MISSOULA, Mont., Jan. 30, 2014 (GLOBE NEWSWIRE) -- Treasure State Bank ("the Bank") (OTCBB:TRSU), a Montana chartered community bank, today announced:
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The Bank had a net profit of $7,000 for the quarter ended December 31, 2013, as compared to $72,000 for the same quarter last year. The earnings for the quarter just ended include $25,000 of a one-time stock option expense for stock options exercised during the quarter. Earnings would have been $32,000 for the quarter just ended without this non-cash expense.
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Earnings, before non-cash expenses of depreciation and amortization, loan loss provisions, real estate owned write-downs, stock option expense and income tax benefit, were $79,000 ($316,000 annualized) for the quarter ended December 31, 2013 as compared to $230,000 for the same quarter last year.
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On a year-to-date basis, the Bank had an operating profit of $564,000, as compared to $266,000 for the same period last year. The year-to-date earnings include a $700,000 income tax benefit, which was partially offset by a $350,000 additional provision for OREO write down. Therefore, net operating profit on a year-to-date basis excluding these two items was $214,000, as compared to $266,000 for the same period last year.
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Earnings, before non-cash expenses of depreciation and amortization, loan loss provisions, real estate owned write-downs and stock option expense were $547,000 for the year ended December 31, 2013, as compared to $841,000 for the same period last year.
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The annualized return on average assets for the quarter ended December 31, 2013 was 0.04% as compared to 0.41% for the same quarter last year. The return on average equity for the quarter ended December 31, 2013 was 0.38% as compared to 5.09% for the same quarter last year.
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The return on average assets for the year ended December 31, 2013 was 0.85%, as compared to 0.36% for the same period last year. The return on average equity for the year ended December 31, 2013 was 7.97%, as compared to 4.29% for the same period last year.
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Excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down, return on average assets for the year ended December 31, 2013 was 0.32% and the return on average equity was 3.03%.
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$1.9MM of the deferred tax asset is available to be recognized as an income tax benefit after 2013 as additional taxable earnings are recognized.
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Tier 1 leverage capital was 10.0% as of December 31, 2013, as compared to 8.80% at December 31, 2012. Total Risk-Based Capital was 14.46% as of December 31, 2013, as compared to 12.92% at December 31, 2012.
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Stockholder's Equity to assets at December 31, 2013 was 10.71% as compared to 9.16% at December 31, 2012.
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Book value per share was $4.08 as of December 31, 2013, based on 1,735,576 shares outstanding.
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Total assets have decreased $1.5MM to $66.1MM at December 31, 2013, as compared to $67.6MM at December 31, 2012.
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Cost of funds at December 31, 2013 was 0.71%, as compared to 1.04% at December 31, 2012, a 31.7% reduction.
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The net interest margin (interest income less interest expense divided by average earning assets) was 3.75% for the quarter ended December 31, 2013, as compared to 3.85% for the quarter ended December 31, 2012.
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Loan loss reserves to total loans were 3.41% ($1.6MM) at December 31, 2013, as compared to 3.89% ($1.9MM) at December 31, 2012.
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Total liquidity as of December 31, 2013 was 22.0%, and available liquidity was 22.0%.
- Non-performing assets decreased $2.1MM to $4.2MM at December 31, 2013 from $6.0MM at December 31, 2012. This is a 30.0% decrease in one year.
President and Chief Executive Officer Jim Salisbury stated, "The above bullet points indicate a continued improvement in the quality of the Bank's assets accompanied by continued profitability. We are pleased with the 30.0% year over year reduction in non-performing assets. Our focus continues to be growing the Bank once again by increasing loan production, which will increase net interest income and loan related fee income. Our net interest margin remains strong at 3.75%, complemented by a 3.41% loan loss reserve to total loans and a continued reduction in the Bank's cost of funds of 31.7% year over year.
"Gross loans were $45.6MM at December 31, 2013, a decrease of $2.8MM from $48.4MM at December 31, 2012. The Bank has originated and refinanced $12.2MM in loans. With the improving economy in Missoula, the Bank has seen some existing loans payoff. However, in several cases the payoffs have enhanced the quality of the Bank's loan portfolio. In addition, core non-certificate of deposit accounts have increased 10.5% since December 31, 2012. The Bank has no brokered deposits.
"The current challenge for the Bank is, like most other financial institutions, that it is seeing a slowdown in the origination of mortgage loans due to the recent volatility in interest rates and a reduced demand for mortgage loan refinancing. This concern was specifically mentioned in the Bank's prior quarter's release of financial results. The earnings for the quarter just ended were not what were anticipated due to the significant reduction in borrowers' refinancing of mortgage loans. We believe that an improving local economy will allow for an increase in mortgage loan financing over the quarter just ended and related fee income. In addition, as mentioned above, the Bank is focused on increasing the loan portfolio to enhance net interest income.
"The Bank believes that its reserve for loan losses is sufficient enough to allow the Bank to not add to loan loss reserves for 2014. There could be additional charges related to foreclosed property if certain appraisals would indicate the need for additional write downs of these assets.
"I am also pleased to note that Bank directors and staff exercised stock options exercisable into 99,755 shares of the Bank's common stock during the fourth quarter of 2013, which increased stockholder's equity by $287,461. I am grateful for this confidence of, and commitment by, these individuals in the success of the Bank.
"Twenty-two cents of every dollar is held in domestic liquid assets to cushion the Bank from a rising interest rate environment and to allow for the funding of new loans. In addition, the investments that the Bank owns have very short term maturities, which will not fluctuate significantly in market value should interest rates increase. The current interest rate environment does not reward the Bank for having this high of a liquidity position because earnings are minimal on these investments. But, given the many uncertainties with the economy, the gradual ending of the Federal Reserve's Quantitative Easing program in 2014, the massive Federal deficits and current strained political situation in Washington D.C. it is analogous to a form of 'insurance' that the Bank is willing to pay at this time to continue to improve its financial condition."
For more information regarding this release, or the Bank in general, you may contact James A. Salisbury, President and CEO, at 406-543-8700.
About Treasure State Bank
Treasure State Bank, a Montana chartered community bank, is headquartered in Missoula, Montana. The Bank was founded in January 2007. Treasure State Bank currently trades on the OTCBB under the ticker symbol "TRSU". Treasure State Bank serves businesses, professionals, non-profit organizations and individuals through customized banking services and products. For more information, please visit www.treasurestatebank.com.
Safe Harbor Statement
This communication contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Treasure State Bank and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully, and the ability to complete before-mentioned transactions. The Bank undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.