BELLEVUE, Wash., Oct. 20, 2010 (GLOBE NEWSWIRE) -- Puget Sound Bank (OTCBB:PUGB), today reported that net income for the first nine months of 2010 was more than double the earnings for the full year of 2009. Year-to-date, Puget Sound Bank earned $920,228 compared to $56,955 for the same period last year. Net income in the third quarter of 2010 increased to $315,122 compared to $315,095 in the preceding quarter and $431,752 in the third quarter a year ago. Pre-tax, pre-provision net income was $659,122 in the third quarter of 2010, compared to $436,095 in the immediate prior quarter, and $415,252 in the third quarter a year ago.
"Our results this quarter reflect the many positive trends we have seen all year, including our strong capital and liquidity, increasing net interest margin and robust local deposit growth. Recently we have seen an increase in loan demand and consequently have had strong loan growth this quarter," said Jim Mitchell, President and Chief Executive Officer. "With only two nonperforming loans at the end of the quarter, we continue to maintain solid credit quality in a very difficult economic environment."
Third Quarter and YTD 2010 Highlights
- Puget Sound Bank's capital ratios exceed regulatory requirements for a well-capitalized financial institution with a Total Risk-based Capital Ratio of 15.26% compared to 17.32% a year ago. To be considered "well-capitalized" a bank must have over 10% Total Risk-based Capital.
- Tangible book value per common share increased to $9.65 compared to $9.17 a year ago.
- Continued profitability with YTD return on average assets at 0.57% and return on average common equity at 4.31%.
- Total deposits grew 33% to $207 million from $155 million a year earlier.
- Low cost demand, money market, savings and NOW accounts accounted for 62% of total deposits.
- Gross loans grew 19% to $166 million from $139 million a year earlier.
- YTD revenues increased 23% to $5.6 million from a year ago.
- Asset quality continues to be solid with nonperforming assets to total assets at 0.83%.
- Loan Loss Reserve was 1.85% of total loans compared to 1.84% of total loans a year ago.
- Net interest margin (NIM) rose to 3.57% from 3.51% in the preceding quarter.
Balance Sheet and Asset Quality Review
Puget Sound Bank's total assets grew 29% to $234.2 million at September 30, 2010, compared to $181.2 million a year ago, reflecting a 19% increase in total loans and an increase in portfolio investments supported by a 33% deposit increase. Total loans increased to $166 million in the third quarter from $139 million a year ago.
The loan portfolio is well diversified with commercial and industrial (C&I) loans, including owner-occupied commercial real estate loans, accounting for 68% of the loan portfolio, with commercial real estate loans representing 25%, and personal and other loans representing 7% of the loan portfolio at the end of September 2010.
Nonperforming assets (NPAs) at the end of the third quarter totaled $1.9 million, or 0.83% of total assets, compared to $3.3 million, or 1.82% of total assets a year ago. "Our loan portfolio continues to perform better than our peer group of banks around the country," said Phil Mitterling, EVP and Chief Financial Officer. "One loan was added to our nonperformers during the quarter, resulting in only two loans presently on nonaccrual status. We continued to prudently build reserves in the third quarter, which reflects both the growth in the loan portfolio and continuing caution on the economic outlook."
A $344,000 provision for loan losses was booked in the third quarter 2010 compared to a loan loss provision of $121,000 taken in the previous quarter; no provision for loan losses was booked in third quarter of 2009. There were no charge-offs in the third quarter 2010. The reserve for loan losses increased to $3.1million, or 1.85% of total loans at quarter end, compared to $2.6 million, or 1.84% of total loans at the end of September a year ago.
Review of Operations
Year-to-date revenue grew 23% to $5.6 million from $4.6 million in the first nine months of 2009. Revenue for the third quarter of 2010 was $2.1 million, compared to $1.9 million in the preceding quarter and $1.6 million a year ago.
"Last quarter we announced that we expected to redeploy assets from our strong deposit base into higher yielding loans in the third quarter; and that's exactly what we did by growing our loan portfolio $19 million from the second quarter 2010," added Mitterling. The net interest margin rose to 3.57%, an increase of six basis points from the preceding quarter, and down four basis points from the year ago quarter.
Third quarter noninterest expense declined $18,000 from the preceding quarter to $1.4 million, reflecting management's continued focus on controlling expenses. The efficiency ratio improved during the third quarter to 68% compared to 77% reported in the preceding quarter, and 75% in the third quarter a year ago.
Puget Sound Bank Rated 4 Stars ("Excellent") by BauerFinancial, Inc.
BauerFinancial has rated Puget Sound Bank 4 stars ("excellent"), its second-highest rating. BauerFinancial has been reporting on and analyzing the performance of U.S. banks since 1983. They are an independent organization and no institution pays for its ratings. Click here to access the BauerFinancial website:
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 86% at the end of the third quarter, which compares favorably to other publicly traded banks in the State of Washington. The stock price as of October 19, 2010 was $8.50.
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 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.
CONTACT: Puget Sound Bank Jim Mitchell, President & CEO (425) 455-2400