PORTLAND, Ore., July 29, 2009 (GLOBE NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank today reported that second quarter results were highlighted by a 23% increase in deposits and notification of a $2 million CDFI (Community Development Financial Institution) Fund Financial Assistance award from the U.S. Treasury. "We expect to receive and record the $2 million award at the holding company in the third quarter of 2009," commented Robert McKean, President and Chief Executive Officer. CDFI funds are awarded to viable financial institutions that have the financial and managerial capacity to provide affordable and appropriate financial products and services that positively impact their communities.
Following a $2.3 million provision for loan losses the company lost $1.7 million, or $1.29 per common share, for the second quarter ended June 30, 2009, compared to a net loss of $562,000, or $0.52 per share in the second quarter a year ago when its loan loss provision totaled $1.2 million. The net loss for the immediate prior quarter was $1.1 million, or $.86 per common share, when its provision was $1.8 million. Year-to-date, Albina has recorded a total provision for loan losses of $4.1 million contributing to a net loss of $2.8 million, or $2.15 per common share, compared to a loss of $972,000, or $0.90 per common share, in the like period a year ago, with a loan loss provision of $2 million.
"While we did not engage in the practices associated with the credit problems that exist today, including subprime lending and credit default swaps, as community bankers, we are on the front line in the effort to alleviate some of these problems," McKean stated. "We believe community banks like Albina are the key to a strong national economy, and we are proud to demonstrate our dedication by serving our customers, our state, and our country the best way we know how."
Second Quarter 2009 Financial Highlights: (for the quarter ended June 30, 2009 compared to June 30, 2008)
* Deposits grew 23% to $178.7 million up from $145.8 million. * Total assets increased 14% to $225.8 million up from $198.7 million. * Capital ratios for Albina Bank exceeded regulatory definitions for well-capitalized banks with a Tier 1 leverage ratio of 6.6%, Tier 1 risk-based ratio of 8.9% and Total risk-based capital ratio of 10.2%. * Net loans remained flat at $151.4 million from $151.3 million in the same quarter a year ago. * Allowance for loan losses increased to $3.4 million, or 2.2% of total loans.
Community Funding Awards
Albina Community Bancorp was recently named as a 2009 recipient of the U.S. Treasury's Community Development Financial Institutions Fund's Financial Assistance Program and will receive its cash award in the third quarter of 2009. The funds will add more than 70 basis points to the Tier 1 capital ratio of the bank holding company.
"At the end of June, we announced that Albina Community Bancorp had been selected to receive a $2 million CDFI Fund Financial Assistance award to continue our community development work," said McKean. "Once again, we are honored to be named for this award. Our mission to build sustainable businesses and support our communities is greatly enhanced by these funds. The 2009 award will allow us to expand our efforts in making credit available to the community during these challenging economic times." Albina's award is part of the $90 million in financial assistance awards that the CDFI fund granted to 59 community development financial institutions in 26 states and Puerto Rico.
"We also recently announced that Albina Equity Fund, LLC, a wholly-owned subsidiary of Albina Community Bancorp, was awarded $10 million in new market tax credits (NMTC)," McKean added. "We intend to deploy the $10 million NMTC throughout the state of Oregon, with approximately 70% in metro Portland and 30% in rural areas. A substantial number of projects have already been identified, and investment decisions will be made from those that are "shovel ready" and will create the greatest positive economic impact in our communities," stated McKean. Neither the CDFI award nor the NMTC is related to TARP funding.
Albina also is a participant in the United States Small Business Administration (SBA) Program's America's Recovery Capital (ARC) Loan Program. "We are delighted that Albina approved the first loan in the state of Oregon under this new program," said Jim Schlotfeldt, Chief Financial Officer. "To be able to participate in this program and provide small businesses the access to the capital needed to drive economic recovery and to retain jobs, is what we are here for." This is a special, temporary loan program designed to help struggling American small businesses during these tough economic conditions. Albina's SBA ARC Loans are deferred payment loans of up to $35,000 and are available to established qualifying businesses that need short-term help to make their principal and interest payment on existing qualifying loans. Albina Community Bank is the fourth largest SBA lender in the Portland district and is a certified 7(a), 504, SBA Express and Patriot Express lender. The SBA ARC loans are 100% guaranteed by the U.S. Small Business Administration.
Capital Adequacy and Liquidity
At June 30, 2009, capital ratios for Albina Bank exceeded regulatory definitions for well-capitalized banks with Tier1 leverage at 6.6%, Tier 1 risk-based at 8.9% and Total risk-based capital at 10.2%. "We are building strong customer relationships demonstrated by our solid growth in deposits and core business operations," continued Schlotfeldt. "We are also beginning to see signs of new interest in business ventures, albeit cautionary at this time. In addition to our solid customer base, we continue to maintain high levels of liquidity and available lines of credit at the Federal Home Loan Bank and the Federal Reserve Bank; our investment portfolio consists entirely of investment grade securities and has an average life of less than three years. Excess liquidity will be invested in securities until the underlying time deposits mature or loan originations increase."
Asset Quality Review
Nonperforming assets (NPAs) decreased during the quarter to $15.3 million, or 6.8% of total assets, at June 30, 2009, from $18.4 million, or 8.0% of total assets in the preceding quarter, and up from $4.0 million, or 2.0% of assets a year ago. Nonperforming assets include nonperforming loans, other real estate owned (OREO), and loans delinquent 90 days or more.
Non-performing loans (NPLs) decreased during the quarter to $13.4 million, or 8.7% of total loans at June 30, 2009, compared to $17.9 million, or 11.3% of total loans, three months earlier. "All but one of the nonperforming loans are to borrowers located in the greater Portland and Vancouver markets, and we are regularly updating the appraisals for the properties in our classified portfolio," commented McKean.
The decrease in NPAs this quarter was primarily due to a condominium project in the greater metro area, which was brought into other real estate owned (OREO) and subsequently written down to the most recent appraised value. "We are actively marketing this project and believe it to be attractively priced at these levels," McKean continued. "We are recently seeing more people expressing an interest in our properties, and we are moderately encouraged by the increase in activity. In the meantime, we continue to work with our developer clients to reduce their inventories of unsold homes." Construction loans account for 10% of the total loan portfolio and 70% of nonperforming loans.
Net charge-offs totaled $2.0 million, or 1.30% of average loans in the second quarter quarter, and $1.4 million, or 0.90% of average loans for the linked quarter, and $137,000, or 0.09% of average loans in the second quarter of 2008. Year-to-date, net charge-offs totaled $3.5 million, or 2.19% of average loans, and $291,000, or 0.19% of average loans in the like period a year ago. The allowance for loan and lease losses (ALLL) totaled $3.4 million, or 2.19% of net loans at June 30, 2009, compared to $3.1 million or 1.98% of net loans at March 31, 2009 and $3.3 million, or 2.14% of net loans a year ago.
Balance Sheet Results
Total assets increased 14% to $225.8 million at June 30, 2009, compared with $198.7 million at June 30, 2008. Loans, net of reserves, remained relatively flat from a year ago at $154.8 million. The loan portfolio continues to remain well-diversified with a wide variety of borrowers and collateral; over 75% of the portfolio is secured by real estate, both residential and commercial. Consumer loan participations were down 26% year-over-year standing at $12.7 million. Commercial loan participations remained unchanged year-over-year at $20.4 million. Consumer and commercial loan participations provide additional earnings and diversification for the portfolio and account for approximately 21% of the portfolio. More than 39% of Albina's commercial real estate loans are owner-occupied.
June 30, March 31, June 30,
2009 2009 2008
-----------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial business $24,222 15.6% $22,234 14.0% $20,230 13.1%
R/E construction 16,630 10.7% 20,075 12.7% 25,141 16.3%
Commercial R/E 76,419 49.4% 78,143 49.3% 76,801 49.7%
Multifamily
residential 3,864 2.5% 2,945 1.9% 3,274 2.1%
One to four family
residential 19,865 12.8% 20,191 12.7% 11,237 7.3%
Consumer 14,152 9.1% 15,232 9.6% 18,360 11.9%
Unearned Loan Fees (308) -0.2% (361) -0.2% (426) -0.3%
------- ------- -------
Total Loans 154,844 100% 158,459 100% 154,617 100%
At June 30, 2009, total deposits rose 23% to $178.7 million up from $145.8 million a year ago. Noninterest bearing deposits accounted for 13% of total deposits and interest bearing and savings accounts accounted for 24% of deposits, and time certificates were 63% of total deposits at quarter end. "We continue to attract deposits not only from within our footprint, but from all over the country from both for-profit and non-profit institutions that support urban renewal and community development," said McKean. "This quarter we increased the number of core deposit relationships and saw outstanding growth in checking and money market accounts while decreasing our reliance on certificates of deposit." The ratio of loans to deposits at June 30, 2009 was 85% compared with 104% at June 30, 2008.
The investment securities portfolio increased by $28.4 million or 151%, to $47.1 million from $18.8 million a year ago, as Albina sought to take advantage of increased credit spreads available in investment securities. All securities are investment grade securities issued by U.S. Government Sponsored Enterprises (GSE). Shareholder equity at June 30, 2009, totaled $9.9 million, or $7.48 per share, compared to $12.5 million, or $9.36 per share a year ago.
Operating Results
Revenue, consisting of net interest income and noninterest income, was $1.7 million in both the first and second quarters of 2009 compared to $2.1 million in the second quarter a year ago. Albina's net interest income, before the provision for loan losses, was $1.4 million in the second quarter of 2009, compared to $1.3 million, before the provision in the preceding quarter, and $1.7 million in the second quarter a year ago. After the $2.3 million provision for loan losses, second quarter 2009 net interest loss was $933,000, down from net interest income of $575,000 a year ago, which included a provision for loan losses of $1.2 million.
Albina's net interest margin in the quarter was 2.85% compared to 2.89% in the first quarter this year and 3.88% in the second quarter a year ago. The reversal of accrued interest from non-performing assets reduced interest income by $322,000 in the quarter and was responsible for the compression in the net interest margin by 67 basis points. Year-to-date, the reversal of accrued interest totaled $788,000, or 84 basis points.
Non-interest expense for the second quarter increased 11% to $1.9 million compared to $1.8 million for the like quarter a year ago. "The 11% increase in total non-interest expense for the second quarter reflects the one-time FDIC special assessment of $106,000, higher ongoing FDIC insurance premiums and additional legal and professional expenses associated with managing the loan portfolio. These expenses impacted our efficiency ratio for the quarter, which rose to 113.94% from 84.14% in the second quarter a year ago," said McKean. "At the same time, salaries and employee benefits have decreased." The FDIC levied the special assessment on all banks -- during the quarter to bolster its insurance fund.
Due to the capital structure of the company, preferred shareholders participated in the per share loss during the quarter and year-to-date periods. "Our original shareholders, owners of the Preferred A and B series, had reached their maximum participation in our earnings stream in prior years," said Schlotfeldt. "With the recent losses, however, our retained earnings have fallen below their earnings participation threshold. Consequently, the loss per share allocated to common shareholders was lower by $0.20 in the second quarter and $0.49 in the first half of 2009. On a pro rata basis, future losses will continue to be allocated between preferred and common shareholders and future earnings will be reduced until preferred shareholders reach the $100 per preferred share liquidation preference."
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.
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
Balance Sheet
(Dollars in thousands) As of the Date Ended
------------------------------------------
June 30, March 31, June 30, Annual
2009 2009 2008 % Change
------------------------------------------
(unaudited)(unaudited) (unaudited)
ASSETS
Cash and due from banks $ 434 $ 541 $ 659 -34%
Interest-bearing deposits 7,596 12,525 2,543 199%
Federal funds sold 121 4,465 7,249 -98%
-------------------------------
Total cash and cash
equivalents 8,151 17,530 10,452 -22%
Time deposits with other
banks 4,333 4,333 5,226 -17%
Investment securities 47,119 39,887 18,765 151%
Federal Home Loan Bank
Stock 1,325 1,325 1,254 6%
Loans
Albina originated loans 121,794 124,529 116,979 4%
Commercial participations
purchased 20,387 20,103 20,444 0%
Consumer participations
purchased 12,662 13,826 17,195 -26%
-------------------------------
Total loans 154,844 158,458 154,618 0%
Allowance for loan and
lease losses (3,395) (3,133) (3,315) 2%
-------------------------------
Net loans 151,448 155,325 151,303 0%
Property and equipment, net 5,506 5,590 5,824 -5%
Other real estate owned 1,928 476 -- 0%
Other assets 5,973 7,335 5,897 1%
-------------------------------
-------------------------------
Total assets $ 225,785 $ 231,803 $ 198,720 14%
===============================
LIABILITIES AND EQUITY
Deposits
Non-interest bearing
deposits $ 22,756 $ 20,682 $ 19,445 17%
Interest-bearing deposits 39,087 36,633 43,625 -10%
Savings account deposits 4,355 3,882 4,159 5%
Time certificates deposits 112,470 119,513 78,563 43%
-------------------------------
Total deposits 178,668 180,710 145,792 23%
Notes payable 29,356 31,863 32,815 -11%
Subordinated debentures 6,186 6,186 6,186 0%
Other liabilities 1,720 1,679 1,438 20%
-------------------------------
Total liabilities 215,929 220,438 186,231 16%
Shareholders' equity:
Preferred stock 2,482 2,482 2,482 0%
Common stock 8,597 8,593 8,577 0%
Retained earnings (1,315) 381 1,468 -190%
Accum. other comp. income 92 (91) (38) -345%
-------------------------------
Total shareholders'
equity 9,856 11,365 12,489 -21%
-------------------------------
-------------------------------
Total liabilities and
equity $ 225,785 $ 231,803 $ 198,720 14%
===============================
FINANCIAL RATIOS
Loans / deposits 84.77% 85.95% 103.78%
Non-performing loans /
total loans 8.65% 11.32% 2.60%
Reserve / loans 2.19% 1.98% 2.14%
Tangible book value per
share $ 7.48 $ 8.62 $ 9.36
Albina Community Bancorp
Income Statement
(Dollars in thousands,
except per-share data) Three Months Ended
------------------------------------------
June 30, March 31, June 30,
------------------------------------------
2009 2009 2008 % Chg
-----------------------------------
(Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
Interest and fees on
loans $ 2,411 $ 2,410 $ 2,745 -12%
Interest on investment
securities 252 213 188 34%
Other interest income 43 42 63 -32%
-----------------------------------
Total interest income 2,707 2,664 2,996 -10%
INTEREST EXPENSE
Interest on deposits 965 995 880 10%
Interest on borrowings 375 347 367 2%
-----------------------------------
Total interest expense 1,340 1,342 1,246 7%
-----------------------------------
NET INTEREST INCOME 1,367 1,323 1,750 -22%
Loan loss provision 2,300 1,845 1,175 96%
-----------------------------------
Net interest income
after provision (933) (522) 575 -262%
NON-INTEREST INCOME
Service charges and fees 181 206 174 4%
Government payments and
contracts -- -- -- NM
Loan fees on brokered
loans -- -- 20 -100%
Merchant & card
interchange income 64 51 62 3%
Realized gain/(loss) on
sale of investment
securities -- -- 13 NM
Other income 109 106 88 24%
-----------------------------------
Total non-interest
income 353 364 357 -1%
NON-INTEREST EXPENSE
Salaries and employee
benefits 764 781 989 -23%
Occupancy and equipment 186 191 183 2%
Legal and professional 254 203 136 87%
Marketing 64 37 89 -28%
Data processing 192 169 160 20%
Other 500 289 214 133%
-----------------------------------
Total non-interest
expense 1,960 1,671 1,772 11%
-
PRETAX INCOME (2,540) (1,830) (841) 202%
Provision for income
taxes (844) (698) (279) 202%
-----------------------------------
NET INCOME $ (1,696) $ (1,132) $ (562) 202%
===================================
Earnings (loss) per common
share:
Basic $ (1.29) $ (0.86) $ (0.53) 143%
Diluted $ (1.29) $ (0.86) $ (0.52) 148%
Weighted average common
shares outstanding:
Basic 1,069,867 1,069,350 1,068,885 0.1%
Diluted 1,069,867 1,069,350 1,076,759 -0.6%
FINANCIAL RATIOS
Return on average assets -0.75% -0.51% -0.28%
Return on average equity -14.72% -9.14% -4.22%
Efficiency ratio 113.94% 99.11% 84.14%
Net interest margin 2.85% 2.89% 3.88%
Six Months Ended
------------------------------
June 30,
------------------------------
2009 2008 % Chg
-----------------------
INTEREST INCOME
Interest and fees on loans $ 4,822 $ 5,554 -13%
Interest on investment securities 465 317 47%
Other interest income 85 174 -51%
-----------------------
Total interest income 5,371 6,045 -11%
INTEREST EXPENSE
Interest on deposits 1,960 1,963 0%
Interest on borrowings 721 656 10%
-----------------------
Total interest expense 2,681 2,619 2%
-----------------------
NET INTEREST INCOME 2,690 3,426 -21%
Loan loss provision 4,145 2,050 102%
-----------------------
Net interest income after provision (1,455) 1,376 -206%
NON-INTEREST INCOME
Service charges and fees 387 322 20%
Government payments and contracts -- -- NM
Loan fees on brokered loans -- 46 -100%
Merchant & card interchange income 115 152 -24%
Realized gain/(loss) on sale of
investment securities -- 13 -100%
Other income 215 200 7%
-----------------------
Total non-interest income 717 734 -2%
NON-INTEREST EXPENSE
Salaries and employee benefits 1,545 2,043 -24%
Occupancy and equipment 377 376 0%
Legal and professional 457 226 103%
Marketing 101 168 -40%
Data processing 362 384 -6%
Other 789 420 88%
-----------------------
Total non-interest expense 3,631 3,617 0%
PRETAX INCOME (4,370) (1,507) 190%
Provision for income taxes (1,542) (535) 188%
-----------------------
NET INCOME $ (2,828) $ (972) 191%
=======================
Earnings (loss) per common share:
Basic $ (2.15) $ (0.91) 136%
Diluted $ (2.15) $ (0.90) 139%
Weighted average common shares
outstanding:
Basic 1,069,610 1,068,650 0.1%
Diluted 1,069,610 1,076,333 -0.6%
FINANCIAL RATIOS
Return on average assets -1.25% -0.49%
Return on average equity -24.54% -7.30%
Efficiency ratio 106.60% 86.94%
Net interest margin 2.87% 3.85%
Albina Community Bancorp
Selected Highlights
(Dollars in
thousands) As of the Date Ended
--------------------------------------------------------
June 30, March 31, June 30,
2009 2009 2008
--------------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial
business $ 24,222 15.6% $ 22,234 14.0% $ 20,230 13.1%
R/E con-
struction 16,630 10.7% 20,075 12.7% 25,141 16.3%
Commercial
R/E 76,419 49.4% 78,143 49.3% 76,801 49.7%
Multifamily
residential 3,864 2.5% 2,945 1.9% 3,274 2.1%
One to four
family res-
idential 19,865 12.8% 20,191 12.7% 11,237 7.3%
Consumer 14,152 9.1% 15,232 9.6% 18,360 11.9%
Unearned
Loan Fees (308) -0.2% (361) -0.2% (426) -0.3%
----------- ----------- -----------
Total
Loans 154,844 100.0% 158,458 100.0% 154,618 100.0%
ASSET QUALITY
Non-Perfor-
ming loans:
Loans past
due 90 days
or more $ 152 $ 1,660 $ 286
Non-accrual
loans 13,243 16,282 3,731
----------- ----------- -----------
Total non-
perform-
ing loans 13,395 17,942 4,017
OREO 1,928 476 0
----------- ----------- -----------
Total non-
perform-
ing
assets $ 15,323 $ 18,418 $ 4,017
----------- ----------- -----------
Non per-
forming
assets /
total
assets 6.79% 7.95% 2.02%
Beginning
ALLL - from
previous
FYE 2,736 2,736 1,556
Provision
for loan
loss
expense 4,145 1,845 2,050
Loan
charge
offs (3,637) (1,490) (398)
Loan re-
coveries 151 42 108
----------- ----------- -----------
(Charge
offs),
net of
recover-
ies (3,486) (1,448) (291)
----------- ----------- -----------
Ending ALLL
- YTD 3,395 3,133 3,315
----------- ----------- -----------
Average
Loans
Quarter 156,752 161,746 153,094
YTD 159,235 161,746 152,123
Net charge-
off
Quarter 2,037 1,448 137
YTD 3,486 1,448 291
Net charge-
offs as %
of Average
loans
Quarter 1.30% 0.90% 0.09%
YTD 2.19% 0.90% 0.19%
Non-accrual
loans
Residen-
tial Dev-
elopment 9,324 12,276 1,797
Commercial
Real
Estate 3,547 3,662 1,836
Commer-
cial/Ind-
ustrial 372 343 98
----------- ----------- -----------
Total
Non-
accrual
loans 13,243 16,282 3,731