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Treasure State Bank Reports First Quarter 2014 Operating Results

MISSOULA, Mont., May 1, 2014 (GLOBE NEWSWIRE) -- Treasure State Bank ("the Bank") (OTCQB:TRSU), a Montana chartered community bank, today announced:

  • The Bank had a net operating profit of $63,000 for the quarter ended March 31, 2014, as compared to $50,000 for the same quarter last year.
  • Earnings, before non-cash expenses of depreciation and amortization, loan loss provisions, real estate owned write-downs and stock option expense, were $109,000 ($436,000 annualized) for the quarter ended March 31, 2014, as compared to $151,000 ($604,000 annualized) for the same quarter last year.
  • The return on average assets for the quarter ended March 31, 2014 was 0.38%, as compared to 0.30% for the same quarter last year. The return on average equity for the quarter ended March 31, 2014 was 3.52%, as compared to 3.19% for the same quarter last year.
  • $1.9MM of the deferred tax asset is available to be recognized as an income tax benefit after 2013 as additional taxable earnings are recognized.
  • Tier 1 leverage capital was 10.24% as of March 31, 2014, as compared to 10.00% at December 31, 2013. Total Risk-Based Capital was 14.49% as of March 31, 2014, as compared to 14.46% at December 31, 2013.
  • Stockholder's Equity to assets at March 31, 2014 was 10.88% as compared to 10.71% at December 31, 2013.
  • Book value per share was $4.12 as of March 31, 2014 based on 1,736,451 shares outstanding.
  • Total assets decreased $400,000, or 0.61%, to $65.7MM at March 31, 2014, as compared to $66.1MM at December 31, 2013.
  • Cost of funds decreased 8.45% to 0.65% at March 31, 2014, as compared to 0.71% at December 31, 2013 and, and decreased 33.00% as compared with 0.97% at March 31, 2013.
  • The net interest margin (interest income less interest expense divided by average earning assets) decreased to 3.59% for the quarter ended March 31, 2014, as compared to 3.75% for the quarter ended December 31, 2013 and 3.93% at March 31, 2013.
  • Loan loss reserves to total loans were 3.33% ($1.6MM) at March 31, 2014, as compared to 3.41% ($1.6MM) as of December 31, 2013.
  • Total liquidity as of March 31, 2014 was 19.69%, and available liquidity was 19.69%.
  • Non-performing assets decreased $100,000 to $4.1MM at March 31, 2014 from $4.2MM at December 31, 2013 and $5.7MM at March 31, 2013. Non-performing assets to total assets at March 31, 2014 were 6.28% as compared to 6.31% at December 31, 2013 and 8.52% at March 31, 2013.

President and Chief Executive Officer Jim Salisbury stated, "I am pleased to report that the Bank began 2014 with continued improvement in many critical areas that continue to enhance the financial condition of the Bank. Our earnings for this quarter ($63,000) represent continued profitability for the Bank. The earnings for the quarter ended March 31, 2014 of $63,000 compares to $50,000 for the same period last year. The $13,000 increase in quarter over quarter earnings is primarily attributable to a reduction of $24,000 in provision for loan losses and provision for valuation loss on OREO and a reduction in operating expenses of $43,000, partially offset by a decrease in net interest income of $54,000.

"We are pleased with the 28.07% year over year reduction in non-performing assets. Our focus continues to be growing the Bank once again by increasing loan production, which will increase net interest income and loan related fee income. This is evidenced by our $1.4MM increase in gross loans during the quarter. Our net interest margin remains strong at 3.59%, complemented by a 3.33% loan loss reserve to total loans and a continued reduction in the Bank's cost of funds of 33.00% year over year. While the net interest margin has been decreasing due to the current low interest rate environment, the Bank intends to offset the reduction in net interest income by increasing it loan portfolio.

"As noted above, non-performing assets decreased $100,000, or 2.38 %, to $4.1MM at March 31, 2014 from $4.2MM at December 31, 2013 and decreased $1.6MM, or 28.07%, from $5.7MM at March 31, 2013. The Bank sold $21,000 of repossessed property during the quarter ended March 31, 2014, while not adding any new repossessed property.

"Total assets decreased $400,000, or 0.61%, to $65.7MM at March 31, 2014, as compared to $66.1MM at December 31, 2013. Cash and cash equivalents decreased $1.5MM and other assets decreased $300,000 while gross loans increased $1.4MM.

"The Bank believes at this time that its reserve for loan losses is sufficient and that no additional provision for loan loss reserves is currently required. There could be additional charges related to foreclosed property if certain appraisals would indicate the need for additional write downs of these assets.

"Twenty cents of every dollar is held in domestic liquid assets to cushion the Bank from a rising interest rate environment and to allow for the funding of new loans. In addition, the investments that the Bank owns have very short term maturities, which will not fluctuate significantly in market value should interest rates increase. The current interest rate environment does not reward the Bank for having this relatively high liquidity position because earnings are minimal on these investments. Given the many uncertainties with the economy, the continued gradual ending of the Federal Reserve's Quantitative Easing program in 2014, the massive Federal deficits and current strained political situation in Washington D.C., such position is analogous to a form of 'insurance' that the Bank is willing to incur at this time to continue to improve its financial condition."

For more information regarding this release, or the Bank in general, you may contact James A. Salisbury, President and CEO, at 406-543-8700.

About Treasure State Bank

Treasure State Bank, a Montana chartered community bank, is headquartered in Missoula, Montana. The Bank was founded in January 2007. Treasure State Bank currently trades on the OTCBB under the ticker symbol "TRSU." Treasure State Bank serves businesses, professionals, non-profit organizations and individuals through customized banking services and products. For more information, please visit www.treasurestatebank.com.

Safe Harbor Statement

This communication contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Treasure State Bank and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully, and the ability to complete before-mentioned transactions. The Bank undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

CONTACT: James Salisbury, President & CEO or Anne Robinson, Chief Financial Officer Treasure State Bank 3660 Mullan Road, Missoula, MT 59808 (406) 543-8700 jsalisbury@treasurestatebank.com arobinson@treasurestatebank.comSource:Treasure State Bank