SOURCE: Capital Pacific Bank

January 24, 2007 12:00 ET

Capital Pacific Bank Reports Continued Growth in Fourth Quarter

PORTLAND, OR -- (MARKET WIRE) -- January 24, 2007 -- Capital Pacific Bank (OTCBB: CPFB) closed the year with a report of consistent growth in key financial performance measures.

Total assets at Portland's emerging business bank grew to $113 million, up from $79 million at the close of 2005. The bank reported loans of $107 million, up $32 million or 43 percent over the 2005 fiscal year. Loan growth was funded entirely by deposits, which increased to $98 million, up $35 million, nearly double the amount of the last fiscal year.

Other key performance indicators for the year:

--  Pre-tax net income of $590,000 representing a $571,000 increase over
    2005
--  Net interest margin of 5.38 percent for the year
--  Third consecutive year of loan growth of $30 million or more.
    
"The strategic initiatives we set forth in 2006 have resulted in a significant number of new clients and steady growth for Capital Pacific Bank," said CEO Mark C. Stevenson. "We will continue to focus on these initiatives in 2007 to capitalize on our momentum and reinforce our capabilities to serve Portland-area businesses and business owners with creative banking solutions and an elite level of service."

With the potential for a softening economy, Stevenson said the bank would continue to selectively grow its loan portfolio. He noted that the bank's asset quality remains good and is appropriately supported by a loan loss reserve of 1.2 percent of total loans. For 2007, Stevenson said the bank will place additional focus on developing business in key deposit-rich sectors.

Capital Pacific Bank serves businesses, professionals and nonprofit organizations with comprehensive banking solutions and an elite level of service. Headquartered in the Fox Tower in downtown Portland, the bank's full array of products and services are delivered through a strategic combination of highly experienced client service officers and the innovative application of technology. For more information, visit www.capitalpacificbank.com.


(unaudited and dollars in thousands, except per share data)

                                                  As of          As of
Condensed Balance Sheets                      Dec. 31, 2006  Dec. 31, 2005
                                              -------------  -------------
Cash and due from banks                       $       2,420  $         851
Investments                                           3,870          2,460
Loans:
Commercial                                           55,403         48,104
Real estate                                          49,423         24,855
Other                                                 1,640          1,403
                                              -------------  -------------
  Total loans                                       106,466         74,362
Loan loss reserve                                    (1,280)          (865)
                                              -------------  -------------
  Total loans, net of loan loss reserve             105,186         73,497
Other assets                                          1,927          1,711
                                              -------------  -------------
  Total assets                                $     113,403  $      78,519
                                              =============  =============

Deposits:
Non interest-bearing demand                   $      19,188  $      11,893
Interest-bearing demand                              45,598         20,952
Certificates of deposit                              33,265         29,718
                                              -------------  -------------
  Total deposits                                     98,051         62,563

Other liabilities                                     1,460          2,817
Shareholders' equity                                 13,892         13,139
                                              -------------  -------------
  Total liabilities and shareholders' equity  $     113,403  $      78,519
                                              =============  =============




                                              For the three  For the three
                                              months ended   months ended
Condensed Statements of Operations            Dec. 31, 2006  Dec. 31, 2005
                                              -------------- --------------
Interest income                               $        2,452 $        1,415
Interest expense                                         927            452
                                              -------------- --------------
  Net interest income                                  1,525            963
Provision for loan losses                                229            140
                                              -------------- --------------
  Net interest income, net of provision for
   loan losses                                         1,296            823
Deposit fees and other non-interest income               142            130
Income associated with the sale of loans                 137            198
Non-interest expense                                   1,280            978
                                              -------------- --------------
  Net income before tax expense                          295            173
Income tax expense                                       120             72
                                              -------------- --------------
  Net income                                  $          175 $          101
                                              ============== ==============
  Net income per share, basic                 $         0.11 $         0.07
                                              ============== ==============
  Net income per share, fully diluted         $         0.11 $         0.07
                                              ============== ==============

Basic average shares outstanding                   1,542,482      1,511,178
                                              ============== ==============
Fully diluted average shares outstanding           1,605,873      1,554,692
                                              ============== ==============




                                              For the year   For the year
                                              ended Dec. 31, ended Dec. 31,
Condensed Statements of Operations                 2006          2005
                                              -------------- -------------
Interest income                               $        8,046 $       4,176
Interest expense                                       2,930         1,196
                                              -------------- -------------
  Net interest income                                  5,116         2,980
Provision for loan losses                                594           351
                                              -------------- -------------
  Net interest income, net of provision for
   loan losses                                         4,522         2,629
Deposit fees and other non-interest income               529           297
Income associated with the sale of loans                 260           394
Non-interest expense                                   4,721         3,301
                                              -------------- -------------
  Net income before tax expense                          590            19
Income tax expense  (benefit) (2)                        248          (839)
                                              -------------- -------------
  Net income                                  $          342 $         858
                                              ============== =============
  Net income per share, basic                 $         0.23 $        0.57
                                              ============== =============
  Net income per share, fully diluted         $         0.22 $        0.55
                                              ============== =============

Basic average shares outstanding                   1,519,068     1,510,260
                                              ============== =============
Fully diluted average shares outstanding           1,583,200     1,550,055
                                              ============== =============




Performance by Quarter          12/31/06    9/30/06    6/30/06    3/31/06
                                =========  =========  =========  =========

Loans, gross                    $ 106,466  $ 107,492  $  91,623  $  80,086
Non-performing loans and loans
 past due 90 days               $     150  $     345  $     314  $       -
Loan loss reserve as a
 percentage of loans                 1.20%      1.14%      1.11%      1.13%
Loans charged off, net of
 recoveries                     $     180  $       -  $       -  $       -

Deposits                        $  98,051  $  86,864  $  81,706  $  69,938

Net interest income             $   1,525  $   1,385  $   1,147  $   1,059
Net income before tax expense   $     295  $     180  $      52  $      64
Net income                      $     175  $      98  $      32  $      38
Net income per share, basic     $    0.11  $    0.06  $    0.02  $    0.02
Net income per share, fully
 diluted                        $    0.11  $    0.06  $    0.02  $    0.02

Return on average equity             5.02%      2.90%      0.98%      1.16%
Return on average assets             0.60%      0.37%      0.14%      0.19%
Net interest margin                  5.38%      5.43%      5.22%      5.47%
Efficiency ratio (1)                   70%        75%        88%        91%


(1) Calculated by dividing non-interest expense by net interest income and
non-interest income.

(2) 2005 includes one-time recognition of a deferred tax asset related to
the Bank's past net operating losses that can be used to offset future
income taxes payable.

Contact Information

  • Contact:
    Mark Stevenson
    CEO
    or Felice Belfiore
    Chief Financial Officer
    (503) 796-0100