SOURCE: Columbia Commercial Bancorp

Columbia Commercial Bancorp

November 07, 2011 16:05 ET

Columbia Commercial Bancorp Reports Third Quarter 2011 Results

HILLSBORO, OR--(Marketwire - Nov 7, 2011) - Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Columbia Community Bank (the Bank), reports a net profit of $121,000, or $0.04 per diluted share for the third quarter of 2011 compared to a net loss of $430,000, or ($0.14) per diluted share for the second quarter and net income of $333,000, or $0.10 per diluted share for the first quarter of 2011. For the nine months ended September 30, 2011, net income was $24,000, or $0.01 basic earnings per share or $0.00 per diluted share. This compares to a net loss of $718,000 or ($0.23) per basic and diluted share for the same nine month period in 2010.

"With the Bank's allowance for loan losses at 3.11% of total loans at the end of this quarter, the Bank did not need to add to its reserves unlike in the second quarter of this year when the Bank's loan loss provision was $1.1 million and in the first quarter when it was $250,000," states the Company's President and Chief Executive Officer, Rick A. Roby. Mr. Roby continues, "While in this quarter the Bank had one significant borrower move into non-accrual status and non-interest expense was higher than prior periods due to some onetime OREO and legal expenses, year-over-year trends at the Bank remain very positive when considering the reduction in non-performing assets, increase in net interest income and net interest margin, an improving efficiency ratio, and the continued decrease in brokered deposits."

Assets

Total assets as of September 30, 2011 at $364.3 million were down 2.0% compared to the $371.6 million at the same time last year and were up 1.6% from the $358.5 million as of December 31, 2010. Fluctuations in the Company's assets over these past quarters have been primarily random as outstanding loans at the end of the past four quarters have fluctuated between $240.0 and $246.2 million. The Bank's liquidity remains very strong with $35.1 million in cash and $5.0 million in fed funds sold as of September 30, 2011. The Bank's increased liquidity at the end of this most recent quarter was in preparation for upcoming loan fundings and $5.2 million in maturing brokered deposits during the month of October that were not renewed.

Total loans at $240.0 million as of September 30, 2011 were down $2.6 million, or 1.1% when compared to the $242.6 million as of September 30, 2010 and down $4.9 million, or 2.0% compared to the $244.9 million as of December 31, 2010. "Loan growth is difficult in today's market but our professional lending staff continues their strong efforts to build upon and expand our relationship lending opportunities. We continue to be successful at attracting quality new borrowers while changing the mix in our loan portfolio away from construction loans and into commercial real estate and other business loans to successful companies in our local communities," states Fred Johnson, the Bank's Chief Credit Officer. As of September 30, 2011, construction and land development loans totaled $44.5 million or 18.5% of loans, down $6.1 million from September 30, 2010 when they were $50.6 million and 20.9% of loans. Outstanding commercial real estate loans have increased to $78.6 million, or 32.7% of the Bank's current loan portfolio, up $1.9 million from the $76.7 million as of September 30, 2010. Commercial and industrial loans are now at $76.0 million, or 31.6% of the Bank's loan portfolio, compared to $73.4 million as of September 30, 2010.

The allowance for loan losses at $7.5 million, or 3.11% of loans as of September 30, 2011 was consistent with the prior quarter-end and December 31, 2010 amounts, but down from the $7.9 million, or 3.24% of loans, as of September 30, 2010. The Bank had $26,000 in net charge-offs for the third quarter of 2011 relative to net charge-offs of $1.0 million and $337,000 for the second and first quarters of this year. Net charge-offs for the first nine months of 2011 at $1.4 million were also down by $1.4 million, or almost 50.0%, when compared to the $2.8 million in net charge-offs for the same nine month period in 2010. Loans past due 30-89 days as of September 30, 2011 were $991,000, or 0.41% of outstanding loans and the Bank has 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 were $24.4 million as of September 30, 2011 relative to $21.1 million as of June 30, 2011, $22.1 million at the end of 2010, and $22.0 million a year ago. The increase in non-performing assets over this past quarter relate to additional loans (primarily one significant relationship) being moved into nonaccrual status as the amount of outstanding OREO properties decreased over the past quarter by almost $1.8 million, to $10.4 million at the end of the third quarter compared to the $12.2 million at the end of the second quarter of 2011. The Bank sold 11 OREO properties with an aggregate carrying amount of $1.5 million during the third quarter, or twenty properties with an aggregate carrying amount of $2.7 million and a net gain of $99,000 during the first three quarters of 2011.

Deposits

Deposits as of September 30, 2011 at $250.9 million were down 0.7% compared to the $252.8 million as of December 31, 2010 and were down 4.6% when compared to the $263.2 million as of September 30, 2010. The Bank's Chief Financial Officer, Bob Ekblad states, "While overall deposits were down, the Bank continues to put significant importance and resources toward local core deposit growth and we have been very successful considering the almost $13.4 million growth in core local deposits thus far for 2011 and the almost $19.1 million in growth since this time last year." For the first nine months of 2011, the Bank has reduced brokered and nontraditional out-of-area deposits by $15.2 million, and compared to this time last year they are down by $26.0 million. Brokered deposits as of September 30, 2011 were $20.1 million compared to $27.7 million as of December 31, 2010 and $36.9 million as of September 30, 2010. Mr. Ekblad continues, "And the Bank continues to reduce these outstandings as it just retired from excess cash another $5.2 million in brokered deposits during October to reduce current outstanding brokered deposits to only $14.9 million." The Bank has no further brokered deposit maturities for 2011.

Earnings

"The Company is showing its structural profitability as evidenced by the $121,000 net profit for this past quarter when the Bank took no loan loss provision expense and it is the loan loss provisions taken earlier this year which have caused the Company to merely breakeven through the first three quarters of 2011," states Mr. Roby. For the nine months ended September 30, 2011, the Company is reporting a net income of $24,000 after loan loss provision expense of $1.4 million compared to the same nine month period ending September 30, 2010 when the Company reported a net loss of $718,000 after $1.8 million in loan loss provision expense.

Net interest income at almost $2.4 million for the third quarter of 2011 was consistent with the prior quarter, while year-to-date net interest income for the first nine months of 2011 at $7.0 million was well above the $6.4 million reported for the same period in 2010. "Lower outstanding loan volumes and an increase in low-yielding liquid investments have caused over a $900,000 decrease in income from yielding assets when comparing year-to-date 2011 amounts to those of 2010, however the Bank's reduction in non-core deposits and favorable re-pricing opportunities on other deposits and liabilities resulted in an almost $1.5 million reduction in interest expense over this same period. And the Bank still has considerable liability repricing opportunities ahead which should allow this trend to continue for the rest of this year and well into 2012," states Mr. Ekblad. Net interest margin at 3.09% for third quarter 2011 was down slightly relative to the prior quarter's 3.16% due the recent increase in low-yielding liquid assets and an increase in non-performing assets, but net interest margin at 3.08% for the first nine months of 2011 was up 37 basis points when compared to the 2.71% reported for the same period in 2010.

Non-interest income of $490,000 for the first nine months of 2011 was up from the $364,000 for the same period in 2010 primarily from an increase in rents on Bank-owned assets acquired through foreclosures or other means (OREO). Non-interest expense was up $68,000 in third quarter 2011 compared to the prior quarter and year-to-date for 2011 at $6.6 million was up $164,000 from the same period last year. The increase in non-interest expense for the quarter and year-to-date was due to increases in expenses related to the Bank's OREO properties along with legal and other professional fees related to current and prior troubled assets. Direct expenses relating to foreclosure, OREO, and other legal expenditures were $336,000 for third quarter compared to $266,000 and $191,000 for the prior second and first quarters of 2011 and at $793,000 year-to-date 2011, these expenses were $284,000 over the amount for the same nine month period of 2010 when they totaled $509,000.

Capital

The Bank's profits this year have not been sufficient to offset the increase in its disallowed deferred tax assets for regulatory calculations of capital, therefore the Bank's leverage ratio has declined from 7.53% as of December 31, 2010 to 7.38% as of September 30, 2011 and its total risk-based capital ratio at 10.92% was below the 11.19% as of December 31, 2010. 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 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 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 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.

Columbia Commercial Bancorp
Consolidated Balance Sheet
Unaudited
(amounts in 000's, except per share data and ratios)
September 30, % Change December 31, % Change
2011 2010 2011 vs. 2010 2010 Year-to-Date
ASSETS
Cash & due from banks $ 35,120 $ 20,603 70.5 % $ 18,743 87.4 %
Federal funds sold 5,000 9,950 -49.7 % 9,995 -50.0 %
Investment Securities - Available for Sale 61,992 75,905 -18.3 % 62,261 -0.4 %
Investments - Other 2,307 2,481 -7.0 % 2,401 -3.9 %
Gross loans 239,968 242,558 -1.1 % 244,868 -2.0 %
Allowance for loan losses (7,471 ) (7,854 ) -4.9 % (7,525 ) -0.7 %
Net loans 232,497 234,704 -0.9 % 237,343 -2.0 %
Other real estate owned 10,370 11,127 -6.8 % 11,051 -6.2 %
Other assets 17,055 16,838 1.3 % 16,704 2.1 %
Total Assets $ 364,341 $ 371,608 -2.0 % $ 358,498 1.6 %
LIABILITIES
Deposits $ 250,940 $ 263,154 -4.6 % $ 252,816 -0.7 %
Repurchase agreements 26,692 21,102 26.5 % 19,893 34.2 %
Federal funds purchased - - 0.0 % - 0.0 %
FHLB borrowings 52,635 52,635 0.0 % 52,635 0.0 %
Other borrowings 4,457 4,451 0.1 % 4,453 0.1 %
Junior subordinated debentures 8,248 8,248 0.0 % 8,248 0.0 %
Other liabilities 3,560 3,649 -2.4 % 3,110 14.5 %
Total Liabilities 346,532 353,239 -1.9 % 341,155 1.6 %
STOCKHOLDERS' EQUITY 17,809 18,369 -3.0 % 17,343 2.7 %
Total Liabilities and Stockholders' Equity $ 364,341 $ 371,608 -2.0 % $ 358,498 1.6 %
Shares outstanding at end-of-period 3,151,581 3,145,081 3,145,081
Book value per share $ 5.65 $ 5.84 $ 5.51
Allowance for loan losses to total loans 3.11 % 3.24 % 3.07 %
Non-performing assets (non-accrual loans & OREO) $ 24,446 $ 21,991 $ 22,134
Bank Tier 1 leverage ratio (5% minimum for "well-capitalized") 7.38 % 7.43 % 7.53 %
Bank Tier 1 risk-based capital ratio (6% minimum for "well-capitalized") 9.66 % 10.04 % 9.92 %
Bank Total risk-based capital ratio (10% minimum for "well-capitalized") 10.92 % 11.31 % 11.19 %

Consolidated Statement of Operations
Unaudited
(amounts in 000's, except per share data and ratios)
Three Months Ending Nine Months Ending
9/30/2011 6/30/2011 % Change 9/30/2011 9/30/2010 % Change
INTEREST INCOME
Loans $ 3,676 $ 3,716 -1.1 % $ 11,068 $ 11,612 -4.7 %
Investments 277 295 -6.1 % 930 1,273 -26.9 %
Federal funds sold and other 19 17 11.8 % 48 72 -33.3 %
Total interest income 3,972 4,028 -1.4 % 12,046 12,957 -7.0 %
INTEREST EXPENSE
Deposits 821 865 -5.1 % 2,670 4,190 -36.3 %
Repurchase agreements and federal funds purchased 87 85 2.4 % 255 249 2.4 %
FHLB borrowings 535 530 0.9 % 1,589 1,589 0.0 %
Other borrowings 121 121 0.0 % 363 338 7.4 %
Junior subordinated debentures 59 60 -1.7 % 177 176 0.6 %
Total interest expense 1,623 1,661 -2.3 % 5,054 6,542 -22.7 %
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 2,349 2,367 -0.8 % 6,992 6,415 9.0 %
PROVISION FOR LOAN LOSSES - 1,100 -100.0 % 1,350 1,750 -22.9 %
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,349 1,267 85.4 % 5,642 4,665 20.9 %
NON-INTEREST INCOME 155 184 -15.8 % 490 364 34.6 %
NON-INTEREST EXPENSE 2,261 2,193 3.1 % 6,650 6,486 2.5 %
INVESTMENTS- REALIZED GAINS / (LOSSES) - - 0.0 % 603 643 -6.2 %
INVESTMENTS - OTHER THAN TEMPORARY IMPAIRMENT - - 0.0 % - (150 ) -100.0 %
OREO VALUATION ADJUSTMENTS & GAINS/(LOSSES) ON SALES - NET (93 ) (1 ) 9200.0 % (180 ) (355 ) -49.3 %
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 150 (743 ) -120.2 % (95 ) (1,319 ) -92.8 %
PROVISION (BENEFIT) FOR INCOME TAXES 29 (313 ) -109.3 % (119 ) (601 ) -80.2 %
NET INCOME (LOSS) $ 121 $ (430 ) -128.1 % $ 24 $ (718 ) -103.3 %
Earnings (Loss) per share - Basic $ 0.04 $ (0.14 ) $ 0.01 $ (0.23 )
Earnings (Loss) per share - Diluted $ 0.04 $ (0.14 ) $ 0.00 $ (0.23 )
Return on average equity 2.67 % -9.84 % 0.18 % -5.21 %
Return on average assets 0.13 % -0.48 % 0.01 % -0.25 %
Net interest margin 3.09 % 3.16 % 3.08 % 2.71 %
Efficiency ratio 90.3 % 86.0 % 88.9 % 95.7 %

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