BERLIN, N.H., Nov. 1 /PRNewswire-FirstCall/ -- Northway Financial,
Inc. (the "Company") (NASDAQ:NWFI) reported net income for the
quarter ended September 30, 2006 of $854,000, or $0.57 per
share-basic, compared to $877,000, or $0.58 per share-basic, for
the same quarter in 2005, a decrease of $23,000, or 2.6%. Net
income for the nine months ended September 30, 2006 was $2,690,000,
or $1.80 per share-basic, compared to $2,604,000, or $1.73 per
share-basic, for the nine months ended September 30, 2005, an
increase of $86,000, or 3.3%. Commenting on the third quarter,
William J. Woodward, President and Chief Executive Officer of the
Company, stated: "Due to the interest rate environment, we
continued to see pressure on our net interest margin, and this
resulted in net interest and dividend income falling below the same
quarter last year. However, our efforts to improve other
noninterest income continued to be successful, and together with
increased securities gains, partially offset the pressure on the
margin. In addition, by increasing our municipal bond holdings in
our investment portfolio, we were able to reduce our effective tax
rate and record a lower provision for income taxes." On October 31,
2006, the Board of Directors declared a dividend of $0.20 cents per
share, payable on November 20, 2006 to shareholders of record on
November 10, 2006. Net interest and dividend income for the third
quarter of 2006 was $5,556,000 compared to $5,835,000 for the third
quarter of 2005, a decrease of $279,000. The provision for loan
losses for the third quarter of 2006 was $120,000 compared to no
provision for the third quarter of 2005. Net securities gains for
the quarter increased $63,000 to $104,000 compared to $41,000 for
the same period last year. Other noninterest income for the quarter
increased $107,000 to $1,403,000 compared to $1,296,000 for the
same period last year. Other operating expense was $5,904,000 for
the quarter compared to $5,946,000 for the same period last year, a
decrease of $42,000. Income tax expense decreased $164,000 to
$185,000 compared to $349,000 for the same period last year. Net
interest and dividend income for the nine months ended September
30, 2006 decreased $604,000 to $16,842,000 compared to $17,446,000
for the same period last year. The provision for loan losses for
the first nine months of 2006 increased $270,000 to $345,000
compared to $75,000 for the first nine months of 2005. Securities
gains for the first nine months of 2006 increased $143,000 to
$353,000 compared to $210,000 for the same period last year. Other
noninterest income year-to-date increased $641,000 to $4,050,000
compared to $3,409,000 for the same period last year. Other
operating expense increased $214,000 to $17,524,000 for the first
nine months of 2006 compared to $17,310,000 for the same period
last year. Income tax expense decreased $390,000 to $686,000
compared to $1,076,000 for the same period last year. At September
30, 2006, the Company had total assets of $629,322,000 compared to
$631,275,000 at September 30, 2005, a decrease of $1,953,000.
Loans, including loans held-for-sale, at September 30, 2006
decreased $634,000 to $455,880,000 compared to $456,514,000 at
September 30, 2005. Investments at September 30, 2006 increased
$1,447,000 to $124,584,000 compared to $123,137,000 at September
30, 2005. Total deposits were $474,027,000 at September 30, 2006
compared to $462,329,000 at September 30, 2005, an increase of
$11,698,000. Total borrowings decreased $13,807,000 to $99,218,000
at September 30, 2006 compared to $113,025,000 at September 30,
2005. Total equity increased $2,607,000 to $52,574,000 at September
30, 2006 compared to $49,967,000 at September 30, 2005. Northway
Financial, Inc., headquartered in Berlin, 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 full-service
banking offices. Certain statements in this press release may be
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements can be identified by the use of the words "expect,"
"believe," "estimate," "will" and other expressions which predict
or indicate future trends and which do not relate to historical
matters. Forward-looking statements may include, but are not
limited to, expectations for impact of new products on noninterest
income and expense, projections of revenue, income or loss, and
plans related to products or services of the Company and its
subsidiary. Such forward-looking statements are subject to known
and unknown risks, uncertainties and contingencies, many of which
are beyond the control of the Company. The Company's actual results
could differ materially from those projected in the forward-looking
statements as the result of, among other factors, changes in
interest rates, changes in the securities or financial markets, a
deterioration in general economic conditions on a national basis or
in the local markets in which the Company operates, including
changes in local business conditions resulting in rising
unemployment and other circumstances which adversely affect
borrowers' ability to service and repay our loans, changes in loan
defaults and charge-off rates, reduction in deposit levels
necessitating increased borrowing to fund loans and investments,
the passing of adverse government regulation, and changes in
assumptions used in making such forward-looking statements. These
forward- looking statements were based on information, plans and
estimates at the date of this press release, and the Company does
not promise to update any forward- looking statements to reflect
changes in underlying assumptions or factors, new information,
future events or other changes. Northway Financial, Inc. Selected
Consolidated Financial Data (Unaudited) (In thousands, except for
ratios and per share amounts) Period end balance sheet data:
September 30, 2006 2005 Total assets $629,322 $631,275 Loans, net
(1) 455,880 456,514 Investments (2) 124,584 123,137 Deposits
474,027 462,329 Borrowings 99,218 113,025 Stockholders' equity
52,574 49,967 Book value per share $35.21 $33.37 Tangible book
value per share (3) 26.36 24.94 Leverage ratio 9.13% 8.86% Shares
outstanding 1,493,174 1,497,574 For the Three Months For the Nine
Months Ended Sep. 30, Ended Sep. 30, Operating results: 2006 2005
2006 2005 Net interest and dividend income $5,556 $5,835 $16,842
$17,446 Securities gains, net 104 41 353 210 Other noninterest
income 1,403 1,296 4,050 3,409 Loan loss provision 120 - 345 75
Other operating expense 5,904 5,946 17,524 17,310 Income before tax
1,039 1,226 3,376 3,680 Income tax expense 185 349 686 1,076 Net
income $854 $877 $2,690 $2,604 Earnings per share $0.57 $0.58 $1.80
$1.73 Return on average assets 0.53% 0.55% 0.57% 0.56% Return on
average equity 6.60% 6.85% 7.04% 6.92% (1) Net of unearned income
and the allowance for loan losses. Includes loans held-for-sale.
(2) Includes federal funds sold, Federal Home Loan Bank stock,
Federal Reserve Bank stock, and investment securities
available-for-sale. (3) Includes a deduction of $13,213 and $12,626
for goodwill, core deposit intangible and mortgage servicing assets
for 2006 and 2005, respectively. DATASOURCE: Northway Financial,
Inc. CONTACT: Richard P. Orsillo, Senior Vice President and Chief
Financial Officer of Northway Financial, Inc., +1-603-752-1171
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