updated 2/24/2011 4:16:45 PM ET 2011-02-24T21:16:45

SEATTLE, Feb. 24, 2011 (GLOBE NEWSWIRE) -- Blueprint Capital, LLC, a specialized finance company for smart, smaller-scale residential construction projects in Seattle, today reported that profits in its first year of operation totaled $702,000. In 2010, Blueprint Capital was one of the few financing options available to construction companies, and the Blueprint co-operative model is proving to be highly successful for its member builders and investors.

"We founded Blueprint Capital a year ago in one of the worst economic recessions we have seen in decades," said Dan Duffus, Co-founder and Chief Executive Officer. "Despite the difficult economic conditions in the national real estate market, we established a co-operative business with some of the best builders in Seattle to capitalize on the excellent building opportunities in this market. In fact, we believe we were the largest residential construction lender in Seattle in 2010."

Blueprint's number one asset is its co-op members, a select group of Seattle builders responsible for 40% of all new detached single family homes sold in Seattle in 2010. "They have the capacity to meet the growing demand for new homes and the lack of available financing for other builders will enable Blueprint builders to utilize this capacity," continued Duffus. "More than just financing, however, we have the experience, contacts and knowledge of the Seattle market that allows us to identify viable projects, unlock hidden value and navigate the complex entitlement process. Our philosophy of establishing relationships with only the best builders in Seattle, and limiting investments to the area and products we know best, has served us well. And, we are very proud of our accomplishments this last year."

2010 Highlights:

  • Blueprint Capital generated a profit of $702,000;
     
  • Distributed preferred returns of $405,000 and a declared a profit sharing distribution of $148,000 to investors, which together yielded a 9.95% return on investment;
     
  • Raised $10.7 million in equity capital;
     
  • Raised $10.9 million in debt financing from three of the best banks in the region;
     
  • Funded 67 loans for a total of $29.8 million;
     
  • Return on average assets was 7.5% and return on average equity was 12.0%;
     
  • Superior operating efficiencies with an efficiency ratio of 27.4%, and an
     
  • Operating expense/average assets ratio of 2.8%.

"The Seattle market offers exceptional opportunities for residential development and construction projects," said Mark Knoll, Co-founder and Chief Financial Officer. "Regardless of the economic cycle, we believe the supply and demand equation for single family housing will remain favorable for builders and, in turn, give us a unique opportunity to grow our business." Three factors restrict the number of new homes available: the availability of capital, the lack of any large empty tracks of land for development, and strict regulatory requirements.

According to the FDIC, 14 community banks headquartered in Washington State failed during 2009 and 2010. Most of these failed banks were active in land, construction and development lending. The remaining healthy community banks have tightened their credit requirements and substantially reduced lending for new construction projects. This trend is likely to continue due to their need to improve asset quality, reduce concentration in construction lending and meet regulatory restrictions. Consequently, the supply of new single family homes is restricted and there have been very few new projects. "Because the availability of capital is severely restricted, Blueprint has stepped in to fill this void," said Knoll.

The Seattle housing supply lacks large empty tracks of land for development. Seattle is well developed and geographically constrained to the west by Puget Sound and to the east by Lake Washington. As a result, almost all residential building in Seattle is in-fill development. This constraint, together with strict regulatory requirements for permitting and platting, limits the chances of an over-supplied market.

"Demand in the Seattle market for entry level housing is strong," commented Knoll. "Most of our financed homes are selling in the $400,000 to $700,000 range, which is the low to middle price range for this area. We are not funding high-end speculative projects, condominiums or commercial buildings. Affordability for entry level buyers is a primary driver of demand, and we believe a large demographic of younger, first-time buyers will sustain an upward demand curve."

At December 31, 2010, Blueprint held 45 loans in its $21 million portfolio. "Our focus is new construction which represents 85% of our loans, by dollar amount; 10% of loans are for existing home rehabilitation and 5% are for acquisition and development," said Knoll. By dollar amount, 70% of loans are secured by detached single family homes, 27% are secured by townhomes ranging from 2 to 8 units and 3% by land under development.

Review of Balance Sheet and Operations

Blueprint's assets totaled $15.8 million at December 31, 2010. Gross loans receivable were $21.2 million at year end with net loans totaling $13.4 million. Loans are Blueprint's primary investment and make up 86% of assets. At the end of December 31, 2010, there were no nonperforming loans. Of the remaining assets, 9% are in cash which is used for working capital and security for bank lines of credit, and 5% represent interest in property held for development. Developed property is sold or held for income and security for bank lines of credit, and is not expected to be a significant part of Blueprint's investment strategy.

"With 70% equity to assets we have a strong balance sheet," said Knoll. "Our current debt ratio is 0.43 to 1 and our target going forward is 2 to 1. We have the capacity to conservatively add to our credit lines at our current equity level. We plan to use any additional capital to grow our loan portfolio and increase our market share." At December 31, 2010, Blueprint Capital had lines of credit with Puget Sound Bank and Columbia Bank, representing 15% and 13% respectively of their total equity plus debt.

In 2010, net interest income was $967,175 and non-interest expense was $265,186. Blueprint's return on average assets was 7.5% and return on average equity was 12.0% at December 31, 2010. The efficiency ratio was 27.4%. Members' equity was $11.0 million at December 31, 2010, an increase of 424% from a balance of $2.1 million at the beginning of the year. Distributions to its members totaled $405,285.

ABOUT BLUEPRINT CAPITAL, LLC

Founded in 2009, Blueprint Capital provides financing and expertise for smart, smaller-scale construction in Seattle neighborhoods. Using a unique, co-operative business model, Blueprint has pooled the resources of top builders to become Seattle's leading residential construction lender. In addition to financing, the company helps builders identify viable projects, navigate the complex entitlement process and market their homes. Blueprint's goal is to continue expanding its builder and capital base along with an efficient operations platform.   www.blueprintcapital.com

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 Blueprint Capital, LLC. Blueprint Capital, LLC, is a private company and undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

 
BLUEPRINT CAPITAL, LLC
   
BALANCE SHEET  For the Year Ended

December 31, 2010 
  (Unaudited)
ASSETS  
Cash  $ 123,518
Restricted cash  1,319,458
Total Cash and Cash Equivalents  1,442,976
   
Loans  
Total loans receivable  21,200,444
Undisbursed loan commitments  (7,527,630)
Deferred loan fees  (230,363)
Net Loans  13,442,451
Accrued interest receivable  123,811
Land and development costs  761,503
Investment in joint venture  43,767
Total Assets  $ 15,814,508
   
LIABILITIES AND MEMBERS' EQUITY  
Liabilities  
Accounts payable  $ 89,258
Lines of credit  4,370,547
Notes payable  350,000
Total Liabilities  4,809,805
   
Members' Equity  11,004,703
Total Liabilities and Members' Equity  $ 15,814,508
   
STATEMENT OF INCOME AND CHANGES IN MEMBERS' EQUITY  For the Year Ended

December 31, 2010 
  (Unaudited)
NET INTEREST INCOME  
Interest Income  $ 1,171,439
Interest and other direct loan expense  204,264
Net Interest Income  967,175
   
Office expenses  114,434
Utilities  1,366
Payroll  149,386
Total Non-interest Expense  265,186
   
NET INCOME  $ 701,989
   
MEMBERS' EQUITY  
Balance, beginning of year  $ 2,145,000
Member contributions  8,562,999
Member distributions  (405,285)
Balance, end of year  $ 11,004,703
   
PERFORMANCE RATIOS  
Return on Average Assets 7.5%
Return on Average Equity 12.0%
Efficiency Ratio 27.4%
CONTACT: Mark Knoll - Co-Founder and Chief Financial Officer
         206.933.7514

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