Albina Community Bancorp (OTCBB:ACBC), the holding
company of Albina Community Bank, the only certified community
development bank headquartered in Portland, today reported earnings
of $252,000, or $0.19 per share in the third quarter ended
September 30, 2012. By comparison, net income was $12,000, or $0.01
per share in the second quarter this year, and Albina lost
$126,000, or $0.10 per share in the third quarter a year ago.
Year-to-date, net income was $362,000, or $0.27 per share, compared
to $135,000, or $0.10 per share in the first nine months of 2011.
Increased revenue, continued improvements in asset quality and
lower cost of funds contributed to profits in the quarter and
year-to-date results.
Net income at Albina Community Bank was $70,000 in the third
quarter of 2012, compared to $143,000 in the preceding quarter and
a loss of $14,000 in the third quarter a year ago. For the first
nine months of 2012, the bank earned $461,000, compared to $514,000
in the first nine months of 2011.
“The third quarter is our sixth profitable quarter out of the
last seven consecutive quarters, for both the bank and the holding
company, and is one of our most profitable quarters in the last few
years,” said Cheryl Cebula, President and Chief Executive Officer
of Albina Community Bank. “Contributing to increased profits for
the quarter and year-to-date was $456,000 of fee income associated
with the deployment of $8.4 million in New Markets Tax Credit
allocations (NMTC) in August.” Expenses directly related to this
fee income totaled $154,000. Albina will continue to collect fee
income of $36,000 annually during the next six years for managing
financial, audit, and compliance activities related to the NMTC
program.
“Our steady return to profitability reflects the hard work of
our team and we continue to work towards improving operating
performance. As a consequence, we are seeing strong interest from
investors in our efforts to raise new capital,” added Cebula.
Financial Highlights (at or for the period ended September
30, 2012):
- Albina earned $0.19 per share in the
third quarter of 2012 and $0.27 per share for the first nine months
of 2012.
- Net income increased 168% to $362,000
for the first nine months of 2012 compared to $135,000 for the like
period a year ago.
- In August 2012, Albina deployed $8.4
million of New Markets Tax Credit (NMTC) allocations generating
$456,000 of fee income, contributing to third quarter revenues of
$1.96 million.
- Deposits totaled $119.7 million,
compared to $123.8 million at the end of the preceding quarter and
$122.2 million at September 30, 2011. Non-interest-bearing deposits
grew 15% year-over-year and accounted for 32% of total deposits at
September 30, 2012.
- Total assets were $130.3 million,
compared to $134.2 million at the end of the preceding quarter and
$134.4 million a year ago.
- Loans totaled $76.2 million at quarter
end, compared to $84.1 million at June 30, 2012, and $96.7 million
at September 30, 2011.
- Interest expense for the quarter
declined 35% to $229,000 from $355,000 during the like quarter a
year ago, primarily due to a shift in deposit mix out of higher
cost certificates of deposit into less expensive checking and money
market products.
- Net interest margin (NIM) expanded 4
basis points to 3.65% in the third quarter of 2012, from 3.61% in
the preceding quarter and was down from 4.18% in the third quarter
a year ago. Year-to-date, NIM was 3.80% compared to 4.54% in the
first nine months of 2011.
Credit Quality
“We have been focusing significantly on improving credit quality
over the years and as a consequence, it was not necessary to record
a loan loss provision in the second or third quarter of 2012,”
Cebula commented. Reserves remained ample with allowance for loan
and lease losses at $2.8 million, or 3.64% of gross loans at
September 30, 2012.
Key credit metrics further improved during the quarter with
nonperforming assets (NPAs), consisting of nonaccrual loans, other
real estate owned (OREO) and loans delinquent 90 days or more,
declining significantly to $4.1 million, or 3.13% of total assets
at September 30, 2012, compared to $6.9 million, or 5.13% of total
assets a year ago. At June 30, 2012, NPAs were $4.4 million, or
3.29% of total assets. $1.0 million, or 38% of loans classified as
NPAs, were current on their payments at quarter end. These NPAs are
classified as nonaccrual loans due to cash flow deficiencies for
properties, which the borrowers are supplementing from other
sources.
Nonperforming loans (NPLs) decreased 40% during the quarter to
$2.6 million, compared to $4.4 million at the end of the preceding
quarter, and dropped 57% from $6.1 million at the end of the third
quarter a year ago. NPLs represented 3.46% of total loans at
September 30, 2012, compared to 5.25% of total loans three months
earlier and 6.30% a year ago. “The decline in NPLs during the
quarter was attributable to foreclosing on nonperforming loans and
converting them to OREO,” said Cebula. “We foreclosed on four
properties during the quarter, and have an offer on one fully
operating business. We anticipate the sale to close during the
fourth quarter. We will soon be actively marketing the remaining
three properties and, as the economy improves, we believe we can
sell these properties within our communities.” OREO accounted for
$1.4 million of NPAs at September 30, 2012. Albina had no OREO at
June 30, 2012 and $795,000 at the end of the third quarter a year
ago.
Net charge offs for the third quarter of 2012 totaled $13,000,
or 0.06% of average loans during the quarter, down sharply from
$243,000, or 0.99% of average loans during the third quarter of
last year. Recoveries from previously charged off loans reduced net
charge-offs by $111,000 in the first nine months of 2012.
The allowance for loan and lease losses (ALLL) was $2.8 million,
or 3.64% of total loans at September 30, 2012, compared to $3.1
million, or 3.25% of total loans a year ago. At June 30, 2012, the
ALLL was $2.8 million, or 3.31% of total loans. No provision for
loan and lease losses was recorded during the second or third
quarter of 2012, compared to a provision of $400,000 taken in the
third quarter of 2011.
Balance Sheet
Albina Community Bancorp’s assets totaled $130.3 million at
September 30, 2012, compared to $134.2 million at June 30, 2012 and
$134.4 million at September 30 2011.
The investment securities portfolio increased 59% to $30.8
million at September 30, 2012, compared to $19.4 million at June
30, 2012 and grew 63% from $18.8 million a year ago. At the end of
September 2012, the investment portfolio was comprised primarily of
government-sponsored mortgage-backed securities that have an
estimated average life of 2.2 years.
“We have been dedicated to growing our loans over the last
several quarters. We see loan demand starting to improve although,
as a result of two large loans paying off, gross loans are down
this quarter,” commented Cebula. “We maintain strong liquidity to
meet the demands of credit-worthy customers by holding short-term
liquid securities, and we also have access to lines of credit at
the Federal Home Loan Bank and the Federal Reserve Bank.” Loans,
net of reserves, were $73.5 million at quarter end, compared to
$81.3 million at June 30, 2012, and $93.6 million at September 30,
2011.
Albina’s loan portfolio remains well-diversified with a wide
variety of borrowers and collateral. Approximately 77% of the loan
portfolio is secured by either residential or commercial real
estate, with approximately 41% of Albina’s commercial real estate
(CRE) being owner-occupied. The following table shows the changes
in the loan portfolio in each category:
(Dollars in thousands)
(Certain loan balances have been
reclassified between categories in the periods presented.)
As of the Date Ended
September 30, June 30, September
30,
2012 2012 2011 (unaudited)
(unaudited) (unaudited)
Loans
Commercial business $ 16,449 21.6 % $ 17,004 20.2 % $ 21,307 22.0 %
R/E construction - 0.0 % - 0.0 % - 0.0 % Commercial R/E 42,785 56.1
% 47,151 56.1 % 49,020 50.7 % Multifamily residential 2,441 3.2 %
2,464 2.9 % 2,783 2.9 % One to four family residential 13,539 17.8
% 16,488 19.6 % 16,363 16.9 % Consumer 1,104 1.4 % 1,087 1.3 %
7,364 7.6 % Unearned Loan Fees (109 ) -0.1 % (120 )
-0.1 % (121 ) -0.1 % Total Loans 76,209 100.0 % 84,073 100.0
% 96,715 100.0 %
Total deposits were $119.7 million at the end of September 2012,
compared to $123.8 million at June 30, 2012 and $122.2 million a
year ago. Noninterest-bearing deposits at September 30, 2012, were
up 15% from a year ago and interest-bearing deposits grew 9%.
Savings account balances were up 32% from year ago levels, while
certificates of deposit dropped 30%.
At the end of the third quarter of 2012, noninterest-bearing
deposits accounted for 32% of total deposits, interest-bearing
accounts represented 37% and savings accounts were 7%. Certificates
of deposits (CDs) accounted for 25% of total deposits at September
30, 2012; a significant decline from year ago levels when CDs
represented 35% of total deposits. “We continue to see strong
support from our neighboring communities who want to support their
local community bank,” said Cebula. “This local support has
contributed to our ability to allow higher rate, out-of-area, CDs
leave the bank as they mature. We had nearly $7.0 million in such
maturities during July but our total deposits only dropped by
approximately $4.1 million during the quarter. As Portland’s only
certified community development bank, we are proud to support the
financial needs of the small businesses in the communities we
serve.”
Review of Operations
Total revenue (net interest income plus non-interest income)
increased 32% to $1.96 million in the third quarter, compared to
$1.48 million in the preceding quarter, and grew 13% from $1.74
million in the quarter ended September 30, 2011.
Net interest income was $1.1 million both in the second and
third quarter of 2012; because of improvements in loan quality and
the adequacy of the ALLL, no loan loss provision was recorded in
either quarter. After a $400,000 provision for loan losses in the
third quarter of 2011, net interest income was $884,000. For the
first nine months of 2012, after a $60,000 loan loss provision, net
interest income was $3.4 million, compared to $4.3 million for the
first nine months of 2011, which was after a provision of $500,000.
The decline in net interest income year-to-date was primarily due
to declining loan balances and the lower yields earned on those
balances as they shifted into cash or short-term investments.
“While our net interest margin remains under pressure because of
the historically low interest rate environment, the margin was up 4
basis points from the preceding quarter but down from a year ago,”
said Cebula. Albina’s net interest margin (NIM) was 3.65% for the
third quarter, compared to 3.61% in the preceding quarter and 4.18%
in the third quarter a quarter a year ago. For the first nine
months of 2012, the NIM was 3.80% compared to 4.54% for the first
nine months of 2011.
Primarily due to the $456,000 of NMTC fee income, non-interest
income was $864,000 in the third quarter of 2012. Non-interest
income in the second quarter was $391,000, compared to $454,000 in
third quarter of 2011. In the first nine months of 2012,
non-interest income was $1.6 million, compared to $1.3 million in
the first nine months of 2011. Although the NMTC fee income was a
main factor in the increased non-interest income year-to-date,
merchant and card interchange income was up 10% from the preceding
quarter and 11% year-over year.
Non-interest expense increased 16% to $1.7 million for the third
quarter of 2012, compared to $1.5 million for the third quarter a
year ago. Year-to-date, non-interest expense declined 6% to $4.6
million from $4.9 million for the first nine months of 2011. “Total
non-interest expense increased for the third quarter primarily due
to increased legal and professional expenses related to the NMTC
fee income we received in the quarter,” added Cebula. “Other
expenses impacting the quarter were legal expenses and unpaid
property taxes related to the OREO properties.”
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. Track Albina’s community involvement by viewing its
scorecard at: www.albinabank.com/company/scorecard.cfm.
Albina Community Bank opened in December 1995 as the sole
subsidiary of Albina Community Bancorp. Albina is one of
approximately 60 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 Oregon. 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 Balance Sheet
(Dollars in thousands)
As of the Date Ended September 30,
June 30, September 30, 2012
2012 2011 (unaudited) (unaudited)
(unaudited)
ASSETS Cash and due from banks $
386 $ 312 $ 368 Interest-bearing deposits 14,030 22,956 10,324
Federal funds sold 6 28
21 Total cash and cash equivalents 14,422 23,297
10,713 Investment securities 30,798 19,418 18,844 Federal
Home Loan Bank Stock 1,313 1,325 1,325 Loans 76,209 84,073
96,715 Allowance for loan and lease losses (2,774 )
(2,787 ) (3,142 ) Net loans 73,434 81,286
93,573 Property and equipment, net 4,596 4,656 4,829 Other
real estate owned 1,439 - 795 Other assets 4,291
4,253 4,270
Total assets $ 130,295 $ 134,235
$ 134,350
LIABILITIES AND EQUITY
Deposits Non-interest bearing deposits $ 38,169 $ 35,457 $
33,291 Interest-bearing accounts 44,109 44,961 40,378 Savings
accounts 7,832 7,460 5,948 Time certificates 29,598
35,908 42,574 Total
deposits 119,708 123,786 122,191 Liabilities Other
borrowings 3,004 3,032 5,117 Subordinated debentures 6,186 6,186
6,186 Other liabilities 2,451 2,436
2,235 Total liabilities 131,349 135,441
135,729 Shareholders' equity: Preferred stock 2,482 2,482
2,482 Common stock 8,611 8,611 8,611 Retained earnings (12,184 )
(12,436 ) (12,703 ) Accum. other comp. income 37
137 231 Total
shareholders' equity (1,054 ) (1,206 )
(1,380 ) Total
liabilities and equity $ 130,295 $ 134,235
$ 134,350
FINANCIAL RATIOS Loans /
deposits 64 % 68 % 79 % Non-performing loans / total loans 3.46 %
5.25 % 6.30 % Reserve / loans 3.64 % 3.31 % 3.25 %
Albina
Community Bancorp Statement of Operations
(Dollars in thousands, except per-share
data)
Three Months Ended Nine Months Ended
September 30, June 30, September
30, September 30, September 30,
2012 2012 2011 2012
2011 (unaudited) (unaudited)
(unaudited) (unaudited) (unaudited)
INTEREST INCOME
Interest and fees on loans $ 1,231 $ 1,277 $ 1,554 $ 3,973 $ 5,149
Interest on investment securities 75 43 76 179 289 Other interest
income 14 12 7
34 20 Total interest
income 1,320 1,332 1,638 4,186 5,458
INTEREST EXPENSE
Interest on deposits 113 130 229 403 793 Interest on borrowings
116 116 126
346 386 Total interest expense
229 247 355
749 1,179
NET INTEREST
INCOME 1,091 1,086 1,284 3,437 4,280 Loan loss provision
- - 400 60
500 Net interest income after provision
1,091 1,086 884 3,377 3,780
NON-INTEREST INCOME
Service charges and fees 144 150 145 445 433 Government payments
and contracts - - - - - Loan fees on brokered loans - - 5 - 5
Merchant & card interchange income 119 121 108 350 314 Realized
gain/(loss) on sale of investment securities - - 1 - 4 Realized
gain/(loss) on sale of Loans & OREO - - 87 (34 ) 205 Other
income 601 120 108
839 320 Total
non-interest income 864 391 454 1,600 1,282
NON-INTEREST
EXPENSE Salaries and employee benefits 617 682 663 1,852 2,142
Occupancy and equipment 168 172 162 508 521 Legal and professional
304 116 139 618 556 Marketing 33 40 33 104 109 Data processing 187
195 184 564 568 Loan and OREO 139 24 117 234 231 FDIC assessment
109 111 92 331 371 Other 146 125
74 404 412
Total non-interest expense 1,703 1,465 1,464 4,615 4,912
PRETAX INCOME 252 12 (126 ) 362 150 Provision for income
taxes - - -
- 15
NET INCOME $ 252
$ 12 $ (126 ) $ 362 $ 135
Earnings per share: Basic $ 0.19 $ 0.01 $ (0.10 ) $
0.27 $ 0.10 Diluted $ 0.19 $ 0.01 $ (0.10 ) $ 0.27 $ 0.10
Weighted average shares outstanding: Basic 1,073,310 1,073,310
1,073,310 1,073,310 1,073,310 Diluted 1,073,310 1,073,310 1,073,310
1,073,310 1,073,310
FINANCIAL RATIOS Return on
average assets 0.77 % 0.04 % -0.36 % 0.37 % 0.13 % Efficiency ratio
87 % 99 % 84 % 92 % 88 % Net interest margin 3.65 % 3.61 % 4.18 %
3.80 % 4.54 %
Albina Community Bancorp Selected
Highlights
(Dollars in thousands)
(Certain loan balances have been
reclassified between categories in the periods presented.)
As of the Date Ended
September 30, June 30, September
30,
2012 2012 2011 (unaudited)
(unaudited) (unaudited)
Loans
Commercial business $ 16,449 21.6 % $ 17,004 20.2 % $ 21,307 22.0 %
R/E construction - 0.0 % - 0.0 % - 0.0 % Commercial R/E 42,785 56.1
% 47,151 56.1 % 49,020 50.7 % Multifamily residential 2,441 3.2 %
2,464 2.9 % 2,783 2.9 % One to four family residential 13,539 17.8
% 16,488 19.6 % 16,363 16.9 % Consumer 1,104 1.4 % 1,087 1.3 %
7,364 7.6 % Unearned Loan Fees (109 ) -0.1 % (120 )
-0.1 % (121 ) -0.1 % Total Loans 76,209 100.0 % 84,073 100.0
% 96,715 100.0 %
ASSET QUALITY Non-Performing
loans: Loans past due 90 days or more $ - $ - $ 81 Non-accrual
loans 2,639 4,411 6,013
Total non-performing loans 2,639 4,411 6,095 OREO 1,439
- 795 Total non performing
assets $ 4,078 $ 4,411 $ 6,890 Non
performing assets / total assets 3.13 % 3.29 % 5.13 %
Beginning ALLL - from previous FYE $ 2,910 $ 2,910 $ 3,298
Provision for loan loss expense 60 60 500 Loan charge offs (307 )
(265 ) (921 ) Loan recoveries 111 82
265 (Charge offs), net of recoveries (196 )
(183 ) (656 ) Ending ALLL - YTD 2,774
2,787 3,142 Average Loans
Quarter 80,203 84,806 97,836 YTD 85,283 87,851 103,489 Net
charge-off Quarter 13 6 243 YTD 196 183 656 Net charge-offs (a)
Quarter 0.06 % 0.03 % 0.99 % YTD 0.31 % 0.42 % 0.85 % (a)
Annualized and calculated on average loan balances
Non-accrual loans Residential Real Estate 1,264 2,516 1,000
Commercial Real Estate 1,375 1,814 4,553 Commercial/ Industrial
- 81 460 Total
Non-accrual loans 2,639 4,411 6,013