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Treasure State Bank Reports Second Quarter 2013 Operating Results

Stocks in this article: TRSU

MISSOULA, Mont., July 30, 2013 (GLOBE NEWSWIRE) -- Treasure State Bank ("the Bank") (OTCBB:TRSU), a Montana chartered community bank, today announced:

  • The Bank had a net profit of $415,000 for the quarter ended June 30, 2013, as compared to $50,000 for the quarter ended March 31, 2013 and $76,000 for the same quarter last year. This quarter's earnings include a $700,000 income tax benefit, which was partially offset by a $350,000 additional provision for OREO write down. Therefore, net operating profit for the quarter was $65,000.
  • Earnings, before non-cash expenses of depreciation and amortization, loan loss provisions, real estate owned write-downs, stock option expense and income tax benefit were $172,000 ($688,000 annualized) for the quarter ended June 30, 2013, as compared to $151,000 ($604,000 annualized) for the quarter ended March 31, 2013 and $214,000 ($856,000 annualized) for the same quarter last year.
  • On a year-to-date basis, the Bank had an operating profit of $465,000, as compared to $118,000 for the same period last year. The year-to-date earnings include a $700,000 income tax benefit, which was partially offset by a $350,000 additional provision for OREO write down. Therefore, net operating profit on a year-to-date basis was $115,000.
  • Earnings, before non-cash expenses of depreciation and amortization, loan loss provisions, real estate owned write-downs and stock option expense were $323,000 ($646,000 annualized) for the six month period ended June 30, 2013, as compared to $391,000 ($782,000 annualized) for the same period last year.
  • Excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down the annualized return on average assets for the quarter ended June 30, 2013 was 0.39%, as compared to 0.30% for the quarter ended March 31, 2013 and 0.41% for the same quarter last year.
  • Excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down the annualized return on average equity for the quarter ended June 30, 2013 was 3.90%, as compared to 3.19% for the quarter ended March 31, 2013 and 5.22% for the same quarter last year.
  • Excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down the annualized return on average assets for the six month period ended June 30, 2013 was 0.35%, as compared to 0.32% for the same six month period last year.
  • Excluding the $700,000 income tax benefit and $350,000 additional provision for OREO write down the annualized return on average equity for the six month period ended June 30, 2013 was 3.44%, as compared to 4.06% for the same six month period last year.
  • Tier 1 leverage capital was 9.67% as of June 30, 2013, as compared to 9.41% as of March 31, 2013 and 7.92% as of June 30, 2012. Total Risk-Based Capital was 13.36% as of June 30, 2013, as compared to 13.37% as of March 31, 2013 and 11.93% as of June 30, 2012.
  • Stockholder's Equity to assets at June 30, 2013 was 10.10% as compared to 9.16% at December 31, 2012.
  • Book value per share was $4.08 as of June 30, 2013, based on 1,635,821 shares outstanding.
  • Total assets decreased $300,000 to $66.4MM at June 30, 2013, as compared to $66.7MM at March 31, 2013.
  • Cost of funds at June 30, 2013 was 0.91%, as compared to 0.97% at March 31, 2013 and 1.19% at June 30, 2012.
  • The net interest margin (interest income less interest expense divided by average earning assets) decreased to 3.86% for the quarter ended June 30, 2013, as compared to 3.93% for the quarter ended March 31, 2013 and 3.30% for the quarter ended June 30, 2012.
  • Loan loss reserves to total loans were 3.12% ($1.5MM) at June 30, 2013, as compared to 3.95% at March 31, 2013 and 4.04% as of June 30, 2012.
  • Total liquidity as of June 30, 2013 was 18.5%, and available liquidity was 17.8%.
  • Non-performing assets decreased 10.5% for the quarter to $5.1MM at June 30, 2013, down from $5.7MM as of March 31, 2013. Year over year non-performing assets decreased 17.7% from $6.2MM at June 30, 2012.

President and Chief Executive Officer Jim Salisbury stated, "While the quarter just ended reflects a net profit of $415,000, the earnings include two unusual items. First, the Bank issued a special press release on May 1, 2013 announcing the release of Deferred Tax Assets in the amount of $700,000. This resulted in an increase in net income for the quarter just ended of an additional $700,000, which represents an income tax benefit resulting from a deferred tax asset valuation allowance reversal. The total amount of deferred tax asset valuation allowance is $2.6MM at December 31, 2012, but the Bank has concluded to release only $700,000 of the $2.6MM in order to be conservative and to be certain that future earnings will continue to justify the release of the remaining $1.9MM. The remaining $1.9MM is available to be recognized as an income tax benefit in future periods as additional taxable earnings are anticipated. The Bank has reported profitability for ten consecutive quarters, asset quality has improved, net interest margins remain strong, cost of funds are decreasing and the Bank believes that the allowance for loan loss reserve is adequately funded. This, along with a reasonable expectation of continued profitability has prompted management to determine that those tax assets would more likely than not be recovered through future taxable income and that maintaining the entire valuation allowance was no longer necessary. Second, the Bank incurred an additional $350,000 provision for OREO write down. The OREO is related to vacant repossessed lots in a prestigious resort. The lots have not sold for some time and the market for them remains weak. Another financial institution that also owns vacant lots in the subdivision recently reduced their sales price substantially, therefore forcing the Bank to adjust the carrying value of the lots due to the lack of reasonable market data for those properties.

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