Total assets were $375.4 million, an increase of 17% in comparison to one year earlier. Capital ratios continued to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements.
Total loans at the end of third quarter were $286.2 million, an increase of 5% from $271.8 million the prior year. Nonperforming assets and the Bank’s Texas Ratio, a measurement of problem loans and bank-owned properties to capital, remained at zero. The Bank’s loan portfolio remained diversified at 33% commercial, 64% commercial real estate, and 3% consumer.
Total deposits at the end of third quarter were $322.2 million, an increase of 16% from $277.1 million in third quarter 2018. The deposit mix at quarter-end was 28% non-interest-bearing, 46% interest bearing (checking, savings, and money market), and 26% time deposit. Interest expense on deposits increased 20% to $762K from $636K one quarter earlier, while the difference from the prior year was more substantial at 80%. This reflects the increased pressure on deposit rates over the previous 18 months. Decreases in Fed Funds rates are expected to provide relief to cost of funds in the fourth quarter of 2019.
“We are pleased with our progress in 2019 as we continue to recognize operational benefits from our merger in late 2016 and increased sources of non-interest income, which was a priority for us this year. We also continue to focus on enhancing shareholder value through new opportunities for growth, innovation, and attention to the customer experience,” said John Manolides, President and Chief Operating Officer.
2019 Third Quarter Financial Highlights:
Total assets increased $53.6 million, or 17%, to $375.4 million at September 30, 2019 from $321.8 million for the period ended September 30, 2018. Assets increased $9.9 million, or 3%, from the $365.5 million recorded at June 30, 2019.
Net income of $1.54 million, or $0.37 per share for the quarter ended September 30, 2019 compared to $1.36 million, or $0.33 per share for the quarter ended September 30, 2018.
Tangible book value per share increased to $10.76 for the quarter ended September 30, 2019, an increase of 13.9% from the quarter ended September 30, 2018.
Return on average assets of 1.60% for the third quarter.
Zero non-performing assets.
Efficiency ratio of 58.75% for the quarter.
For further discussion, please contact the following:
John E. Manolides
President and Chief Operating Officer
Direct Phone: (253) 284-1802
Executive Vice President and Chief Financial Officer
Direct Phone: (253) 284-1803
About Commencement Bank
Commencement Bank, headquartered in Tacoma, Washington, was formed in 2006 to provide traditional, reliable, and sustainable banking in Pierce County, South King County, Thurston County and the surrounding areas. The team of experienced banking experts focuses on personal attention, flexible service, and building strong relationships with customers through state-of-the-art technology as well as traditional delivery systems. As a local bank, Commencement Bank is deeply committed to the community.
Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe Commencement Bank’s projections, estimates, plans and expectations of future results and can be identified by words such as “believe,” “intend,” “estimate,” “likely,” “anticipate,” “expect,” “looking forward,” and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve’s actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Commencement Bank undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.
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