SOURCE: Columbia Commercial Bancorp

Columbia Commercial Bancorp

October 26, 2012 16:05 ET

Columbia Commercial Bancorp Reports Third Quarter 2012 Results

HILLSBORO, OR--(Marketwire - Oct 26, 2012) - Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Columbia Community Bank (the Bank), reports a net profit of $294,000, or $0.09 per diluted share for the third quarter of 2012 compared to $133,000 and $211,000, or $0.04 and $0.07 per diluted share, for the second and first quarters of 2012, respectively. For the nine months ended September 30, 2012 net income was $638,000, or $0.20 per diluted share, compared to net income of $24,000, or $0.01 per diluted share, for the same nine month period in 2011. 

"We continue to see the successes of our strategic initiatives," states the Company's President and CEO, Rick A. Roby. And he continues, "Growth in core deposits over the past year has allowed the Company to use these funds and other low-yielding excess liquidity to continually pay-down high cost liabilities while also growing loans which have resulted in increasing net interest income despite a low interest rate environment and a very competitive loan market. This along with a continued reduction in problem loan related expenses and the strengthening of the Bank's loan portfolio, meaning no loan loss provision expense, profitability continues to improve."

Assets

Total assets as of September 30, 2012 at $346.0 million were down $6.6 million, or 1.9%, when compared to the $352.6 million as of December 31, 2011 and were down $18.3 million, or 5.0%, when compared to the $364.3 million as of September 30, 2011. "A reduction in the overall assets over the past year shows the Company has been successful with its deleveraging strategy, but just as importantly, the recent increase in outstanding loans shows the Company is succeeding at improving its asset mix," states Mr. Roby. Outstanding loans were $243.8 million as of September 30, 2012, which was an increase of $5.4 million or 2.3% since December 31, 2011 when they were $238.4 million. Mr. Johnson, the Company's Chief Credit Officer comments, "With the competitive nature of our markets today and the continued reduction of problematic construction and development loans, we are very pleased to be seeing overall loan growth when compared to last year, and especially the net growth over this past quarter which exceeded $3.0 million." Construction and land development loans were $44.5 million, or 18.5% of loans, as of September 30, 2011 and were down $9.1 million to $35.4 million, or 14.5% of loans, as of September 30, 2012. And included in this amount are $6.4 million of commercial construction projects in process. 

The allowance for loan losses was $7.0 million, or 2.86% of loans, as of September 30, 2012 which is relatively consistent with the $7.1 million, or 2.97% of loans as of December 31, 2011. For the first nine months of 2012, loan charge-offs were $1.6 million, loan recoveries were $1.5 million and there has been no loan loss provision expense, therefore minimal net change to the allowance for loan losses this year. For the first nine months of 2011, there were $1.6 million in loan charge-offs, $232,000 in recoveries, and a $1.4 million loan loss provision expense. 

As of September 30, 2012 the Bank had loans in the amount of $947,000 that were past due over 30 days and still accruing interest, while as of December 31, 2011 the Bank had no loans in that category. 

Non-performing assets consist of loans on nonaccrual status and other real estate owned (OREO) which in aggregate were $16.8 million, or 4.8% of total assets, as of September 30, 2012 and are down $2.2 million when compared to the $19.0 million as of December 31, 2011, or down $7.6 million when compared to the $24.4 million, or 6.7% of assets, as of September 30, 2011. Nonaccrual loans of $9.4 million at September 30, 2012 consisted of seven relationships ranging in size from $169,000 to $3.7 million. OREO as of September 30, 2012 was $7.4 million and consisted of nine properties ranging in net realizable values from $31,000 to $4.6 million. 

Deposits

Total deposits at $237.9 million as of September 30, 2012 were down $1.2 million or 0.5% for the first nine months of 2012 and were down $13.0 million, or 5.2% when compared to the $250.9 million in total deposits this time a year ago. Bob Ekblad, the Company's Chief Financial Officer, states, "While overall deposits are down, the mix between core local deposits and other deposits continues to improve significantly as brokered and other nontraditional out-of-area deposits are down $22.2 million over the past 12 months, which means core local deposit growth increased over $9.2 million since this time last year." The Bank has retired $10.7 million in brokered deposits since September 30, 2011, or $5.6 million for the first nine months of 2012. Of the $9.4 million in brokered deposits outstanding as of September 30, 2012, shortly after the end of the third quarter $4.3 million matured and were not replaced while another $100,000 will pay down later this quarter; this will leave approximately $5.0 million in brokered deposits outstanding at December 31, 2012.

Earnings

Interest income from loans and other earning assets at $11.1 million for the first nine months of 2012 is down $900,000 or 7.9% when compared to the $12.0 million for the same nine months of 2011. "There are a variety of factors that are contributing to the reduced interest income this year which include lower loan volumes in early 2012, higher levels of excess low-yielding liquidity, and an overall reduction in loan yields due to scheduled repricings and other competitive pressures," states Mr. Roby; and he continues, "And while we don't have control of the competitive nature of our market, we have been successful at increasing loan volumes and using the Bank's excess liquidity to pay-down high cost deposits and other obligations as they mature which has substantially reduced interest expense." Interest expense for the 9 months ending September 2012 was $3.9 million, which is a reduction of $1.2 million, or 22.5%, when compared to the $5.1 million of interest expense for the same period in 2011. And as a result, net interest income of $7.2 million for the first nine months of 2012 was $200,000 or 2.6% higher than the $7.0 million for the same nine month period of 2011.

For 2012, the Bank has not taken any loan loss provision expense compared to last year when it took loan loss provision expenses of $250,000 for the first quarter of 2011 and $1.1 million during the second quarter of 2011. There was no loan loss provision expense for the third or fourth quarters of 2011, and therefore the Bank has not had a loan loss provision expense for the past five quarters.

Non-interest income was down slightly this quarter due to the reduction in rent receipts from OREO properties that the Bank no longer possesses while non-interest expenses continue a gradual reduction primarily from lower expenses related to problem loans and OREO properties. Also for the first nine months of 2011, the Company had $603,000 in gains on the sale of marketable securities along with $180,000 in write-downs or losses on the sale of OREO properties, which for 2012 these amounts were negligible at $18,000 in securities gains and $36,000 in net gains on the sales of OREO properties. 

The Bank's net interest margin for the first nine months of 2012 has increased to 3.26% compared to the same period in 2011 when it was 3.08%. An improved asset mix and numerous repricing opportunities with the Bank's deposits and other borrowings clearly offset loan repricings over this period. During this past third quarter, the Bank had very limited maturities of high cost borrowings while loan repricings continued and caused a slight reduction in net interest margin for third quarter 2012 down to 3.28% compared to the second quarter 2012 margin of 3.36%. Mr. Ekblad notes, "The Bank still has a significant amount of low-yielding excess liquidity that it is holding to pay-off high cost liabilities upon their maturity which will continue to give us the opportunity to improve our net interest margin further moving forward."

The Company's efficiency ratio, which measures operating performance excluding loan loss provisions, taxes, and other non-recurring items, at 81.6% for the third quarter, or 84.5% for the nine month period ending September 2012, shows considerable improvement and is reflective of the Company's increased net interest income and reduction in non-interest expenses. 

Capital

With continued profitability and on-going deleveraging over the past year, capital ratios at the Bank as of September 30, 2012 have increased to 8.27% and 11.71% for the leverage ratio and the total risk-based capital ratio, respectively, compared to December 31, 2011 when these ratios were 7.63% and 11.42%, and compared to September 30, 2011 at which time they were 7.38% and 10.92%. 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.

                               
Columbia Commercial Bancorp  
Consolidated Balance Sheet  
Unaudited  
(amounts in 000s, except per share data and ratios)  
                               
           % Change             % Change  
    September 30,     2012 vs.     December     Year-  
    2012     2011      2011      31, 2011     to-Date  
                                     
ASSETS                                    
  Cash & due from banks   $ 22,047     $ 35,120     -37.2 %   $ 25,982     -15.1 %
  Federal funds sold     5,000       5,000     0.0 %     10,000     -50.0 %
  Investment Securities - Available for Sale     55,395       61,992     -10.6 %     58,417     -5.2 %
  Investments - Other     2,247       2,307     -2.6 %     2,307     -2.6 %
                                       
  Gross loans     243,839       239,968     1.6 %     238,403     2.3 %
  Allowance for loan losses     (6,963 )     (7,471 )   -6.8 %     (7,083 )   -1.7 %
    Net loans     236,876       232,497     1.9 %     231,320     2.4 %
                                       
  Other real estate owned     7,358       10,370     -29.0 %     8,408     -12.5 %
  Other assets     17,109       17,055     0.3 %     16,174     5.8 %
                                       
    Total Assets   $ 346,032     $ 364,341     -5.0 %   $ 352,608     -1.9 %
                                     
LIABILITIES                                    
  Deposits   $ 237,872     $ 250,940     -5.2 %   $ 239,083     -0.5 %
  Repurchase agreements     24,314       26,692     -8.9 %     26,722     -9.0 %
  Federal funds purchased     -       -     0.0 %     -     0.0 %
  FHLB borrowings     47,900       52,635     -9.0 %     52,635     -9.0 %
  Other borrowings     4,516       4,457     1.3 %     4,513     0.1 %
  Junior subordinated debentures     8,248       8,248     0.0 %     8,248     0.0 %
  Other liabilities     4,122       3,560     15.8 %     3,433     20.1 %
    Total Liabilities     326,972       346,532     -5.6 %     334,634     -2.3 %
                                     
STOCKHOLDERS' EQUITY     19,060       17,809     7.0 %     17,974     6.0 %
                                         
    Total Liabilities and Stockholders' Equity   $ 346,032     $ 364,341     -5.0 %   $ 352,608     -1.9 %
                                     
Shares outstanding at end-of-period     3,241,581       3,151,581             3,151,581        
Book value per share   $ 5.88     $ 5.65           $ 5.70        
Allowance for loan losses to total loans     2.86 %     3.11 %           2.97 %      
Non-performing assets (non-accrual loans & OREO)   $ 16,766     $ 24,446           $ 18,984        
                                     
Bank Tier 1 leverage ratio (5% minimum for "well-capitalized")     8.27 %     7.38 %           7.63 %      
Bank Tier 1 risk-based capital ratio (6% minimum for "well-capitalized")     10.44 %     9.66 %           10.16 %      
Bank Total risk-based capital ratio (10% minimum for "well-capitalized")     11.71 %     10.92 %           11.42 %      
                                 
                                 
Consolidated Statement of Operations  
Unaudited  
(amounts in 000s, except per share data and ratios)  
                                 
    Three Months Ending           Nine Months Ending        
    9/30/2012   6/30/2012     % Change     9/30/2012   9/30/2011     % Change  
INTEREST INCOME                                        
  Loans   $ 3,489   $ 3,443     1.3 %   $ 10,379   $ 11,068     -6.2 %
  Investments     220     207     6.3 %     655     930     -29.6 %
  Federal funds sold and other     16     20     -20.0 %     55     48     14.6 %
    Total interest income     3,725     3,670     1.5 %     11,089     12,046     -7.9 %
                                         
INTEREST EXPENSE                                        
  Deposits     530     551     -3.8 %     1,697     2,670     -36.4 %
  Repurchase agreements and federal funds purchased     46     48     -4.2 %     145     255     -43.1 %
  FHLB borrowings     490     485     1.0 %     1,520     1,589     -4.3 %
  Other borrowings     121     120     0.8 %     361     363     -0.6 %
  Junior subordinated debentures     67     65     3.1 %     195     177     10.2 %
    Total interest expense     1,254     1,269     -1.2 %     3,918     5,054     -22.5 %
                                         
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES     2,471     2,401     2.9 %     7,171     6,992     2.6 %
                                         
PROVISION FOR LOAN LOSSES     -     -     0.0 %     -     1,350     -100.0 %
                                         
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     2,471     2,401     2.9 %     7,171     5,642     27.1 %
                                         
NON-INTEREST INCOME     158     180     -12.2 %     490     490     0.0 %
                                         
NON-INTEREST EXPENSE     2,146     2,201     -2.5 %     6,471     6,650     -2.7 %
                                         
INVESTMENTS- REALIZED GAINS / (LOSSES)     18     -     n/a       18     603     -97.0 %
INVESTMENTS - OTHER THAN TEMPORARY IMPAIRMENT     -     -     0.0 %     -     -     0.0 %
OREO VALUATION ADJUSTMENTS & GAINS/(LOSSES) ON SALES - NET     76     (64 )   -218.8 %     36     (180 )   -120.0 %
                                         
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES     577     316     82.6 %     1,244     (95 )   -1409.5 %
                                         
PROVISION (BENEFIT) FOR INCOME TAXES     283     183     54.6 %     606     (119 )   -609.2 %
                                         
NET INCOME (LOSS)   $ 294   $ 133     121.1 %   $ 638   $ 24     2558.3 %
                                         
Earnings (Loss) per share - Basic   $ 0.09   $ 0.04           $ 0.20   $ 0.01        
                                         
Earnings (Loss) per share - Diluted   $ 0.09   $ 0.04           $ 0.20   $ 0.01        
                                         
Return on average equity     6.17 %   2.92 %           4.58 %   0.18 %      
Return on average assets     0.33 %   0.16 %           0.25 %   0.01 %      
Net interest margin     3.28 %   3.36 %           3.26 %   3.08 %      
Efficiency ratio     81.6 %   85.3 %           84.5 %   88.9 %      

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