Alpine Banks of Colorado announces financial results for third quarter 2022

GLENWOOD SPRINGS, Colo., Oct. 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 third quarter ended September 30, 2022. The Company reported net income of $22.4 million, or $208.49 per basic Class A common share and $1.39 per basic Class B common share, for third quarter 2022.

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

• Basic earnings per Class A common share increased 21.6%, or $36.97, during third quarter 2022
• Basic earnings per Class A common share increased 13.3%, or $59.18, during the 12 months ended September 30, 2022
• Basic earnings per Class B common share increased 21.6%, or $0.25, during third quarter 2022
• Basic earnings per Class B common share increased 13.3%, or $0.39, during the 12 months ended September 30, 2022
• Loan growth during third quarter 2022 was 3.8%, or $137.2 million
• Loan growth during the 12 months ended September 30, 2022 was 13.8%, or $452.5 million
• In July 2022, Alpine successfully issued $34 million of its Class B common stock which further bolstered capital
  

“The third quarter of 2022 continued the strong momentum Alpine has created throughout the year,” said Alpine Banks of Colorado President and Vice Chairman Glen Jammaron. “Earnings improved greatly and we continued to grow our loan portfolio. The Alpine team makes a difference every day by providing customer-focused community banking throughout Colorado. Both our Fort Collins and Colorado Springs branches are on schedule for opening by December 1, 2022. We look forward to extending the Alpine brand to these dynamic new markets.”

Net income
Net income for third quarter 2022 and second quarter 2022 was $22.4 million and $17.5 million, respectively. Interest income increased $4.8 million in third quarter 2022 compared to second quarter 2022, primarily due to an increase in volume in the loan portfolio 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 the securities portfolio and balances due from banks. Interest expense increased $0.3 million in third quarter 2022 compared to second quarter 2022, primarily due to an increase in volume in deposits and increases in costs on the Company’s trust preferred securities and deposits. Noninterest income increased $3.5 million in third quarter 2022 compared to second quarter 2022, primarily due to a one-time loss on the sale of the Bank’s equity investment in the Transwestern Institutional Short Duration Government Bond Fund during second quarter 2022, along with increases in mortgage banking activities and fee income. This increase was slightly offset by declines in service charges on deposit accounts, and earnings on bank-owned life insurance. Noninterest expense increased $1.5 million in third quarter 2022 compared to second quarter 2022, due to increases in salaries and employee benefits expense, other expenses and furniture and fixture expense, slightly offset by a decrease in occupancy expense. No provision for loan losses was recorded in third quarter 2022 or second quarter 2022, primarily due to sustained asset quality during the quarters.

Net income for the nine months ended September 30, 2022 and September 30, 2021 was $52.7 million and $46.0 million, respectively. Interest income increased $16.9 million in the first nine months of 2022 compared to the first nine 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 increased $0.4 million in the first nine months of 2022 compared to the first nine months of 2021, primarily due to an increase in cost on the Company’s trust preferred securities and an increase in volume in deposits. This was slightly offset by a decrease in cost on deposits. Noninterest income decreased $5.3 million in the first nine months of 2022 compared to the first nine 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 service charges on deposit accounts, fee income, and earnings on life insurance. Noninterest expense increased $9.0 million in the first nine months of 2022 compared to the first nine 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 nine months of 2022 compared to the first nine months of 2021, primarily due to asset quality improvement during the period.

Net interest margin increased from 3.31% to 3.49% from second quarter 2022 to third quarter 2022. Net interest margin for third quarter 2022 net of the Paycheck Protection Program (“PPP”) loan influence was 3.48%, compared to second quarter 2022 net interest margin net of the PPP loan influence of 3.27%. Net interest margin for the nine months ended September 30, 2022 and September 30, 2021 was 3.22% and 3.16%, respectively.

Assets
Total assets increased $184.9 million, or 3.0%, to $6.3 billion as of September 30, 2022 compared to June 30, 2022 primarily due to organic loan growth, strategic growth in the securities portfolio and an increase of cash and due from banks. Total assets grew $157.3 million, or 2.6%, from September 30, 2021 to September 30, 2022. The Alpine Bank Wealth Management* division had assets under management of $1.01 billion on September 30, 2022, compared to $1.11 billion on September 30, 2021, a decrease of 8.9%.

Loans
Loans outstanding as of September 30, 2022 totaled $3.7 billion. The loan portfolio increased $137.2 million, or 3.8%, during third quarter 2022 compared to June 30, 2022. This growth was driven by a $76.5 million increase in residential real estate loans, a $40.4 million increase in real estate construction loans, a $25.3 million increase in commercial real estate loans, and a $0.3 million increase in consumer loans. This increase was slightly offset by a decrease in commercial and industrial loans of $3.9 million and a $0.2 million decrease in other loans. The decrease in commercial and industrial loans includes $7.7 million in PPP loan forgiveness pay-downs processed in third quarter 2022. Loans outstanding net of PPP loans as of September 30, 2022 reflected an increase of $145.0 million, or 4.0%, compared to loans outstanding net of PPP loans of $3.6 billion on June 30, 2022.

Loans outstanding as of September 30, 2022 reflected an increase of $452.5 million, or 13.8%, compared to loans outstanding of $3.3 billion on September 30, 2021. This growth was driven by a $283.8 million increase in residential real estate loans, a $141.9 million increase in real estate construction loans, a $72.0 million increase in commercial real estate loans, and a $0.3 million increase in other loans. This year-over-year growth was slightly offset by a $41.5 million decrease in commercial and industrial loans of and a $4.3 million decrease in consumer loans. The decrease in commercial and industrial loans includes $115.9 million in PPP loan forgiveness pay-downs. Loans outstanding net of PPP loans as of September 30, 2022, reflected an increase of $568.4 million, or 17.9%, compared to loans outstanding net of PPP loans of $3.2 billion on September 30, 2021.

Deposits
Total deposits increased $149.1 million, or 2.7%, to $5.7 billion during third quarter 2022 compared to June 30, 2022, primarily due to a $82.4 million increase in money fund accounts, a $51.1 million increase in demand accounts, a $7.9 million increase in savings accounts, a $7.7 million increase in interest checking accounts and a $0.1 million increase in certificate of deposit accounts.

Total deposits of $5.7 billion on September 30, 2022 reflected an increase of $175.8 million, or 3.2%, compared to total deposits of $5.5 billion on September 30, 2021. This increase was due to a $90.6 million increase in interest checking accounts, a $52.0 million increase in demand deposits, a $26.9 million increase in money fund accounts and a $16.1 million increase in savings accounts, slightly offset by a $9.7 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 September 30, 2022, the Bank’s Tier 1 Leverage Ratio was 9.03%, Tier 1 Risk-Based Capital Ratio was 13.08% and Total Risk-Based Capital Ratio was 14.04%. On a consolidated basis, the Company’s Tier 1 Leverage Ratio was 8.56%, Tier 1 Risk-Based Capital Ratio was 12.40% and Total Risk-Based Capital Ratio was 14.50% as of September 30, 2022.

Capital, including book value per share, during third quarter 2022 was negatively impacted by a $27.3 million accumulated other comprehensive loss on the Bank’s available-for-sale investment portfolio resulting from the increase in market interest rates. Book value per share on September 30, 2022 was $3,712.20 per Class A common share and $24.75 per Class B common share, a decrease of $51.66 per Class A common share and $0.34 per Class B common share from June 30, 2022.

On July 18, 2022, the Company announced that it had completed a $34.0 million private placement through the sale of 1,192,983 shares of its Class B nonvoting common stock, at $28.50 per share, to certain qualified institutional and accredited investors. The Company expects to continue 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 third quarter 2022, Alpine paid cash dividends of $27.00 per Class A common share and $0.18 per Class B common share. On October 13, 2022, Alpine declared cash dividends of $27.00 per Class A common share and $0.18 per Class B common share, payable on October 31, 2022 to shareholders of record on October 24, 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 $6.3 billion, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. With banking offices across Colorado, Alpine Bank employs more than 800 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 09/30/2022
Statement of Income 09/30/2022
Statement of Financial Condition 09/30/2022
Statement of Comprehensive Income 09/30/2022