Alpine Banks of Colorado Announces Financial Results for Q2 2021

GLENWOOD SPRINGS, Colo., July 27, 2021 (GLOBE NEWSWIRE) -- Alpine Banks of Colorado (OTCQX: ALPIB) (“Alpine” or the “Company”), the holding company for Alpine Bank, today announced results (unaudited) for the second quarter 2021. The Company reported net income of $15.7 million, or $152.16 per basic Class A common share and $1.01 per basic Class B common share for the second quarter 2021.

Second Quarter 2021 Achievements

• Book Value per Class A share increased 3.5%, or $131.85 to $3,877.86 per share versus first quarter 2021
• Book Value per Class B share increased 3.5%, or $0.88 to $25.85 per share versus first quarter 2021
• Organic loan growth during the second quarter 2021 was 2.5% or $76.7 million versus first quarter 2021
• Core deposit growth during the second quarter 2021 was 2.8% or $141.8 million versus first quarter 2021

“Alpine performed well during the second quarter 2021,” said president and vice chairman Glen Jammaron. “The Colorado economy continues to perform well and that manifests itself in Alpine’s financial results. The Company has locations in many diverse and exciting markets within Colorado. We are well-served by operating in markets where people want to live and vacation.”

Net Income

Net income for the second quarter 2021 and the first quarter 2021 was $15.7 million and $14.1 million, respectively. Interest income decreased $1.9 million in the second quarter 2021 compared to the first quarter 2021 primarily due to a decrease in yields on loans, securities and balances due from banks, slightly offset by an increase in volume in the loans, securities, and balances due from banks. Loan yields were unusually high in the first quarter 2021 due to the booking of $6.0 million in Paycheck Protection Program (PPP) fees compared to $2.0 million booked in the second quarter 2021. Interest expense decreased $85,000 in the second quarter 2021 compared to the first quarter 2021 primarily due to a decrease in yield on deposits and the Company’s subordinated notes and slightly offset by an increase in volume on deposits. Noninterest income increased $0.6 million in the second quarter 2021 compared to the first quarter 2021 primarily due to an increase in income generated by Mortgage Banking activities, other income and service charges on deposit accounts. Noninterest expense decreased $0.3 million in the second quarter 2021 compared to the first quarter 2021 primarily due to decreases in occupancy expense, furniture and fixture expense and salaries and employee benefits. Provision for loan losses decreased $3.0 million in the second quarter 2021 compared to the first quarter 2021, primarily due to management’s analysis that the allowance adequately supports the inherent credit losses within the loan portfolio.

Net income for the six months ended June 30, 2021 and 2020 was $29.8 million and $23.4 million, respectively. Interest income increased $3.9 million in the first six months of 2021 compared to the first six months of 2020, primarily due to an increase in volume in loans, securities and balances due from banks, slightly offset by decreased yields on loans, securities and balances due from banks. Interest expense increased $46,000 in the first six months of 2021 compared to the first six months of 2020, primarily due to an increase in volume and yield on the Company’s subordinated notes and an increase in volume on deposits, slightly offset by a decrease in deposit yields. Noninterest income increased $3.1 million in the first six months of 2021 compared to the first six months of 2020, primarily due to an increase in fee income, service charges on deposit accounts, and other income, slightly offset by a decrease in earnings on life insurance. Noninterest expense increased $2.2 million in the first six months of 2021 compared to the first six months of 2020 primarily due to an increase in salary and employee benefit expenses, other expenses and occupancy expenses, slightly offset by a decrease in furniture and fixtures expenses. Provision for loan losses decreased $3.4 million in the first six months of 2021 compared to the first six months of 2020, primarily due to management’s analysis that the allowance adequately supports the inherent credit losses within the loan portfolio.

Net interest margin decreased from 3.43% to 3.07% from the first quarter 2021 to the second quarter 2021. Net interest margin for the first quarter 2021 was substantially influenced by PPP loan fee income of $6.0 million as compared to PPP loan fee income of $2.0 million in the second quarter 2021. As a result, the second quarter 2021 PPP loan portfolio yield was 4.31% compared to the first quarter 2021 PPP loan portfolio yield of 11.43%. Net interest margin for the second quarter 2021 net of the PPP loan influence was 3.01% compared to the first quarter 2021 net interest margin net of the PPP loan influence of 3.06%. Net interest margin for the six months ended June 30, 2021 and 2020 was 3.24% and 4.26%, respectively.

Assets

As of June 30, 2021, total assets were $5.8 billion, an increase of 2.6% or $149.1 million from the first quarter 2021. Total assets increased in the second quarter 2021 from the first quarter 2021 due to organic loan growth, strategic growth in the securities portfolio and core deposit increases. Total assets grew 24.51% or $1.1 billion from June 30, 2020 to June 30, 2021. Alpine Bank’s Wealth Management Division* had assets under management of $1.13 billion on June 30, 2021, compared to $0.94 billion on June 30, 2020, an increase of 20.1%.

Loans

Loans outstanding as of June 30, 2021 totaled $3.4 billion. The loan portfolio increased $29.3 million or 0.9% during the second quarter 2021 compared to March 31, 2021. This growth was driven by a $60.7 million increase in Commercial Real Estate loans, a $22.3 million increase in Real Estate Construction loans, a $7.2 million increase in Residential Real Estate loans, primarily due to an increase in one-to-four family residential loans, and a $0.3 million increase in Other loans. This growth was slightly offset by decreases in Commercial and Industrial loans of $60.7 million and Consumer loans of $0.6 million during the second quarter 2021 compared to March 31, 2021. The decrease in Commercial and Industrial loans was primarily the result $47.3 million in PPP loan forgiveness paydowns processed in the second quarter 2021. Loans outstanding net of PPP loans as of June 30, 2021 reflected an increase of $76.7 million or 2.5% compared to loans outstanding net of PPP loans of $3.1 billion on March 31, 2021.

Loans outstanding as of June 30, 2021 reflected an increase of $253.4 million or 8.1% compared to loans outstanding of $3.1 billion on June 30, 2020. This growth was driven by a $175.8 million increase in Residential Real Estate loans, primarily due to an increase in one-to-four family residential loans, a $165.5 million increase in Commercial Real Estate loans and a $3.7 million increase in Consumer loans. This year-over-year growth was slightly offset by a decrease in Commercial Real Estate loans of $74.7 million, Real Estate Construction loans of $16.1 million and Other loans of $0.1 million. The decrease in Commercial and Industrial loans was primarily the result of $85.3 million in PPP loan forgiveness paydowns. Loans outstanding net of PPP loans as of June 30, 2021 reflected an increase of $338.7 million or 12.0% compared to loans outstanding net of PPP loans of $2.8 billion on June 30, 2020.

Deposits

Total deposits increased $141.8 million or 2.8% to $5.2 billion during the second quarter 2021 compared to March 31, 2021, primarily due to a $139.4 million increase in Money Fund accounts, a $39.6 million increase in Interest Checking accounts, and a $3.7 million increase in Savings accounts. This was slightly offset by a $34.5 million decrease in Demand accounts and a $6.1 million decrease in Certificates of Deposit accounts. The second quarter 2021 deposit growth is partially reflective of PPP loan activity and a high amount of liquidity in the general market.

Total deposits of $5.2 billion on June 30, 2021 reflected an increase of $1.1 billion or 27.2% compared to total deposits of $4.1 billion on June 30, 2020. This increase was due to a $496.0 million increase in Demand deposits, a $416.6 million increase in Money Fund accounts, a $261.3 million increase in Interest Checking accounts, and a $25.1 million increase in Savings accounts. This was slightly offset by a $90.9 million decrease in Certificates of Deposit accounts, primarily related to matured Brokered Certificates of Deposit.

Capital

The Company’s banking subsidiary, Alpine Bank (the “Bank”), continues to be designated as a “well capitalized” institution as its capital ratios exceed the minimum requirements for this designation. As of June 30, 2021, the Bank’s Tier 1 Leverage Ratio was 8.31%, Tier 1 Risk-Based Capital Ratio was 13.14% and Total Risk-Based Capital Ratio was 14.33%. On a consolidated level, the Company’s Tier 1 Leverage Ratio was 7.96%, Tier 1 Risk-Based Capital Ratio was 12.58% and Total Risk-Based Capital Ratio was 15.17% as of June 30, 2021.

Dividends

During the second quarter 2021, Alpine paid cash dividends of $24.00 per Class A common share and $0.16 per Class B common share. The Class A and Class B common share cash dividends were unchanged from the Class A and Class B common share cash dividends paid during the first quarter 2021. On July 8, 2021, Alpine declared a dividend of $24.00 per Class A common share and $0.16 per Class B common share, payable on July 26, 2021. The dividend is unchanged from the dividend paid in the previous quarter.

COVID-19 Pandemic Response

The Company continues to respond to the COVID-19 pandemic as circumstances change. All Bank branches are currently open to customers. There were no branch closures due to positive COVID-19 tests in the second quarter 2021. Back office personnel returned to the office on July 6.

In order to support its customer base, Alpine enacted a 90-day loan payment deferral program in late March 2020. Both principal and interest payments during the period were deferred to the end of the loan. As the 90-day deferral period came to an end, Alpine reviewed options to extend the deferral period for up to 180 days as provided for in regulatory guidance. Reviews for an additional 90-day extension for each borrower’s deferral period included an analysis of the borrower’s plan and ability to resume normal payments when the deferral period ends. As of June 30, 2020, $823.0 million of the loan portfolio (26.5%) was active in the loan deferral program. The majority of borrowers did not require a second 90-day deferral period. On December 31, 2020, only $29.3 million (0.9%) of the loan portfolio remained in a deferral status. As of June 30, 2021, $0.4 million (0.01%) of the loan portfolio remains on a COVID-19 deferral status.

The Company actively participated in Round 1 of the PPP loan program. As of June 30, 2021, Alpine had outstanding balances of $60.2 million in Round 1 PPP loans. The Company entered into a contract with a third party technology provider to assist with the Round 1 PPP loan forgiveness process for our borrowers. The web portal for processing Round 1 PPP forgiveness was activated in September 2020. Forgiveness activity began in the fourth quarter 2020 and the Bank processed $249.9 million in Round 1 PPP forgiveness approvals from the SBA as of June 30, 2021. It’s anticipated that the majority of remaining Round 1 PPP loans will be forgiven in the second half of 2021. The Company began actively participating in Round 2 of the PPP loan program in late-January 2021. Alpine issued 1,965 Round 2 PPP loans during the first half of 2021 with combined original balances of $162.1 million. The total outstanding balance of the Round 2 PPP loans was $157.5 million as of June 30, 2021.

About Alpine Banks of Colorado

Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $5.8 billion, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. With banking offices across Colorado, Alpine Bank employs more than 790 people and serves more than 160,000 customers with personal, business, wealth management*, mortgage and electronic banking services. Alpine Bank has a 5-star rating for financial strength by BauerFinancial, Inc., the nation’s leading bank rating firm. The 5-star rating is BauerFinancial’s highest rating for financial institutions. Shares of the Class B Nonvoting Common Stock of Alpine Banks of Colorado trade under the symbol “ALPIB" on the OTCQX® Best Market. Learn more at www.alpinebank.com.

*Alpine Bank Wealth Management services are not FDIC insured, may lose value and are not guaranteed by the Bank.

A Note About Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding our evaluation of macro-environment risks, Federal Reserve rate management, and trends reflecting things such as regulatory capital standards and adequacy. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward- looking statements. They are neither statements of historical fact or guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statement include:

• The ability to attract new deposits and loans;
• Demand for financial services in our market areas;
• Competitive market-pricing factors;
• The adverse effects of public health events, such as the current COVID-19 pandemic, including governmental and societal responses;
• Statements regarding the expected impact of the stock split of our Class B common shares;
• Deterioration in economic conditions that could result in increased loan losses;
• Actions by competitors and other market participants that could have an adverse impact on our expected performance;
• Risks associated with concentrations in real estate-related loans;
• Market interest rate volatility;
• Stability of funding sources and continued availability of borrowings;
• Risk associated with potential cyber threats;
• Changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth;
• The ability to recruit and retain key management and staff;
• The ability to raise capital or incur debt on reasonable terms; and
• Effectiveness of legislation and regulatory efforts to help the U.S. and global financial markets.
  

There are many factors that could cause actual results to differ materially from those contemplated by forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Key Financial Measures

Click the following links for tables that highlight Alpine’s key financial measures for the periods indicated (unaudited).

Key Financial Measures 06/30/2021
Statements of Income 06/30/2021
Statements of Financial Condition 06/30/2021
Statement of Comprehensive Income 06/30/2021