Puget Sound Bancorp Reports 30% Year-Over-Year Net Income Growth

ROE at 10.78% and ROA at 1.01%; Consecutive Quarter for High Performing Profitability Levels

BELLEVUE, Wash.--()--Puget Sound Bancorp (OTCQB:PUGB), the holding company for Puget Sound Bank, today reported net income of $1.3 million or $0.39 per share for the quarter ending March 31, 2017. This compares to $1.0 million or $0.30 per share for the year-earlier quarter, a 30% increase year-over-year for both net income and earnings per share.

With return on equity at 10.78% and return on assets at 1.01% in the first quarter, Puget Sound Bank continues to perform at or above profitability levels for high-performing banks. This compares with a ROE of 9.00% and ROA of 0.86% from a year ago.

“We are pleased to report this 30% year-over-year net-income and EPS growth, as well as our strong quarter-to-quarter results,” said Jim Mitchell, Puget Sound Bancorp president and chief executive officer. “This performance shows that our model of serving business customers with our highly personalized service is valued by the market.”

Total assets increased 16% to $547.8 million at quarter-end as compared to $473.0 million a year earlier, and total loans at quarter-end increased 10% to $365.9 million as compared to $333.5 million a year earlier. Puget Sound Bank’s ratio of nonperforming assets to total assets of 0.07% at quarter end as compared to 0.10% a year earlier, remains in the top 10% of its peer-group.

“As we deliver this growth we remain steadfastly focused on maintaining the high quality of our loan portfolio,” said Mr. Mitchell. The percentage of Puget Sound Bank’s business-related loans (including owner-occupied real estate) at year-end accounted for approximately 65% of the Bank’s portfolio. This places the Bank near the top of all commercial banks in Washington state for these loans as a percentage of total loans.

Total deposits at quarter-end increased 17% to $486.9 million as compared to $416.8 million a year earlier, with 51% of total deposits in checking accounts at quarter-end.

2017 First Quarter Highlights

  • Total assets grew 16% to $547.8 million at the end of the first quarter of 2017 as compared to $473.0 million a year ago.
  • Noninterest demand deposits were $204.0 million at quarter-end, or 42% of total deposits.
  • Total loans grew 10% to $365.9 million at quarter end as compared to $333.5 million a year earlier.
  • Total deposits grew 17% to $486.8 million at quarter-end as compared to $416.8 million a year earlier.
  • Net interest margin increased to 3.77% in the first quarter as compared to 3.60% in the year-earlier quarter.
  • Tangible book value per share increased to $14.66 at quarter-end from $13.63 a year earlier.
  • Return on equity for the first quarter increased to 10.78% as compared to 9.00% in the year-earlier quarter.
  • Return on assets for the first quarter increased to 1.01% as compared to 0.86% in the year-earlier quarter.
  • The ratio of nonperforming assets to total assets improved to 0.07% at year-end as compared to 0.10% in the year-earlier period.
  • Allowance for loan losses and the fair value discount on the acquired loan portfolio, together were 1.22% of loans.
  • The efficiency ratio (noninterest expense divided by revenue) improved to 58.9% in the first quarter as compared to 63.5% for year-earlier quarter.
  • Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements.
  • For the 26th consecutive quarter, Puget Sound Bank was awarded a 5-star rating (superior), the highest available from independent bank-rating agency BauerFinancial.

In addition to recognition as a Best Company to Work For by Seattle Business Magazine, Puget Sound Bank has also been named a Best Workplace, Fastest Growing Company and Top Corporate Philanthropist by Puget Sound Business Journal. The Bank is rated “five-star superior” by BauerFinancial (a nationally recognized, independent bank rating agency) and has an A+ rating from DepositAccounts.com.

Common stock for Puget Sound Bancorp trades on the OTCQB® electronic marketplace under the symbol PUGB.

About Puget Sound Bancorp

Based in Bellevue, Washington, Puget Sound Bancorp provides banking products and services through its wholly-owned subsidiary, Puget Sound Bank (member FDIC). 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. As one of Washington state’s top commercial banks (as measured by commercial and industrial loans as a percentage of total loans), 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, on mobile devices or through Puget Sound Bank's nationwide ATM network. For more information visit www.PugetSoundBank.com or call (425) 455-2400.

To access investor relations information for Puget Sound Bancorp, visit www.PugetSoundBancorp.com 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,” “looking forward,” 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 Bancorp
First Quarter 2017

 

CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

 
 

Quarterly

($ in thousands except per share data) 2017
1st Qtr
  2016
4th Qtr
      2016
1st Qtr
       
EARNINGS
Net interest income $ 4,659 4,508 3,966
Provision for loan losses $ 59   113   0  
Net interest income after provision for loan losses $ 4,600 4,395 3,966
NonInterest income $ 222 238 198
NonInterest expense $ 2,874   2,786   2,644  
Pre-tax Net income $ 1,947 1,847 1,520
Provision for income taxes (benefit) $ 631   497   504  
Net income $ 1,316 1,350 1,016
Preferred dividends $ 0   0   0  
Net income available to common shareholders $ 1,316 1,350 1,016

Earnings per share1

$ 0.39 0.40 0.30
Average shares outstanding 3,410 3,385 3,361
Total revenue $ 4,881 4,746 4,164
PERFORMANCE RATIOS
Return on average assets 1.01 % 1.00 % 0.86 %

Return on average tangible common equity1

10.78 % 11.07 % 9.00 %
Net interest margin 3.77 % 3.53 % 3.60 %
Efficiency ratio 58.9 % 58.7 % 63.5 %
 
CAPITAL
Common equity tier 1 ratio 12.44 % 13.40 %
Tier 1 leverage ratio 10.14 % 10.87 %
Tier 1 risk-based capital ratio 12.44 % 13.40 %
Total risked based capital ratio 13.50 % 14.53 %
Tangible Common Equity Ratio 9.18 % 9.36 % 9.74 %
 
ASSET QUALITY
Net loan charge-offs (recoveries) $ 1 8 (97 )
Allowance for loan losses $ 4,409 4,351 4,096
Allowance for losses to total loans 1.20 % 1.17 % 1.21 %
Nonperforming loans $ 402 403 477
Other real estate owned $ 0 0 0
Nonperforming assets to total assets 0.07 % 0.08 % 0.10 %
 

1Includes preferred stock dividends not included in net income.

 
Puget Sound Bancorp
First Quarter 2017
 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
 
  Quarterly
($ in thousands except per share data) 2017
1st Qtr
  2016
4th Qtr
      2016
1st Qtr
       
BALANCE SHEET
 
Cash and Due From Banks $ 21,167 20,501 19,182
Investments $ 153,068 117,067 115,947
Commercial and Industrial Loans $ 162,751 166,693 143,416
Owner-Occupied Commercial Real Estate $ 76,595 80,022 75,107
Other Commercial Real Estate $ 107,422 105,837 85,875
Personal Loans $ 19,648 21,136 29,338
Non-accrual Loans $ 402 403 451
Acquired Loan Fair Value Adjustment $ (50 ) (55 ) (132 )
Deferred Loan Fees $ (879 ) (727 ) (565 )
Total Loans $ 365,889 373,309 333,490
Allowance for Loan Losses $ (4,409 ) (4,351 ) (4,096 )
Net Loans $ 361,479 368,958 329,394
Goodwill/Core Deposit Intangible $ 2,090 2,096 2,115
Other Assets $ 9,950   10,436   6,329  
Total Assets $ 547,754 519,058 472,968
 
Non-interest bearing Demand $ 204,043 187,439 193,720
Interest Bearing Demand $ 37,484 37,588 23,732
Money Market and Savings $ 203,291 193,173 172,610
Certificates of Deposit $ 42,062   41,392   26,728  
Total Deposits $ 486,880 459,591 416,790
Debt $ 5,400 6,000 6,000
Other Liabilities $ 3,304 3,005 2,198
Total Equity $ 52,170   50,462   47,980  
Total Liabilities and Equity $ 547,754 519,058 472,968
 
Tangible Shareholders' equity $ 50,080 48,366 45,865
Tangible book value per share $ 14.66 14.25 13.63
Book value per share $ 15.27 14.87 14.26
 

Contacts

Puget Sound Bank
Brad Ogura, 425-467-2037

Contacts

Puget Sound Bank
Brad Ogura, 425-467-2037