Yahoo Finance SaviBank Earns $533,000 in Second Quarter of 2020; Loans Increase 33% and Deposits Increase 30%, Year-Over-Year Results Highlighted by Strong Participation in Paycheck Protection Program
BURLINGTON, Wash., July 27, 2020 (GLOBE NEWSWIRE) -- Savi Financial Corporation, Inc. (OTC Pink: SVVB), the bank holding company for SaviBank, today reported second quarter 2020 earnings increased 40% to $533,000, or $0.12 per diluted share, compared to $381,000, or $0.09 per diluted share, in the second quarter of 2019. In the first six months of the year, Savi reported net income of $624,000, or $0.14 per diluted share, compared to $906,000, or $0.21 per diluted share, in the first six months of 2019.
“Our second quarter results reflect double digit loan and deposit growth and strong revenue generation, in an unprecedented operating environment,” said Michal D. Cann, Chairman and CEO of SaviBank. “As we prioritize the safety of our customers and employees, we have cautiously reopened all of our branch offices, while continuing to encourage the use of drive-up services, ATM machines and digital banking operations. We will continue to work closely with our customers to provide support on programs available for financial assistance.”
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) providing economic relief for the country, including the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) to fund short-term loans for small businesses. “Our participation in the PPP offered through the SBA helped service the needs of our business customers as well as new customers in our community,” said Andrew Hunter, President of SaviBank. “As a result, through June 30, 2020 we helped approximately 631 customers receive $61.2 million in PPP funding.”
As of June 30, 2020, the Company had provided 120 loan accommodations, totaling $38.9 million, to defer payments or make interest only payments for up to 90 days in response to requests from borrows who have been affected by the economic impacts of COVID-19.
“Our net interest margin came under pressure from the 150 basis point reductions in the Federal Funds rate in March 2020, but also from lower yields on newly funded PPP loans,” said Hunter. “However, our strong loan growth, higher loan yields and some decrease in funding costs continue to keep our net interest margin above industry averages.” Net interest margin was 3.79% in the second quarter of 2020 compared to 4.03% in the preceding quarter and 4.47% in the second quarter a year ago. The net interest margin remains higher than the peer average of 3.57% posted by the 438 banks that comprised the SNL Microcap U.S. Bank Index at March 31, 2020. In the first six months of 2020, the net interest margin was 3.93% compared to 4.54% in the first six months of 2019.
Second Quarter 2020 Highlights:
Pretax income was $676,000 in the second quarter of 2020, compared to $483,000 in the second quarter of 2019, and $116,000 in the first quarter of 2020.
Earnings per diluted share were $0.12 in the second quarter, compared to $0.09 in the second quarter a year ago and $0.02 in the preceding quarter.
Net interest income increased 10% to $3.36 million in the second quarter of 2020, compared to $3.05 million in the second quarter a year ago, and increased 9% from $3.08 million in the first quarter of 2020.
Total revenue, consisting of net interest income and non-interest income increased 10% to $3.82 million in the second quarter of 2020, compared to $3.47 million in both the second quarter a year ago and the preceding quarter.
Average second quarter of 2020 total loans increased 29%, to $315.0 million, compared to $244.5 million in the second quarter year ago, and grew 16% from $272.3 million in the first quarter of 2020. Total loans at June 30, 2020, increased 33% to $333.4 million from $251.3 million a year ago and grew 21% from $275.2 million at March 31, 2020. The loan growth compared to the prior quarter was primarily due to the origination of $61.2 million in PPP loans.
SBA and USDA loan production for the twelve months ended June 30, 2020, totaled 15 loans for $15.4 million, compared to production of 18 loans for $9.72 million in the year-ago period.
Average second quarter of 2020 total deposits grew 25% to $297.8 million from $238.4 million, in the second quarter a year ago, and increased 18% from $253.2 million in the first quarter of 2020. Total deposits grew 30% to $317.1 million, at June 30, 2020, from $244.3 million a year ago, and increased 24% from $256.0 million at March 31, 2020. The increase in total deposits from the preceding quarter was potentially due to PPP loan funds deposited into customer accounts.
The provision for loan losses was $300,000 in the second quarter of 2020, compared to $179,000 in the second quarter of 2019, and 362,000 in the first quarter of 2020.
Allowance for loan losses, as a percentage of total loans, was 0.96% at June 30, 2020, compared to 1.00% at June 30, 2019, and 1.09% at March 31, 2020. The allowance for loan losses, excluding PPP loans, was 1.17% of total loans, as of June 30, 2020.
Nonperforming loans, as a percentage of total loans, was 0.32% at June 30, 2020, compared to 0.07% at June 30, 2019, and 0.30% at March 31, 2020.
Nonperforming assets, as a percentage of total assets, was 0.39% at June 30, 2020, compared to 0.25% a year ago and 0.45% three months earlier.
Net charge-offs were $112,000 in the second quarter of 2020, compared to net charge-offs of $32,000 in the second quarter of 2019, and net recoveries of $8,000 in the first quarter of 2020. The increase during the preceding quarter was due to the write-down of the non-guaranteed portion of an SBA loan.
SaviBank capital levels remained above the threshold for well-capitalized institutions with a tier-1 leverage ratio of 8.32% at June 30, 2020.
“The elevated costs associated with our branch expansion efforts are starting to stabilize, and the new locations are beginning to contribute to the bottom line,” said Rob Woods, Chief Financial Officer of SaviBank. “In 2019, we opened full-service branches in Concrete, Sedro Woolley and Mt. Vernon, all communities in northwest Washington State. We also relocated our loan production office into a full-service branch in Anacortes and relocated to our new Oak Harbor branch and our main Burlington branch. We believe that by investing in these additional locations, we now have both the infrastructure and the people in place to continue to grow the company.”
About Northwest Washington
SaviBank currently operates six branches in Skagit County, two branches in Island County, and one branch in Whatcom County. The Skagit, Whatcom and Island counties region stretches north from the greater Seattle/Everett/Bellevue metropolis to the Canadian border. Northwest Washington continues to be one of the most vibrant regions in the country, with a solid employment base, moderate climate and a strong housing market.
The housing market in Skagit, Island and Whatcom Counties remains healthy. According the Northwest Multiple Listing Service, the average home in Skagit County sold for $402,680 up 6.68% in June 2020 compared to a year ago, and there was a 1.2-month supply of homes on the market. For Island County, the average house sold for $399,970, up 0.24% from a year ago and supply totaled 1.1 months. For Whatcom County, the average home sold for $400,000, down 0.99% from a year ago and supply totaled 1.9 months.
Skagit County’s economy is dominated by manufacturing, which accounts for 33.4% of GDP with food, machinery and oil and petroleum products the leading contributors. Skagit’s population is projected to grow 5.71% from 2020 through 2025, and median household income is projected to increase by 16.18% during the same time frame.
Whatcom County is home to Western Washington University and is the nation’s largest producer of raspberries. Whatcom County’s population is projected to grow 6.26% from 2020 through 2025, and median household income is projected to increase by 13.28%.
Island County is home to Naval Air Station Whidbey Island. Whidbey Island’s population is 86,280, with approximately 23,575 in Oak Harbor. Island County’s population is projected to grow 5.19% from 2020 through 2025 and median household income is projected to increase by 6.07%.
Sources:
http://www.northwestmls.com/library/CorporateContent/statistics/Recaps.pdf
www.SNL.com
About Savi Financial Corporation Inc. and SaviBank –
Savi Financial Corporation is the bank holding company of SaviBank. The Bank began operations April 11, 2005, and has 9 branch locations in Anacortes, Burlington, Bellingham, Concrete, Mount Vernon (2), Oak Harbor, Freeland and Sedro-Woolley, Washington. The Bank provides loan and deposit services to customers who are predominantly small and middle-market businesses and individuals in and around Skagit, Island, and Whatcom counties. As a locally-owned community bank, we believe that when everyone becomes Savi about their finances, our entire community benefits. Call us or stop by one of our branches and we’ll show you how to bank Savi. For additional information about SaviBank visit www.SaviBank.com
Forward Looking Statement
This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to SaviBank or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.
SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands of dollars, except for ratios and per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, | June 30, | Var % | March 31, | Var % | June 30, | June 30, | Var % | |||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income | $ | 4,057 | $ | 3,853 | 5 | % | $ | 3,878 | 5 | % | $ | 7,935 | $ | 7,526 | 5 | % | ||||||||||||||||||||||||||||||||||||||
Interest expense | (695 | ) | (801 | ) | (13 | ) | (799 | ) | (13 | ) | (1,494 | ) | (1,523 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||||||
Net interest income | 3,362 | 3,052 | 10 | 3,079 | 9 | 6,441 | 6,003 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for loan losses | (300 | ) | (179 | ) | 68 | (362 | ) | (17 | ) | (662 | ) | (275 | ) | 141 | ||||||||||||||||||||||||||||||||||||||||
NII after loss provision | 3,062 | 2,873 | 7 | 2,717 | 13 | 5,779 | 5,728 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Non-interest income | 458 | 413 | 11 | 389 | 18 | 847 | 751 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||
Non-interest expense | (2,844 | ) | (2,803 | ) | 1 | (2,990 | ) | (5 | ) | (5,834 | ) | (5,329 | ) | 9 | ||||||||||||||||||||||||||||||||||||||||
Income before tax | 676 | 483 | 40 | 116 | 483 | 792 | 1,150 | (31 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Federal income tax expense | 143 | 102 | 40 | 25 | 472 | 168 | 244 | (31 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 533 | $ | 381 | 40 | % | $ | 91 | 486 | % | $ | 624 | $ | 906 | (31 | )% | ||||||||||||||||||||||||||||||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares outstanding (000s) | 3,433 | 3,433 | - | % | 3,433 | — | % | 3,433 | 3,433 | - | % | |||||||||||||||||||||||||||||||||||||||||||
Earnings per share, diluted | $ | 0.12 | $ | 0.09 | 40 | $ | 0.02 | 486 | $ | 0.14 | $ | 0.21 | (31 | ) | ||||||||||||||||||||||||||||||||||||||||
Market value | 7.62 | 10.77 | (29 | ) | 7.75 | (2 | ) | 7.62 | 10.77 | (29 | ) | |||||||||||||||||||||||||||||||||||||||||||
Book value | 9.75 | 9.39 | 4 | 9.51 | 3 | 9.75 | 9.39 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||
Market value to book value | 78.14 | % | 114.68 | % | (32 | ) | 80.87 | % | (3 | ) | 78.14 | % | 114.68 | % | (32 | ) | ||||||||||||||||||||||||||||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | $ | 396,736 | $ | 299,731 | 32 | % | $ | 334,586 | 19 | % | $ | 396,736 | $ | 299,731 | 32 | % | ||||||||||||||||||||||||||||||||||||||
Investments securities | 9,222 | 11,147 | (17 | ) | 9,382 | (2 | ) | 9,222 | 11,147 | (17 | ) | |||||||||||||||||||||||||||||||||||||||||||
Total loans | 333,351 | 251,321 | 33 | 275,183 | 21 | 333,351 | 251,321 | 33 | ||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | 317,113 | 244,256 | 30 | 255,967 | 24 | 317,113 | 244,256 | 30 | ||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | 45,000 | 22,000 | 105 | 45,000 | - | 45,000 | 22,000 | 105 | ||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 33,479 | 32,240 | 4 | 32,899 | 2 | 33,479 | 32,240 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average assets | $ | 365,661 | $ | 290,604 | 26 | % | $ | 323,555 | 13 | % | $ | 354,630 | $ | 283,727 | 25 | % | ||||||||||||||||||||||||||||||||||||||
Average total loans | 315,045 | 244,542 | 29 | 272,254 | 16 | 293,650 | 238,104 | 23 | ||||||||||||||||||||||||||||||||||||||||||||||
Average total deposits | 297,804 | 238,422 | 25 | 253,210 | 18 | 282,871 | 226,347 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||
Average shareholders' equity | 33,189 | 31,967 | 4 | 32,843 | 1 | 33,133 | 31,682 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||
ASSET QUALITY RATIOS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | $ | (112 | ) | $ | (32 | ) | N/M | $ | 8 | N/M | $ | (120 | ) | $ | (39 | ) | N/M | |||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries to average loans | (0.14 | )% | (0.05 | )% | N/M | 0.01 | % | N/M | (0.08 | )% | (0.03 | )% | N/M | |||||||||||||||||||||||||||||||||||||||||
Non-performing loans as a % of loans | 0.32 | 0.07 | 353 | 0.30 | 6 | 0.32 | 0.07 | 353 | ||||||||||||||||||||||||||||||||||||||||||||||
Non-performing assets as a % of assets | 0.39 | 0.25 | 55 | 0.45 | (14 | ) | 0.39 | 0.25 | 55 | |||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses as a % of total loans | 0.96 | 1.00 | (4 | ) | 1.09 | (12 | ) | 0.96 | 1.00 | (4 | ) | |||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses as a % of non-performing loans | 301.61 | 1,351.08 | (78 | ) | 362.39 | (17 | ) | 301.61 | 1,351.08 | (78 | ) | |||||||||||||||||||||||||||||||||||||||||||
FINANCIAL RATIOS\STATISTICS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average equity | 6.42 | % | 4.77 | % | 35 | % | 1.11 | % | 480 | % | 3.77 | % | 5.72 | % | (34 | )% | ||||||||||||||||||||||||||||||||||||||
Return on average assets | 0.58 | 0.52 | 11 | 0.11 | 418 | 0.35 | 0.64 | (45 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net interest margin | 3.79 | 4.47 | (15 | ) | 4.03 | (6 | ) | 3.93 | 4.54 | (13 | ) | |||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio | 73.29 | 79.60 | (8 | ) | 85.38 | (14 | ) | 79.04 | 77.79 | 2 | ||||||||||||||||||||||||||||||||||||||||||||
Average number of employees (FTE) | 92 | 89 | 3 | 94 | (2 | ) | 92 | 89 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage ratio -- Bank | 8.32 | 10.32 | (19 | )% | 9.57 | (13 | )% | 8.32 | 10.32 | (19 | )% | |||||||||||||||||||||||||||||||||||||||||||
Contact: | Michal D. Cann | |
Chairman & President | ||
Savi Financial Corporation | ||
(360) 707-2272 |
