Puget Sound Bank Reports Record Earnings 2013 Results Highlighted by Successful Acquisition and Strong Loan Growth

BELLEVUE, Wash., Jan. 15, 2014 /PRNewswire/ -- Puget Sound Bank (OTCQB: PUGB) today reported net income of $2.2 million or $.77 per share for the year ending December 31, 2013, which compares to $1.9 million or $.78 per share for the year earlier period. Net income for the current quarter was $553,366 or $0.18 per share as compared to $359,516 or $0.14 per share for the year-earlier quarter. Without one-time costs resulting from Puget Sound Bank's acquisition of Core Business Bank completed in June 2013, net income for 2013 would have been $2.7 million or $0.96 per share.

"2013 was truly remarkable for Puget Sound Bank," said Jim Mitchell, Puget Sound Bank chief executive officer and president. "We successfully completed our acquisition of Core Business Bank, ended the year with 0.22% of nonperforming assets to total assets (less than $1 million) and grew assets 26% to $339.3 million."

"From day one we have focused on becoming one of the state's leading C&I (commercial and industrial) banks," said Mr. Mitchell, "and quarter-by-quarter, year-by-year our performance has continually confirmed our business model."

Total loans, including loans acquired from Core Business Bank and new organic loan growth, increased 28% to $275.4 million as compared to $215.2 million a year earlier. The percentage of Puget Sound Bank's C&I loans (including loans acquired from Core Business Bank and owner-occupied real estate) accounts for approximately 66% of the Bank's portfolio. This places the Bank in the top 15% of all commercial banks in Washington state for C&I loans as a percentage of total loans.

2013 Highlights

  • Total assets grew 26% to $339.3 million as compared to $268.4 million a year ago.
  • Noninterest demand deposits increased 40% to $122.1 million, or 44% of total deposits compared to 38% a year ago.
  • Total loans grew 28% to $275.4 million and total deposits grew 22% to $280.8 million compared to a year ago.
  • Net interest margin increased to 4.24% for the year, up from 4.18% one year ago.
  • Tangible book value per share increased to $11.18 from $10.99 a year earlier.
  • Return on equity decreased to 6.98% from 7.37% a year ago due to expenses related to the acquisition. Return on equity would have been 8.66% without acquisition costs.
  • Return on assets decreased to 0.73% from 0.77% a year ago due to expenses related to the acquisition. Return on assets would have been 0.89% without acquisition costs.
  • Nonperforming assets to total assets decreased to 0.22%, down from 0.85% in the year-earlier period.
  • Allowance for loan losses and the fair value discount on the acquired loan portfolio, together were 1.42% of loans.
  • The efficiency ratio increased to 69.9% for the year compared to 63.5% in the year earlier. Without acquisition costs the efficiency ratio would have been 63.8%.
  • Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements.
  • For the 13th consecutive quarter, Puget Sound Bank was awarded a 5-star rating, the highest available from independent banking rating agency BauerFinancial.

"We expect 2014 to be another year of exceptional growth," said Mr. Mitchell, "with particular attention to growing loans and increasing earnings under our demonstrated strategy."

About Puget Sound Bank
Puget Sound Bank proudly serves the greater Puget Sound region of Washington state. Based in Bellevue, Washington, the bank was founded to meet the specialized needs of small- and medium-sized businesses, select commercial real estate projects, professional service providers and high net worth individuals. Puget Sound Bank offers a full range of competitive financial products including an advanced suite of cash management services. Customers can access their accounts in-branch, online or through Puget Sound Bank's banking relationships offering branch and ATM deposit access throughout the continental United States. For more information visit www.PugetSoundBank.com or call (425) 455-2400.

Puget Sound Bank trades on the OTCQB® electronic marketplace under the symbol PUGB. To access investor relations information for Puget Sound Bank, visit www.PugetSoundBank.com/IR or call (425) 467-2037.

Forward-Looking Statement Safe Harbor: 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. Forward-looking statements describe Puget Sound Bank's projections, estimates, plans and expectations of future results and can be identified by words such as "believe," "intend," "estimate," "likely," "anticipate," "expect," and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve's actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Puget Sound Bank undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.



Puget Sound Bank









Fourth Quarter 2013 


















CONSOLIDATED STATEMENT OF OPERATIONS







(Unaudited)











Quarterly





2013

2013


2012


2013

2012

($ in thousands except per share data)


4th Qtr

3rd Qtr


4th Qtr


YTD

YTD










EARNINGS









   Net interest income

$

3,324

3,322


2,624


12,068

10,133

   Provision for loan losses

$

264

63


549


441

993

   Net interest income after provision for loan losses

3,060

3,259


2,074


11,627

9,140

   NonInterest income

$

153

211


195


641

517

   NonInterest expense

$

2,348

2,456


1,733


8,885

6,766

   Pre-tax Net income

$

865

1,014


536


3,382

2,891

   Provision for income taxes (benefit)

$

311

412


177


1,217

958

   Net income

$

553

602


360


2,164

1,933

   Preferred dividends

$

25

25


25


99

99

Net income available to common shareholders

$

528

577


335


2,066

1,834

   1Earnings per share

$

0.18

0.20


0.14


0.77

0.78

   Average shares outstanding


2,921

2,920


2,350


2,674

2,348

   Total revenue

$

3,477

3,533


2,818


12,708

10,649










PERFORMANCE RATIOS









   Return on average assets


0.68%

0.74%


0.55%


0.73%

0.77%

   1Return on average tangible common equity

6.49%

7.23%


5.23%


6.98%

7.37%

   Net interest margin


4.24%

4.31%


4.11%


4.24%

4.18%

   Efficiency ratio


67.5%

69.5%


61.5%


69.9%

63.5%










CAPITAL









   Tier 1 leverage ratio



12.98%


13.56%




   Tier 1 risk-based capital ratio



14.84%


14.66%




   Total risked based capital ratio 



16.03%


15.91%




   Tangible Common Equity Ratio


9.73%

9.92%


9.68%













ASSET QUALITY









   Net loan charge-offs (recoveries)

$

(126)

0


330




   Allowance for loan losses

$

3,538

3,148


3,241




   Allowance for losses to total loans


1.29%

1.24%


1.51%




   Nonperforming loans

$

738

1,145


2,286




   Other real estate owned

$

0

0


0




   Nonperforming assets to total assets


0.22%

0.35%


0.85%






















Puget Sound Bank









Fourth Quarter 2013 


















CONSOLIDATED FINANCIAL HIGHLIGHTS








(Unaudited)











Quarterly





2013

2013


2012




($ in thousands except per share data)


4th Qtr

3rd Qtr


4th Qtr













BALANCE SHEET


















 Cash and Due From Banks 

$

16,627

15,430


8,903




 Investments 

$

42,713

49,258


42,673




 Commercial and Industrial Loans 

$

126,764

123,389


101,666




 Owner-Occupied Commercial Real Estate 

$

54,377

45,100


40,666




 Other Commercial Real Estate 

$

71,509

66,571


55,392




 Personal Loans 

$

22,422

19,440


15,216




 Non-accrual Loans 

$

738

1,145


2,286




 Acquired Loan Fair Value Adjustment 

$

(378)

(482)


-




 Deferred Loan Fees 

$

(522)

(486)


(361)




    Total Loans 

$

274,910

254,677


214,865




 Allowance for Loan Losses 

$

(3,538)

(3,148)


(3,241)




   Net Loans 

$

271,372

251,529


211,625




  Goodwill/Core Deposit Intangible

$

2,196

2,206


-




 Other Assets 

$

6,355

6,388


5,188




 Total Assets 

$

339,263

324,811


268,389













 Non-interest bearing Demand  

$

122,148

118,196


87,211




 Interest Bearing Demand  

$

24,529

23,990


19,307




 Money Market and Savings 

$

108,158

103,561


74,048




 Certificates of Deposit 

$

25,932

33,211


49,486




    Total Deposits 

$

280,767

278,958


230,053




 Borrowings 


12,000

-


-




Other Liabilities

$

2,027

2,042


2,474




Total Equity

$

44,469

43,811


35,862




   Total Liabilities and Equity

$

339,263

324,811


268,389













   Tangible Shareholders' equity

$

32,785

32,007


25,727




   Tangible book value per share


11.18

10.96


10.99














1Includes preferred stock dividends not included in net income.

SOURCE Puget Sound Bank



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