PRESS RELEASE
July 22, 2004
Contact
Cathy Reines, Chief Financial Officer
(360) 459 -1100
Venture Financial Group Reports
Record 2nd Quarter Earnings
SECOND
QUARTER HIGHLIGHTS
First South King County branch location purchased
Demand deposits and savings and interest bearing demand
increase 12% and 10%, respectively for the quarter
Loan growth continues – 6% year-to-date and 9% over June 30,
2003
Credit quality continues to improve
Olympia, Wash. - July 22, 2004 - Venture
Financial Group, Inc. (“Venture” or “the Company”), parent company of
Venture Bank (www.venture-bank.com),
today announced second quarter net income of $1.89 million, a slight
decrease of $64,000 or 3% compared to $1.95 million for the second
quarter 2003. Diluted earnings per share were $.28 for the quarters
ended June 30, 2004 and June 30, 2003.
For the quarter ended June 30, 2004,
assets totaled $528 million, an increase of 11% over the
$476 million in total assets at June 30, 2003. Total loans
increased $30 million or 9% to $386 million from $356
million at June 30, 2003. Securities available for sale
increased $42 million or 131% to $75 million from $33
million at June 30, 2003. Premises and equipment increased
$1 million compared to the June 30, 2003 balance. This
increase is primarily attributed to the purchase of the
Bank’s first South King County location. This financial
center, located in Kent is anticipated to be open in
November 2004.
Demand deposits and interest bearing demand deposits
increased 12% and 10% respectively for the quarter. Time
deposits decreased slightly during the quarter.
“We are pleased with the quarterly and year-to-date results. To
exceed year over year income despite significant reductions in small
loan and mortgage loan income represents substantial improvement in
our core banking revenue. We believe that this, along with our
expansion into the South King County market, positions us well for
the future” said Ken F. Parsons Sr., Venture Financial Group
Chairman.
Operating Results
Quarter Ended June 30, 2004
Net Interest Income
Net interest income for the second quarter of 2004 decreased
9% to $6.0 million, from $6.6 million for the same period in
2003. This decrease is due to discontinued income from the
small loan program in the state of Alabama. Net interest
income excluding the Alabama small loan income in 2003 would
have been $5.2 million. The reduction in small loan income
is partially offset by an increase in investment income of
$419,000 or 120% and a decrease in deposit interest expense
of $151,000 or 13% for the quarter ended June 30, 2004
compared to the same period in 2003.
Net interest income for the six months ended June 30, 2004 decreased
$1.1 million or 8% to $12,105,000 from $13,232,000 for the same period
last year. Net interest income for the six months ending June 30, 2003
excluding the Alabama small loan income in 2003 would have been $11,068,000.
Non-interest Income
Non interest income decreased by $461,000 or 19% to a total of $2 million
for the quarter ended June 30, 2004 compared to $2.5 million for the same
quarter in 2003. This decrease is due largely to a decrease for the quarter
ended June 30, 2004 of $678,000 or 68% in origination fees on mortgage loans
sold. This decrease was expected and is attributed to the slowing refinance market.
The six months ending June 30, 2004 showed a decrease in non interest
income of $1.2 million or 25% compared to the previous year. This was
due largely to a decrease in originations fees on mortgage loans sold of
$1,198,000 or 65%.
Non-interest Expense
Total non interest expense decreased by $528,000 or 9% for the three
months ended June 30, 2004 compared to the three months ended June 30,
2003. This cost savings is due to a decrease in salary and benefit
expense of $258,000 related to reduced mortgage commissions and fewer
employees. In addition, the Company incurred marketing and branding
costs during the quarter ended June 30, 2003 approximating $204,000 not
incurred during the second quarter 2004. Finally, the Company continues
to focus on cost control in 2004 and accordingly other expenses are
continuing to be reduced.
Non interest expense for the six months ending June 30, 2004 decreased $1.6
million or 14% compared to the same period in 2003. This reduction is due to a decrease
in salary and benefit expense of $614,000 resulting primarily from a reduction in mortgage
commissions. In addition, the Company incurred $604,000 in marketing and branding costs
in the first six months of 2003 not incurred in 2004.
“Our team continues to concentrate on growth in our core banking areas and we are
excited about the progress. We are focused on taking advantage of our brand and building
quality relationships with our customers” said Jon M. Jones, Venture Bank President.
Non-performing Assets
Nonperforming assets (which includes nonperforming loans and other nonperforming assets)
as a percentage of total assets was .56%, .82% and 2.81% as of June 30, 2004, December 31,
2003 and June 30, 2003 respectively.
Non-performing loans as a percentage of total loans was .42%, .60% and 1.28% as of June 30,
2004, December 31, 2003 and June 30, 2003 respectively.
“I am proud of the efforts of our credit team in once again improving the quality of the loan portfolio.
Having placed the credit issues acquired during the Harbor Bank acquisition behind us, this year we
have demonstrated our ability to grow the portfolio with quality loans” said Mr. Jones.
Agreement to Sell Seven Branches
On June 24, 2004 the Company entered into agreement to sell seven of its branches. The sale is
subject to customary regulatory approval and is anticipated to close in early Fall, 2004. Venture
Financial Group Shareholders will benefit from an estimated $4 million net gain on the sale.
Venture Financial Group, through its wholly owned
subsidiary Venture Bank, has 20 offices in four western Washington
counties and offers a full spectrum of financial services including
commercial, construction, residential and consumer lending, deposit
products and other banking services. Further information about the Bank
may be found on the Internet at
www.venture-bank.com.
Note Regarding Forward-Looking Information
This press release includes forward-looking statements within the meaning of the
"Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which
management believes are a benefit to shareholders. These statements are necessarily
subject to risk and uncertainty and actual results could differ materially due to certain risk
factors, including those set forth from time to time in each company's filings with the Securities
and Exchange Commission (the "SEC"). You should not place undue reliance on forward-looking
statements and we undertake no obligation to update any such statements. Specific risks in this
press release include whether the Company can continue to reduce expenses and grow in our
targeted markets and can complete the sale of its seven branches as anticipated.
Condensed Statements of
Condition
Condensed Statements of Income
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