2009-11-05 / Correspondents' Notes

Tower Bancorp, Inc. Announces Quarterly Earnings

Strong earnings, excellent asset quality, and successful stock offering support continued growth

Tower Bancorp Inc. , the parent company of Graystone Tower Bank (the “Bank”), reported net income of $1.7 million or 30 cents per diluted share for the third quarter of 2009 compared to net income of $711 thousand or 26 cents per diluted share for the same quarter a year ago.

“Following the very successful offering of our common stock during the quarter to support our continuing growth strategy, we are delighted to report another quarter of strong earnings,” said Andrew Samuel, chairman, president and CEO. “The results for the third quarter, which marks the second full quarter following the partnership with Graystone Financial Corp., reflect a continuation of excellent asset quality, in-market core de- posit growth, an enhanced capital position and greater efficiencies as we begin to recognize the anticipated cost savings resulting from the integration and systems conversion in connection with the partnership.”


Net income for the third quarter of 2009 was $1.7 million, or 30 cents per diluted share. The third quarter results included after-tax merger-related expenses of $205 thousand, which negatively impacted earnings. Excluding merger related expenses, net income would have totaled $1.9 million or 33 cents per diluted share.

Assets grew $106.1 million or 8.33 percent from June 30, 2009 to September 30, 2009, and deposits grew $63.3 million or 5.95 percent from June 30, 2009, to September 30, 2009.

Nonperforming assets at September 30, 2009, comprised 0.55 percent of total period-end assets and net loan charge-offs during the quarter totaled just 0.05 percent of average loans. The company’s allowance for credit losses to nonperforming loans was 245.26 percent at September 30, 2009.

Non-interest expense decreased $611 thousand or 6.79 percent from the second quarter of 2009, excluding merger-related expenses and the FDIC special assessment, as the company began to realize cost savings from the merger with Graystone Financial Corp.

The company’s strong capital position was bolstered by the successful completion of a common stock offering during the third quarter of 2009, which resulted in net proceeds of approximately $51.7 million. The company’s ratio of total riskbased capital to risk-based assets at September 30, 2009, equaled 16.14 percent, substantially exceeding the 10.0 percent minimum regulatory requirement to be considered “well capitalized.” The company’s tangible book value totaled $20.89 per share at September 30, 2009, which is an increase of $1.91 or 10.07 percent from June 30, 2009.

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