PORTLAND, Ore., Oct. 30, 2008 (GLOBE NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank, today reported it increased its loans 15% and increased deposits 20% over the past year. The income from the Federal government's Bank Enterprise Award helped to offset higher loan loss reserves and contributed to a profitable third quarter. In the third quarter, Albina generated net income of $105,000, or $0.10 per share, compared to $580,000, or $0.54 per share in the third quarter of 2007. Year-to-date, Albina has added $3.0 million to its reserves contributing to a net loss of $867,000, or $0.81 per share, compared to net income of $686,000, or $0.66 per share, in the first nine months of 2007.
"Despite the sharp rise in nonperforming loans, the vast majority of our borrowers are continuing to make their payments to us promptly. Our nonperforming assets are characterized by a few larger projects with strong collateral underlying these loans," said Bob McKean, president and chief executive officer. "In addition, we have excellent liquidity and solid capital to provide us with the ability to continue to weather this economic cycle."
Albina received the maximum award of $675,000 from the U.S. Treasury's Community Development Financial Institutions Fund's Bank Enterprise Award (BEA) Program. Albina has received awards in 7 out of the last 8 years totaling more than $4.1 million. Through this program, the CDFI Fund awards financial institutions for their support of community development through small business loans, home improvement loans and commercial real estate loans. "Now, more than ever, our mission to create hope and financial opportunity wherever the need exists is vital to the communities we serve in greater Portland," McKean commented.
Third Quarter 2008 Financial Highlights: (for the quarter ended September 30, 2008, compared with September 30, 2007)
* Revenues increased 4% to $2.7 million from $2.6 million. * Net loans increased 15% to $161.8 million from $140.4 million. * Total assets rose 18% to $208.3 million from $175.9 million. * Deposits increased 20% to $157.9 million from $132.0 million. * Albina remains Well-Capitalized: Capital ratios remained well above the regulatory guidance for the holding company and its subsidiary bank.
Capital Adequacy and Liquidity
At September 30, 2008, capital ratios for Albina Bank exceeded regulatory definitions for Well-Capitalized banks with Tier 1 leverage at 8.1%, Tier 1 risk-based at 9.1% and Total risk-based capital at 10.3%. "In the current economic climate, maintaining a solid capital base is vital to our operations," said Jim Schlotfeldt, Chief Financial Officer. "To further bolster our capital base, we completed a financing in October 2008 for $2.6 million at the holding company level, $1 million of which was down-streamed to the subsidiary bank level, further enhancing capital ratios. In addition, we have applied for the Treasury Department's TARP Capital Purchase Program and believe we will qualify for additional funds should we need them."
"We also are well positioned to meet the liquidity needs of our customers," said Schlotfeldt. "Cash, cash equivalents and available unused borrowing lines total $54 million or 34% of our total deposits, and more than 26% of assets, we have adequate resources to meet the needs of our depositors. The bulk of the credit lines are with the Federal Home Loan Bank and the Federal Reserve Bank and are collateralized with investments and loans. The investment portfolio consists entirely of investment grade securities and has an average life of less than three years."
Asset Quality Review
Nonperforming assets increased during the quarter to $10.2 million, or 4.91% of total assets. Nonaccrual loans totaled $9.5 million and are primarily six large projects. The components of the nonaccrual portfolio are as follows:
* A newly renovated mixed use commercial building with a $1.9 million balance that is secured by a first deed at a loan-to-current-market value of 42%. The borrower filed a bankruptcy petition which is currently being considered by the courts. * Two land development projects to a single borrower totaling $1.8 million for a total of 45 lots, all of which are priced for entry level and moderate income buyers. The Bank has additional guarantees from the borrower. * A lot development project for $2.2 million for 34 lots in the east Portland metro area is nearly complete and will be ready for market in the 4th quarter. The bank is negotiating a settlement with the borrower. * A condominium development of 46 entry level units in southeast Portland for which Albina has a $1.7 million participation, or approximately one-third of the outstanding loan. The project is nearing completion and the lead bank on the loan is negotiating with the developer to provide further collateral. * An assisted living center for seniors located on the Oregon coast for which Albina has a $2.9 million participation for less than half the total loan. The lead bank is negotiating with the owners for additional collateral.
Net charge-offs totaled $1.2 million, or 0.78% of average loans in the third quarter and $1.5 million, or 0.99% of average loans year to date. Based on current appraisals for the six projects discussed above, the original loan balances of $10.5 million were written down by $1.0 million during the quarter. Albina also charged off $202,000 related to consumer loan participations during the third quarter. Reserves for loan losses were funded by $980,000 during the quarter and stand at $3.1 million
Balance Sheet Results
Total assets grew 18% to $208.3 million at September 30, 2008, compared with $175.9 million at September 30, 2007. Loans, net of reserves, increased 15% from a year ago to $161.8 million. Commercial and consumer loan participations, which provide diversification for the portfolio and additional earnings, account for approximately 24% of the portfolio and were down 6% year over year and stand at $38 million.
The loan portfolio remains well diversified with a wide variety of borrowers and collateral. Over 75% of the portfolio is secured by real estate, both residential and commercial. Real estate construction loans increased moderately as projects under development continued to be funded.
(Dollars in thousands) As of the Date Ended
--------------------------------------------------
Sept. 30, June 30, Sept. 30,
--------
2008 2008 2007
--------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial
business $ 21,495 13.3% $ 20,230 13.1% $ 16,885 12.0%
R/E construction 29,158 18.0% $ 25,141 16.3% 21,763 15.5%
Commercial R/E 78,530 48.5% $ 76,801 49.7% 69,895 49.8%
Multifamily
residendial 2,976 1.8% $ 3,274 2.1% 3,449 2.5%
One to four
family
residendial 12,653 7.8% $ 11,237 7.3% 6,952 5.0%
Consumer 17,410 10.8% $ 18,360 11.9% 21,976 15.7%
Unearned
Loan Fees (468) -0.3% $ (426) -0.3% (556) -0.4%
-------- -------- --------
Total Loans 161,754 100.0% 154,618 100.0% 140,364 100.0%
At September 30, 2008, total deposits rose 20% to $157.9 million from $132.0 million a year ago. Noninterest bearing deposits decreased 3% and accounted for 14% of total deposits. Interest bearing accounts increased 36% and accounted for 28% of deposits, and time certificates were up 24% and accounted for 55% 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 that support urban renewal and community development," said McKean. The ratio of loans to deposits at September 30, 2008 was 100.51% compared with 105.20% at September 30, 2007.
Shareholder equity at September 30, 2008, totaled $12.5 million, or $9.37 per share, compared to $13.4 million, or $10.19 per share a year ago.
Operating Results
Revenue in the third quarter of 2008 rose 4% to $2.7 million compared to $2.6 million in the third quarter of 2007. For the third quarter of both 2008 and 2007, net interest income, before the provision for loan losses, was $1.7 million After a $1.0 million provision for loan losses, third quarter 2008 net interest income totaled $718,000, down 52% from $1.5 million a year ago, which included a provision for loan losses of $278,000.
For the first nine months of 2008, revenue increased 9% to $6.9 million from $6.3 million in the like period of 2007. Year-to-date, net interest income, before the provision for loan losses, grew 14% to $3.9 million from $3.5 million in the first nine months of 2007. After a $3.0 million provision for loan losses, year-to-date net interest income totaled $2.1 million compared to $4.2 million a year ago, after a provision of $310,000.
Net interest margin in the third quarter was 3.75% compared to 4.44% in the third quarter of 2007. Year-to-date net interest margin was 3.81% compared to 4.38%. The reversal of accrued interest from non-performing assets reduced interest income by $242,000 or 53 basis points in the quarter and $414,000 or 31 basis points year to date.
Non-interest expense for the third quarter fell 12% to $1.6 million compared with $1.9 million for the same quarter of 2007.
The fourth quarter should see some additional reduction in operating expenses, reflecting a reduction of seven full-time equivalent staff from the headquarters' roster. "With the slower growth outlook for the foreseeable future, we are asking our employees to do more with less at the headquarters office so that we can maintain service levels in the branches," said McKean. In the first nine months of 2008, non-interest expense was flat at $5.3 million with year ago levels. The expense ratio (non-interest expenses as a percentage of average assets) improved to 3.23% in the third quarter compared to 4.25% in the third quarter a year ago. Albina improved its efficiency ratio for the quarter to 59.87% from 71.02% in the third quarter of 2007. For the first nine months of 2008, the efficiency ratio was 76.19% compared to 83.73% in the first nine 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.
Albina Community Bancorp
Income Statement
(Dollars in thousands,
except per-share data)
Three Months Ended Nine Months Ended
------------------------- --------------------------
September 30, September 30,
------------------------- --------------------------
2008 2007 %Chg 2008 2007 %Chg
-------------------- --------------------
(Unaudited)(Unaudited) (Unaudited)(Unaudited)
INTEREST INCOME
Interest and
fees on
loans $ 2,660 $ 2,806 -5% $ 8,214 $ 7,295 13%
Interest on
investment
securities 209 143 46% 527 431 22%
Other
interest
income 74 60 25% 222 233 -5%
-------------------- --------------------
Total
interest
income 2,943 3,009 -2% 8,963 7,958 13%
INTEREST EXPENSE
Interest on
deposits 882 1,054 -16% 2,845 2,866 -1%
Interest on
borrowings 364 278 31% 1,020 603 69%
-------------------- --------------------
Total
interest
expense 1,245 1,332 -7% 3,865 3,470 11%
-------------------- --------------------
NET INTEREST
INCOME 1,698 1,678 1% 5,098 4,489 14%
Loan loss
provision 980 175 460% 3,030 310 877%
-------------------- --------------------
Net interest
income after
provision 718 1,503 -52% 2,068 4,179 -51%
NON-INTEREST
INCOME
Service
charges and
fees 185 155 19% 507 453 12%
Government
payments and
contracts 675 530 27% 675 530 27%
Loan fees
on brokered
loans 8 37 -79% 54 172 -69%
Merchant &
card
interchange
income 70 144 -52% 222 356 -38%
Realized
gain/(loss)
on sale of
investment
securities -- -- NM 13 12 NM
Other income 107 88 22% 308 295 4%
-------------------- --------------------
Total
non-
interest
income 1,045 955 9% 1,779 1,818 -2%
NON-INTEREST
EXPENSE
Salaries and
employee
benefits 902 1,032 -13% 2,945 2,922 1%
Occupancy
and
equipment 190 183 4% 566 530 7%
Legal and
professional 104 109 -5% 330 299 10%
Marketing 64 72 -10% 232 212 9%
Data
processing 164 260 -37% 548 675 -19%
Other 218 213 2% 638 641 -1%
-------------------- --------------------
Total
non-
interest
expense 1,642 1,869 -12% 5,259 5,280 0%
PRETAX INCOME 121 588 -79% (1,386) 716 -294%
Provision
for income
taxes 16 8 97% (519) 30 -1808%
-------------------- --------------------
NET INCOME $ 105 $ 580 -82% $ (867) $ 686 -226%
==================== ====================
Earnings per
share:
Basic $ 0.10 $ 0.54 -81% $ (0.81) $ 0.66 -223%
Diluted $ 0.10 $ 0.54 -81% $ (0.81) $ 0.66 -223%
Weighted
average
shares
outstanding:
Basic 1,068,991 1,065,647 0% 1,068,768 1,041,063 3%
Diluted 1,070,630 1,065,771 0% 1,075,086 1,043,545 3%
FINANCIAL
RATIOS
Return on
average assets 0.05% 0.35% -0.44% 0.41%
Return on
average equity 0.84% 4.48% -6.92% 5.30%
Efficiency
ratio 59.87% 71.02% 76.19% 83.73%
Net interest
margin 3.75% 4.44% 3.81% 4.38%
Albina Community Bancorp
Balance Sheet
(Dollars in thousands)
As of the Date Ended
-------------------------------------------
Sept. 30, June 30, Sept. 30, Annual
2008 2008 2007 %Change
-------------------------------------------
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from
banks $ 496 $ 659 $ 464 7%
Interest-bearing
deposits 4,074 2,543 2,129 91%
Federal funds sold 8,698 7,249 7,820 11%
-------------------------------------------
Total cash and
cash equivalents 13,268 10,452 10,413 27%
Time deposits with
other banks 4,731 5,226 3,098 53%
Investment securities 17,863 18,765 11,536 55%
Federal Home
Loan Bank Stock 1,361 1,254 503 171%
Loans
Albina originated
loans 123,720 116,979 99,898 24%
Commercial
participations
purchased 22,065 20,444 19,662 12%
Consumer
participations
purchased 15,969 17,195 20,805 -23%
-------------------------------------------
Total loans 161,754 154,618 140,364 15%
Allowance for loan
and lease losses (3,066) (3,315) (1,460) 110%
-------------------------------------------
Net loans 158,688 151,303 138,904 14%
Property and
equipment, net 5,751 5,824 6,025 -5%
Other real estate
owned -- -- -- 0%
Other assets 6,677 5,897 5,458 22%
-------------------------------------------
Total assets $ 208,340 $ 198,720 $ 175,937 18%
===========================================
LIABILITIES AND EQUITY
Deposits
Non-interest
bearing deposits $ 22,363 $ 19,445 $ 23,122 -3%
Interest-bearing
accounts 44,955 43,625 33,086 36%
Savings accounts 3,982 4,159 5,868 -32%
Time certificates 86,589 78,563 69,956 24%
-------------------------------------------
Total deposits 157,889 145,792 132,033 20%
Notes payable 30,293 32,815 22,524 34%
Subordinated debentures 6,186 6,186 6,186 0%
Other liabilities 1,469 1,438 1,834 -20%
Total liabilities 195,836 186,231 162,576 20%
-------------------------------------------
Shareholders' equity:
Preferred stock 2,482 2,482 2,482 0%
Common stock 8,567 8,577 8,422 2%
Retained earnings 1,573 1,468 1,737 -9%
Accum. other
comp. income (118) (38) 719 -116%
-------------------------------------------
Total shareholders'
equity 12,503 12,489 13,360 -6%
-------------------------------------------
-------------------------------------------
Total liabilities
and equity $ 208,340 $ 198,720 $ 175,937 18%
===========================================
FINANCIAL RATIOS
Loans / deposits 100.51% 103.78% 105.20%
Non-performing
loans / total loans 6.32% 2.60% 0.21%
Reserve / loans 1.90% 2.14% 1.04%
Tangible book value
per share $ 9.37 $ 9.36 $ 10.19
Sept. 30, June 30, Sept. 30,
-------
2008 2008 2007
------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial
business $21,495 13.3% $20,230 13.1% $16,885 12.0%
R/E
construction 29,158 18.0% $25,141 16.3% 21,763 15.5%
Commercial R/E 78,530 48.5% $76,801 49.7% 69,895 49.8%
Multifamily
residendial 2,976 1.8% $ 3,274 2.1% 3,449 2.5%
One to four
family
residendial 12,653 7.8% $11,237 7.3% 6,952 5.0%
Consumer 17,410 10.8% $18,360 11.9% 21,976 15.7%
Unearned Loan
Fees (468) -0.3% $ (426) -0.3% (556) -0.4%
------- ------- -------
Total Loans 161,754 100.0% 154,618 100.0% 140,364 100.0%
ASSET QUALITY
Non-Performing
loans:
Loans past due
90 days
or more $ 761 $ 286 $ 222
Non-accrual
loans 9,458 3,731 75
------- ------- -------
10,219 4,017 297
Beginning
ALLL - from
previous FYE 1,556 1,556 1,261
Provision for
loan loss
expense 3,030 2,050 310
Loan charge
offs (1,661) (398) (194)
Loan
recoveries 141 108 85
------- ------- -------
(Charge offs),
net of
recoveries (1,520) (291) (110)
------- ------- -------
Ending ALLL
- YTD 3,066 3,315 1,460
Average Loans
Quarter 158,280 153,094 132,142
YTD 154,192 152,123 117,394
Net charge-off
Quarter 1,229 137 6
YTD 1,520 291 110
Net charge-offs
as % of
Average loans
Quarter 0.78% 0.09% 0.00%
YTD 0.99% 0.19% 0.09%
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.