PORTLAND, Ore., July 31, 2008 (PRIME NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank, today reported it increased its loans 24% and increased deposits 16% over the past year, generating solid revenue growth for the second quarter and first six months of 2008. Higher loan loss reserves, reflecting a few large, well-secured loans that are not performing as expected, contributed to a $562,000, or $0.52 per share net loss in the second quarter, compared to net income of $66,000, or $0.06 per share in the second quarter of 2007. Second quarter results were also impacted by the reversal of accrued interest from non performing assets of approximately $80,000. Year-to-date, Albina has added $2.1 million to reserves, contributing to a net loss of $972,000, or $0.91 per share, compared to net income of $106,000, or $0.10 per share, in the first six months of 2007.
"We are experiencing the same economic headwinds that are affecting the nation, although at a lesser degree than many other regions," stated Bob McKean, president and chief executive officer. "Because our banking business is focused on the urban core of the greater Portland market, which is well served by transit and bike routes, we are seeing housing prices remain relatively strong in these submarkets, compared to some suburban neighborhoods where commuting costs are a more important factor for home buyers. While it is still too early to call a recovery, May housing sales increased 17.8% from April although were still down 31% from last year's strong market performance. The homes for sale inventory levels have also started to drop, with May inventories falling 12.1% year-over-year and down 2.1% from the prior month.
"With the continuing softness in the national and regional economies and the increase in non-accrual assets, we increased our allowance for loan losses to 2.14% of total loans," McKean continued. "We have two lending relationships for three loans that have been placed on non-accrual that include two land development projects and one commercial building. Both borrowers have personal guarantees supporting these loans, and we are working with our customers to resolve the issues surrounding these loans."
Second Quarter 2008 Financial Highlights: (for the quarter ended June 30, 2008, compared with June 30, 2007)
* Revenues increased 13% to $2.1 million from $1.9 million.
* Net loans increased 24% to $151.3 million from $121.8 million.
* Total assets rose 27% to $198.7 million from $155.9 million.
* Deposits increased 16% to $145.8 million from $125.8 million.
* Albina remains "Well-Capitalized:" Capital ratios remained well
above the regulatory guidance for the holding company and our
subsidiary bank.
* Net interest margin increased 5 basis points to 3.86% from the
immediate prior quarter but was down 49 basis points from the
second quarter a year ago.
* Allowance for loan losses increased to $3.3 million, or 2.14% of
total loans.
Balance Sheet Results
Total assets grew 27% to $198.7 million at June 30, 2008, compared with $155.9 million at June 30, 2007. Capital ratios remained well above the regulatory guidance for the holding company. Capital ratios for our subsidiary bank exceed regulatory definitions for "Well-Capitalized" banks with Tier 1 leverage at 8.3%, Tier 1 risked based at 9.4% and Total risked based capital at 10.7%. Loans, net of reserves, increased 26% from a year ago to $151.3 million. Loan originated by Albina increased 34% to $117.0 million compared to $87.4 million a year ago. Commercial and consumer loan participations, which provide diversification for the portfolio and additional earnings, account for approximately 24% of the portfolio and were up 5% year over year.
"Our loan portfolio remains well diversified by category, and we have limited exposure to any one single loan type," said Jim Schlotfeldt, chief financial officer. "Real estate construction, which has been hard hit by the economic downturn this year, accounts for 16% of our loan portfolio, or $25.4 million. Two of the land development loans which we referenced last quarter as a concern moved into nonaccrual status this quarter. The two development projects totaling $1.8 million are for a total of 45 lots, all of which are priced for entry level and moderate income buyers. While the current appraised value of the land itself is lower than the amount owed, we have additional guarantees from the borrower and are working closely with the developer to bring the loans current. We are also seeing some developers shift condominium projects to leased apartment homes to capitalize on the low rental vacancy rates in the area."
(Dollars in thousands) As of the Date Ended
-----------------------------------------------
June 30, March 31, June 30,
2008 2008 2007
-----------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial business $20,230 13% $18,573 12% $15,289 12%
R/E construction 25,141 16% 25,218 17% 14,742 12%
Commercial R/E 76,801 50% 72,624 48% 62,061 50%
Multifamily
residential 3,274 2% 3,411 2% 2,899 2%
One to four family
residential 11,237 7% 10,313 7% 6,551 5%
Consumer 18,360 12% 20,075 13% 21,980 18%
Unearned Loan Fees (426) 0% (435) 0% (420) 0%
------------ ------------ ------------
Total Loans 154,618 100% 149,779 100% 123,103 100%
Nonperforming assets increased in the quarter to $4.0 million, or 2.60% of total loans, from $2.5 million at March 31, 2008 and $334,000 a year ago. In addition to the two land development loans discussed above, the other significant nonaccrual loans is for $1.9 million that is secured by a first deed on a newly renovated mixed use commercial building. "Our first lien position remains at a loan-to-current-market value of 42%, and we are continuing to negotiate with the borrower. As usual a resolution will take time, but the outlook for a positive outcome remains strong," said Schlotfeldt.
Albina increased its allowance for loan losses to $3.3 million, representing a reserve-to-loan ratio of 2.14%, compared with $1.3 million, or 1.09% of loans at June 30, 2007. Net loan charge-offs for the second quarter of 2008 were $136,000, or 0.09% of average loans, versus 46,000, or .04% of average loans, in the second quarter of 2007. Year-to-date, net charge-offs totaled $290,000, or .19% of average loans, compared with $50,000, or .04% of average loans, in the first six months of 2007.
At June 30, 2008, total deposits rose 16% to $146.0 million from $125.8 million a year ago. Noninterest bearing deposits decreased 14% and accounted for 13% of total deposits. Interest bearing accounts increased 33% and accounted for 30% of deposits, and time certificates were up 23% and accounted for 54% of total deposits at quarter end. "As a community development bank, we attract deposits from all over the country from both for-profit and non-profit institutions who support urban renewal and community development," said McKean. The ratio of loans to deposits at June 30, 2008 was 103.78% compared with 96.79% at June 30, 2007.
Shareholder equity at June 30, 2008, totaled $12.5 million, or $9.36 per share, compared to $12.5 million, or $9.68 per share, a year ago.
Operating Results
Revenue in the second quarter of 2008 rose 13% to $2.1 million compared to $1.9 million in the second quarter of 2007. For the second quarter of 2008, net interest income, before the provision for loan losses, increased 19% to $1.8 million from $1.5 million in the same quarter last year. After a $1.2 million provision for loan losses, second quarter 2008 net interest income totaled $575,000, down 59% from $1.4 million a year ago.
For the first six months of 2008, revenue increased 13% to $4.2 million from $3.7 million in the like period of 2007. Year-to-date, net interest income, before the provision for loan losses, grew 22% to $3.4 million from $2.8 million in the first six months of 2007. After a $2.0 million provision for loan losses, year-to-date net interest income totaled $1.4 million compared to $2.7 million a year ago.
Net interest margin in the second quarter began to recover from the recent drop in short-term interest rates that occurred in the last year. In addition, the reversal of accrued interest from non-performing assets reduced interest income by $81,000, or 18 basis points, in the quarter and $173,000, or 19 basis points, year to date. Second quarter net interest margin was 3.86%, compared to 3.81% in the immediate prior quarter and 4.35% in the second quarter of 2007.
Non-interest expense for the second quarter grew 3% to $1.8 million compared with $1.7 million for the same quarter of 2007, reflecting increased staffing needs and overhead costs to support the growth of the bank. In the first six months of 2008, non-interest expense increased 6% to $3.6 million from $3.4 million in the first six months of 2007. Albina improved its efficiency ratio for the quarter to 84.14% from 91.92% in the second quarter of 2007. For the first six months of 2008, the efficiency ratio was 86.94% compared to 92.83% in the first six months of 2007.
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.
This release contains forward-looking statements within the meaning of the Private Securities Litigation 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.
Albina Community Bancorp
Income Statement
(Dollars in thousands,
except per-share data)
Three Months Ended Six Months Ended
-------------------------- --------------------------
June 30, June 30,
-------------------------- --------------------------
2008 2007 % Chg 2008 2007 % Chg
-------------------- --------------------
(Unaudited) (Unaudited)
INTEREST
INCOME
Interest
and fees
on loans $ 2,745 $ 2,369 16% $ 5,554 $ 4,489 24%
Interest on
investment
securities 188 124 52% 317 287 10%
Other
interest
income 63 103 -39% 174 173 0%
-------------------- --------------------
Total
interest
income 2,996 2,595 15% 6,045 4,949 22%
INTEREST
EXPENSE
Interest on
deposits 880 964 -9% 1,963 1,812 8%
Interest on
borrowings 367 160 129% 656 325 102%
-------------------- --------------------
Total
interest
expense 1,246 1,124 11% 2,619 2,138 23%
-------------------- --------------------
NET INTEREST
INCOME 1,750 1,471 19% 3,426 2,811 22%
Loan loss
provision 1,175 68 1641% 2,050 135 1419%
-------------------- --------------------
Net
interest
income
after
prov-
ision 575 1,403 -59% 1,376 2,676 -49%
NON-INTEREST
INCOME
Service
charges
and fees 174 155 12% 322 298 8%
Government
payments
and
contracts -- -- NM -- -- NM
Loan fees
on
brokered
loans 20 35 -42% 46 135 -66%
Merchant &
card
inter-
change
income 62 124 -50% 152 212 -28%
Realized
gain/(loss)
on sale of
investment
securities 13 -- NM 13 12 8%
Other
income 88 85 3% 200 207 -3%
-------------------- --------------------
Total
non-
interest
income 357 398 -10% 734 863 -15%
NON-INTEREST
EXPENSE
Salaries
and
employee
benefits 989 963 3% 2,043 1,890 8%
Occupancy
and
equipment 183 169 9% 376 347 8%
Legal and
profess-
ional 136 86 59% 226 190 19%
Marketing 89 76 18% 168 141 19%
Data
processing 160 214 -25% 384 415 -8%
Other 214 211 2% 420 428 -2%
-------------------- --------------------
Total
non-
interest
expense 1,772 1,718 3% 3,617 3,411 6%
PRETAX INCOME (841) 84 NM (1,507) 128 NM
Provision
for income
taxes (279) 18 NM (535) 22 NM
-------------------- --------------------
NET INCOME $ (562) $ 66 NM $ (972) $ 106 NM
==================== ====================
Earnings per
share:
Basic $ (0.53) $ 0.06 NM $ (0.91) $ 0.10 NM
Diluted $ (0.52) $ 0.06 NM $ (0.90) $ 0.10 NM
Weighted
average
shares
outstanding:
Basic 1,068,885 1,033,186 3.5% 1,068,650 1,028,542 3.9%
Diluted 1,076,759 1,077,332 -0.1% 1,076,333 1,072,687 0.3%
FINANCIAL
RATIOS
Return on
average
assets -0.28% 0.04% -0.49% 0.07%
Return on
average
equity -4.19% 0.53% -7.25% 0.85%
Efficiency
ratio 84.14% 91.92% 86.94% 92.83%
Net interest
margin 3.86% 4.35% 3.83% 4.34%
Albina Community Bancorp
Balance Sheet
(Dollars in thousands) As of the Date Ended
-----------------------------------------
June 30, March 31, June 30, Annual
2008 2008 2007 %Chg
-----------------------------------------
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $ 659 $ 620 $ 438 51%
Interest-bearing deposits 2,543 1,620 1,881 35%
Federal funds sold 7,249 13,053 6,174 17%
-----------------------------------
Total cash and cash
equivalents 10,452 15,292 8,492 23%
Time deposits with other
banks 5,226 5,524 3,098 69%
Investment securities 18,765 10,743 11,508 63%
Federal Home Loan Bank Stock 1,254 1,002 423 196%
Loans
Albina originated loans 116,979 107,716 87,431 34%
Commercial participations
purchased 20,444 23,063 14,707 39%
Consumer participations
purchased 17,195 19,000 20,964 -18%
-----------------------------------
Total loans 154,618 149,779 123,103 26%
Allowance for loan and
lease losses (3,315) (2,277) (1,346) 146%
-----------------------------------
Net loans 151,303 147,502 121,756 24%
Property and equipment, net 5,824 5,889 6,063 -4%
Other real estate owned -- -- -- 0%
Other assets 5,897 5,966 4,574 29%
-----------------------------------
-----------------------------------
Total assets $ 198,720 $ 191,919 $ 155,914 27%
===================================
LIABILITIES AND EQUITY
Deposits
Non-interest bearing
deposits $ 19,445 $ 21,966 $ 22,687 -14%
Interest-bearing accounts 43,625 49,052 32,899 33%
Savings accounts 4,159 6,059 6,149 -32%
Time certificates 78,563 69,127 64,055 23%
-----------------------------------
Total deposits 145,792 146,205 125,790 16%
Notes payable 32,815 24,338 9,906 231%
Subordinated debentures 6,186 6,186 6,186 0%
Other liabilities 1,438 1,918 1,523 -6%
-----------------------------------
Total liabilities 186,231 178,647 143,405 30%
Shareholders' equity:
Preferred stock 2,482 2,482 2,482 0%
Common stock 8,577 8,562 8,269 4%
Retained earnings 1,468 2,029 1,737 -16%
Accum. other comp. income (38) 198 21 -279%
-----------------------------------
Total shareholders'
equity 12,489 13,271 12,509 0%
-----------------------------------
-----------------------------------
Total liabilities and
equity $ 198,720 $ 191,919 $ 155,914 27%
===================================
FINANCIAL RATIOS
Loans / deposits 103.78% 100.89% 96.79%
Non-performing loans /
total loans 2.60% 1.69% 0.27%
Reserve / loans 2.14% 1.52% 1.09%
Tangible book value
per share $ 9.36 $ 10.10 $ 9.68