MEDFORD, Ore., Oct. 28, 2009 (GLOBE NEWSWIRE) -- PremierWest Bancorp (Nasdaq:PRWT) announced results for the third quarter of 2009 as follows:
For the three months ended and as of September 30, 2009:
* Strong capital position with all but one of the regulatory ratios above published requirements for "Well Capitalized" bank status. Bank risk-based capital was 9.72%, "Adequately Capitalized". * Net interest margin of 3.64% with net interest income remaining flat as compared to the quarter ended June 30, 2009. * Total deposit growth of $241.8 million reflecting acquired Wachovia branch deposits of $308.0 million, net of deposit run-off, at quarter end, brokered deposit reductions of $82.2 million, and other net deposit growth of $16.0 million. * Reserve for loan and lease losses (ALLL) of $41.5 million or 3.50% of gross loans. * Loss per common share of $0.22 on a net loss of $5.6 million, compared with earnings per common share of $0.05 on net income of $1.2 million for the same period in 2008. * Provision expense of $10.3 million and charge-offs, net of recoveries, of $9.0 million. * Non-performing loans of $109.4 million and other real estate owned (OREO) of $19.5 million.
For the nine months ended and as of September 30, 2009:
* Net interest margin of 4.10%. * Growth in deposits of $279.3 million after a reduction of $44.7 million in brokered deposits, 30.9% annualized growth, with significant growth occurring in core deposit categories both as a result of the Wachovia branch acquisition and organic growth. * Loss per common share of $1.54 on a net loss of $38.1 million, compared with earnings per common share of $0.15 on net income of $3.5 million for the same period in 2008. * Provision expense of $71.4 million and charge-offs, net of recoveries, of $47.0 million.
James M. Ford, President & CEO remarked, "We acknowledge that total non-performing loans and OREO levels are higher than we want. This is a direct result of our previous lending concentrations in real estate and the commitment to lend in the communities we serve. Our goal for the past year has been to ensure we have identified the risk in the portfolio and properly dealt with that risk through charge-offs or higher reserves in our ALLL. Our ALLL as a percentage of loans is much higher than our Peer group average, and we have been aggressive in risk rating all of our loans in a conservative manner. We also are performing periodic, detailed reviews of a significant portion of our loan portfolio. While it is still too early to claim victory, we believe we are nearing the end of the increases and, in fact, are seeing improvement in marketing efforts to sell OREO and in credit remediation successes. The Wachovia branch additions were strategic in that they position the balance sheet to withstand the economic downturn with significant liquidity. As we convert that cash to better yielding loans and securities, our net interest margin will further improve from the better than Peer level that it is today. Finally, like many financial institutions, one needs to look at the core earning ability of the franchise without these extraordinary expenses. I'm confident when you analyze the core earning power of PremierWest, you come to the conclusion that this franchise has significant future value."
CREDIT QUALITY AND NON-PERFORMING ASSETS
During the quarter just ended, we recorded $10.3 million in provision expense and charged-off $9.5 million of non-performing loans. Recoveries of previously charged-off loans totaled $408 thousand for the quarter. Our reserve for loan and lease losses totaled $41.5 million or 3.50% of gross loans. Non-performing loans rose to $109.4 million or 9.23% of gross loans at September 30, 2009.
The table below summarizes the Company's non-performing loans (NPL) by loan type and geographic region:
Total non-performing loans by type and geographic region
(Dollars in 000's)
September 30, 2009
--------------------------------------------------
Non-performing Loans
--------------------------------------------------
Southern Mid-Central Northern Sacramento
Oregon Oregon California Valley Totals
--------------------------------------------------
Agricultural/Farm $ -- $ -- $ 362 $ 177 $ 539
C&I 4,226 463 17 1,060 5,766
CRE 19,455 24,725 9,144 19,268 72,592
Residential RE
construction 2,963 2,395 8,136 8,419 21,913
Residential RE 2,458 888 2,654 1,980 7,980
Consumer RE 227 -- -- -- 227
Consumer 83 245 33 3 364
--------------------------------------------------
Total
non-performing
loans $ 29,412 $ 28,716 $ 20,346 $ 30,907 $ 109,381
==================================================
Non-performing
loans to total
funded loans 5.6% 12.2% 13.6% 11.4% 9.3%
Total
funded
loans* $524,468 $234,466 $149,814 $271,059 $1,179,807
September 30, 2009
--------------------------------------------------
Percent NPL
to Funded
Funded Loan Loan Totals
Totals* by Category
--------------------------------------------------
Agricultural/Farm $ 51,587 1.0%
C&I $ 237,300 2.4%
CRE $ 738,238 9.8%
Residential RE construction $ 34,600 63.3%
Residential RE $ 34,258 23.3%
Consumer RE $ 34,104 0.7%
Consumer $ 49,720 0.7%
----------
Total non-performing loans $1,179,807
==========
* Excludes Other category comprised of credit cards, overdrafts,
leases and other adjustments such as loan premiums, etc., in the
amount of $4.7 million.
The Company's principal source of credit stress continues to be real estate related loans. Borrowers either involved in real estate development or having secured loans with real estate have been vulnerable to both the ongoing economic downturn and to declining real estate values. A majority of our non-performing loan total of $109.4 million is directly related to real estate in the form of commercial or residential real estate loans. At September 30, 2009, $34.8 million of our real estate related non-performing loans remain current as to contractual principal and interest payments, but were placed on non-accrual status due to the absence of evidence supporting the borrowers' ongoing ability to discharge their loan obligations.
Continuing actions taken to address the credit situation include:
* Credit monitoring activities have further increased since the beginning of the fourth quarter of 2008 to provide early warning of possible borrower distress that could lead to loan payment defaults. The pre-emptive credit monitoring and early warnings are intended to provide additional time to seek viable alternatives with the borrower. For those borrowers who have experienced payment problems and wish to seek a workable arrangement with the Company, management and staff are actively involved in seeking loan restructuring and other loan modification options and obtaining additional collateral coverage. We believe that these actions have and will continue to facilitate recovery strategies with cooperative borrowers. In those instances where alternatives have been exhausted or determined to be impractical and default under the terms of the loans has occurred, foreclosure actions are pursued. * An evaluation to confirm the reliability of our internal reviews was completed on a significant portion of our loan portfolio during the second quarter by the same outside firm that had conducted a similar review of our acquisition and development portfolio during the fourth quarter of 2008. We have engaged this firm during the quarter just ended to perform ongoing quarterly reviews. * Senior management continues to actively guide activities related to resolution of non-performing asset issues.
Bill Yarbenet, Executive Vice President and Chief Credit Officer stated, "We continue to work diligently to resolve our problem loan situation and to reduce our non-performing asset total. Working through the problem loans is a time-consuming effort, but we see some acceleration in the process with the formation and staffing of our Asset Recovery Group during the quarter just ended. We continue to be active in marketing and selling smaller OREO properties, with dispositions during the third quarter of $1.5 million. We anticipate some acceleration in this process during the fourth quarter ending December 31, 2009."
LOAN AND DEPOSIT GROWTH
Gross loans as of September 30, 2009 were $1.20 billion, down $63.5 million from the balance as of December 31, 2008 primarily due to loan charge-offs of $48.0 million during the nine months ending September 30, 2009.
Deposits at September 30, 2009, were $1.5 billion, up $279.3 million from year end 2008 despite a decline of $44.7 million in brokered deposits. The increase was primarily the result of the acquisition of two Wachovia Bank branches in Davis and Grass Valley, California, in July 2009. However, without the additional Wachovia branch contributions, we have seen solid growth in core deposits which increased by $70.0 million, an annualized increase of 10.62% from December 31, 2008. This is directly attributable to successful branch campaigns to stimulate core deposit growth. The average non-interest bearing component of demand deposits was up $11.7 million, a 5.04% increase over year end 2008, with the number of accounts increasing at an annualized rate of 5.09%.
Joe Danelson, Executive Vice President & Chief Banking Officer, remarked, "Our branch staff is continuing to do an exemplary job in providing stellar customer service and selling services to prospective new customers, which is supported by our high customer satisfaction ratings. We have also decided to extend our participation in the FDIC's Transaction Account Guarantee Program to provide our customers with an extra measure of security."
NET INTEREST INCOME
Interest income was virtually flat at $19.2 million during the quarter just ended when compared to the immediately preceding quarter. Net interest margin fell to 3.64% for the most recent quarter, down 69 basis points from the previous quarter, as cash from the Wachovia branch acquisition was initially invested in Fed Funds sold at an annualized average rate of 0.27% and then re-invested over the course of the quarter into securities in a measured, deliberate manner now held in our investment portfolio.
Yield on earning assets for the quarter just ended was 4.98% compared to 5.82% for the immediately preceding quarter. Again, deployment of the cash from the Wachovia transaction was a primary factor in the quarter-over-quarter decline, which we anticipate reversing as the higher yields from our investment portfolio replace the initial low yields obtained from Fed Funds. The cost of average interest bearing liabilities for the quarter ended September 30, 2009 was 1.63% compared to 1.90% for the quarter ended June 30, 2009.
Mike Fowler, Executive Vice President & Chief Financial Officer, commented, "I am confident that our net interest margin will improve in the quarters ahead as we redeploy funds into the investment portfolio and as we progress in dealing with problem loans. We've seen a good deal of movement in the composition of our earning assets and interest bearing liabilities during the past three months that should settle during the fourth quarter. During the third quarter, we lost 16 basis points of net interest margin to interest reversals on loans transferred to non-accrual status. This is a decline from the comparable 20 basis point loss we saw in the second quarter of 2009."
GOODWILL
In light of the volatility in the Company's stock price in recent months, the Company is carefully analyzing the value of goodwill related to prior acquisitions to determine if impairment in the value of goodwill has occurred as of September 30, 2009. Any goodwill impairment could be material to reported earnings, although it would be a non-cash charge with no effect on our cash balances, liquidity or tangible equity capital. Similarly, because goodwill is excluded when calculating regulatory capital, the Company's regulatory capital ratios would be largely unaffected. The Company expects the goodwill impairment analysis will be completed prior to filing the Quarterly Report on Form 10-Q with the Securities and Exchange Commission in early November.
NON-INTEREST INCOME
During the third quarter of 2009, PremierWest recorded non-interest income of $2.8 million, up $252 thousand from the same period last year. The increase from the previous year was primarily related to increases in other fee income and gains on the sale of other real estate owned and fixed assets.
NON-INTEREST EXPENSE
Non-interest expense during the quarter just ended was $14.8 million, an increase of $1.3 million, or 9.7% when compared to the preceding quarter and 29.2% when compared to the same period in 2008. Absent the impact of Wachovia branch staff additions and $165 thousand in recruiting and hiring expense, salary and benefits expense declined $73 thousand or 1.0% as compared to the immediately preceding quarter. However, this and other expense control measures taken by management were overwhelmed by the impact of regulatory and non-performing asset related expenses. As indicated in the table below, FDIC and state regulatory assessments, problem loan related expenses, and branch acquisition transaction expenses were significant increase factors during both the quarter and the nine-month periods as compared to last year.
Significant Increase Categories
(Dollars in 000's)
Three Months Ended Nine Months Ended
------------------------ ------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 Increase 2009 2008 Increase
------------------------ ------------------------
FDIC and State
assessments $1,275 $ 235 $1,040 $3,014 $ 696 $2,318
Wachovia
acquisition
expenses 662 2 660 804 80 724
Professional fee
expense 494 201 293 1,594 1,147 447
Problem loan
expense 406 50 356 740 316 424
OREO expense 291 11 280 511 229 282
------------------------ ------------------------
Total $3,128 $ 499 $2,629 $6,663 $2,468 $4,195
======================== ========================
CAPITAL OUTLOOK
As indicated in the table below, PremierWest Bank is now "Adequately Capitalized" in one of the three published regulatory standards as of September 30, 2009. In light of this and our problem loan situation, PremierWest expects to enter into an agreement with our Regulators relating to raising capital and reducing non-performing assets.
Regulatory
Minimum to be Regulatory
September 30, "Adequately Minimum to be
2009 Capitalized" "Well-Capitalized"
------------- ------------- ------------------
greater than greater than or
Total risk-based or equal to equal to
capital ratio 9.72% 8.00% 10.00%
greater than greater than or
Tier 1 risk-based or equal to equal to
capital ratio 8.44% 4.00% 6.00%
greater than greater than or
or equal to equal to
Leverage ratio 7.20% 4.00% 5.00%
Our Board of Directors is reviewing plans to elevate our risk-based capital ratio to a level well above the regulatory minimum for "Well Capitalized." Additionally, management has recommended we defer further payments on our trust preferred securities and our TARP-Capital Purchase Program-related preferred stock issue until such time as we have clear indications that our credit quality issues have been resolved and our profitability is solidly restored. These actions do not cause default under the underlying agreements governing the securities involved and will be reversed at the earliest time possible.
Jim Ford commented, "We are convinced that we are getting closer to the performance our shareholders expect. Non-performing assets will be reduced over time, and we will see the resulting improvement in profitability we all are seeking. We appreciate the loyalty shown by our customers and shareholders through these challenging times. I know without any doubt that our people are putting forth the maximum effort possible to accelerate this process. Challenging times reveal the true character of an organization and its people; and this bank and its people are determined, motivated, and dedicated and are moving things in the right direction."
ABOUT PREMIERWEST BANCORP
PremierWest Bancorp (Nasdaq:PRWT) is a financial services holding company headquartered in Medford, Oregon, and operates primarily through its subsidiary PremierWest Bank. PremierWest Bank offers expanded banking-related services through two subsidiaries, Premier Finance Company and PremierWest Investment Services, Inc.
PremierWest Bank was created following the merger of the Bank of Southern Oregon and Douglas National Bank in May, 2000. In April, 2001, PremierWest Bancorp acquired Timberline Bancshares, Inc. and its wholly-owned subsidiary, Timberline Community Bank, with eight branch offices located in Siskiyou County in northern California. In January, 2004, PremierWest acquired Mid Valley Bank with five branch offices located in the northern California counties of Shasta, Tehama and Butte. In January 2008, PremierWest acquired Stockmans Financial Group, and its wholly owned subsidiary, Stockmans Bank, with five full service banking offices in the Sacramento, California area. In July of this year, PremierWest acquired two branches, one in Davis, California and a second in Grass Valley, California. During the last several years, PremierWest expanded into the Klamath Falls and Central Oregon communities of Bend and Redmond, and into Yolo, Butte, and Placer counties in California.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including those set forth from time to time in PremierWest's filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. We make forward-looking statements in this press release about the prospects for earnings growth, deposit and loan growth, capital levels, our dividend program, expected peer rankings, the effective management of our credit quality, the collectability of identified non-performing loans and the adequacy of our Allowance for Loan Losses.
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(All amounts in 000's, except per share data)
(unaudited)
STATEMENT OF OPERATIONS
AND EARNINGS (LOSS) AND PER COMMON SHARE DATA
For the Three Months %
Ended September 30 2009 2008 Change Change
----------- ----------- ----------- -------
Interest income $ 19,155 $ 22,694 $ (3,539) -15.6%
Interest expense 5,178 7,149 (1,971) -27.6%
----------- ----------- -----------
Net interest income 13,977 15,545 (1,568) -10.1%
Loan loss provision 10,261 4,750 5,511 116.0%
Non-interest income 2,846 2,594 252 9.7%
Non-interest expense 14,818 11,469 3,349 29.2%
----------- ----------- -----------
Pre-tax income (loss) (8,256) 1,920 (10,176) -530.0%
Provision (benefit)
for income taxes (3,316) 632 (3,948) -624.7%
Net income (loss) $ (4,940) $ 1,288 $ (6,228) -483.5%
=========== =========== ===========
Net income (loss) $ (4,940) $ 1,288 $ (6,228) -483.5%
Less preferred
dividend and discount
accrection (614) (69) (545) 789.9%
----------- ----------- -----------
Net income (loss)
applicable to common
shareholders $ (5,554) $ 1,219 $ (6,773) -555.6%
=========== =========== ===========
Basic earnings (loss)
per common share (1) $ (0.22) $ 0.05 $ (0.27) -540.0%
=========== =========== ===========
Diluted earnings
(loss) per common
share (1) $ (0.22) $ 0.05 $ (0.27) -540.0%
=========== =========== ===========
Average common shares
outstanding--
basic (1) 24,766,928 23,518,339 1,248,589 5.3%
Average common shares
outstanding--
diluted (1) 24,766,928 23,545,208 1,221,720 5.2%
For the Three
Months Ended
June 30, %
2009 Change Change
----------- ----------- -------
Interest income $ 19,216 $ (61) -0.3%
Interest expense 4,920 258 5.2%
----------- -----------
Net interest income 14,296 (319) -2.2%
Loan loss provision 50,390 (40,129) -79.6%
Non-interest income 2,865 (19) -0.7%
Non-interest expense 13,506 1,312 9.7%
----------- -----------
Pre-tax income (loss) (46,735) 38,479 82.3%
Provision (benefit) for income
taxes (18,750) 15,434 82.3%
----------- -----------
Net income (loss) $ (27,985) $ 23,045 82.3%
=========== ===========
Net income (loss) $ (27,985) $ 23,045 82.3%
Less preferred dividend and
discount accrection (614) -- 0.0%
----------- -----------
Net income (loss) applicable to
common shareholders $ (28,599) $ 23,045 80.6%
=========== ===========
Basic earnings (loss) per
common share (1) $ (1.15) $ 0.93 80.9%
=========== ===========
Diluted earnings (loss) per
common share (1) $ (1.15) $ 0.93 80.9%
=========== ===========
Average common shares
outstanding--basic (1) 24,766,928 -- 0.0%
Average common shares
outstanding--diluted (1) 24,766,928 -- 0.0%
For the Nine Months %
Ended September 30 2009 2008 Change Change
----------- ----------- ----------- -------
Interest income $ 58,416 $ 68,323 $ (9,907) -14.5%
Interest expense 15,765 21,997 (6,232) -28.3%
----------- ----------- -----------
Net interest income 42,651 46,326 (3,675) -7.9%
Loan loss provision 71,351 13,050 58,301 446.8%
Non-interest income 8,225 7,568 657 8.7%
Non-interest expense 40,959 35,197 5,762 16.4%
----------- ----------- -----------
Pre-tax income (loss) (61,434) 5,647 (67,081) -1187.9%
Provision (benefit)
for income taxes (24,901) 1,911 (26,812) -1403.0%
----------- ----------- -----------
Net income (loss) $ (36,533) $ 3,736 $ (40,269) -1077.9%
=========== =========== ===========
Net income (loss) $ (36,533) $ 3,736 $ (40,269) -1077.9%
Less preferred
dividend and discount
accrection (1,555) (206) (1,349) 654.9%
----------- ----------- -----------
Net income (loss)
applicable to common
shareholders $ (38,088) $ 3,530 $ (41,618) -1179.0%
=========== =========== ===========
Basic earnings (loss)
per common share (1) $ (1.54) $ 0.15 $ (1.69) -1126.7%
=========== =========== ===========
Diluted earnings
(loss) per common
share (1) $ (1.54) $ 0.15 $ (1.69) -1126.7%
=========== =========== ===========
Average common shares
outstanding--
basic (1) 24,736,473 23,000,712 1,735,761 7.5%
Average common shares
outstanding--
diluted (1) 24,736,473 23,046,017 1,690,456 7.3%
(1) Share and per share amounts adjusted for the 5% stock dividend,
effective April 15, 2009, for the periods presented.
SELECTED FINANCIAL RATIOS
(annualized) (unaudited)
For the Three
Months Ended
For the Three Months June 30,
Ended September 30 2009 2008 Change 2009 Change
------ ------ ------ ------ ------
Yield on average
gross loans (1) 6.01% 6.90% (0.89) 6.11% (0.10)
Yield on average
investments (1) 1.18% 2.96% (1.78) 1.75% (0.57)
Total yield on
average earning
assets (1) 4.98% 6.77% (1.79) 5.82% (0.84)
Cost of average
interest bearing
deposits 1.53% 2.60% (1.07) 1.78% (0.25)
Cost of average
borrowings 5.77% 4.44% 1.33 5.83% (0.06)
Cost of average total
deposits and
borrowings 1.36% 2.20% (0.84) 1.54% (0.18)
Cost of average
interest bearing
liabilities 1.63% 2.70% (1.07) 1.90% (0.27)
Net interest spread 3.35% 4.07% (0.72) 3.92% (0.57)
Net interest
margin (1) 3.64% 4.66% (1.02) 4.33% (0.69)
Net (charge-offs)
recoveries to
average gross loans -0.75% -0.64% (0.11) -2.88% 2.13
Allowance for loan
losses to gross loans 3.50% 1.65% 1.85 3.36% 0.14
Allowance for loan
losses to
non-performing loans 37.95% 35.64% 2.31 38.97% (1.02)
Non-performing loans
to gross loans 9.23% 4.63% 4.60 8.61% 0.62
Non-performing assets
to total assets 7.51% 4.17% 3.34 7.98% (0.47)
Return on average
common equity -15.30% 2.68% (17.98) -67.16% 51.86
Return on average
assets -1.14% 0.34% (1.48) -7.45% 6.31
Efficiency ratio (2) 88.08% 63.23% 24.85 78.51% 9.57
For the Nine Months
Ended September 30
Yield on average
gross loans (1) 6.15% 7.23% (1.08)
Yield on average
investments (1) 1.42% 3.72% (2.30)
Total yield on
average earning
assets (1) 5.61% 7.10% (1.49)
Cost of average
interest bearing
deposits 1.78% 2.80% (1.02)
Cost of average
borrowings 4.94% 4.99% (0.05)
Cost of average total
deposits and
borrowings 1.55% 2.36% (0.81)
Cost of average
interest bearing
liabilities 1.89% 2.90% (1.01)
Net interest spread 3.72% 4.20% (0.48)
Net interest
margin (1) 4.10% 4.82% (0.72)
Net (charge-offs)
recoveries to
average gross loans -3.80% -1.01% (2.79)
Allowance for loan
losses to gross loans 3.50% 1.66% 1.84
Allowance for loan
losses to
non-performing loans 37.95% 35.64% 2.31
Non-performing loans
to gross loans 9.23% 4.64% 4.59
Non-performing assets
to total assets 7.51% 4.17% 3.34
Return on average
common equity -31.02% 2.68% (33.70)
Return on average
assets -3.10% 0.34% (3.44)
Efficiency ratio (2) 80.51% 65.31% 15.20
(1) Tax equivalent
(2) Non-interest expense divided by net interest income plus
non-interest income
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(All amounts in 000's, except per share data)
(unaudited)
BALANCE SHEET %
At September 30 2009 2008 Change Change
----------- ----------- ----------- ------
Fed funds sold and
investments $ 329,098 $ 43,691 $ 285,407 653.2%
----------- ----------- -----------
Gross loans, net of
deferred fees 1,183,386 1,267,878 (84,492) -6.7%
Allowance for loan
losses (41,513) (20,960) (20,553) 98.1%
----------- ----------- -----------
Net loans 1,141,873 1,246,918 (105,045) -8.4%
Goodwill 74,920 75,204 (284) -0.4%
Other assets 169,659 107,406 62,253 58.0%
----------- ----------- -----------
Total assets $ 1,715,550 $ 1,473,219 $ 242,331 16.4%
=========== =========== ===========
Non-interest-bearing
deposits $ 251,752 $ 230,619 $ 21,133 9.2%
Interest-bearing
deposits 1,238,826 995,299 243,527 24.5%
----------- ----------- -----------
Total deposits 1,490,578 1,225,918 264,660 21.6%
Borrowings 30,958 44,281 (13,323) -30.1%
Other liabilities 12,931 14,730 (1,799) -12.2%
Stockholders' equity 181,083 188,290 (7,207) -3.8%
----------- ----------- -----------
Total liabilities and
stockholders' equity $ 1,715,550 $ 1,473,219 $ 242,331 16.4%
=========== =========== ===========
Period end common
shares outstanding 24,766,928 23,523,030 1,243,898 5.3%
Period end common
shares outstanding,
all preferred shares
or warrant converted
to common (1) 25,857,313 24,751,451 1,105,862 4.5%
Book value per common
share $ 5.63 $ 7.61 $ (1.98) -26.0%
Tangible book value
per common share $ 2.59 $ 4.46 $ (1.87) -41.9%
Allowance for loan
losses:
Balance beginning
of period $ 17,157 $ 11,450 $ 5,707 49.8%
Acquired from
Stockmans Bank
merger -- 9,112 (9,112) nm
Provision for loan
losses 71,351 13,050 58,301 446.8%
Net (charge-offs)
recoveries (46,995) (12,652) (34,343) 271.4%
----------- ----------- -----------
Balance end of period $ 41,513 $ 20,960 $ 20,553 98.1%
=========== =========== ===========
Non-performing assets:
Loans in nonaccrual
status $ 106,792 $ 55,864 $ 50,928 91.2%
Impaired loans in
process of collection -- -- -- nm
Other real estate
owned 19,533 2,669 16,864 631.8%
90-days past due not
on non-accrual 2,589 2,948 (359) -12.2%
----------- ----------- -----------
Total non-performing
assets $ 128,914 $ 61,481 $ 67,433 109.7%
=========== =========== ===========
Balance Sheet
at June 30, %
2009 Change Change
----------- ----------- ------
Fed funds sold and
investments $ 87,047 $ 242,051 278.1%
----------- -----------
Gross loans, net of
deferred fees 1,199,776 (16,390) -1.4%
Allowance for loan
losses (40,300) (1,213) 3.0%
----------- -----------
Net loans 1,159,476 (17,603) -1.5%
Goodwill 70,437 4,483 6.4%
Other assets 161,080 8,579 5.3%
----------- -----------
Total assets $ 1,478,040 $ 237,510 16.07%
=========== ===========
Non-interest-bearing
deposits $ 244,083 $ 7,669 3.1%
Interest-bearing
deposits 1,004,688 234,138 23.3%
----------- -----------
Total deposits 1,248,771 241,807 19.4%
Borrowings 30,960 (2) 0.0%
Other liabilities 12,289 642 5.2%
Stockholders' equity 186,020 (4,937) -2.7%
----------- -----------
Total liabilities and
stockholders' equity $ 1,478,040 $ 237,510 16.1%
=========== ===========
Period end common
shares outstanding 24,766,928 -- 0.0%
Period end common
shares outstanding,
all preferred shares
or warrant converted
to common (1) 25,857,313 -- 0.0%
Book value per common
share $ 5.83 $ (0.20) -3.4%
Tangible book value
per common share $ 3.02 $ (0.43) -14.2%
Allowance for loan
losses:
Balance beginning
of period $ 17,157 $ -- 0.0%
Acquired from
Stockmans Bank
merger -- -- nm
Provision for loan
losses 61,090 10,261 16.8%
Net (charge-offs)
recoveries (37,947) (9,048) 23.8%
----------- -----------
Balance end of period $ 40,300 $ 1,213 3.0%
=========== ===========
Non-performing assets:
Loans in nonaccrual
status $ 103,185 $ 3,607 3.5%
Impaired loans in
process of collection -- -- nm
Other real estate
owned 14,588 4,945 33.9%
90-days past due not
on non-accrual 235 2,354 1001.7%
----------- -----------
Total non-performing
assets $ 118,008 $ 10,906 9.2%
=========== ===========
(1) The June 30, 2008 shares includes 11,000 shares of Series A
preferred stock issued November 17, 2003 as if converted into
common stock at a conversion ratio of 106.35 to 1 for a total
of 1,169,925 common shares increased by the April 2009 5% stock
dividend. The March 31, 2009 and June 30, 2009 shares include
1,090,385 shares related to the US Treasury Troubled Asset
Relief Program (TARP) Capital Purchase Program warrant.
For the Three Months %
Ended September 30 2009 2008 Change Change
----------- ----------- ----------- ------
Average fed funds
sold and investments $ 326,996 $ 44,100 $ 282,896 641.5%
Average gross loans,
including mortgages
held for sale $ 1,204,684 $ 1,286,174 $ (81,490) -6.3%
Average total assets $ 1,721,385 $ 1,495,529 $ 225,856 15.1%
Average non-interest-
bearing deposits $ 254,923 $ 236,220 $ 18,703 7.9%
Average interest-
bearing deposits $ 1,229,167 $ 1,054,541 $ 174,626 16.6%
Average total deposits $ 1,484,090 $ 1,233,825 $ 250,265 20.3%
Average total
borrowings $ 30,959 $ 56,936 $ (25,977) -45.6%
Average stockholders'
equity $ 185,604 $ 189,952 $ (4,348) -2.3%
Average common equity $ 144,002 $ 180,362 $ (36,360) -20.2%
For the Three
Months Ended %
June 30, 2009 Change Change
----------- ----------- ------
Average fed funds
sold and investments $ 89,791 $ 237,205 264.2%
Average gross loans,
including mortgages
held for sale $ 1,241,117 $ (36,433) -2.9%
Average total assets $ 1,506,252 $ 215,133 14.3%
Average non-interest-
bearing deposits $ 240,744 $ 14,179 5.9%
Average interest-
bearing deposits $ 1,009,095 $ 220,072 21.8%
Average total deposits $ 1,249,839 $ 234,251 18.7%
Average total borrowings $ 30,962 $ (3) 0.0%
Average stockholders'
equity $ 212,322 $ (26,718) -12.6%
Average common equity $ 170,796 $ (26,794) -15.7%
For the Nine Months %
Ended September 30 2009 2008 Change Change
----------- ----------- ----------- ------
Average fed funds
sold and investments $ 160,399 $ 38,434 $ 121,965 317.3%
Average gross loans,
including mortgages
held for sale $ 1,237,726 $ 1,250,709 $ (12,983) -1.0%
Average total assets $ 1,573,231 $ 1,449,040 $ 124,191 8.6%
Average non-interest-
bearing deposits $ 243,384 $ 232,435 $ 10,949 4.7%
Average interest-
bearing deposits $ 1,079,453 $ 1,012,253 $ 67,200 6.6%
Average total deposits $ 1,322,838 $ 1,199,057 $ 123,781 10.3%
Average total
borrowings $ 37,348 $ 45,631 $ (8,283) -18.2%
Average stockholders'
equity $ 199,146 $ 184,909 $ 14,237 7.7%
Average common equity $ 164,156 $ 175,319 $ (11,163) -6.4%
LOANS BY CATEGORY
(All amounts in 000's)
(unaudited)
9/30/2009 6/30/2009 3/31/2009 12/31/2008 9/30/2008
------------------------------------------------------
Agricultural/
Farm $ 51,587 $ 49,580 $ 42,626 $ 48,640 $ 47,473
Commercial
and Industrial 237,300 236,178 265,305 253,107 265,776
Commercial
Real Estate -
Owner Occupied 260,914 262,031 261,646 265,965 253,668
Commercial
Real Estate -
Non-Owner
Occupied 511,926 533,823 556,075 567,119 592,125
Consumer/Other 121,659 118,164 111,866 111,741 108,836
------------------------------------------------------
Gross loans,
net of
deferred fees $1,183,386 $1,199,776 $1,237,518 $1,246,572 $1,267,878
======================================================
Commercial Real
Estate
Owner Occupied
--------------
Commercial
Term $ 236,351 $ 235,081 $ 235,199 $ 236,951 $ 219,977
Commercial
Construction 19,070 19,051 16,370 16,778 20,284
Single Family
Residential
Construction
Oregon 769 450 1,180 1,599 1,071
California 4,724 7,449 8,897 10,637 12,336
------------------------------------------------------
Total Owner
Occupied $ 260,914 $ 262,031 $ 261,646 $ 265,965 $ 253,668
======================================================
Non-Owner
Occupied
---------
Commercial
Term $ 321,780 $ 323,699 $ 322,008 $ 321,168 $ 302,638
Commercial
Construction 33,429 40,548 41,602 45,155 62,491
Single Family
Residential
Construction
Oregon
Pre-Sold 221 1,286 1,359 1,100 3,093
Speculative 1,120 1,455 2,310 3,098 4,937
Builder
Inventory 11,107 11,775 13,507 15,158 18,526
------------------------------------------------------
Total Oregon 12,448 14,516 17,176 19,356 26,556
------------------------------------------------------
California
Pre-Sold 1,659 1,870 1,718 1,977 1,779
Speculative 2,607 3,316 3,407 3,643 4,033
Builder
Inventory 12,394 13,652 16,321 12,370 11,131
------------------------------------------------------
Total
California 16,660 18,838 21,446 17,990 16,943
------------------------------------------------------
Commercial -
Land
Acquisition
and Development 27,449 27,521 31,119 32,167 30,749
Commercial -
Land Only 46,285 48,155 47,163 48,751 48,925
Residential -
Land
Acquisition
and Development 53,875 60,546 75,561 82,532 103,823
------------------------------------------------------
Total Non-Owner
Occupied $ 511,926 $ 533,823 $ 556,075 $ 567,119 $ 592,125
======================================================
NONPERFORMING LOANS BY REGION AND TYPE
(All amounts in 000's)
(unaudited)
Other Real Estate Owned
By Geographic Region 9/30/2009 6/30/2009 3/31/2009 12/31/2008
-------------------- ---------------------------------------------
Mid-Central Oregon $ 7,711 $ 7,975 $ 2,111 $ --
Southern Oregon 5,776 1,578 5,368 2,540
Northern California 1,223 148 -- --
Greater Sacramento 4,823 4,887 1,883 1,883
Other -- -- -- --
---------------------------------------------
Total Other Real Estate
Owned $ 19,533 $ 14,588 $ 9,362 $ 4,423
=============================================
Non Performing Loans
By Geographic Region 9/30/2009 6/30/2009 3/31/2009 12/31/2008
-------------------- ---------------------------------------------
Mid-Central Oregon $ 28,716 $ 32,215 $ 16,717 $ 19,338
Southern Oregon 29,412 30,997 31,641 27,854
Northern California 20,346 11,416 15,166 18,376
Greater Sacramento 30,907 28,792 19,941 15,610
Other -- -- 548 1,437
---------------------------------------------
Total Nonperforming
Loans $109,381 $103,420 $ 84,013 $ 82,615
=============================================
By Loan Type
------------
Agricultural/Farm $ 539 $ 391 $ 391 $ 493
Commercial and Industrial 5,767 7,502 4,003 5,154
Commercial Real Estate -
Owner Occupied
Single Family
Residential
Construction
Oregon -- -- -- 162
California 1,815 409 439 439
Other 4,115 5,149 5,932 5,029
Commercial Real Estate -
Non-Owner Occupied
Oregon 16,866 11,081 8,235 12,754
California 3,140 6,565 594 594
Single Family
Residential
Construction
Oregon 13,800 13,041 8,729 9,595
California 22,415 16,811 14,269 9,715
Commercial - Land
Acquisition and
Development 13,078 13,324 11,208 7,164
Commercial - Land Only 8,596 6,429 1,498 1,498
Residential - Land
Acquisition and
Development 8,365 10,531 14,224 14,601
Commercial Construction
- Multiplex (5+) 3,414 5,541 5,543 5,543
Other 6,880 6,411 6,830 6,830
Consumer/Other 591 235 2,118 3,044
---------------------------------------------
Total Nonperforming
Loans $109,381 $103,420 $ 84,013 $ 82,615
=============================================