Alpine Banks of Colorado announces financial results for second quarter 2022

GLENWOOD SPRINGS, Colo., July 26, 2022 (GLOBE NEWSWIRE) -- Alpine Banks of Colorado (OTCQX: ALPIB) (“Alpine” or the “Company”), the holding company for Alpine Bank (the “Bank”), today announced results (unaudited) for the second quarter ended June 30, 2022. The Company reported net income of $17.5 million, or $171.52 per basic Class A common share and $1.14 per basic Class B common share, for second quarter 2022.

Achievements in second quarter 2022, and the past 12 months, include:

• Basic earnings per Class A common share increased 38.4%, or $47.55, during second quarter 2022
• Basic earnings per Class A common share increased 2.3%, or $6.65 during the last 12 months ended June 30, 2022
• Basic earnings per Class B common share increased 38.4%, or $0.32, during second quarter 2022
• Basic earnings per Class B common share increased 2.3%, or $0.04, during the last 12 months ended June 30, 2022
• Organic loan growth during second quarter 2022 was 6.6%, or $222.3 million
• Organic loan growth during the last 12 months ended June 30, 2022 was 14.0%, or $441.8 million

“The second quarter completed June 30, 2022 brought continued success for the organization,” said Alpine Banks of Colorado President and Vice Chairman Glen Jammaron. “Rising interest rates began to positively impact our net interest margin while growth in the loan portfolio increased our earning power. Deposit levels during the quarter benefited our capital ratios. In July 2022 we successfully issued $34 million of our Class B common stock which further bolstered our capital. We look forward to opening two new locations in Fort Collins and Colorado Springs later in 2022.”

Net income
Net income for second quarter 2022 and first quarter 2022 was $17.5 million and $12.7 million, respectively. Interest income increased $5.8 million in second quarter 2022 compared to first quarter 2022, primarily due to an increase in volume in the loan and securities portfolios and increases in yields on the loan portfolio, the securities portfolio and balances due from banks. This increase was slightly offset by a decrease in volume in balances due from banks. Interest expense increased $0.1 million in second quarter 2022 compared to first quarter 2022, primarily due to an increase in yield on the Company’s trust preferred securities and an increase in yield on deposits, slightly offset by a decrease in volume in deposits. Increases in yields can be attributed to two rate hikes by the Federal Open Market Committee (“FOMC”) during second quarter 2022 and one rate hike during first quarter 2022. During second quarter 2022, the FOMC voted to increase rates by 0.50% on May 4, 2022, and by an additional 0.75% on June 15, 2022. During first quarter 2022 the FOMC voted to increase rates by 0.25% on March 16, 2022. Noninterest income increased $1.4 million in second quarter 2022 compared to first quarter 2022, primarily due to increases in mortgage banking activities, fee income, service charges on deposit accounts, and earnings on bank-owned life insurance. This increase was slightly offset by a loss on the sale of the Bank’s equity investment in the Transwestern Institutional Short Duration Government Bond Fund. Noninterest expense increased $1.1 million in second quarter 2022 compared to first quarter 2022, due to increases in other expenses and furniture and fixture expense, slightly offset by decreases in salaries and employee benefits expense and occupancy expense. No provision for loan losses was recorded in second quarter 2022 or first quarter 2022, primarily due to asset quality improvement during the period.

Net income for the six months ended June 30, 2022 and June 30, 2021, was $30.3 million and $29.8 million, respectively. Interest income increased $6.6 million in the first six months of 2022 compared to the first six months of 2021, primarily due to increases in volume in the securities and loan portfolios and an increase in yield in balances due from banks. This was slightly offset by a decrease in yield in the loan and securities portfolios, and a decrease in volume in balances due from banks. Interest expense decreased $6,000 in the first six months of 2022 compared to the first six months of 2021, primarily due to a decrease in yield on deposits. This was slightly offset by an increase in yield on the Company’s trust preferred securities and an increase in volume in deposits. Noninterest income decreased $6.5 million in the first six months of 2022 compared to the first six months of 2021, primarily due to realized losses on the sale of the Bank’s equity investment in the Transwestern Institutional Short Duration Government Bond Fund and decreases in income from the bank’s mortgage banking activities. This was slightly offset by increases in services charges on deposit accounts, fee income, and earnings on life insurance. Noninterest expense increased $5.5 million in the first six months of 2022 compared to the first six months of 2021, due to increases in other expenses, salary and employee benefit expenses, furniture and fixtures expenses, and occupancy expenses. Provision for loan losses decreased $5.2 million in the first six months of 2022 compared to the first six months of 2021, primarily due to asset quality improvement during the period.

Net interest margin increased from 2.87% to 3.31% from first quarter 2022 to second quarter 2022. Net interest margin for second quarter 2022 net of the Paycheck Protection Program (“PPP”) loan influence was 3.27%, compared to first quarter 2022 net interest margin net of the PPP loan influence of 2.85%. Net interest margin for the six months ended June 30, 2022 and June 30, 2021, was 3.09% and 3.24%, respectively.

Assets
As of June 30, 2022, total assets were $6.1 billion, a decrease of 1.6% or $100.4 million from first quarter 2022. Total assets decreased in second quarter 2022 from first quarter 2022 primarily due to a reduction of cash and due from banks. This decrease was slightly offset by organic loan growth and strategic growth in the securities portfolio. Total assets grew 5.0%, or $291.6 million, from June 30, 2021 to June 30, 2022. The Alpine Bank Wealth Management* division had assets under management of $1.03 billion on June 30, 2022, compared to $1.13 billion on June 30, 2021, a decrease of 8.8%.

Loans
Loans outstanding as of June 30, 2022 totaled $3.6 billion. The loan portfolio increased $199.0 million, or 5.8%, during second quarter 2022 compared to March 31, 2022. This growth was driven by a $154.5 million increase in residential real estate, primarily 1-4 family residential loans, a $40.6 million increase in real estate construction loans, a $13.6 million increase in commercial real estate loans, a $0.6 million increase in consumer loans, and a $0.4 million increase in other loans. This increase was slightly offset by a decrease in commercial and industrial loans of $10.4 million. The decrease in commercial and industrial loans includes $23.3 million in PPP loan forgiveness pay-downs processed in second quarter 2022. Loans outstanding net of PPP loans as of June 30, 2022 reflected an increase of $222.3 million, or 6.6%, compared to loans outstanding net of PPP loans of $3.4 billion on March 31, 2022.

Loans outstanding as of June 30, 2022 reflected an increase of $240.3 million, or 7.1%, compared to loans outstanding of $3.4 billion on June 30, 2021. This growth was driven by a $195.1 million increase in residential real estate, primarily 1-4 family residential loans, an $83.1 million increase in real estate construction loans, a $59.6 million increase in commercial real estate loans, and a $0.5 million increase in other loans. This year-over-year growth was slightly offset by a decrease in commercial and industrial loans of $97.7 million and a decrease in consumer loans of $3.7 million. The decrease in commercial and industrial loans includes $201.4 million in PPP loan forgiveness pay-downs. Loans outstanding net of PPP loans as of June 30, 2022, reflected an increase of $441.8 million, or 14.0%, compared to loans outstanding net of PPP loans of $3.2 billion on June 30, 2021.

Deposits
Total deposits decreased $80.7 million, or 1.4%, to $5.5 billion during second quarter 2022 compared to March 31, 2022, primarily due to a $95.8 million decrease in demand accounts, a $4.5 million decrease in savings accounts, and a $0.1 million decrease in certificate of deposit accounts. This decrease was slightly offset by an $11.9 million increase in money fund accounts and a $7.8 million increase in interest checking accounts.

Total deposits of $5.5 billion on June 30, 2022 reflected an increase of $333.7 million, or 6.4%, compared to total deposits of $5.2 billion on June 30, 2021. This increase was due to a $234.6 million increase in demand deposits, a $122.9 million increase in interest checking accounts, and a $9.9 million increase in savings accounts, slightly offset by an $18.1 million decrease in money fund accounts and a $15.6 million decrease in certificate of deposit accounts.

Capital
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, 2022, the Bank’s Tier 1 Leverage Ratio was 8.44%, Tier 1 Risk-Based Capital Ratio was 12.27% and Total Risk-Based Capital Ratio was 13.27%. On a consolidated basis, the Company’s Tier 1 Leverage Ratio was 7.95%, Tier 1 Risk-Based Capital Ratio was 11.56% and Total Risk-Based Capital Ratio was 13.74% as of June 30, 2022.

Capital, including book value per share, during second quarter 2022 was negatively impacted by a $52.8 million accumulated other comprehensive loss, related to our available-for-sale investment portfolio. Excluding the accumulated other comprehensive loss, book value per share on June 30, 2022 would have increased $521.36 per Class A common share and $3.48 per Class B common share.

On July 18, 2022, the Company announced that it had completed a private placement of $34.0 million of common stock through the sale of 1,192,983 shares of Class B nonvoting common stock, at $28.50 per share, to certain qualified institutional and accredited investors. The Company expects to use the proceeds from the capital raise for general corporate purposes, including but not limited to enhancing regulatory capital ratios and supporting continued organic growth.

Dividends
During second quarter 2022, Alpine paid cash dividends of $27.00 per Class A common share and $0.18 per Class B common share. On July 14, 2022, Alpine declared cash dividends of $27.00 per Class A common share and $0.18 per Class B common share, payable on August 1, 2022 to shareholders of record on July 25, 2022. The third quarter 2022 dividends are unchanged from the dividends paid in second quarter 2022.

About Alpine Banks of Colorado
Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $6.1 billion, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. With banking offices across Colorado, Alpine Bank employs more than 810 people and serves more than 160,000 customers with personal, business, wealth management*, mortgage and electronic banking services. Learn more at www.alpinebank.com. Shares of the Class B nonvoting common stock of Alpine Banks of Colorado trade under the symbol “ALPIB" on the OTCQX® Best Market.

*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 COVID-19 pandemic, including governmental and societal responses;
• 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
The tables in the links below highlight Alpine’s key financial measures for the periods indicated (unaudited).

Key Financial Measures 06/30/2022

Statement of Income 06/30/2022

Statement of Financial Condition 06/30/2022

Statement of Comprehensive Income 06/30/2022