I’m pleased to share Seattle Bancshares’ financial results for the third quarter of 2023. It has been a pivotal year for our company as we’ve continued to grow and outperform our peers in the industry. Given the unexpected bank closures in the first half of the year that caused concern amongst consumers and the industry, Seattle Bank’s strong performance and financial stability provide clients and partners with every confidence to bank with us.
With an annualized return on equity of 9.6% through Q3 2023, Seattle Bank:
Ranks in the 95th percentile for our net interest margin, a key indicator of profitability
Ranks in the 95th percentile for our yield on- loans, a key indicator of both profitability and our discipline in loan origination
Ranks in the 80th percentile for assets per employee, reflecting our productivity, efficiency, and business model
Profitability
Seattle Bancshares’ Q3 2023 net income was $1.4 million, down from Q3 2022’s net income of $3.1 million. Seattle Bancshares’ Q3 2023 pre-tax, pre-provision income was $4.3 million, down from Q3 2022’s $5.1 million. While our net interest margin remains high, our lower net income is the result of our aggressive investments in supporting the growth of CD Valet and Partner Banking, which are driving growth and positioning Seattle Bancshares for future success.
CD Valet is our online marketplace connecting consumers with financial institutions to compare and open Certificates of Deposit (CDs) with the best rates and terms nationwide. With more than one million visitors and growing recognition in the financial services industry, we recently signed our first financial institution partners to utilize CD Valet’s lead gen and digital account opening capabilities thus creating the nation’s first transactional, two-sided CD marketplace.
Capital
As of September 30, 2023, Seattle Bank’s leverage ratio measured 12%, over twice the minimum regulatory requirement of 5% and significantly above the regulatory criteria for being “well capitalized.”
Assets
At the third-quarter end, Seattle Bancshares’ assets totaled $797.7 million, an increase of $16.7 million from year end. This primarily reflects the continued growth in our Partner Banking and reverse mortgage loan portfolios. Partner Banking has proven to be a highly effective channel of loan origination and we will launch new collaborations in 2024 that we expect will significantly scale up this business line.
Deposits
Total deposits were $661.7 million at the third quarter-end 2023, up from $623.9 million at year-end 2022, for an annualized increase of 8.0%. Maintaining deposit levels has become the biggest challenge for most of the industry, however, Seattle Bank is continuing to see deposits grow. Seattle Bank’s client deposit growth rate is 10.3% through Q3 2023 due to our Private Banking focus and aggressive strategy with CDs.
