BURLINGTON, Wash., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Savi Financial Corporation, Inc. (OTC Pink: SVVB), the bank holding company for SaviBank, today reported fourth quarter 2020 earnings of $490,000, or $0.11 per diluted share, compared to $154,000, or $0.04 per diluted share, in the fourth quarter of 2019. For the year ended December 31, 2020, Savi reported net income of $1.35 million, or $0.31 per diluted share, compared to $1.41 million, or $0.33 per diluted share, for the year ended December 31, 2019.
“Our 2020 financial results reflect the steady progress we are making in strengthening Savi’s core operations, with top line revenue increasing 27.4% during the fourth quarter, compared to the fourth quarter a year ago, and increasing 13.8% for the year 2020 from 2019. Strong deposit growth also contributed to fourth quarter results, increasing 40% year-over-year,” said Michal D. Cann, Chairman and President of Savi Financial Corporation. “Results for the fourth quarter and the year were affected by increases to the loan loss provision as a result of the pandemic’s effect on the economy and its impact on our Northwest Washington markets. We recorded a $356,000 provision for loan losses in the fourth quarter, and a $1.23 million provision for the year, bringing our allowance for loan losses to 1.31% of total loans, excluding SBA guaranteed Paycheck Protection Program (“PPP”) loans, at year-end. We believe this reserve level is adequate to cover potential future loan losses.”
“We were strong participants in the SBA’s PPP program, servicing the needs of our business customers as well as new customers in our community,” said Andrew Hunter, President and CEO of SaviBank. “During the second and third quarters of 2020, we assisted approximately 664 customers who received $62.3 million in PPP funding. We added new relationships with strong future growth opportunities, generating receivables of approximately $2.5 million in total PPP loan fees. As of December 31, 2020, we had received payment from the SBA for 40 borrowers totaling $9.9 million. Approximately $455,000 of the income recorded during the fourth quarter was related to recognizing origination fees for PPP loan payoffs, and we utilized this additional income to add to our allowance for loan losses.
“We also offered loan accommodation options to support our clients who have been affected by the economic impacts of COVID-19,” Hunter continued. “As of December 31, 2020, approximately 88.3% of loans originally modified are now performing according to the loan agreements, bringing total deferred loans to 1.13% of total loans.”
“The positive impact relating to PPP loan forgiveness contributed to a 52-basis point increase in net interest margin during the fourth quarter compared to the prior quarter, and helped to keep our net interest margin above industry averages,” said Rob Woods, Chief Financial Officer of SaviBank. Savi’s net interest margin was 4.02% in the fourth quarter of 2020, compared to 3.50% in the preceding quarter, and 4.08% in the fourth quarter a year ago. The net interest margin remains higher than the peer average of 3.29% posted by the 440 banks that comprised the SNL Microcap U.S. Bank Index at September 30, 2020. The net interest margin for the year was 3.82% compared to 4.30% in 2019.
Fourth Quarter 2020 Highlights:
“Our bankers have done an excellent job of growing the balance sheet, with double digit loan and deposit growth year-over-year,” said Hunter. “The branch expansion strategy we implemented in 2019 is also contributing to our success. We opened full-service branches in Concrete, Sedro Woolley and Mt. Vernon in 2019, all communities in northwest Washington State. We also relocated our loan production office into a full-service branch in Anacortes and relocated our Oak Harbor branch and our main Burlington branch. We believe that the investments in these additional locations is starting to pay off, and we now have both the infrastructure and the people in place to grow the company.”
Savi Financial Corporation announced that SaviBank President Andrew Hunter has been promoted to President/CEO of Savi Bank, succeeding Michal D. Cann. Hunter has been with the bank since 2010, and has been serving as President of Savi Bank since 2013. Michal D. Cann will continue his positions as Chairman of SaviBank and Chairman and President of Savi Financial Corporation.
About Northwest Washington
SaviBank currently operates six branches in Skagit County, two branches in Island County, and one branch in Whatcom County. The Skagit, Whatcom and Island counties region stretches north from the greater Seattle/Everett/Bellevue metropolis to the Canadian border. Northwest Washington continues to be one of the most vibrant regions in the country, with a solid employment base, moderate climate and a strong housing market.
The housing market in Skagit, Island and Whatcom Counties remains healthy. According to the Northwest Multiple Listing Service, the average home in Skagit County sold for $431,000 up 16.52% in December 2020 compared to a year ago, and there was a 0.58 month supply of homes on the market. For Island County, the average house sold for $423,500, up 11.59% from a year ago and supply totaled 0.42 months. For Whatcom County, the average home sold for $466,000, up 23.53% from a year ago and supply totaled 0.78 months.
Skagit County’s economy is dominated by manufacturing, which accounts for 33.4% of GDP with food, machinery and oil and petroleum products the leading contributors. Skagit’s population is projected to grow 5.86% from 2021 through 2026, and median household income is projected to increase by 15.16% during the same time frame.
Whatcom County is home to Western Washington University and is the nation’s largest producer of raspberries. Whatcom County’s population is projected to grow 6.49% from 2021 through 2026, and median household income is projected to increase by 6.92%.
Island County is home to Naval Air Station Whidbey Island. Whidbey Island’s population is 86,704, with approximately 23,578 in Oak Harbor. Island County’s population is projected to grow 5.32% from 2021 through 2026 and median household income is projected to increase by 13.68%.
About Savi Financial Corporation Inc. and SaviBank –
Savi Financial Corporation is the bank holding company of SaviBank. The Bank began operations April 11, 2005, and has 9 branch locations in Anacortes, Burlington, Bellingham, Concrete, Mount Vernon (2), Oak Harbor, Freeland and Sedro-Woolley, Washington. The Bank provides loan and deposit services to customers who are predominantly small and middle-market businesses and individuals in and around Skagit, Island, and Whatcom counties. As a locally-owned community bank, we believe that when everyone becomes Savi about their finances, our entire community benefits. Call us or stop by one of our branches and we’ll show you how to bank Savi. For additional information about SaviBank, visit: www.SaviBank.com.
Forward Looking Statement
This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to SaviBank or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.
|SELECTED FINANCIAL DATA|
|(In thousands of dollars, except for ratios and per share amounts)|
|Three Months Ended||Year Ended|
|December 31, 2020||December 31, 2019||Var %||September 30, 2020||Var %||December 31, 2020||December 31, 2019||Var %|
|SUMMARY OF OPERATIONS|
|Net interest income||3,756||2,942||28||3,313||13||13,510||11,899||14|
|Provision for loan losses||(356||)||(123||)||189||(207||)||72||(1,225||)||(428||)||186|
|NII after loss provision||3,400||2,819||21||3,106||9||12,285||11,471||7|
|Income before tax||632||198||219||289||119||1,713||1,800||(5||)|
|Federal income tax expense||142||44||223||53||168||363||387||(6||)|
|PER COMMON SHARE DATA|
|Number of shares outstanding (000s)||3,434||3,433||0%||3,433||0.03%||3,434||3,433||0.03||%|
|Earnings per share, diluted||$||0.11||$||0.04||218||$||0.05||108||$||0.31||$||0.33||(6||)|
|Market value to book value||80.25%||121.99%||(34||)||78.34%||2||80.25%||121.99%||(34||)|
|BALANCE SHEET DATA|
|AVERAGE BALANCE SHEET DATA|
|Average total loans||332,470||257,307||29||334,783||(1||)||313,747||246,362||27|
|Average total deposits||338,595||252,428||34||325,199||4||298,777||228,533||31|
|Average shareholders' equity||33,488||32,705||2||33,111||1||33,510||31,955||5|
|ASSET QUALITY RATIOS|
|Net (charge-offs) recoveries||$||(45||)||$||(30||)||N/M||$||(1||)||N/M||$||(166||)||$||(62||)||N/M|
|Net (charge-offs) recoveries to average loans||(0.05)||%||(0.05)||%||N/M||(0.00)||%||N/M||(0.05)||%||(0.03)||%||N/M|
|Non-performing loans as a % of loans||0.36||0.07||398||0.31||17||0.36||0.07||398|
|Non-performing assets as a % of assets||0.43||0.21||103||0.40||6||0.43||0.21||103|
|Allowance for loan losses as a % of total loans||1.07||1.00||7||1.01||6||1.07||1.00||7|
|Allowance for loan losses as a % of non-performing loans||294.67||1,420.43||(79||)||321.63||(8||)||294.67||1,420.43||(79||)|
|Return on average equity||5.85||%||1.88||%||211||%||2.85||%||105%||4.03||%||4.42||%||(9||)%|
|Return on average assets||0.49||0.20||148||0.24||104||0.37||0.49||(23||)|
|Net interest margin||4.02||4.08||(1||)||3.50||15||3.82||4.30||(11||)|
|Average number of employees (FTE)||99||92||8||94||5||96||92||4|
|Tier 1 leverage ratio -- Bank||8.16||9.97||(18||)%||8.00||2||%||8.16||9.97||(18||)%|
|Contact:||Michal D. Cann|
|Chairman & President|
|Savi Financial Corporation|