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"Oregon businesses have been hit hard, from manufacturing to real estate to construction and financial services," said Mark Stevenson, CEO of Capital Pacific Bancorp. "While we continue to conservatively address credit quality issues in our own loan portfolio, we believe opportunity exists in this environment. We're focused on increasing marketshare within the sectors we serve best, including schools, non-profit organizations, property management companies and professional service firms." Credit Quality As of June 30, 2009, the Company's reserve for loan losses totaled $2.57 million, or 1.97% of total loans. The following table provides information about the Company's reserve for loan losses and other credit quality measures:
Reserve for
Loan Reserve for loan losses
Provision for charge-offs loan losses to to total non-
loan losses (recoveries) total loans performing loans
-------------- -------------- -------------- --------------
Q1 2008 40,000 (2,000) 1.87% 178%
Q2 2008 (603,000) (1,016,000) 2.19% 648%
Q3 2008 60,000 - 2.24% 159%
Q4 2008 463,000 451,000 2.17% 302%
Q1 2009 262,000 190,000 2.31% 96%
Q2 2009 425,000 853,000 1.97% 173%
Non-performing assets At June 30, 2009, non-performing assets in total were $5.5 million, or 3.81% of total assets, and 26% of total capital. This is an increase of $290,000 when compared to the previous quarter. Non-performing assets include loans 90 days past due and still accruing interest, loans on non accrual status and other real estate owned as follows:
-- As of June 30, 2009, there were no loans 90 days past due and still
accruing interest.
-- At June 30, 2009, the company had $1.5 million in loans on non-accrual
status of which approximately 70% is classified as loans originated under
lending programs of the Small Business Administration, and the balance is
investor owned commercial real estate. Loans on non-accrual declined
significantly when compared to the prior quarter balances of $3.1 million.
The decline in loans on non-accrual status was primarily due to transfers
into other real estate owned during the current quarter.
-- At June 30, 2009, the Company had $4.0 million in other real estate
owned representing four properties compared to $2.0 million representing
two properties in the prior quarter. Other real estate owned includes
commercial property valued at $1.7 million in Hillsboro, Oregon, improved
residential land valued at $1.0 million in Vancouver, Washington, and land
valued at $1.3 million in southern Oregon. The expected disposition date of
these properties will vary based upon location and type.
Capital adequacy The company continues to be classified as well-capitalized by regulatory standards. The Company's total risk-based capital ratio is 16.3% at June 30, 2009. To be considered well-capitalized, a company must have total risked-based capital equal to 10.0% of risk-weighted assets. The company is a participant in the U.S. Department of the Treasury's Capital Purchase Program (TCPP) and currently has $4 million in preferred stock outstanding under this program. Preferred dividends accrued and payable under this program total $128,000 year-to-date. Loans As of June 30, 2009, loans totaled $130.3 million, unchanged for the quarter and down $5 million for the year. Total loans declined for the year due to a combination of loan sales and conservative steps taken by our existing customers to reduce debt. Year to date, the Company has originated $12.3 million in new loan commitments and renewed another $33.1 million in loan commitments. Total new and renewed loan commitments are approximately 90% of volumes experienced for the same period in 2008. Deposits As of June 30, 2009, actual client deposits totaled $99.1 million, unchanged for the quarter, and up $9 million for the year. New deposits include net increases in the number of non-profit clients, which continues to be a growing sector for the Company. Net interest margin The net interest margin was 4.62% in the second quarter of 2009, up 30 basis points from the previous quarter's net interest margin of 4.32%. The improvement was due to the decrease in non-performing loans and lower interest costs on rolling certificates of deposit. The net interest margin was down 11 basis points when compared to the same quarter last year. Other financial highlights
-- Income associated with the sale of loans in the second quarter of 2009
totaled $68,000 compared to $110,000 in the first quarter of 2009, and
$216,000 in the same quarter last year. The Company anticipates that income
associated with the sale of loans will be at, or below, historical levels
depending on ongoing investor interest in government-guaranteed and
commercial real estate loans.
-- Non-interest expense in the second quarter of 2009 totaled $1.4
million, which is consistent with historical averages for the last several
quarters. While the Company's workforce is smaller than previous quarters
due to a staff reduction in late 2008, regulatory costs continue to rise.
The FDIC assessed all commercial banks with a special premium assessment in
the second quarter of 2009, which increased the Company's pre-tax premiums
by $64,000.
About Capital Pacific Bancorp Capital Pacific Bancorp (OTCBB: CPBO | Quote | Chart | News | PowerRating) is the parent company of Capital Pacific Bank, which serves businesses, professionals and non-profit organizations with comprehensive banking expertise and an elite level of service. Centrally headquartered in the Fox Tower in downtown Portland, the bank's full array of products and services are delivered through a strategic combination of Vice President-level client service officers and the innovative application of technology. For more information on Capital Pacific Bancorp or to see past press releases, visit www.capitalpacificbank.com. Forward-looking statements Statements in this release about future events or performance are forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results of the company to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include changes in the financial condition of our borrowers, changes in economic conditions generally, deteriorating asset values caused by changing market conditions, loan losses that exceed our reserve for loan losses, fluctuations in interest rates and the impact any of these factors may have upon clients of the company. Other factors include competition for loans and deposits within the company's trade area, and the impact that may have upon growth or income. Although forward-looking statements help to provide complete information about the company, readers should keep in mind that forward-looking statements may be less reliable than historical information. The company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.
(unaudited and dollars in thousands, except per share data)
As of June 30, As of Dec. 31,
Condensed Consolidated Balance Sheets 2009 2008
=============== ===============
Cash and due from banks $ 7,840 $ 3,804
Investments 1,814 993
Loans:
Commercial 46,519 53,595
Real estate 75,077 71,554
Other 8,696 10,131
--------------- ---------------
Total loans 130,292 135,280
Loan loss reserve (2,573) (2,929)
--------------- ---------------
Total loans, net of loan loss reserve 127,719 132,351
Other assets 5,791 3,552
--------------- ---------------
Total assets $ 143,164 $ 140,700
=============== ===============
Deposits:
Non interest-bearing demand $ 28,062 $ 19,142
Interest-bearing demand 43,825 38,720
Certificates of deposit 27,193 32,229
--------------- ---------------
Total client deposits 99,080 90,091
Brokered certificates of deposit 16,754 24,396
--------------- ---------------
Total deposits 115,834 114,487
Other liabilities 6,681 5,663
Shareholders' equity 20,649 20,550
--------------- ---------------
Total liabilities and shareholders'
equity $ 143,164 $ 140,700
=============== ===============
For the three For the three
Condensed Consolidated Statements of months ending months ending
Income June 30, 2009 June 30, 2008(1)
=============== ===============
Interest income $ 1,977 $ 2,276
Interest expense 433 743
--------------- ---------------
Net interest income 1,544 1,533
Provision for loan losses 425 (603)
--------------- ---------------
Net interest income, net of provision
for loan losses 1,119 2,136
Deposit fees and other non-interest
income 193 242
Income associated with the sale of loans 68 216
Non-interest expense 1,378 1,443
--------------- ---------------
Net income before tax expense 2 1,151
Income tax expense 1 447
--------------- ---------------
Net income $ 1 $ 704
=============== ===============
Preferred stock dividends (64) -
--------------- ---------------
Net income (loss) available to common
shareholders $ (63) $ 704
=============== ===============
Earnings (loss) per common share,
basic (2) $ (0.04) $ 0.40
=============== ===============
Earnings (loss) per common share,
fully diluted (2) $ (0.04) $ 0.40
=============== ===============
Basic average common shares outstanding 1,771,910 1,748,594
=============== ===============
Fully diluted average common shares
outstanding 1,771,910 1,748,594
=============== ===============
For the six For the six
Condensed Consolidated Statements of months ending months ending
Income June 30, 2009 June 30, 2008(1)
=============== ===============
Interest income $ 3,907 $ 4,744
Interest expense 928 1,661
--------------- ---------------
Net interest income 2,979 3,083
Provision for (recovery of) loan losses 687 (563)
--------------- ---------------
Net interest income, net of provision
for loan losses 2,292 3,646
Deposit fees and other non-interest
income 412 469
Income associated with the sale of loans 179 303
Non-interest expense 2,708 2,904
--------------- ---------------
Net income before tax expense 175 1,514
Income tax expense 61 584
--------------- ---------------
Net income $ 114 $ 930
=============== ===============
Preferred stock dividends (128) -
--------------- ---------------
Net income (loss) available to common
shareholders $ (14) $ 930
=============== ===============
Earnings (loss) per common share,
basic (2) $ (0.01) $ 0.56
=============== ===============
Earnings (loss) per common share,
fully diluted (2) $ (0.01) $ 0.56
=============== ===============
Basic average common shares outstanding 1,762,120 1,665,495
=============== ===============
Fully diluted average common shares
outstanding 1,762,120 1,665,495
=============== ===============
Performance by Quarter 6/30/09 3/31/09 12/31/08 9/30/08
========= ========= ========= =========
Actual Loans $ 130,292 $ 130,067 $ 135,280 $ 130,155
Average Loans $ 131,645 $ 136,984 $ 136,486 $ 128,129
Loans past due 90 days or more
and still accruing interest $ - $ - $ - $ -
Loans on non accrual $ 1,484 $ 3,129 $ 970 $ 1,840
Other real estate owned $ 3,976 $ 2,041 $ 1,652 $ 1,066
Total non-performing assets $ 5,460 $ 5,170 $ 2,622 $ 2,906
Total non-performing assets as
a percentage of total assets 3.81% 3.61% 1.86% 2.13%
Loans charged off, net of
recoveries $ 853 $ 190 $ 451 $ -
Loan loss reserve as a
percentage of loans 1.97% 2.31% 2.17% 2.24%
Loan loss reserve as a
percentage of non-performing
loans 173% 96% 302% 159%
Actual Client Deposits $ 99,080 $ 99,489 $ 90,091 $ 90,228
Average Client Deposits $ 98,680 $ 93,739 $ 89,574 $ 89,971
Net interest income $ 1,544 $ 1,435 $ 1,593 $ 1,507
Net income $ 1 $ 113 $ 114 $ 212
Net income (loss) available to
common shareholders (2) $ (63) $ 49 $ 113 $ 212
Net earnings (loss) per common
share, basic (2) $ (0.04) $ 0.03 $ 0.07 $ 0.12
Net earnings (loss) per common
share, fully diluted (2) $ (0.04) $ 0.03 $ 0.07 $ 0.12
Actual common shares
outstanding 1,771,910 1,771,910 1,748,594 1,748,594
Book value per common share $ 9.38 $ 9.42 $ 9.46 $ 9.39
Return on average common
equity (2) -1.52% 1.19% 2.77% 5.14%
Return on average assets 0.00% 0.32% 0.32% 0.63%
Net interest margin (3) 4.62% 4.32% 4.69% 4.74%
Efficiency ratio (4) 76% 75% 69% 78%
(1) Results in 2008 include a $1.0 million one-time pre-tax recovery of a
loan that was previously charged off. Excluding the recovery, net
income was $86,000, or $.05 per diluted common share in the second
quarter of 2008 and $311,000, or $0.19 per diluted common share for
the six months ending June 30, 2008
(2) Includes the dilutive effect of preferred stock dividends accrued
during the period
(3) Calculated on a tax equivalent basis
(4) Calculated by dividing non-interest expense by net interest income and
non-interest income.
Contact: Mark Stevenson, CEO Felice Belfiore, CFO (503) 796-0100 SOURCE: Capital Pacific Bancorp For full details for CPBO click here.
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