PORTLAND, OR--(Marketwired - Apr 24, 2013) - Capital Pacific Bancorp (
Highlights
- In its 12 th consecutive profitable quarter, net income to common shareholders in first quarter 2013 was $450,000 or $0.16 per common diluted share compared with $231,000 or $0.07 per common diluted share in first quarter 2012.
- Return on average assets (ROAA) (annualized) increased to 0.92% in the first quarter compared with 0.50% in the prior year's first quarter, while return on average equity (ROAE) (annualized) grew to 8.32% in the first quarter compared with 3.60% in the prior year's first quarter.
- Total loans at March 31, 2013 were $154.20 million, up 17% compared with $134.63 million at March 31, 2012, primarily reflecting growth in owner-occupied and investor-owned commercial real estate.
- Total deposits were $163.89 million at March 31, 2013 compared with $159.24 million at March 31, 2012.
- Total non-performing assets including troubled debt restructurings were 2.66% of total assets in first quarter 2013, compared with 2.85% of total assets in first quarter 2012.
- The bank's cost of funds for the quarter ended March 31, 2013 was 32 basis points, hovering just above its average in 2012.
- The bank grew tangible book value per share in first quarter 2013 to $7.97 compared with $7.38 per share in first quarter 2012.
- The bank fully redeemed $4.2 million in preferred shares that were originally issued by the U.S. Treasury under the TARP program and later sold by the U.S. Treasury to private investors.
"Net income has grown consistently over the last several quarters, the result of customer growth and stable asset quality," said Mark Stevenson, President and CEO. "Our performance over the last twelve months has resulted in an 8% increase in tangible book value per share, and a nice step-up in both ROAA and ROAE. These important shareholder value and performance measurements have increased each of the last five consecutive quarters."
Net Income and Income Statement Highlights
For the quarter ended March 31, 2013, the company reported net income of $450,000, compared with $231,000 for the quarter ended March 31, 2012, and $410,000 for the quarter ended December 31, 2012. Net income to common shareholders (after preferred stock dividends) was $408,000 in the first quarter compared with $166,000 in first quarter 2012.
Total interest income increased 16% to $2.27 million in first quarter 2013 compared with $1.96 million in first quarter 2012. First quarter 2013 results reflected fees collected from loan prepayments, which positively impacted earnings on a one-time basis. While loan prepayments and declining loan yields are a reality in a continued low interest rate environment, past and future loan growth is expected to help counter pressure on interest income.
The bank reported a 4.61% net interest margin in first quarter, which includes the one-time fees from loan prepayments. Without the prepayment fees, which totaled $233,000, the net interest margin was 4.13%, five basis points lower than first quarter 2012. Total interest expense was $137,000 in first quarter 2013 compared with $155,000 in first quarter 2012.
Non-interest income for the quarter ended March 31, 2013 was $189,000 compared with $193,000 for the quarter ended March 31, 2012. Total non-interest expense was $1.67 million compared with $1.60 million in first quarter 2012. The bank has held operating expenses and salaries relatively stable following an expansion of the bank's account management, support and lending teams in 2011.
Balance Sheet Reflects Loan Growth and Deposit Stability, Year-over-year.
Total loans at March 31, 2013 were $154.20 million compared with total loans of $134.63 million at March 31, 2012 and down slightly from total loans at December 31, 2012, due to the prepaid loans previously mentioned. "We believe our greatest strength and source of future growth resides with the experience of our staff and our specialized capabilities in niche markets such as private schools and non-profit organizations. We believe these market segments are often underserved and require a higher level of expertise. We continue to win loan and deposit relationships within these niche markets," said Stevenson. The bank has approximately $14 million in loan commitments that are expected to fund over the next six months.
Total non-performing assets including troubled debt restructurings totaled $5.08 million, down from $5.42 million in first quarter 2012, reflecting the return of certain loans to original performing status, and overall stability in the bank's portfolio of problem assets.
The bank's loan loss reserve was $2.72 million at March 31, 2013, compared with $2.67 million at March 31, 2012 and $2.64 million at December 31, 2012. The loan loss reserve as a percentage of total loans was 1.76% as of March 31, 2013, which compared with 1.99% at March 31, 2012.
As noted in the highlights section, total deposits at March 31, 2013 were up slightly when compared with deposits at March 31, 2012. Similar to last year, seasonal volatility impacted first quarter results. The bank added approximately $6 million in new customer deposits during the quarter. This growth was offset by significant declines in deposit balances among law firms and the bank's educational based clientele. Deposits are expected to return to 2012 levels in the second quarter due to seasonal inflows and a strong pipeline of new depositors currently in the implementation phase.
The bank's cost of funds was 32 basis points in first quarter 2013, near historically low levels for the bank, and attractive compared with peer banks.
Operational Efficiency Improvement, Capital Adequacy, and Outlook
The bank's efficiency ratio was 72.34% in first quarter 2013, as compared to 84.00% in first quarter 2012. Management anticipates the bank's ability to drive more revenue through a single-headquarter facility continues to be a key component of future efficiency ratio improvements.
The bank remained well-capitalized as of March 31, 2013. During the quarter, the bank redeemed $4.2 million in preferred shares and replaced the capital with long-term debt. The redemption replaced non tax- deductible dividends on the preferred shares of 5% (series A) and 9% (series B) per year, with tax-deductible interest payments of 4.75% per year. The redemption was immediately accretive to shareholders. As of the end of the quarter, the bank's tier 1 leverage ratio, tier 1 capital ratio and total risk-based capital ratios were 9.86%, 11.80% and 13.06%, respectively. To be considered adequately capitalized by federal banking agencies, a bank holding company must have ratios of 4.00%, 4.00% and 8.00%, respectively.
"We are encouraged by our growth in clients and earnings on a twelve month trailing basis," Stevenson concluded. "We are also really proud of the active role we play within the Portland market which continues to demonstrate strength and vitality compared with many other markets throughout the country. Our identity is founded on reputable market knowledge, and a shared sense of values within the community. These are strong selling points that will translate into ongoing growth of the bank and shareholder value."
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) | ||||||||||||
| Condensed Consolidated Balance Sheets | As of 3/31/2013 | As of 12/31/2012 | % change | |||||||||
| Cash and due from banks | $ | 5,173 | $ | 3,643 | 42 | % | ||||||
| Time certificates of deposits at other banks | 2,973 | 5,181 | -43 | % | ||||||||
| Investments | 25,851 | 30,224 | -14 | % | ||||||||
| Loans: | ||||||||||||
| Construction and land development | 7,439 | 7,479 | -1 | % | ||||||||
| Real estate | 114,533 | 117,030 | -2 | % | ||||||||
| Commercial | 31,873 | 34,454 | -7 | % | ||||||||
| Other | 351 | 239 | nm | |||||||||
| Total loans | 154,196 | 159,202 | -3 | % | ||||||||
| Loan loss reserve | (2,719 | ) | (2,642 | ) | 3 | % | ||||||
| Total loans, net of loan loss reserve | 151,477 | 156,560 | -3 | % | ||||||||
| Other real estate owned | 198 | 198 | 0 | % | ||||||||
| Other assets | 5,251 | 5,451 | -4 | % | ||||||||
| Total assets | $ | 190,923 | $ | 201,257 | -5 | % | ||||||
| Deposits: | ||||||||||||
| Non interest-bearing demand | $ | 48,360 | $ | 62,938 | -23 | % | ||||||
| Interest-bearing demand | 69,418 | 73,188 | -5 | % | ||||||||
| Certificates of deposit | 46,115 | 38,187 | 21 | % | ||||||||
| Total client deposits | 163,893 | 174,313 | -6 | % | ||||||||
| Other liabilities | 2,894 | 3,115 | -7 | % | ||||||||
| Long-term debt | 3,948 | - | nm | |||||||||
| Shareholders' equity | 20,188 | 23,829 | -15 | % | ||||||||
| Total liabilities and shareholders' equity | $ | 190,923 | $ | 201,257 | -5 | % | ||||||
| Capital Pacific Bancorp | |||||||||||||||||||
| (unaudited and dollars in thousands, except per share data) | |||||||||||||||||||
| Condensed Consolidated Income Statements | For the three months ending March 31, 2013 | For the three months ending December 31 2012 | For the three months ending March 31, 2012 | Sequential quarter % change | Year over year % change | ||||||||||||||
| Interest income | $ | 2,273 | $ | 2,115 | $ | 1,960 | 7 | % | 16 | % | |||||||||
| Interest expense | 137 | 118 | 155 | 16 | % | -12 | % | ||||||||||||
| Net interest income | 2,136 | 1,997 | 1,805 | 7 | % | 18 | % | ||||||||||||
| Provision for loan losses | - | 260 | - | nm | nm | ||||||||||||||
| Net interest income, net of provision for loan losses | 2,136 | 1,737 | 1,805 | 23 | % | 18 | % | ||||||||||||
| Deposit fees and other non-interest income | 189 | 178 | 193 | 6 | % | -2 | % | ||||||||||||
| Salaries and benefits | 933 | 901 | 944 | 4 | % | -1 | % | ||||||||||||
| Occupancy | 157 | 156 | 148 | 1 | % | 6 | % | ||||||||||||
| Net expense (recovery) associated with non-performing assets | 32 | (252 | ) | 33 | nm | nm | |||||||||||||
| Net loss on sale or impairment of other real estate owned | - | - | 73 | nm | nm | ||||||||||||||
| Other non-interest expense | 548 | 576 | 481 | -5 | % | 14 | % | ||||||||||||
| Total non-interest expense | 1,670 | 1,381 | 1,679 | 21 | % | -1 | % | ||||||||||||
| Net income before tax expense | 655 | 534 | 319 | 23 | % | 105 | % | ||||||||||||
| Income tax expense | 205 | 124 | 88 | 65 | % | 133 | % | ||||||||||||
| Net income | $ | 450 | $ | 410 | $ | 231 | 10 | % | 95 | % | |||||||||
| Preferred stock dividends | (42 | ) | (65 | ) | (65 | ) | -35 | % | -35 | % | |||||||||
| Net income to common shareholders | $ | 408 | $ | 345 | $ | 166 | 18 | % | 146 | % | |||||||||
| Net income per common share, basic (1) | $ | 0.16 | $ | 0.14 | $ | 0.07 | 14 | % | 129 | % | |||||||||
| Net income per common share, fully diluted (1) | $ | 0.16 | $ | 0.13 | $ | 0.07 | 23 | % | 129 | % | |||||||||
| Basic average common shares outstanding | 2,525,086 | 2,517,500 | 2,501,289 | ||||||||||||||||
| Fully diluted average common shares outstanding | 2,731,021 | 2,571,300 | 2,520,663 | ||||||||||||||||
| Capital Pacific Bancorp | ||||||||||||||||||||
| (unaudited and dollars in thousands, except per share data) | ||||||||||||||||||||
| Performance by Quarter | 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | |||||||||||||||
| Actual loans, gross | $ | 154,196 | $ | 159,202 | $ | 145,081 | $ | 144,525 | $ | 134,630 | ||||||||||
| Average loans, gross | $ | 158,100 | $ | 151,536 | $ | 145,845 | $ | 137,260 | $ | 131,503 | ||||||||||
| Loans past due 30-89 days (2) | $ | - | $ | - | $ | 395 | $ | - | $ | - | ||||||||||
| Loans past due 90 days or more (2) | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Loans on non-accrual status | $ | 3,627 | $ | 3,940 | $ | 2,500 | $ | 2,393 | $ | 2,333 | ||||||||||
| Other real estate owned | $ | 198 | $ | 198 | $ | 198 | $ | 320 | $ | 320 | ||||||||||
| Total non-performing assets | $ | 3,825 | $ | 4,138 | $ | 2,698 | $ | 2,713 | $ | 2,653 | ||||||||||
| Total non-performing assets as a percentage of total assets | 2.00 | % | 2.06 | % | 1.31 | % | 1.46 | % | 1.39 | % | ||||||||||
| Performing troubled debt restructings (not included in non-performing assets) | 1,252 | 1,262 | 2,753 | 2,754 | 2,762 | |||||||||||||||
| Total non-performing assets plus performing troubled debt restructurings | $ | 5,077 | $ | 5,400 | $ | 5,451 | $ | 5,467 | $ | 5,415 | ||||||||||
| Total non-performing assets plus troubled debt restructurings as a percentage of total assets | 2.66 | % | 2.68 | % | 2.64 | % | 2.94 | % | 2.85 | % | ||||||||||
| Loan loss reserve | $ | 2,719 | $ | 2,642 | $ | 2,691 | $ | 2,683 | $ | 2,673 | ||||||||||
| Loans charged off, net of recoveries / (recoveries, net of loans charged off) | $ | (77 | ) | $ | 309 | $ | (8 | ) | $ | 25 | $ | 220 | ||||||||
| Loan loss reserve as a percentage of loans | 1.76 | % | 1.65 | % | 1.86 | % | 1.86 | % | 1.99 | % | ||||||||||
| Loan loss reserve as a percentage of non-performing loans | 74.97 | % | 67.06 | % | 107.64 | % | 112.00 | % | 115.00 | % | ||||||||||
| Actual client deposits | $ | 163,893 | $ | 174,313 | $ | 180,245 | $ | 160,872 | $ | 159,244 | ||||||||||
| Average client deposits | $ | 170,792 | $ | 184,740 | $ | 179,254 | $ | 160,659 | $ | 158,031 | ||||||||||
| Net income | $ | 450 | $ | 410 | $ | 399 | $ | 330 | $ | 231 | ||||||||||
| Net income available to common shareholders (1) | $ | 408 | $ | 345 | $ | 334 | $ | 265 | $ | 166 | ||||||||||
| Net earnings per common share, basic (1) | $ | 0.16 | $ | 0.14 | $ | 0.13 | $ | 0.11 | $ | 0.07 | ||||||||||
| Net earnings per common share, fully diluted (1) | $ | 0.16 | $ | 0.13 | $ | 0.13 | $ | 0.10 | $ | 0.07 | ||||||||||
| Actual common shares outstanding | 2,531,855 | 2,524,239 | 2,515,868 | 2,513,558 | 2,513,558 | |||||||||||||||
| Book value per common share | $ | 7.97 | $ | 7.79 | $ | 7.64 | $ | 7.49 | $ | 7.38 | ||||||||||
| Tier 1 risk-based capital ratio (bank only) | 13.84 | % | 13.54 | % | 14.93 | % | 14.78 | % | 15.36 | % | ||||||||||
| Tier 1 risk-based capital ratio (holding company) | 11.80 | % | 13.88 | % | 15.13 | % | 15.01 | % | 15.63 | % | ||||||||||
| Return on average common equity (1) | 8.32 | % | 7.06 | % | 6.98 | % | 5.69 | % | 3.60 | % | ||||||||||
| Return on average assets | 0.92 | % | 0.82 | % | 0.77 | % | 0.70 | % | 0.50 | % | ||||||||||
| Net interest margin (3) | 4.61 | % | 3.98 | % | 4.08 | % | 4.21 | % | 4.17 | % | ||||||||||
| Efficiency ratio (4) | 72.34 | % | 63.52 | % | 73.35 | % | 75.87 | % | 84.00 | % | ||||||||||
| (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 $98,000 and $78,000 for the three months ended March 31, 2013 and 2012, respectively. |
| (4) Calculated by dividing non-interest expense by the sum of net interest income and non-interest income. |
| nm = not meaningful |
Contact: Mark Stevenson President and CEO Felice Belfiore CFO (503) 796-0100
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