SOURCE: New Hampshire Thrift Bancshares

January 30, 2015 16:15 ET

New Hampshire Thrift Bancshares, Inc. Reports Fourth Quarter and 2014 Annual Results

NEWPORT, NH--(Marketwired - Jan 30, 2015) -  New Hampshire Thrift Bancshares, Inc. ("we," "us," "our" or the "Company") (NASDAQ: NHTB), the holding company for Lake Sunapee Bank, fsb (the "Bank"), today announced results for the fourth quarter and the year ended December 31, 2014.

Consolidated net income for the fourth quarter of 2014 was $2.9 million, or $0.34 per diluted common share, compared to $2.7 million, or $0.32 per diluted share, for the third quarter of 2014. Consolidated net income for the year ended December 31, 2014 was $10.0 million, or $1.19 per diluted common share, compared to $8.4 million, or $1.11 per diluted share, for the year ended December 31, 2013.

"We are encouraged by our results for the year ending 2014 as growth in our loan portfolio and an improved net interest margin fueled an increase in net interest income," President and Chief Executive Officer, Steve Theroux, commented. "In addition, contributions from our wealth management and insurance subsidiaries enhanced overall earnings. These revenue streams helped to offset the absence of over $1.5 million from our mortgage banking operations as demand for mortgage loan refinancing declined. The increase in earnings per common share reflects our ability to successfully integrate our 2013 acquisitions."

Full Year Highlights

Highlights of the full year 2014 include:

  • Net income available to common stockholders increased 21.13% compared to 2013.
  • Return on average common equity of 8.07% and return on average assets of 0.68%.
  • Book value per common share increased 3.90% to $15.97 as of December 31, 2014.
  • Loans increased $72.7 million, or 6.41%, to $1.2 billion as of December 31, 2014.
  • Net loan charge-offs were $1.4 million, or 0.11%, of average loans for the year ended December 31, 2014.
  • Deposits increased $64.6 million, or 5.94%, to $1.2 billion.
  • Net interest margin increased to 3.08% from 2.97%.
  • Noninterest income increased 22.34% to $19.2 million.

Fourth Quarter Highlights

Highlights of the fourth quarter of 2014 include:

  • Net income available to common stockholders increased 5.63% compared to the third quarter of 2014.
  • Return on average common equity of 9.16% and return on average assets of 0.75%.
  • Loans increased 0.22% compared to the third quarter of 2014.
  • Net loan charge-offs were $427 thousand, or 0.14% (annualized), of average loans for the fourth quarter of 2014.
  • Deposits increased $41.6 million, or 3.74%, from the third quarter of 2014.

Earnings Summary

The net income available to common stockholders increased $149 thousand, or 5.63% compared to the third quarter of 2014. The $1.7 million, or 21.14%, increase in net income available to common stockholders for the year ended December 31, 2014 compared to the year ended December 31, 2013, resulted from increases of $8.2 million, or 24.19%, in net interest income and $3.4 million, or 22.34%, in noninterest income, partially offset by an increase of $9.7 million, or 26.16%, in noninterest expense. The increases demonstrate the combined impact of growth during the year and operations from entities acquired in the second half of 2013.

Net Interest Income and Margin

Net interest and dividend income for the quarter decreased $227 thousand, or 2.14%, compared to the third quarter of 2014, primarily driven by the addition of $201 thousand of interest expense related to the issuance of $17.0 million of subordinated debt in October 2014. Net interest and dividend income increased 24.18% to $41.9 million for the year ended December 31, 2014 compared to the year ended December 31, 2013, which included an increase of 20.98% in interest and dividend income and an increase of 4.34% in interest expense.

For the fourth quarter of 2014, our net interest margin decreased to 3.05% from 3.14% for the third quarter of 2014. This increase was largely due to the impact of the issuance of subordinated debt on net interest income during the fourth quarter. The average cost of deposits for the fourth quarter of 2014 was 0.41% compared to 0.43% for the third quarter of 2014. 

For the year ended December 31, 2014, our net interest margin increased to 3.08% compared to 2.97% for the year ended December 31, 2013. This increase was primarily due to a lower average cost of funds resulting from replacement rates on maturities in the advance portfolio and migrations from higher-costing time deposit accounts to transaction and savings accounts.

The average cost of deposits for the year ended December 31, 2014 was 0.53% compared to 0.52% for the year ended December 31, 2013. 

Provision for Loan Losses

We recognized an increase of $142 thousand in the provision for loan losses compared to the third quarter of 2014. Net loan charge-offs were $427 thousand, or 0.14%, of average loans (annualized) for the quarter ended December 31, 2014 compared to net loan charge-offs of $253 thousand, or 0.08%, of average loans (annualized) for the third quarter of 2014. Net loan charge-offs were $1.4 million, or 0.11%, of average loans for the year ended December 31, 2014 compared to net loan charge-offs of $1.1 million, or 0.12%, of average loans for the year ended December 31, 2013.

Noninterest Income

Noninterest income for the fourth quarter of 2014 was $4.8 million, a decrease of $43 thousand compared to the third quarter of 2014. The decrease was primarily due to decreases of $60 thousand in customer service fees and $105 thousand in gains on sales and calls of securities, partially offset by increases of $44 thousand in net gains on sales of loans and $112 thousand in trust and management fees.

Noninterest income was $19.2 million for the year ended December 31, 2014, representing an increase of $3.5 million compared to noninterest income of $15.7 million for the year ended December 31, 2013. The increase was primarily due to increases of $818 thousand, or 15.61%, in customer service fees and $5.6 million, or 204.27%, in trust and management fees, partially offset by a decrease of $1.5 million in net gain on sales of loans due to lower volume and valuations during the year ended December 31, 2014, compared to the same period in 2013. Trust and management fees increased primarily due to a full year of ownership of Charter Holding Corp. in 2014 compared to only four months in 2013.

Noninterest Expense

Noninterest expense for the fourth quarter of 2014 increased $388 thousand, or 3.39%, compared to the third quarter of 2014. The increase primarily resulted from $292 thousand higher salaries and employee benefits driven by higher compensation expenses during the fourth quarter.

Noninterest expense for the year ended December 31, 2014 increased $9.7 million, or 26.16%, to $46.7 million compared to $37.0 million for the year ended December 31, 2013. This increase was largely due to the additional operational expenses related to the acquisitions of Charter Holding Corp. and its subsidiary, Charter Trust Company, and Randolph National Bank in September 2013 and October 2013, respectively. The increases related to the acquired operations include increases of $3.9 million in salaries and benefits, $1.3 million in occupancy expenses, $688 thousand in amortization of intangibles, and $1.0 million in other operational expenses at Charter Trust Company.

Income Tax Provision

Income tax expense for the fourth quarter decreased $947 thousand, or 72.35%, to $362 thousand compared to the third quarter of 2014 primarily due to the recognition of a tax benefit related to funding of a tax credit investment.

Income tax expense for the year ended December 31, 2014 increased $437 thousand, or 13.98%, compared to the year ended December 31, 2013, due to an increase of $2.1 million, or 17.87%, in pre-tax income, partially offset by a tax credit investment funding in 2014. Our effective tax rate decreased to 26.20% for the year ended December 31, 2014 from 27.09% for the year ended December 31, 2013, as a result, in part, of the tax impact of the tax credit investment benefit recorded.

Loans and Credit Quality

Loans increased $2.6 million compared to the third quarter of 2014 while loans increased $72.7 million, or 6.41%, to $1.2 billion at December 31, 2014 compared to $1.1 billion at December 31, 2013. The increase reflects increases of $42.2 million in conventional real estate mortgage loans, $25.7 million in commercial real estate mortgage loans, and $6.7 million in construction and land loans offset, partially offset by decreases of $1.5 million in home equity loans, $1.6 million in commercial and industrial loans and $757 thousand in consumer loans.

At December 31, 2014, nonperforming loans totaled $7.3 million, or 0.61%, of total loans compared to $7.1 million, or 0.59%, of total loans at September 30, 2014, and $9.3 million, or 0.82%, of total loans at December 31, 2013. The allowance for loan losses to nonperforming loans at December 31, 2014 was 119.74% compared to 134.16% at September 30, 2014 and 106.4% at December 31, 2013.

Deposits and Funding

Deposits increased $41.6 million, or 3.74%, to $1.2 billion at December 31, 2014 compared to September 30, 2014, and increased $64.6 million, or 5.94%, compared to December 31, 2013. These increases were primarily due to an increase of $30.0 million in wholesale deposits and increased transaction accounts partially offset by a decrease in time deposit accounts. Our noninterest-bearing deposits increased $16.4 million, or 16.21%, and interest-bearing deposits increased $48.2 million, or 4.88%, comparing December 31, 2014 to balances at December 31, 2013.

SBLF Redemption

We redeemed $15.0 million of our outstanding preferred securities issued under the U.S. Treasury's Small Business Lending Fund ("SBLF") program. The redemption was funded with the proceeds of a $17.0 million private placement of subordinated notes, which the Company completed in October 2014. We continue to have $8.0 million of preferred securities outstanding under the SBLF program, which we anticipate redeeming on or before first quarter 2016 when the dividend on such securities is scheduled to increase from 1% to 9%.

Quarterly Dividend

On January 8, 2015, the Company declared a regular quarterly cash dividend of $0.13 per share payable January 30, 2015 to stockholders of record as of January 23, 2015. 

Annual Meeting

The 2015 Annual Meeting of Stockholders will be held on May 14, 2015 at the Lake Sunapee Bank Building, 1868 Room, 9 Main Street, Newport, New Hampshire at 10:00 a.m.

About New Hampshire Thrift Bancshares, Inc.
New Hampshire Thrift Bancshares, Inc. is the holding company of Lake Sunapee Bank, fsb, a federally chartered savings bank that provides a wide range of life-cycle banking and financial services. Lake Sunapee Bank has four wholly owned subsidiaries: Lake Sunapee Financial Services Corp.; Lake Sunapee Group, Inc., which owns and maintains all buildings and investment properties; McCrillis & Eldredge Insurance, Inc., a full-line independent insurance agency; and Charter Holding Corp., which wholly owns Charter Trust Company, a trust services and wealth management company. New Hampshire Thrift Bancshares, Inc., through its direct and indirect subsidiaries, operates 30 offices in New Hampshire in Grafton, Hillsborough, Merrimack and Sullivan counties and 16 offices in Vermont in Orange, Rutland and Windsor counties.

Forward-Looking Statements

The Company wishes to caution readers not to place undue reliance on any such forward-looking statements contained in this press release, which speak only as of the date made. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013, and in subsequent filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date of this release. The Company and Lake Sunapee Bank do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to 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.

   
   
New Hampshire Thrift Bancshares, Inc.  
Selected Financial Highlights  
   
    Three Months
Ended December 31,
    Year Ended
Ended December 31,
 
(Dollars in thousands except for per share data)   2014     2013     2014     2013  
Net Income   $ 2,851     $ 1,995     $ 10,040     $ 8,414  
Per Common Share Data:                                
  Basic Earnings     0.34       0.24       1.19       1.11  
  Diluted Earnings (1)     0.34       0.24       1.19       1.11  
  Dividends Paid     0.13       0.13       0.52       0.52  
  Dividend Payout Ratio     38.24 %     54.17 %     43.70 %     46.85 %
                                 
    As of  
(Dollars in thousands except for per share data)   December 31, 2014     December 31, 2013  
Total Assets   $ 1,503,786     $ 1,423,870  
Total Securities (2)     126,460       134,998  
Loans, Net     1,206,845       1,134,110  
Total Deposits     1,152,714       1,088,092  
Federal Home Loan Bank Advances     140,992       121,734  
Stockholders' Equity     139,836       149,257  
Book Value per Common Share   $ 15.97     $ 15.37  
Common Shares Outstanding     8,258,031       8,216,747  
                 
Leverage (Tier I) Capital     8.43 %     8.29 %
                 
Number of Offices:                
  Banking Offices     36       37  
  Insurance Offices     3       3  
  Trust Offices     7       6  
                 
(1) Diluted earnings per share are calculated using the weighted-average number of shares outstanding for the period, including common stock equivalents, as appropriate.
   
(2) Includes available-for-sale securities shown at fair value and Federal Home Loan Bank stock at cost.
   
   
   
New Hampshire Thrift Bancshares, Inc.
Consolidated Balance Sheets
 
    December 31,     December 31,  
(Dollars in thousands)   2014     2013  
ASSETS                
Cash and due from banks   $ 24,957     $ 12,005  
Interest-bearing deposit with the Federal Reserve Bank     26,163       21,573  
      Cash and cash equivalents     51,120       33,578  
Interest-bearing time deposits with other banks     747       1,743  
Securities available-for-sale     115,698       125,238  
Federal Home Loan Bank stock     10,762       9,760  
Loans held-for-sale     2,000       680  
Loans receivable, net of the allowance for loan losses of $9.3 million as of December 31, 2014 and $9.8 million as of December 31, 2013     1,206,845       1,134,110  
Accrued interest receivable     2,576       2,628  
Premises and equipment, net     24,391       23,842  
Investments in real estate     3,533       3,681  
Other real estate owned     251       1,343  
Goodwill     44,576       44,632  
Intangible assets     9,332       11,020  
Bank owned life insurance     20,187       19,544  
Other assets     11,768       12,071  
      Total assets   $ 1,503,786     $ 1,423,870  
                 
LIABILITIES                
Deposits:                
  Noninterest-bearing   $ 117,889     $ 101,446  
  Interest-bearing     1,034,825       986,646  
      Total deposits     1,152,714       1,088,092  
Federal Home Loan Bank advances     140,992       121,734  
Securities sold under agreements to repurchase     16,756       27,885  
Subordinated debentures     37,620       20,620  
Accrued expenses and other liabilities     15,868       16,282  
      Total liabilities     1,363,950       1,274,613  
                 
STOCKHOLDERS' EQUITY                
  Preferred stock, $.01 par value, per share: 2,500,000 shares authorized:                
    Series B, non-cumulative perpetual, 8,000 shares issued and outstanding at December 31, 2014 and 23,000 shares issued and outstanding as of December 31, 2013, liquidation value $1,000 per share     -       -  
  Common stock, $.01 par value: 10,000,000 shares authorized, 8,692,360 shares issued and 8,258,031 shares outstanding as of December 31, 2014 and 8,651,076 shares issued and 8,216,747 shares outstanding as of December 31, 2013     87       87  
  Paid-in capital     86,561       100,961  
  Retained earnings     63,876       58,347  
  Unearned restricted stock awards     (598 )     (490 )
  Accumulated other comprehensive loss     (3,339 )     (2,897 )
  Treasury stock, at cost, 434,329 shares as of December 31, 2014 and December 31, 2013     (6,751 )     (6,751 )
      Total stockholders' equity     139,836       149,257  
      Total liabilities and stockholders' equity   $ 1,503,786     $ 1,423,870  
                 
                 
                 
New Hampshire Thrift Bancshares, Inc.
Consolidated Statements of Income (unaudited)
 
    For the three months ended     For the twelve months ended
(Dollars in thousands, except for per share data)   December 31, 2014     December 31, 2013     December 31, 2014   December 31, 2013
INTEREST AND DIVIDEND INCOME                            
  Interest and fees on loans   $ 11,793     $ 10,757     $ 46,647   $ 38,034
  Interest on debt securities:                            
    Taxable     328       292       1,362     1,333
  Dividends     43       13       165     52
  Other     111       236       554     857
      Total interest and dividend income     12,275       11,298       48,728     40,276
                             
INTEREST EXPENSE                            
  Interest on deposits     1,140       992       4,464     4,055
  Interest on advances and other borrowed money     356       394       1,417     1,585
  Interest on debentures     359       159       835     806
  Interest on securities sold under agreements to repurchase     17       13       63     51
      Total interest expense     1,872       1,558       6,779     6,497
      Net interest and dividend income     10,403       9,740       41,949     33,779
                             
PROVISION FOR LOAN LOSSES     169       268       905     962
  Net interest and dividend income after provision for loan losses     10,234       9,472       41,044     32,817
                             
NONINTEREST INCOME                            
  Customer service fees     1,510       1,473       6,057     5,239
  Net gain on sales and calls of securities     208       182       950     964
  Net gain on sales of loans     285       166       696     2,224
  Net (loss) gain on sales of other real estate owned, other assets and fixed assets     (39 )     (5 )     181     5
  Mark-to-market adjustment, Charter Holding Corp.     -       -       -     1,369
  Net (benefit) amortization of mortgage servicing rights and mortgage servicing income     25       17       174     40
  Rental income     189       189       717     746
  Realized gain in Charter Holding Corp.     -       -       -     294
  Bank owned life insurance income     182       195       635     626
  Trust and management fees     2,150       2,063       8,340     2,741
  Insurance commissions     315       297       1,476     1,467
        Total noninterest income     4,825       4,577       19,226     15,715
                             
NONINTEREST EXPENSES                            
  Salaries and employee benefits     6,618       6,193       25,037     19,206
  Occupancy and equipment expenses     1,380       1,302       5,616     4,500
  Depositors' insurance     221       202       994     776
  Professional services     254       270       1,254     1,265
  Data processing and outside services fees     455       328       2,455     1,393
  ATM processing fees     193       164       843     630
  Telephone expense     264       212       1,087     706
  Supplies     142       104       568     454
  Advertising and promotion     254       192       912     662
  Merger related expense     -       147       -     1,620
  Amortization of intangible assets     403       407       1,688     1,000
  Other expenses     1,662       1,633       6,212     4,779
      Total noninterest expenses     11,846       11,154       46,666     36,991
INCOME BEFORE PROVISION FOR INCOME TAXES     3,213       2,895       13,604     11,541
PROVISION FOR INCOME TAXES     362       900       3,564     3,127
NET INCOME   $ 2,851     $ 1,995     $ 10,040   $ 8,414
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS   $ 2,795     $ 1,937     $ 9,810   $ 8,098
                             
Earnings per common share   $ 0.34     $ 0.24     $ 1.19   $ 1.11
Earnings per common share, assuming dilution   $ 0.34     $ 0.24     $ 1.19   $ 1.11
Dividends declared per common share   $ 0.13     $ 0.13     $ 0.52   $ 0.52

Contact Information

  • For additional information contact:
    Laura Jacobi
    First Senior Vice President
    Chief Financial Officer
    603-863-0886