SOURCE: Columbia Commercial Bancorp

Columbia Commercial Bancorp

July 26, 2012 17:03 ET

Columbia Commercial Bancorp Reports Second Quarter 2012 Results

HILLSBORO, OR--(Marketwire - Jul 26, 2012) -   Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Columbia Community Bank (the Bank), reports a net profit of $133,000, or $0.04 per diluted share, for the second quarter of 2012 compared to $211,000, or $0.07 per diluted share, for the first quarter of 2012. For the six months ended June 30, 2012 net income was $344,000, or $0.11 per diluted share, compared to a net loss of $97,000, or ($0.04) per diluted share, for the same six month period in 2011. 

"During this past quarter earnings were adversely affected by legal and other related costs to troubled assets, but ultimately these costs and efforts resulted in significant recoveries to the Bank which resulted in a substantial increase to the Bank's allowance for loan losses which now stands at $7.7 million or 3.19% of loans compared to $7.1 million or 2.97% of loans at fiscal year-end 2011. And as a result of these recoveries and improvements in other credit matrices, the Bank was not required to have any loan loss provision expense for these first six months of 2012 compared to the same period in 2011 when it was almost $1.4 million. And while the Bank still has some significant non-performing assets in areas outside of the Portland-metropolitan area which will continue to be challenges moving forward, an improving asset mix, increased loan production, and reducing non-performing assets are strong examples of our teams continued drive and success," states the Company's President and CEO, Rick A. Roby. 

Assets

Total assets as of June 30, 2012 at $339.7 million were down $12.9 million, or 3.7%, when compared to the $352.6 million as of December 31, 2011 and are down $21.3 million or 5.9% when compared to the $361.0 million as of June 30, 2011. "Much of this asset reduction is from a planned decrease as the Bank utilized excess cash and other low-yielding short-term investments to pay down high cost wholesale funds as they matured over the past year," states Mr. Roby. And Fred Johnson, the Company's Chief Credit Officer, adds, "And some of this asset reduction over the past year is also attributable to the continued reduction in the Bank's construction and development loans which has reduced overall loans when compared to last year. We are pleased with our progress in reducing our exposure to construction risk and proud with our results in other types of loan originations as total outstanding loans have increased when compared to year-end 2011." Total loans were $240.7 million as of June 30, 2012 which is a $2.2 million or 0.9% increase from the year-end 2011 amount. Compared to June 30, 2011 when loans were $246.2 million, they are down $5.6 million, or 2.3%. As of June 30, 2012 construction and land development loans totaled $32.0 million, or 13.3%, of the Bank's total loans which are down modestly from the $34.4 million, or 14.4% of loans as of December 31, 2011, and are down $15.6 million when compared to the $47.6 million, or 19.3% of total loans, as of June 30, 2011. And Mr. Johnson continues, "Our credit administration is working through our non-accrual and other problematic loans while the rest of our lending staff, despite intense competition, continue to nurture existing and new relationships to successfully grow the rest of the Bank's loan portfolio." 

For second quarter 2012, the Bank had $933,000 in recoveries compared to $315,000 in charge-offs relative to first quarter 2012 when there were $593,000 in recoveries and $620,000 in loan charge-offs. With recoveries at $1.5 million and charge-offs of $935,000 for the first six months, even without a loan loss provision expense for 2012, the allowance for loan losses has grown $591,000 for the year so that at June 30, 2012 it is $7.7 million or 3.19% of loans compared to December 31, 2011 when it was $7.1 million, or 2.97% of loans. The allowance for loan losses was $7.5 million, or 3.05% of loans as of June 30, 2011 when for the first six months of 2011 the Bank had $1.4 million in net charge-offs and $1.4 million in loan loss provision expense. 

As of June 30, 2012 the Bank had loans in the amount of $829,000 that were past due over 30 days and still accruing interest while as of December 31, 2011, the Bank had no loans that were past due over 30 days and still accruing interest. 

Non-performing assets consist of loans on nonaccrual status and other real estate owned (OREO) which in aggregate were $16.0 million as of June 30, 2012 and are down $3.0 million when compared to the $19.0 million as of December 31, 2011 and are down $5.1 million when compared to the $21.1 million as of June 30, 2011. OREO is 54.3% of non-performing assets as of June 30, 2012 compared to 44.3% as of December 31, 2011.

Deposits

"Total deposits continue their downward trend as funding needs have decreased and the Bank transitions away from brokered and nontraditional out-of-area deposits and focuses on core local deposits," states Bob Ekblad, the Company's Chief Financial Officer. Total deposits at $230.0 million as of June 30, 2012 are down $9.1 million, or 3.8%, for the first six months of 2012 and are down $21.8 million, or 8.7% since June 30, 2011. For the first six months of 2012, the Bank retired $5.6 million in wholesale brokered deposits and also reduced non-traditional out of area deposits by $5.0 million. And when compared to June 30, 2011, the Bank has retired $10.7 million in wholesale brokered deposits and reduced non-traditional out of area deposits by $15.3 million, leaving core deposit growth at $4.2 million over the past twelve months. And Mr. Ekblad continues, "Moving forward the Bank's non-core deposit maturities are slowing which means continued core deposit growth can be utilized for loan and other asset growth." As of June 30, 2012 the Bank has $9.3 million in brokered deposits of which $4.3 million mature in October 2012 and the remaining $5.0 million mature throughout 2013 and 2014. 

Earnings

"While the reduction in loans over the past few years has reduced asset income, the Bank's continued reduction of its high-cost wholesale funding, non-performing assets, and low-yielding excess liquidity continue to provide increasing net interest income and margins," states Mr. Roby. And he continues, "With the amount of recent recoveries to the allowance for loan losses and a strengthening loan portfolio, there has been no need for additional loan loss provision expenses which has led to four consistent quarters of profitability."

Net income at $133,000 for second quarter 2012 was down from the $211,000 for the first quarter of 2012 due primarily to increased non-interest expenses while year-to-date net income for the first six months of 2012 was $344,000 compared to a loss of $97,000 for the same six months of 2011 when the Company had $1.4 million in loan loss provision expenses which were partially offset by $603,000 in realized gains on security sales. 

Net interest income at $2.4 million for second quarter 2012 is showing a steady increase over the $2.3 million for first quarter 2012 which is also true for the first six months of 2012 with net interest income at $4.7 million compared to the $4.6 million for the same period in 2011. Net interest margin at 3.36% for second quarter 2012 is up 23 basis points compared to the 3.13% for first quarter 2012; and when comparing the first six month period of 2012 at 3.24% to the 3.05% for 2011, the increase is 19 basis points. 

With some temporary rental income on various OREO properties, non-interest income at $180,000 for the second quarter of 2012 is above the $152,000 for first quarter 2012. Non-interest income for the first six months of 2012 at $332,000 is consistent with $335,000 for the first six months of 2011. Non-interest expense of $2.2 million for second quarter 2012 is higher than the $2.1 million in the prior quarter due to increased legal expenses but these also resulted in significant loan recoveries for the year. Overall costs associates with all troubled assets which include legal, foreclosure, and OREO expenses continue their downward trend from $458,000 for the first six months of 2011 to $213,000 for the first six months of 2012, which explains most of the variance in total non-interest expense for the six month period of 2011 from $4.4 million down to $4.3 million for the same six months of 2012. The income tax provision for second quarter 2012 is at a higher effective rate than prior quarters as a change in tax rates moving forward has a negative effect on the deferred tax asset valuation and there was also a temporary difference between book and tax expense that became permanent, both which have and will continue to have a negative effect on the income tax provision for the rest of 2012. 

Capital

With the Bank's on-going profitability and its strategy over past quarters to reduce excess low-yielding liquidity and non-performing assets, its capital ratios continue their steady rise. The Bank's leverage ratio and total risk-based capital ratios were 8.34% and 11.57% as of June 30, 2012 compared to 7.63% and 11.42% as of December 31, 2011 and 7.37% and 10.52% as of June 30, 2011, respectively. The Bank's capital ratios continue to exceed those required to be considered "well-capitalized" according to the traditional regulatory guidelines.

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 has been 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.

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 known 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 those markets; 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)
 
                             
                             
    June 30,     % Change 2012 vs.      December 31,   % Change Year-to-  
    2012     2011     2011     2011   Date  
                                   
ASSETS                                  
  Cash & due from banks   $ 22,129     $ 28,574     -22.6 %   $ 25,982   -14.8 %
  Federal funds sold     5,005       5,020     -0.3 %     10,000   -50.0 %
  Investment Securities - Available for Sale     52,903       57,262     -7.6 %     58,417   -9.4 %
  Investments - Other     2,266       2,307     -1.8 %     2,307   -1.8 %
                                   
  Gross loans     240,652       246,206     -2.3 %     238,403   0.9 %
  Allowance for loan losses     (7,674 )     (7,497 )   2.4 %     (7,083 ) 8.3 %
    Net loans     232,978       238,709     -2.4 %     231,320   0.7 %
                                   
  Other real estate owned     8,691       12,152     -28.5 %     8,408   3.4 %
  Other assets     15,709       16,991     -7.5 %     16,174   -2.9 %
                                   
    Total Assets   $ 339,681     $ 361,015     -5.9 %   $ 352,608   -3.7 %
                                   
LIABILITIES                                  
  Deposits   $ 230,026     $ 251,828     -8.7 %   $ 239,083   -3.8 %
  Repurchase agreements     26,731       23,231     15.1 %     26,722   0.0 %
  Federal funds purchased     -       -     0.0 %     -   0.0 %
  FHLB borrowings     47,900       52,635     -9.0 %     52,635   -9.0 %
  Other borrowings     4,515       4,456     1.3 %     4,513   0.0 %
  Junior subordinated debentures     8,248       8,248     0.0 %     8,248   0.0 %
  Other liabilities     3,690       3,102     19.0 %     3,433   7.5 %
    Total Liabilities     321,110       343,500     -6.5 %     334,634   -4.0 %
                                   
STOCKHOLDERS' EQUITY     18,571       17,515     6.0 %     17,974   3.3 %
    Total Liabilities and Stockholders' Equity   $ 339,681     $ 361,015     -5.9 %   $ 352,608   -3.7 %
                                   
Shares outstanding at end-of-period     3,241,581       3,151,581             3,151,581      
Book value per share   $ 5.73     $ 5.56           $ 5.70      
Allowance for loan losses to total loans     3.19 %     3.05 %           2.97 %    
Non-performing assets (non-accrual loans & OREO)   $ 16,007     $ 21,084           $ 18,984      
                                   
Bank Tier 1 leverage ratio (5% minimum for "well-capitalized")     8.34 %     7.37 %           7.63 %    
Bank Tier 1 risk-based capital ratio (6% minimum for "well-capitalized")     10.30 %     9.25 %           10.16 %    
Bank Total risk-based capital ratio (10% minimum for "well-capitalized")     11.57 %     10.52 %           11.42 %    
                                   
                                     
Consolidated Statement of Operations
Unaudited
(amounts in 000's, except per share data and ratios)
       
                                     
                                     
                                     
    Three Months Ending           Six Months Ending        
    6/30/2012     3/31/2012     % Change     6/30/2012     6/30/2011     % Change  
INTEREST INCOME                                            
  Loans   $ 3,443     $ 3,447     -0.1 %   $ 6,890     $ 7,392     -6.8 %
  Investments     207       228     -9.2 %     435       653     -33.4 %
  Federal funds sold and other     20       19     5.3 %     39       29     34.5 %
    Total interest income     3,670       3,694     -0.6 %     7,364       8,074     -8.8 %
                                             
INTEREST EXPENSE                                            
  Deposits     551       616     -10.6 %     1,167       1,849     -36.9 %
  Repurchase agreements and federal funds purchased     48       51     -5.9 %     99       168     -41.1 %
  FHLB borrowings     485       544     -10.8 %     1,029       1,054     -2.4 %
  Other borrowings     120       120     0.0 %     240       242     -0.8 %
  Junior subordinated debentures     65       64     1.6 %     129       118     9.3 %
    Total interest expense     1,269       1,395     -9.0 %     2,664       3,431     -22.4 %
                                             
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES     2,401       2,299     4.4 %     4,700       4,643     1.2 %
                                             
PROVISION FOR LOAN LOSSES     -       -     0.0 %     -       1,350     -100.0 %
                                             
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     2,401       2,299     4.4 %     4,700       3,293     42.7 %
                                             
NON-INTEREST INCOME     180       152     18.4 %     332       335     -0.9 %
                                             
NON-INTEREST EXPENSE     2,201       2,124     3.6 %     4,325       4,389     -1.5 %
                                             
INVESTMENTS- REALIZED GAINS / (LOSSES)     -       -     0.0 %     -       603     -100.0 %
INVESTMENTS - OTHER THAN TEMPORARY IMPAIRMENT     -       -     0.0 %     -       -     0.0 %
OREO VALUATION ADJUSTMENTS & GAINS/(LOSSES) ON SALES - NET     (64 )     24     -366.7 %     (40 )     (87 )   -54.0 %
                                             
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES     316       351     -10.0 %     667       (245 )   -372.2 %
                                             
PROVISION (BENEFIT) FOR INCOME TAXES     183       140     30.7 %     323       (148 )   -318.2 %
                                             
NET INCOME (LOSS)   $ 133     $ 211     -37.0 %   $ 344     $ (97 )   -454.6 %
                                             
Earnings (Loss) per share - Basic   $ 0.04     $ 0.07           $ 0.11     $ (0.03 )      
                                             
Earnings (Loss) per share - Diluted   $ 0.04     $ 0.07           $ 0.11     $ (0.04 )      
                                             
Return on average equity     2.92 %     4.69 %           3.78 %     -1.11 %      
Return on average assets     0.16 %     0.24 %           0.20 %     -0.05 %      
Net interest margin     3.36 %     3.13 %           3.24 %     3.05 %      
Efficiency ratio     85.3 %     86.7 %           85.9 %     88.2 %      

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