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Buenas yan Hafa Adai! Thank you for your continuing support of BankGuam Holding Company and your local bank, Bank of Guam®. As in recent years, we continue to distribute our Annual Report and accompanying materials in a way that conserves resources and helps to contain our costs. We are still "going green," so we have again distributed our Proxy Statement, Annual Report, and Securities and Exchange Commission Report on Form 10-K electronically, saving not only trees, but also what had become high postage expenses. Again, though, as in recent years, all of these materials are available on paper. This printed Annual Report is limited to a brief narrative of the past year's financial performance, focusing more on some of the differences that were unique to 2014. Extensive details regarding our financial condition and performance are reported in our Form 10-K report.
I am happy to announce that 2014 was again a profitable year for our Company. Despite a couple of setbacks in our loan portfolio, we earned nearly $9.6 million after taxes on total revenues of $77.3 million. Although those revenues represent an increase of $2.0 million from 2013, our net profit actually declined by $308 thousand. We were able to hold the line on total expenses, which increased by just $188 thousand from 2013, to $59.4 million, but we increased our provision for loan losses by $2.4 million to raise our allowance for loan losses to $12.5 million. We experienced an unexpected increase in net charge-offs during the year, and loan growth, coupled with economic conditions, made it prudent for us to build a higher allowance. Despite a surge in total assets by more than 14.2% during 2014, to $1.5 billion, we were able to generate a return on average assets of 0.66%. We also increased your total stockholders' equity by 8.9%, to $102.2 million, and yielded a return on average equity of 9.8% during 2014.
— Lourdes (Lou) A. Leon Guerrero
PRESIDENT & CHAIR OF THE BOARD