Treasure State Bank (“the Bank”) (OTCBB:TRSU), a Montana chartered community bank, today announced:
President and Chief Executive Officer Jim Salisbury stated “During the quarter just ended, the Bank began a vigorous review of the potential loss imbedded in the loan portfolio and real estate owned acquired by foreclosure within the Bank. As mentioned in the prior quarter’s earnings release, the continued deterioration in the Western Montana economy, the receipt of updated appraisals, the continued volume of foreclosures and the inability to sell repossessed property near the asking price indicated that an additional provision for loan losses would be necessary in the fourth quarter. The review resulted in the Bank adding $3.0MM to loan loss provisions and $150,000 to expense for loss related to the foreclosed properties. While this is a bitter pill to swallow, it positions the Bank to return to profitability in 2011. The Bank now has an allowance for loan losses to gross loans of 4.54% ($2.6MM) to act as a cushion to absorb potential losses on existing troubled loans. The Bank has made substantial headway in its efforts to reduce non-performing assets. During the quarter just ended, the Bank sold $1.2MM of non-performing assets. In addition, as of the date of this letter and since 2010 year end, the Bank has sold an additional $797,000 of non-performing assets. While the $4.5MM loss for the year is very disappointing, the Bank has worked hard to restructure the balance sheet of the Bank. Assets have decreased as planned by 11.8%, which enhances the capital to assets ratio. Nearly twenty cents of every dollar is held in liquid assets to cushion the Bank from a rising interest rate environment. The Bank has positioned itself to be asset sensitive. Therefore, if interest rates were to increase, the effect on the Bank’s net interest income should not be material. The 49.1% reduction in the Bank’s cost of funds has positioned the Bank to maintain a net interest margin sufficient to cover the Bank’s normal operating expenses during these difficult times. Finally, even though the Bank’s Tier 1 leverage ratio has declined to 6.12%, if the Bank is able to successfully implement its business plan for 2011 and beyond, this ratio will improve. Coupled with profitability, the Bank’s return on equity, return on assets and book value should also improve.”
For more information regarding this release, or the Bank in general, you may contact James A. Salisbury, President and CEO at 406-543-8700.
About Treasure State Bank
Treasure State Bank, a Montana chartered community bank, is headquartered in Missoula, Montana. The Bank was founded in January 2007. Treasure State Bank currently trades on the OTCBB under the ticker symbol “TRSU”. Treasure State Bank serves businesses, professionals, non-profit organizations and individuals through customized banking services and products. For more information, please visit www.treasurestatebank.com.
Safe Harbor Statement
This communication contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Treasure State Bank and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully, and the ability to complete before-mentioned transactions. The Bank undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.