TowneBank records higher profits as conditions improve

TowneBank, the largest bank based in Hampton Roads, said Tuesday that its fourth-quarter income rose nearly 15 percent, propelled in part by less costly deposits and greater insurance commission income.

Earnings for all of 2011 rose 10 percent, the Portsmouth-based community bank said. The bank earned $33.3 million last year, up from $30.3 million in 2010. That amounts to 79 cents per share, up from the 73 cents a share the institution earned in 2010.

For the fourth quarter, TowneBank bank said it earned $8.99 million, up from $7.84 million in the same quarter a year ago.

TowneBank's higher earnings also were helped from setting aside less money to cover loan losses and an increase in what it earned from credit and debit card transactions, said G. Robert Aston Jr., the bank's chairman and CEO.

"I think that was pretty exciting," he said. "Not so much anything we did, but the good news is that people are spending money they weren't spending the year before."

Aston said the bank was also helped last year from modest loan growth.

The lower loan-loss provision was related to a general improvement in the credit quality of the bank's borrowers, Aston said. The bank charged off $12.5 million of bad loans in 2011, down from $17.7 million in 2010.

The bank's nonperforming assets at the end of December added as much as $85.6 million, up from $77.6 million a year earlier. As a percent of assets, they fell to 2.1 percent, down from 2.2 percent at the end of September, but up from roughly 2 percent a year earlier.

"All in all, I think 2011 was a good year," Aston said. "We saw our customers getting healthy and business conditions getting better. Hopefully, we'll see that continue this year."

TowneBank's share price closed Tuesday at $13.20, down 12 cents, before the earnings were released.

The bank, with assets of $4.08 billion as of Dec. 31, has 26 branches in Hampton Roads, from Williamsburg to the Outer Banks.

Josh Brown, 757-446-2318, josh.brown@pilotonline.com