Columbia Commercial Bancorp Reports Full Year and Fourth Quarter 2012 Results

Marketwired

HILLSBORO, OR--(Marketwire - Jan 25, 2013) - Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Columbia Community Bank (the Bank), reports a net profit of $1.2 million, or $0.38 per diluted share for the year ended December 31, 2012 compared to $184,000, or $0.06 per diluted share for 2011. Net income for fourth quarter 2012 was $608,000 or $0.18 per diluted share after a $750,000 negative loan loss provision which was partially offset by a $144,000 prepayment fee expense on $6.9 million of FHLB borrowings. The effect of these two transactions was $370,000 after tax. Net income for third quarter 2012 was $294,000, or $0.09 per diluted share. Return on average equity for the full year of 2012 was 6.64% compared to 1.03% for 2011.

"The Company had considerable success during 2012 with a variety of its strategic objectives," states the Company's President and CEO, Rick A. Roby. And he continues, "During the year, low-yielding cash and investments were utilized to pay down high-cost liabilities such as brokered deposits, repurchase agreements, and FHLB borrowings; and while these activities deleveraged the overall balance sheet by almost $30.0 million, at the same time we were still able to grow loans by over $6.4 million. Year-to-date net interest margins reflect the success of these initiatives which also set a strong foundation for continued improvement in net interest income for 2013. Additionally, during the fourth quarter, the Company converted over $1.9 million of its 8.50% convertible subordinated notes into common stock which moving forward reduces both the leverage and interest expense at the holding company level." 

Assets

Total assets of $322.6 million as of December 31, 2012 were down $30.0 million, or 8.5%, over the past year when compared to the $352.6 million at year-end 2011. Cash, federal funds sold, and investments totaled $61.3 million as of December 31, 2012, or 19.0% of total assets, and are down $35.4 million compared to the end of 2011 when they totaled $96.7 million, or 27.4% of total assets. This reduction was brought about by retiring $4.7 million of FHLB borrowings that matured during second quarter 2012, prepaying $6.9 million during the fourth quarter of FHLB borrowings that had an average rate of 4.23%, and throughout the year by reducing brokered deposits by $9.9 million and repurchase agreements by $9.3 million. "And after all the changes during 2012, the Company still retains strong liquidity with over $36.9 million of cash and unpledged securities, or 11.4% of total assets," states Bob Ekblad, the Company's Chief Financial Officer. 

Total loans at $244.8 million as of December 31, 2012 are up $1.0 million, or 0.4%, during the fourth quarter and have increased $6.4 million or 2.7% when compared to the $238.4 million outstanding as of December 31, 2011. "We are seeing an increased level of confidence within several of our targeted business segments so loan demand has picked up this past year; and while the competition for these loans is strong, our team of experienced professionals continue to show our ability to succeed as evidenced by this loan growth; and we expect more for 2013," comments the Company's Chief Credit Officer, Fred Johnson.

As of December 31, 2012, the Bank had $329,000 in loans, or 0.13% of total loans, that were past due over 30 days and still accruing interest. 

During 2012 the Bank had $1.8 million in loan charge-offs relative to $1.6 million in loan recoveries, or net charge-offs of $180,000 for the year; compared to 2011 when net charge-offs were $1.8 million. The considerable recoveries during the year along with a general improvement in other credit matrices within the loan portfolio allowed the bank to negative loan provision $750,000 for 2012 compared to 2011 when it had a loan loss provision expense of $1.4 million. As a result of the strengthening loan portfolio and negative provision expense, the allowance for loan losses as of December 31, 2012 at $6.2 million, was 2.51% of loans compared to year-end 2011 when it was $7.1 million, or 2.97% of loans.

Non-performing assets consist of loans on nonaccrual status and other real estate owned (OREO) which totaled $17.7 million as of December 31, 2012 and are down $1.3 million compared to year-end 2011 when they were $19.0 million. During 2012 the Bank reduced non-performing assets through pay downs on nonaccrual loans and the liquidation of OREO properties by $7.1 million while additions to nonaccrual loans (which were primarily from two existing relationships) were $5.8 million. OREO at year-end 2012 consisted of nine properties totaling $7.3 million which was 41.2% of non-performing assets while nonaccrual loans consisted of nine relationships totaling $10.4 million, or 58.8% of non-performing assets. 

Deposits

Total deposits for the Bank at $228.0 million as of December 31, 2012 were down $11.1 million, or 4.6% for the year when compared to deposits of $239.1 million at year-end 2011. And Mr. Ekblad comments, "The reduction in deposits over the past year was certainly not reflective of our efforts to grow local deposits, in fact, local deposit growth for 2012 was quite successful at almost $11.1 million and the reason for the overall deposit decline was due to an intentional $10.0 million reduction in brokered deposits and another $12.2 million reduction in nontraditional out-of-area deposits during 2012." As of December 31, 2012, the Bank had $5.0 million in brokered deposits which was 2.2% of total deposits compared to $15.0 million and $27.7 million in brokered deposits as of December 31, 2011 and 2010 when they were 6.3% and 10.9% of total deposits, respectively. The Bank has $4.6 million in brokered deposits that mature throughout 2013 which will not be renewed. 

Earnings

Asset income for full year 2012 at $14.7 million was down $1.2 million, or 7.2%, compared to the $15.9 million for 2011 due substantially from lower yields on both the loan and investment portfolios. In addition, asset income was also down for 2012 due to a $3.8 million reduction in average outstanding loans during 2012 relative to 2011 (even though year-end 2012 outstanding loans were higher than year-end 2011 outstanding loans). However, the reduction in asset income of $1.2 million was offset by a $1.3 million, or 20.2%, reduction in interest expenses from 2012 relative to 2011. This reduction in interest expense relates to reductions in outstanding deposits, repurchase agreements, and FHLB borrowings; as well as a general downward trend in overall deposit rates paid by the Bank. Net interest income for 2012 at $9.5 million was therefore up slightly, $181,000 or 1.9%, over net interest income for 2011. However, also included in the 2012 interest expense was a $144,000 prepayment penalty during fourth quarter related to the early pay-off of $6.9 million of FHLB borrowings that had an average rate of 4.23%. Net interest margin for the full year of 2012 at 3.24% was 16 basis points higher than the 3.08% for 2011. Mr. Roby adds, "And blended in with the deleveraging done during 2012 will be a considerable improvement in our net interest income and margins for 2013 as the Company has retired significant amounts of high cost deposits and FHLB borrowings during 2012 which were paid off from lower yielding cash and investments."

Non-interest income was relatively stable for the past two quarters and the full year 2012 was consistent with 2011. Non-interest expense for the past two quarters was also consistent, however for 2012 non-interest expense at $8.7 million was $196,000, or 2.2% lower than in 2011 which relates to a reduction in problem asset related expenses. 

For 2012 the Company recognized $51,000 in realized gains on securities that were liquidated as part the Bank's deleveraging strategy while for 2011 security gains were $603,000. The 2012 OREO liquidations and revaluation adjustments netted to a $19,000 loss for the year showing some stabilization within the real estate markets when compared to 2011 and the net losses were $188,000. 

Equity and Capital

During the fourth quarter of 2012, the Company converted over $1.9 million of its $3.0 million subordinated 8.50% convertible notes, along with their fourth quarter interest into 496,596 of common shares at $4.00 per share. The dilution from this transaction was approximately $0.26 per share but reduces leverage, reduces cash flow requirements, and saves over $165,000 in interest expense annually at the holding company.

Capital ratios at the Bank continue to grow through a combination of retained earnings and deleveraging. The Bank's leverage ratio was 8.79% as of December 31, 2012 compared to 7.63% as of December 31, 2011 while its tier one and total risk-based capital ratios were 10.90% and 12.16% as of December 31, 2012 compared to 10.16% and 11.42% at December 31, 2011 respectively. The Bank's capital ratios continue to exceed those required to be considered "well-capitalized" according to the standard regulatory guidelines.

About Columbia Commercial Bancorp:

Information about the Company's stock may be obtained through the Over the Counter Bulletin Board at www.otcbb.com. Columbia Commercial Bancorp's stock symbol is CLBC.

Columbia Commercial Bancorp was formed in 2002 as a holding company for Columbia Community Bank, which was opened in 1999 by local business people to deliver loan and deposit product solutions through experienced and professional bankers to businesses, nonprofits, professionals, and individuals throughout Washington County and the greater Portland metropolitan area. The Bank has been named among the "100 Best Companies to Work for in Oregon" by Oregon Business Magazine for 2012, 2011, and 2009.

For more information about Columbia Commercial Bancorp, or its subsidiary, Columbia Community Bank, call (503) 693-7500 or visit our website at www.columbiacommunitybank.com. Information contained in or linked to our website is not incorporated as a part of this release.

Certain statements in this release may constitute forward-looking statements within the definition of the "safe-harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to significant uncertainties, which could cause actual results to differ materially from those set forth in such statements. Forward-looking statements are those that incorporate management's current expectations and plans based on information currently known to them. These statements can sometimes be identified by words such as "believe," "estimate," "anticipate," "expect," "intend," "will," "may," "should," or other similar phrases or words. Readers are cautioned not to place undue reliance on forward-looking statements. In particular, they should not be construed as assurances of a given level of performance or as promises of a given set of management's actions. Some of the factors that could cause management to deviate from its current plans, or could cause the Company's results to differ from current expectations, include the effect of localized or regional economic shifts that may affect the collectability of loans or the value of the collateral underlying those loans; the effects of laws, regulations, policies and government actions upon the Company's assets and operations; sensitivity to the Northwestern Oregon geographic markets and events affecting those markets; and the impacts of new government initiatives upon us and our borrowers. The Company does not intend to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

   
Consolidated Balance Sheet
Unaudited
(amounts in 000's, except per share data and ratios)
 
                               
    December 31,     % Change     September 30,     % Change  
    2012     2011     2012 vs. 2011     2012     Quarter  
                                     
ASSETS                                    
  Cash & due from banks   $ 19,102     $ 25,982     -26.5 %   $ 22,047     -13.4 %
  Federal funds sold     -       10,000     -100.0 %     5,000     -100.0 %
  Investment securities - available for sale     40,019       58,417     -31.5 %     55,395     -27.8 %
  Investments - Other     2,227       2,307     -3.5 %     2,247     -0.9 %
                                     
  Gross loans     244,765       238,403     2.7 %     243,839     0.4 %
  Allowance for loan losses     (6,153 )     (7,083 )   -13.1 %     (6,963 )   -11.6 %
    Net loans     238,612       231,320     3.2 %     236,876     0.7 %
                                     
  Other real estate owned     7,289       8,408     -13.3 %     7,358     -0.9 %
  Other assets     15,370       16,174     -5.0 %     17,109     -10.2 %
                                     
    Total Assets   $ 322,619     $ 352,608     -8.5 %   $ 346,032     -6.8 %
                                     
LIABILITIES                                    
  Deposits   $ 227,977     $ 239,083     -4.6 %   $ 237,872     -4.2 %
  Repurchase agreements     17,438       26,722     -34.7 %     24,314     -28.3 %
  Federal funds purchased             -     0.0 %     -     0.0 %
  FHLB borrowings     41,000       52,635     -22.1 %     47,900     -14.4 %
  Other borrowings     2,579       4,513     -42.9 %     4,516     -42.9 %
  Junior subordinated debentures     8,248       8,248     0.0 %     8,248     0.0 %
  Other liabilities     3,882       3,433     13.1 %     4,122     -5.8 %
    Total Liabilities     301,124       334,634     -10.0 %     326,972     -7.9 %
                                     
STOCKHOLDERS' EQUITY     21,495       17,974     19.6 %     19,060     12.8 %
    Total Liabilities and Stockholders' Equity   $ 322,619     $ 352,608     -8.5 %   $ 346,032     -6.8 %
                                     
Shares outstanding at end-of-period     3,759,677       3,151,581             3,241,581        
Book value per share   $ 5.72     $ 5.70           $ 5.88        
Allowance for loan losses to total loans     2.51 %     2.97 %           2.86 %      
Non-performing assets (nonaccrual loans & OREO)   $ 17,661     $ 18,984           $ 16,766        
                                     
Bank Tier 1 leverage ratio (5% minimum for "well-capitalized")     8.79 %     7.63 %           8.27 %      
Bank Tier 1 risk-based capital ratio (6% minimum for "well-capitalized")     10.90 %     10.16 %           10.44 %      
Bank Total risk-based capital ratio (10% minimum for "well-capitalized")     12.16 %     11.42 %           11.71 %      
                                     
                                     
                                     
Consolidated Statement of Operations
Unaudited
(amounts in 000's, except per share data and ratios)
 
                                     
                                     
    Three Months Ending           Twelve Months Ending        
    12/31/2012     9/30/2012     % Change     12/31/2012     12/31/2011     % Change  
INTEREST INCOME                                            
  Loans   $ 3,459     $ 3,489     -0.9 %   $ 13,838     $ 14,649     -5.5 %
  Investments     178       220     -19.1 %     833       1,171     -28.9 %
  Federal funds sold and other     17       16     6.3 %     72       65     10.8 %
    Total interest income     3,654       3,725     -1.9 %     14,743       15,885     -7.2 %
                                             
INTEREST EXPENSE                                            
  Deposits     444       530     -16.2 %     2,141       3,359     -36.3 %
  Repurchase agreements and federal funds purchased     34       46     -26.1 %     179       329     -45.6 %
  FHLB borrowings     623       490     27.1 %     2,143       2,125     0.8 %
  Other borrowings     128       121     5.8 %     489       483     1.2 %
  Junior subordinated debentures     64       67     -4.5 %     259       238     8.8 %
    Total interest expense     1,293       1,254     3.1 %     5,211       6,534     -20.2 %
                                             
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES     2,361       2,471     -4.5 %     9,532       9,351     1.9 %
                                             
PROVISION FOR LOAN LOSSES     (750 )     -     100.0 %     (750 )     1,350     -155.6 %
                                             
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     3,111       2,471     25.9 %     10,282       8,001     28.5 %
                                             
NON-INTEREST INCOME     178       158     12.7 %     668       645     3.6 %
                                             
NON-INTEREST EXPENSE     2,177       2,146     1.4 %     8,648       8,844     -2.2 %
                                             
INVESTMENTS- REALIZED GAINS / (LOSSES)     33       18     83.3 %     51       603     -91.5 %
INVESTMENTS - OTHER THAN TEMPORARY IMPAIRMENT     -       -     0.0 %     -       (25 )   -100.0 %
OREO VALUATION ADJUSTMENTS & GAINS/(LOSSES) ON SALES - NET     (55 )     76     -172.4 %     (19 )     (188 )   -89.9 %
                                             
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES     1,090       577             2,334       192        
                                             
PROVISION (BENEFIT) FOR INCOME TAXES     482       283             1,088       8        
                                             
NET INCOME (LOSS)   $ 608     $ 294           $ 1,246     $ 184        
                                             
Earnings (Loss) per share - Basic   $ 0.19     $ 0.09           $ 0.39     $ 0.06        
                                             
Earnings (Loss) per share - Diluted   $ 0.18     $ 0.09           $ 0.38     $ 0.06        
                                             
Return on average equity     12.61 %     6.17 %           6.64 %     1.03 %      
Return on average assets     0.71 %     0.33 %           0.36 %     0.05 %      
Net interest margin     3.18 %     3.28 %           3.24 %     3.08 %      
Efficiency ratio     85.74 %     81.6 %           84.8 %     88.5 %      
                                             
                                             
Contact:
CONTACT:
Rick A. Roby
President and Chief Executive Officer
503-693-7500
rick@columbiacommunitybank.com

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