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Board of Directors
Kathleen Bentz
Lino Canalia
Dr. Paul Chemello
PeterFeit
JosephPascale
Michael Perry
George Reynolds
ThomasRiordan
Peter Selleck
Robert Taylor
JoanWator
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Town Center Bank Officers
Robert Taylor President/CEO/CFO
Joseph Hogan Sr. Vice President
Deanie Clare Sr. Vice President/Branch Manager
Karen Morgan Vice President/Corporate Secretary
Gina Persiani Asst. Vice President/Branch Manager
Sarah Neighbors Asst. Vice President
Eileen Pallisard Officer/IT Operations
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Banking Landscape
• Delinquent loans and other real estate owned have leveled off
• Capital remains under pressure and this will continue to be the norm in the industry
• Deposits continuing to grow, as is cash and liquidity– People have faith in the banking industry
• Portfolio yields are still falling• Regulatory and Dodd-Frank burden unlikely to lift
anytime soon
2011 Performance(Dollar amounts in thousands)
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2009 2010 2011
Assets $148,786 $141,350 $115,684
Loans $90,662 $88,387 $76,934
Investments $46,224 $38,938 $27,231
Deposits $107,103 $107,113 $100,917
Borrowings $22,500 $20,500 $5,250
Net interest margin 2.91% 2.74% 3.24%
Pre-provision earnings (loss)
$1,099 $2,055 $336
Net Income (loss) $(1,074) $(4,343) $(4,209)
Quarterly PerformanceAs of or for the Quarter Ended
(Dollar amounts in thousands)
3/31/11 6/30/11 9/30/2011 12/31/2011 03/31/2012
Assets $137,790 $129,583 $118,204 $115,684 $114,481
Loans, net $85,348 $79,955 $80,351 $76,934 $73,162
Investments $36,711 $34,523 $26,501 $27,231 $17,918
Deposits $106,607 $102,237 $102,109 $100,917 $105,171
Borrowings $19,500 $15,500 $5,250 $5,250 -
Net Interest Margin 2.93% 3.24% 3.46% 3.40% 3.32%
Net Interest Income $965 $1,028 $991 $962 $913
Non-interest Income $160 $89 $282 $203 $238
Non-interest Expense $1,257 $1,336 $1,911 $1,546 $1,295
Net Inc (Loss) Before Prov. $138 $61 $(95) $232 $27
Provision for Loan Loss $(1,738) $(83) $(406) $(614) $(16)
Provision for OREO Loss $(270) $(279) $(543) $(613) $(171)
Net Income (Loss) $(1,870) $(301) $(1,044) $(995) $(160)12
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2010 2011 3/31/12
Residential Real Estate $28,585 $23,584 $22,703
Commercial Real Estate 36,479 31,063 29,637
Commercial 9,123 9,148 9,153
Consumer 16,019 14,791 13,301
Total Loans $90,206 $78,586$74,79
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Deferred Loan origination fees & costs
518 780 771
Allowance for Loan Losses (2,337) (2,432) (2,403)
Loans, net $88,387 $76,934 $73,162
Loan Portfolio Mix(Dollar amounts in thousands)
Loans by ClassAs of 12/31/11
(Dollar amounts in thousands)
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Pass Watch Substandard TotalResidential RE:
1-4 family, owner occupied $17,253 $300 $2,683 $20,236 1-4 family, non-owner occupied 2,148 1,002 198 3,348
Commercial RE:Commercial, owner occupied 6,503 1,533 929 8,965 Commercial, non-owner occupied 10,782 489 873 12,144 Land development 2,257 362 3,203 5,822 Farmland 98 4,034 - 4,132
Commercial 6,963 1,187 998 9,148 Consumer
Indirect automobile loans 9,098 - - 9,098 Consumer, non-real estate 5,597 96 5,693
Total $60,699 $9,003 $8,884 $78,586
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Pass Watch Substandard TotalResidential RE:
1-4 family, owner occupied $17,669 $286 $1,379 $19,334 1-4 family, non-owner occupied 1,946 1,225 198 3,369
Commercial RE:Commercial, owner occupied 6,438 1,521 925 8,884 Commercial, non-owner occupied 10,827 486 871 12,184 Land development 2,264 362 2,490 5,116 Farmland 91 3,362 - 3,453
Commercial 5,601 2,566 986 9,153 Consumer
Indirect automobile loans 7,937 - - 7,937 Consumer, non-real estate 5,223 116 25 5,364
Total $57,996 $9,924 $6,874 $74,794
Loans by ClassAs of 3/31/12
(Dollar amounts in thousands)
Liquidity (Cash Resources)As of March 31, 2012(Dollar amounts in thousands)
Total Availabilit
y
Used or Pledged
Unused Capacity
Federal Reserve Secured Borrowing $ 2,500 $ - $ 2,500
Federal Funds Line 7,000 - 7,000
Securities Portfolio 17,918 9,057 8,861
Federal Funds Sold and Interest-Bearing Deposits with Banks 16,057 - 16,057
Total $ 43,475 $ 9,057 $ 34,418
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•Primary funding is provided by deposits. The above sources are supplemental.
Regulatory Capital(Dollar amounts in thousands)
ActualConsent Order Requirement
Excess Capital Above
Minimum
Amount Ratio Amount Ratio
March 31, 2012
Total capital to risk weighted assets
$9,824 11.84% $10,788
13.00% $(964)
Tier 1 capital to risk weighted assets
$8,770 10.57% N/A N/A -
Tier 1 capital to average assets
$8,770 7.57% $10,420
9.00% $(1,650)
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2012 Plan– Bank’s Assets will shrink to $100 million through prepayment of
FHLB Advances (done) and non-renewal of wholesale CDs• This will increase Tier I Ratio 1%
– Decrease Non-Performing Assets by $2.3 million• Actively market Bank Owned Properties
• Negotiate and litigate with delinquent borrowers to collect highest amount possible
• Recently negotiated a recovery on a loan at $300,000 higher than the charge off balance. This is one of the first significant recoveries. This will not be the last. We expect more going forward.
– Recover charged off loans from borrowers through negotiation and litigation
• Recently finalized a legal settlement on an owned property which will allow us to recover at least $300,000
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2012 Plan cont’d
• Seek and obtain high quality loans
• Maintain competitive rates on deposits to attract long term relationships
• Continue to keep operating costs low
• Raise Capital
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2012 Plan cont’d
• Add new products and services– Mobile scanning– Upgrade online banking– E-checking– Rewards debit card
• Actively market as a Community Bank
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Raise Capital
• Exercise Stock Warrants– 1 Warrant for each original 5 shares of stock
purchased– Exercise price at $3.00 per share– Example: If you purchased 250 shares of stock, you
received 50 warrants to buy 50 shares of stock at $3.00 each
– 50 shares x $3.00 = $150.00 Total Purchase Price
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Raise Capital
• Exercise Stock Warrants – Cont’d– When does exercise date expire?– Dollar cost averaging – exercise 50 warrants
at $3.00 each on 250 shares purchased at $10.00 each and will give an average purchase price of $8.83
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Raise Capital
• Stock Rights Offering– Offer additional shares to be purchased
– Each shareholder will be offered a defined amount of shares which will allow the shareholder to maintain the same proportional level of ownership
– The Board will then have the option to re-offer the unexercised shares at a later date to all purchasers of the stock through the stock rights offering
– As a goal we hope to raise $3.0 million from the warrants and the stock rights offering
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