SOURCE: Columbia Commercial Bancorp

Columbia Commercial Bancorp

July 19, 2013 16:01 ET

Columbia Commercial Bancorp Reports Second Quarter 2013 Results

HILLSBORO, OR--(Marketwired - Jul 19, 2013) - Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Columbia Community Bank (the Bank), reports a net profit of $671,000, or $0.18 per diluted share, for the six months ended June 30, 2013, compared to net income of $344,000, or $0.11 per diluted share, for the same six month period in 2012. Net income for second quarter 2013 of $303,000, or $0.08 per diluted share, was down from the $368,000, or $0.10 per diluted share, in the first quarter of 2013 due to $49,000 of net losses on the sale and valuation adjustments of OREO properties in the current quarter compared to first quarter when the net amount was a gain of $137,000.

"We are very pleased with the continued loan and core deposit growth along with the reductions in non-performing assets. These successes have resulted in improved asset and liability mixes that have generated increased core earnings so far this year and will continue. This progress along with our strong and stable team of seasoned bankers and the well-implemented deleveraging strategy of 2012 that resulted in increased capital levels, continues to solidify a strong framework for the Bank moving forward," stated the Company's President and CEO, Rick A. Roby.

Assets

Total assets as of June 30, 2013 at $325.7 million were down $14.0 million, or 4.1%, when compared to the $339.7 million as of June 30, 2012. This reduction came in the form of lower-yielding cash, federal funds sold, and investments, which in aggregate decreased over $19.3 million as a part of the Bank's deleveraging strategy over the past year. Loans continue to increase and were $246.7 million as of June 30, 2013, up $1.9 million, or 0.8%, above the $244.8 million as of year-end 2012, and were $6.0 million, or 2.5%, above the $240.7 million as of June 30, 2012. Other assets have remained relatively unchanged.

"Just like in prior years, thus far in 2013 the Bank continues to reduce its real estate acquisition, development, and construction loans while at the same time growing other segments of the loan portfolio," states Fred Johnson, the Company's Chief Credit Officer. Real estate acquisition, development, and construction loans at $33.3 million as of June 30, 2013 were down $7.9 million, or 19.2%, when compared to the $41.2 million as of December 31, 2012. These loans are now 13.5% for the Bank's total loan portfolio compared to 16.8% as of December 31, 2012. As of June 30, 2013, Commercial and Industrial (C&I) loans were $75.8 million or 30.7% of the Bank's total loans, while commercial real estate loans were $107.0 million or 43.4%. And Mr. Johnson continues, "Our lenders continue to focus and have been quite successful at seeking and obtaining well-rounded banking relationships from our current markets as evidenced by net loan growth of almost $10.0 million in the non-construction related loan categories for the first six months of 2013; and with the recent addition of a loan production office in Newberg, we look for even more opportunity and success."

For the first six months of 2013, the Bank had $157,000 in loan charge-offs and $188,000 in loan recoveries, or net recoveries of $31,000 compared to the same period in 2012 when loan charge-offs were $935,000 relative to recoveries of $1.5 million, or net recoveries of $591,000. The allowance for loan losses as of June 30, 2013 and December 31, 2012 was at $6.2 million, or 2.51% of loans, which were below the June 30, 2012 amount of $7.7 million, or 3.19% of loans, from charge-offs during the latter half of 2012 and a $750,000 negative loan loss provision taken in fourth quarter 2012 due the improved credit metrics. The Bank made no loan loss provision for these first six months of 2013 or for the full year of 2012. 

As of June 30, 2013 the Bank had $5.3 million in loans that were past due between 30 to 89 days. These loans were all to one adversely classified borrower. And Mr. Johnson commented, "The Bank and borrower are working cooperatively on a resolution strategy that is anticipated to return the borrower to current status within the near term." As of December 31, 2012 and June 30, 2012, the Bank had $829,000 and $329,000 in loans past due between 30 to 89 days, respectively. As of June 30, 2013, December 31, 2012, and June 30, 2012, the Bank had no loans over 90 days past due and still accruing interest. 

Non-performing assets consist of loans on nonaccrual status and other real estate owned (OREO) which in aggregate at $14.0 million as of June 30, 2013 were down $3.7 million, or 20.5%, when compared to the $17.7 million as of December 31, 2012. Nonaccrual loans as of June 30, 2013 consisted of nine relationships ranging in size from $29,000 to $3.4 million and totaled $7.2 million. OREO as of June 30, 2013 consisted of eight properties with carrying amounts ranging from $45,000 to $4.6 million and totaled $6.8 million. OREO as a percentage of non-performing assets was 48.7% as of June 30, 2013. 

Deposits

Total deposits at $228.2 million as of June 30, 2013 were consistent with the $228.0 million as of December 31, 2012, but were down $1.8 million, or 0.8%, when compared to the $230.0 million as of June 30, 2012. Mr. Ekblad, the Company's Chief Financial Officer, states, "A reduction in non-core deposits has been a part of our strategic plan over the past several years and continues to be in the near future as the Bank works to deleverage, reduce excess liquidity, and reduce its reliance on brokered and other non-traditional out-of-area deposits." From June 30, 2012 to June 30, 2013, brokered deposits have decreased $7.1 million and other non-traditional out-of-area deposits have decreased by $12.3 million. As of June 30, 2013, brokered deposits totaled $2.3 million of which $1.9 million will mature in October 2013 and will not be renewed. And as of June 30, 2013, non-traditional out-of-area deposits with varying maturities over the next several years totaled $44.8 million. Mr. Ekblad continues, "Extracting the changes in brokered and non-traditional out-of-area deposits from the change in total deposits, core deposits have grown $17.5 million, or 10.7% over the past twelve months."

Earnings

Increases in net interest income continue to drive increased earnings. Net interest income for second quarter 2013 of $2.6 million was up 2.3% when compared to the $2.5 million for first quarter 2013, and was $5.1 million for the first six months of 2013 compared to $4.7 million for the same period last year, which was an 8.2% increase. Mr. Ekblad states, "While the Bank continues to experience lower loan yields due to scheduled repricings and competitive factors, we are pleased that we have been able to offset these pressures by reducing non-performing assets, improving our asset mix, reducing borrowings, and reducing the costs on our remaining deposits and other liabilities." Net interest margin was 3.39% for both the first and second quarters of 2013 and for the first six months of 2013, which was 15 basis points higher than the 3.24% for the first six months of 2012. 

The Bank did not have any loan loss provision expense for the first six months of 2013 or 2012. With the Bank's continued improvement in the loan portfolio's metrics, reduced charge-offs, and considerable recoveries, the Bank has not taken a loan loss provision expense since second quarter of 2011, and actually took a negative loan loss provision of $750,000 during fourth quarter 2012. 

Noninterest income at $156,000 for second quarter 2013 was up slightly due to increased service charges and fees when compared to the $144,000 for first quarter 2013. For the first six months of 2013, noninterest income at $300,000 was below the $332,000 for the same period of 2012 due to reduced rental receipts on OREO properties that have subsequently been or are in the process of being liquidated. Noninterest expense at $2.2 million for the second quarter 2013 was consistent with the first quarter 2013. For the first six months of 2013, noninterest expense was $4.5 million, up 3.6% from the $4.2 million for the same six month period of 2012 due to increased personnel costs, technology, and the continued high costs related to the Bank's problem loans and OREO properties as they are worked toward final resolutions and liquidations. 

Equity and Capital

Stockholders' equity for the Company at $21.9 million as of June 30, 2013 increased $3.3 million, or 17.8%, since June 30, 2012 from both retained profits and from the fourth quarter 2012 conversion of $1.9 million of the Company's 8.50% subordinated notes into 496,596 common shares. Year-to-date 2013, stockholder equity has increased $389,000 as the increase from retained profits for the year of $671,000 has been partially offset by a $282,000 negative adjustment, net of taxes, from the devaluation of the Bank's securities portfolio due to the rising interest rate environment. At the Bank level, retained profits for the year have resulted in continued increases in all capital measures since year-end 2012, and due to the considerable deleveraging during the last two quarters of 2012, current capital levels are significantly higher than those at this time last year. The Bank's leverage ratio and total risk-based capital ratios were 9.41% and 12.59% as of June 30, 2013 compared to 8.79% and 12.16%, respectively, as of December 31, 2012, and 8.34% and 11.57% as of June 30, 2012. The Bank's capital ratios continue to exceed those required to be considered "well-capitalized" according to the standard regulatory guidelines.

About Columbia Commercial Bancorp:

Information about the Company's stock may be obtained through the OTCQB marketplace at www.otcmarkets.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 for 2012, 2011, and 2009.

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           % Change  
    2013     2012     2013 vs. 2012     December 31, 2012     Year-to-Date  
                               
ASSETS                              
  Cash & due from banks   $ 28,230     $ 22,129     27.6 %   $ 19,102     47.8 %
  Federal funds sold     -       5,005     -100.0 %     -     n/a  
  Investment Securities - Available for Sale     32,454       52,903     -38.7 %     40,019     -18.9 %
  Investments - Other     2,188       2,266     -3.4 %     2,227     -1.8 %
                                       
  Gross loans     246,663       240,652     2.5 %     244,765     0.8 %
  Allowance for loan losses     (6,183 )     (7,674 )   -19.4 %     (6,153 )   0.5 %
    Net loans     240,480       232,978     3.2 %     238,612     0.8 %
                                       
  Other real estate owned     6,836       8,691     -21.3 %     7,289     -6.2 %
  Other assets     15,532       15,709     -1.1 %     15,370     1.1 %
                                       
    Total Assets   $ 325,720     $ 339,681     -4.1 %   $ 322,619     1.0 %
                                     
LIABILITIES                                    
  Deposits   $ 228,190     $ 230,026     -0.8 %   $ 227,977     0.1 %
  Repurchase agreements     18,848       26,731     -29.5 %     17,438     8.1 %
  Federal funds purchased     -       -     0.0 %     -     0.0 %
  FHLB borrowings     41,000       47,900     -14.4 %     41,000     0.0 %
  Other borrowings     2,523       4,515     -44.1 %     2,579     -2.2 %
  Junior subordinated debentures     8,248       8,248     0.0 %     8,248     0.0 %
  Other liabilities     5,027       3,690     36.2 %     3,882     29.5 %
    Total Liabilities     303,836       321,110     -5.4 %     301,124     0.9 %
                                     
STOCKHOLDERS' EQUITY     21,884       18,571     17.8 %     21,495     1.8 %
    Total Liabilities and Stockholders' Equity   $ 325,720     $ 339,681     -4.1 %   $ 322,619     1.0 %
                                     
Shares outstanding at end-of-period     3,775,752       3,241,581             3,759,677        
Book value per share   $ 5.80     $ 5.73           $ 5.72        
Allowance for loan losses to total loans     2.51 %     3.19 %           2.51 %      
Non-performing assets (non-accrual loans & OREO)   $ 14,041     $ 16,007           $ 17,661        
                                     
Bank Tier 1 leverage ratio (5% minimum for "well-capitalized")     9.41 %     8.34 %           8.79 %      
Bank Tier 1 risk-based capital ratio (6% minimum for "well-capitalized")     11.33 %     10.30 %           10.90 %      
Bank Total risk-based capital ratio (10% minimum for "well-capitalized")     12.59 %     11.57 %           12.16 %      
                                     
                                     
                                     
Consolidated Statement of Operations
Unaudited
(amounts in 000's, except per share data and ratios)
                                     
                                     
                                     
    Three Months Ending           Six Months Ending        
    6/30/2013     3/31/2013     % Change     6/30/2013     6/30/2012     % Change  
INTEREST INCOME                                    
  Loans   $ 3,341     $ 3,328     0.4 %   $ 6,669     $ 6,890     -3.2 %
  Investments     121       139     -12.9 %     260       435     -40.2 %
  Federal funds sold and other     22       10     120.0 %     32       39     -17.9 %
    Total interest income     3,484       3,477     0.2 %     6,961       7,364     -5.5 %
                                             
INTEREST EXPENSE                                            
  Deposits     366       417     -12.2 %     783       1,167     -32.9 %
  Repurchase agreements and federal funds purchased     16       27     -40.7 %     43       99     -56.6 %
  FHLB borrowings     413       408     1.2 %     821       1,029     -20.2 %
  Other borrowings     50       50     0.0 %     100       240     -58.3 %
  Junior subordinated debentures     67       61     9.8 %     128       129     -0.8 %
    Total interest expense     912       963     -5.3 %     1,875       2,664     -29.6 %
                                             
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES     2,572       2,514     2.3 %     5,086       4,700     8.2 %
                                             
PROVISION FOR LOAN LOSSES     -       -     0.0 %     -       -     0.0 %
                                             
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     2,572       2,514     2.3 %     5,086       4,700     8.2 %
                                             
NON-INTEREST INCOME     156       144     8.3 %     300       332     -9.6 %
                                             
NON-INTEREST EXPENSE     2,235       2,247     -0.5 %     4,482       4,325     3.6 %
                                             
INVESTMENTS- REALIZED GAINS / (LOSSES)     -       -     0.0 %     -       -     0.0 %
INVESTMENTS - OTHER THAN TEMPORARY IMPAIRMENT     -       -     0.0 %     -       -     0.0 %
OREO VALUATION ADJUSTMENTS & GAINS/(LOSSES) ON SALES - NET     (49 )     137     -135.8 %     88       (40 )   -320.0 %
                                             
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES     444       548     -19.0 %     992       667     48.7 %
                                             
PROVISION (BENEFIT) FOR INCOME TAXES     141       180     -21.7 %     321       323     -0.6 %
                                             
NET INCOME (LOSS)   $ 303     $ 368     -17.7 %   $ 671     $ 344     95.1 %
                                             
Earnings (Loss) per share - Basic   $ 0.08     $ 0.10           $ 0.18     $ 0.11        
                                             
Earnings (Loss) per share - Diluted   $ 0.08     $ 0.10           $ 0.18     $ 0.11        
                                             
Return on average equity     5.51 %     6.89 %           6.17 %     3.78 %      
Return on average assets     0.37 %     0.46 %           0.41 %     0.20 %      
Net interest margin     3.39 %     3.39 %           3.39 %     3.24 %      
Efficiency ratio     81.9 %     84.5 %           83.2 %     85.9 %      
                                             
                                             

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