Gateway Financial Holdings, Inc. (NASDAQ:GBTS)
Industry: Financial
Gateway Financial Holdings, Inc. is a financial holding company for Gateway Bank & Trust Co. (the Bank). The Bank is a chartered commercial bank that attracts deposits from the general public in its market area and uses these deposits and other sources of funds to originate loans. It also invests in mortgage-related securities that are issued by the United States government and its agencies. The Bank has two wholly owned operating subsidiaries: insurance agency Gateway Insurance Services Inc. and securities brokerage firm Gateway Investment Services, Inc. Its market area consists of four geographic regions: the Greater Metropolitan Hampton Roads area of Virginia; the geographically contiguous Northeastern coastal region of North Carolina, including the Outer Banks; Southeastern North Carolina, including Wilmington, and Central North Carolina including Raleigh. The bank serves its customers from 18 full-service financial centers located in Elizabeth City (3), Edenton, Kitty Hawk, Moyock, Nags Head, Plymouth and Roper, North Carolina, and Chesapeake (2), Emporia, Suffolk and Virginia Beach (5), Virginia. During 2005, the Bank added two full-service de novo financial centers, both in Virginia Beach, Virginia. Lending Activities Commercial business lending is a primary focus of the Bank's lending activities. Commercial loans include both secured and unsecured loans for working capital, expansion, and other business purposes. Short-term working capital loans generally are secured by accounts receivable, inventory and/or equipment. At December 31, 2005, the Company's commercial loan portfolio equaled $80.8 million, or 12.1%, of total loans. Real estate loans are made for purchasing, constructing and refinancing one- to four- family, five or more family and commercial properties. The Bank offers fixed and adjustable rate options. The Company provides customers access to long-term conventional real estate loans through its mortgage loan department, which makes the Federal National Mortgage Association - conforming loans for the account of third parties. At December 31, 2005, residential one- to four-family loans amounted to $83 million, or 12.4%, of total loans. These loans are secured by properties located within the market area. Commercial real estate loans equaled $221.5, or 33.2%, of total loans at December 31, 2005. This lending has involved loans secured principally by commercial buildings for office, storage and warehouse space, and by agricultural properties. One- to four- family residential construction loans are originated for the construction of custom homes and provide financing to builders and consumers for the construction of pre-sold homes. Real estate construction loans amounted to $114 million, or 17.1%, of total loans at December 31, 2005. Consumer loans to individuals include automobile loans, boat and recreational vehicle financing, home equity and home improvement loans and miscellaneous secured and unsecured personal loans. Investment Activities The Company's portfolio of investment securities, all of which are available for sale, consists primarily of United States Treasury and government agency securities, and mortgage-backed securities. Securities to be held for indefinite periods of time and not intended to be held to maturity are classified as available for sale and carried at fair value with any unrealized gains or losses reflected as an adjustment to stockholders' equity. Securities held for indefinite periods include securities that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates and/or significant prepayment risks. The market value of securities held by the Bank totaled to $123,773,000 in 2005. Sources of Funds Deposits are the Bank's main source of funding. Customer deposits consist of savings accounts, negotiable order of withdrawal accounts, time deposit accounts, total interest-bearing deposits, and money market accounts. The Bank's sources of funds are customer depos
As Of: 10/07 00:00 ET
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