Published March 2002

Cascade reports benefits of converting to commercial

By Bryan Corliss
Herald Business Writer

Cascade Financial Corp. reported record profits and revenues and a 54 percent jump in earnings for its most recent quarter.

For the year, profits were up 47 percent on revenue growth of 15 percent, the Everett-based bank company reported at the end of January.

Chairman Frank McCord attributed the increases to the successful execution of plans to convert Cascade Bank to a full-service commercial bank. In July, Cascade made the conversion from a federally chartered savings and loan to a state-chartered commercial bank.

“The offense and defense and everything clicked,” he said. “It’s nice to see it up on the scoreboard now.”

The results also came during an economic slump, he noted. “If we can do it in a recession, what can we do when times turn around?”

For the quarter, Cascade reported a profit of $1.7 million, or 26 cents a share. That compared with a profit of $1.1 million, or 17 cents a share, for the same period of 2000. Revenue increased 22 percent to $6.3 million. For the year, net income grew from $3.8 million (59 cents a share) to $5.6 million (87 cents a share). Revenues for the 2001 calendar year grew 15 percent to $23.4 million.

“We are delighted with the exceptional progress,” said Carol Nelson, President and CEO. “We believe we can continue to profitably build on this foundation to achieve a sustainable earnings growth in excess of 15 percent in 2002.”

The bank, which has 14 branches in Snohomish and King counties, has focused on improving efficiency and expanding margins, she said.

It also has increased its provision for loan losses, said Chief Financial Officer Lars Johnson. The loan loss fund was at $540,000 for the most recent quarter, up from $210,000 during the same period last year. Cascade charged off $89,000 in loans during the quarter.

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