MISSOULA, Mont., Oct. 30, 2015 (GLOBE NEWSWIRE) — Treasure State Bank (“the Bank”) (OTCBB:TRSU), a Montana chartered community bank, today announced:

  • The Board of Directors, at a meeting held on October 26, 2015, declared a distribution of $0.10 per share. This is the first distribution to shareholders ever paid in the history of the Bank. The distribution is payable on December 2, 2015, to shareholders of record on November 18, 2015.
     
  • The Board of Directors is analyzing strategies to best maximize the return on equity for shareholders, including, but not limited to, a potential stock repurchase program.
     
  • The Bank had an unaudited net operating profit of $149,000 for the quarter ended September 30, 2015, as compared to $75,000 for the quarter ended June 30, 2015, $99,000 for the quarter ended March 31, 2015, and $133,000 for the quarter ended September 30, 2014. The prior year’s net operating profit of $133,000 for the quarter ended September 30, 2014 was not affected by income taxes. On a pre-tax basis, the net operating income for the quarter ended September 30, 2015 was $250,000, as compared to pre-tax earnings of $125,000 for the quarter ended June 30, 2015, $160,000 for the quarter ended March 31, 2015 and the $133, 000 for the quarter ended September 30, 2014.
     
  • 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 $312,000 ($1.2MM annualized) for the quarter ended September 30, 2015, as compared to $159,000 ($636,000 annualized) for the quarter ended June 30, 2015, $223,000 ($892,000 annualized) for the quarter ended March 31, 2015 and $194,000 ($776,000 annualized) for the quarter ended September 30, 2014.
     
  • On a year-to-date basis, the Bank had a net operating profit of $324,000 for the nine month period ended September 30, 2015 as compared to $329,000 for the same period last year. The prior year’s net operating profit of $329,000 was not affected by income taxes. On a pre-tax basis, the net operating income for the nine month period ended September 30, 2015 was $535,000, as compared to the $329,000 for the same period last year.
     
  • Earnings before non-cash expenses of depreciation and amortization, loan loss provisions, real estate owned write-downs and stock option expense and income tax benefit were $723,000 ($964,000 annualized) for the nine month period ended September 30, 2015, as compared to $549,000 ($732,000 annualized) for the same period last year.
     
  • The annualized return on average assets for the quarter ended September 30, 2015 was 0.82% as compared to 0.43% for the quarter ended June 30, 2015, 0.55% for the quarter ended March 31, 2015, and 0.78% for the quarter ended September 30, 2014. The return on average assets on a pre-tax basis for the quarter ended September 30, 2015 was 1.37%, as compared to 0.71% for the quarter ended June 30, 2015, 0.89% for the quarter ended March 31, 2015 and 0.78% for the quarter ended September 30, 2014.
     
  • The annualized return on average assets for the nine month period ended September 30, 2015 was 0.60%, as compared to 0.66% for the same period last year. The return on average assets on a pre-tax basis for the nine month period ended September 30, 2015 was 0.99%, as compared to 0.66% for the same period last year.
     
  • The annualized return on average equity for the quarter ended September 30, 2015 was 6.25%, as compared to 3.21% for the quarter ended June 30, 2015, 4.23% for the quarter ended March 31, 2015 and 7.16% for the quarter ended September 30, 2014. The return on average equity on a pre-tax basis for the quarter ended September 30, 2015 was 10.44% as compared to 5.32% for the quarter ended June 30, 2015, 6.86% for the quarter ended March 31, 2015 and 7.16% for the quarter ended September 30, 2014.
     
  • The annualized return on average equity for the nine month period ended September 30, 2015 was 4.60%, as compared to 5.91% for the same period last year. The return on average equity on a pre-tax basis for the nine month period ended September 30, 2015 was 7.60%, as compared to 5.91% for the same period last year.
     
  • Earnings per share for the quarter were $0.086 ($0.34 annualized), and year-to-date were $0.19 ($0.25 annualized) based on 1,740,951 shares outstanding. Earnings per share on a pre-tax basis for the quarter were $0.14 ($0.57 annualized), and year-to-date were $0.31 ($0.41 annualized).
     
  • Tier 1 leverage ratio was 10.31% as of September 30, 2015, as compared to 10.42% as of December 31, 2014. Total capital ratio was 13.93% as of September 30, 2015, as compared to 14.14% at December 31, 2014.
     
  • Stockholder’s Equity to assets at September 30, 2015 was 13.39% as compared to 13.01% at December 31, 2014.
     
  • Book value per share was $5.49 at September 30, 2015, based on 1,740,951 shares outstanding.
     
  • Total assets decreased $0.5MM to $71.4MM at September 30, 2015, as compared to $71.9MM at December 31, 2014.
     
  • Cost of funds at September 30, 2015 was 0.57%, as compared to 0.61% at September 30, 2014.
     
  • The net interest margin (interest income less interest expense divided by average earning assets) was 3.58% for the quarter ended September 30, 2015, as compared to 3.56% at June 30, 2015 and 3.61% for the same period last year.
     
  • Loan loss reserves to total loans were 2.67% ($1.4MM) at September 30, 2015, as compared to 2.76% ($1.3MM) at December 31, 2014.
     
  • Total liquidity as of September 30, 2015 was 17.41%, and available liquidity was 17.41%.
     
  • Non-performing assets decreased $200,000 during the quarter to $3.3MM at September 30, 2015, from $3.5MM at June 30, 2015 and down $800,000 from $4.1MM at December 31, 2014.

President and Chief Executive Officer Jim Salisbury stated, “the date of this earnings release marks the sixth anniversary of my being President/CEO of Treasure State Bank. The Board of Directors, our employees, and I are very pleased to announce the first ever distribution to be paid by the Bank to its shareholders since its founding in January 2007. The Bank has been through some very difficult financial times as the result of the massive economic downturn that began in late 2008. As noted above, the Bank’s earnings, capital position, liquidity position and substantially reduced non-performing assets provides the Bank with the ability to pay a distribution as a return on investment for our very patient shareholders. I am eternally grateful for the patience of our shareholders and the many dedicated customers of the Bank. The Board, at this time, plans to pay an annual distribution based on the earnings of the prior four quarters beginning in December and ending in September. This policy may change as the financial condition of the Bank changes going forward.

In the press release reporting the fourth quarter 2014 earnings, I noted that going forward the Bank will make a provision for income taxes on earnings for financial statement purposes at approximately 39.0% and this will reduce earnings on a comparable basis. However, because the tax provision is offset by net operating loss carryforwards, there will not be a cash effect to the Bank until all of the net operating loss carryforwards are fully utilized. Management expects that it will be several years before the Bank will be required to actually pay income taxes. Therefore, some discussions focus on pre-tax earnings as a comparison to prior periods.

In the first quarter of 2015, the Bank reported record pre-tax earnings of $160,000. This quarter’s pre-tax earnings of $250,000 represent a new record of earnings for the Bank. Mortgage loan fee income continues to be very strong and this quarter the Bank recognized $92,000 in gains on the sale of repossessed assets. The return on equity for the current quarter was 6.25% as compared to 7.16% for the same period last year. However, on a pre-tax basis, the return on equity for the current quarter was 10.44%, as compared to 7.16% for the same period last year. Stockholders’ equity at September 30, 2015 was $9.6MM as compared to $7.4MM at September 30, 2014. This is primarily the result of the $1.88MM income tax benefit reported for the quarter ended December 31, 2014.

Our focus continues to be growing the Bank by increasing loan production, which will increase net interest income and loan related fee income. Loan growth during the quarter was $1.80MM, or an increase of 3.63%. Our net interest margin increased during the quarter and remains strong at 3.55%, complemented by a 2.67% loan loss reserve to total loans and a continued reduction in the Bank’s cost of funds of 6.56% year over year to 0.57% at September 30, 2015 as compared to 0.61% for the same period last year. Our reduction in cost of funds has slowed and is probably near its low.  

As noted above, non-performing assets have decreased $800,000, year-to-date, or 19.51%, to $3.3MM at September 30, 2015 from $4.1MM at December 31, 2014.

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 necessary. There were no loan loss provisions during the comparative quarters or year to date performance. OREO loss provisions for the nine month period ended September 30, 2015 were $15,000 as compared to $81,000 for the same period last year. There could be additional charges related to foreclosed property if certain appraisals indicate the need for additional write downs of these assets, none of which we are currently aware.

With the Bank’s stock trading at a significant discount to its $5.49 book value at September 30, 2015, the Board of Directors feels it is prudent to explore options to maximize shareholder value. This would include, but not be limited to, a potential stock repurchase program.

Seventeen 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 global economy and civil unrest, talk of rate increases soon by the Federal Reserve, 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.