PORTLAND, Ore., April 28, 2008 (PRIME NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank, today reported loans grew 34% and deposits grew 17% from the same period a year ago. Higher provision for loan loss reserves and lower loan fees on brokered loans contributed to a net loss in the first quarter of $410,000, or $0.38 per share, compared to net income of $40,000, or $0.04 per share in the first quarter of 2007. First quarter results were also impacted by a one-time reversal of accrued interest from prior periods of approximately $60,000.
"The greater Portland economy is slowing down compared to the brisk pace of expansion we've seen in the past few years, but the region is showing signs of resilience," stated Bob McKean, president and chief executive officer. "Housing inventories based on time it takes to sell, while still significantly higher than a year ago, dropped in March to 9.1 months from 10.4 months in February and 12.8 months in January. In Northeast Portland, our primary market area, home prices appreciated 6.9% year-to-date, according to RMLS Market Action Area Report for March 2008." Residential development in outlying areas has slowed to a greater degree and prices are softer. While economic conditions have made consumers more cautious, and affected some residential property values, commercial real estate values seem to be holding up at this time.
"We increased our allowance for loan losses to 1.52% of total loans based upon our evaluation of trends affecting national and local markets," McKean continued. "We are beginning to see the national trends in consumer loan delinquencies and real estate values impact the local market. While our loans to developers are performing, we believe slower sales and anecdotal evidence of declining land values may impact a small number of our borrowers."
First Quarter 2008 Financial Highlights: (for the quarter ended March 31, 2008, compared with March 31, 2007)
* Revenues increased 14% to $2.1 million from $1.8 million. * Net loans increased 34% to $147.5 million from $110.1 million. * Total assets rose 30% to $191.9 million from $148.2 million. * Deposits increased 17% to $146.2 million from $125.4 million. * Capital ratios remained well above the regulatory guidance at 10.5% for Tier 1 capital/ risk adjusted assets and 9.3% for Tier 1 capital/ total assets. For our subsidiary bank, both capital ratios also exceed regulatory definitions for well capitalized banks. * Net interest margin compressed to 3.81% due to rates cuts and reversal of accrued interest. * Allowance for loan losses increased to $2.3 million or 1.52% of total loans.
Balance Sheet Results
Total assets grew 30% to $191.9 million at March 31, 2008, compared with $148.2 million at March 31, 2007. Loans, net of reserves, increased 34% from a year ago to $147.5 million. Albina continues to supplement loan production by purchasing commercial and consumer loan participations. "Our loan portfolio is well diversified by category and we have limited exposure to any single loan type," said Jim Schlotfeldt, chief financial officer. "Nevertheless, we are continuing to build our reserves to reflect the overall growth in the loan portfolio and the changing dynamics in the local real estate market."
Capital ratios remained well above the regulatory guidance. Tier 1 capital/ risk-weighted assets stand at 10.5% and Tier 1 capital/ total assets stands at 9.3%.
Loans As of the Date Ended
-----------------------------------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
-----------------------------------------------------
(Dollars in (unaudited) (unaudited) (unaudited)
thousands)
Commercial
business $ 18,573 12.4% $ 13,892 9.4% $ 10,500 9.4%
R/E construction 25,218 16.8% 25,639 17.4% 12,696 11.4%
Commercial R/E 72,624 48.5% 73,368 49.7% 62,535 55.9%
Multifamily
residential 3,411 2.3% 3,428 2.3% 2,926 2.6%
One to four
family
residential 10,313 6.9% 9,401 6.4% 5,296 4.7%
Consumer 20,075 13.4% 22,442 15.2% 17,853 16.0%
Unearned Loan Fees (435) -0.3% (499) -0.3% (335) -0.3%
--------- --------- ---------
Total Loans 149,779 100.0% 147,671 100.0% 111,471 99.7%
"While our nonperforming assets increased in the quarter to $2.5 million due to two large loans placed on non-accrual, we are well secured on the majority of these assets, and $479,000 was returned to performing status right after the close of the quarter," said Schlotfeldt. "Almost all of the remaining nonperforming assets consist of a single credit for $1.9 million that is secured by a first deed on a newly renovated mixed use commercial building. Our first lien position is at a loan-to-current-market value of 42%, and we are negotiating a resolution for this loan. Consequently, we anticipate the loan will remain in nonperforming assets for a bit longer, but that it will be resolved satisfactorily." At March 31, 2008, nonperforming loans were 1.69% of total loans, compared to 0.28% reported one year ago.
Albina increased its allowance for loan losses based on the uncertainty of real estate valuations, combined with an increase in delinquency and net charge offs in the consumer loan pools purchased. The allowance for loan losses now stands at $2.3 million, representing a reserve-to-loan ratio of 1.52%, compared with $1.3 million, or 1.19% of loans at March 31, 2007. Net loan charge-offs for the first quarter of 2008 were $154,000, or 0.10% of average loans, versus $3,000, or 0.00% of average loans, in the first quarter of 2007.
"We continue to carefully monitor our loan portfolio and are keeping a close eye on several projects in the greater Portland area that continue to perform, as agreed," Schlotfeldt noted. "Currently we are funding several developments for a total of 79 lots, the majority of which are priced for entry level and moderate income buyers. These land development loans are still performing according to the loan agreements, although we believe there is a higher level of risk in this type of loan than when they were originally underwritten. We are also working with several builders of relatively small multifamily residential developments that, given the locations and price points, should perform well, although we anticipate slower absorption rates given the current market conditions."
At March 31, 2008, total deposits rose 17% to $146.2 million from $125.4 million a year ago. Noninterest bearing deposits increased 11% and accounted for 15% of total deposits. Interest bearing accounts increased 19% and accounted for 34% of deposits, and time certificates were up 19%, accounting for 47% of total deposits at quarter end. The ratio of loans to deposits at March 31, 2008 was 100.89% compared with 87.83% at March 31, 2007.
Shareholder equity at March 31, 2008, increased 7% to $13.3 million, or $10.10 per share, compared to $12.4 million, or $9.73 per share a year ago.
Operating Results
Revenue in the first quarter of 2008 rose 14% to $2.1 million compared to $1.8 million in the first quarter of 2007. For the first quarter of 2008, net interest income, before the provision for loan losses, grew 25% to $1.7 million from $1.3 million in the same quarter last year. After an $875,000 provision for loan losses, first quarter 2008 net interest income totaled $801,000, down 37% from $1.3 million a year ago.
Net interest margin in the first quarter was impacted by the sharp drop in short-term interest rates that occurred in the last six months. In addition, the reversal of accrued interest from prior periods reduced interest income by $60,000 and lowered net interest margin in the quarter by approximately 0.14%. First quarter net interest margin was 3.81% compared to 4.32% in the first quarter of 2007. "Barring any substantial rate cuts or other unforeseen events, we believe our net interest margin will improve in the latter half of the year," Schlotfeldt commented.
Non-interest expense for the first quarter of 2008 grew 9% to $1.8 million compared with $1.7 million for the same quarter of 2007, reflecting increased staffing needs and overhead costs to support the growth of the bank. The efficiency ratio for the quarter improved to 89.82% from 93.79% in the first quarter of 2007.
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 NE 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
Income Statement
(Dollars in thousands, except
per-share data) Three Months Ended
-----------------------------
March 31,
-----------------------------
2008 2007 % Chg
----------------------
(Unaudited) (Unaudited)
INTEREST INCOME
Interest and fees on loans $ 2,809 $ 2,120 33%
Interest on investment securities 129 163 -21%
Other interest income 111 70 57%
----------------------
Total interest income 3,049 2,354 30%
INTEREST EXPENSE
Interest on deposits 1,084 848 28%
Interest on borrowings 289 165 75%
----------------------
Total interest expense 1,373 1,014 35%
----------------------
NET INTEREST INCOME 1,676 1,340 25%
Loan loss provision 875 68 1196%
----------------------
Net interest income after provision 801 1,273 -37%
NON-INTEREST INCOME
Service charges and fees 148 143 4%
Government payments and contracts -- -- NM
Loan fees on brokered loans 26 100 -74%
Merchant & card interchange income 91 88 3%
Realized gain/(loss) on sale of
investment securities -- -- NM
Other income 113 134 -16%
----------------------
Total non-interest income 378 465 -19%
NON-INTEREST EXPENSE
Salaries and employee benefits 1,054 927 14%
Occupancy and equipment 193 178 8%
Legal and professional 90 104 -14%
Marketing 78 65 21%
Data processing 224 201 11%
Other 206 217 -5%
----------------------
Total non-interest expense 1,845 1,693 9%
PRETAX INCOME (666) 45 -1590%
Provision for income taxes (256) 4 -5908%
----------------------
NET INCOME $ (410) $ 40 -1118%
======================
Earnings per share:
Basic $ (0.38) $ 0.04 -1066%
Diluted $ (0.38) $ 0.04 -1093%
Weighted average shares outstanding:
Basic 1,068,437 1,023,845 4%
Diluted 1,076,013 1,053,347 2%
FINANCIAL RATIOS
Return on average assets -0.22% 0.03%
Return on average equity -3.04% 0.33%
Efficiency ratio 89.82% 93.79%
Net interest margin 3.81% 4.32%
Albina Community Bancorp
Balance Sheet
(Dollars in thousands) As of the Date Ended
-------------------------------------------
March 31, Dec. 31, March 31, Annual
2008 2007 2007 % Change
-------------------------------------------
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $ 620 $ 467 $ 490 27%
Interest-bearing deposits 1,620 1,554 5,722 -72%
Federal funds sold 13,053 8,775 8,612 52%
-----------------------------------
Total cash and cash
equivalents 15,292 10,796 14,825 3%
Time deposits with other
banks 5,524 5,625 3,098 78%
Investment securities 10,743 10,733 9,806 10%
Federal Home Loan Bank Stock 1,002 615 423 137%
Loans
Albina originated loans 107,716 105,819 85,360 26%
Commercial participations
purchased 23,063 20,657 9,232 150%
Consumer participations
purchased 19,000 21,195 16,879 13%
-----------------------------------
Total loans 149,779 147,671 111,471 34%
Allowance for loan and lease
losses (2,277) (1,556) (1,324) 72%
-----------------------------------
Net loans 147,502 146,115 110,147 34%
Property and equipment, net 5,889 5,970 6,104 -4%
Other real estate owned -- -- -- 0%
Other assets 5,966 5,718 3,759 59%
-----------------------------------
-----------------------------------
Total assets $ 191,919 $ 185,572 $ 148,162 30%
===================================
LIABILITIES AND EQUITY
Deposits
Non-interest bearing
deposits $ 21,966 $ 23,366 $ 19,712 11%
Interest-bearing accounts 49,052 39,417 41,174 19%
Savings accounts 6,059 5,646 6,199 -2%
Time certificates 69,127 77,411 58,331 19%
-----------------------------------
Total deposits 146,205 145,840 125,416 17%
Notes payable 24,338 17,861 3,429 610%
Subordinated debentures 6,186 6,186 6,186 0%
Other liabilities 1,918 2,201 685 180%
-----------------------------------
Total liabilities 178,647 172,088 135,715 32%
Shareholders' equity:
Preferred stock 2,482 2,482 2,482 0%
Common stock 8,562 8,540 8,189 5%
Retained earnings 2,029 2,442 1,737 17%
Accum. other comp. income 198 20 39 403%
-----------------------------------
Total shareholders' equity 13,271 13,484 12,447 7%
-----------------------------------
-----------------------------------
Total liabilities and equity $ 191,919 $ 185,572 $ 148,162 30%
===================================
FINANCIAL RATIOS
Loans / deposits 100.89% 100.19% 87.83%
Non-performing loans / total
loans 1.69% 0.14% 0.28%
Reserve / loans 1.52% 1.05% 1.19%
Tangible book value per
share $ 10.10 $ 10.30 $ 9.73