SOURCE:
Capital Pacific Bancorp
2008-07-17 11:00:00
PORTLAND, OR–(EMWNews – July 17, 2008) – Capital Pacific Bancorp (
net income of $704,000 or $0.40 per diluted share in the second quarter of
2008, compared to net income of $8,000 and $0.01 per diluted share in the
second quarter last year.
Second quarter 2008 earnings include a pre-tax $1.0 million recovery
related to a $2.0 million loan that was charged off in 2007. The recovery
is the result of a settlement that includes real estate. This real estate
is classified as other real estate owned with an estimated net realizable
value based upon a 2008 appraisal. Management believes the recovery amount
may increase in future periods based upon the outcome of external events,
but any additional recovery is subject to significant uncertainty.
Excluding the recovery, net income for the second quarter of 2008 totaled
$86,000, or $.05 per share.
“The outlook on asset quality continues to evolve. Although we are pleased
with this recovery, we remain cautious about the current economic cycle and
how it might impact our loan portfolio in the future,” said Mark Stevenson,
CEO of Capital Pacific Bancorp.
Loans and credit quality
As of June 30, 2008, loans totaled $130.5 million, unchanged when compared
to the first quarter of 2008 and up $9.0 million when compared to the same
quarter last year. Second quarter 2008 loan growth has been influenced by
the soft economy and orchestrated declines in certain portfolio segments.
The Company’s reserve for potential loan losses increased to $2.9 million
in the second quarter of 2008, or 2.19% of total loans. Management believes
its reserve for potential loan losses is appropriate given prevailing
economic conditions.
Other credit related events in the second quarter of 2008 were as follow:
-- Successful refinance with new borrower and guarantors of a $934,000
non-performing loan.
-- Non-performing loans and loans past due 90 days declined to less than
$500,000, or .34% of total loans as of the end of the quarter.
-- Loans related to residential development have reduced to approximately
$6 million. This segment of the portfolio now equals less than 5% of total
loans.
-- Conservatively increased the reserve for potential loan losses by
$400,000.
Deposits
As of June 30, 2008, average client deposits were $92.1 million, up $13.8
million compared to the same quarter last year and up $4.3 million on a
linked-quarter basis. Deposit activity has been supported by modest growth
in new clients in the not-for-profit sector. Client deposits are defined
as total deposits excluding brokered or nationally sourced deposits.
Net interest margin
The net interest margin was down 67 basis points compared to the same
quarter last year but unchanged at 4.73% compared to the first quarter
2008. Interest recoveries on the settlement of non-performing loans
totaled $35,000 in the second quarter 2008. Excluding one-time interest
recoveries, the net interest margin was 4.62%. The decline in net interest
margin is the result of the rapid decline in interest rates driven by the
actions of the Federal Reserve Bank and a very competitive deposit market.
Other financial highlights
-- Income associated with the sale of loans increased to $216,000
compared to $82,000 for the same quarter last year and $87,000 on a linked
quarter basis. Higher income in the second quarter was attributable to one
transaction that accounted for 63% of the total. Management believes that
income associated with the sale of loans will revert back to historical
averages in future periods.
-- Non-interest expenses totaled $1.4 million, up 11% when compared to
the same quarter last year and down 3% on a linked-quarter basis. Growth in
non-interest expenses is expected to be modest for the remainder of 2008.
-- Tax-exempt loan originations grew by $3.4 million in the second
quarter. The company was heavily involved with the Oregon Facilities
Authority in the formation of this unique program benefiting non-profit
organizations. Capital Pacific Bank is the market leader in originations.
Capital adequacy
The company continues to be classified as well capitalized by regulatory
standards. The company successfully raised $1.8 million in additional
capital in the first quarter of 2008.
About Capital Pacific Bancorp
Capital Pacific Bancorp (
Pacific Bank, which serves businesses, professionals and nonprofit
organizations with comprehensive banking expertise and an elite level of
service. Headquartered in the Fox Tower in downtown Portland, the bank’s
full array of products and services are delivered through a strategic
combination of highly experienced client service officers and the
innovative application of technology. For more information on Capital
Pacific Bancorp or to see past press releases, visit
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 allowance 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 As of
June 30, December 31,
Condensed Balance Sheets 2008 2007
----------- -----------
Cash and due from banks $ 2,555 $ 517
Investments 1,648 5,569
Loans:
Commercial 53,115 59,023
Real estate 67,333 60,913
Other 10,037 8,598
----------- -----------
Total loans 130,485 128,534
Loan loss reserve (2,857) (2,403)
----------- -----------
Total loans, net of loan loss reserve 127,628 126,131
Other assets 2,813 2,341
----------- -----------
Total assets $ 134,644 $ 134,558
=========== ===========
Deposits:
Non interest-bearing demand $ 16,919 $ 19,531
Interest-bearing demand 50,899 58,074
Certificates of deposit 38,422 35,769
----------- -----------
Total deposits 106,240 113,374
Other liabilities 12,207 7,697
Shareholders' equity 16,197 13,487
----------- -----------
Total liabilities and shareholders' equity $ 134,644 $ 134,558
=========== ===========
Condensed Statements of Operations For the three For the three
months ending months ending
June 30, June 30,
2008 2007
----------- -----------
Interest income $ 2,276 $ 2,539
Interest expense 743 970
----------- -----------
Net interest income 1,533 1,569
Provision for (recovery of) loan losses (603) 543
----------- -----------
Net interest income, net of provision for loan
losses 2,136 1,026
Deposit fees and other non-interest income 242 173
Income associated with the sale of loans 216 82
Non-interest expense 1,443 1,271
----------- -----------
Net income (loss) before tax expense 1,151 10
Income tax expense (benefit) 447 2
----------- -----------
Net income (loss) $ 704 $ 8
=========== ===========
Net income (loss) per share, basic $ 0.40 $ 0.01
=========== ===========
Net income (loss) per share, fully diluted $ 0.40 $ 0.01
=========== ===========
Basic average shares outstanding 1,748,594 1,551,178
=========== ===========
Fully diluted average shares outstanding 1,748,594 1,596,548
=========== ===========
Condensed Statements of Operations For the six For the six
months ending months ending
June 30, June 30,
2008 2007
----------- -----------
Interest income $ 4,744 $ 4,935
Interest expense 1,661 1,877
----------- -----------
Net interest income 3,083 3,058
Provision for (recovery of) loan losses (563) 642
----------- -----------
Net interest income, net of provision for loan
losses 3,646 2,416
Deposit fees and other non-interest income 469 341
Income associated with the sale of loans 303 151
Non-interest expense 2,904 2,580
----------- -----------
Net income before tax expense 1,514 328
Income tax expense 584 129
----------- -----------
Net income $ 930 $ 199
=========== ===========
Net income per share, basic $ 0.56 $ 0.13
=========== ===========
Net income per share, fully diluted $ 0.56 $ 0.12
=========== ===========
Basic average shares outstanding 1,665,495 1,551,178
=========== ===========
Fully diluted average shares outstanding 1,665,495 1,602,148
=========== ===========
Performance by Quarter 6/30/08 3/31/08 12/31/07 9/30/07
---------- ---------- ---------- ----------
Actual Loans $ 130,485 $ 131,020 $ 128,534 $ 128,158
Average Loans $ 129,127 $ 130,393 $ 131,383 $ 125,388
Non-performing loans and
loans past due 90 days $ 441 $ 1,375 $ 1,375 $ 3,029
Other real estate owned $ 1,066 $ - $ - $ -
Loan loss reserve as a
percentage of loans 2.19% 1.87% 1.87% 1.80%
Loans charged off, net of
recoveries $ (1,016) $ (2) $ 2,012 $ (6)
Loan loss reserves as a
percentage of
non-performing loans 648% 178% 175% 76%
Actual Client and Wholesale
Deposits $ 106,240 $ 110,184 $ 113,374 $ 103,682
Average Client and
Wholesale Deposits $ 113,624 $ 112,013 $ 110,641 $ 111,607
Actual Client Deposits $ 90,717 $ 87,399 $ 88,604 $ 79,489
Average Client Deposits $ 92,106 $ 87,840 $ 88,056 $ 88,053
Net interest income $ 1,533 $ 1,550 $ 1,670 $ 1,607
Net income (loss) before
tax expense $ 1,151 $ 362 $ (1,438) $ 266
Net income (loss) $ 704 $ 225 $ (855) $ 170
Net income (loss) per
share, basic $ 0.40 $ 0.14 $ (0.55) $ 0.11
Net income (loss) per
share, fully diluted $ 0.40 $ 0.14 $ (0.55) $ 0.11
Actual shares outstanding 1,748,594 1,748,594 1,552,178 1,552,178
Book value per share $ 9.26 $ 8.86 $ 8.69 $ 9.20
Return on average equity 17.99% 6.59% -23.31% 4.71%
Return on average assets 2.14% 0.67% -2.49% 0.52%
Net interest margin (1) 4.73% 4.73% 5.01% 5.00%
Efficiency ratio (2) 72% 78% 66% 62%
(1) Calculated on a tax equivalent basis
(2) Calculated by dividing non-interest expense by net interest income
and non-interest income.
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