PORTLAND, Ore., Jan. 31, 2008 (PRIME NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank, today reported net income grew 41% in 2007 fueled by loan growth and improved net interest margin. Asset quality remained high and net loan charge-offs were low. Net income in 2007 increased to $704,000, or $0.65 per diluted share, from $498,000, or $0.76 per diluted share in 2006. Earnings per share were affected by an increase in the number of shares outstanding. In December 2006, Albina raised $4.5 million in net proceeds from a common stock offering of 417,000 shares.
Fourth-quarter results were impacted by a tax provision adjustment booked during the quarter related to resolution of the tax treatment of revenue from government payments booked in the third quarter. Reported net income in the fourth quarter of 2007 was $19,000, or $0.02 per diluted share. On an adjusted basis to exclude the tax provision true-up, fourth-quarter net income rose 16% to $223,000, or $0.20 per diluted share. Net income reported in the third quarter totaled $580,000 or $0.53 per diluted share; third-quarter net income, normalized for the timing in recognition of this tax expense, would have been $376,000 or $0.35 per diluted share.
"Our bank has been impacted minimally by the sub-prime crisis. As a community bank, we strive to know our market and our customers. Lending in our neighborhood is a key competitive advantage in difficult economic times," stated Bob McKean, president and chief executive officer. "In our role as a mortgage broker for residential mortgages, we aim to place our clients in products appropriate for their circumstances. We do not hold sub-prime mortgages or collateralized debt obligations on our balance sheet. Albina's focus on small business lending in our local market has helped to diversify our credit risk over a larger number of small loans. Our construction and development loan portfolio has continued to perform well, thanks to our diligent underwriting and monitoring processes. Participation loans have been purchased from known and reliable sources and are subject to a thorough review by our staff."
2007 Financial Highlights: (for the twelve-month period ended December 31, 2007, compared with December 31, 2006) * Net income rose 41% to $704,000, or $0.65 per diluted share. * Revenues increased 28% to $8.6 million. * Efficiency ratio was 81.82% versus 91.56%. The 2007 fourth-quarter efficiency ratio was 76.63%. * Net interest margin improved to 4.36% from 4.18%. * Net loans increased 53% to $146.1 million. * Total assets rose 36%. * Asset quality remained strong; non-performing loans were 0.16% of total loans. * Deposits increased by 34%.
Operating Results
Revenue in 2007 rose 28% to $8.6 million from $6.7 million in 2006. Fourth-quarter 2007 revenue climbed 42% to $2.3 million from $1.6 million. Net interest income in 2007, before the provision for loan losses, gained 30% to $6.2 million from $4.8 million in 2006. After the provision for loan losses, net interest income rose 23% year over year. For the fourth quarter of 2007, net interest income, before the provision for loan losses, was $1.7 million, an increase of 43% over the $1.2 million produced in the same quarter last year.
After a $233,000 provision for loan losses, net interest income for the fourth quarter of 2007 totaled $1.5 million, representing a year-over-year increase of 9%. In the year-ago quarter, Albina Community Bank recognized no expense for provision for loan losses.
Net interest margin in 2007 expanded to 4.36% from 4.18% in 2006. In the fourth quarter of 2007, net interest margin also rose to 4.19% from 4.07% in the fourth quarter of 2006. The improvement reflects an increase in earning assets and, in particular, the ratio of loans to deposits averaging nearly 100% during the year compared with approximately 88% in 2006.
For the full-year 2007, non-interest expense rose 15% to $7.1 million compared with $6.2 million in 2006. Non-interest expense for the fourth quarter of 2007 grew 10% to $1.8 million compared with $1.6 million for the same quarter of 2006. Higher non-interest expense for the year and quarter reflects increased staffing needs and overhead costs to support the growth of the bank. In May 2006, Albina Community Bancorp opened its fifth branch office in the Rose City Park neighborhood.
The efficiency ratio for the year dropped to 81.82% from 91.56% in 2006 and stood at 76.63% for the fourth quarter versus 98.49% in the comparable year-ago quarter. "The solid improvement in our efficiency ratio for both the year and quarter reflects our ability to leverage the investments made in 2006 to grow profitably in 2007," stated Jim Schlotfeldt, chief financial officer.
Balance Sheet Results
Total assets grew 36% to $185.6 million at December 31, 2007, compared with $136.7 million at year-end 2006. Asset quality remained strong with non-performing loans to total loans of 0.16% - down from 0.28% reported one year ago and down 5 basis points from 0.21% in the third quarter of 2007.
Loans, net of reserves, increased 53% to $146.1 million from a year ago. To deploy new capital raised at year-end 2006 quickly, Albina supplemented loan production by purchasing commercial and consumer loan participations.
The allowance for loan losses stood at $1.6 million, representing a reserve-to-loan ratio of 1.05%, compared with $1.3 million, or 1.30% of loans at the end of December 31, 2006. Net loan charge-offs for the year were $247,800, or 0.20% of average loans, versus $136,600, or 0.16% of average loans, for the year ended December 31, 2006.
At December 31, 2007, total deposits were $145.8 million, an increase of $36.6 million or 34% from year-ago levels. The ratio of loans to deposits at year-end 2007 was 100.19% compared with 87.51% at year-end 2006.
About Albina Community Bancorp
Albina Community Bank is a locally owned full-service independent commercial bank committed to investing in individuals, families, businesses and local neighborhoods. The bank promotes community development by providing products and services and banking solutions that are directed towards improving the social or economic conditions of underserved peoples or residents of distressed communities. Albina offers a wide range of competitive banking solutions, while also maintaining its mission to promote jobs, growth of small businesses, and wealth in our local Portland neighborhoods.
Albina Community Bank opened in December 1995 as the sole subsidiary of Albina Community Bancorp. Albina is one of approximately 50 commercial banks across the United States certified by the U.S. Treasury Department's Community Development Financial Institutions Fund as a community development financial institution. Albina is the only CDFI-certified commercial bank headquartered in the Pacific Northwest.
Albina operates from five local Portland locations including offices at: 2002 Northeast Martin Luther King Jr. Boulevard; 8040 North Lombard in the St. Johns neighborhood of North Portland; 4020 Northeast Fremont Street in the Beaumont neighborhood; 5636 NE Sandy Boulevard in the Rose City Park neighborhood of the International District; and 430 Northwest 10th Avenue in Portland's Pearl District; and a remote ATM at New Columbia in North Portland. For more information about Albina Community Bank, please call 503-287-7537 or visit www.albinabank.com.
Albina Community Bancorp Income Statement (Dollars in thousands, except per-share data) Three Months Ended Twelve Months Ended ----------------------- ----------------------- December 31, December 31, ----------------------- ----------------------- 2007 2006 % Chg 2007 2006 % Chg ------------------ ------------------- (Unaudited) (Unaudited) INTEREST INCOME Interest and fees on loans $ 2,960 $ 1,913 55% $ 10,255 $ 7,194 43% Interest on investment securities 137 258 -47% 568 881 -36% Other interest income 128 35 270% 360 288 25% ----------------- ----------------- Total interest income 3,225 2,206 46% 11,183 8,363 34% INTEREST EXPENSE Interest on deposits 1,171 835 40% 4,038 2,966 36% Interest on borrowings 325 165 97% 928 628 48% ----------------- ----------------- Total interest expense 1,496 1,000 50% 4,966 3,594 38% ----------------- ----------------- NET INTEREST INCOME 1,729 1,206 43% 6,217 4,769 30% Loan loss provision 233 -- NM 543 138 292% ----------------- ----------------- Net interest income after provision 1,496 1,206 24% 5,674 4,631 23% NON-INTEREST INCOME Service charges and fees 154 151 2% 607 607 0% Government payments and contracts - - NM 530 500 6% Loan fees on brokered loans 29 47 -39% 201 135 49% Merchant & card interchange income 173 93 86% 530 344 54% Realized gain/ (loss) on sale of investment securities 138 - NM 149 (19) NM Other income 95 141 -33% 390 389 0% ----------------- ----------------- Total non-interest income 589 432 36% 2,407 1,956 23% NON-INTEREST EXPENSE Salaries and employee benefits 952 844 13% 3,874 3,277 18% Occupancy and equipment 184 180 2% 715 684 5% Legal and professional 115 144 -20% 414 444 -7% Marketing 70 38 82% 282 244 15% Data processing 260 178 46% 935 670 40% Other 195 230 -15% 837 839 0% ----------------- ----------------- Total non-interest expense 1,776 1,614 10% 7,057 6,158 15% PRETAX INCOME 309 24 NM 1,024 429 139% Provision for income taxes 290 (3) NM 320 (69) NM ----------------- ----------------- NET INCOME $ 19 $ 27 -32% $ 704 $ 498 41% ================= ================= Earnings per share: Basic $ 0.02 $ 0.05 -61% $ 0.67 $ 0.81 -17% Diluted $ 0.02 $ 0.04 -60% $ 0.65 $ 0.76 -14% Weighted average shares outstanding: Basic 1,050,568 606,879 73% 1,047,800 618,008 70% Diluted 1,087,944 647,955 68% 1,082,130 655,398 65% FINANCIAL RATIOS Return on average assets 0.04% 0.08% 0.45% 0.39% Return on average equity 0.55% 1.23% 5.51% 6.44% Efficiency ratio 76.63% 98.49% 81.82% 91.56% Net interest margin 4.19% 4.07% 4.36% 4.18% Albina Community Bancorp Balance Sheet (Dollars in thousands) As of the Date Ended ----------------------------------------- Dec. 31, Sept. 30, Dec. 31, Annual 2007 2007 2006 % Change ----------------------------------------- (unaudited)(unaudited) (unaudited) ASSETS Cash and due from banks $ 467 $ 464 $ 463 1% Interest-bearing deposits 1,554 2,129 2,071 -25% Federal funds sold 8,775 7,820 3,051 188% --------------------------------- Total cash and cash equivalents 10,796 10,413 5,585 93% Time deposits with other banks 5,625 3,098 3,098 82% Investment securities 10,733 11,536 22,151 -52% Federal Home Loan Bank Stock 615 503 423 46% Loans Albina originated loans 105,819 100,591 78,862 34% Commercial participations purchased 20,657 18,962 9,708 113% Consumer participations purchased 21,195 20,811 8,278 156% --------------------------------- Total loans 147,671 140,364 96,848 52% Allowance for loan and lease losses (1,556) (1,460) (1,261) 23% --------------------------------- Net loans 146,115 138,904 95,587 53% Property and equipment, net 5,970 6,025 6,128 -3% Other real estate owned - - - 0% Other assets 5,718 5,458 3,736 53% --------------------------------- --------------------------------- Total assets $ 185,572 $ 175,937 $ 136,708 36% ================================= LIABILITIES AND EQUITY Deposits Non-interest bearing deposits $ 23,366 $ 23,122 $ 19,530 20% Interest-bearing accounts 39,417 33,086 29,488 34% Savings accounts 5,646 5,869 6,089 -7% Time certificates 77,411 69,956 54,127 43% --------------------------------- Total deposits 145,840 132,033 109,234 34% Notes payable 17,861 22,524 8,201 118% Subordinated debentures 6,186 6,186 6,186 0% Other liabilities 2,201 1,834 714 209% --------------------------------- Total liabilities 172,088 162,577 124,335 38% Shareholders' equity: Preferred stock 2,482 2,482 2,482 0% Common stock 8,540 8,422 8,173 4% Retained earnings 2,442 2,423 1,737 41% Accum. other comp. income 20 33 (19) NM --------------------------------- Total shareholders' equity 13,484 13,360 12,373 9% --------------------------------- --------------------------------- Total liabilities and equity $ 185,572 $ 175,937 $ 136,708 36% ================================= FINANCIAL RATIOS Loans / deposits 100.19% 105.20% 87.51% Non-performing loans / total loans 0.16% 0.21% 0.28% Reserve / loans 1.05% 1.04% 1.30%
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the continued financial performance of the company and its plans and opportunities for future growth. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially than those expected. Specific risks include, but are not limited to, general business and economic conditions, competitive factors, pricing pressures, further interest rate changes, and other factors listed from time to time in Albina Community Bancorp's regulatory reports.