SOURCE: Capital Pacific Bank

April 16, 2007 17:00 ET

Capital Pacific Bank Reports Increased Earnings for First Quarter

PORTLAND, OR -- (MARKET WIRE) -- April 16, 2007 -- Capital Pacific Bank (OTCBB: CPFB) reports net income of $192,000 for the first quarter, up nine percent over the previous quarter. This is the 7th consecutive quarter of profitable performance for the bank, which opened its doors in late 2003. The bank's interest margin remained steady at 5.37 percent, unchanged from the previous quarter.

Loans grew to $110 million, compared to $106 million at the end of 2006. Deposits declined to $91 million, as growth in new business relationships was offset by changes in existing balances. "While the first quarter did not reflect the growth we had expected, the addition of several high profile clients has provided us with a meaningful pipeline of business as we move into the 2nd quarter," said CEO Mark Stevenson.

Asset quality is satisfactory with loan loss reserves at 1.19 percent of total loans. With some signs of softening credit, Stevenson noted that the bank has taken steps to be conservative in its credit underwriting and is working actively to strengthen credit quality. The bank ends the quarter without any loans past due 30 days or more.

A highlight of the first quarter was the announcement of a strategic marketing alliance with Allen Trust Company of Portland. The bank's shareholders and customers now have access to trust and investment management services typically reserved only for customers of large regional or national organizations.

"We are also pleased that for the third year in a row, Capital Pacific Bank was named one of the top 100 companies to work for in Oregon by Oregon Business Magazine," continued Stevenson. "We believe our staff is among the best in the industry. We're confident we can continue to deliver the growth we've enjoyed historically while at the same time maintain good asset quality and increase profitability and shareholder value."

About Capital Pacific Bank

Capital Pacific Bank (OTCBB: CPFB) 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. Capital Pacific Bank reported total assets of over $115 million as of March 31, 2007. For more information, visit www.capitalpacificbank.com.

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

                                                        As of      As of
                                                      March 31,  December
Condensed Balance Sheets                                2007     31, 2006
                                                      =========  =========
Cash and due from banks                               $   1,608  $   2,420
Investments                                               2,707      3,870
Loans:
Commercial                                               58,149     55,403
Real estate                                              50,152     49,423
Other                                                     1,604      1,640
                                                      ---------  ---------
  Total loans                                           109,905    106,466
Loan loss reserve                                        (1,312)    (1,280)
                                                      ---------  ---------
  Total loans, net of loan loss reserve                 108,593    105,186
Other assets                                              1,777      1,927
                                                      ---------  ---------
  Total assets                                        $ 114,685  $ 113,403
                                                      =========  =========

Deposits:
Non interest-bearing demand                           $  19,792  $  19,188
Interest-bearing demand                                  40,445     45,598
Certificates of deposit                                  30,945     33,265
                                                      ---------  ---------
  Total deposits                                         91,182     98,051

Other liabilities                                         9,418      1,460
Shareholders' equity                                     14,085     13,892
                                                      ---------  ---------
  Total liabilities and shareholders' equity          $ 114,685  $ 113,403
                                                      =========  =========



                                                        For the   For the
                                                          three     three
                                                         months    months
                                                         ending    ending
                                                        March 31, March 31,
Condensed Statements of Operations                        2007      2006
                                                        ========= =========
Interest income                                         $   2,396 $   1,556
Interest expense                                              907       497
                                                        --------- ---------
  Net interest income                                       1,489     1,059
Provision for loan losses                                      99        40
                                                        --------- ---------
  Net interest income, net of provision for loan losses     1,390     1,019
Deposit fees and other non-interest income                    167       135
Income associated with the sale of loans                       70         9
Non-interest expense                                        1,306     1,099
                                                        --------- ---------
  Net income before tax expense                               321        64
Income tax expense                                            129        26
                                                        --------- ---------
  Net income                                            $     192 $      38
                                                        ========= =========
  Net income per share, basic                           $    0.12 $    0.02
                                                        ========= =========
  Net income per share, fully diluted                   $    0.12 $    0.02
                                                        ========= =========

Basic average shares oustanding                         1,551,178 1,511,178
                                                        ========= =========
Fully diluted average shares outstanding                1,612,160 1,571,460
                                                        ========= =========



Performance by Quarter           3/31/07   12/31/06    9/30/06    6/30/06
                                =========  =========  =========  =========

Loans                           $ 109,905  $ 106,466  $ 107,492  $  91,623
Non-performing loans and loans
 past due 90 days               $     150  $     150  $     345  $     314
Loan loss reserve as a
 percentage of loans                 1.19%      1.20%      1.14%      1.11%
Loans charged off, net of
 recoveries                     $      66  $     180  $       -  $       -

Deposits                        $  91,182  $  98,051  $  86,864  $  81,706

Net interest income             $   1,489  $   1,525  $   1,385  $   1,147
Net income before tax expense   $     321  $     295  $     180  $      52
Net income                      $     192  $     175  $      98  $      32
Net income per share, basic     $    0.12  $    0.11  $    0.06  $    0.02
Net income per share, fully
 diluted                        $    0.12  $    0.11  $    0.06  $    0.02

Return on average equity             5.53%      5.02%      2.90%      0.98%
Return on average assets             0.68%      0.60%      0.37%      0.14%
Net interest margin                  5.38%      5.38%      5.43%      5.22%
Efficiency ratio (1)                   74%        70%        75%        88%


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

Contact Information

  • Contact:
    Mark Stevenson
    CEO
    Felice Belfiore
    CFO
    (503) 796-0100