BEO Bancorp Reports 2013 Earnings

BEO Bancorp (OTCBB:BEOB) and its subsidiary, Bank of Eastern Oregon, announced consolidated year end 2013 earnings of $2,763,000, an increase of 12.2% when compared to $2,462,000 in 2012. Basic earnings per share increased 3.1% from $2.55 in 2012 to $2.63 in 2013. Total assets increased 5.0% from $284.8 million to $299.2 million. Net loans ended 2013 at $240.1 million, up 6.8% year over year. Deposits increased 4.8% from $252.9 million to $265.0 million.

“2013 was a very good year for the Bank, with net income at an all-time high. We are an agricultural and natural resource based institution, and when those related industries perform well, so do main street businesses and so does our Bank. Even though the 2013 harvest as a whole was not as good as the past few years, loan portfolio performance is still strong. It is important to note that a dry winter warrants caution over the 2014 eastern Oregon ag conditions. We are also keeping an eye on the recovery of the national and global economy and the potential impact on the interest rate environment,” said President and CEO Jeff Bailey.

“Total shareholders’ equity increased 17.0% year over year to $23.019 million. Our Tier 1 capital ratio of 10.02% matches up favorably to our peer banks across the nation and continues to make us the highest capitalized bank in eastern Oregon,” said Chief Financial Officer Mark Lemmon. “Return on Average Assets is 0.95% and Return on Average Equity is 12.94%, compared to 0.90% and 13.23%, respectively, year over year.”

Chief Operations Officer Gary Propheter said, “With the prolonged low interest rate environment, continued growth in year over year deposits is substantial. We continue to look for ways to enhance the services we offer our customers. In 2013 we expanded our ATM network, with deployment of three “smart” (deposit taking) ATMs in Monument, Ontario, and at our newest loan production office in Lakeview. The acceptance of the technology by our customers in those locations has been quite favorable.”

“If you really look into the numbers, you will see that we continue to clean up our balance sheet. Other real estate owned is down almost 87% year over year and past dues are at manageable levels. That said, we realize that agriculture is a cyclical business, and we are taking prudent steps to make sure that our loan loss provision is funded at appropriate levels. Our pre-tax, pre-provision income is up 5.8% from 2012,” continued Bailey. “We continue to see good lending opportunities across our system of branches and loan production offices. Our new LPO in Lakeview complements our existing branch in Burns and adds to our vast eastern Oregon presence. We welcome new customers and strive to build on our relationships with existing friends and neighbors. 2013 was a very good year for Bank of Eastern Oregon. We were able to build upon the success of 2011 and 2012. Our success is directly attributable to our excellent team of employees and the support of loyal shareholders and customers,” concluded Bailey.

For further information on the Company or to access internet banking, please visit our website at http://www.beobank.com.

About BEO Bancorp

BEO Bancorp is the holding company for Bank of Eastern Oregon, which operates 12 branches and five loan production offices in eleven eastern Oregon counties. Branches are located in Arlington, Ione, Heppner, Condon, Irrigon, Boardman, Burns, John Day, Prairie City, Fossil, Moro, and Enterprise; loan production offices are located in Hermiston, Ontario, Island City, Pendleton, and Lakeview. Bank of Eastern Oregon also operates a mortgage division. The bank’s website is www.beobank.com.

Forward-Looking Statements

The statements contained in this release that are not historical facts are forward-looking statements based upon management’s current expectations and beliefs concerning future developments and their potential effect on BEO Bancorp. There can be no assurances that future developments affecting BEO Bancorp will be the same as those anticipated by management.

Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These risks and uncertainties include, but are not limited to:

(1) Competitive pressures in the banking and financial industries.

(2) Changes in interest rate environment.

(3) General economic conditions, nationally, regionally, and in operating markets.

(4) Changes in regulatory environment.

(5) Changes in business conditions and inflation.

(6) Changes in securities markets.

(7) Future credit loss experience.

BEO BancorpJeff Bailey, 541-676-0201President and CEOorMark Lemmon, 541-676-0201EVP & CFO

BEO Bancorp (PK) (USOTC:BEOB)
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