| Cascade Financial Corporation | The Cereghino Group |
| Contacts: | Carol K. Nelson, CEO | | | | corporate investor relations |
| | Lars Johnson, CFO | | | | www.stockvalues.com |
| | 425.339.5500 | | | | 206.762.0993 |
| | www.cascadebank.com | | | | |
NEWS RELEASE
CASCADE FINANCIAL INCREASES NET INCOME 21% IN FOURTH QUARTER AND 2005;
FEE INCOME GROWTH CONTRIBUTES TO RECORD YEAR
Everett, WA - January 24, 2006 - Cascade Financial Corporation (Nasdaq: CASB), parent company of Cascade Bank, today reported that profits grew 21% in the fourth quarter and full year 2005, reflecting a strong increase in recurring checking and service fees, continued loan growth, and strong credit quality. Net income was a record $13.0 million in 2005, with diluted earnings per share growing to $1.32, compared to $10.8 million and $1.16 in the previous year. In the quarter ended December 31, 2005, net income increased 21% to $3.4 million, or $0.35 per diluted share, compared to $2.8 million, or $0.29 per diluted share in the fourth quarter a year ago.
2005 Highlights
| · | Net income increased 21% over 2004. |
| · | Earnings per diluted share increased 14% over 2004. |
| · | Return on tangible equity improved to 17.8%, return on assets to 1.13%. |
| · | Revenues increased 15% from the previous year to $42.9 million. |
| · | Continued success of the High Performance Checking (HPC) program contributed to solid increases in checking and service fees. |
| · | Total loans grew 9% from a year ago, with an emphasis on business credits. |
| · | Credit quality remained strong: net charge offs of 0.03% of total loans and nonperforming loans of 0.23% of total loans at year-end. |
“The Western Washington economy remains strong and continued success at Boeing has contributed to further expansion in Snohomish County,” stated Carol K. Nelson, President and CEO. “We are capitalizing on the opportunities in this dynamic market, growing our prime-based loan portfolio while maintaining solid credit quality. As a result, we posted record profits in 2005 despite a very competitive marketplace and a difficult interest rate environment.”
Operating Results
In 2005, net interest income before the provision for loan losses was $36.5 million, up 13% from $32.4 million the previous year. A larger asset base and an ongoing shift to higher-yielding credits contributed to the growth, which offset rising interest rates that drove up funding costs.
Other income grew 33% for the year to $6.3 million, from $4.7 million in 2004, with increased checking and service fees climbing to $4.0 million, compared to $2.8 million a year ago. In addition, the gain on sale of loans, securities and real estate was $965,000 in 2005, versus $820,000 the year before.
“While our High Performance Checking program has certainly helped lessen our dependence on CDs, the growth in checking and service fees has been very rewarding,” Nelson said. “We view these fees as a recurring revenue stream, and one that has offset the costs associated with HPC.”
Total other operating expenses were $22.6 million in 2005, compared to $20.3 million the previous year. The increase was primarily due to the costs of operating the Issaquah Division for a full year, the new Silver Lake branch for nine months, and the launch of HPC, which accounted for $566,000 in additional expenses in 2005. In 2004, seven months of operating Issaquah cost $1.4 million, and merger expenses were $356,000 in the year.
“Looking towards 2006, I anticipate that HPC will contribute to additional fee income growth and further reduce our reliance on time deposits,” Nelson said. “During the fourth quarter of 2005, HPC broke even ahead of plan and should provide a positive contribution in 2006.”
Revenues (net interest income plus other income) were up 16% in 2005, reflecting strong growth in both net interest and other operating income. Revenues totaled $42.9 million, compared to $37.1 million in 2004, and were $10.8 million in the fourth quarter of 2005, versus $9.9 million in the same quarter last year.
For the fourth quarter of 2005, net interest income grew 7% to $9.3 million, from $8.7 million in the same quarter a year ago. Other income grew 29% to $1.5 million, compared to $1.2 million in the same period last year. The continued growth of checking and service fees and gains on asset sales contributed to the improvement. Other expenses increased slightly to $5.6 million, versus $5.5 million in the fourth quarter of 2004.
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Cascade Financial - 2005 Profits Up 21%
January 24, 2006
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“Keeping operating expenses in check contributed to our success, particularly in the fourth quarter,” stated Lars Johnson, EVP and CFO. “Due to a decline in compensation expense, total other expenses were basically flat in the fourth quarter and down slightly on a sequential-quarter basis. In addition, we benefited from a lower effective tax rate in the fourth quarter, allowing us to lessen our tax accrual by $90,000.”
Balance Sheet Management
Total loans increased by 9% in 2005 to $881 million, compared to $807 million at the end of the preceding year. Loan growth was tempered by $44.0 million in loan sales in the year, including a $9.3 million residential loan sale in the fourth quarter, as well as a $7.7 million loan that was paid off on the last day of the year. Excluding non-standard loan sales, portfolio growth would have been 15% in 2005.
Core commercial loans, which include construction, business, and commercial real estate lending, increased by 21% to $701 million at year-end 2005, from $578 million a year prior. Construction loans grew by 54% to $166 million. Business loans increased by 35% to $394 million, while commercial real estate loans decreased by 21% to $141 million, primarily due to a reclassification of $35.0 million from owner-occupied commercial real estate to business loans at the final integration of the Issaquah Division. Core commercial loans now account for 80% of total loans, compared to 72% of loans at the end of 2004.
Residential loans decreased by 10% to $95.4 million, reflecting the practice of selling most fixed rate loans upon origination. In addition, Cascade sold $9.3 million of seasoned loans in the fourth quarter. Multifamily loans dropped 44% to $52.1 million, largely due to two loan sales in the year totaling $34.7 million.
LOANS ($ in 000s) | | December 31, 2005 | | December 31, 2004 | |
| Business | | $ | 394,034 | | | 44.8 | % | $ | 292,117 | | | 36.2 | % |
| R/E Construction | | | 165,957 | | | 18.8 | % | | 107,431 | | | 13.3 | % |
| Commercial R/E | | | 141,109 | | | 16.0 | % | | 178,704 | | | 22.2 | % |
| Multifamily | | | 52,057 | | | 5.9 | % | | 92,372 | | | 11.5 | % |
| Home Equity/Consumer | | | 32,160 | | | 3.7 | % | | 30,125 | | | 3.7 | % |
| Residential | | | 95,429 | | | 10.8 | % | | 105,975 | | | 13.1 | % |
| Total Loans | | $ | 880,746 | | | 100.0 | % | $ | 806,724 | | | 100.0 | % |
“Occasional loan sales drive up noninterest income while helping mitigate both credit and interest rate risk,” Nelson said. “We continue to monitor similar opportunities that will help us meet our goals. Loan growth was further slowed by heavy prepayments, as customers were able to refinance their loans with other institutions.”
Total deposits increased 10% to $796 million, compared to $722 million at the end of last year. Checking balances were up 7% from a year ago, savings and money market accounts increased 14%, and time deposits grew 10% since the end of December 2004.
“While time deposits remain an integral part of our funding mix, HPC is bringing in new, low-cost retail accounts,” Nelson said. “The program is credited with bringing in $17.4 million in core deposits over the course of 2005, helping to mitigate the increase in funding costs in a rising interest rate environment. The growth in low-cost funds has also given us the freedom to let some high-yield CDs run off.”
DEPOSITS ($ in 000s) | | December 31, 2005 | | December 31, 2004 | |
| Checking Accounts | | $ | 120,468 | | | 15.1 | % | $ | 112,564 | | | 15.6 | % |
| Savings and MMDA | | | 196,790 | | | 24.7 | % | | 172,584 | | | 23.9 | % |
| CDs | | | 478,510 | | | 60.1 | % | | 436,760 | | | 60.5 | % |
| Total Deposits | | $ | 795,768 | | | 100.0 | % | $ | 721,908 | | | 100.0 | % |
Stockholders’ equity increased by 9% to $105 million at year-end, compared to $96.3 million at the end of 2004. Book value per share was $10.95 at December 31, 2005, compared to $10.07 a year ago. Tangible book value was $8.23 at the end of 2005, compared to $7.32 a year prior.
Asset Quality
Nonperforming loans (NPLs) were $2.0 million at year-end 2005, compared to $910,000 at the end of the preceding quarter and $532,000 a year earlier. NPLs represented 0.23% of total loans, versus 0.10% at the end of the previous quarter and 0.07% of loans at the end of December 2004. Cascade had $101,000 in Real Estate Owned and Other Repossessed Assets at year-end, down from $386,000 three months earlier and $868,000 at the end of 2004. Net charge offs remain very diminutive, at $27,000 in the fourth quarter and $254,000 for the year.
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January 24, 2006
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“Our credit quality has remained quite good, although NPLs ticked up to $2.0 million at year-end,” Johnson said.“Of the loans we classified as non-performing, we have purchase agreements for the properties on loans totaling $850,000, and another $392,000 is in three related loans that are current and have been renewed.”
The provision for loan losses was $200,000 in the fourth quarter and $945,000 in 2005, compared to $150,000 in the same quarter last year and $675,000 in 2004. At the end of December 2005, the allowance for loan losses had grown to $10.3 million, representing 1.16% of total loans and more than five times the level of NPLs.
Net Interest Margin & Interest Rate Risk
“After a couple quarters of moderate net interest margin expansion, the continued rise in short-term interest rates, a flat yield curve and fierce competition resulted in margin compression in the fourth quarter,” Johnson said. “While our yield on assets has improved over the last year, our liability costs increased more.” The net interest margin was 3.29% in the fourth quarter of 2005 and 3.35% for the full year.
“The 3.29% margin in the fourth quarter was slightly below the lower end of our projected range of 3.30% - 3.50%, primarily due to unexpected loan payoffs earlier in the quarter and competition for CDs that was even more intense than usual,” Johnson continued. “The net interest margin will likely remain between 3.20% - 3.50% over the next twelve months, assuming the Fed stops raising the target funds rate in the first half of the year.”
| | 1Q04 | 2Q04 | 3Q04 | 4Q04 | 1Q05 | 2Q05 | 3Q05 | 4Q05 |
| Asset yield | 5.89% | 5.78% | 5.89% | 5.90% | 5.97% | 6.17% | 6.33% | 6.41% |
| Liability cost | 2.76% | 2.59% | 2.70% | 2.80% | 2.94% | 3.11% | 3.28% | 3.50% |
| | | | | | | | | |
| Spread | 3.13% | 3.19% | 3.19% | 3.10% | 3.03% | 3.06% | 3.05% | 2.91% |
| Margin | 3.40% | 3.46% | 3.48% | 3.41% | 3.34% | 3.38% | 3.41% | 3.29% |
Performance Measures
Return on equity (ROE) was 13.1% for 2005 and 13.3% for the final quarter, relative to 13.2% and 11.9%, respectively, a year ago. Management also uses return on tangible equity (ROTE), a non-GAAP performance measure that excludes the goodwill created in the past merger, and believes that this provides a more consistent comparison with pre-merger performance. Cascade’s ROTE was 17.8% for the full year, compared to 16.2% in 2004, and was 17.8% in the final quarter of 2005, compared to 16.4% a year ago. The efficiency ratio improved to 52.8% in 2005 and 52.2% in the fourth quarter, reflecting increased revenues and tight expense controls, compared to 54.7% and 56.2% in the respective periods in 2004.
Option Expense
Beginning January 1, 2006, Cascade will be expensing stock options. “We estimate that the adoption of this accounting standard will reduce our earnings per share by $0.015 - $0.02 in 2006, and slightly less in subsequent years,” Johnson said.
Conference Call
Carol Nelson and Lars Johnson will host a conference call on Wednesday, January 25, at 11:00 am PST (2:00 pm EST). Interested investors may listen to the call live or via replay at www.cascadebank.com. Investment professionals are invited to dial (303) 262-2139 to participate in the live call. A telephone replay of the call will be available for three weeks at (303) 590-3000, using passcode 11048908#.
About Cascade Financial
Established in 1916, Cascade Bank, the only operating subsidiary of Cascade Financial Corporation, is a state chartered commercial bank headquartered in Snohomish County, Washington. Cascade Bank operates 19 full service offices, located in Everett, Lynnwood, Marysville, Mukilteo, Smokey Point, Issaquah, Clearview, Woodinville, Lake Stevens, Bellevue, Snohomish and North Bend.
In August 2005, US Banker magazine ranked Cascade #67 out of the Top Publicly Traded Mid-Tier Banks, those with less than $10 billion in assets, based on three-year average return on equity. The same publication has named President and CEO Carol Nelson one of the 25 Most Powerful Women in Banking. In January 2006, Washington CEO magazine named Nelson a CEO of Influence.
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Cascade Financial - 2005 Profits Up 21%
January 24, 2006
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CONSOLIDATED FINANCIAL HIGHLIGHTS | | | | | | | | | | | | |
INCOME STATEMENT | | Three Months Ended | | | | Twelve Months Ended | | |
| (Dollars in thousands except per share amounts) | | December 31, 2005 | | December 31, 2004 | | Change | | December 31, 2005 | | December 31, 2004 | | Change |
| (Unaudited) | | | | | | | | | | | | |
| Interest income | | $ 18,145 | | $ 15,093 | | 20% | | $ 67,802 | | $ 55,316 | | 23% |
| Interest expense | | 8,880 | | 6,395 | | 39% | | 31,276 | | 22,919 | | 36% |
| Net interest income | | 9,265 | | 8,698 | | 7% | | 36,526 | | 32,397 | | 13% |
| Provision for loan losses | | 200 | | 150 | | 33% | | 945 | | 675 | | 40% |
| Net interest income after provision for loan losses | 9,065 | | 8,548 | | 6% | | 35,581 | | 31,722 | | 12% |
| Other income | | | | | | | | | | | | |
| | Gain on sale of loans | | 160 | | 29 | | 452% | | 865 | | 228 | | 279% |
| | Gain on sale of securities | | 54 | | - | | NA | | 67 | | 510 | | -87% |
| | Checking fees | | 780 | | 555 | | 41% | | 3,124 | | 2,069 | | 51% |
| | Service fees | | 244 | | 197 | | 24% | | 916 | | 704 | | 30% |
| | Gain/(loss) on sale of real estate | | - | | (17) | | NA | | 33 | | 82 | | -60% |
| | Bank owned life insurance | | 192 | | 165 | | 16% | | 764 | | 566 | | 35% |
| | Other | | 72 | | 239 | | -70% | | 564 | | 588 | | -4% |
| Total other income | | 1,502 | | 1,168 | | 29% | | 6,333 | | 4,747 | | 33% |
| | | | | | | | | | | | | | |
| Total income | | 10,567 | | 9,716 | | 9% | | 41,914 | | 36,469 | | 15% |
| | | | | | | | | | | | | | |
| Compensation expense | | 2,897 | | 3,094 | | -6% | | 12,114 | | 11,483 | | 5% |
| Other operating expenses | | 2,708 | | 2,451 | | 10% | | 10,382 | | 8,452 | | 23% |
| Merger expenses | | - | | - | | NA | | - | | 356 | | NA |
| FHLB prepayment fees | | - | | - | | NA | | 110 | | 26 | | 323% |
| Total other expense | | 5,605 | | 5,545 | | 1% | | 22,606 | | 20,317 | | 11% |
| | | | | | | | | | | | | | |
| Net income before tax | | 4,962 | | 4,171 | | 19% | | 19,308 | | 16,152 | | 20% |
| | | | | | | | | | | | | | |
| Income tax expense | | 1,546 | | 1,347 | | 15% | | 6,262 | | 5,367 | | 17% |
| | | | | | | | | | | | | | |
| Net income | | $ 3,416 | | $ 2,824 | | 21% | | $ 13,046 | | $ 10,785 | | 21% |
| | | | | | | | | | | | | | |
EARNINGS PER SHARE INFORMATION | | | | | | | | | | | | |
| Earnings per share, basic | | $ 0.36 | | $ 0.30 | | 21% | | $ 1.36 | | $ 1.20 | | 13% |
| Earnings per share, diluted | | $ 0.35 | | $ 0.29 | | 21% | | $ 1.32 | | $ 1.16 | | 14% |
| | | | | | | | | | | | | | |
| Weighted average number of shares outstanding | | | | | | | | | | | | |
| Basic | | 9,595,187 | | 9,560,593 | | | | 9,582,259 | | 8,952,493 | | |
| Diluted | | 9,865,183 | | 9,869,402 | | | | 9,855,898 | | 9,276,232 | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | Three Months Ended | | | | Twelve Months Ended | | |
| | | | December 31, 2005 | | December 31, 2004 | | | | December 31, 2005 | | December 31, 2004 | | |
PERFORMANCE MEASURES AND RATIOS | | | | | | | | | | | | |
| Return on equity | | 13.25% | | 11.90% | | | | 13.13% | | 13.22% | | |
| Return on tangible equity | | 17.83% | | 16.40% | | | | 18.94% | | 16.24% | | |
| Return on average assets | | 1.14% | | 1.04% | | | | 1.13% | | 1.09% | | |
| Efficiency ratio | | 52.20% | | 56.20% | | | | 52.75% | | 54.70% | | |
| Net interest margin | | 3.29% | | 3.41% | | | | 3.35% | | 3.44% | | |
| Capital/asset ratio (Tier 1, inc. Jr. Sub Deb) | | 8.13% | | 8.04% | | | | 8.13% | | 8.04% | | |
| Tangible cap/asset ratio (ex. Sub Deb) | | 6.53% | | 6.59% | | | | 6.53% | | 6.59% | | |
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January 24, 2006
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BALANCE SHEET | | | | | | | | | | | |
| (Dollars in thousands except per share amounts) | | December 31, 2005 | | September 30, 2005 | | Three Month Change | | December 31, 2004 | | One Year Change | |
| (Unaudited) | | | | | | | | | | | |
| Cash and due from banks | | $ | 16,616 | | $ | 19,303 | | | -14 | % | $ | 11,692 | | | 42 | % |
| Interest bearing deposits | | | 14,493 | | | 22,475 | | | -36 | % | | 1,337 | | | 984 | % |
| | | | | | | | | | | | | | | | | |
| Securities held to maturity | | | 95,122 | | | 91,346 | | | 4 | % | | 91,339 | | | 4 | % |
| Federal Home Loan Bank (FHLB) stock | | | 11,920 | | | 11,920 | | | 0 | % | | 11,872 | | | 0 | % |
| Securities available for sale | | | 140,596 | | | 111,097 | | | 27 | % | | 112,404 | | | 25 | % |
| Total securities | | | 247,638 | | | 214,363 | | | 16 | % | | 215,615 | | | 15 | % |
| Loans | | | | | | | | | | | | | | | | |
| Business | | | 394,034 | | | 393,880 | | | 0 | % | | 292,117 | | | 35 | % |
| R/E construction | | | 165,957 | | | 151,875 | | | 9 | % | | 107,431 | | | 54 | % |
| Commercial real estate | | | 141,109 | | | 140,413 | | | 0 | % | | 178,704 | | | -21 | % |
| Multifamily | | | 52,057 | | | 53,389 | | | -2 | % | | 92,372 | | | -44 | % |
| Home equity/consumer | | | 32,160 | | | 32,752 | | | -2 | % | | 30,125 | | | 7 | % |
| Residential | | | 95,429 | | | 106,639 | | | -11 | % | | 105,975 | | | -10 | % |
| Total loans | | | 880,746 | | | 878,948 | | | 0 | % | | 806,724 | | | 9 | % |
| Deferred loan fees | | | (3,443 | ) | | (3,077 | ) | | 12 | % | | (2,695 | ) | | 28 | % |
| Allowance for loan losses | | | (10,254 | ) | | (10,081 | ) | | 2 | % | | (9,563 | ) | | 7 | % |
| Loans, net | | | 867,049 | | | 865,790 | | | 0 | % | | 794,466 | | | 9 | % |
| Premises and equipment | | | 12,270 | | | 12,656 | | | -3 | % | | 12,824 | | | -4 | % |
| Real estate owned and other repossessed assets | | | 101 | | | 386 | | | -74 | % | | 868 | | | -88 | % |
| Bank owned life insurance | | | 17,313 | | | 17,148 | | | 1 | % | | 16,650 | | | 4 | % |
| Other assets | | | 10,183 | | | 8,886 | | | 15 | % | | 9,211 | | | 11 | % |
| Goodwill and intangible assets | | | 26,121 | | | 26,095 | | | 0 | % | | 26,292 | | | -1 | % |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 1,211,784 | | $ | 1,187,102 | | | 2 | % | $ | 1,088,955 | | | 11 | % |
| | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | |
| Checking accounts | | $ | 120,468 | | $ | 122,135 | | | -1 | % | $ | 112,564 | | | 7 | % |
| Savings and money market accounts | | | 196,790 | | | 174,835 | | | 13 | % | | 172,584 | | | 14 | % |
| Certificates of deposit | | | 477,888 | | | 502,999 | | | -5 | % | | 436,760 | | | 9 | % |
| Total deposits | | | 795,146 | | | 799,969 | | | -1 | % | | 721,908 | | | 10 | % |
| FHLB advances | | | 236,000 | | | 241,000 | | | -2 | % | | 228,000 | | | 4 | % |
| Securities sold under agreement to repurchase | | | 51,058 | | | 20,513 | | | 149 | % | | 20,902 | | | 144 | % |
| Jr. Sub. Deb. (Trust Preferred Securities) | | | 15,212 | | | 15,367 | | | -1 | % | | 15,454 | | | -2 | % |
| Other liabilities | | | 8,786 | | | 7,511 | | | 17 | % | | 6,441 | | | 36 | % |
| Total liabilities | | | 1,106,202 | | | 1,084,360 | | | 2 | % | | 992,705 | | | 11 | % |
| | | | | | | | | | | | | | | | | |
| Stockholders' equity | | | | | | | | | | | | | | | | |
| Common stock and paid in capital | | | 38,245 | | | 38,042 | | | 1 | % | | 37,422 | | | 2 | % |
| Retained earnings | | | 68,945 | | | 66,420 | | | 4 | % | | 59,975 | | | 15 | % |
| Accumulated comprehensive gain/(loss) | | | (1,997 | ) | | (1,720 | ) | | 16 | % | | (1,147 | ) | | 74 | % |
| Total stockholders' equity | | | 105,193 | | | 102,742 | | | 2 | % | | 96,250 | | | 9 | % |
| | | | | | | | | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,211,395 | | $ | 1,187,102 | | | 2 | % | $ | 1,088,955 | | | 11 | % |
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AVERAGE BALANCES | | Three Months Ended | | Twelve Months Ended | |
| (Unaudited) (Dollars in thousands except per share amounts) | | December 31, 2005 | | December 31, 2004 | | December 31, 2005 | | December 31, 2004 | |
| | | | | | | | | | |
| Average assets | | $1,194,006 | | $1,083,470 | | $1,155,738 | | $988,666 | |
| Average earning assets | | 1,126,032 | | 1,020,513 | | 1,088,822 | | 942,805 | |
| Average deposits | | 795,884 | | 717,731 | | 770,337 | | 650,753 | |
| Average loans | | 874,683 | | 798,893 | | 854,684 | | 691,373 | |
| Average equity | | 102,690 | | 94,806 | | 99,370 | | 81,575 | |
| Average tangible equity | | 76,620 | | 68,896 | | 73,204 | | 66,408 | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
| Total equity | | $ | 105,193 | | $ | 96,250 | | | | | | | |
| Less: goodwill and intangibles | | | 26,121 | | | 26,292 | | | | | | | |
| Tangible equity | | $ | 79,072 | | $ | 69,958 | | | | | | | |
| | | | | | | | | | | | | | |
| Common stock outstanding | | | 9,603,787 | | | 9,559,822 | | | | | | | |
| Book value per common share | | $ | 10.95 | | $ | 10.07 | | | | | | | |
| Tangible book value per share | | $ | 8.23 | | $ | 7.32 | | | | | | | |
| | | | | | | | | | | | | | |
ASSET QUALITY | | | December 31, 2005 | | | September 30, 2005 | | | December 31, 2004 | | | | |
| Nonperforming loans (NPLs) | | $ | 1,987 | | $ | 910 | | $ | 532 | | | | |
| Nonperforming loans/total loans | | | 0.23 | % | | 0.10 | % | | 0.07 | % | | | |
| Net loan charge-offs in the quarter | | $ | 27 | | $ | 60 | | $ | 22 | | | | |
| Net charge-offs/total loans in the quarter | | | 0.00 | % | | 0.01 | % | | 0.00 | % | | | |
| Allowance for loan losses/total loans | | | 1.16 | % | | 1.15 | % | | 1.19 | % | | | |
| Allowance for loan losses/nonperforming loans | | | 516 | % | | 1108 | % | | 1798 | % | | | |
| Real estate owned and other repossessed assets | | $ | 101 | | $ | 386 | | $ | 868 | | | | |
| Nonperforming assets | | $ | 2,088 | | $ | 1,296 | | $ | 1,400 | | | | |
| Nonperforming assets/total assets | | | 0.17 | % | | 0.11 | % | | 0.13 | % | | | |
This press release contains supplemental financial information determined by methods other than in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”). These measures include return on tangible equity, tangible book value per share and tangible capital to asset ratio. Cascade’s management uses these non-GAAP measures in its analysis of the company’s performance. These measures exclude the average and ending balances of acquisition-related goodwill and intangibles in determining average tangible shareholders’ equity. Banking and financial institution regulators also exclude goodwill and intangibles from shareholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of the financial measure excluding the impact of these items provides useful supplemental information that is essential for a proper understanding of the financial results of Cascade Financial Corporation, as they provide a method to assess management’s success in utilizing the company’s tangible capital. This disclosure should not be viewed as a substitute for results determined to be in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Safe Harbor Statement
This document contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. All such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to: continued strong demand for Cascade’s products and services, the ability to attract low-cost deposits and commercial loans, expectations for the net interest margin, maintaining asset quality, management’s ability to minimize interest rate exposure and the impact of interest rate movements, the ability to attract and retain qualified people, and other factors. For a discussion of factors that could cause actual results to differ, please see the Company's publicly available Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2004.
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Note: Transmitted on Business Wire on January 24, 2006, at 1:00 pm PST.
