PORTLAND, OR--(Marketwired - Oct 22, 2014) - Capital Pacific Bancorp (
Highlights
- Net income to common shareholders in the third quarter of 2014 was $624,000 or $0.24 per common diluted share, up 45% compared with $431,000 or $0.17 per common diluted share in the third quarter of 2013.
- Net income to common shareholders in the nine months of 2014 was $1.71 million or $0.66 per common diluted share, an increase of 42% compared with $1.20 million or $0.46 per common diluted share in the nine months of 2013, primarily reflecting higher net interest income.
- Total loans were $201.1 million at September 30, 2014, a 7% increase from December 31, 2013 and up 12% compared with $179.32 million a year ago.
- Total client deposits, more than half of which are noninterest bearing or low-interest bearing demand deposits, increased 9% to $224.97 million at September 30, 2014 compared with $207.0 million at December 31, 2013 and $204.13 million a year ago.
- The Company's net interest margin of 4.00% for the quarter ending September 30, 2014, was consistent with previous consecutive quarters, reflecting continuing management emphasis on controlling interest expense, and identifying niche lending opportunities that reduce the impact of rate-based competition for quality loans.
- Asset quality ratios remained strong, including a decline in the ratio of non-performing assets to total assets, which was below 1% at the close of the third quarter of 2014.
- Return on average common equity (annualized) increased to 10.8% at September 30, 2014 compared with 8.4% in the prior year's third quarter, while return on average assets (annualized) was 1.02% compared with 0.76% a year ago.
- The Company's book value per common share was $9.08 at September 30, 2014, reflecting a steady consecutive quarter increase in book value from $8.17 per common share a year ago.
"Our commitment to stable growth, client retention, and disciplined underwriting has contributed to noteworthy financial results and growth throughout 2014," said Mark Stevenson, President and CEO. "Our financial performance reflects the consistent execution of our strategy to build long-term shareholder value."
Income Statement Highlights
Results for three and nine months ending September 30, 2014 reflected double-digit growth year-over-year in net interest income. In the third quarter of 2014, net interest income was $2.35 million, up 12% from $2.09 million in the third quarter of 2013. For the nine months ending September 30, 2014, net interest income was $6.81 million, a 10% increase compared with $6.16 million for the nine months ending September 30, 2013. Growth in net interest income is a result of new business with a growing number of companies in our market.
Revenue from deposit fees and other non-interest income was $235,000 in the third quarter of 2014, up 18% from a year ago. For the first nine months of 2014, deposit fees and other non-interest income totaled $673,000, up 16% compared with the same period last year.
Total non-interest expense in the third quarter of 2014 was $1.65 million compared with $1.56 million in the third quarter of 2013. Non-interest expense for the first nine months of 2014 was up 3% compared with the same period last year, reflecting the Company's investment in retaining experienced staff, partially offset by lower operating expenses. Stevenson noted that increasing productivity and a growing asset base were the major contributors to a 63.75% efficiency ratio in the third quarter of 2014, significantly improved from 68.14% in the third quarter of 2013.
Balance Sheet Highlights
Total loans at September 30, 2014 were $201.10 million, up 7% compared with $187.98 million at December 31, 2013 and up 12% from $179.32 million a year ago. Expansion in the Company's loan portfolio was due to growth in owner-occupied commercial real estate loans, equipment financing, acquisition financing and working capital lines of credit, all part of the Bank's commercial lending segment.
"Among the goals we set for 2014 was to grow commercial lending and build greater diversity into our overall loan portfolio," explained Stevenson. "We planned for and delivered a strong summer season. Commercial lending, in particular, often requires a solution that is customized to integrate with a client's overall business and it is here that we excel as lenders."
Total client deposits at September 30, 2014 were $224.97 million, up from $207.0 million at December 31, 2013. "Our deposit mix is a great composite of our business clients, with over 55% of our core deposits in demand checking accounts. As a result, our cost of funds has remained very low at an annualized rate of 28 basis points for several consecutive quarters," explained Stevenson.
Asset quality remained high, with total non-performing assets of only $2.29 million at September 30, 2014 compared with $2.99 million at December 31, 2013 and $3.82 million at September 30, 2013. The ratio of total non-performing assets to total assets was 0.90% in the current quarter compared with 1.66% in the third quarter of 2013. Non-performing assets, including performing troubled debt restructurings, were $3.38 million or 1.32% of total assets at September 30, 2014. The Bank's loan loss reserve as a percentage of loans was 1.41% at September 30, 2014, and more than 200% of non-performing loans.
Other real estate owned (OREO) was $1.13 million at September 30, 2014 compared with $157,000 at September 30, 2013, reflecting the expected migration of a non-performing loan to OREO in the 2nd quarter of 2014. The Company charged off $247,000 of this loan with reserves set aside in a prior year, and anticipates the sale of the OREO without additional loss.
The Bank remained well-capitalized by accepted regulatory standards as of September 30, 2014, with a tier 1 leverage ratio of 10.11%, a tier 1 capital ratio of 12.22%, and a total risk based capital ratio of 13.47%.
"We are part of a vibrant and growing community, which has embraced our unique business model that emphasizes business banking and social responsibility. As a result, our visibility is increasing," said Stevenson. "Reflecting our commitment to supporting our vision, we will be a sponsor at the SRI Conference in November. This is the nation's largest conference on sustainable, responsible, impact investing, attended by hundreds of financial professionals and industry practitioners. We look forward to the opportunity to share the Capital Pacific Bank story with investors on a national platform."
About Capital Pacific Bancorp
Capital Pacific Bancorp (
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, changes in non-performing assets, deteriorating asset values caused by market conditions, loan losses that exceed our reserve for loan losses, gains or losses on other real estate owned, 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.
| Capital Pacific Bancorp | ||||||||||||
| (unaudited and dollars in thousands) | As of | As of | ||||||||||
| Condensed Consolidated Balance Sheets | 9/30/2014 | 12/31/2013 | % change | |||||||||
| Cash and due from banks | $ | 19,824 | $ | 17,073 | 16 | % | ||||||
| Investments | 28,246 | 28,608 | -1 | % | ||||||||
| Loans: | ||||||||||||
| Construction | 6,693 | 8,373 | -20 | % | ||||||||
| Real estate | 154,110 | 148,048 | 4 | % | ||||||||
| Commercial | 39,647 | 29,058 | 36 | % | ||||||||
| Other | 652 | 2,501 | -74 | % | ||||||||
| Total loans | 201,102 | 187,980 | 7 | % | ||||||||
| Loan loss reserve | (2,836 | ) | (2,986 | ) | -5 | % | ||||||
| Total loans, net of loan loss reserve | 198,266 | 184,994 | 7 | % | ||||||||
| Other real estate owned | 1,129 | 157 | nm | |||||||||
| Other assets | 8,426 | 8,292 | 2 | % | ||||||||
| Total assets | $ | 255,891 | $ | 239,124 | 7 | % | ||||||
| Deposits: | ||||||||||||
| Non interest-bearing demand deposits | $ | 70,844 | $ | 66,205 | 7 | % | ||||||
| Interest-bearing demand deposits | 52,326 | 43,259 | 21 | % | ||||||||
| Money market deposits | 63,811 | 56,499 | 13 | % | ||||||||
| Certificates of deposit | 38,235 | 41,032 | -7 | % | ||||||||
| Total client deposits | 225,216 | 206,995 | 9 | % | ||||||||
| Brokered deposits | 1,987 | 5,000 | -60 | % | ||||||||
| Total deposits | 227,203 | 211,995 | 7 | % | ||||||||
| Other liabilities | 2,012 | 2,298 | -12 | % | ||||||||
| Long-term debt | 3,401 | 3,655 | -7 | % | ||||||||
| Common equity | 23,275 | 21,176 | 10 | % | ||||||||
| Total liabilities and shareholders' equity | $ | 255,891 | $ | 239,124 | 7 | % | ||||||
| Capital Pacific Bancorp | |||||||||||||||||
| (unaudited and dollars in thousands, except per share data) | |||||||||||||||||
| Condensed Consolidated Income Statements | For the three months ending 9/30/2014 | For the three months ending 6/30/2014 | For the three months ending 9/30/2013 | Sequential quarter % change | Year over year % change | ||||||||||||
| Interest income | $ | 2,501 | $ | 2,373 | $ | 2,239 | 5 | % | 12 | % | |||||||
| Interest expense | 156 | 150 | 145 | 4 | % | 8 | % | ||||||||||
| Net interest income | 2,345 | 2,223 | 2,094 | 5 | % | 12 | % | ||||||||||
| Provision for loan losses | 60 | - | 144 | nm | -58 | % | |||||||||||
| Net interest income, net of provision for loan losses | 2,285 | 2,223 | 1,950 | 3 | % | 17 | % | ||||||||||
| Deposit fees and other non-interest income | 235 | 224 | 200 | 5 | % | 18 | % | ||||||||||
| Salaries and benefits | 1,008 | 1,019 | 1,017 | -1 | % | -1 | % | ||||||||||
| Occupancy | 167 | 168 | 165 | -1 | % | 1 | % | ||||||||||
| Net expense (recovery) associated with non-performing assets | (27 | ) | 39 | 28 | nm | nm | |||||||||||
| Other non-interest expense | 497 | 438 | 353 | 13 | % | 41 | % | ||||||||||
| Total non-interest expense | 1,645 | 1,664 | 1,563 | -1 | % | 5 | % | ||||||||||
| Net income before tax expense | 875 | 783 | 587 | 12 | % | 49 | % | ||||||||||
| Income tax expense | 251 | 236 | 156 | 6 | % | 61 | % | ||||||||||
| Net income | $ | 624 | $ | 547 | $ | 431 | 14 | % | 45 | % | |||||||
| Net income per common share, basic | $ | 0.24 | $ | 0.21 | $ | 0.17 | 14 | % | 41 | % | |||||||
| Net income per common share, fully diluted | $ | 0.24 | $ | 0.21 | $ | 0.17 | 14 | % | 41 | % | |||||||
| Basic average common shares outstanding | 2,562,578 | 2,560,689 | 2,531,264 | ||||||||||||||
| Fully diluted average common shares outstanding | 2,629,561 | 2,625,308 | 2,612,881 | ||||||||||||||
| Capital Pacific Bancorp | |||||||||||
| (unaudited and dollars in thousands, except per share data) | |||||||||||
| For the nine months | For the nine months | ||||||||||
| Condensed Consolidated Income Statements | ending 9/30/2014 | ending 9/30/2013 | % change | ||||||||
| Interest income | $ | 7,260 | $ | 6,592 | 10 | % | |||||
| Interest expense | 455 | 433 | 5 | % | |||||||
| Net interest income | 6,805 | 6,159 | 10 | % | |||||||
| Provision for loan losses | 60 | 144 | -58 | % | |||||||
| Net interest income, net of provision for loan losses | 6,745 | 6,015 | 12 | % | |||||||
| Deposit fees and other non-interest income | 673 | 578 | 16 | % | |||||||
| Salaries and benefits | 3,070 | 2,880 | 7 | % | |||||||
| Occupancy | 501 | 486 | 3 | % | |||||||
| Net expense (recovery) associated with non-performing assets | 52 | 55 | -5 | % | |||||||
| Other non-interest expense | 1,379 | 1,435 | -4 | % | |||||||
| Total non-interest expense | 5,002 | 4,856 | 3 | % | |||||||
| Net income before tax expense | 2,416 | 1,737 | 39 | % | |||||||
| Income tax expense | 703 | 492 | 43 | % | |||||||
| Net income | $ | 1,713 | $ | 1,245 | 38 | % | |||||
| Preferred stock dividends | - | (42 | ) | -100 | % | ||||||
| Net income to common shareholders | $ | 1,713 | $ | 1,203 | 42 | % | |||||
| Net income per common share, basic (1) | $ | 0.67 | $ | 0.48 | 40 | % | |||||
| Net income per common share, fully diluted (1) | $ | 0.66 | $ | 0.46 | 43 | % | |||||
| Basic average common shares outstanding | 2,555,074 | 2,528,767 | |||||||||
| Fully diluted average common shares outstanding | 2,609,485 | 2,604,454 | |||||||||
| Capital Pacific Bancorp | ||||||||||||||||||||
| (unaudited and dollars in thousands, except per share data) | ||||||||||||||||||||
| Performance by Quarter | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
| Actual loans, gross | $ | 201,102 | $ | 193,445 | $ | 186,724 | $ | 187,980 | $ | 179,318 | ||||||||||
| Average loans, gross | $ | 197,495 | $ | 189,739 | $ | 187,953 | $ | 181,518 | $ | 174,158 | ||||||||||
| Loans past due 90 days or more (2) | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Loans on non-accrual status | $ | 1,164 | $ | 1,450 | $ | 2,781 | $ | 2,832 | $ | 3,663 | ||||||||||
| Other real estate owned | $ | 1,129 | $ | 1,129 | $ | 157 | $ | 157 | $ | 157 | ||||||||||
| Total non-performing assets | $ | 2,293 | $ | 2,579 | $ | 2,938 | $ | 2,989 | $ | 3,820 | ||||||||||
| Total non-performing assets as a percentage of total assets | 0.90 | % | 1.09 | % | 1.27 | % | 1.27 | % | 1.66 | % | ||||||||||
| Performing troubled debt restructurings (not included in non-performing assets) | $ | 1,089 | $ | 1,096 | $ | 908 | $ | 913 | $ | 918 | ||||||||||
| Total non-performing assets plus performing troubled debt restructurings | $ | 3,382 | $ | 3,675 | $ | 3,846 | $ | 3,902 | $ | 4,738 | ||||||||||
| Total non-performing assets plus troubled debt restructurings as a percentage of total assets | 1.32 | % | 1.55 | % | 1.66 | % | 1.63 | % | 2.06 | % | ||||||||||
| Loan loss reserve | $ | 2,836 | $ | 2,769 | $ | 3,001 | $ | 2,986 | $ | 2,891 | ||||||||||
| Loans charged off, net of recoveries / (recoveries, net of loans charged off) | $ | (7 | ) | $ | 232 | $ | (15 | ) | $ | (95 | ) | $ | (9 | ) | ||||||
| Loan loss reserve as a percentage of loans | 1.41 | % | 1.43 | % | 1.61 | % | 1.59 | % | 1.61 | % | ||||||||||
| Loan loss reserve as a percentage of non-performing loans | 243.64 | % | 190.97 | % | 107.91 | % | 105.44 | % | 78.92 | % | ||||||||||
| Actual client deposits | $ | 225,216 | $ | 209,823 | $ | 203,085 | $ | 206,995 | $ | 204,127 | ||||||||||
| Average client deposits | $ | 220,311 | $ | 211,942 | $ | 205,642 | $ | 203,529 | $ | 199,549 | ||||||||||
| Net income | $ | 624 | $ | 547 | $ | 541 | $ | 595 | $ | 431 | ||||||||||
| Net earnings per common share, basic | $ | 0.24 | $ | 0.21 | $ | 0.21 | $ | 0.24 | $ | 0.17 | ||||||||||
| Net earnings per common share, fully diluted | $ | 0.24 | $ | 0.21 | $ | 0.21 | $ | 0.23 | $ | 0.17 | ||||||||||
| Actual common shares outstanding | 2,563,707 | 2,560,689 | 2,560,689 | 2,532,985 | 2,532,119 | |||||||||||||||
| Book value per common share | $ | 9.08 | $ | 8.82 | $ | 8.58 | $ | 8.36 | $ | 8.17 | ||||||||||
| Tier 1 risk-based capital ratio (bank) | 12.22 | % | 12.33 | % | 12.45 | % | 11.95 | % | 11.92 | % | ||||||||||
| Tier 1 risk-based capital ratio (company) | 11.15 | % | 11.00 | % | 11.08 | % | 10.50 | % | 10.45 | % | ||||||||||
| Return on average common equity | 10.80 | % | 9.84 | % | 10.18 | % | 11.24 | % | 8.37 | % | ||||||||||
| Return on average assets | 1.02 | % | 0.92 | % | 0.92 | % | 1.02 | % | 0.76 | % | ||||||||||
| Net interest margin (3) | 4.00 | % | 4.02 | % | 4.12 | % | 4.08 | % | 3.92 | % | ||||||||||
| Efficiency ratio (4) | 63.75 | % | 67.09 | % | 69.11 | % | 65.12 | % | 68.14 | % | ||||||||||
| (1) Includes the dilutive effect of preferred stock dividends accrued during the period. |
| (2) Excludes loans that are no longer accruing interest. |
| (3) Tax exempt interest has been adjusted to a tax equivalent basis at a 34% tax rate. The amount of such adjustment was an addition to recorded interest income of approximately $112,000 and $98,000 for the three months ended September 30, 2014 and 2013, respectively, and $334,000 and $290,000 for the nine months ended September 30, 2014 and 2013, respectively. |
| (4) Calculated by dividing non-interest expense by the sum of net interest income and non-interest income. |
| nm = percentage not meaningful |
Contact: Mark Stevenson President and CEO Felice Belfiore CFO (503) 796-0100
