Puget Sound Bank First Quarter Profits Increase 13%; Return on Equity Increases 20%; Earnings Per Share Grow 24%

News provided by

Apr 18, 2012, 04:15 ET

BELLEVUE, Wash., April 18, 2012 /PRNewswire/ -- Puget Sound Bank (OTCBB: PUGB), today reported that strong revenue growth and year-over-year loan growth contributed to net income of $517,065, or $.21 per share for first quarter 2012 compared to $456,124, or $.17 per share for first quarter 2011.

"Puget Sound Bank's strong first quarter results are attributable to our continued focus on building strong relationships with small businesses and their owners," said Jim Mitchell, President and Chief Executive Officer. "Our focus on growing relationships lead to an increase in revenues of 14% from a year ago, compared to growth of just 2% in expenses. These strong results are due to the extraordinary effort of the Puget Sound Bank team. "

Loans grew 9% to $187 million from $172 million in first quarter 2011. Commercial and industrial (C&I) loans, including owner-occupied commercial real estate loans, accounted for 60% of the loan portfolio at the end of the quarter.

Loan quality continues to be solid with nonperforming loans of $2.3 million, 1.0% of total assets. This percentage continues to be among the lowest of banks in the State.

Noninterest-bearing deposits increased 15% from first quarter 2011 and accounted for 32% of total deposits, compared to 28% a year ago. Money market and savings deposits account for 36% of Puget Sound's total deposits.

First Quarter Highlights:

Revenues increased 14% from a year ago to $2.7 million.
The net interest margin (NIM) was 4.44% for the quarter, up 8 basis points from first quarter 2011 and up 12 basis points from prior quarter.
Return of equity increased to 8.08% from 6.72% a year earlier.
Total loans grew 9% from a year ago, to $187.5 million.
Non-interest bearing demand deposits increased 15% from first quarter 2011, to $63.7 million.
Tangible book value per share grew 5% to $10.37 from a year earlier.
Nonperforming assets to total assets ratio of 0.99%, down from 1.22% in prior quarter and down from 1.09% in first quarter 2011.
Allowance for Loan and Lease Losses is 1.75%.
Capital ratios continue to substantially exceed regulatory requirements for a well-capitalized financial institution with total risk-based capital at 16.9%.
Puget Sound Bank was awarded a 5-Star rating for the sixth consecutive quarter, which is the highest rating available from BauerFinancial, Inc., an independent banking rating agency.

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 1500, 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
First Quarter 2012

CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
		Quarterly
		2012	2011	2011
($ in thousands except per share data)		1st Qtr	4th Qtr	1st Qtr

EARNINGS
Net interest income	$	2,578	2,571	2,265
Provision for loan losses	$	223	(128)	14
Net interest income after provision for loan losses		2,355	2,699	2,251
NonInterest income	$	118	106	91
NonInterest expense	$	1,699	1,690	1,663
Pre-tax Net income	$	774	1,115	679
Provision for income taxes (benefit)	$	257	370	223
Net income	$	517	745	456
Preferred dividends	$	25	14	73
Net income available to common shareholders	$	492	731	383
(1) Earnings per share	$	0.21	0.32	0.17
Average shares outstanding		2,344	2,318	2,307
Total revenue	$	2,696	2,676	2,356
PERFORMANCE RATIOS
Return on average assets		0.85%	1.22%	0.83%
(1) Return on average common equity		8.08%	12.47%	6.72%
Net interest margin		4.44%	4.32%	4.36%
Efficiency ratio		63.0%	63.1%	70.6%

CAPITAL
Tier 1 leverage ratio		14.05%	13.65%	12.48%
Tier 1 risk-based capital ratio		15.67%	15.13%	13.38%
Total risked based capital ratio		16.92%	16.39%	14.63%
Tangible Common Equity Ratio		10.32%	9.46%	10.09%

ASSET QUALITY
Net loan charge-offs (recoveries)	$	317	0	0
Allowance for loan losses	$	3,288	3,376	3,174
Allowance for losses to total loans		1.75%	1.75%	1.84%
Nonperforming loans	$	2,346	3,057	2,483
Other real estate owned	$	0	0	0
Nonperforming assets to total assets		0.99%	1.22%	1.09%


Puget Sound Bank
First Quarter 2012

CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
		Quarterly
		2012	2011	2011
($ in thousands except per share data)		1st Qtr	4th Qtr	1st Qtr

BALANCE SHEET

Cash and Due From Banks	$	6,070	9,449	6,641
Investments	$	40,834	45,833	46,048
Commercial and Industrial Loans	$	75,359	82,383	71,378
Owner-Occupied Commercial Real Estate	$	36,749	38,040	37,189
Other Commercial Real Estate	$	53,175	50,425	46,983
Personal Loans	$	20,099	19,716	14,431
Non-accrual Loans	$	2,347	3,057	2,483
Deferred Loan Fees	$	(242)	(277)	(306)
Total Loans	$	187,487	193,343	172,158
Allowance for Loan Losses	$	(3,288)	(3,376)	(3,174)
Net Loans	$	184,199	189,967	168,984
Other Assets	$	4,958	5,213	5,350
Total Assets	$	236,061	250,462	227,023

Non-interest bearing Demand	$	63,706	62,079	55,449
Interest Bearing Demand	$	17,562	30,812	7,605
Money Market and Savings	$	71,955	67,260	65,803
Certificates of Deposit	$	47,623	52,753	70,066
Total Deposits	$	200,846	212,904	198,923
Borrowings		-	-	-
Other Liabilities	$	978	3,982	600
Total Equity	$	34,237	33,576	27,500
Total Liabilities and Equity	$	236,061	250,462	227,023

Shareholders' equity	$	24,351	23,690	22,898
Tangible book value per share		10.37	10.22	9.92

(1) Includes preferred stock dividends not included in net income.