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West Town Bancorp, Inc. Announces First Quarter 2018 Financial Results

Company Release - 4/27/2018 8:30 AM ET

RALEIGH, N.C., April 27, 2018 (GLOBE NEWSWIRE) -- West Town Bancorp, Inc. (OTC PINK:WTWB) (the “Company” or “West Town”), the multi-bank holding company for West Town Bank & Trust and Sound Bank, reported record quarterly net income of $2,481,000 or $0.80 per diluted share for the first quarter 2018 compared to net income of $879,000, or $0.57 per diluted share for the first quarter of 2017, an increase of $1,602,000, or 182%.  Return on average assets was 1.88%, and return on average shareholders’ equity was 15.02% as compared to 1.31% and 12.40%, respectively, in the first quarter 2017.

Eric Bergevin, President and CEO commented, “We are pleased to announce record quarterly earnings in the first three months of 2018. As planned, we began to reap the benefit of our 'originate and hold' strategy for governmental guaranteed lending that was implemented in the fourth quarter of 2017. We resumed selling the guaranteed portion of these loans into the secondary market and recorded a net gain on the sale totaling $3,054,000 during the first quarter of 2018 as compared to $192,000 in the fourth quarter of 2017 and $1,636,000 in the first quarter of 2017. Our governmental guaranteed lending division originated loans of $81 million in the first quarter of 2018 as compared to $90 million in the fourth quarter of 2017. With $61 million in loans held for sale as of March 31, 2018, we are like-wise well positioned for the second quarter of 2018. Also enhancing our earnings for the first quarter was the $564,000 in income earned from our strategic investment in Windsor Advantage, LLC made in early 2017.” 

First quarter 2018 highlights:

  • Record quarterly earnings of $2,481,000 driven by net revenue of $3,054,000 in government lending compared to $1,636,000 for first quarter 2017.
    • West Town Bank & Trust earned net income totaling $1,879,000 for the first quarter of 2018, resulting in a return on average assets of 2.32% and a return on average common shareholders’ equity of 20.87%. 
    • Sound Bank earned net income of $449,000 for the first quarter of 2018, resulting in a return on average assets of 0.91% and a return on average common equity of 6.69%.
  • Tangible book value increased 5% from $19.07 as of December 31, 2017 to $19.94 as of March 31, 2018.
  • Return on average assets of 1.88%, compared to 1.31% for the first quarter of 2017.
  • Return on average common shareholders’ equity of 15.02%, compared to 12.40% for the first quarter of 2017.
  • Return on average tangible common shareholders’ equity of 18.30%, compared to 12.57% for the first quarter of 2017.
  • Efficiency ratio of 60.4%, compared to 70.5% for the first quarter of 2017.
 
Financial Performance (Consolidated)
(Includes Sound Bank as of 9/1/2017)
 
Dollars in thousands, except per share data; unauditedThree Months Ended Year-to-Date
  3/31/18 12/31/17 9/30/17 6/30/17 3/31/17   
3/31/18
 3/31/17
Interest income               
Interest and fees on loans$6,036$6,062 $4,223 $3,288$3,373 $6,036$3,373
Investment securities & deposits 184 155  142  78 73  184 73
Total interest income 6,220 6,217  4,365  3,366 3,446  6,220 3,446
Interest expense               
Interest on deposits 771 792  712  684 677  771 677
Interest on borrowed funds 378 191  102  92 56  378 56
Total interest expense 1,149 983  814  776 733  1,149 733
Net interest income 5,071 5,234  3,551  2,590 2,713  5,071 2,713
Provision for loan losses 469 1,129  491  281 276  469 276
Noninterest income               
Government lending revenue 3,054 192  1,537  730 1,636  3,054 1,636
Mortgage revenue 455 515  699  1,938 1,555  455 1,555
Service charge revenue 219 203  89  15 17  219 17
Bank owned life insurance income 57 60  42  37 31  57 31
Income from Windsor investment 564 203  519  573 205  564 205
Loss on sale of securities 0 0  (7) 0 0  0 0
Other noninterest income 172 373  134  119 112  172 112
Total noninterest income 4,521 1,546  3,013  3,412 3,556  4,521 3,556
Noninterest expense               
Compensation 3,266 3,248  2,481  2,812 2,801  3,266 2,801
Occupancy and equipment 413 434  303  314 366  413 366
Loan, foreclosure and OREO 362 373  287  408 19  362 19
Professional services 274 313  155  404 258  274 258
Data processing 313 316  247  143 148  313 148
Communication 235 188  112  85 84  235 84
Advertising 54 109  91  77 92  54 92
Transaction-related expenses 14 60  231  125 172  14 172
Other operating expense 864 856  547  438 482  864 482
Total noninterest expense 5,795 5,897  4,454  4,806 4,422  5,795 4,422
Income (loss) before income taxes 3,328 (246) 1,619  915 1,571  3,328 1,571
Income tax expense (benefit) 847 (798) 672  401 692  847 692
Net income$2,481$552 $947 $514$879 $2,481$879
Basic earnings per common share (1) $0.84$0.21 $0.59 $0.35$0.60 $0.84$0.60
Diluted earnings per common share (1) $0.80$0.20 $0.56 $0.34$0.57 $0.80$0.57
Weighted average common shares outstanding (1) 2,952 2,649  1,626  1,467 1,465  2,952 1,465
Diluted average common shares outstanding (1) 3,087 2,755  1,932  1,534 1,531  3,087 1,531
                


 
Performance Ratios
 Three Months Ended Year-to-Date
  3/31/18 12/31/17 9/30/17(1) 6/30/17(2) 3/31/17(2)  3/31/18 3/31/17
                
PER COMMON SHARE               
Basic earnings per common share$0.84 $0.21 $0.59 $0.35 $0.60  $0.84 $0.60 
Diluted earnings per common share$0.80 $0.20 $0.56 $0.34 $0.57  $0.80 $0.57 
Book value per common share$23.02 $22.21 $22.03 $20.62 $20.25  $23.02 $20.25 
Tangible book value per common share$19.94 $19.07 $18.69 $20.62 $20.25  $19.94 $20.25 
                
FINANCIAL RATIOS (ANNUALIZED)               
Return on average assets 1.88%  0.44%  1.09%  0.75%  1.31%   1.88%  1.31% 
Return on average common shareholders’ equity 15.02%  3.62%  9.62%  6.78%  12.40%   15.02%  12.40% 
Return on average tangible common shareholders’ equity 18.30%  4.31%  9.99%  6.96%  12.57%   18.30%  12.57% 
Net interest margin (FTE) 4.26%  4.66%  4.58%  4.27%  4.46%   4.26%  4.46% 
Efficiency ratio 60.4%  87.0%  67.8%  80.1%  70.5%   60.4%  70.5% 
  1. Calculation of book value per common share and tangible book value per common share for September 30, 2017, includes the 698,580 common shares that were issued in October 2017 for the Sound Bank acquisition and the convertible preferred equity as if converted to 329,130 shares of common stock.  These incremental shares are not included in EPS calculations for the quarter ended September 30, 2017.
                 
  2. Calculation of book value per common share and tangible book value per common share for June 30, 2017 and March 31, 2017 include the convertible preferred equity outstanding as of such dates as if converted to 21,739 shares of common stock.  These incremental shares are not included in the quarter-end EPS calculations as of such dates.
                 
  3. Sum of quarterly EPS may not total YTD EPS due to the 698,580 common shares issued in October 2017 as part of the Sound Bank acquisition and the 329,130 common shares issued December 1, 2017, due to the conversion of the convertible preferred stock into common stock at the preferred stock’s conversion ratio.
 
 
Noninterest Income and Expense Data (Consolidated)
(Includes Sound Bank as of 9/1/2017)
 
Dollars in thousands; unauditedThree Months Ended Year-to-Date
  3/31/18 12/31/17 9/30/17 6/30/17 3/31/17   
3/31/18
 3/3(1/17
                
Noninterest income               
Government lending revenue$3,054$192$1,537 $730$1,636 $3,054$1,636
Mortgage revenue 455 515 699  1,938 1,555  455 1,555
Service charge revenue 219 203 89  15 17  219 17
Bank owned life insurance income 57 60 42  37 31  57 31
Income from Windsor investment 564 203 519  573 205  564 205
Loss on sale of securities 0 0 (7) 0 0  0 0
Other noninterest income 172 373 134  119 112  172 112
Total noninterest income$4,521$1,546$3,013 $3,412$3,556 $4,521$3,556
                
Noninterest expense               
Compensation$3,266$3,248$2,481 $2,812$2,801 $3,266$2,801
Occupancy and equipment 413 434 303  314 366  413 366
Loan, foreclosure and OREO 362 373 287  408 19  362 19
Professional services 274 313 155  404 258  274 258
Data processing 313 316 247  143 148  313 148
Communication 235 188 112  85 84  235 84
Advertising 54 109 91  77 92  54 92
Transaction-related expenses 14 60 231  125 172  14 172
Other operating expense 864 856 547  438 482  864 482
Total noninterest expense$5,795$5,897$4,454 $4,806$4,422 $5,795$4,422
 

Total noninterest income for the first quarter of 2018 was $4,521,000, an increase of $2,975,000 or 192% from $1,546,000 for the fourth quarter of 2017.  The increase in noninterest income was primarily attributable to increased sales volume to the secondary market as the Company unwound a portion of its “originate and hold” strategy implemented in the fourth quarter of 2017.  Other notable changes in the noninterest income category, as compared to the linked quarter, are an increase in income from Windsor due to an increase in secondary market fees; a reduction in mortgage revenue primarily due to seasonal effects on new originations; and a decrease in other noninterest income as the fourth quarter 2017 was elevated due to a gain on the sale of fixed assets at West Town Bank & Trust. 

In comparison to the prior year, comparative quarter noninterest income increased $965,000, or 27% as compared to the first quarter 2017 primarily due to a $1,418,000, or 87%, increase in governmental lending revenue.  Mortgage revenue was down $1,100,000, or 71%, from the first quarter 2017 due to the Company’s shift away from a national mortgage operation that was completed in mid-year 2017.  Income earned from the Company’s investment in Windsor totaled $564,000 for the first quarter of 2018 as compared to $205,000 for the same period last year.  This $359,000 or 175% increase is due to the timing of the Company’s investment which was made in mid-February 2017 as well as increased secondary market fees earned by Windsor for the first quarter of 2018.  Service charge revenue increased $202,000 or 1,188% as compared to the first quarter of 2017 due to the inclusion of Sound Bank in the first quarter of 2018.

Total noninterest expense was $5,795,000 for the first quarter of 2018, a decrease of $102,000, or 2%, from the $5,897,000 for the linked quarter ended December 31, 2017.  The only notable increase was communication expense which increased $47,000, or 25%, due to the integration of the two banks’ networks.  Notable decreases include professional services declining $39,000, or 12%, due to lower litigation and audit costs; advertising costs decreasing $55,000, or 50%, due to elevated promotional expenses in the fourth quarter 2017; and transaction-related expenses decreasing $46,000, or 77%, due to the Sound Bank transaction costs being primarily completed by December 31, 2017. 

Total noninterest expense increased $1,373,000, or 31%, from the $4,422,000 recorded in the first quarter 2017.  The increases are primarily related to first quarter 2018 activity for Sound Bank. The only decreases were advertising and transaction-related costs.

 
Selected Consolidated Balance Sheet Data
Dollars in thousands; unauditedEnding Balance
  3/31/18 12/31/17 9/30/17 6/30/17 3/31/17
Portfolio loans:          
Originated loans$265,887 $242,744 $206,133 $200,863 $175,862 
Acquired loans, net 124,919  135,808  144,994  0  0 
Allowance for loan losses (3,791) (3,427) (2,841) (2,580) (2,537)
Portfolio loans, net 387,015  375,125  348,286  198,283  173,325 
Loans held for sale 61,286  66,706  21,023  30,166  45,266 
Investment securities and deposits 44,470  48,080  64,970  25,953  26,807 
Total interest-earning assets 492,771  489,911  433,896  254,402  245,398 
Loan servicing rights 4,969  5,237  5,568  5,721  5,624 
Goodwill 7,016  7,016  7,016  0  0 
Other intangible assets, net 2,102  2,272  2,450  0  0 
Total assets 549,427  544,134  487,904  283,628  275,343 
           
Deposits          
Noninterest bearing deposits$86,561 $84,178 $70,984 $24,141 $22,926 
Interest-bearing deposits 298,711  308,556  317,714  201,072  201,179 
Total deposits 385,272  392,734  388,698  225,213  224,105 
Borrowings 87,814  78,903  19,309  22,599  16,000 
Total fundings 473,086  471,637  408,007  247,812  240,105 
           
Shareholders’ equity:          
Preferred equity$0 $0 $7,570 $500 $500 
Common equity 47,337  47,300  39,485  13,218  13,159 
Retained earnings 20,765  18,284  17,895  16,949  16,434 
Accumulated other comprehensive income (134) (4) 28  50  42 
Total shareholders’ equity$67,968 $65,580 $64,978 $30,717 $30,135 
 

Total assets were $549,427,000, an increase of $5,293,000 or 1% as compared to total assets of $544,134,000 at December 31, 2017.  Total net portfolio loans were $387,015,000 at March 31, 2018, an increase of $11,890,000, or 3% as compared to $375,125,000 at December 31, 2017.  Loans held for sale decreased $5,420,000 or 8% to $61,286,000 as compared to $66,706,000 at December 31, 2017.  The decreases in loans held for sale is primarily attributable to the partial unwinding of the “originate and hold” strategy implemented in the fourth quarter of 2017 offset by new originations totaling $81 million during the first quarter of 2018.

Total deposits were $385,272,000 at March 31, 2018, a decrease of $7,462,000, or 2%, as compared to total deposits of $392,734,000 at December 31, 2017.  The deposit account balance reductions were balance fluctuations on consumer interest-bearing deposit products.  Borrowings increased $8,911,000, or 11%, as compared to the linked quarter to offset the deposit reductions. 

Total shareholders’ equity was $67,968,000 at March 31, 2018, an increase of $2,388,000 or 4% as compared to $65,580,000 at December 31, 2017.  At March 31, 2018, both banks’ capital ratios exceed the minimum thresholds established for well-capitalized banks by regulatory measures.

 
 
 
“Well Capitalized”
Minimums
 West Town
Bank & Trust
 Sound Bank
Tier 1 common equity ratio6.5%14.6%11.9%
Tier 1 risk based capital ratio8.0%14.6%11.9%
Total risk based capital ratio10.0%15.8%12.2%
Tier 1 leverage ratio5.0%11.1%9.9%
 


Acquired Loan Summary
 
Dollars in thousands 3/31/18 12/31/17 9/30/17
       
Performing acquired loans$121,852 $132,846 $142,087 
Less:  remaining FMV adjustments (1,400)  (1,592)  (1,783) 
Performing acquired loans, net$120,452 $131,254 $140,304 
FMV adjustment % 1.1%  1.2%  1.3% 
       
Purchase credit impaired loans (PCI)$5,293 $5,386 $5,657 
Less:  remaining FMV adjustments (826)  (832)  (967) 
PCI loans, net$4,467 $4,554 $4,690 
FMV adjustment % 15.6%  15.4%  17.1% 
       
Total acquired performing loans 120,452  131,254  140,304 
Total acquired PCI loans 4,467  4,554  4,690 
Total acquired loans 124,919  135,808  144,994 
FMV adjustment % 1.8%  1.8%  1.9% 
 

The performing acquired loan pool decreased $10,994,000 during the first quarter of 2018.  The reduction is due to $9,139,000 in net principal payments and $1,855,000 in renewals which moved to the originated category at the time of renewal.  The PCI loan pool decreased $93,000 during the first quarter due to net principal payments.

Asset Quality

The Company’s nonperforming assets to total assets ratio decreased 9 basis points during the first quarter of 2018 from 1.35% at December 31, 2017 to 1.26% at March 31, 2018.  Excluding acquired loans, nonperforming assets to total loans and OREO declined 25 basis points, from 2.56% at December 31, 2017 to 2.31% at March 31, 2018.  The reduction is related to the net charge-offs during the quarter and a decline in nonaccrual balances.  In comparison to the prior year, the Company’s nonperforming assets to total loans and OREOs ratio increased 5 basis points from 2.26% at March 31, 2017. 

The Company recorded a $469,000 provision for loan losses during the first quarter of 2018, as compared to a provision of $1,129,000 in the fourth quarter 2017 and $276,000 in first quarter 2017.  The decreased provision expense compared to the fourth quarter 2017 is primarily due to a $438,000 decrease in net charge-offs in comparison to the fourth quarter 2017.  Excluding acquired loans, the ratio of allowance for loan and lease losses as a percentage of total non-acquired loans decreased 1 basis point from one year earlier, from 1.44% at March 31, 2017, to 1.43% at March 31, 2018.

 
Dollars in thousandsEnding Balance 
  3/31/18 12/31/17 9/30/17 6/30/17 3/31/17
           
Nonaccrual loans – non-acquired$5,910 $6,218 $6,803 $6,967 $3,717 
Nonaccrual loans – acquired 182  413  0  0  0 
OREO – non-acquired 54  0  0  270  270 
OREO – acquired 0  0  0  0  0 
90 days past due – non-acquired 186  0  0  0  0 
90 days past due – acquired 594  697  1,396  0  0 
Total nonperforming assets 6,926  7,328  8,199  7,237  3,987 
Total nonperforming assets – non-acquired 6,150  6,218  6,803  7,237  3,987 
           
Net charge-offs, QTD$105 $543 $230 $238 $58 
Annualized net charge-offs to total average portfolio loans 0.09%  0.54%  0.34%  0.43%  0.10% 
           
Ratio of total nonperforming assets to total assets 1.26%  1.35%  1.68%  2.55%  1.45% 
Ratio of total nonperforming loans to total portfolio loans 1.78%  1.95%  2.35%  3.51%  2.14% 
Ratio of total allowance for loan losses to total portfolio loans 0.97%  0.91%  0.81%  1.28%  1.44% 
           
Excluding acquired (Non-GAAP)          
Ratio of nonperforming assets to loans and OREO 2.31%  2.56%  3.30%  3.60%  2.26% 
Ratio of nonperforming loans to loans 2.29%  2.56%  3.30%  3.47%  2.11% 
Ratio of allowance for loan losses to loans 1.43%  1.41%  1.38%  1.28%  1.44% 
 


 
Net Interest Income and Margin
(Includes Sound Bank as of 9/1/2017)
 
Dollars in thousandsThree Months Ended Year-to-Date
  3/31/18 12/31/17 9/30/17 6/30/17 3/31/17  3/31/18 3/31/17
Quarterly average balances:               
Loans$446,857$400,324$273,225$222,099$226,218 $446,857$226,218
Investment securities 11,353 7,346 6,944 4,778 4,954  11,353 4,954
Interest-bearing balances and other 24,803 37,640 27,171 16,482 15,384  24,803 15,384
Total interest-earning assets 483,013 445,310 307,340 243,359 246,556  483,013 246,556
Noninterest deposits 82,849 75,707 40,028 21,089 22,576  82,849 22,576
Interest-bearing liabilities:               
Interest bearing deposits 302,119 312,155 239,475 201,027 199,399  302,119 199,399
Borrowed funds 76,422 31,574 13,748 15,680 16,249  76,422 16,249
Total interest-bearing liabilities 378,541 343,729 253,223 216,707 215,648  378,541 215,648
Total assets 536,185 495,958 343,328 274,137 272,015  536,185 272,015
Common shareholders’ equity 67,013 60,432 40,848 29,629 28,334  67,013 28,334
Tangible common equity 57,799 50,795 37,617 29,629 28,334  57,799 28,334
                


 
Dollars in thousandsThree Months Ended Year-to-Date
  3/31/18 12/31/17 9/30/17 6/30/17 3/31/17  3/31/18 3/31/17
Interest Income/Expense:               
Loans$6,036 $6,061 $4,223 $3,288 $3,373  $6,036 $3,373 
Investment securities, tax 64  39  47  29  29   64  29 
Interest-bearing balances and other 120  117  95  49  44   120  44 
Total interest income 6,220  6,217  4,365  3,366  3,446   6,220  3,446 
Deposits 771  791  712  684  677   771  677 
Borrowings 378  192  102  92  56   378  56 
Total interest expense 1,149  983  814  776  733   1,149  733 
Net interest income$5,071 $5,234 $3,551 $2,590 $2,713  $5,071 $2,713 
                
Average Yields and Costs:               
Loans 5.48%  6.01%  6.13%  5.94%  6.05%   5.48%  6.05% 
Investment securities 2.25%  2.12%  2.71%  2.43%  2.34%   2.25%  2.34% 
Interest-bearing balances and other 1.96%  1.23%  1.39%  1.19%  1.16%   1.96%  1.16% 
Total interest-earning assets 5.22%  5.54%  5.63%  5.55%  5.67%   5.22%  5.67% 
Total interest-bearing deposits 1.03%  1.01%  1.18%  1.36%  1.38%   1.03%  1.38% 
Borrowed funds 2.01%  2.41%  2.94%  2.35%  1.40%   2.01%  1.40% 
Total interest-bearing liabilities 1.23%  1.13%  1.28%  1.44%  1.38%   1.23%  1.38% 
Cost of funds 1.01%  0.93%  1.10%  1.31%  1.25%   1.01%  1.25% 
Net interest margin 4.26%  4.66%  4.58%  4.27%  4.46%   4.26%  4.46% 
                       

Net interest income for the first quarter of 2018 was $5,071,000, a decrease from $5,234,000 for the fourth quarter of 2017. 

  • West Town Bank & Trust contributed $3,256,000 for the first quarter of 2018, as compared to $3,453,000 for the fourth quarter of 2017, a decrease of $197,000 or 6%.  The decrease is due to elevated funding costs and decreased accretion income on early loan payoffs.
  • Sound Bank contributed $1,925,000 for the first quarter of 2018, as compared to $1,896,000 for the fourth quarter of 2017, an increase of $29,000 or 2%.
  • Interest expense at the holding company totaled $111,000 for the first quarter of 2018, as compared to $115,000 for the fourth quarter of 2017. 

Net interest margin was 4.26% for the first quarter of 2018, a 40 basis point decrease as compared to 4.66% for the fourth quarter of 2018.

  • West Town Bank & Trust net interest margin was 4.30% for the first quarter 2018, as compared to 5.03% for the fourth quarter of 2017.  The drivers for the decrease include 10 basis point lower start rates for new government guaranteed lending originations specifically in the solar farm loans as compared to our seasoned solar farm loan portfolio; increased overnight borrowing costs due to recent rate hikes; and lower prepayments in government lending. 
  • Sound Bank net interest margin was 4.45% for the first quarter 2018, as compared to 4.35% for the fourth quarter.  The primary increase in the margin was the purchase of $7.7 million of investment securities with excess cash.  Excluding accretion of the loan and deposit fair value marks, the Sound Bank net interest margin was 3.95% for the first quarter 2018, as compared to 3.82% for the fourth quarter of 2017.
  • On a consolidated basis, the Company’s cost of funds increased 8 basis points as compared to the fourth quarter of 2017.  This is primarily due to an increase in overnight borrowing costs and CD campaigns with a 2.00% interest rate. 

Average interest-earning assets for the first quarter of 2018 were $483,013,000, an increase of $37,703,000, or 9% as compared to $445,310,000 for the fourth quarter of 2017.  The increase was primarily due to the “originate and hold” strategy that began to unwind with loan sales occurring primarily in March 2018.  Likewise, average interest-bearing liabilities were $378,541,000, an increase of $34,812,000, or 10%, as compared to the $343,729,000 for the fourth quarter of 2017.

About West Town Bancorp, Inc.
West Town Bancorp, Inc. is the multi-bank holding company for West Town Bank & Trust, a North Riverside, IL based state-chartered bank and Sound Bank, a Morehead City, NC based state-chartered bank. West Town Bank & Trust provides banking services through its offices in Illinois and North Carolina, while Sound Bank provides banking services through its offices in North Carolina. Primary deposit products are checking, savings, and time certificate accounts, and primary lending products are government guaranteed lending, residential mortgage, commercial, and installment loans. The Company is registered with, and supervised by, the Federal Reserve.  West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.  Sound Bank’s primary regulators are the North Carolina Commissioner of Banks and the FDIC.

For more information, visit www.westtownbank.com.

Important Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like "expect," "anticipate," "estimate," and "believe," variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; recent changes in tax law, including the impact of such changes on our tax assets and liabilities; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Sound Banking Company acquisition; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; and the impact of competition from traditional or new sources. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Contact: Eric Bergevin, 252-482-4400

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Source: West Town Bancorp