Message from the President
Old News—Good News!
Our Bank Notes are published four times per year and the timing of my articles always leaves me in a quandary. I often wonder why I can’t write my article after the end of the quarter. Waiting a few weeks would allow me to share the most recent quarterly news about HomeTown Bank.
Because I wrote my January 1, 2013 piece in mid-December, I did not know the final numbers for 2012. As I write this current article, I know the results of last year but cannot report on the first quarter of 2013. Hopefully the “old news” I am about to report will help you understand why I am so proud of the “good news” that our HomeTown family has created.
Thanks to our incredible customers and terrific board and staff, the final numbers for 2012 were outstanding. Net income after-tax increased 12.76% to $5.7 million, and we paid a record $3.00 per share cash dividend on our common stock. We earned 13.83% return on equity while growing total assets by 6% to $453 million.
Total deposits grew $19.4 million in 2012, placing the five year growth (2008-2012) after Ike at 88%. Our staff has done an incredible job of managing this phenomenal growth while making sure each customer is treated with the utmost respect. Our loan officers produced $63.7 million in loans last year, and each one of those loans was made to someone in our market area. We avoid speculating in markets we don’t understand, but prefer to loan money in our hometowns.
Our HomeTown team opened a new office on Pearland Parkway in mid-December. Opening a new office is not an easy task. It takes all of us joining together to make it work. Several dedicated directors formed a branch committee to watch over construction, and our incredible staff made sure that each department of the new bank was ready to function properly when the doors were opened. The new staff was trained by the “best of the best” throughout our organization, and the new bank has had an incredible start. In fact, they have reached over 50% of their deposit goal in the first two months.
The New Year will certainly bring its challenges. The new branch will operate at a loss for at least two years, and the squeeze on net interest margins caused by a historic low interest environment will curtail earnings. The over-bearing regulatory burden has community banks screaming all across the country as the Dodd-Frank Act and the new Consumer Financial Protection Bureau have produced thousands of pages of new regulations. Unfortunately, community banks are shouldering a disproportionate amount of the new regulatory avalanche. Community banks harmoniously agree that the answer is a bifurcated banking system that creates separate rules for big and small banks. The challenge is to get Congress to agree with us and do something about it.
I have no doubt that 2013 will be a great year at HomeTown Bank. Our team is ready for the challenge, and we know that excellent customer service is never overrated.