MISSOULA, Mont., Oct. 30, 2013 (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 $93,000 for the quarter ended September 30, 2013, as compared to $415,000 for the quarter ended June 30, 2013, $50,000 for the quarter ended March 31, 2013 and $76,000 for the same quarter last year. The earnings for the quarter ended June 30, 2013 included a $700,000 income tax benefit, which was partially offset by a $350,000 additional provision for OREO write down. Therefore, net operating profit for the second quarter was $65,000.
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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 $145,000 ($580,000 annualized) for the quarter ended September 30, 2013, $172,000 ($688,000 annualized and not including the extraordinary items) for the quarter ended June 30, 2013, $151,000 ($604,000 annualized) for the quarter ended March 31, 2013 and $219,000 ($876,000 annualized) for the same quarter last year.
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On a year-to-date basis, the Bank had an operating profit of $558,000, as compared to $194,000 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 was $208,000, as compared to $194,000 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 $468,000 ($624,000 annualized) for the nine month period ended September 30, 2013, as compared to $611,000 ($815,000 annualized) for the same period last year.
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The annualized return on average assets for the quarter ended September 30, 2013 was 0.56% as compared to 2.51% for the quarter ended June 30, 2013 (0.39% excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down), 0.30% for the quarter ended March 31, 2013 and 0.41% for the same quarter last year.
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The annualized return on average equity for the quarter ended September 30, 2013 was 5.49% as compared to 24.89% for the quarter ended June 30, 2013 (3.90% excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down), 3.19% for the quarter ended March 31, 2013 and 5.09% for the same quarter last year.
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The annualized return on average assets for the nine month period ended September 30, 2013 was 1.12% (0.42% excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down), as compared to 0.35% for the same nine month period last year.
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The annualized return on average equity for the nine month period ended September 30, 2013 was 10.99% (4.09% excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down), as compared to 4.34% for the same nine month period last year.
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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 9.81% as of September 30, 2013, as compared to 8.80% at December 31, 2012. Total Risk-Based Capital was 14.28% as of September 30, 2013, as compared to 12.92% at December 31, 2012.
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Stockholder's Equity to assets at September 30, 2013 was 10.42% as compared to 9.16% at December 31, 2012.
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Book value per share was $4.13 as of September 30, 2013, based on 1,635,821 shares outstanding.
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Total assets have decreased $2.7MM to $64.9MM at September 30, 2013, as compared to $67.6MM at December 31, 2012.
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Cost of funds at September 30, 2013 was 0.74%, as compared to 0.91% at June 30, 2013 and 1.09% at September 30, 2012.
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The net interest margin (interest income less interest expense divided by average earning assets) was 3.87% for the quarter ended September 30, 2013, as compared to 3.99% for the quarter ended September 30, 2012.
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Loan loss reserves to total loans were 3.45% ($1.5MM) at September 30, 2013, as compared to 3.89% ($1.9MM) at December 31, 2012.
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Total liquidity as of September 30, 2013 was 22.2%, and available liquidity was 21.4%.
- Non-performing assets decreased 11.8% for the quarter to $4.5MM at September 30, 2013, down from $5.1MM as of June 30, 2013. Non-performing assets decreased 25.0% for the year from $6.0MM at December 31, 2012. Year over year non-performing assets decreased 30.8% from $6.5MM at September 30, 2012.
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 25.0% year over year reduction in non-performing assets. The Bank's staff has worked tirelessly to reduce non-performing assets in this continued weak economy. I am pleased to note that this is my fourth anniversary as President of the Bank. In this four year period the Bank has not originated a loan that is currently past due. Our focus is now on 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 3.87% complimented by a 3.45% loan loss reserve to total loans and a continued reduction in the Bank's cost of funds.
Gross loans were $44.7MM, a decrease of $3.3MM from June 30, 2013 and a decrease of $3.7MM from December 31, 2012. The Bank continues to lend to qualified borrowers and is actively seeking qualified borrowers. Year to date the Bank has originated and refinanced $8.9MM 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 9.9% since December 31, 2012.
The current challenge for the Bank is that like most other financial institutions the Bank is seeing a slowdown in the origination of mortgage loans due to the recent increase in interest rates. This in turn will reduce the Bank's related fee income going forward. However, there has been an advantageous reduction in long-term interest rates in the last few weeks, which could lead to increased mortgage loan activity.
Nearly 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 very probable ending of the Federal Reserve's Quantitate 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.