Puget Sound Bancorp Reports Record Year as Net Income Increases 27%

Fourth Quarter ROE reaches 10.04% and ROA hits 0.95%

BELLEVUE, Wash.--()--Puget Sound Bancorp (OTCQB: PUGB), the holding company for Puget Sound Bank, today reported record net income of $4.1 million or $1.22 per share for the year ending December 31, 2015, which compares to $3.2 million or $1.06 per share for the year-earlier period, a 27% increase in net income. For the quarter ending December 31, 2015, net income was $1.1 million or $0.33 per share as compared to $952,426 or $0.31 per share for the year-earlier quarter, a 20% increase in net income.

“These outstanding results, including the high-performance ROE and ROA ratios, are due to an incredibly hardworking and focused group of employees”

“These outstanding results, including the high-performance ROE and ROA ratios, are due to an incredibly hardworking and focused group of employees,” said Jim Mitchell, Puget Sound Bancorp president and chief executive officer. “We look forward to delivering more record performances with the same careful approach to growth that has resulted in Puget Sound Bank being one of the healthiest and most successful banks in the region.”

Total assets increased 24% to $480.5 million at year-end as compared to $387.7 million a year earlier, and total loans at year-end increased 7% to $337.6 million as compared to $315.0 million a year earlier. Puget Sound Bank’s ratio of nonperforming assets to assets continued to improve (0.10% at year-end compared to 0.15% for the year earlier). “From the Bank’s inception we have always focused on growing the Bank in a sound and prudent manner,” said Tony Chalfant, Puget Sound Bank chief credit officer. “We are honored to be working with some of the region’s strongest companies and organizations; they are truly the reason for our ongoing success.” With nonperforming assets at these historic lows, Puget Sound Bank ranks in the top 10% of banks in Washington state.

The percentage of Puget Sound Bank’s business-related loans (including owner-occupied real estate) at year-end accounted for approximately 63% 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 year-end increased 26% to $425.3 million as compared to $336.6 million a year earlier. With 55% of total deposits in checking accounts at year-end, net-interest margin for the fourth quarter was 3.57%, one of the highest among commercial banks in Washington state.

2015 Highlights

  • Total assets grew 24% to $480.5 million at the end of 2015 as compared to $387.7 million a year ago.
  • Noninterest demand deposits increased 17% to $208.1 million at year-end, or 49% of total deposits compared to 53% a year ago. Core deposits accounted for 99.9% of overall deposits.
  • Total loans grew 7% to $337.6 million at the end of 2015 as compared to $315.0 million a year earlier.
  • Total deposits grew 26% to $425.3 million at year-end as compared to $336.6 million a year earlier.
  • Net interest margin was 3.85% for the year, down from 4.17% one year ago due to increased liquidity.
  • Tangible book value per share increased to $13.15 at year-end from $12.17 a year earlier.
  • Return on equity for the fourth quarter increased from the third quarter to 10.04%.
  • Return on assets for the fourth quarter increased from the third quarter to 0.95%.
  • Nonperforming assets to total assets decreased to only 0.10% at year-end, down from 0.15% in the year-earlier period.
  • Allowance for loan losses and the fair value discount on the acquired loan portfolio, together were 1.25% of loans.
  • The efficiency ratio (noninterest expense divided by revenue) improved to 61.4% for the year and 59.3% for the fourth quarter as compared to 64.0% for 2014.
  • Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements.
  • For the 21st consecutive quarter, Puget Sound Bank was awarded a 5-star rating (superior), the highest available from independent bank-rating agency BauerFinancial.

In November, the Bank redeemed $9.9 million of preferred stock received from the U.S. Department of the Treasury’s Small Business Lending Fund program and concurrently borrowed $6.0 million of senior debt at a rate of 4.01%. This will allow the Bank to continue to exceed its well-capitalized levels.

Puget Sound Bank has been named a best workplace, fastest growing company and top corporate philanthropist by the Puget Sound Business Journal and is consistently rated one of the country’s strongest banks by independent analysts.

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

About Puget Sound Bancorp

Puget Sound Bancorp is based in Bellevue, Washington and provides banking products and services through its wholly-owned subsidiary, Puget Sound Bank. 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 Bank, visit www.PugetSoundBank.com/IR 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
Fourth Quarter 2015
 
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Quarterly            
2015 2015 2014 2015 2014
($ in thousands except per share data)

4th Qtr

  3rd Qtr   4th Qtr   YTD     YTD  
 
EARNINGS
Net interest income $ 3,939 3,886 3,752 15,383 14,104
Provision for loan losses $ 4     70   99   103     613  
Net interest income after provision for loan losses $ 3,935 3,816 3,652 15,280 13,491
NonInterest income $ 235 176 206 749 674
NonInterest expense $ 2,476     2,487   2,559   9,912     9,462  
Pre-tax Net income $ 1,694 1,505 1,299 6,117 4,703
Provision for income taxes (benefit) $ 551     505   347   2,034     1,480  
Net income $ 1,142 1,000 952 4,083 3,223
Preferred dividends $ 34     25   25   108     99  
Net income available to common shareholders $ 1,108 975 927 3,975 3,124
1Earnings per share $ 0.33 0.29 0.31 1.22 1.06
Average shares outstanding 3,338 3,333 2,972 3,264 2,960
Total revenue $ 4,173 4,062 3,958 16,132 14,778
PERFORMANCE RATIOS
Return on average assets 0.95 % 0.90 % 1.01 % 0.95 % 0.91 %
1Return on average tangible common equity 10.04 % 9.18 % 10.29 % 9.60 % 9.01 %
Net interest margin 3.57 % 3.67 % 4.17 % 3.85 % 4.17 %
Efficiency ratio 59.3 % 61.2 % 64.7 % 61.4 % 64.0 %
 
CAPITAL
Common equity tier 1 ratio 11.35 % NA
Tier 1 leverage ratio 11.90 % 12.36 %
Tier 1 risk-based capital ratio 13.96 % 13.68 %
Total risked based capital ratio 15.08 % 14.93 %
Tangible Common Equity Ratio 9.21 % 9.45 % 9.44 %
 
ASSET QUALITY
Net loan charge-offs (recoveries) $ (97 ) 75 0
Allowance for loan losses $ 4,096 3,994 4,013
Allowance for losses to total loans 1.21 % 1.20 % 1.27 %
Nonperforming loans $ 477 451 583
Other real estate owned $ 0 0 0
Nonperforming assets to total assets 0.10 % 0.10 % 0.15 %
 
     
Puget Sound Bancorp
Fourth Quarter 2015
 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
Quarterly
2015 2015 2014
($ in thousands except per share data) 4th Qtr   3rd Qtr   4th Qtr
 
BALANCE SHEET
 
Cash and Due From Banks $ 29,313 28,531 18,138
Investments $ 109,209 91,615 49,992
Commercial and Industrial Loans $ 143,247 137,358 132,734
Owner-Occupied Commercial Real Estate $ 71,179 74,987 61,221
Other Commercial Real Estate $ 94,096 86,631 90,283
Personal Loans $ 29,226 33,474 30,894
Non-accrual Loans $ 477 451 583
Acquired Loan Fair Value Adjustment $ (139 ) (148 ) (193 )
Deferred Loan Fees $ (533 ) (563 ) (507 )
Total Loans $ 337,553 332,190 315,015
Allowance for Loan Losses $ (4,096 ) (3,994 ) (4,013 )
Net Loans $ 333,457 328,196 311,002
Goodwill/Core Deposit Intangible $ 2,122 2,130 2,155
Other Assets $ 6,432   5,792   6,442  
Total Assets $ 480,533 456,263 387,729
 
Non-interest bearing Demand $ 208,125 192,447 177,441
Interest Bearing Demand $ 21,313 29,625 23,972
Money Market and Savings $ 166,111 144,864 108,327
Certificates of Deposit $ 29,776   31,745   26,852  
Total Deposits $ 425,325 398,681 336,592
Borrowings $ 6,000 - -
Other Liabilities $ 3,043 2,628 2,688
Total Equity $ 46,166   54,953   48,448  
Total Liabilities and Equity $ 480,533 456,263 387,729
 
Tangible Shareholders' equity $ 44,044 42,938 36,537
Tangible book value per share $ 13.15 12.86 12.17
Book value per share $ 13.79 13.50 12.89
 
1Includes preferred stock dividends not included in net income.
 

Contacts

Puget Sound Bank
Brad Ogura, 425-467-2037

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