Cascade Financial Posts Record Third Quarter Profits Earnings Per Share Rise 16% to $0.36.Business Editors EVERETT Everett. 1 City (1990 pop. 35,701), Middlesex co., E Mass., an industrial suburb of Boston, on the Mystic River; settled c.1643, set off from Malden 1870, inc. as a city 1892. , Wash.--(BUSINESS WIRE)--Oct. 21, 2003 Cascade A connected series of devices or images. It often implies that the second and subsequent device takes over after the previous one is used up. For example, cascading tapes in a dual-tape backup system means the second tape is written after the first one is full. Financial Corporation (Nasdaq:CASB CASB Cost Accounting Standards Board CASB Colorado Association of School Boards CASB Canadian Aviation Safety Board CASB Catalogs and Surveys Branch CASB Chinese Association at Stony Brook CASB Council for the Advancement of Small Business ), parent company of Cascade Bank, today reported its twelfth consecutive record quarterly profit driven by strong growth in the business banking portfolio with continued strong asset quality. Third quarter profits rose 18% to $2.4 million, or $0.36 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $2.1 million, or $0.31 per diluted share, in the third quarter a year ago. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , Cascade's profits increased 20% to $7.1 million, or $1.05 per diluted share, compared to $5.9 million, or $0.90 per diluted share, in the first nine months of 2002. "Over the past three years, we've we've Contraction of we have. we've have focused on building a dynamic sales and service culture and expanding our commercial lending capabilities. The success of these initiatives has energized the entire organization and generated double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" growth in profits," said Carol K. Nelson, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our experienced lenders and skilled staff deliver the quality of service that our customers require from financial professionals. We believe our service standards contribute to our success in the local marketplace, particularly with business owners." Business, commercial real estate and construction loans account for 61% of Cascade's loan portfolio, up substantially from 49% a year ago and 37% three years ago. Conference Call The company will host a conference call on October October: see month. 22, 2003, at 10:00 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT (1:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). Investment professionals may dial in at 303-262-2050 and other interested parties may listen at www.cascadebank.com.
Operating Financial Highlights (periods ended 09/30/03 compared
to 09/30/02)
Three Months Nine Months
---------------------- ----------------------
-- Revenues increased 10% to $8.2 million 11% to $24.7 million
-- Net interest income
increased 9% to $6.8 million 5% to $20.3 million
-- Net income increased 18% to $2.4 million 20% to $7.1 million
-- EPS increased 16% to $0.36 17% to $1.05
-- Return on average
equity rose to 15.54% from 15.19% 15.87% from 15.51%
-- Return on average
assets grew to 1.11% from 1.08% 1.13% from 1.04%
-- The efficiency
ratio improved to 52.8% from 55.1% 53.9% from 54.7%
Balance Sheet Highlights (at 09/30/03 compared to 09/30/02) -- Business loans grew 50% to $198 million and now account for 35% of the loan portfolio. -- Asset quality remained strong with nonperforming loans at 0.21% of total loans. -- Allowance for loan losses grew to 1.33% of total loans compared to 1.21%. Operating Results Growth in business loans, increased service fee revenue, income from bank-owned life insurance and gains on sale of loans and securities boosted revenues in the third quarter and first nine months of 2003. Total revenues (net interest income before provision for loan losses plus non-interest income) grew 10% to $8.2 million in the third quarter of 2003. Year-to-date, revenues increased 11% to $24.7 million. Net interest income before provision increased 9% to $6.8 million in the third quarter of 2003 compared to $6.3 million in the like quarter a year ago. For the first nine months of 2003, net interest income before provision increased 5% to $20.3 million compared to $19.3 million in the same period last year. "Low interest rates continue to pressure our net interest margin, which reflects yield on earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin , as assets with relatively high yields are refinanced or paid down. Offsetting some of this runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. in higher yielding assets are the prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. we're we're Contraction of we are. we're we are making on higher cost Federal Home Loan Bank (FHLB FHLB Federal Home Loan Bank ) borrowings and the strong growth in lower cost deposits," said Lars Johnson, Chief Financial Officer. Third quarter net interest margin was down 12 basis points to 3.25% compared to the same quarter in 2002. Year-to-date net interest margin was off 14 basis points at 3.32% compared to the year ago period. "With the increase in our ratio of reserves to loans and the strong performance of the portfolio, our provision for loan losses has declined moderately," Johnson noted. The provision for loan losses was $300,000, level with that taken in the second quarter this year and $75,000 lower than that taken in the third quarter last year. Year-to-date, provision for loan losses was $975,000, compared to $1.5 million a year ago. The allowance for loan losses increased to $7.6 million, or 632% of nonperforming loans and 1.33% of total loans at September September: see month. 30, 2003, compared to $6.9 million, or 358% of nonperforming loans and 1.21% of total loans a year ago. Other operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 18% in the third quarter and 47% year to date, reflecting growth in service fee income and gains from loan sales generated from record mortgage lending activity. Service fees increased 18% to $488,000 in the third quarter as company-wide initiatives gained momentum. Year-to-date, service fees were up 10% to $1.3 million. Residential mortgage originations almost doubled reaching $37 million in the third quarter and $97 million year-to-date compared to the like periods of 2002. "These record volumes reflect the unprecedented refinancing Refinancing An extension and/or increase in amount of existing debt. activity generated from what appears to be the bottoming of mortgage rates. Such high levels of refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. activity are likely to decline in subsequent quarters resulting in lower gains on sale of loans," Johnson said. Other operating income was $1.4 million in the third quarter, which included $680,000 in gains on sale of securities and loans, compared to $1.1 million in the third quarter a year ago, which included $691,000 in gains on sale of securities and loans. Other income for the first nine months grew 47% to $4.4 million, which included $2.5 million in gains on sales of securities and loans, compared to $3.0 million, which included $1.3 million in gains on sales of securities and loans a year ago. Third quarter operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased 6% to $4.3 million compared to $4.1 million for the third quarter of 2002. Year-to-date operating expenses were $13.3 million, a 9% increase from the $12.2 million in the prior year period. As a result of the strong top-line growth and moderate expense increases, Cascade's efficiency ratio (operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. divided by total revenues) improved to 52.8% in the third quarter compared to 55.1% in the third quarter a year ago. Return on average equity improved to 15.54% for the quarter from 15.19%. Return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). rose to 1.11%, compared to 1.08% for the like quarter in the previous year. Year-to-date, the efficiency ratio improved to 53.9% compared to 54.7% a year ago, while the return on average equity improved to 15.87% from 15.51% for the first nine months last year. Asset Management Total assets increased 13% to $870 million at the end of the third quarter, compared to $772 million as of September 30, 2002. Investment securities increased to $259 million from $168 million a year ago. The growth in the investment portfolio continued to offset reductions in the residential loan portfolio. "Business and commercial real estate lending remained strong in the quarter," said Johnson. The business loan portfolio increased by 50% to $198 million and the commercial real estate loan portfolio grew 21% from year ago levels, offsetting declines in construction and residential loans. Total loans were up 1% to $573 million. "The refinancing wave continued to reduce our residential and multifamily loan balances, and our portfolio composition reflects the strategic shift into the commercial sector." Deposit growth was robust in the third quarter with total deposits increasing 16% to $555 million from $477 million at the end of the third quarter last year. Checking accounts increased 20% to $61 million, savings and money market accounts grew 9% to $137 million and time deposits rose 18% to $356 million. Credit Quality Credit quality remained strong with nonperforming loans decreasing to $1.2 million at the end of the quarter from $1.9 million a year ago. At September 30, 2003, nonperforming loans were 0.21% of total loans compared to 0.34% of total loans a year earlier. The ratio of nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. to total assets was 0.18% at the end of the third quarter compared to 0.33% one year ago. Net charge-offs in the third quarter increased to $234,000, or 0.04% of total loans, compared to $167,000, or 0.03% of total loans at September 30, 2002.
INCOME STATEMENT
($ in thousands, except per share)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Interest
Income $ 12,506 $ 12,748 -1.9% $ 37,786 $ 39,419 -4.1%
Interest
expense 5,660 6,456 -12.3% 17,499 20,094 -12.9%
--------- --------- --------- ---------
Net interest
income 6,846 6,292 8.8% 20,287 19,325 5.0%
Provision
for loan
losses 300 375 -20.0% 975 1,495 -34.8%
--------- --------- --------- ---------
Net interest
income after
provision
for loan
losses 6,546 5,917 10.6% 19,312 17,830 8.3%
Other income
Gain on sale
of loans 275 159 73.0% 748 388 92.8%
Gain on
sale of
securities 405 532 -23.9% 1,745 919 89.9%
Service fees 488 415 17.6% 1,338 1,219 9.8%
Gain/(loss)
on sale of
real estate - (2) n/m 48 351 -86.3%
Bank owned
life
insurance 155 7 n/m 450 23 n/m
Other 30 35 -14.3% 90 111 -18.9%
--------- --------- --------- ---------
Total other
income 1,353 1,146 18.1% 4,419 3,011 46.8%
Total income 7,899 7,063 11.8% 23,731 20,841 13.9%
Compensation
expense 2,341 2,144 9.2% 7,147 6,620 8.0%
Other
operating
expenses 1,846 1,710 8.0% 5,315 5,018 5.9%
FHLB
prepayment
fees 146 244 -40.2% 863 569 51.7%
--------- --------- --------- ---------
Total other
expense 4,333 4,098 5.7% 13,325 12,207 9.2%
--------- --------- --------- ---------
Net income
before tax 3,566 2,965 20.3% 10,406 8,634 20.5%
Income tax
expense 1,133 907 24.9% 3,310 2,717 21.8%
--------- --------- --------- ---------
Net income $ 2,433 $ 2,058 18.2% $ 7,096 $ 5,917 19.9%
========= ========= ========= =========
EARNINGS PER
SHARE INFORMATION
Earnings
per share,
basic $ 0.37 0.32 15.6% $ 1.09 0.93 17.2%
Earnings
per share,
diluted 0.36 0.31 16.1% $ 1.05 0.90 16.7%
Weighted
average
shares
outstanding:
basic 6,571,118 6,444,037 6,534,596 6,375,358
diluted 6,809,920 6,642,442 6,758,129 6,588,826
BALANCE SHEET Sept.30, Dec. 31, Sept.30, Annual
($ in 000s) (Unaudited) 2003 2002 2002 Change
-------- -------- -------- ------
Cash and due from banks $ 9,880 $ 9,640 $ 8,500 16%
Interest bearing deposits 9,795 10,955 23,238 -58%
Securities held to maturity 88,361 49,078 47,874 85%
Securities available for sale 171,123 159,897 119,877 43%
-------- -------- --------
Total Securities 259,484 208,975 167,751 55%
Loans
Business 198,003 142,273 131,922 50%
R/E construction 71,145 84,229 82,283 -14%
Commercial real estate 78,733 63,108 64,905 21%
Home equity/consumer 34,168 49,331 56,336 -39%
Residential 106,580 122,561 130,942 -19%
Multifamily 84,873 94,245 99,219 -14%
-------- -------- --------
Total loans 573,502 555,747 565,607 1%
Deferred loan fees (2,210) (2,198) (2,316) -5%
Allowance for loan losses (7,642) (6,872) (6,859) 11%
-------- -------- --------
Loans, net 563,650 546,677 556,432 1%
Premises and equipment 8,543 9,261 8,748 -2%
Bank owned life insurance 11,029 10,619 - n/m
Other assets 7,153 8,026 8,111 -12%
-------- -------- --------
Total assets $869,534 $804,153 $772,780 13%
======== ======== ========
Deposits
Checking accounts $ 61,163 $ 54,570 $ 50,960 20%
Savings and money market
accounts 137,355 113,951 125,697 9%
Certificates of deposit 356,135 341,329 300,603 18%
-------- -------- --------
Total deposits 554,653 509,850 477,260 16%
FHLB advances 192,000 197,500 192,500 0%
Securities sold under agreement
to repurchase 40,588 20,569 30,175 35%
Other liabilities 9,840 9,594 8,573 15%
Trust preferred securities (TPS) 10,000 10,000 10,000 0%
-------- -------- --------
Total liabilities 807,081 747,513 718,508 12%
Stockholders' equity
Common stock and paid in
capital 11,840 11,548 11,398 4%
Treasury stock - (1,347) (1,347) -100%
Retained earnings 50,189 45,438 43,607 15%
Accumulated comprehensive
gain/(loss) 424 1,001 614 -31%
-------- -------- --------
Total stockholders' equity 62,453 56,640 54,272 15%
-------- -------- --------
Total Liabilities and equity $869,534 $804,153 $772,780 13%
======== ======== ========
FINANCIAL HIGHLIGHTS
($ in thousands, except per share)
Three Months Nine Months
Ended Ended
Sept. 30, Sept. 30,
2003 2002 2003 2002
------- ------- ------- -------
PERFORMANCE MEASURES
Return on Equity 15.54% 15.19% 15.87% 15.51%
Return on Assets 1.11% 1.08% 1.13% 1.04%
Efficiency Ratio 52.84% 55.10% 53.93% 54.65%
Net Interest Margin 3.25% 3.37% 3.32% 3.46%
ADDITIONAL INFORMATION Sept. 30, Dec. 31, Sept. 30,
2003 2002 2002
---------- ---------- ----------
Book value per common share $ 9.48 $ 8.74 $ 8.39
Capital/Asset Ratio (including
TPS) 8.33% 8.29% 8.32%
Average assets $ 865,399 $ 803,382 $ 759,212
Average earning assets $ 839,846 $ 783,950 $ 744,384
Average equity $ 62,058 $ 55,313 $ 53,826
Shares outstanding at period end $6,584,914 $6,484,120 $6,471,443
ASSET QUALITY
Nonperforming loans (NPLs) $ 1,209 $ 956 $ 1,916
Net loan charge-offs (recoveries) $ 234 $ 387 $ 167
Net charge-offs/total loans (%) 0.04% 0.07% 0.03%
Nonperforming loans/total loans 0.21% 0.17% 0.34%
Allowance for loan losses/non-
performing loans 632% 719% 358%
Allowance for loan losses/total
loans 1.33% 1.24% 1.21%
Nonperforming assets/total assets 0.18% 0.18% 0.33%
About Cascade Financial Established in 1916, Cascade Bank, the only operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of Cascade Financial Corporation, is a state chartered commercial bank headquartered in Snohomish County, Washington Snohomish County is a county located in the U.S. state of Washington. It is named after the Snohomish tribe. Since 2000, the county's population has grown from 606,024 to 686,300 residents (2007 figures), making it one of the fastest-growing in the state, ranking third in overall . Cascade Bank operates 15 full service offices, located in Everett, Lynnwood Lynnwood, city (1990 pop. 28,695), Snohomish co., W central Wash., a residential and industrial suburb of Seattle; inc. 1959. Aerospace parts, communications and electrical equipment, electronic components, precious metal jewelry, and scales and balances are among , Marysville Marysville is the name of several places. Locations Australia
John Stevens, 1749–1838, b. New York City, was graduated from King's College (now Columbia Univ.) in 1768. and Bellevue Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. . In June June: see month. 2003, Washington CEO Magazine ranked Cascade Bank the number one medium sized "Best Companies to Work For" in Washington State. This release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 ("PSLRA PSLRA Private Securities Litigation Reform Act PSLRA Public Service Labour Relations Act (Canada) "), including statements about the financial condition, results of operations and earnings outlook of the Company. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to, impact of the current national and regional economic recession on small business loan demand in the Puget Sound Puget Sound (py `jĕt), arm of the Pacific Ocean, NW Wash., connected with the Pacific by Juan de Fuca Strait, entered through the Admiralty Inlet and extending in two arms c. area, loan delinquency delinquencyCriminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates, changes in portfolio composition, the bank's ability to attract quality commercial business, interest rate movements and the impact on margins such movement may cause, changes in the demographic make-up Make-up The amount of deficiency when a cash flow or capital item is deficient. For example, an interest make-up relates to the interest amount above a ceiling percentage. of the Company's market, fluctuation Fluctuation A price or interest rate change. in demand for the Company's products and services, the Company's ability to attract and retain qualified people, regulatory changes, competition with other banks and financial institutions, and other factors. For a discussion of factors that could cause actual results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. Words such as "expects," "anticipates," "believes," estimates," "intends," "strategy," other similar expressions or future or conditional verbs such as "will," "may," "should," "would," and "could" are intended to identify such forward-looking statements. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . This statement is included for the express purpose of protecting the Company under PSLRA's safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions. |
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