SOURCE: Columbia Commercial Bancorp

Columbia Commercial Bancorp

February 15, 2011 22:11 ET

Columbia Commercial Bancorp Reports Fourth Quarter and Full Year 2010 Results

HILLSBORO, OR--(Marketwire - February 15, 2011) - Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Columbia Community Bank (the Bank), reports a net loss of $415,000 or ($0.13) per diluted share for the fourth quarter of 2010 compared to a net profit of $210,000 or $0.07 per diluted share for the third quarter of 2010 and a net loss of $1.8 million or ($0.57) per diluted share for the fourth quarter of 2009. For the full year ended December 31, 2010, the Company's net loss was $1.1 million or ($0.36) per diluted share compared to a net loss of $5.5 million or ($1.76) per diluted share for the same twelve month period in 2009.

"The Bank reported a loss this quarter due to a $750,000 loan loss provision and a $225,000 other-than-temporary impairment charge against one of the Bank's securities. But this quarter's financial results shouldn't overshadow the number of positive trends over this past year which include improvement in the quality of the Bank's loan portfolio, a continued reduction in construction and land development loans, a reduction in non-performing assets, increased local deposits, and considerable improvement in net interest margin," states the Company's President and Chief Executive Officer, Rick A. Roby. And Mr. Roby continues, "For 2011 we foresee these positive trends continuing and we are also looking forward to increasing outstanding loans and seeing a reduction in non-interest expenses compared to 2010 and the prior year as the amount of troubled assets and their related cost are reduced."

Assets

Total assets at December 31, 2010 of $358.5 million are down $13.1 million or 3.5% over the past quarter primarily from the liquidation of excess investments to retire maturing brokered deposits. Compared to the $380.2 million in total assets outstanding as of December 31, 2009, current year-end assets are down $21.7 million or 5.7%. Liquid assets at December 31, 2010 consist of $18.7 million of cash, federal funds sold of almost $10.0 million and marketable securities of $62.3 million. With over $41.8 million in excess cash and unpledged securities, or 11.7% of total assets, the Bank remains very liquid.

Loans outstanding at December 31, 2010 of $244.9 million are down $16.7 million, or 6.4% relative to the $261.6 million at the prior year-end, however, loans are up $2.3 million for the fourth quarter of 2010 compared to the prior quarter. The Bank's Chief Credit Officer, Fred Johnson states, "This past quarter was the first time in the last few years that other loan growth outpaced the reduction in construction and land development loans. We are seeing a pickup in loan demand from our continued marketing efforts as evidenced by the increased commercial real estate and commercial and industrial loans over the past quarter and we anticipate this trend to continue throughout 2011." Construction and land development loans totaled $49.0 million, or 20.0% of total loans as of December 31, 2010 compared to $60.6 million, or 23.1% of total loans as year-end 2009 and $116.0 million or 36.8% of loans as of year-end 2008. The loan portfolio mix as of December 31, 2010 was $79.3 million or 32.4% in commercial real estate loans, $75.3 million or 30.8% of commercial and industrial loans, $49.0 million or 20.0% of construction and land development loans, $25.4 million or 10.4% of 1-4 family residential property loans, and other loans totaled $15.9 million or 6.4% of total loans.

The allowance for loan losses at $7.5 million is 3.07% of loans which is down from the $7.9 million, or 3.24%, as of September 30, 2010 and the $8.9 million or 3.40% of loans as of December 31, 2009. Loan loss provision for the fourth quarter was $750,000 relative to net charge-offs of $1.1 million. For all of 2010, the loan loss provision was $2.5 million and net charge-offs were $3.9 million compared to 2009 when the loan loss provision was $7.7 million and net charge-offs were $4.7 million.

Non-performing assets (both loans on non-accrual status and other real estate owned, or OREO) were relatively stable the past two quarters as they totaled $22.1 million as of December 31, 2010 and $22.0 million as of September 30, 2010 but they are down considerably when compared to the $28.9 million as of December 31, 2009. OREO at December 31, 2010 of $11.1 million is 49.9% of non-performing assets compared to $11.9 million, or 41.1% as of December 31, 2009. Non-performing assets as a percentage of total assets are down to 6.2% as of December 31, 2010 compared to 7.6% as of December 31, 2009. As of December 31, 2010, the Bank has only $1.4 million in loans past due between 30-89 days and no loans over 90 days past due and still accruing interest. "The Bank continues to be pleased with the strength of the performing loans within its portfolio especially given the state of the economy over the past few years," states Mr. Johnson. And he continues, "Past-dues over this past year have been and continue to be acceptable, and, while the economy may still be sluggish, our non-real estate related borrowers continue to perform well. Of course our challenges have been and will continue to be with real estate related assets, especially with larger borrowers or projects as their properties are more difficult to liquidate in today's depressed market. This is further evidenced by the fact that over 65% of the Bank's non-performing assets stem from only four projects or borrowers. While we are observing greater stability in the real estate market, sales remain anemic and pricing remains influenced by significant inventory being sold under foreclosure or other distressed conditions. I am confident though, that the Bank will continue its steady success with converting non-performing assets to performing."

Deposits

Deposits continue to decline at the Bank as brokered funds mature and are not replaced. At $252.8 million as of December 31, 2010, total deposits declined $10.3 million or 3.9% over the past quarter and $20.8 million or 7.6% during 2010. Brokered deposits dropped $29.4 million during 2010 and are now $27.7 million or 10.9% of total deposits compared to $57.1 million or 20.8% of total deposits at year-end 2009. "The Bank continues to make considerable progress in reducing its reliance on non-core funding sources not only as evidenced by the significant reduction in outstanding brokered deposits, but more importantly by the increase in local deposits at our branches which increased $17.7 million, or 13.3% during 2010. Our success in local deposit growth is providing the Bank with ample liquidity and additional funds to increase lending as we move into 2011," states Bob Ekblad, the Company's Chief Financial Officer.

Earnings

Net loss for the current quarter was $415,000 compared to net profit of $210,000 for the third quarter and net losses of $597,000 and $331,000 for the second and first quarters of 2010. For the twelve month fiscal year ended December 31, 2010, the Company's net loss was $1.1 million compared to a net loss of $5.5 million for 2009.

Interest income from loans and investments has remained steady at $4.3 million for all four quarters of 2010, or $17.2 million for the full 2010 year compared to $19.1 million for the full year of 2009. The reduction in interest income in 2010 is due to the $16.7 million reduction in loans throughout 2010 along with the $53.6 million reduction during 2009. Interest expense continues its strong downward trend from the reduction of high-cost brokered deposits and the overall reduction in market rates paid on core and other deposits. Interest expense for fourth quarter 2010 was $1.9 million compared to $2.1 million for the prior quarter and $2.3 million for first quarter 2010. For the full 2010 year, interest expense at $8.5 million is down $2.0 million, or 19.2%, when compared to the $10.5 million in interest costs for 2009. "The reduction in overall interest costs in 2010 actually exceeded the drop in interest income over the year, such that our net interest income in 2010 slightly exceed that of 2009; and we should continue to see this trend throughout 2011," states Mr. Ekblad. Net interest income for the full year 2010 was $8.8 million relative to $8.7 million for 2009. Fourth quarter 2010 net interest income was $2.4 million compared to $2.3 million in the prior quarter and $2.0 million for first quarter 2010.

Provision for loan losses was $750,000 for fourth quarter of 2010. There was no loan loss provision taken in the prior third quarter of 2010. For the full-year 2010, loan loss provision was $2.5 million, down considerably from the $7.7 million provision taken in 2009.

Non-interest income for the recent quarter of $135,000 and year-to-date 2010 of $499,000 is up marginally when compared to prior quarters and the $458,000 for 2009. Non-interest expense was constant at $2.2 million for both of the past two quarters and has been consistent most of the year, totaling $8.7 million for 2010 which is also very consistent when compared to the $8.8 million for 2009. "Costs related to troubled loans, OREO properties, and FDIC insurance continued at elevated levels throughout 2010," commented Mr. Roby. He continued by noting, "While we anticipate continuing to see significant costs with the holding and liquidating of OREO properties, legal and other costs associated with troubled loans should go down considerably as the number of troubled relationships has declined. And additionally, the recently revised FDIC insurance assessment methodology will also benefit the Bank."

During the fourth quarter, the Bank recognized a $225,000 other-than-temporary impairment charge against one of its investment securities in addition to the $150,000 charge it had already taken in the third quarter of 2010. "With the $375,000 taken during 2010 along with the $1.5 million in additional other-than-temporary charges taken already on this security during 2009, it has basically been written-off, so further other-than-temporary impairment charges at the Bank are not expected moving forward," states Mr. Ekblad. In addition to the other-than-temporary impairment charges for 2010, the Bank also had losses on the sale and market value write-downs of various OREO properties totaling $393,000 for the year. These charges were somewhat mitigated by the $643,000 in gains on securities sales for the year which were recognized during the third and first quarters of 2010.

Capital

With the reduction in both average and risk-weighted assets along with a successful capital raise in the first quarter of 2010, all of the Bank's regulatory capital ratios increased over the past year and continue to be considered "well-capitalized" according to standard regulatory guidelines. As of December 31, 2010, the Bank's leverage ratio is 7.53%, its tier 1 risk-based capital ratio is 9.92%, and its total risk-based capital ratio is 11.19% compared to 7.17%, 9.12%, and 10.39% at year-end 2009, respectively.

About Columbia Commercial Bancorp:

Information about the Company's stock may be obtained through the Over the Counter Bulletin Board at www.otcbb.com. Columbia Commercial Bancorp's stock symbol is CLBC.

Columbia Commercial Bancorp was formed in 2002 as a holding company for Columbia Community Bank, which was opened in 1999 by local business people to deliver loan and deposit product solutions through experienced and professional bankers to businesses, nonprofits, professionals, and individuals throughout Washington County and the greater Portland metropolitan area. The Bank was named among the "100 Best Companies to Work for in Oregon" by Oregon Business Magazine (2009 and 2007) and the Bank has also been named by Portland Business Journal as one of the "100 Fastest-Growing Private Companies in Oregon" consistently over the past several years. In 2008, US Banker magazine ranked Columbia Commercial Bancorp number 15 among 1,115 financial institutions in the nation with assets of $2 billion or less based upon a three-year average return on equity.

For more information about Columbia Commercial Bancorp, or its subsidiary, Columbia Community Bank, call (503) 693-7500 or visit our website at www.columbiacommunitybank.com. Information contained in or linked to our website is not incorporated as a part of this release.

Certain statements in this release may constitute forward-looking statements within the definition of the "safe-harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to significant uncertainties, which could cause actual results to differ materially from those set forth in such statements. Forward-looking statements are those that incorporate management's current expectations and plans based on information currently know to them. These statements can sometimes be identified by words such as "believe," "estimate," "anticipate," "expect," "intend," "will," "may," "should," or other similar phrases or words. Readers are cautioned not to place undue reliance on forward-looking statements. In particular, they should not be construed as assurances of a given level of performance or as promises of a given set of management's actions. Some of the factors that could cause management to deviate from its current plans, or could cause the Company's results to differ from current expectations, include the effect of localized or regional economic shifts that may affect the collectability of loans or the value of the collateral underlying those loans; the effects of laws, regulations, policies and government actions upon the Company's assets and operations; sensitivity to the Northwestern Oregon geographic markets and events affecting this market; and the impacts of new government initiatives upon us and our borrowers. The Company does not intend to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.


                           Consolidated Balance Sheet
                                   Unaudited
               (amounts in 000's, except per share data and ratios)


                                             % Change
                                               2010
                            December 31,        vs.  September 30, % Change
                          2010       2009      2009       2010     Quarter
                        ---------  ---------  -------  ----------  -------

ASSETS
   Cash & due from
    banks               $  18,743  $  25,810    -27.4% $   20,603     -9.0%
   Federal funds sold       9,995     15,000    -33.4%      9,950      0.5%
   Investment
    Securities -
    Available for Sale     62,261     54,198     14.9%     75,905    -18.0%
   Investments - Other      2,401      2,566     -6.4%      2,481     -3.2%

   Gross loans            244,868    261,591     -6.4%    242,558      1.0%
   Allowance for loan
    losses                 (7,525)    (8,903)   -15.5%     (7,854)    -4.2%
                        ---------  ---------  -------  ----------  -------
      Net loans           237,343    252,688     -6.1%    234,704      1.1%

   Other real estate
    owned                  11,051     11,890     -7.1%     11,127     -0.7%
   Other assets            16,704     18,021     -7.3%     16,838     -0.8%
                        ---------  ---------  -------  ----------  -------

      Total Assets      $ 358,498  $ 380,173     -5.7% $  371,608     -3.5%
                        =========  =========  =======  ==========  =======

LIABILITIES
   Deposits             $ 252,816  $ 273,654     -7.6% $  263,154     -3.9%
   Repurchase
    agreements             19,893     22,515    -11.6%     21,102     -5.7%
   Federal funds
    purchased                   -          -      0.0%          -      0.0%
   FHLB borrowings         52,635     52,635      0.0%     52,635      0.0%
   Other borrowings         4,453      1,730    157.4%      4,451      0.0%
   Junior subordinated
    debentures              8,248      8,248      0.0%      8,248      0.0%
   Other liabilities        3,110      2,899      7.3%      3,649    -14.8%
                        ---------  ---------  -------  ----------  -------
      Total Liabilities   341,155    361,681     -5.7%    353,239     -3.4%

STOCKHOLDERS' EQUITY       17,343     18,492     -6.2%     18,369     -5.6%
                        ---------  ---------  -------  ----------  -------
      Total Liabilities
       and
       Stockholders'
       Equity           $ 358,498  $ 380,173     -5.7% $  371,608     -3.5%
                        =========  =========  =======  ==========  =======

Shares outstanding at
 end-of-period          3,145,081  3,142,581            3,145,081
Book value per share    $    5.51  $    5.88           $     5.84
Allowance for loan
 losses to total loans       3.07%      3.40%                3.24%
Non-performing assets
 (non-accrual loans &
 OREO)                  $  22,134  $  28,914           $   21,991

Bank Tier 1 leverage
 ratio (5% minimum for
 "well-capitalized")         7.53%      7.17%                7.43%
Bank Tier 1 risk-based
 capital ratio (6%
 minimum for
 "well-capitalized")         9.92%      9.12%               10.04%
Bank Total risk-based
 capital ratio (10%
 minimum for
 "well-capitalized")        11.19%     10.39%               11.31%






                           Consolidated Statement of Operations
                                        Unaudited
                  (amounts in 000's, except per share data and ratios)


                    Three Months Ending        Twelve Months Ending
                    ------------------          ------------------
                     12/31/     9/30/     %      12/31/    12/31/     %
                      2010      2010    Change    2010      2009    Change
                    --------  --------  ------  --------  --------  ------
INTEREST INCOME
   Loans            $  3,827  $  3,842    -0.4% $ 15,439  $ 17,584   -12.2%
   Investments           438       491   -10.8%    1,711     1,421    20.4%
   Federal funds
    sold and other        14        17   -17.6%       86       133   -35.3%
                    --------  --------  ------  --------  --------  ------
      Total
       interest
       income          4,279     4,350    -1.6%   17,236    19,138    -9.9%
                    --------  --------  ------  --------  --------  ------ 

INTEREST EXPENSE
   Deposits            1,126     1,265   -11.0%    5,316     7,585   -29.9%
   Repurchase
    agreements and
    federal funds
    purchased             80        84    -4.8%      329       196    67.9%
   FHLB borrowings       536       535     0.2%    2,125     2,274    -6.6%
   Other borrowings      122       123    -0.8%      460       131   251.1%
   Junior
    subordinated
    debentures            58        63    -7.9%      234       283   -17.3%
                    --------  --------  ------  --------  --------  ------
      Total
       interest
       expense         1,922     2,070    -7.1%    8,464    10,469   -19.2%
                    --------  --------  ------  --------  --------  ------

NET INTEREST INCOME
 BEFORE PROVISION
 FOR LOAN LOSSES       2,357     2,280     3.4%    8,772     8,669     1.2%

PROVISION FOR LOAN
 LOSSES                  750         -     n/a     2,500     7,740   -67.7%
                    --------  --------  ------  --------  --------  ------

NET INTEREST INCOME
 AFTER PROVISION
 FOR LOAN LOSSES       1,607     2,280   -29.5%    6,272       929   575.1%

NON-INTEREST INCOME      135       123     9.8%      499       458     9.0%

NON-INTEREST
 EXPENSE               2,212     2,168     2.0%    8,698     8,772    -0.8%

INVESTMENTS-
 REALIZED GAINS /
 (LOSSES)                  -       470  -100.0%      643     1,383   -53.5%
INVESTMENTS - OTHER
 THAN TEMPORARY
 IMPAIRMENT             (225)     (150)   50.0%     (375)   (1,500)  -75.0%
OREO VALUATION
 ADJUSTMENTS &
 GAINS/(LOSSES) ON
 SALES - NET             (38)     (258)  -85.3%     (393)   (1,813)  -78.3%
                    --------  --------  ------  --------  --------  ------

INCOME (LOSS)
 BEFORE PROVISION
 FOR INCOME TAXES       (733)      297  -346.8%   (2,052)   (9,315)  -78.0%

PROVISION (BENEFIT)
 FOR INCOME TAXES       (318)       87  -465.5%     (919)   (3,797)  -75.8%
                    --------  --------  ------  --------  --------  ------

NET INCOME (LOSS)   $   (415) $    210  -297.6% $ (1,133) $ (5,518)  -79.5%
                    ========  ========  ======  ========  ========  ======

Earnings (Loss) per
 share - Basic      $  (0.13) $   0.07          $  (0.36) $  (1.76)

Earnings (Loss) per
 share - Diluted    $  (0.13) $   0.07          $  (0.36) $  (1.76)

Return on average
 equity                -8.85%     4.52%            -6.14%   -24.85%
Return on average
 assets                -0.45%     0.22%            -0.30%    -1.41%
Net interest margin     2.95%     2.84%             2.77%     2.51%
Efficiency ratio        88.8%     90.2%             93.8%     95.9%

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