BREMERTON, Wash., April 25, 2007 (PRIME NEWSWIRE) -- WSB Financial Group, Inc. (the "Company) (Nasdaq:WSFG), the parent company for Westsound Bank, today reported earnings for the quarter ended March 31, 2007 of $1.1 million, an increase of 20.2% over the $900,000 produced in the first quarter of 2006. Earnings per share on a fully diluted basis was $0.18 per diluted share for the quarter ended March 31, 2007, compared with pre IPO earnings per share of $0.29 for the same quarter in 2006.
David K. Johnson, President and Chief Executive Officer commented, "We feel confident of the strong, long-term growth opportunities our markets offer. We are aggressively managing our business and making the investments required to take advantage of those opportunities and enhance our bottom line going forward. Our opening of the Port Townsend and Federal Way banking centers will increase and diversify our overall enterprise footprint. Enhancements in personnel, technology and facilities are key towards executing our growth plan."
Net Interest Margin
The Company's net interest income before its provision for loan losses was $4.8 million, a 40.0% increase compared to the $3.5 million posted in the same period in 2006. The increase in net interest income is attributed primarily due to strong growth in the loan portfolio. This was offset by a variety of factors, including increased cost of deposits and treatment of loan fees.
For 2007, the Company has begun deferring loan fees on all loans regardless of maturity. Previously, the company had taken all loan fees of loans with maturity of 12 months or less into income at the time of booking and fees on other loans were accounted for using the straight-line deferral method. The effect of this inclusion will be less fee income recorded in the earlier months of 2007 and a gradual increase of these fees over the year.
Non Interest Income and Expenses
Non interest income in the first quarter of 2007 was $1.3 million, a 10.2% increase over the $1.2 million posted in the same period of 2006. Non interest expense for the first quarter of 2007 was $4.1 million, a 37.6% increase over the same period for 2006. Certain additional expenses realized during the first quarter of 2007 were associated with recruitment expenses, additional staffing requirements, bringing on line two full service branches, and additional costs associated with public company obligations.
Balance Sheet
The total assets of the company increased to an all time high of $435.6 million as of March 31, 2007, up $48.9 million, or 12.6% from December 31, 2006 total assets of $386.8 million. During the first quarter of 2007, net loans increased by 12.8% to $371.3 million, deposits increased by 14.8% to $361.7 million, and stockholders' equity increased 1.9% to $62.8 million from December 31, 2006. All reported figures for assets, loans, deposits, and equity represent all time highs for the Company.
Total nonperforming assets for the Company increased at March 31, 2007 to $1.9 million from $219,000 at December 31, 2006. The current total is comprised of $552,000 in non-performing loans, and $1.3 million in other real estate owned. The allowance for loan loss totaled $4.4 million, or 1.15% of total loans, which is in line with historical practice.
"While we have seen an increase in non performing assets, it remains at a low and manageable level. Management has taken an aggressive posture in dealing with loans that may be demonstrating signs of credit weakness," said Johnson. "We believe that this is the most opportune time to address these loans given the fact that we are still in a favorable real estate market."
EARNINGS CONFERENCE CALL
Management will host a conference call today at 2:00 pm Pacific Standard Time to discuss the results for the first quarter of 2007. Interested parties are invited to listen in on the call by dialing (800) 361-0912. The call will also be available for viewing via our website at www.westsoundbank.com.
ABOUT WSB FINANCIAL GROUP, INC.
WSB Financial Group, Inc., based out of Bremerton, Washington, is the holding company for Westsound Bank. The company was founded in 1999, and currently operates nine full service locations and one loan production office, all located within 6 contiguous counties within Western Washington. Our website is www.westsoundbank.com.
This news release may contains "forward-looking statements" that are subject to risks and uncertainties. These forward-looking statements describe management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, maintenance of the net interest margin, credit quality and loan losses, the efficiency ratio and continued success of the Company's business plan. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. The words "should," "anticipate," "expect," "will," "believe," and words of similar meaning are intended, in part, to help identify forward-looking statements. Future events are difficult to predict, and the expectations described above are subject to risk and uncertainty that may cause actual results to differ materially. In addition to discussions about risks and uncertainties set forth from time to time in the Company's filing with the Securities and Exchange Commission, factors that may cause actual results to differ materially from those contemplated in these forward-looking statements include, among others: (1) local and national general and economic condition; (2) changes in interest rates and their impact on net interest margin; (3) competition among financial institutions; (4) legislation or regulatory requirements; and (5) success of the Company's expansion efforts. WSB Financial Group, Inc. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made. Any such statements are made in reliance on the safe harbor protections provided under the Securities Exchange Act of 1934, as amended.
CONSOLIDATED BALANCE SHEETS
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(Unaudited) March 31, December 31, March 31,
(in thousands except share data) 2007 2006 2006
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ASSETS
Cash and due from banks $ 11,747 $ 9,048 $ 9,398
Fed funds sold 24,200 17,150 13,900
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Total cash and cash equivalents 35,947 26,198 23,298
Investment securities available for
sale, at fair value 7,928 8,244 8,222
Federal Home Loan Bank stock, at cost 234 234 234
Loans held for sale 5,797 11,007 5,000
Loans receivable 375,694 333,173 237,052
Less: allowance for loan losses (4,407) (3,972) (2,825)
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Loans, net 371,287 329,201 234,227
Premises and equipment, net 8,802 7,846 6,183
Accrued interest receivable 2,037 1,980 1,101
Other assets 3,600 2,044 442
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TOTAL ASSETS $435,632 $386,754 $278,707
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LIABILITIES
Deposits:
Noninterest-bearing $ 27,514 $26,864 $ 26,418
Interest-bearing 334,173 288,158 225,887
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Total deposits 361,687 315,022 252,305
Accrued interest payable 1,452 1,109 360
Other liabilities 1,446 718 836
Junior subordinated debentures 8,248 8,248 8,248
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TOTAL LIABILITIES 372,833 325,097 261,749
STOCKHOLDERS' EQUITY
Common Stock, $ 1 par value;
15,357,250 shares authorized;
5,556,421 shares issued and
outstanding March 31, 2007,
5,545,673 and 2,736,177
shares issued and
outstanding at December 31, 2006
and March 31, 2006, respectively 5,556 5,546 2,736
Additional paid-in capital 48,141 48,089 9,096
Retained earnings 9,136 8,054 5,195
Accumulated other comprehensive loss (34) (32) (69)
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TOTAL STOCKHOLDERS' EQUITY 62,799 61,657 16,958
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $435,632 $386,754 $278,707
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CONSOLIDATED STATEMENTS OF INCOME Quarter Ended
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(Unaudited) March 31, December 31, March 31,
(in thousands except share data) 2007 2006 2006
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Interest Income
Interest and fees on loans $ 8,343 $ 8,095 $ 5,452
Taxable investment securities 73 66 65
Tax exempt securities 19 19 19
Federal funds sold 156 53 122
Other interest income 50 18 32
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Total interest income 8,641 8,251 5,690
Interest Expense
Deposits 3,662 3,494 2,110
Other borrowings 1 44 --
Junior subordinated debentures 146 149 128
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Total interest expense 3,809 3,687 2,238
Net Interest Income 4,832 4,564 3,452
Provision for loan losses 491 256 305
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Net interest income after
provision for loan losses 4,341 4,308 3,147
Noninterest Income
Service charges on deposit accounts 84 75 53
Other customer fees 246 266 162
Net gain on sale of loans 979 784 998
Other income 36 3 8
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Total noninterest income 1,345 1,128 1,221
Noninterest Expense
Salaries and employee benefits 2,667 3,012 1,927
Premises lease 90 89 81
Depreciation expense 193 183 130
Occupancy and equipment 168 144 122
Data and item processing 151 137 118
Advertising expense 54 41 51
Printing, stationary and supplies 60 60 52
Telephone expense 29 27 25
Postage and courier 39 34 30
Legal fees 38 12 8
Director fees 57 72 78
Business and occupation taxes 73 70 61
Other expenses 440 371 266
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Total noninterest expense 4,059 4,252 2,949
Income before provision for income
taxes 1,627 1,184 1,419
Provision for income taxes 545 406 519
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Net Income $ 1,082 $ 778 $ 900
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Basic Earnings per Common Share $ 0.20 $ 0.24 $ 0.33
Diluted Earnings per Common Share $ 0.18 $ 0.21 $ 0.29
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Average Number of Common Shares
Outstanding 5,548,283 3,259,489 2,727,645
Fully Diluted Average Common
Shares Outstanding 6,109,233 3,693,464 3,089,106
Financial Statistics Quarter Ended
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(Unaudited) March 31, December 31, March 31,
(in thousands except share data) 2007 2006 2006
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Revenues $ 9,986 $ 9,379 $ 6,911
Averages
Total Assets $400,327 $353,126 $260,719
Loans and Loans Held for Sale $363,296 $327,974 $226,710
Interest Earning Assets $387,429 $341,617 $249,228
Deposits $327,944 $313,828 $234,058
Shareholders' Equity $ 62,296 $ 26,175 $ 16,548
Financial Ratios
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Return on Average Assets 1.10% 0.87% 1.40%
Return on Average Equity 7.04% 11.78% 22.06%
Net Interest Margin 5.06% 5.30% 5.62%
Efficiency Ratio 65.7% 74.7% 63.1%
Non-performing Assets to Total Assets 0.43% 0.06% 0.05%
Asset Quality Quarter Ended
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(Unaudited) March 31, December 31, March 31,
(in thousands) 2007 2006 2006
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Allowance for Loan Losses Activity:
Balance of Beginning of Period $ 3,972 $ 3,725 $ 2,520
Charge-offs (50) (5) --
Recoveries -- 2 --
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Net Loan Charge-offs (50) (3) --
Reclassification of unfunded credit
commitments (6) (6) --
Provision for Loan Losses 491 256 305
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Balance at End of Period $ 4,407 $ 3,972 $ 2,825
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Selected Ratios:
Net Charge-offs to average loans 0.01% 0.00% 0.00%
Provision for loan losses to
average loans 0.14% 0.08% 0.13%
Allowance for loan losses to
total loans 1.15% 1.15% 1.17%
Nonperforming Assets:
Non-Accrual loans $ 209 $ 219 $ 130
Accruing Loans past due 90 days
or more 343 -- --
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Total non-performing loans (NPLs) $ 552 $ 219 $ 130
Other real estate owned 1,310 -- --
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Total non-performing assets (NPAs) $ 1,862 $ 219 $ 130
Selected Ratios:
NPLs to total loans 0.14% 0.06% 0.05%
NPAs to total assets 0.43% 0.06% 0.05%