Puget Sound Bank (OTCQB: PUGB) today reported net income of $3.2 million or $1.06 per share for the year ending December 31, 2014, which compares to $2.2 million or $.77 per share for the year-earlier period. Net income for the quarter ending December 31, 2014 was $952,426 or $0.31 per share as compared to $553,366 or $0.18 per share for the year-earlier quarter.
Puget Sound Bank reached two high-performing milestones in the fourth quarter: return on assets above 1.0% and return on equity above 10%. “We will continue to focus on achieving this level of performance by growing our assets in a careful manner, building a strong deposit base and remaining focused with our acquisition strategy,” said Jim Mitchell, Puget Sound Bank president and chief executive officer.
“As we near our 10-year anniversary in April, the board, executive management team and I are extremely proud of each individual at the Bank who contributed to our phenomenal history of delivering consistent, ongoing profitability and growth," said Mr. Mitchell. “We are honored to be a part of our local community and contribute to the strength and vitality of this region.”
Total loans at year-end increased 15% to $315.0 million as compared to $274.9 million a year earlier. Puget Sound Bank’s ratio of nonperforming assets to assets continues to decline (0.15% at year-end compared to 0.22% for the year earlier), reflecting the Bank’s ongoing commitment to prudent growth. The percentage of Puget Sound Bank’s business-related loans (including owner-occupied real estate) accounts for approximately 61% of the Bank’s portfolio. This places the Bank near the top of all commercial banks in Washington state for these loans as a percentage of total loans.
Total deposits at year-end increased 20% to $336.6 million as compared to $280.8 million a year earlier. With 53% of total deposits in noninterest bearing accounts, the Bank has been able to maintain a net-interest margin of 4.17%, one of the highest among commercial banks in Washington state.
2014 Highlights
- Total assets grew 14% to $387.7 million at the end of 2014 as compared to $339.3 million a year ago.
- Noninterest demand deposits increased 45% to $177.4 million at year-end, or 53% of total deposits compared to 44% a year ago.
- At year-end, total loans grew 15% to $315.0 million and total deposits grew 20% to $336.6 million compared to a year ago.
- Net interest margin decreased slightly to 4.17% for the year, down from 4.24% one year ago.
- Tangible book value per share increased to $12.21 at year-end from $11.18 a year earlier.
- Return on equity for the fourth quarter increased to 10.29% as compared to 6.49% in 2013.
- Return on assets for the fourth quarter increased to 1.01% as compared to 0.68% in 2013.
- Nonperforming assets to total assets decreased to 0.15% at year-end, down from 0.22% in the year-earlier period. This represents a Texas ratio of 1.2%.
- Allowance for loan losses and the fair value discount on the acquired loan portfolio, together were 1.33% of loans.
- The efficiency ratio (noninterest expense divided by revenue) improved to 64.0% for the year compared to 69.9% in the year earlier.
- Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements.
- For the 17th consecutive quarter, Puget Sound Bank was awarded a 5-star rating (superior), the highest available from independent bank-rating agency BauerFinancial.
“We expect this to be another year of exceptional growth,” said Mr. Mitchell, “and we remain committed to the strong fundamentals that have delivered this high level of performance.”
“Part of this commitment relies on the Bank continuing to carefully manage expenses,” said Phil Mitterling, executive vice president and chief financial officer. “We expect our efficiency ratio to remain in the 60% to 65% range as we continue to invest in staff and technology to support our client growth.”
About Puget Sound Bank
Puget Sound Bank is one of Washington state’s top commercial banks (as measured by commercial and industrial loans as a percentage of total loans) proudly serving the greater Puget Sound region. Based in Bellevue, Washington, the bank was founded to meet the specialized needs of small- and medium-sized businesses, select commercial real estate projects, professional service providers and high net worth individuals. Puget Sound Bank offers a full range of competitive financial products including an advanced suite of cash management services. Customers can access their accounts in-branch, online, on their smartphones or through Puget Sound Bank's banking relationships offering branch and ATM deposit access throughout the continental United States. For more information visit www.PugetSoundBank.com or call (425) 455-2400.
Puget Sound Bank trades on the OTCQB® electronic marketplace under the symbol PUGB. To access investor relations information for Puget Sound Bank, visit www.PugetSoundBank.com/IR or call (425) 467-2037.
Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe Puget Sound Bank’s projections, estimates, plans and expectations of future results and can be identified by words such as “believe,” “intend,” “estimate,” “likely,” “anticipate,” “expect,” “looking forward,” and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve’s actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Puget Sound Bank undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.
| Puget Sound Bank | ||||||||||||||||
| Fourth Quarter 2014 | ||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Quarterly | ||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||
| ($ in thousands except per share data) | 4th Qtr | 3rd Qtr | 4th Qtr | YTD | YTD | |||||||||||
| EARNINGS | ||||||||||||||||
| Net interest income | $ | 3,752 | 3,657 | 3,324 | 14,104 | 12,068 | ||||||||||
| Provision for loan losses | $ | 99 | 230 | 264 | 613 | 441 | ||||||||||
| Net interest income after provision for loan losses | $ | 3,653 | 3,427 | 3,060 | 13,491 | 11,627 | ||||||||||
| NonInterest income | $ | 206 | 155 | 153 | 674 | 641 | ||||||||||
| NonInterest expense | $ | 2,559 | 2,307 | 2,348 | 9,462 | 8,885 | ||||||||||
| Pre-tax Net income | $ | 1,299 | 1,274 | 865 | 4,703 | 3,382 | ||||||||||
| Provision for income taxes (benefit) | $ | 347 | 424 | 311 | 1,480 | 1,217 | ||||||||||
| Net income | $ | 952 | 850 | 553 | 3,223 | 2,164 | ||||||||||
| Preferred dividends | $ | 25 | 25 | 25 | 99 | 99 | ||||||||||
| Net income available to common shareholders | $ | 927 | 825 | 528 | 3,124 | 2,066 | ||||||||||
| 1Earnings per share | $ | 0.31 | 0.28 | 0.18 | 1.06 | 0.77 | ||||||||||
| Average shares outstanding | 2,972 | 2,962 | 2,921 | 2,960 | 2,674 | |||||||||||
| Total revenue | $ | 3,958 | 3,811 | 3,477 | 14,778 | 12,708 | ||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||
| Return on average assets | 1.01 | % | 0.92 | % | 0.68 | % | 0.91 | % | 0.73 | % | ||||||
| 1Return on average tangible common equity | 10.29 | % | 9.42 | % | 6.49 | % | 9.01 | % | 6.98 | % | ||||||
| Net interest margin | 4.17 | % | 4.14 | % | 4.24 | % | 4.17 | % | 4.24 | % | ||||||
| Efficiency ratio | 64.7 | % | 60.5 | % | 67.5 | % | 64.0 | % | 69.9 | % | ||||||
| CAPITAL | ||||||||||||||||
| Tier 1 leverage ratio | 12.30 | % | 13.09 | % | ||||||||||||
| Tier 1 risk-based capital ratio | 13.55 | % | 14.22 | % | ||||||||||||
| Total risked based capital ratio | 14.79 | % | 15.47 | % | ||||||||||||
| Tangible Common Equity Ratio | 9.48 | % | 9.26 | % | 9.73 | % | ||||||||||
| ASSET QUALITY | ||||||||||||||||
| Net loan charge-offs (recoveries) | $ | 0 | 145 | (126 | ) | |||||||||||
| Allowance for loan losses | $ | 4,013 | 3,907 | 3,538 | ||||||||||||
| Allowance for losses to total loans | 1.27 | % | 1.27 | % | 1.29 | % | ||||||||||
| Nonperforming loans | $ | 583 | 593 | 738 | ||||||||||||
| Other real estate owned | $ | 0 | 0 | 0 | ||||||||||||
| Nonperforming assets to total assets | 0.15 | % | 0.16 | % | 0.22 | % | ||||||||||
1Includes preferred stock dividends not included in net income. | ||||||||||||||||
| Puget Sound Bank | ||||||||||
| Fourth Quarter 2014 | ||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||
| (Unaudited) | ||||||||||
| Quarterly | ||||||||||
| 2014 | 2014 | 2013 | ||||||||
| ($ in thousands except per share data) | 4th Qtr | 3rd Qtr | 4th Qtr | |||||||
| BALANCE SHEET | ||||||||||
| Cash and Due From Banks | $ | 18,138 | 18,683 | 16,627 | ||||||
| Investments | $ | 49,992 | 52,350 | 42,713 | ||||||
| Commercial and Industrial Loans | $ | 132,734 | 135,414 | 126,764 | ||||||
| Owner-Occupied Commercial Real Estate | $ | 61,221 | 61,406 | 54,377 | ||||||
| Other Commercial Real Estate | $ | 90,283 | 84,889 | 71,509 | ||||||
| Personal Loans | $ | 30,894 | 25,160 | 22,422 | ||||||
| Non-accrual Loans | $ | 583 | 593 | 738 | ||||||
| Acquired Loan Fair Value Adjustment | $ | (193 | ) | (249 | ) | (378 | ) | |||
| Deferred Loan Fees | $ | (507 | ) | (576 | ) | (522 | ) | |||
| Total Loans | $ | 315,015 | 306,639 | 274,910 | ||||||
| Allowance for Loan Losses | $ | (4,013 | ) | (3,907 | ) | (3,538 | ) | |||
| Net Loans | $ | 311,002 | 302,732 | 271,372 | ||||||
| Goodwill/Core Deposit Intangible | $ | 2,155 | 2,165 | 2,196 | ||||||
| Other Assets | $ | 6,442 | 6,126 | 6,355 | ||||||
| Total Assets | $ | 387,729 | 382,056 | 339,263 | ||||||
| Non-interest bearing Demand | $ | 177,441 | 161,801 | 122,148 | ||||||
| Interest Bearing Demand | $ | 23,972 | 21,189 | 24,529 | ||||||
| Money Market and Savings | $ | 108,327 | 112,047 | 108,158 | ||||||
| Certificates of Deposit | $ | 26,852 | 37,757 | 25,932 | ||||||
| Total Deposits | $ | 336,592 | 332,794 | 280,767 | ||||||
| Borrowings | $ | - | - | 12,000 | ||||||
| Other Liabilities | $ | 2,688 | 2,225 | 2,027 | ||||||
| Total Equity | $ | 48,448 | 47,038 | 44,469 | ||||||
| Total Liabilities and Equity | $ | 387,729 | 382,056 | 339,263 | ||||||
| Tangible Shareholders' equity | $ | 36,537 | 35,194 | 32,785 | ||||||
| Tangible book value per share | $ | 12.21 | 11.88 | 11.18 | ||||||
| Book value per share | $ | 12.93 | 12.61 | 11.92 | ||||||
