Cascade Financial Reports Record Fiscal 2001 Profits; Net Income Increases 23% to $4.6 Million or $.78 Per Share.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)--July 24, 2001 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 for Cascade Bank, today reported record fiscal 2001 profits fueled by a 44% jump in fourth quarter net income. Profits for the year increased 23% to $4.6 million or $0.78 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 on revenue of $22.2 million, compared to $3.7 million, or $0.63 per diluted share, on revenues of $21.0 million for the year ended June June: see month. 30, 2000. "In her first full quarter as 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. , President Carol Nelson demonstrated her leadership and banking acumen acumen Astuteness, perception, perspicacity by delivering outstanding results," said Frank McCord McCord is the placename for several places in the United States:
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , are proving to be a real benefit to our organization." In February February: see month. , Carol K. Nelson was named President and CEO to lead the bank in its efforts to transition to a commercial bank from a traditional thrift thrift: see leadwort. . "Improving efficiency while building our commercial banking business has been a priority," stated Nelson. "Our team has been successful in cutting costs while maintaining high service levels for our customers, which is key to competing in the community business banking market," said Nelson. "We've we've Contraction of we have. we've have focused on the small-business sector of the commercial market and are building strong relationships in this fast-growing adj. 1. tending to spread quickly; - used mostly of plants. Adj. 1. fast-growing - tending to spread quickly; "an aggressive tumor" strong-growing, aggressive community." Revenues (net interest income before provision for losses plus non-interest income) grew 6% in fiscal 2001 to $22.2 million compared to $21.0 million in fiscal 2000. Net interest income after provision for possible credit losses totaled $18.6 million for the year compared to $18.0 million in the fiscal 2000. Non-interest income, which includes fee income and gains on sale, increased 16% to $2.6 million compared to $2.3 million in fiscal 2000. Return on average equity for the fiscal year ended June 30, 2001 improved to 11.26% compared to 10.34% for the prior year. Return on average assets increased to .64% from .60% in the prior year. "We shall continue to strive to improve all measures of our profitability," stated Nelson. "In that context, our plans call for earnings growth of at least 15% for the next fiscal year." Fourth Quarter Financial Highlights (compared to a year ago): -- Fourth quarter net interest income, after provision for losses, increased 9% to $4.9 million. -- Non-interest income in 4Q01 grew 7% to $713,000. -- Fourth quarter net income increased 44% to $1.3 million or .22 per diluted share. -- Business loans balances grew by 32% and real estate construction loans outstanding were up by 24%. Efficiency 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. were down significantly for both the quarter and the year due to bank-wide cost reduction efforts. In the fourth quarter, non-interest expense dropped 4% to $3.7 million and declined 2% to $14.3 million for the year. The bank's efficiency ratio, a measure of profitability, also improved. In fiscal 2001, Cascade's efficiency ratio was 64.4% compared to 69.6% in fiscal 2000. Fourth quarter efficiency improved even more, dropping to 62.7% from 71.3% in the fourth quarter a year ago. Lending Assets increased 8% to $733 million at June 30, 2001 from $676 million a year ago. Cascade's net loan portfolio grew 5% to $565 million at year end from $540 million at June 30, 2000. The loan portfolio remains well diversified diversified (di·verˑ·s and reflects the bank's success in growing its business banking loans with the following mix:
Type FYE 2001 % FYE 2000 %
($ in millions)
Business $ 113.7 20% $ 86.3 16%
R/E Construction 69.9 12% 56.4 10%
Home Equity and
Consumer Loans 60.4 11% 62.1 11%
Commercial Real Estate 56.9 10% 54.3 10%
Residential 165.0 29% 175.9 32%
Multifamily 107.4 19% 112.7 21%
Total Gross Loans $ 573.3 100% $ 547.7 100%
Credit Quality Credit quality was strong at year end with non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. totaling only $1.3 million, or 0.23% of total loans compared to $.6 million or 0.11% of total loans a year ago. The bank remains well-reserved for potential credit losses with reserves more than double non-performing loans. At June 30, 2001, reserves for losses were 0.99% of total loans, up from 0.92% a year ago. "As we diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our loan portfolio into a more commercial mix, we will continue to build reserves to reflect the increased risk inherent in commercial loan products." Nelson noted. Capital Management At June 30, 2001, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was up 20% to $44.6 million, or $8.02 per share, compared to $37.3 million, or 6.74 per share a year earlier. Capital ratios continue to be above the well-capitalized guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. established by regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. . The bank's Capital/Asset Ratio at June 30, 2001 was 7.45%, compared to 7.00% at June 30, 2000. For those same periods the Total Risk-based Capital Ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. were 11.41% and 11.69%, respectively. Chartered in 1916, Cascade Bank is the oldest financial institution headquartered in Snohomish Snohomish can refer to:
Enacted by Congress in 1977, the CRA encourages banks to help meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes, while maintaining safe and sound operations. rating for serving the credit needs of the local community. Cascade Bank operates 14 full service offices, located in Everett, Lynnwood, Marysville, Mukilteo, Smokey Point, Issaquah, Clearview, Woodinville, Lake Stevens and Bellevue. This document may contain 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. that 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, 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, changes in the local economy, 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, interest rate changes and other factors. For a discussion of factors that could cause actual results to differ, please see the Company's publicly available Securities and Exchange Commission filings, including its Annual Report on Form 10-KSB for the year ended December 31, 2000.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share amounts)
Three Months Ended Twelve Months Ended
June 30, June 30,
2001 2000 2001 2000
---- ---- ---- ----
(Unaudited) (Unaudited)
Net interest income $ 5,160 4,713 $ 19,561 18,735
Provision for loan
losses 270 210 980 770
---- ---- ---- ---
Net interest income
after provision
for loan losses 4,890 4,503 18,581 17,965
Non-interest income
Gain on sale of
loans 139 68 336 427
Gain on sale of
securities 56 - 212 -
Service Fees 452 487 1,839 1,591
Other 66 108 257 258
--- ---- ---- ---
Total non-interest
income 713 663 2,644 2,276
---- ---- ------ -----
Total income 5,603 5,166 21,225 20,241
Operating expenses 3,682 3,833 14,301 14,617
Income tax expense 653 456 2,357 1,912
---- ---- ------ -----
Net income $ 1,268 877 $ 4,567 3,712
======== ==== ======== =====
EARNINGS PER SHARE
INFORMATION
Earnings per
share, basic $ 0.23 0.16 $ 0.83 0.68
Earnings per
share, diluted 0.22 0.15 0.78 0.63
Weighted average
number of shares
outstanding:
basic 5,561,198 5,527,966 5,529,063 5,492,804
diluted 5,838,572 5,867,126 5,843,249 5,930,387
PERFORMANCE MEASURES
Return on Equity 11.64% 9.48% 11.26% 10.34%
Return on Assets 0.71% 0.55% 0.64% 0.60%
Efficiency Ratio 62.69% 71.30% 64.40% 69.57%
Net Interest Margin 2.94% 3.00% 2.84% 3.13%
BALANCE SHEET June 30, 2001 June 30, 2000
------------- -------------
(Dollars in thousands except (Unaudited) (Unaudited)
for per share amounts)
Cash and due from banks $ 8,025 13,277
Interest bearing deposits 5,855 83
Securities held to maturity 6,592 10,851
Securities available for sale 129,213 93,444
Loans, net 564,869 539,972
Premises and equipment, net 8,977 9,132
Other assets 9,536 9,417
------ -----
Total assets $ 733,067 676,176
========== =======
Deposits 401,915 398,507
FHLB advances 232,124 215,656
Securities sold under agreement
to repurchase 36,920 5,787
Other liabilities 7,511 8,970
------ -----
Total liabilities 678,470 628,920
-------- -------
Trust preferred securities 10,000 10,000
Stockholders' equity
Common stock and paid in capital 5,541 5,093
Treasury stock (723) -
Retained earnings 39,426 34,862
Accumulated comprehensive
gain/(loss) 353 (2,699)
---- -------
Total stockholders' equity 44,597 37,256
------- ------
Total Liabilities and equity $ 733,067 676,176
========== =======
Book value per common share $ 8.02 6.74
ASSET QUALITY
Non-performing loans/total loans 0.23% 0.11%
Allowance for loan
losses/non-performing loans 432% 873%
Allowance for loan losses/total loans 0.99% 0.92%
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