Northway Financial, Inc. Announces First Quarter Earnings

Rhea-AI Summary

Northway Financial, Inc. (NWYF) reported a significant turnaround in Q1 2021 with net income of $1.9 million, or $0.69 per share, compared to a loss of $1.4 million in Q1 2020. Total assets reached $1.2 billion, with total deposits increasing by 33% year-over-year. Key growth metrics include a 280% rise in residential mortgage production and a 128% increase in municipal loans, contributing to a 21% overall loan growth. Credit quality is improving, with nonperforming loans at 0.35%. Market price as of April 29, 2021, was $30.90.

Positive

• Net income rose to $1.9 million in Q1 2021 from a net loss of $1.4 million in Q1 2020.
• Total deposits increased by 33% year-over-year, reaching $952 million.
• Residential mortgage production rose by 280% year-over-year.
• Overall loan growth up 21% compared to the previous year.

Negative

• Net interest margin decreased to 2.76% from 3.37% year-over-year.
• Provision for loan losses increased uncertainty, indicating caution in lending.

NORTH CONWAY, N.H., April 30, 2021 (GLOBE NEWSWIRE) -- Northway Financial, Inc. (the “Company”) (OTCQB: NWYF), the parent company of Northway Bank (the “Bank”), today reported net income for the quarter ended March 31, 2021 of $1.9MM, or $0.69 per basic common share.

President and CEO William J. Woodward commented: “I am pleased to report the results for the first quarter of 2021, which was $1.9 million in net income. This is a significant increase over the first quarter of 2020, where we reported a loss of $1.4 million. The Bank weathered the pandemic and we emerged as a stronger organization. Key performance measures in the first quarter includes an increase in total deposits of 33%, a 280% increase in residential mortgage production, and a 128% increase in municipal loans. Overall, the Bank experienced loan growth of 21% from the prior year. Because of the uncertainty in the economy, we increased our allowance for loan losses by $2.25 million during 2020. Our credit quality continues to show improvement, which is a testament to many of the provisions of the CARES Act. We are in a good position to take advantage of opportunities, as the economy continues to improve. The results are an indication of the trust that our existing customers and new customers have in Northway Bank. None of this would have been possible without the hard work of all our employees.”

Financial Highlights

• Total assets were $1.2 billion, total loans, net, were $763 million, and total deposits were $952 million at March 31, 2021.
• Total loans, net increased $133 million or 21% compared to March 31, 2020.
  
• Residential real estate loan originations were $39 million in the first three months of the year which was 280% greater than the same period last year.
  
• Loans to municipalities increased $45 million or 128% compared to March 31, 2020.
  
• During the quarter, the Bank funded 318 Paycheck Protection Program loans with total balances of $26 million.
  
• Total deposits increased 33% compared to March 31, 2020 driven by an increase in total non-maturity deposits of $249 million, or 41%.
  
• The cost of interest bearing liabilities was .33% vs .62% at March 31, 2020.
  
• The gain on marketable equity securities was $1.3 million compared to a loss of $3.6 million at March 31, 2020.
  
• Nonperforming loans as a percentage of total loans stood at 0.35% at March 31, 2021 compared to 0.52% at March 31, 2020.
  
• Regulatory capital ratios at March 31, 2021 were 9.42% Tier 1 Core Capital to Average Assets, 16.57% Total Risk-Based Capital, and 12.45% Common Equity Risk-Based Capital.
  
• The market price of our common stock, as of April 29, 2021, was $30.90.

Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)
(Dollars in thousands, except per share data)	Three Months Ended
	3/31/2021			3/31/2020
Interest and Dividend Income	$	7,965		$	8,090
Interest Expense		671			1,025
Net Interest and Dividend Income		7,294			7,065
Provision for Loan Losses		-			-
All Other Noninterest Income		1,313			1,144
Noninterest Expense		7,589			7,715
Net Income Before Gain (Loss) on Securities		1,018			494
Gain on Securities Available-for-Sale, net		-			1,142
Gain (Loss) on Marketable Equity Securities		1,273			(3,568	)
Income (Loss) before Income Tax Expense		2,291			(1,932	)
Income Tax Expense (Benefit)		392			(540	)
Net Income	$	1,899		$	(1,392	)
Net Income Available to Common Stockholders	$	1,899		$	(1,392	)
Earnings per Common Share, Basic	$	0.69		$	(0.51	)

	3/31/2021			12/31/2020			3/31/2020
Balance Sheet
Total Assets	$	1,182,047		$	1,120,692		$	897,271
Cash and Due from Banks and Interest-Bearing Deposits		162,361			167,812			68,998
Securities Available-for-Sale, at Fair Value		191,526			172,117			143,700
Marketable Equity Securities, at Fair Value		23,965			17,901			11,910
Loans Held-for-Sale		-			237			3,444
Loans, Net		763,428			722,354			630,128
Total Liabilities		1,086,244			1,024,577			807,006
Non Municipal Non-Maturity Deposits		752,921			673,502			521,030
Municipal Non-Maturity Deposits		107,566			116,255			90,466
Certificates of Deposit		91,870			96,476			104,871
Securities Sold Under Agreements to Repurchase		86,952			103,523			50,972
Junior Subordinated Debentures		20,620			20,620			20,620
Stockholders' Equity		95,803			96,115			90,265
Profitability and Efficiency
Net Interest Margin		2.76	%		2.96	%		3.37	%
Yield on Earning Assets		3.01			3.34			3.84
Cost of Interest Bearing Liabilities		0.33			0.51			0.62
Book Value Per Share of Common Shares Outstanding	$	34.82		$	34.93		$	32.80
Tangible Book Value Per Share of Common Shares Outstanding		30.94			31.07			29.01
Capital and Credit
Tier 1 Core Capital to Average Assets		9.42	%		9.67	%		11.13	%
Common Equity Risk-Based Capital		12.45			13.05			13.07
Tier 1 Risk-Based Capital		15.31			16.08			16.32
Total Risk-Based Capital		16.57			17.34			17.51
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

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.

FAQ

What was Northway Financial's net income for Q1 2021?

Northway Financial reported a net income of $1.9 million for Q1 2021.

How much did total deposits increase for NWYF in Q1 2021?

Total deposits increased by 33% year-over-year, reaching $952 million.

What was the market price of NWYF stock on April 29, 2021?

The market price of Northway Financial's common stock was $30.90 on April 29, 2021.

What percentage of nonperforming loans did NWYF have as of March 31, 2021?

Nonperforming loans as a percentage of total loans stood at 0.35% as of March 31, 2021.

How did the provision for loan losses impact NWYF?

The provision for loan losses increased uncertainty, indicating a cautious approach in lending.