financial Highlights

(Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

Six Months Ended

6/30/2020

6/30/2019

6/30/2020

6/30/2019

Interest and Dividend Income

$

7,802

$

8,806

$

15,892

$

17,692

Interest Expense

984

1,475

2,009

2,940

Net Interest and Dividend Income

6,818

7,331

13,883

14,752

Provision for Loan Losses

750

210

750

210

All Other Noninterest Income

2,374

1,717

3,518

3,275

Realized Gains on Securities Available-for-Sale, net

33

388

1,175

545

Noninterest Expense

7,357

7,651

15,072

14,892

Net Income Before Gains on Marketable Equity Securities, net

1,118

1,575

2,754

3,470

(Loss) Gain on Marketable Equity Securities Sold, net

(65

)

225

(65

)

498

Unrealized Gain (Loss) on Marketable Equity Securities Held, net

1,749

238

(1,819

)

2,164

Income Before Income Tax Expense

2,802

2,038

870

6,132

Income Tax (Benefit) Expense

487

294

(53

)

1,092

Net Income

$

2,315

$

1,744

$

923

$

5,040

Net Income Available to Common Stockholders

$

2,315

$

1,744

$

923

$

5,040

Earnings per Common Share, Basic

$

0.84

$

0.63

$

0.34

$

1.83


6/30/20

12/31/2019

6/30/2019

Balance Sheet

Total Assets

$

1,065,015

$

916,995

$

933,770

Cash and Due from Banks and Interest-Bearing Deposits

160,342

78,639

36,399

Securities Available-for-Sale, at Fair Value

154,067

160,484

195,173

Marketable Equity Securities, at Fair Value

13,607

11,899

17,611

Loans, Net

691,777

628,797

644,227

Total Liabilities

972,286

825,616

846,020

Retail Non-Maturity Deposits

644,427

508,724

494,974

Municipal Non-Maturity Deposits

107,663

110,602

98,764

Certificates of Deposit

84,071

111,771

154,390

Securities Sold Under Agreements to Repurchase

99,635

64,329

67,430

Junior Subordinated Debentures

20,620

20,620

20,620

Stockholders' Equity

92,729

91,379

87,750

Profitability and Efficiency

Net Interest Margin

3.26

%

3.45

%

3.44

%

Yield on Earning Assets

3.72

4.05

4.11

Cost of Interest Bearing Liabilities

0.59

0.77

0.84

Book Value Per Share of Common Shares Outstanding

$

33.70

$

33.21

$

31.89

Tangible Book Value Per Share of Common Shares Outstanding

30.09

29.60

28.28

Capital and Credit

Tier 1 Core Capital to Average Assets

10.51

%

11.43

%

10.92

%

Common Equity Risk-Based Capital

13.10

13.61

12.47

Tier 1 Risk-Based Capital

16.26

16.89

15.60

Total Risk-Based Capital

17.51

18.10

16.77

Common Shares Outstanding

2,751,650

2,751,650

2,751,650

Weighted Average Number of Common Shares, Basic

2,751,650

2,751,650

2,751,650

Nonperforming Loans as a % of Total Loans

0.48

0.49

0.53

Allowance for Loan Losses as a % of Nonperforming Loans

260

230

216

About Northway Financial, Inc.

Northway Financial, Inc., headquartered in North Conway, New Hampshire, is a bank holding company. Through its subsidiary bank, Northway Bank, the Company offers a broad range of financial products and services to individuals, businesses and the public sector from its 16 full-service banking offices and its loan production offices located in Bedford and Portsmouth, New Hampshire.

Forward-looking Statements

Statements included in this press release that are not historical or current fact are “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Northway Financial, Inc. disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Contact:
Gary Laurash
Chief Financial Officer
603-326-7377