Northway Financial, Inc. Announces 2018 Earnings and Declares Semi-Annual Dividend - Northway Finl (OTC:NWYF)

NORTH CONWAY, N.H., Feb. 01, 2019 (GLOBE NEWSWIRE) -- Northway Financial, Inc. (the "Company") NWYF, the parent company of Northway Bank (the "Bank"), today reported net income for the year ended December 31, 2018 of $2.9MM, or $1.07 per basic common share, compared to $7.3MM, or $2.64 per basic common share for the year ended December 31, 2017.

The Board of Directors has declared a semi-annual cash dividend of $0.35 per share, payable on February 19, 2019, to common stockholders of record on February 11, 2019. William J. Woodward President and Chief Executive Officer stated, "We are continuing our current level of dividend as we believe our investment in loan growth will continue to generate revenue for years to come."

In 2018, the Bank adopted ASU 2016-01, "Financial Instruments – overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The adoption of this ASU requires equity investments to be measured at fair value with changes in fair value recognized in net income. With the current volatility in the stock market, net income for 2018 was negatively impacted by a $1.8MM unrealized loss on equity securities, net of taxes.

The investment we made to support loan growth has begun to pay dividends as we saw interest and dividend income improve $3.4MM compared to the prior year primarily as a result of an increase in average loan balances of $67MM, an increase of 12%, partially offset by an increase in noninterest expense related to the hiring of additional resources to support our growth strategy.

Financial Highlights

Total assets were $927MM, total loans, net, were $628MM, and total deposits were $726MM at December 31, 2018.
Loans, net, increased $63MM, or 11.1%, from December 31, 2017, which is the result of the implementation of our organic growth strategy.
Net interest income increased $1.5MM for the year ended December 31, 2018 when compared to the same period last year.
Net income for the year ending December 31, 2018 was $4.3MM less than the same period last year, primarily due to the previously mentioned unrealized loss on equity securities, a decrease in realized gains on securities, the previously mentioned increase in noninterest expense, and an increase in interest expense.
The net interest margin at December 31, 2018 was 3.36%.
The yield on earning assets was 3.91% and the cost of interest-bearing liabilities was 0.70%, for the year ended December 31, 2018.
For the year ended December 31, 2018, Return on Average Assets was 0.31% and Return on Average Equity was 3.75%
Regulatory capital ratios at December 31, 2018 were 9.83% Tier 1 Leverage, 15.27% Total Risk Based Capital, and 16.44% Common Equity Tier 1.
Nonperforming loans as a percentage of total loans stood at 0.35% at December 31, 2018.
The market price of our common stock, as of January 30, 2019, was $30.50


Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)

(Dollars in thousands, except per share data)	Three Months Ended					Year Ended
	12/31/2018			12/31/2017		12/31/2018			12/31/2017

Interest and Dividend Income	$	9,259		$	7,878	$	34,364		$	30,920
Interest Expense		1,530			740		4,986			3,034
Net Interest and Dividend Income		7,729			7,138		29,378			27,886
Provision for Loan Losses		195			-		390			-
All Other Noninterest Income		938			1,055		4,662			5,478
Noninterest Expense		7,554			7,084		29,022			26,342
Net Income Before Securities Gains		918			1,109		4,628			7,022
Realized Securities Gains, Net		54			1,102		590			2,704
Unrealized Securities (Losses) Gains, Net		(2,464	)		-		(2,498	)		-
Net Income Before Taxes		(1,546	)		1,109		2,130			7,022
Provision for Income Tax		(255	)		492		(218	)		2,448
Net Income	$	(1,291	)	$	617	$	2,348		$	4,574
Net Income Available to Common Stockholders	$	(1,237	)	$	1,719	$	2,938		$	7,278
Earnings per Common Share, Basic	$	(0.45	)	$	0.62	$	1.07		$	2.64


	12/31/2018			12/31/2017

Balance Sheet
Total Assets	$	926,898		$	884,084
Cash and Due from Banks and Interest-Bearing Deposits		18,132			25,091
Securities Available-for-Sale, at Fair Value		243,387			258,109
Loans, Net		627,915			565,294
Total Liabilities		847,480			802,895
Retail non-maturity deposits		494,793			503,391
Municipal non-maturity deposits		101,746			108,918
Certificates of deposit		128,993			110,446
Federal Home Loan Bank Advances		13,848			-
Securities Sold Under Agreements to Repurchase		79,340			53,380
Junior Subordinated Debentures		20,620			20,620
Stockholders' Equity		79,418			81,189
Profitability and Efficiency
Net Interest Margin		3.36	%		3.48	%
Yield on Earning Assets		3.91			3.84
Cost of Interest Bearing Liabilities		0.70			0.45
Book Value Per Share of Common Shares Outstanding	$	28.86		$	29.51
Tangible Book Value Per Share of Common Shares Outstanding		25.25			25.88
Capital and Credit
Tier 1 Core Capital to Average Assets		9.83	%		10.45	%
Common Equity Risk-Based Capital		12.08			12.08
Tier 1 Risk-Based Capital		15.27			15.35
Total Risk-Based Capital		16.44			16.66
Common Shares Outstanding		2,751,650			2,751,650
Weighted Average Number of Common Shares, Basic		2,751,650			2,751,650
Return on Average Assets		0.31	%		0.82	%
Return on Average Equity		3.75			9.32
Nonperforming Loans as a % of Total Loans		0.35			0.52
Allowance for Loan Losses as a % of Nonperforming Loans		323			242

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

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