PORTLAND, Ore., April 30, 2009 (GLOBE NEWSWIRE) -- Albina Community Bancorp (OTCBB:ACBC), Portland's only certified community development bank, today reported that deposits grew 24% and total loans increased 6% from the same period a year ago. After booking a $1.8 million provision for loan losses, Albina lost $1,132,000, or $1.06 per share, in the first quarter, compared to a net loss of $410,000, or $0.38 per share in the like quarter a year ago.
"Albina's loan originations slowed during the first quarter, as we balanced the need to fulfill our community development mission by making loans within the greater Portland market to creditworthy businesses and consumers with the realities of the market," said Bob McKean, president and chief executive officer. "Nonperforming loans increased in the first quarter due to residential construction and development delinquencies impacted by cost overruns, and the cascading impact of a slowing housing market on sales volumes and pricing. Management continues to actively monitor the loan portfolio and quickly identify problem loans to minimize losses. Our problem loans are primarily centered in the construction and land development loan categories and the timely recognition of these loans, including providing for specific reserves, or charge-offs when merited, is essential in managing our loan portfolio. Based upon our evaluation of trends affecting our markets, we have increased our allowance for loan losses to 1.98% of total loans. We have charged off $3 million over the past 15 months to recognize the decrease in collateral value, and believe we have made great progress in getting stalled projects back on track and gaining control of collateral where appropriate."
"The greater Portland economy is not immune to the national and global recession, and we are witnessing a continued deterioration in the Oregon economy," added McKean. "Residential housing permits fell in February, and Portland area homes continue to sell at their slowest pace in at least 15 years. Foreclosed homes accounted for about 18% of all Portland area home sales in February, which is well below levels seen in some other major Western markets where foreclosures account for half or more of all resale activity. That being said, according to federal data released on April 17, Oregon has the second highest unemployment rate in the nation at 12.1% in March up from 10.7% in February."
"We have adapted to these challenging market conditions by aggressively charging off nonperforming assets as new appraisals suggest, adding to reserves to reflect our current view of anticipated losses in NPAs as well as the effect of unemployment on consumers and small businesses," continued McKean. " We have reduced operating costs to better match our expected growth until capital is again flowing freely."
First Quarter 2009 Financial Highlights: (for the quarter ended March 31, 2009, compared with March 31, 2008)
* Deposits increased 24% to $180.7 million up from $146.2 million. * Total loans increased 6% to $158.5 million up from $149.8 million. * Total assets rose 21% to $232.1 million up from $191.9 million. * Investment securities increased 271% to $39.9 million. * Capital ratios for Albina Bank exceeded regulatory definitions for well-capitalized banks with Tier 1 leverage at 7.2%, Tier 1 risk-based at 9.4% and Total risk-based capital at 10.6%. * Allowance for loan losses increased to $3.1 million, or 1.98% of total loans.
Capital Adequacy and Liquidity
"Our core business operations and customer relationships remain strong, and we continue to have capital reserves that exceed regulatory requirements for well-capitalized banks," said Jim Schlotfeldt, chief financial officer. "We have sufficient capital to weather the storm; however, we are keeping our options open for additional capital and are pursuing a number of capital initiatives. In the meantime, we continue to maintain high levels of liquidity and available lines of credit at the Federal Home Loan Bank and the Federal Reserve Bank." Excess liquidity will be invested in securities until the underlying time deposits mature or loan originations increase.
Albina is competing for the U.S. Treasury's Community Development Financial Institutions Fund's Bank Enterprise Award (BEA) Program in 2009 as well as a CDFI Core award. Awards are expected to be granted before September 30, 2009. In 2008, Albina received the maximum BEA award of $675,000 from the program and received awards in 7 out of the last 8 years totaling more than $4.1 million. Through this program, the CDFI Fund awards financial institutions for their support of community development through small business loans, home improvement loans and commercial real estate loans. Core awards are designed to bolster the capital of CDFI banks to support their community development mission.
Asset Quality Review
Nonperforming assets, which include nonperforming loans, other real estate owned (OREO), and loans delinquent 90 days or more, increased during the quarter to $17.9 million, or 7.7% of total assets, at March 31, 2009, up from $2.5 million a year ago. One loan for $1.4 million that was delinquent more than 90 days has subsequently been brought current. Of the total NPA, loans that are not accruing interest totaled $16.3 million and are in the greater Portland and Vancouver markets. "We continue to work with our developer clients to reduce their inventories of unsold homes, although market conditions remain challenging. We have reached an agreement to sell the only property we have in OREO (other real estate owned), which will produce a small gain when the sale closes," said McKean. Construction loans now account for 13% of the total loan portfolio and 75% of nonperforming loans.
In addition, one commercial property loan, for $1.9 million, which has been in NPA, has returned to performing status under a court ordered bankruptcy agreement. The allowance for loan and lease losses was $3.1 million, or 1.98% of net loans at March 31, 2009, compared to $2.7 million or 1.68% of net loans at December 31, 2008 and $2.3 million, or 1.52% of net loans a year ago. Net charge-offs totaled $1.4 million, or 0.90% of average loans in the first quarter quarter, and $1.2 million, or 1.71% of average loans for the linked quarter and $154,000, or 0.10% of average loans in the first quarter of 2008. Based on current appraisals for nonperforming construction and land development loans, the original loan balances were written down by $1 million during the first quarter. Albina also charged off $300,000 related to consumer loan participations and $28,000 in small business loans during the quarter.
Balance Sheet Results
Total assets increased 21% to $232.1 million at March 31, 2009, compared with $191.9 million at March 31, 2008. Loans, net of reserves, increased 6% from a year ago to $155.8 million. The loan portfolio remains well diversified with a wide variety of borrowers and collateral; over 75% of the portfolio is secured by real estate, both residential and commercial. Commercial and consumer loan participations, which provide diversification for the portfolio and additional earnings, account for approximately 21% of the portfolio and were down 17% year-over-year standing at $33.9 million.
March 31, December 31, March 31,
2009 2008 2008
(unaudited) (unaudited) (unaudited)
--------------------------------------------
Loans
Commercial business $ 22,234 14% $ 21,665 13% $ 18,573 13%
R/E construction 20,075 13% 22,572 14% 25,218 17%
Commercial R/E 78,143 49% 80,265 49% 72,624 49%
Multifamily residential 2,945 2% 2,959 2% 3,411 2%
One to four family
residential 20,191 13% 19,991 12% 10,313 7%
Consumer 15,232 10% 16,182 10% 20,075 14%
Unearned Loan Fees (361) 0% (410) 0% (435) 0%
--------- --------- ---------
Total Loans 158,459 100% 163,224 100% 147,671 100%
At March 31, 2009, total deposits rose 24% to $180.7 million up from $146.2 million a year ago. Noninterest bearing deposits accounted for 11% of total deposits and interest bearing and savings accounts accounted for 22% of deposits, and time certificates were 66% of total deposits at quarter end. "We continue to attract deposits not only from within our footprint, but from all over the country from both for-profit and non-profit institutions that support urban renewal and community development. This quarter we increased the number of certificates of deposit, taking advantage of historically low interest rates and in anticipation of a number of maturing certificates in the next few months," said McKean. The ratio of loans to deposits at March 31, 2009 was 86.23% compared with 100.89% at March 31, 2008.
Shareholder equity at March 31, 2009, totaled $11.7 million, or $8.86 per share, compared to $13.3 million, or $10.10 per share a year ago.
Operating Results
Revenue, consisting of net interest income and noninterest income, was $1.7 million in the first quarter of 2009 compared to $2.1 million in the first quarter of 2008. For the first quarter of 2009, net interest income, before the provision for loan losses, was $1.3 million. After the $1.3 million provision for loan losses, first quarter 2009 net interest loss was $22,000, down from net interest income of $801,000 a year ago, which included a provision for loan losses of $1.7 million.
Net interest margin in the first quarter was 2.89% compared to 3.81% in the first quarter of 2008. The reversal of accrued interest from non-performing assets reduced interest income by $467,000 in the quarter and was partially responsible for the compression in the net interest margin by 103 basis points.
Non-interest expense for the first quarter fell 9% to $1.7 million compared to $1.8 million for the same quarter of 2008. "The 9% reduction in total non-interest expense for the first quarter reflects prudent management of our salaries and employee benefits and a general reduction in our overhead expenses," said McKean. "The increase in legal and professional expenses is primarily a result of our taking aggressive actions in collecting on troubled loans and impairments based on new appraisals. These expenses impacted our efficiency ratio for the quarter, which rose to 99.11% from 89.82% in the first quarter a year ago."
"In spite of our ongoing challenges, all of our employees at Albina continue to focus on the essence of community banking serving our customers and helping our communities grow toward a better future," McKean concluded.
The Annual Meeting of Shareholders of Albina Community Bancorp will be held at our SIB Branch, at 430 NW 10th Avenue, Portland, OR 97209, on May 5, 2009, at 5:30pm.
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 Northeast 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, Dec. 31, March 31,
2009 2008 2008 % Chg
---------------------------------
(Unaudited)(Unaudited)(Unaudited)
INTEREST INCOME
Interest and fees on loans $ 2,410 $ 2,726 $ 2,809 -14%
Interest on investment
securities 213 196 129 65%
Other interest income 42 57 111 -62%
---------------------------------
Total interest income 2,664 2,978 3,049 -13%
INTEREST EXPENSE
Interest on deposits 995 924 1,084 -8%
Interest on borrowings 347 359 289 20%
---------------------------------
Total interest expense 1,342 1,283 1,373 -2%
---------------------------------
NET INTEREST INCOME 1,323 1,695 1,676 -21%
Loan loss provision 1,845 820 875 111%
---------------------------------
Net interest income
after provision (522) 875 801 -165%
NON-INTEREST INCOME
Service charges and fees 206 188 148 39%
Government payments and
contracts -- 250 -- NM
Loan fees on brokered loans -- 8 26 -100%
Merchant & card interchange
income 51 51 91 -43%
Realized gain/(loss)
on sale of investment
securities -- -- -- NM
Other income 106 106 113 -6%
---------------------------------
Total non-interest
income 364 603 378 -4%
NON-INTEREST EXPENSE
Salaries and employee
benefits 781 823 1,054 -26%
Occupancy and equipment 191 192 193 -1%
Legal and professional 203 129 90 127%
Marketing 37 52 78 -52%
Data processing 169 176 224 -24%
Other 289 198 206 40%
---------------------------------
Total non-interest
expense 1,671 1,571 1,845 -9%
PRETAX INCOME (1,830) (93) (666) 175%
Provision for income taxes (698) (32) (256) 173%
---------------------------------
NET INCOME $ (1,132) $ (60) $ (410) 176%
=================================
Earnings per share:
Basic $ (1.06) $ (0.06) $ (0.38) 179%
Diluted $ (1.06) $ (0.06) $ (0.38) 179%
Weighted average shares
outstanding:
Basic 1,069,350 1,069,198 1,068,437 0%
Diluted 1,069,350 1,069,198 1,076,013 -1%
FINANCIAL RATIOS
Return on average assets -0.51% -0.03% -0.22%
Return on average equity -9.23% -0.46% -3.08%
Efficiency ratio 99.11% 68.34% 89.82%
Net interest margin 2.89% 3.63% 3.81%
Albina Community Bancorp
Selected Highlights
(Dollars in thousands)
As of the Date Ended
-----------------------------------------------
March 31, Dec. 31, March 31,
2009 2008 2008
-----------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans
Commercial business $ 22,234 14.0% $ 21,665 13.3% $ 18,573 12.4%
R/E construction 20,075 12.7% 22,572 13.8% 25,218 16.8%
Commercial R/E 78,143 49.3% 80,265 49.2% 72,624 48.5%
Multifamily
residential 2,945 1.9% 2,959 1.8% 3,411 2.3%
One to four family
residential 20,191 12.7% 19,991 12.2% 10,313 6.9%
Consumer 15,232 9.6% 16,182 9.9% 20,075 13.4%
Unearned Loan Fees (361) -0.2% (410) -0.3% (435) -0.3%
-------- -------- --------
Total Loans 158,458 100.0% 163,224 100.0% 149,779 100.0%
ASSET QUALITY
Non-Performing loans:
Loans past due 90
days or more $ 229 $ 166 $ 644
Non-accrual loans 16,282 12,836 1,893
-------- -------- --------
Total non-
performing loans 16,511 13,001 2,537
Beginning ALLL -
from previous FYE 2,736 1,556 1,556
Provision for loan
loss expense 1,845 3,850 875
Loan charge offs (1,490) (2,833) (201)
Loan recoveries 42 163 47
-------- -------- --------
(Charge offs), net
of recoveries (1,448) (2,670) (154)
-------- -------- --------
Ending ALLL - YTD 3,133 2,736 2,277
Average Loans
Quarter 161,746 162,831 151,156
YTD 161,746 156,363 151,156
Net charge-off
Quarter 1,448 1,150 154
YTD 1,448 2,670 154
Net charge-offs as
% of Average loans
Quarter 0.90% 0.71% 0.10%
YTD 0.90% 1.71% 0.10%
Non-accrual loans
Residential
Development 12,276 7,966 --
Commercial Real
Estate 3,662 4,240 1,835
Commercial /
Industrial 343 630 58
-------- -------- --------
16,282 12,836 1,893