SEATTLE, Feb. 6, 2008 (PRIME NEWSWIRE) -- EvergreenBancorp, Inc. (OTCBB:EVGG), the holding company for EvergreenBank, today announced that following a fourth-quarter net after-tax charge totaling $1.4 million, or $0.59 per share, it earned $1.3 million, or $0.53 per diluted share in 2007, and lost $929,000, or $0.39 per basic share, in the fourth quarter. The non-cash charge represents EvergreenBank's estimated proportionate share of ongoing litigation liabilities involving Visa and its member banks. In 2006 EvergreenBancorp earned $1.8 million, or $0.88 per diluted share, for the full year, and $593,000, or $0.27 per diluted share, in the fourth quarter a year ago. Adjusted to exclude the net charge, EvergreenBancorp's full-year 2007 net income was $2.7 million, or $1.13 per diluted share, and its fourth-quarter 2007 net income was $473,000, or $0.20 per diluted share.
"Our team's productivity and efficiency were highlights of the year. Thanks to improving efficiencies, we leveraged 28% loan growth into a 47% net-income gain, excluding the Visa charge. Our team remained productive in the fourth quarter as total loans rose 6% sequentially or at an annualized rate of 24%. As we enter 2008, our lending officers remain focused on making high-quality commercial and industrial loans. Expanding our presence in south King County, with the planned opening of a branch office in Kent, will help us meet our goal," stated Gerald O. Hatler, president and chief executive officer. "Operating in the Puget Sound region is an advantage. The region's economy is being driven by a continued positive outlook for aerospace and technology," added Hatler.
Notable Fourth-Quarter Events
Three significant items impacted EvergreenBancorp's 2007 fourth-quarter and full-year results. Cumulatively, these items lowered reported earnings per share by $0.50 in the quarter and for the year. The first item represented a non-cash charge totaling $2.1 million pretax, or $0.59 per share after-tax, and relates to the company's estimate of its proportionate share of obligations to indemnify Visa Inc. for certain litigation matters. This amount includes a $1.4 million pretax charge that was previously announced. The company expects that the value of the Visa stock that EvergreenBancorp will receive upon completion of Visa's initial public offering will exceed the amount of the $2.1 million charge. The offering is anticipated to close sometime in 2008. The second item relates to a gain of $1.0 million pretax, or $0.28 per share on an after-tax basis, related to the termination of the company's post-retirement plan. This action not only positively impacted the company's results in 2007, but will also reduce compensation and benefit expense in future years. The last item was a cash loss of $444,000, or $0.19 per share after tax, resulting from the sale of a significant investment held by the bank. The bank had owned the investment, a mutual fund investing in highly-rated short-term mortgage backed securities, for approximately five years. There were two primary reasons behind the company's decision to sell the investment. First, the company continues to experience strong loan growth and the sale of the investment provided an opportunity to reinvest the proceeds in loans with a substantially higher yield. Second, market turmoil and lack of liquidity affecting even high-quality mortgage-related investments increased the risk of holding the investment.
2007 Financial Highlights
(for the twelve month period ended December 31, 2007, compared with December 31, 2006)
* Revenues, defined as the sum of net interest income before provision for loan losses and noninterest income, increased 29% to $18.5 million. * Total loans advanced 28%. * Total assets rose 23%. * Deposits were up 21%. * The efficiency ratio was 67.81%% versus 76.24%, adjusted for non-cash charge. * Asset quality remained strong; nonperforming assets were 0.19% of total assets.
Operating Results
Revenue in 2007 rose 29% to $18.5 million from $14.4 million in 2006. Fourth-quarter revenue gained 30% to $5.2 million from $4.0 million in the fourth quarter a year ago. In 2007, net interest income, before the provision for loan losses, rose 27% to $16.0 million from $12.5 million in 2006. After the provision for loan losses, net interest income increased 21%. For the quarter, net interest income, before the provision for loan losses, rose 19% and 4% after the provision for loan losses. The provision for loan losses in fourth-quarter 2007 increased to $758,000 from $232,000 in the year-ago quarter. The increase primarily relates to a single nonperforming customer loan relationship. Otherwise, the increase in the provision for loan losses rose inline with the loan portfolio's growth. "On the whole, credit quality within our portfolio remains high. With the exception of this one relationship, we continue to enjoy very low delinquency and nonperforming assets levels," stated Michael Tibbits, executive vice president and chief credit officer.
Noninterest income was up 39% for the year and up 114% for the quarter.
EvergreenBancorp's net interest margin (taxable-equivalent) was 4.17% in the fourth quarter of 2007 compared with 4.57% in the fourth of 2006. The cumulative effects of a 100 basis point decline in the federal funds rate over a three-month period affected net interest margin. Also, the decrease reflects the company's greater reliance on non-core funding sources to meet continued strong loan demand. Full-year 2007 net interest margin (taxable-equivalent) was 4.37% compared with 4.67% for all of 2006.
Noninterest expense rose 34% in 2007 to $14.7 million compared with $11.0 million during 2006. In the fourth quarter, noninterest expense increased 95% to $5.6 million compared to $2.9 million in the same quarter a year ago.
Adjusted for the non-cash Visa litigation charge, the efficiency ratio for the year dropped to 67.81% from 76.24% in 2006 and stood at 67.57% for the fourth quarter versus 72.59% in the comparable year-ago quarter. "The solid improvement in our efficiency ratio for the year reflects the productivity levels of our lending officers. Noninterest expense grew at a slower rate than the bank, overall, and reflects continued investment in the people and infrastructure we need to support the growth we expect going forward," stated Gordon D. Browning, chief financial officer.
Balance Sheet Results
Total assets grew 23% to $422.9 million at December 31, 2007, from $343.5 million at year-end 2006. Asset quality remained solid with a ratio of nonperforming assets to total assets of 0.19% compared with 0.14% at year-end 2006.
Total loans rose 28% to $375.4 million from $292.4 million in the year-ago period. The allowance for loans losses stood at $4.0 million or 1.07% of total loans compared with $2.8 million or 0.95% of total loans at December 31, 2006 and $3.7 million or 1.05% of total loans in the third quarter of 2007.
Deposits rose 21% to $309.5 million, a $53.0 million increase from prior levels one year ago.
Shareholders' equity was up 7% year over year to $25.5 million. On a per share basis, shareholders' equity edged up 6% to $10.69. In September 2006, EvergreenBancorp issued 310,500 common shares through a common stock offering.
About EvergreenBancorp and EvergreenBank
Founded in 1971, EvergreenBank is a subsidiary of EvergreenBancorp, Inc., a bank holding company headquartered in Seattle, Washington. EvergreenBank is an independent community bank with six offices in Seattle, Bellevue, Lynnwood, and Federal Way. The Bank offers a full suite of personal and business banking services. Services include commercial, real estate, and consumer lending; savings, checking, and certificate of deposit accounts; health savings accounts; Internet banking; and merchant credit card processing services. Visit www.EvergreenBancorp.com to learn more.
This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning business strategies and their intended results, and similar statements concerning expectations that are not historical facts. The forward-looking statements in this press release are subject to numerous risks and uncertainties, including the effects of economic conditions, demand for financial services, competitive conditions, regulatory changes, and the availability of capital to finance growth, which could cause actual results to differ materially from those expressed in or implied by the statements herein.
EvergreenBancorp, Inc.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Quarterly
---------------------------------------------
(unaudited) Annual
(dollars in thousands 2007 2007 2006 %
except per-share data) 4th Qtr 3rd Qtr 4th Qtr Chg
---------------------------------------------
EARNINGS RESULTS
Revenue $ 5,192 $ 4,813 $ 3,980 30%
Net interest income $ 4,154 $ 4,298 $ 3,495 19%
Provision for loan
losses $ 758 $ 525 $ 232 227%
Noninterest income $ 1,038 $ 515 $ 485 114%
Noninterest expense $ 5,630 $ 3,103 $ 2,889 95%
Net income (loss) $ (929) $ 802 $ 593 NM
Basic earnings
(loss) per share $ (0.39) $ 0.34 $ 0.28 NM
Diluted earnings
(loss) per share $ (0.39) $ 0.33 $ 0.27 NM
Weighted average
basic shares
outstanding 2,386,837 2,358,394 2,154,709 11%
Weighted average
diluted shares
outstanding 2,386,837 2,397,211 2,187,581 9%
PERFORMANCE RATIOS
Return on average
assets -0.90% 0.81% 0.73%
Return on average
common equity -14.13% 12.62% 10.79%
Net interest margin
(fully tax-
equivalent) 4.17% 4.51% 4.57%
Efficiency ratio
(excl. non-cash
Visa litigation
charge) 67.57% 64.95% 72.59%
CAPITAL
Equity to assets 6.04% 6.26% 6.93%
Book value per share $ 10.69 $ 10.80 $ 10.12 6%
ASSET QUALITY
Net loan charge-offs
(recoveries) $ 449 $ 66 $ 79 468%
Allowance for loan
losses $ 4,019 $ 3,710 $ 2,784 44%
Allowance for losses
to total loans 1.07% 1.05% 0.95%
Nonperforming loans $ 815 $ 1,072 $ 497 64%
Nonperforming assets
to total assets 0.19% 0.26% 0.14%
END OF PERIOD BALANCES
Total loans $ 375,428 $ 354,438 $ 292,449 28%
Total assets $ 422,884 $ 409,965 $ 343,520 23%
Deposits $ 309,471 $ 320,498 $ 256,435 21%
Shareholders' equity $ 25,533 $ 25,678 $ 23,819 7%
AVERAGE BALANCES
Total loans $ 367,098 $ 344,978 $ 271,378 35%
Earning assets $ 396,652 $ 380,117 $ 305,630 30%
Total assets $ 412,938 $ 396,380 $ 321,218 29%
Deposits $ 301,651 $ 317,888 $ 241,256 25%
Shareholders' equity $ 26,300 $ 25,211 $ 21,974 20%
12 Months Year-To-Date
-------------------------------
(unaudited) Annual
(dollars in thousands %
except per-share data) 2007 2006 Chg
-------------------------------
EARNINGS RESULTS
Revenue $ 18,503 $ 14,363 29%
Net interest income $ 15,954 $ 12,535 27%
Provision for loan losses $ 1,779 $ 810 120%
Noninterest income $ 2,549 $ 1,828 39%
Noninterest expense $ 14,668 $ 10,950 34%
Net income (loss) $ 1,278 $ 1,819 -30%
Basic earnings (loss) per share $ 0.54 $ 0.89 -39%
Diluted earnings (loss) per share $ 0.53 $ 0.88 -39%
Weighted average basic shares
outstanding 2,358,693 2,043,375 15%
Weighted average diluted shares
outstanding 2,396,109 2,070,565 16%
PERFORMANCE RATIOS
Return on average assets 0.33% 0.64%
Return on average common equity 5.11% 9.55%
Net interest margin (fully
tax-equivalent) 4.37% 4.67%
Efficiency ratio (excl. non-cash
Visa litigation charge) 67.81% 76.24%
CAPITAL
Equity to assets 6.04% 6.93%
Book value per share $ 10.69 $ 10.12 6%
ASSET QUALITY
Net loan charge-offs (recoveries) $ 544 $ 82 563%
Allowance for loan losses $ 4,019 $ 2,784 44%
Allowance for losses to total loans 1.07% 0.95%
Nonperforming loans $ 815 $ 497 64%
Nonperforming assets to total assets 0.19% 0.14%
END OF PERIOD BALANCES
Total loans $ 375,428 $ 292,449 28%
Total assets $ 422,884 $ 343,520 23%
Deposits $ 309,471 $ 256,435 21%
Shareholders' equity $ 25,533 $ 23,819 7%
AVERAGE BALANCES
Total loans $ 334,341 $ 234,531 43%
Earning assets $ 367,043 $ 269,957 36%
Total assets $ 383,511 $ 285,603 34%
Deposits $ 292,261 $ 218,290 34%
Shareholders' equity $ 24,992 $ 19,046 31%
EvergreenBancorp, Inc.
UNAUDITED CONSOLIDATED BALANCE SHEETS
December 31, 2007 and December 31, 2006
(in thousands, except per-share data)
December 31,
---------------------------
Assets 2007 2006 % Chg
Cash and cash equivalents
Cash and due from banks $ 14,076 $ 9,160 54%
Interest-bearing deposits in
financial institutions 5,923 1,983 199%
Federal funds sold 2,383 760 214%
-------- -------- ---
Total cash and cash equivalents 22,382 11,903 88%
Investment securities available for sale 14,446 29,531 -51%
Loans 375,428 292,449 28%
Allowance for loan losses (4,019) (2,784) 44%
-------- -------- ---
Net loans 371,409 289,665 28%
Premises and equipment 2,886 3,078 -6%
Bank owned life insurance 5,537 5,316 4%
Accrued interest and other assets 6,224 4,027 55%
-------- -------- ---
Total assets $422,884 $343,520 23%
======== ======== ===
Liabilities
Deposits
Noninterest bearing $ 59,458 $ 55,373 7%
Interest bearing 250,013 201,062 24%
-------- -------- ---
Total deposits 309,471 256,435 21%
Junior subordinated debt 12,372 12,217 1%
Advances from Federal Home Loan Bank 69,910 46,805 49%
Accrued expenses and other liabilities 5,598 4,244 32%
-------- -------- ---
Total liabilities 397,351 319,701 24%
Stockholders' equity
Preferred stock: No par value; 100,000
shares authorized issued and
outstanding - none
Common stock and surplus: No par value;
15,000,000 shares authorized;
2,388,804 and 2,353,262 shares issued
and outstanding on 12/31/07 and
12/31/06, respectively. 21,467 21,129 2%
Retained earnings 4,069 3,453 18%
Accumulated other comprehensive
income (loss) AFS (3) (763) -100%
-------- -------- ---
Total stockholders' equity 25,533 23,819 7%
-------- -------- ---
Total liabilities and stockholders'
equity $422,884 $343,520 23%
======== ======== ===
EvergreenBancorp, Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
December 31, 2007 and December 31, 2006
(in thousands, except per-share data)
Three months Twelve months
ended ended
December 31, December 31,
---------------- % ---------------- %
2007 2006 Chg 2007 2006 Chg
------- ------- ------- -------
Interest and dividend
income
Loans, including
fees $ 7,650 $ 5,782 32% $28,528 $19,352 47%
Federal funds sold
and other 85 44 93% 296 130 128%
Investments
securities
Taxable securities 209 299 -30% 1,057 1,167 -9%
Tax-exempt
securities 29 34 -15% 123 137 -10%
------- ------- --- ------- ------- ---
Total interest
and dividend
income 7,973 6,159 29% 30,004 20,786 44%
Interest expense
Deposits 2,761 1,849 49% 10,559 5,706 85%
Federal funds
purchased and
securities sold
under agreements
to repurchase 2 25 -92% 83 75 11%
Advances from
Federal Home Loan
Bank 834 622 34% 2,422 1,979 22%
Junior subordinated
debt 222 168 32% 986 491 101%
------- ------- --- ------- ------- ---
Total interest
expense 3,819 2,664 43% 14,050 8,251 70%
Net interest income 4,154 3,495 19% 15,954 12,535 27%
Provision for loan
losses 758 232 227% 1,779 810 120%
Net interest income
after provision for
loan losses 3,396 3,263 4% 14,175 11,725 21%
Noninterest income
Service charges on
deposit accounts 350 318 10% 1,411 1,165 21%
Net Merchant credit
card processing 37 45 -18% 174 157 11%
Earnings in value of
CSV-life insurance 50 57 -12% 221 226 -2%
Other commissions
and fees 13 22 -41% 60 141 -57%
Gain on settlement &
curtailment of
post-retirement plan 1,002 -- NM 1,002 -- NM
Loss on sale of
securities (444) -- NM (444) -- NM
Other noninterest
income 30 43 -30% 125 139 -10%
------- ------- --- ------- ------- ---
Total
noninterest
income 1,038 485 114% 2,549 1,828 39%
Noninterest expense
Salaries and
employee benefits 1,716 1,500 14% 6,086 5,416 12%
Occupancy and
equipment 506 512 -1% 1,970 1,811 9%
Data processing 238 213 12% 948 832 14%
Professional fees 90 93 -3% 280 318 -12%
Litigation expense 2,122 -- NM 2,122 -- NM
Marketing 189 136 39% 555 485 14%
State & local taxes 147 104 41% 543 358 52%
Other noninterest
expense 622 331 88% 2,164 1,730 25%
------- ------- --- ------- ------- ---
Total
noninterest
expense 5,630 2,889 95% 14,668 10,950 34%
Income before income
tax expense (1,198) 859 NM 2,056 2,603 -21%
Income tax expense/
(benefit) (269) 266 NM 778 784 -1%
------- ------- --- ------- ------- ---
Net income $ (929) $ 593 NM $ 1,278 $ 1,819 -30%
======= ======= === ======= ======= ===
Basic earnings per
share $ (0.39) $ 0.28 NM $ 0.54 $ 0.89 -39%
Diluted earnings per
share $ (0.39) $ 0.27 NM $ 0.53 $ 0.88 -40%