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West Town Bancorp, Inc. Announces Fourth Quarter 2017 Financial Results

RALEIGH, N.C., Feb. 12, 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 today fourth quarter net earnings of $552,000 or $0.20 per diluted share, compared to a net loss of $537,000, or ($0.38) per share for the fourth quarter of 2016. The fourth quarter of 2017 included a $548,000 revaluation of the Company’s net deferred tax liability that was required in light of the December 2017 enactment of the Tax Cuts and Jobs Act. The revaluation lowered the Company’s tax expenses for 2017. Net earnings for the year ended December 31, 2017, totaled $2,892,000, or $1.54 per diluted share, an increase of $1,092,000, or 60.7% as compared to $1,800,000 and $1.24 per diluted share for the year ended December 31, 2016. Return on average assets was 0.83%, and return on average shareholders’ equity was 7.27% as compared to 0.74% and 6.99% respectively for fiscal year 2016.

Eric Bergevin, President and CEO commented, “2017 was a monumental year for West Town Bancorp as we made a strategic investment in Windsor Advantage LLC (“Windsor”), which contributed significant noninterest income to the Company, completed a highly successful capital raise with gross proceeds of $17.5 million, and consummated the closing and system conversion of the Sound Banking Company acquisition. Our governmental guaranteed lending division recorded $359 million in loan originations during the year, with $90 million of that production occurring in the fourth quarter of 2017. As anticipated, net income was impacted in the fourth quarter 2017 by two factors: 1) new tax legislation and 2) our “originate and hold” strategy for government guaranteed loans to leverage excess capital that was embarked upon in September 2017. This “originate-and-hold” strategy significantly contributed to our $56.2 million asset growth in the fourth quarter of 2017 and enhanced interest income. We expect to resume selling the guaranteed portion of these loans into the secondary market during the first quarter of 2018 on a systematic “first in-first out” basis to optimize the gain on sale premium and manage liquidity and capital levels.”

Fourth quarter 2017 highlights:

  • Asset growth of $56.2 million, compared to the linked quarter ended September 30, 2017.
  • Return on average assets of 0.44%, compared to (0.80%) for fourth quarter of 2016.
  • Return on average common shareholders’ equity of 3.62%, compared to (7.82%) for the fourth quarter of 2016.
  • Return on average tangible common shareholders’ equity of 4.31%, compared to (7.82%) for fourth quarter of 2016.
  • West Town Bank & Trust earned net income totaling $560,000 for the fourth quarter of 2017, resulting in a return on average assets of 0.76% and a return on average common shareholders’ equity of 6.29%. Included in net income is a revaluation of West Town Bank & Trust’s deferred tax liability totaling $605,000, which lowered West Town Bank & Trust’s tax expense.
  • Sound Bank recorded a net loss of $21,000 for the fourth quarter of 2017, resulting in a return on average assets of (0.04%) and a return on average common equity of (0.31%). Included in the net loss is a revaluation of Sound Bank’s deferred tax asset totaling $115,000, which resulted in a charge to earnings.


Financial Performance (Consolidated)
(Includes Sound Bank as of 9/1/2017)

In thousands, except per share dataThree Months Ended
Twelve Months Ended
12/31/17 9/30/17 6/30/17 3/31/17
12/31/16

12/31/17

12/31/16
Interest income
Interest and fees on loans$6,062 $4,223 $3,288$3,373$3,311 $16,946 $11,895
Investment securities & deposits 155 142 78 73 55 448 209
Total interest income 6,217 4,365 3,366 3,446 3,366 17,394 12,104
Interest expense
Interest on deposits 792 712 684 677 674 2,865 2,353
Interest on borrowed funds 191 102 92 56 38 441 117
Total interest expense 983 814 776 733 712 3,306 2,470
Net interest income 5,234 3,551 2,590 2,713 2,654 14,088 9,634
Provision for loan losses 1,129 491 281 276 570 2,177 1,319
Noninterest income
Government lending revenue 192 1,537 730 1,636 2,111 4,095 7,129
Mortgage revenue 515 699 1,938 1,555 1,809 4,707 8,539
Service charge revenue 203 89 15 17 21 324 105
Bank owned life insurance income 60 42 37 31 32 170 139
Income from Windsor investment 203 519 573 205 0 1,500 0
Gain (loss) on sale of securities 0 (7) 0 0 2 (7) 0
Other noninterest income 373 134 119 112 118 738 658
Total noninterest income 1,546 3,013 3,412 3,556 4,093 11,527 16,570
Noninterest expense
Compensation 3,248 2,481 2,812 2,801 3,525 11,342 12,291
Occupancy and equipment 434 303 314 366 331 1,417 1,336
Loan, foreclosure and OREO 373 287 408 19 275 1,087 1,597
Professional services 313 155 404 258 1,606 1,130 2,444
Data processing 316 247 143 148 303 854 915
Communication 188 112 85 84 106 469 372
Advertising 109 91 77 92 185 369 666
Transaction-related expenses 60 231 125 172 176 588 298
Other operating expense 856 547 438 482 488 2,323 1,735
Total noninterest expense 5,897 4,454 4,806 4,422 6,995 19,579 21,654
Income before income taxes (246) 1,619 915 1,571 (818) 3,859 3,231
Income tax expense (798) 672 401 692 (281) 967 1,431
Net income (loss)$552 $947 $514$879$(537) $2,892 $1,800
Basic earnings (loss) per common share (1) (3)$0.21 $0.59 $0.35$0.60$(0.39) $1.60 $1.31
Diluted earnings (loss) per common share (1) (3)$0.20 $0.56 $0.34$0.57$(0.38) $1.54 $1.24
Weighted average common shares outstanding (1) 2,649 1,626 1,467 1,465 1,380 1,804 1,375
Diluted average common shares outstanding (1) 2,755 1,932 1,534 1,531 1,445 1,881 1,450

Performance Ratios

Three Months Ended Twelve Months Ended
12/31/17 9/30/17(1) 6/30/17(2) 3/31/17(2) 12/31/16 12/31/17 12/31/16
PER COMMON SHARE
Basic earnings (loss) per common share$0.21 $0.59 $0.35 $0.60 $(0.39) $1.60 $1.31
Diluted earnings (loss) per common share$0.20 $0.56 $0.34 $0.57 $(0.38) $1.54 $1.24
Book value per common share $22.21 $22.03 $20.62 $20.25 $19.11 $22.21 $21.61
Tangible book value per common share$19.07 $18.69 $20.62 $20.25 $19.11 $19.07 $19.11
FINANCIAL RATIOS (ANNUALIZED)
Return on average assets 0.44% 1.09% 0.75% 1.31% (0.80%) 0.83% 0.74%
Return on average common shareholders’ equity 3.62% 9.62% 6.78% 12.40% (7.82%) 7.27% 6.99%
Return on tangible common equity 4.31% 9.99% 6.96% 12.57% (7.82%) 10.58% 9.35%
Net interest margin (FTE) 4.66% 4.58% 4.27% 4.46% 4.33% 6.05% 5.87%
Efficiency ratio 87.0% 67.8% 80.1% 70.5% 103.7% 76.4% 82.6%

(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 thousandsThree Months Ended Twelve Months Ended
12/31/17 9/30/17 6/30/17 3/31/17
12/31/16
Unaudited
12/31/17
Audited
12/31/16
Noninterest income
Government lending revenue$192$1,537 $730$1,636$2,111 $4,095 $7,129
Mortgage revenue 515 699 1,938 1,555 1,809 4,707 8,539
Service charge revenue 203 89 15 17 21 324 105
Bank owned life insurance income 60 42 37 31 32 170 139
Income from Windsor investment 203 519 573 205 0 1,500 0
Gain (loss) on sale of securities 0 (7) 0 0 2 (7) 0
Other noninterest income 373 134 119 112 118 738 658
Total noninterest income$1,546$3,013 $3,412$3,556$4,093 $11,527 $16,570
Noninterest expense
Compensation $3,248$2,481 $2,812$2,801$3,525 $11,342 $12,291
Occupancy and equipment 434 303 314 366 331 1,417 1,336
Loan, foreclosure and OREO 373 287 408 19 275 1,087 1,597
Professional services 313 155 404 258 1,606 1,130 2,444
Data processing 316 247 143 148 303 854 915
Communication 188 112 85 84 106 469 372
Advertising 109 91 77 92 185 369 666
Transaction-related expenses 60 231 125 172 176 588 298
Other operating expense 856 547 438 482 488 2,323 1,735
Total noninterest expense$5,897$4,454 $4,806$4,422$6,995 $19,579 $21,654

Total noninterest income for the fourth quarter of 2017 was $1,547,000, a decrease of $1,466,000 or 48.6% from $3,013,000 for the third quarter of 2017. The decrease in noninterest income was primarily attributable to the governmental lending “originate and hold” strategy implemented in the fourth quarter of 2017. Other notable changes in the noninterest category, as compared to the linked quarter are an increase in service charge revenue derived from having a full three months included for Sound Bank for the fourth quarter of 2017, as compared to only one month of Sound Bank activity for the third quarter of 2017; a reduction in income from Windsor resulting primarily from year-end tax entries; and an increase in other noninterest income resulting from a gain recorded on the sale of fixed assets at West Town Bank & Trust.

In comparison to the prior year, noninterest income totaled $11,526,000, a decrease of $5,043,000, or 30.4% as compared to 2016. The reduction was driven by a $3,832,000, or 44.8% decrease in mortgage revenue and a $1,736,000, or 29.7% decrease in governmental lending revenue. Mortgage revenue is down year over year due to the Company’s shift away from a national mortgage operation that was primarily dependent upon refinance activity, while the reduction in governmental lending revenue is due to the “originate-and-hold” strategy implemented in the fourth quarter of 2017. These reductions were offset by increases in service charge revenue and BOLI income due to the Sound Bank acquisition and the income earned from the Company’s investment in Windsor.

Total noninterest expense was $5,898,000 for the fourth quarter of 2017, an increase of $1,444,000 from $4,454,000 for the linked quarter ended September 30, 2017. The increases are primarily related to having a full three-months of activity for Sound Bank for the fourth quarter of 2017, as compared to only one-month of Sound Bank activity included in the Company’s consolidated results for the linked quarter.

Total noninterest expense for the year was $19,580,000, a decrease of $2,074,000, or 9.5% as compared to the $21,654,000 reported for 2016. Compensation is down year over year despite the Sound Bank acquisition, due primarily to the change in mortgage strategy, and professional fees are down significantly year over year due to the $1.4 million litigation settlement that was recorded during the fourth quarter of 2016. The litigation settlement reserve that was finalized in the fourth quarter of 2017 for a total of $1,243,000. The $297,000, or 44.5% reduction in advertising expense for 2017, as compared to 2016, is also related to the change in mortgage strategy. Transaction-related expenses totaled $588,000, an increase of $290,000, or 97.3% as compared to the $298,000 incurred in fiscal year 2016.

Selected Consolidated Balance Sheet Data

Dollars in thousandsEnding Balance
12/31/17 9/30/17 6/30/17 3/31/17 12/31/16
Portfolio loans:
Originated loans$242,744 $206,133 $200,863 $175,862 $170,112
Acquired loans, net 135,808 144,994 0 0 0
Allowance for loan losses (3,427) (2,841) (2,580) (2,537) (2,318)
Portfolio loans, net 375,125 348,286 198,283 173,325 167,794
Loans held for sale 66,706 21,023 30,166 45,266 58,923
Investment securities and deposits 48,080 64,970 25,953 26,807 28,399
Total interest-earning assets 489,911 433,896 254,402 245,398 255,116
Loan servicing rights 5,237 5,568 5,721 5,624 5,569
Goodwill 7,016 7,016 0 0 0
Other intangible assets, net 2,272 2,450 0 0 0
Total assets 544,134 487,904 283,628 275,343 280,158
Deposits
Noninterest bearing deposits$84,178 $70,984 $24,141 $22,926 $20,820
Interest-bearing deposits 308,556 317,714 201,072 201,179 195,999
Total deposits 392,734 388,698 225,213 224,105 216,819
Borrowings 78,903 19,309 22,599 16,000 30,000
Total interest-bearing liabilities 471,637 408,007 247,812 240,105 246,819
Shareholders’ equity:
Preferred equity$0 $7,570 $500 $500 $0
Common equity 46,503 38,688 12,421 12,362 12,359
Retained earnings 18,284 17,895 16,949 16,434 15,556
Accumulated other comprehensive income (4) 28 50 42 40
Windsor call option 797 797 797 797 0
Total shareholders’ equity$65,580 $64,978 $30,717 $30,135 $27,955

Total assets were $544,134,000, an increase of 11.5% as compared to total assets of $487,904,000 at September 30, 2017. Total net portfolio loans were $375,125,000 at December 31, 2017, an increase of $27,222,000, or 7.8% as compared to $347,903,000 at September 30, 2017. Loans held for sale increased $45,683,000 or 217.3% to $66,706,000 as compared to $21,023,000 at September 30, 2017. The increases are all primarily attributable to the “originate-and-hold” strategy implemented in the fourth quarter of 2017 to leverage the excess capital position at West Town Bank & Trust. The Guaranteed Governmental Lending Division at West Town Bank & Trust originated $90 million in new loans during the fourth quarter of 2017, its highest quarterly volume of originations ever.

Total deposits were $392,734,000 at December 31, 2017, an increase of $4,036,000 as compared to total deposits of $388,698,000 at September 30, 2017, while borrowings increased $59,594,000 as compared to the linked quarter. The Company used overnight borrowings at the FHLB to fund the increased government guaranteed loan production during the quarter to essentially match fund the loans held for sale.

Total shareholders’ equity was $65,380,000 at December 31, 2017, an increase of $602,000 or 1% as compared to $64,978,000 at September 30, 2017. The Company’s holders of convertible preferred stock converted their shares to 329,130 shares of non-voting common stock on December 1, 2017, at the predetermined conversion ratio. As a result of such conversions, the Company had no shares of convertible preferred stock outstanding at December 31, 2017. As part of the Windsor investment, the Company obtained a call option to acquire the remaining 56.5% of Windsor on or before December 31, 2019. At December 31, 2017, 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%13.5%13.1%
Tier 1 risk based capital ratio8.0%13.5%13.1%
Total risk based capital ratio10.0%14.8%13.2%
Tier 1 leverage ratio5.0%12.0%10.0%

Acquired Loan Summary



Dollars in thousands
12/31/17 9/30/17
Performing acquired loans$132,846 $142,087
Less: remaining FMV adjustments (1,592) (1,783)
Performing acquired loans, net$131,254 $140,304
FMV adjustment % 1.2% 1.3%
Purchase credit impaired loans (PCI)$5,386 $5,657
Less: remaining FMV adjustments (832) (967)
PCI loans, net$4,554 $4,690
FMV adjustment % 15.4% 17.1%
Total acquired performing loans 131,254 140,304
Total acquired PCI loans 4,554 4,690
Total acquired loans 135,808 144,994
FMV adjustment % all acquired loans 1.8% 1.9%

The performing acquired loan pool decreased $9,241,000 during the fourth quarter of 2017. The reduction is due to $6,629,000 in principal payments and $2,612,000 in renewals. The PCI loan pool decreased $271,000 during the fourth quarter due to $168,000 in principal payments and $103,000 in net charge-offs.

Asset Quality

The Company’s nonperforming assets to total assets ratio decreased 33 basis points during the fourth quarter of 2017 from 1.68% at September 30, 2017, to 1.35% at December 31, 2017. Excluding acquired loans, nonperforming assets to total assets declined 78 basis points from 3.31% at September 30, 2017, to 2.53% at December 31, 2017. 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 assets ratio decreased 19 basis points from 1.54% at December 31, 2016, to 1.35% at December 31, 2017.

The Company recorded a $1,129,000 provision for loan losses during the fourth quarter of 2017, as compared to a provision of $491,000 in the third quarter 2017 and $570,000 in fourth quarter 2016. For the year, the Company recorded a $2,177,000 provision for loan losses, an increase of $858,000 from the $1,319,000 recorded in 2016. The increased provision expense is reflective of the organic growth in portfolio loans (primarily government guaranteed lending) and the $1,069,000 in net charge-offs recorded during 2017. Excluding acquired loans, the ratio of allowance for loan and lease losses as a percentage of total portfolio loans increased from 1.36% at December 31, 2016, to 1.41% at December 31, 2017.

Dollars in thousandsEnding Balance
12/31/17 9/30/17 6/30/17 3/31/17 12/31/16
Nonaccrual loans – non-acquired$6,218$6,803 $6,967 $3,717 $3,447
Nonaccrual loans – acquired 413 0 0 0 0
OREO – non-acquired 0 0 270 270 873
OREO – acquired 0 0 0 0 0
90 days past due – non-acquired 0 0 0 0 0
90 days past due – acquired 697 1,396 0 0 0
Total nonperforming assets 7,328 8,199 7,237 3,987 4,320
Total nonperforming assets – non-acquired 6,218 6,803 7,237 3,986 4,320
Net charge-offs, QTD$543$230 $238 $58 $420
Annualized net charge-offs to total average portfolio loans 0.54% 0.34% 0.43% 0.10% 0.74%
Ratio of total nonperforming assets to total assets 1.35% 1.68% 2.55% 1.45% 1.54%
Ratio of total nonperforming loans to total portfolio loans 1.95% 2.35% 3.51% 2.14% 2.05%
Ratio of total allowance for loan losses to total portfolio loans 0.91% 0.81% 1.28% 1.44% 1.36%
Excluding acquired (Non-GAAP)
Ratio of nonperforming assets to loans and OREO 2.56 3.30% 3.60% 2.26% 2.53%
Ratio of nonperforming loans to loans 2.56 3.30% 3.47% 2.11% 2.03%
Ratio of allowance for loan losses to loans 1.41 1.38% 1.28% 1.44% 1.36%

Net Interest Income and Margin
(Includes Sound Bank as of 9/1/2017)

Dollars in thousandsThree Months Ended Twelve Months Ended
12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 12/31/17 12/31/16
Quarterly average balances:
Loans$400,324$273,225$222,099$226,218$226,624 $280,924$201,199
Investment securities 7,346 6,944 4,778 4,954 5,178 6,014 5,629
Interest-bearing balances and other 37,640 27,171 16,482 15,384 11,627 24,238 12,628
Total interest-earning assets 445,310 307,340 243,359 246,556 243,429 311,176 219,456
Noninterest deposits 75,707 40,028 21,089 22,576 19,339 39,996 14,928
Interest-bearing liabilities:
Interest bearing deposits 312,155 239,475 201,027 199,399 191,852 238,327 171,198
Borrowed funds 31,574 13,748 15,680 16,249 23,784 19,340 26,723
Total interest-bearing liabilities 343,729 253,223 216,707 215,648 215,636 257,667 197,921
Total assets 495,958 343,328 274,137 272,015 266,066 347,781 241,753
Common shareholders’ equity 60,432 40,848 29,629 28,334 27,264 39,746 25,731
Tangible common equity 50,795 37,617 29,629 28,334 27,264 36,503 25,731


Dollars in thousandsThree Months Ended Twelve Months Ended
12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 12/31/17 12/31/16
Interest Income/Expense:
Loans$6,061 $4,223 $3,288 $3,373 $3,311 $16,945 $11,895
Investment securities, tax 39 47 29 29 28 144 101
Interest-bearing balances and other 117 95 49 44 27 304 108
Total interest income 6,217 4,365 3,366 3,446 3,366 17,393 12,104
Deposits 791 712 684 677 674 2,865 2,353
Borrowings 192 102 92 56 38 441 117
Total interest expense 983 814 776 733 712 3,306 2,470
Net interest income$5,234 $3,551 $2,590 $2,713 $2,654 $14,087 $9,634
Average Yields and Costs:
Loans 6.01% 6.13% 5.94% 6.05% 5.80% 8.06% 7.90%
Investment securities 2.12% 2.71% 2.43% 2.34% 2.16% 3.19% 2.39%
Interest-bearing balances and other 1.23% 1.39% 1.19% 1.16% 0.92% 1.68% 1.14%
Total interest-earning assets 5.54% 5.63% 5.55% 5.67% 5.49% 7.47% 7.37%
Total interest-bearing deposits 1.01% 1.18% 1.36% 1.38% 1.39% 1.61% 1.84%
Borrowed funds 2.41% 2.94% 2.35% 1.40% 0.63% 3.05% 0.59%
Total interest-bearing liabilities 1.13% 1.28% 1.44% 1.38% 1.31% 1.72% 1.67%
Cost of funds 0.93% 1.10% 1.31% 1.25% 1.20% 1.48% 1.55%
Net interest margin 4.66% 4.58% 4.27% 4.46% 4.33% 6.05% 5.87%

Net interest income for the fourth quarter of 2017 was $5,234,000, an increase from $3,551,000 for the third quarter of 2017.

  • West Town Bank & Trust contributed $3,453,000 for the fourth quarter of 2017, as compared to $2,981,000 for the third quarter of 2017, an increase of $472,000 or 15.8%.
  • Sound Bank contributed $1,896,000 for the fourth quarter of 2017, as compared to $692,000 for the third quarter of 2017, an increase of $1,204,000 or 174.0%. The third quarter of 2017 only reflected one month of activity for Sound Bank.
  • Interest expense at the holding company totaled $115,000 for the fourth quarter of 2017, as compared to $85,000 for the third quarter of 2017, due to the increased $4 million in borrowings taken down August 31, 2017, in conjunction with closing the Sound Bank acquisition.

Net interest margin was 4.66% for the fourth quarter of 2017, an 8 basis point increase as compared to 4.58% for the third quarter of 2017.

  • West Town Bank & Trust net interest margin was 5.03% for the fourth quarter 2017, as compared to 4.71% for the third quarter of 2017. The driver for the increase was the growth in the average loan balances of $24,467,000, or 11%.
  • Sound Bank net interest margin was 4.35% for the fourth quarter 2017, as compared to 4.46% for the third quarter. Excluding accretion, the Sound Bank net interest margin was 3.82% for the fourth quarter 2017, as compared to 3.67% for the third quarter of 2017.
  • On a consolidated basis, the Company’s cost of funds declined 17 basis points as compared to the third quarter of 2017. This is primarily due to a full three-month’s activity from Sound Bank in the fourth quarter. Sound Bank’s cost of funds was 0.30%, as compared to West Town Bank & Trust cost of funds of 1.18% for the fourth quarter of 2017.

Average interest-earning assets for the fourth quarter of 2017 were $445,310,000, an increase of $137,970,000, or 44.9% as compared to $307,340,000 for the third quarter of 2017. The increase was primarily due to the Sound Banking Company acquisition as well as the increased loan production at West Town Bank & Trust coupled with its “originate-and-hold” strategy implemented in the fourth quarter of 2017. Likewise, average interest-bearing liabilities were $343,729,000, an increase of $90,506,000, or 35.7%, as compared to the $253,223,000 for the third quarter of 2017, due primarily to the Sound Banking Company acquisition.

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 residential mortgage, commercial, and installment loans. Additionally, both banks engage in mortgage banking activities and, as such, originate and sell one-to-four family residential mortgage loans in multiple states. 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; 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; 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

Source:West Town Bancorp