BELLEVUE, Wash., July 21, 2010 (GLOBE NEWSWIRE) -- Puget Sound Bank (OTCBB:PUGB), today reported year-to-date profits reached record levels for any six month period in the bank's history, reflecting solid capital ratios, robust deposit growth and stable margins. For the first half of 2010, profits grew to $605,105 from a net loss of $374,798 in the like period a year ago. Puget Sound's net income in the second quarter of 2010 increased to $315,095 compared to $290,009 in the preceding quarter, and a net loss of $381,211 in the same quarter a year ago.
"We are delighted to report that our year-to-date profits now exceed earnings for all of 2009, reflecting the strength of our loan portfolio and the experience of our customer-oriented bankers," said Jim Mitchell, President and Chief Executive Officer. "Our credit quality continues to be solid, with only one nonperforming loan at quarter end."
Second Quarter 2010 Highlights
- Profitability continues to improve - return on average assets at 0.59% and return on average common equity at 4.47% on an annualized basis.
- Puget Sound Bank remains "well-capitalized", by regulatory standards with a solid Total Risk-based Capital Ratio of 16.58% compared to 16.74% a year ago. To be considered "well-capitalized" a bank must have over 10% Total Risk-based Capital.
- Solid asset quality in a very difficult economic environment with nonperforming assets to total assets at only 0.35%.
- Total deposits grew 37% to $208 million from $151 million a year earlier.
- Demand deposits, comprising non-interest and interesting bearing checking accounts, made up 27% of total deposits, and are up from 23% the preceding quarter and 14% a year ago.
- Total loans grew 5% to $147 million from $140 million a year earlier.
- Net interest margin (NIM) increased to 3.51% from 3.43% in the preceding quarter.
Asset Quality and Balance Sheet Review
Puget Sound's total assets grew 33% to $234 million at June 30, 2010, compared to $177 million a year ago, reflecting, strong deposit growth and an increase in portfolio investments. Total loans increased 5% to $147 million in the second quarter from $140 million a year ago.
The loan portfolio remains diversified with commercial and industrial (C&I) loans, including owner-occupied commercial real estate loans, accounting for 64% of the loan portfolio, with commercial real estate loans representing 27%, and personal and other loans representing 9% of the loan portfolio at the end of June.
Nonperforming assets at the end of the second quarter totaled $810,000, or 0.35% of total assets, compared to $3.3 million, or 1.87% of total assets a year ago and zero nonperforming assets in the first quarter this year.
The allowance for loan losses was $2.7 million, or 1.85% of total loans, at quarter end, compared to $2.6 million, or 1.85% of total loans at the end of June 2009. A $121,000 provision for loan losses was booked in the second quarter of 2010, with no charge-offs in the quarter.
Review of Operations
Demonstrating strong growth in deposits and loans, second quarter revenue increased 10% to $1.9 million compared to $1.7 million in the first quarter, and up 33% from $1.4 million in the second quarter a year ago. Year-to-date revenue increased 21% to $3.6 million from $3.0 million a year ago. Revenue includes net interest income plus other operating income.
"With deposit growth outpacing loan demand, we are adding high quality, albeit low-yielding, short-term securities to our balance sheet. We expect we will be able to redeploy these assets into higher yielding loans as demand from our business customers accelerates," said Phil Mitterling, EVP and Chief Financial Officer. The net interest margin increased to 3.51% for the second quarter 2010, from 3.43% for the preceding quarter. Year-to-date net interest margin was 3.47% compared to 3.51% a year ago.
Puget Sound Bank Stock
Puget Sound Bank stock is traded on the over-the-counter bulletin board under the symbol PUGB.OB. The stock price relative to book value was 90% at the end of the second quarter, which compares favorably to other publicly traded banks in the State of Washington. The stock price as of July 20, 2010 was $8.55.
About Puget Sound Bank
Puget Sound Bank is a locally-owned and operated commercial bank proudly serving the greater Puget Sound region. Based out of Bellevue, Washington, the bank was founded to meet the specialized needs of small and medium-sized businesses, commercial real estate projects, professionals and individuals seeking a higher level of service in the Puget Sound region. Staffed by the most experienced, customer-oriented banking professionals in the region, Puget Sound Bank offers a full range of competitive financial products with superior customer service and a consultative/partnership approach to its clients. Puget Sound Bank provides online banking at www.pugetsoundbank.com and has access to a large branch network in the state of Washington. The bank can also provide remote capture technology which allows its clients to make deposits from their offices. Puget Sound Bank is located at 10500 NE 8th Street, Suite 1800, Bellevue, Washington. For more information, please call 425-455-2400.
Safe Harbor Statement. This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices; levies and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by Puget Sound Bank with the Securities and Exchange Commission. Puget Sound Bank undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
| Puget Sound Bank | |||||
| Second Quarter 2010 | |||||
| (Unaudited) | |||||
| Quarterly | |||||
| 2010 | 2010 | 2009 | 2010 | 2009 | |
| ($ in thousands except per share data) | 2nd Qtr | 1st Qtr | 2nd Qtr | YTD | YTD |
| EARNINGS | |||||
| Net interest income | $1,790 | 1,613 | 1,477 | 3,402 | 2,813 |
| Provision for loan losses | $121 | 105 | 585 | 226 | 833 |
| NonInterest income | $75 | 87 | (74) | 163 | 139 |
| NonInterest expense | $1,429 | 1,305 | 1,199 | 2,734 | 2,494 |
| Pre-tax, pre-provision net income | $436 | 395 | 204 | 831 | 458 |
| Net income (loss) | $315 | 290 | (381) | 605 | (375) |
| Preferred dividends | $73 | 73 | 73 | 145 | 104 |
| Net income available to common shareholders | $243 | 217 | (454) | 460 | (478) |
| 1Earnings (loss) per share | $0.11 | 0.10 | (0.20) | 0.20 | (0.21) |
| Average shares outstanding | 2,284 | 2,275 | 2,262 | 2,279 | 2,257 |
| PERFORMANCE RATIOS | |||||
| Return on average assets | 0.59% | 0.58% | -0.89% | 0.59% | -0.45% |
| 1Return on average common equity | 4.47% | 4.07% | -8.65% | 4.31% | -4.60% |
| Net interest margin | 3.51% | 3.43% | 3.65% | 3.47% | 3.51% |
| Efficiency ratio | 76.6% | 76.8% | 85.5% | 76.7% | 84.5% |
| CAPITAL | |||||
| Tier 1 leverage ratio | 12.20% | 12.91% | 14.39% | ||
| Tier 1 risk-based capital ratio | 15.32% | 15.70% | 15.48% | ||
| Total risked based capital ratio | 16.58% | 16.96% | 16.74% | ||
| Tangible Common Equity Ratio | 9.27% | 10.02% | 11.53% | ||
| ASSET QUALITY | |||||
| Net loan charge-offs (recoveries) | $0 | 0 | 0 | ||
| Allowance for loan losses | $2,714 | 2,593 | 2,589 | ||
| Allowance for losses to total loans | $1.85% | 1.85% | 1.85% | ||
| Nonperforming loans | $810 | 0 | 3,300 | ||
| Other real estate owned | $0 | 0 | 0 | ||
| Nonperforming assets to total assets | 0.35% | 0.00% | 1.87% | ||
| END OF PERIOD BALANCES | |||||
| ($ in millions) | |||||
| Total Loans | $147 | 140 | 140 | ||
| Total Assets | $234 | 214 | 177 | ||
| Deposits | $208 | 187 | 151 | ||
| Shareholders' equity | $21.7 | 21.4 | 20.4 | ||
| Tangible book value per share | 9.51 | 9.41 | 9.00 | ||
| 1Includes preferred stock dividends and warrants expense not included in net income. | |||||