PORTLAND, Ore., Feb. 27, 2009 (GLOBE NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank today reported a 15% increase in deposits and an 11% increase in loans for the year.
Driven primarily by the $820,000 provision for loan losses, Albina reported a net loss of $60,000 for the fourth quarter 2008, or $0.06 per share, compared to a net income of $105,000, or $0.10 per diluted share, for the immediate prior quarter, and net income of $19,000, or $0.02 per diluted share, for the fourth quarter of 2007. For the full year in 2008, Albina booked a $3.9 million provision for loan losses contributing to a net loss of $927,000, or $0.87 per share, compared to earnings of $704,000, or $0.67 per diluted share for the full year in 2007.
"We are continuing to see the impact of the economic recession as our nonperforming loans increased in the fourth quarter; however, the majority of our borrowers are maintaining their payments to us," said Bob McKean, president and chief executive officer. "While the current economic climate remains challenging, we have a clear strategy in place to continue reducing costs which is already reflected in our lower operating expenses this quarter.
"We are actively strategizing to improve the operations of the bank and to strengthen our capital position," continued McKean. "In our efforts to place the bank in the best possible position to participate in any recapitalization programs that may be available to us, we are keeping all of our options open as we continue to weather this economic storm. At the same time, we are beginning to increase our deposits organically to further build upon our base of affordable local deposits."
In 2008, 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. "We continue with our mission to create optimism and financial opportunity wherever the need exists which is vital to the communities we serve in greater Portland," McKean commented.
2008 Financial Highlights: (for the year ended December 31, 2008, compared with December 31, 2007)
* Revenues increased 7% to $9.2 million from $8.6 million. * Total loans increased 11% to $163.2 million from $147.7 million. * Total assets rose 17% to $216.4 million from $185.6 million. * Deposits increased 15% to $167.1 million from $145.8 million. * Capital ratios for Albina Bank exceeded regulatory definitions for well-capitalized banks with Tier 1 leverage at 8.2%, Tier 1 risk-based at 9.9% and Total risk-based capital at 11.2%.
During the fourth quarter we originated approximately $3 million in loans: 13 commercial loans totaling $2.7 million and an additional 9 micro-loans in the amount of $430,000. Although loan demand diminished towards the end of the 2008, we are witnessing an increase in demand as we begin the new year. In this regard, we are proceeding prudently to review pricing and establish full account relationships as we implement our strategy.
Capital Adequacy and Liquidity
"We previously announced that we had applied for funds under the U.S. Treasury Department's Capital Purchase Program (TCPP). We have since modified our application with the TCPP where the new terms are considerably more favorable for certified community development banks," said Jim Schlotfeldt, chief financial officer. "Additional capital from this program would allow us to increase lending in the primary markets we serve, and would enhance Albina's already strong capital position." At December 31, 2008, capital ratios for Albina Bank exceeded regulatory definitions for well-capitalized banks with Tier 1 leverage at 8.2%, Tier 1 risk-based at 9.9% and Total risk-based capital at 11.2%.
"In the meantime, we are maintaining high levels of liquidity on the balance sheet and available lines of credit at the Federal Home Loan Bank and the Federal Reserve Bank," continued Schlotfeldt.
Asset Quality Review
Nonperforming assets increased during the quarter to $13.0 million, or 6.01% of total assets. Nonaccrual loans totaled $12.8 million and primarily consist of eight large projects. "The level of distress is clearly in the construction and land development loan portfolio which accounts for 22% of our total loan portfolio and 80% of our NPAs, and they are all close to home in our Portland metro market," said McKean. "At this time, we do not know how many other categories may suffer as we continue through these unprecedented economic times; however, we are making progress in resolving these issues and expect to see some movement as we go forward."
The allowance for loan and lease losses was $2.7 million, or 1.70% of net loans at December 31, 2008, compared to $3.1 million or 1.93% of net loans at September 30, 2008 and $1.6 million, or 1.06% of net loans a year ago. Net charge-offs totaled $1.2 million, or 0.71% of average loans in the fourth quarter, and $2.7 million, or 1.71% of average loans for the year. Based on current appraisals for nonperforming construction and land development loans, the original loan balances were written down by $936,000 during the quarter. Albina also charged off $167,000 related to consumer loan participations and $54,000 in small business loans during the fourth quarter.
Balance Sheet Results
Total assets grew 17% to $216.4 million at December 31, 2008, compared with $185.6 million at December 31, 2007. Loans, net of reserves, increased 10% from a year ago to $160.5 million. Commercial and consumer loan participations, which provide diversification for the portfolio and additional earnings, account for approximately 21% of the portfolio and were down 8% year-over-year standing at $35 million.
Over 75% of the portfolio is secured by real estate, both residential and commercial. The loan portfolio remains well diversified with a wide variety of borrowers and collateral.
(Dollars in thousands)
As of the Date Ended
-----------------------------------------------------
December 31, September 30, December 31,
2008 2008 2007
-----------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial
business $ 21,665 13.3% $ 21,495 13.3% $ 13,892 9.4%
R/E
construction 22,572 13.8% 29,158 18.0% 25,639 17.4%
Commercial R/E 80,265 49.2% 78,530 48.5% 73,368 49.7%
Multifamily
residential 2,959 1.8% 2,976 1.8% 3,428 2.3%
One to four
family
residential 19,991 12.2% 12,653 7.8% 9,401 6.4%
Consumer 16,182 9.9% 17,410 10.8% 22,442 15.2%
Unearned Loan
Fees (410) -0.3% (468) -0.3% (499) -0.3%
-------- -------- --------
Total Loans 163,224 100.0% 161,754 100.0% 147,671 100.0%
At December 31, 2008, total deposits rose 15% to $167.1 million from $145.8 million a year ago. Noninterest bearing deposits decreased 17% and accounted for 12% of total deposits. Interest bearing accounts increased 5% and accounted for 25% of deposits, and time certificates were up 33% and accounted for 62% 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 December 31, 2008 was 96.03% compared with 100.19% at December 31, 2007.
Shareholder equity at December 31, 2008, totaled $12.5 million, or $9.35 per share, compared to $13.5 million, or $10.30 per share a year ago.
Operating Results
Revenue, consisting of net interest income and noninterest income, was $2.3 million in the fourth quarter of 2008 compared to $2.5 million in the fourth quarter of 2007. For the fourth quarter of both 2008 and 2007, net interest income, before the provision for loan losses, was $1.7 million After a $820,000 provision for loan losses, fourth quarter 2008 net interest income totaled $875,000, down 41% from $1.5 million a year ago, which included a provision for loan losses of $233,000.
For the full year of 2008, revenue increased 7% to $9.2 million from $8.6 million in 2007. Net interest income, before the provision for loan losses, grew 10% to $6.8 million from $6.2 million in 2007. After a $3.8 million provision for loan losses, net interest income for 2008 totaled $3.0 million compared to $5.7 million for 2007 after a provision of $543,000.
Net interest margin in the fourth quarter was 3.63% compared to 4.14% in the fourth quarter of 2007. 2008 net interest margin was 3.76% compared to 4.31%. The reversal of accrued interest from non-performing assets reduced interest income by $358,595 or 77 basis points in the quarter and $772,949 or 43 basis points for the year. Non-interest expense for the fourth quarter fell 12% to $1.6 million compared with $1.8 million for the same quarter of 2007.
"The fourth quarter saw additional reduction in operating expenses with salaries and employee benefits down 13% and marketing expenses down 25%," said McKean. "We are maintaining first rate service levels in our branches, thanks to the dedication of our loyal employees who continue to do more with less." For the full year of 2008, non-interest expense decreased 3% at $6.8 million from 2007 levels. The expense ratio (non-interest expenses as a percentage of average assets) improved to 3.01% in the fourth quarter compared to 4.00% in the fourth quarter a year ago. Albina improved its efficiency ratio for the quarter to 68.34% from 76.63% in the fourth quarter of 2007. In 2008, the efficiency ratio was 74.23% compared to 81.82% in 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 Northeast 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,
---------------------------- ----------------------------
2008 2007 % Chg 2008 2007 % Chg
---------------------- ----------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
INTEREST
INCOME
Interest
and
fees on
loans $ 2,726 $ 2,960 -8% $ 10,940 $ 10,255 7%
Interest
on
investment
securities 196 137 42% 722 568 27%
Other
interest
income 57 128 -56% 305 361 -16%
---------------------- ----------------------
Total
interest
income 2,978 3,225 -8% 11,967 11,183 7%
INTEREST
EXPENSE
Interest on
deposits 924 1,171 -21% 3,769 4,038 -7%
Interest on
borrowings 359 325 10% 1,379 929 48%
---------------------- ----------------------
Total
interest
expense 1,283 1,497 -14% 5,148 4,966 4%
---------------------- ----------------------
NET INTEREST
INCOME 1,695 1,728 -2% 6,819 6,217 10%
Loan loss
provision 820 233 252% 3,850 543 609%
---------------------- ----------------------
Net
interest
income
after
provision 875 1,495 -41% 2,969 5,674 -48%
NON-INTEREST
INCOME
Service
charges
and fees 188 154 22% 695 607 15%
Government
payments
and
contracts 250 -- NM 925 530 74%
Loan fees
on
brokered
loans 8 29 -72% 62 201 -69%
Merchant &
card
interchange
income 51 173 -71% 273 530 -48%
Realized
gain/(loss)
on sale of
investment
securities -- 138 NM 13 150 NM
Other
income 106 232 -54% 413 389 6%
---------------------- ----------------------
Total non-
interest
income 603 727 -17% 2,382 2,407 -1%
NON-INTEREST
EXPENSE
Salaries
and
employee
benefits 823 952 -13% 3,769 3,874 -3%
Occupancy
and
equipment 192 184 4% 758 714 6%
Legal and
professional 129 115 11% 459 414 11%
Marketing 52 70 -25% 284 282 1%
Data
processing 176 260 -32% 724 935 -23%
Other 198 195 2% 836 837 0%
---------------------- ----------------------
Total non-
interest
expense 1,571 1,776 -12% 6,830 7,056 -3%
PRETAX
INCOME (93) 308 -130% (1,479) 1,025 -244%
Provision
for
income
taxes (32) 290 -111% (552) 320 -272%
---------------------- ----------------------
NET INCOME $ (60) $ 19 -422% $ (927) $ 704 -232%
====================== ======================
Earnings
per
share:
Basic $ (0.06) $ 0.02 -444% $ (0.87) $ 0.67 -230%
Diluted $ (0.06) $ 0.02 -445% $ (0.87) $ 0.67 -230%
Weighted
average
shares
outstanding:
Basic 1,069,198 1,067,864 0% 1,068,868 1,047,818 2%
Diluted 1,069,198 1,070,346 0% 1,068,868 1,047,819 2%
FINANCIAL
RATIOS
Return on
average
assets -0.03% 0.01% -0.43% 0.39%
Return on
average
equity -0.46% 0.14% -7.12% 5.27%
Efficiency
ratio 68.34% 76.63% 74.23% 81.82%
Net interest
margin 3.63% 4.14% 3.76% 4.31%
Albina Community Bancorp
Balance Sheet
(Dollars in thousands)
As of the Date Ended
---------------------------------------------
Dec. 31, Sept. 30, Dec. 31, Annual
2008 2008 2007 % Change
-------------------------------------
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $ 396 $ 496 $ 467 -15%
Interest-bearing
deposits 13,646 4,074 1,554 778%
Federal funds sold 5,715 8,698 8,775 -35%
-------------------------------------
Total cash and cash
equivalents 19,757 13,268 10,796 83%
Time deposits with other
banks 4,532 4,731 5,625 -19%
Investment securities 17,684 17,863 10,733 65%
Federal Home Loan Bank
Stock 1,325 1,361 615 115%
Loans
Albina originated loans 128,378 123,720 105,819 21%
Commercial
participations
purchased 19,939 22,065 20,657 -3%
Consumer participations
purchased 14,906 15,969 21,195 -30%
-------------------------------------
Total loans 163,224 161,754 147,671 11%
Allowance for loan and
lease losses (2,736) (3,066) (1,556) 76%
-------------------------------------
Net loans 160,488 158,688 146,115 10%
Property and equipment,
net 5,673 5,751 5,970 -5%
Other real estate owned -- -- -- 0%
Other assets 6,918 6,677 5,718 21%
-------------------------------------
-------------------------------------
Total assets $ 216,377 $ 208,340 $ 185,572 17%
=====================================
LIABILITIES AND EQUITY
Deposits
Non-interest bearing
deposits $ 19,291 $ 22,363 $ 23,366 -17%
Interest-bearing
accounts 41,264 44,955 39,418 5%
Savings accounts 3,763 3,982 5,646 -33%
Time certificates 102,800 86,589 77,411 33%
-------------------------------------
Total deposits 167,117 157,889 145,840 15%
Notes payable 28,314 30,293 17,861 59%
Subordinated debentures 6,186 6,186 6,186 0%
Other liabilities 2,277 1,469 2,201 3%
-------------------------------------
Total liabilities 203,894 195,836 172,088 18%
Shareholders' equity:
Preferred stock 2,482 2,482 2,482 0%
Common stock 8,580 8,567 8,540 0%
Retained earnings 1,513 1,573 1,737 -13%
Accum. other comp
income (92) (118) 725 -113%
-------------------------------------
Total shareholders'
equity 12,483 12,503 13,484 -7%
-------------------------------------
Total liabilities and -------------------------------------
equity $ 216,377 $ 208,340 $ 185,572 17%
=====================================
FINANCIAL RATIOS
Loans / deposits 96.03% 100.51% 100.19%
Non-performing loans /
total loans 7.97% 6.32% 0.16%
Reserve / loans 1.68% 1.90% 1.05%
Tangible book value per
share $ 9.35 $ 9.37 $ 10.30
Albina Community Bancorp
Selected Highlights
(Dollars in thousands)
As of the Date Ended
---------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2008 2008 2007
---------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial
business $ 21,665 13.3% $ 21,495 13.3% $ 13,892 9.4%
R/E construction 22,572 13.8% 29,158 18.0% 25,639 17.4%
Commercial R/E 80,265 49.2% 78,530 48.5% 73,368 49.7%
Multifamily
residential 2,959 1.8% 2,976 1.8% 3,428 2.3%
One to four family
residential 19,991 12.2% 12,653 7.8% 9,401 6.4%
Consumer 16,182 9.9% 17,410 10.8% 22,442 15.2%
Unearned Loan Fees (410) -0.3% (468) -0.3% (499) -0.3%
-------- -------- --------
Total Loans 163,224 100.0% 161,754 100.0% 147,671 100.0%
ASSET QUALITY
Non-Performing
loans:
Loans past due 90
days or more $ 166 $ 761 $ 202
Non-accrual loans 12,836 9,458 35
-------- -------- --------
Total
non-performing
loans 13,001 10,219 237
Beginning ALLL -
from previous FYE 1,556 1,556 1,261
Provision for loan
loss expense 3,850 3,030 543
Loan charge offs (2,833) (1,661) (342)
Loan recoveries 163 141 95
-------- -------- --------
(Charge offs),
net of
recoveries (2,670) (1,520) (247)
-------- -------- --------
Ending ALLL - YTD 2,736 3,066 1,556
Average Loans
Quarter 162,831 158,280 143,344
YTD 156,363 154,192 123,935
Net charge-off
Quarter 1,150 1,229 6
YTD 2,670 1,520 247
Net charge-offs as
% of Average loans
Quarter 0.71% 0.78% 0.00%
YTD 1.71% 0.99% 0.20%
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.