BREMERTON, Wash., July 24, 2007 (PRIME NEWSWIRE) -- WSB Financial Group, Inc. (the "Company) (Nasdaq:WSFG), the parent company for Westsound Bank, today reported earnings for the quarter ended June 30, 2007 of $1.4 million, an increase of 36.6% over the $1.0 million net income produced in the second quarter of 2006. Earnings per share on a fully diluted basis was $0.24 per diluted share for the quarter ended June 30, 2007, compared with pre IPO diluted earnings per share of $0.33 for the same quarter in 2006.
David K. Johnson, President and Chief Executive Officer commented, "To achieve earnings growth of 36.6% over the same period last year is a reflection of our sales and lending team efforts." Johnson added, "We have been able to maintain our net interest margin at a level of over 5%, due to our disciplined pricing structure on both loans and deposits. Our sales culture has produced positive growth numbers for the period as well, producing a 51.1% increase in assets over the same period last year."
Net Interest Margin
The net interest margin for the company remained strong at 5.06%, the same as first quarter 2007. Net interest income before provision for loan losses grew to $5.4 million, a 31% increase over the same period for 2006. The increase was due primarily to continued growth in the loan portfolio.
Non Interest Income and Expenses
Non interest income for Q2 2007 was $1.2 million, down from $1.3 million reported for the first quarter of 2007. The decline is attributed to fewer secondary market mortgage loans being delivered to the secondary market. Non interest expense showed a modest increase from $4.1 million recorded for the first quarter of 2007 to $4.2 million recorded for Q2 2007. Compared to last quarter, the efficiency ratio showed a marked improvement, falling from 65.7% to 62.7%.
Balance Sheet
The total assets of the Company increased to an all time high of $455.3 million as of June 30, 2007, up $19.6 million, or 4.5% from March 31, 2007 total assets of $435.6 million. During the second quarter of 2007, net loans increased by 5.8% to $392.7 million, deposits increased by 5.1% to $380.0 million, and stockholders' equity increased 2.3% to $64.3 million from March 31, 2007. All reported figures for assets, loans, deposits, and equity represent all time highs for the Company.
Total nonperforming assets for the Company at June 30, 2007 were $1.8 million compared to the $1.9 million reported at March 31, 2007. The current total is comprised of $201,000 in non-performing loans, and $1.6 million in other real estate owned. The allowance for loan loss (ALLL) totaled $4.5 million, or 1.10% of total loans.
"Our non performing assets have shown a modest decline for the quarter, and remain at a manageable level" said Johnson. "The current level of the ALLL reflects management's confidence in the performance of the portfolio."
EARNINGS CONFERENCE CALL
Management will host a conference call today at 2:00 pm Pacific Daylight Time to discuss the results for the second 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 listening 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
------------------------------
(Unaudited)
(in thousands except June 30, December 31, June 30,
share data) 2007 2006 2006
--------------------------------------------------------------------
ASSETS
Cash and due from banks $ 9,709 $ 9,048 $ 7,939
Fed funds sold 18,200 17,150 1,000
--------------------------------------------------------------------
Total cash and cash equivalents 27,909 26,198 8,939
Investment securities available
for sale, at fair value 8,357 8,244 8,159
Federal Home Loan Bank stock,
at cost 319 234 234
Loans held for sale 10,482 11,007 8,897
Loans receivable 397,212 333,173 269,142
Less: allowance for loan losses (4,492) (3,972) (3,289)
--------------------------------------------------------------------
Loans, net 392,720 329,201 265,853
Premises and equipment, net 9,275 7,846 6,358
Accrued interest receivable 2,265 1,980 1,370
Other assets 3,925 2,044 1,371
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TOTAL ASSETS $455,252 $386,754 $301,181
====================================================================
LIABILITIES
Deposits:
Noninterest-bearing $ 30,123 $ 26,864 $ 26,134
Interest-bearing 349,891 288,158 247,877
--------------------------------------------------------------------
Total deposits 380,014 315,022 274,011
Accrued interest payable 1,795 1,109 458
Other liabilities 943 718 473
Junior subordinated debentures 8,248 8,248 8,248
--------------------------------------------------------------------
TOTAL LIABILITIES 391,000 325,097 283,190
STOCKHOLDERS' EQUITY
Common Stock, $ 1 par value;
15,357,250 shares authorized;
5,567,478 shares issued and
outstanding June 30, 2007,
5,545,673 and 2,742,320 shares
issued and outstanding at
December 31, 2006 and June 30,
2006, respectively 5,567 5,546 2,742
Additional paid-in capital 48,192 48,089 9,110
Retained earnings 10,566 8,054 6,242
Accumulated other comprehensive
loss (73) (32) (103)
--------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 64,252 61,657 17,991
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $455,252 $386,754 $301,181
====================================================================
CONSOLIDATED
STATEMENTS OF INCOME Quarter Ended Six Month Ended
--------------------- ------------- ---------------
(Unaudited)
(in thousands
except June 30, March 31, June 30, June 30, June 30,
share data) 2007 2007 2006 2007 2006
---------------------------------------------- ---------------------
Interest Income
Interest and
fees on
loans $ 9,324 $ 8,343 $ 6,545 $ 17,667 $ 11,997
Taxable
investment
securities 71 73 66 144 131
Tax exempt
securities 19 19 19 38 38
Federal funds
sold 257 156 59 413 181
Other interest
income 44 50 24 94 56
---------------------------------------------- ---------------------
Total interest
income 9,715 8,641 6,713 18,356 12,403
Interest Expense
Deposits 4,182 3,662 2,433 7,844 4,543
Other borrowings -- 1 26 1 26
Junior
subordinated
debentures 150 146 140 296 268
---------------------------------------------- ---------------------
Total interest
expense 4,332 3,809 2,599 8,141 4,837
Net Interest
Income 5,383 4,832 4,114 10,215 7,566
Provision for
loan losses 326 491 498 817 803
---------------------------------------------- ---------------------
Net interest
income after
provision for
loan losses 5,057 4,341 3,616 9,398 6,763
Noninterest
Income
Service charges
on deposit
accounts 96 84 61 180 114
Other customer
fees 233 246 235 479 397
Net gain on sale
of loans 886 979 760 1,865 1,758
Other income 16 36 43 52 51
---------------------------------------------- ---------------------
Total
noninterest
income 1,231 1,345 1,099 2,576 2,320
Noninterest
Expense
Salaries and
employee
benefits 2,576 2,667 2,059 5,243 3,986
Premises lease 82 90 81 172 162
Depreciation
expense 204 193 143 397 273
Occupancy and
equipment 141 168 132 309 254
Data and item
processing 172 151 127 323 245
Advertising
expense 42 54 50 96 101
Printing,
stationary
and supplies 45 60 49 105 101
Telephone expense 28 29 27 57 52
Postage and courier 43 39 35 82 65
Legal fees 71 38 17 109 25
Director fees 66 57 84 123 162
Business and
occupation taxes 84 73 73 157 134
Other expenses 596 440 330 1,036 596
---------------------------------------------- ---------------------
Total
noninterest
expense 4,150 4,059 3,207 8,209 6,156
Income before
provision for
income taxes 2,138 1,627 1,508 3,765 2,927
Provision for
income taxes 708 545 461 1,253 980
---------------------------------------------- ----------------------
Net Income $ 1,430 $ 1,082 $ 1,047 $ 2,512 $ 1,947
============================================== ======================
Basic Earnings
per Common
Share $ 0.26 $ 0.20 $ 0.38 $ 0.45 $ 0.71
Diluted
Earnings
per Common
Share $ 0.24 $ 0.18 $ 0.33 $ 0.42 $ 0.62
============================================== ======================
Average Number
of Common
Shares
Outstanding 5,563,887 5,548,283 2,736,244 5,556,128 2,731,968
Fully Diluted
Average
Common Shares
Outstanding 5,926,369 6,109,233 3,152,021 5,952,216 3,120,587
Financial
Statistics Quarter Ended Six Months Ended
----------- ------------- ----------------
(Unaudited)
(in thousands
except June 30, March 31, June 30, June 30, June 30,
share data) 2007 2007 2006 2007 2006
---------------------------------------------- ---------------------
Revenues
(Net interest
income plus
non-interest
income) $ 6,614 $ 6,177 $ 5,213 $ 12,791 $ 9,886
Averages
Total Assets $ 441,352 $ 400,327 $ 283,271 $ 420,839 $ 271,936
Loans and
Loans Held
for Sale $ 395,639 $ 363,296 $ 257,612 $ 379,607 $ 242,418
Interest
Earning
Assets $ 427,049 $ 387,429 $ 272,857 $ 407,379 $ 260,715
Deposits $ 366,568 $ 327,944 $ 254,125 $ 347,256 $ 244,273
Shareholders'
Equity $ 63,779 $ 62,296 $ 17,723 $ 63,037 $ 17,065
Financial Ratios
---------------------------------------------- ---------------------
Return on
Average Assets 1.30% 1.10% 1.48% 1.20% 1.45%
Return on
Average Equity 8.99% 7.04% 25.37% 8.04% 23.00%
Net Interest
Margin 5.06% 5.06% 6.05% 5.06% 5.85%
Efficiency Ratio 62.7% 65.7% 61.2% 64.2% 62.6%
Non-performing
Assets to
Total Assets 0.40% 0.43% 0.00% 0.40% 0.00%
Asset Quality Quarter Ended Six Months Ended
------------- ------------- ----------------
(Unaudited)
(dollars in June 30, March 31, June 30, June 30, June 30,
thousands) 2007 2007 2006 2007 2006
---------------------------------------------- ---------------------
Allowance for
Loan Losses
Activity:
Balance of
Beginning of
Period $ 4,407 $ 3,972 $ 2,825 $ 3,972 $ 2,520
Charge-offs (234) (50) (15) (284) (15)
Recoveries -- -- -- -- --
---------------------------------------------- ---------------------
Net Loan
Charge-offs (234) (50) (15) (284) (15)
Reclassification
of unfunded
credit
commitments (7) (6) (19) (13) (19)
Provision for
Loan Losses 326 491 498 817 803
---------------------------------------------- ---------------------
Balance at End
of Period $ 4,492 $ 4,407 $ 3,289 $ 4,492 $ 3,289
============================================== =====================
Selected Ratios:
Net Charge-offs
to average loans 0.06% 0.01% 0.01% 0.07% 0.01%
Provision for
loan losses
to average
loans 0.08% 0.14% 0.19% 0.22% 0.33%
Allowance for
loan losses
to total loans 1.10% 1.15% 1.18% 1.10% 1.18%
Nonperforming
Assets:
Non-Accrual
loans $ 201 $ 209 $ --
Accruing Loans
past due 90
days or more -- 343 --
----------------------------------------------
Total
non-performing
loans
(NPLs) $ 201 $ 552 $ --
Other real
estate owned 1,605 1,310 --
----------------------------------------------
Total
non-performing
assets
(NPAs) $ 1,806 $ 1,862 $ --
Selected Ratios:
NPLs to total
loans 0.05% 0.14% 0.00%
NPAs to total
assets 0.40% 0.43% 0.00%