SEATTLE, April 24, 2008 (PRIME NEWSWIRE) -- EvergreenBancorp, Inc. (OTCBB:EVGG), the holding company for EvergreenBank, today reported operating profits, boosted by a gain from its ownership of Visa Inc., contributed to record net income of $3.9 million, or $1.60 per diluted share in the first quarter of 2008. In the first quarter of 2007, EvergreenBancorp earned $656,000, or $0.27 per diluted share. Adjusted to exclude the impact of Visa, which totaled $3.8 million after tax, or $1.58 per diluted share, first quarter 2008 net income was $44,000, or $0.02 per diluted share.
"First quarter results were strong with solid loan and deposit growth and the expansion of our regional branch network with the new office in Kent," stated Gerald O. Hatler, president and chief executive officer. "The significant impact from Visa's initial public offering contributed to a large gain on the income statement. The shares of Visa we still hold were worth more than $6 million as of yesterday's close, and the value of the shares will not be reflected in our book value until they are sold." These shares remain restricted from sale for the next three years to offset Visa's possible litigation exposure.
"Because the first quarter Visa gain was preceded by a sizable Visa-related charge in the prior quarter, neither period is reflective of our normal operations," said Gordon Browning, chief financial officer. "We believe results based on earnings from core operations better reflect our underlying business and consequently have provided a supplemental table reconciling operating earnings with GAAP earnings for our financial results for the first quarter of 2008 and the fourth quarter of 2007. Core earnings in both quarters were impacted by loan loss provisions larger than those we have taken in prior quarters. These provisions are the result of the charge off of a previously-identified non-performing customer relationship and the effects of the slowing economy." Excluding non-routine transactions that occurred in each quarter, core earnings were $44,000, or $0.02 per diluted share in the first quarter of 2008, compared to $159,000, or $0.07 per diluted share in the fourth quarter of 2007. In the first quarter of 2007, the Company earned $656,000, or $0.27 per diluted share. Excluding non-routine items, return on average assets in the first quarter of 2008 was 0.04% compared to 0.15% in the fourth quarter of 2007 and 0.74% in the first quarter a year ago. First quarter 2008 return on average equity was 0.69% compared to 2.42% in the fourth quarter of 2007 and 10.97% in the first quarter of 2007.
First Quarter 2008 Financial Highlights (for the three months ended 3/31/2008, compared with 3/31/2007)
* Asset quality remained strong with nonperforming assets at 0.12%
of total assets.
* Revenue, excluding the Visa gain, increased 7% to $4.4 million.
* Total loans increased 25% to $389 million.
* Total assets rose 19% to $434 million.
* Deposits were up 10% to $324 million.
* The ratio of noninterest expense to average assets was 3.08%
versus 3.27%.
* Capital ratios remained strong with Tier 1 Capital/average assets
of 9%, well above the regulatory requirements for well-
capitalized institutions.
Operating Results
First-quarter operating revenue grew 7% to $4.4 million from $4.1 million in the first quarter a year ago. Revenue includes net interest income before provision for loan losses and non interest income excluding Visa gain or expenses. First quarter net interest income, before the provision for loan losses, rose 9% to $4.0 million from $3.6 million in the first quarter a year ago.
In the first quarter, net interest margin (taxable-equivalent) was 3.92% compared to 4.17% in the fourth quarter of 2007 and 4.40% in the first quarter of last year. With disruptions in the credit markets and short term interest rates continuing to fall precipitously, net interest margin was compressed.
"We are prudently increasing our allowance for loan losses to reflect a changing economic environment and our rapidly growing loan portfolio. Our credit quality remains very strong, and the portfolio continues to perform well, in part because we have maintained our limited exposure to construction and land development loans to 16% of our entire loan portfolio," said Michael Tibbits, chief credit officer. Evergreen added $1.1 million to its provision for loan losses compared to $905,000 in the fourth quarter of 2007 and $263,000 in the first quarter of 2007. After the provision for loan losses, net interest income totaled $2.9 million in the first quarter of 2008, compared to $3.4 million in the first quarter a year ago. Currently the allowance for loan losses (ALL) stands at 1.17% of total loans up from 0.96% a year ago.
First quarter noninterest income was $6.0 million. Excluding the Visa gain first quarter, non interest income was $436,000, compared to $475,000 in the first quarter a year ago.
Noninterest expense rose 12% in the first quarter of 2008 to $3.3 million compared with $2.9 million in the same quarter a year ago, reflecting overall franchise growth and increased FDIC insurance premiums. The ratio of annualized noninterest expense to average assets for the quarter was 3.08% compared to 3.27% in the first quarter of 2007. "As we gear up for the new branch opening, expenses are up. As the new branch comes into production, we anticipate asset growth will offset the higher expense levels. In addition, the settlement of our retirement program last year will also generate cost savings going forward," said Hatler.
Balance Sheet Results
Total assets grew 19% to $434 million at March 31, 2008, from $364 million at March 31, 2007. Total loans rose 25% to $389 million from $311 million a year-ago. The loan portfolio continues to be well diversified and well secured. At March 31, 2008, commercial loans accounted for 23% of the portfolio, commercial real estate loans were 45%, construction and land development loans were 16%, single family residential loans totaled 10% and consumer loans contributed 6% of gross loans.
Asset quality remained solid with a ratio of nonperforming assets to total assets of 0.12% equal to a year ago. The allowance for loan losses stood at $4.6 million or 1.17% of total loans at March 31, 2008 compared with $3.0 million or 0.96% of total loans at March 31, 2007. In the first quarter of 2008, net charge-offs totaled $727,000, or 0.19% of average loans compared to $64,000, or 0.02% of average loans for the same quarter a year ago. The increase was primarily due to a charge-off of a single commercial relationship.
Deposits rose 10% to $324 million, a $30 million increase from one year ago. Shareholders' equity was up 20% year over year to $29 million. Book value per share was up 18% to $12.24 at March 31, 2008 from $10.36 at March 31, 2007.
EvergreenBancorp Annual Meeting
EvergreenBancorp will host its annual meeting for shareholders this afternoon at 3:30 p.m. at 1111 Third Avenue, Suite 300, in Seattle. For more information, please contact the company at 206-628-4250.
About EvergreenBancorp and EvergreenBank
Founded in 1971, EvergreenBank is a subsidiary of EvergreenBancorp, Inc., a bank holding company headquartered in Seattle, Washington. EvergreenBank is a community bank with seven offices; located in Seattle, Bellevue, Lynnwood, Federal Way and Kent. The Bank offers a full suite of personal and business banking services. Services include commercial, real estate, and consumer lending; savings, checking, and certificate of deposit accounts; health savings accounts; Internet banking; and merchant credit card processing services. Visit www.EvergreenBancorp.com to learn more.
This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning business strategies and their intended results, and similar statements concerning expectations that are not historical facts. The forward-looking statements in this press release are subject to numerous risks and uncertainties, including the effects of economic conditions, demand for financial services, competitive conditions, regulatory changes, and the availability of capital to finance growth, which could cause actual results to differ materially from those expressed in or implied by the statements herein.
EvergreenBancorp, Inc.
GAAP Reconciliation Table
Core Earnings to GAAP reconciliation (1) GAAP GAAP GAAP
(in 000's except per share) 1Q08 4Q07 1Q07
----------------------------
GAAP net income $ 3,882 $ (1,024) $ 656
Loss on sale of securities 0 444 0
Gain on settlement of post-retirement
plan 0 (1,002) 0
Visa related costs or gains (5,587) 2,122 0
Net tax effect 1,749 (381)
Core earnings $ 44 $ 159 $ 656
============================
Provision for loan losses (net of tax
effects) $ 734 $ 597 $ 174
Core earnings excluding provision for
loan losses $ 778 $ 757 $ 830
Core earnings per share (1)
Basic core earnings per share $ 0.02 $ 0.07 $ 0.28
Diluted core earnings per share $ 0.02 $ 0.07 $ 0.27
Basic core earnings per share excluding
provision for loan losses $ 0.33 $ 0.32 $ 0.35
Diluted core earnings per share
excluding provision for loan losses $ 0.32 $ 0.31 $ 0.35
Weighted average basic common shares
outstanding 2,392 2,387 2,353
Weighted average diluted common shares
outstanding 2,422 2,410 2,392
(1) Core earnings is defined as reported net income excluding certain
non-core items that occur infrequently. These non-core items
include significant infrequent gains, losses, or expenses that
are not reflective of continuing operations. Core earnings is a
non-GAAP financial measure.
EvergreenBancorp Inc.
Consolidated Financial Highlights
Quarterly
(unaudited) ---------------------------------------------
(in thousands except 1st
per share and ratio 2008 2007 2007 Quarter
data) 1st Qtr 4th Qtr 1st Qtr % Change
EARNINGS RESULTS
Revenue $ 9,987 $ 4,190 $ 4,114 143%
Net interest income $ 3,964 $ 4,154 $ 3,639 9%
Provision for loan
losses $ 1,112 $ 905 $ 263 323%
Noninterest income $ 6,023 $ 36 $ 475 1168%
Noninterest expense $ 3,254 $ 4,628 $ 2,895 12%
Net income $ 3,882 $ (1,024) $ 656 492%
Basic earnings per share $ 1.62 $ (0.43) $ 0.28 482%
Diluted earnings per
share $ 1.60 $ (0.43) $ 0.27 484%
Weighted average basic
shares outstanding 2,392,074 2,386,837 2,353,262 2%
Weighted average diluted
shares outstanding 2,422,054 2,386,837 2,391,552 1%
PERFORMANCE RATIOS
Return on average assets
(annualized) 3.68% -0.99% 0.74%
Return on average common
equity (annualized) 60.45% -15.57% 10.97%
Net interest margin
(fully tax-equivalent) 3.92% 4.17% 4.40%
Noninterest expense to
average assets
(annualized) 3.08% 4.48% 3.27%
CAPITAL
Equity to assets 6.76% 6.02% 6.69% 1%
Book value per share $ 12.24 $ 10.65 $ 10.36 18%
ASSET QUALITY
Net loan charge-offs
(recoveries) $ 727 $ 449 $ 64 1036%
Allowance for loan
losses $ 4,551 $ 4,166 $ 2,983 53%
Allowance for losses to
total loans 1.17% 1.11% 0.96%
Nonperforming loans $ 507 $ 815 $ 421 20%
Nonperforming assets to
total assets 0.12% 0.19% 0.12%
END OF PERIOD BALANCES
Total loans $ 389,344 $ 375,428 $ 311,403 25%
Total assets $ 433,791 $ 422,787 $ 364,310 19%
Deposits $ 324,289 $ 309,471 $ 293,815 10%
Shareholders' equity $ 29,335 $ 25,436 $ 24,383 20%
AVERAGE BALANCES
Total loans $ 383,358 $ 367,098 $ 304,378 26%
Earning assets $ 407,093 $ 396,652 $ 336,923 21%
Total assets $ 422,275 $ 412,938 $ 353,947 19%
Deposits $ 307,929 $ 301,651 $ 260,675 18%
Shareholders' equity $ 25,688 $ 26,300 $ 23,919 7%
EvergreenBancorp Inc.
Consolidated Statements of Income
(unaudited) Three months ended
Annual
(in thousands except per March 31, Dec. 31, March 31, %
share data) 2008 2007 2007 Change
Interest and dividend income
Loans, including fees $ 7,268 $ 7,650 $ 6,395 14%
Federal funds sold and other 64 85 36 78%
Investments securities:
Taxable securities 112 209 288 -61%
Tax exempt securities 27 29 32 -16%
----------------------------------
Total interest and dividend
income 7,471 7,973 6,751 11%
Interest expense
Deposits 2,538 2,760 2,171 17%
Federal funds purchased and
securities sold under
agreements to repurchase 2 2 36 -94%
Federal Home Loan Bank
advances 773 834 671 15%
Junior subordinated debt 194 223 234 -17%
----------------------------------
Total interest expense 3,507 3,819 3,112 13%
Net interest income 3,964 4,154 3,639 9%
Provision for loan losses 1,112 905 263 323%
----------------------------------
Net interest income after
provision for loan losses 2,852 3,249 3,376 -16%
Noninterest income
Service charges on deposit
accounts 312 350 335 -7%
Merchant credit card
processing 24 37 44 -45%
Net gain (loss) on sale of
loans and securities -- (444) --
Net earnings on bank owned
life insurance 48 50 56 -14%
Other noninterest income 52 43 40 30%
Gain on redemption of Visa
stock 5,587 -- --
----------------------------------
Total noninterest income 6,023 36 475 NM
Noninterest expense
Salaries and employee
benefits 1,449 1,716 1,457 -1%
Gain on settlement of
post-retirement plan -- (1,002) --
Occupancy and equipment 510 506 479 6%
Data processing 247 238 206 20%
Professional fees 133 18 96 39%
Indemnification charges -- 2,122 --
Marketing 64 189 61 5%
State & local taxes 182 147 107 70%
Other outside service fees 115 168 124 -7%
Other noninterest expense 554 526 365 52%
----------------------------------
Total noninterest expense 3,254 4,628 2,895 12%
Income before income tax
expense 5,621 (1,343) 956 488%
Income tax expense 1,739 (319) 300 480%
----------------------------------
Net income $ 3,882 $ (1,024) $ 656 492%
==================================
Earnings per share basic $ 1.62 $ (0.43) $ 0.28 482%
Earnings per share diluted $ 1.60 $ (0.43) $ 0.27 484%
Weighted average basic
shares outstanding 2,392,074 2,386,837 2,353,262
Weighted average diluted
shares outstanding 2,422,054 2,386,837 2,391,552
EvergreenBancorp Inc.
Consolidated Balance Sheets
1st
(unaudited) March 31, Dec. 31, March 31, Quarter,
(in thousands) 2008 2007 2007 % Change
-----------------------------------------
Assets
Cash and cash equivalents:
Cash and due from banks $ 6,296 $ 14,076 $ 7,024 -10%
Interest-bearing deposits
in financial institutions 6,376 2,383 2,540 151%
Federal funds sold 5,757 5,923 3,090 86%
-------------------------------
Total cash and cash
equivalents 18,429 22,382 12,654 46%
Investment securities:
Available for sale 15,070 14,446 29,097 -48%
Loans 389,344 375,428 311,403 25%
Allowance for loan losses (4,551) (4,166) (2,983) 53%
-------------------------------
Net Loans 384,793 371,262 308,420 25%
Premises and equipment 3,253 2,886 3,031 7%
Cash surrender value of bank
owned life insurance 5,585 5,537 5,372 4%
Interest in escrow fund of
Visa stock 2,122 -- -- NM
Accrued interest and other
assets 4,539 6,274 5,736 -21%
-------------------------------
Total assets $ 433,791 $ 422,787 $ 364,310 19%
===============================
Liabilities
Deposits:
Noninterest bearing $ 52,227 $ 59,458 $ 59,296 -12%
Interest bearing 272,062 250,013 234,519 16%
-------------------------------
Total deposits 324,289 309,471 293,815 10%
Federal funds purchased and
securities sold under
agreements to repurchase -- -- --
Junior subordinated debt 12,372 12,372 12,217 1%
Federal Home Loan Bank
advances 62,410 69,910 29,557 111%
Indemnification liabilities 2,122 2,122 -- NM
Accrued expenses and other
liabilities 3,263 3,476 4,338 -25%
-------------------------------
Total liabilities 404,456 397,351 339,927 19%
Stockholders' equity
Preferred stock: No par
value; 100,000 shares
authorized issued and
outstanding - none -- -- --
Common stock and surplus: No
par value; 15,000,000 shares
authorized; 2,397,046 shares
issued and outstanding at
March 31, 2008 21,576 21,467 21,154 2%
Retained earnings 7,685 3,972 3,944 95%
Accumulated other
comprehensive income (loss) 74 (3) (715) -110%
Total stockholders' equity 29,335 25,436 24,383 20%
-------------------------------
Total liabilities and
stockholders' equity $ 433,791 $ 422,787 $ 364,310 19%
===============================