PUGET SOU 
By BELLEVUE, Wash., Oct. 23, 2013 /PRNewswire/ -- Puget Sound Bank (OTCQB: PUGB) today reported net income of $601,533 or $.20 per share for the third quarter ending September 30, 2013 as compared to $529,649 or $.21 per share in the third quarter of 2012. Net income for the current quarter would have been approximately $733,000 or $0.24 per share before one-time costs resulting from Puget Sound Bank's acquisition of Core Business Bank, completed June 14, 2013.
Net income for the first nine months of 2013 increased to $1.611 million from $1.573 million in the year-earlier period. Without one-time acquisition costs net income for the current nine-months would have been $2.0 million.
"This quarter - the first full quarter with Core Business Bank contributing to our operations - has been particularly strong for the Bank, said Jim Mitchell, Puget Sound Bank chief executive officer and president. "Our credit quality and performance ratios have exceeded our expectations to support our long-term strategy."
Total loans, including loans acquired from Core Business Bank and new organic loan growth, increased to $255.2 million, a 27% increase from the year-earlier period. Commercial and industrial loans (including loans acquired from Core Business Bank and owner-occupied real estate) account for approximately 66% of Puget Sound Bank's portfolio as compared to approximately 65% in the year-earlier quarter.
"We anticipate double-digit organic loan growth to continue in 2014," said Mr. Mitchell, "especially given our new legal lending limit of $9 million and new products and services such as mobile banking that we anticipate launching this quarter. However," he added, "we won't sacrifice our loan quality or stray from our C&I focus in the name of growth."
Third Quarter 2013 Highlights:
-- Total assets grew 23% to $324.8 million as compared to $264.7 million a
year ago.
-- Noninterest demand deposits increased 53% from a year ago to $118.2
million, or 42% of total deposits compared to 34% a year ago.
-- Total loans grew 27% and total deposits grew 23% from a year ago.
-- Net interest margin increased to 4.31% for the quarter, up from 3.91%
one year ago.
-- Tangible book value per share increased to $10.96 from $10.87 a year
earlier.
-- Return on equity decreased to 7.23% from 8.04% a year ago due to
expenses related to the acquisition. Return on equity would have been
8.87% without acquisition costs.
-- Return on assets decreased to 0.74% from 0.82% a year ago due to
expenses related to the acquisition. Return on assets would have been
0.90% without acquisition costs.
-- Nonperforming assets to total assets decreased to 0.35%, down from 0.91%
in the year-earlier period.
-- Allowance for loan losses and the fair value discount on the acquired
loan portfolio, together were 1.43% of loans.
-- Capital ratios continue to substantially exceed regulatory requirements
for a well-capitalized financial institution, with total risk-based
capital at 16.03%, well above the 10% well-capitalized regulatory
requirement.
-- The efficiency ratio decreased to 69.5% compared to 73.5% last quarter
and 64.9% in the year-earlier quarter. The efficiency ratio would have
been 63.7% without acquisition costs.
-- For the 12(th) consecutive quarter, Puget Sound Bank was awarded a
5-star rating, the highest available from independent banking rating
agency BauerFinancial.
Integration of Core Business Bank
Customer data integration of Core Business Bank was successfully completed the weekend of October 11-14, 2013. All customers are now on one unified service platform.
"We are pleased that all of the planning the last six months has paid off, resulting in a smooth integration for former Core Business Bank customers, said Mr. Mitchell. "Based on how well systems performed we anticipate upcoming transactions, statements and reporting to provide our new customers an experience that mirrors the high-level of service Puget Sound Bank customers have enjoyed since our inception."
"Acquisition costs have been below preliminary forecasts," said Mr. Mitchell, "and beginning in 2014 we expect the efficiency ratio (noninterest expense to revenue) to continue to improve and decrease more into our typical 65% range."
About Puget Sound Bank
Puget Sound Bank (OTCQB: PUGB) 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. Staffed by the most experienced, customer-oriented banking professionals in the region, 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 us online at www.PugetSoundBank.com or call us at (425) 455-2400.
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.
CONTACT: Brad Ogura, 425-467-2037
Puget Sound
Bank
Third
Quarter
2013
CONSOLIDATED STATEMENT OF
OPERATIONS
(Unaudited)
Quarterly
---------
2013 2013 2012 2013 2012
($ in
thousands
except per
share
data) 3rd Qtr 2nd Qtr 3rd Qtr YTD YTD
------- ------- ------- --- ---
EARNINGS
Net
interest
income $3,322 2,793 2,460 8,744 7,509
Provision
for
loan
losses $63 68 110 177 443
--- ---
Net
interest
income
after
provision
for loan
losses 3,259 2,725 2,350 8,567 7,066
NonInterest
income $211 138 109 487 322
NonInterest
expense $2,456 2,153 1,666 6,537 5,033
----- -----
Pre-tax
Net
income $1,014 710 793 2,517 2,355
Provision
for
income
taxes
(benefit) $412 233 263 906 782
--- ---
Net
income $602 476 530 1,611 1,573
Preferred
dividends $25 25 25 74 74
--- ---
Net
income
available
to
common
shareholders $577 451 505 1,537 1,499
(1)Earnings
per
share $0.20 0.18 0.21 0.59 0.64
Average
shares
outstanding 2,920 2,477 2,349 2,591 2,347
Total
revenue $3,533 2,930 2,569 9,231 7,831
PERFORMANCE
RATIOS
Return on
average
assets 0.74% 0.69% 0.82% 0.74% 0.85%
(1)Return
on average
tangible
common
equity 7.23% 6.55% 8.04% 7.17% 8.12%
Net
interest
margin 4.31% 4.26% 3.91% 4.24% 4.20%
Efficiency
ratio 69.5% 73.5% 64.9% 70.8% 64.3%
CAPITAL
Tier 1
leverage
ratio 12.98% 15.04% 13.54%
Tier 1
risk-
based
capital
ratio 14.83% 15.32% 15.01%
Total
risked
based
capital
ratio 16.03% 16.52% 16.26%
Tangible
Common
Equity
Ratio 9.92% 9.90% 9.65%
ASSET
QUALITY
Net loan
charge-
offs
(recoveries) $0 78 0
Allowance
for
loan
losses $3,148 3,085 3,021
Allowance
for losses
to total
loans 1.24% 1.24% 1.50%
Nonperforming
loans $1,180 1,722 2,415
Other
real
estate
owned $0 0 0
Nonperforming
assets to
total
assets 0.35% 0.54% 0.91%
Puget Sound Bank
Third Quarter
2013
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
Quarterly
---------
2013 2013 2012
($ in thousands
except per
share data) 3rd Qtr 2nd Qtr 3rd Qtr
------- ------- -------
BALANCE SHEET
Cash and Due
From Banks $15,430 12,731 8,940
Investments $49,258 51,517 52,484
Commercial and
Industrial
Loans $123,389 127,340 88,621
Owner-
Occupied
Commercial
Real Estate $45,100 38,931 41,275
Other
Commercial
Real Estate $66,571 61,667 54,361
Personal Loans $19,440 19,912 14,921
Non-accrual
Loans $1,145 1,722 2,415
Deferred Loan
Fees $(486) (335) (324)
-----
Total Loans $255,159 249,238 201,269
Allowance for
Loan Losses $(3,148) (3,085) (3,021)
Acquired Loan
Fair Value
Adjustment (482) (650) -
---- ---- ---
Net Loans $251,529 245,503 198,247
Goodwill/Core
Deposit
Intangible 2,206 2,218 -
Other Assets $6,388 6,555 4,994
-----
Total Assets $324,811 318,524 264,665
Non-interest
bearing
Demand $118,196 117,462 77,038
Interest
Bearing
Demand $23,990 23,306 20,314
Money Market
and Savings $103,561 94,464 76,978
Certificates
of Deposit $33,211 38,393 52,460
------
Total Deposits $278,958 273,625 226,791
Borrowings - - -
Other
Liabilities $2,042 1,701 2,450
Total Equity $43,811 43,199 35,425
------
Total
Liabilities
and Equity $324,811 318,524 264,665
Tangible
Shareholders'
equity $32,007 31,301 25,207
Tangible book
value per share 10.96 10.74 10.87
(1)Includes preferred stock
dividends not included in net
income.
SOURCE Puget Sound Bank
