Columbia Bancorp Reports First Quarter ROE of 15.06%
With 16% Annualized Loan Growth
THE DALLES, Ore., April 24 /PRNewswire-FirstCall/ -- Columbia Bancorp
(Nasdaq: CBBO), the financial holding company for Columbia River Bank, announced
today first quarter earnings and an overview of our long-term expansion into
some of the fastest growing markets in the Northwest. This remains a top
priority in 2007, despite an industry-wide net interest margin compression
driven by a flattening yield curve and an increase in our cost of funds.
Columbia reported net income in the first quarter of $3.5 million, or $0.34 per
diluted share, compared to $3.7 million, or $0.37 per diluted share in the first
quarter of 2006. "Our net interest margin has been gradually compressing since
the second quarter of 2006," explained Columbia Bancorp President and CEO, Roger
Christensen. "Margin compression is a natural cycle in this business; this cycle
will not dissuade our team from achieving the goal of building long term value
for our customers, shareholders and employees," he added.
FIRST QUARTER 2007 FINANCIAL HIGHLIGHTS
1Q07 Return on Equity (ROE) was 15.06%
1Q07 Return on Assets (ROA) was 1.45%
1Q07 (tax equivalent) Net Interest Margin (NIM) was 5.82%
1Q07 Efficiency Ratio was 57.93%
In this challenging environment of margin compression and a foreseeable
static Fed Funds rate, Christensen said management will continue its major areas
of focus: operational efficiency, well-thought-out branch and administrative
level expansions, the very best people in the right positions, balanced loan and
deposit growth and advanced products and services designed to enhance the
customer experience. "Columbia River Bank's employees have once again voted this
organization one of Oregon's 50 best large companies to work for, as noted in
Oregon Business Magazine's annual survey. Knowing our employees place their
faith in this bank is a driving force in our performance and in management's
strategic plans for the Company's future," added Christensen. Columbia Bancorp's
Chief Financial Officer, Greg Spear, said it was worthwhile to note Columbia
ranked 23rd in the April, 2007 issue of US Banker magazine's Top 200 Mid-Tier
Banks Ranked by Three-Year Return on Equity (ROE), with a three-year average ROE
of 18.41%.
INCOME STATEMENT PERFORMANCE
Revenue (net interest income plus non-interest income) grew in the first
quarter to $15.6 million, compared to $14.3 million in the same quarter a year
ago, an increase of $1.3 million or 9%. The net interest margin for the first
quarter dropped 55 basis points to 5.82%, compared to 6.37% in the first quarter
2006. Non-interest expense for the quarter rose to $9.0 million, up $1.2
million, or 16%, from $7.8 million in the same period last year. As expected,
the increase was due in large part to increased salary, benefit and occupancy
expenses related to the Company's expansion into Yakima, Pasco, Sunnyside and
Vancouver, Washington. Increases in other non-interest expense were attributable
to management of a single problem loan, branch and credit card losses, investor
relations and maintenance and repairs.
The provision for loan losses increased 86% in the first quarter of 2007,
compared to the same quarter of 2006. The provision for loan losses was $1.0
million for the period ending March 31, 2007, up $475,000 from the first quarter
of the prior year. The provision included a significant charge-off of a loan to
a single borrower. Management affirmed Columbia is appropriately reserved for
the remaining balance on this loan to a single borrower related to the potato
industry. Columbia's efficiency ratio, a measurement of operating effectiveness,
increased from 54.47% in the first quarter of 2006 to 57.93% in the first
quarter of 2007. The efficiency ratio measures overhead expenses as a percentage
of total revenues and is calculated by dividing non-interest expense by net
interest and non-interest income. The change in the efficiency ratio is due
primarily to an increase in overhead expenses.
BALANCE SHEET PERFORMANCE
Columbia's loan portfolio grew 24% to $847.1 million in the first quarter
of the year, compared to $684.1 million in the like quarter of 2006. Year-
over-year growth continues to outperform strategic initiatives. Chief Banking
Officer Shane Correa explained, "We experienced an increase over historical
growth patterns in our loans from the end of the year through the first quarter
of 2007. Loans grew $34 million, or 4%, due to strong demand for real estate
loans." Total assets dropped slightly (2%) from December 31, 2006 to March 31,
2007, due primarily to a reduction in our interest bearing deposits with other
financial institutions, but increased from $856.7 million at the end of the
first quarter last year, to $1.0 billion as of March 31, 2007, a 19% rise.
On the deposit side, Columbia continued to take a balanced approach to the
increasingly competitive market environment. "The banking industry is facing
challenges in gathering deposits," said Craig Ortega, Columbia River Bank's
President. "We are responding to this challenge by hiring a team of dedicated
deposit-gathering personnel, ramping up our marketing strategies and improving
our core operational systems. We will also enhance our presence in the market
place by continuing to provide superior customer service." Total deposits for
the quarter ended March 31, 2007 jumped $171.8 million, or 24%, compared to the
same quarter in the prior year. Deposit growth from December 31, 2006 to the
first quarter of this year experienced a 4% gain of $35.3 million.
Shareholders' equity increased 16% or $13.2 million in the first quarter
to $93.7 million or $9.38 per share, compared to $80.5 million or $8.15 per
share at the end of the first quarter of 2006. Tangible book value per share was
$8.64 and $7.40 for the same respective periods.
"Overall," said Spear, "our balance sheet is behaving in accordance with
the rest of the industry in light of the challenges we faced in the first
quarter and will continue to face throughout the year. Our goal is to maintain
liquidity and focus on growth for the remainder of this year."
LOOKING TO THE FUTURE
"Management of Columbia Bancorp will be concentrating its efforts
throughout the remainder of 2007 on adjusting to the flat yield curve and the
compressing margin, as well as carefully monitoring our overhead expenses. At
the same time, we remain committed to our expansion plans. By the end of this
year, we anticipate the opening of at least one temporary branch as well as the
completion of our satellite support office in Vancouver, Washington. We have had
an exciting and positive response to our move into Vancouver, and we are looking
forward to a rewarding relationship with our new business partners and neighbors
in the community," stated Roger Christensen. "We continue to experience growing
consumer confidence in the Pacific Northwest regions, with employment and
housing keeping pace. Management remains dedicated to being a high performing
bank and the premier community Bank of choice for our customers, shareholders
and employees. We invite all shareholders and interested investors to join us
Thursday, April 26th, for our annual shareholder's meeting, which will be held
at The Discovery Center, The Dalles, Oregon, at 5:45 p.m."
EARNINGS TELECONFERENCE AND WEBCAST
Columbia will conduct a Teleconference and Webcast on Wednesday, April 25,
2007, at 12:00 noon Pacific Time (3:00 p.m. Eastern Time) when management, led
by Roger Christensen, will discuss results for the first quarter 2007. To
participate in the call, dial 1-888-404-1740; the conference ID is 3837465. The
live Webcast can be heard by going to Columbia Bancorp's web site,
www.columbiabancorp.com, and clicking on Presentations/Webcast under the
Investor Relations section. The call replay will be available starting two hours
after the completion of the live call until April 30, 2007. To listen to the
replay dial 1-800-642-1687 and use access code 3837465. The Webcast will be
archived on Columbia Bancorp's website.
ABOUT COLUMBIA BANCORP
Columbia Bancorp (www.columbiabancorp.com) is the financial holding
company for Columbia River Bank, which operates 21 branches located in The
Dalles (2), Hood River, Bend (3), Madras, Redmond (2), Pendleton, Hermiston,
McMinnville, Lake Oswego, Canby, and Newberg, Oregon, and in Goldendale, White
Salmon, Sunnyside, Yakima, Pasco and Richland, Washington. In addition, Columbia
River Bank has three limited service branches located in retirement homes, one
in Bend, Oregon and two in McMinnville, Oregon. To supplement its community
banking services, Columbia River Bank also provides mortgage-lending services
through Columbia River Bank Mortgage Team and brokerage services through CRB
Financial Services Team.
FORWARD LOOKING STATEMENTS
This press release contains various forward-looking statements about plans
and anticipated results of operations and financial condition relating to
Columbia Bancorp. These statements include statements about management's present
plans and intentions about our strategy, growth, and deployment of resources,
and about management's expectations for future financial performance. Readers
can sometimes identify forward-looking statements by the use of prospective
language and context, including words like "may", "will", "should", "expect",
"anticipate", "estimate", "continue", "plans", "intends", or other similar
terminology. Because forward-looking statements are, in part, an attempt to
project future events and explain management's current plans, they are subject
to various risks and uncertainties, which could cause our actions and our
financial and operational results to differ materially from those set forth in
such statements. These risks and uncertainties include, without limitation, our
ability to estimate accurately the collectibility of our loans, economic and
other factors that affect the collectibility of our loans, the impact of
competition and fluctuations in market interest rates on Columbia's revenues and
margins, management's ability to open and generate growth from new branches, and
other risks and uncertainties that we have in the past, or that we may from time
to time in the future, detail in our filings with the Securities and Exchange
Commission ("SEC"). Information presented in this release is accurate as of the
date the report was filed with the SEC, and we cannot undertake to update our
forward-looking statements or the factors that may cause us to deviate from
them, except as required by law.
INCOME STATEMENT
(Unaudited)
(In thousands, except per share data and ratios)
Three Months Ended %
March 31, Change
2007 2006
Interest income $18,923 $15,558 22%
Interest expense 6,010 3,600 67%
Net interest income before
provision for loan losses 12,913 11,958 8%
Provision for loan losses 1,025 550 86%
Net interest income
after provision for loan losses 11,888 11,408 4%
Non-interest income:
Service charges and fees 1,002 1,130 -11%
Mortgage loan origination income 1,013 638 59%
Financial services revenue 220 199 11%
Credit card discounts and fees 115 106 8%
Other non-interest income 296 246 20%
Total non-interest income 2,646 2,319 14%
Non-interest expense:
Salaries and employee benefits 5,042 4,577 10%
Occupancy expense 1,123 866 30%
Other non-interest expense 2,849 2,333 22%
Total non-interest expense 9,014 7,776 16%
Income before provision for income taxes 5,520 5,951 -7%
Provision for income taxes 2,067 2,229 -7%
Net income $3,453 $3,722 -7%
Earnings per common share
Basic $0.35 $0.38 -8%
Diluted 0.34 0.37 -8%
Cumulative dividend per common share 0.10 0.09 11%
Book value per common share $9.38 $8.15
Tangible book value per common share (1) 8.64 7.40
Weighted average shares outstanding
Basic 9,964 9,853
Diluted 10,199 10,115
Actual shares outstanding 9,992 9,880
Quarter Ended
March 31, March 31,
RATIOS (annualized) 2007 2006
Interest rate yield on interest-
earning assets, tax equivalent 8.52% 8.28%
Interest rate expense on interest-
bearing liabilities 3.72% 2.75%
Interest rate spread, tax equivalent 4.79% 5.53%
Net interest margin, tax equivalent 5.82% 6.37%
Efficiency ratio (2) 57.93% 54.47%
Return on average assets 1.45% 1.84%
Return on average equity 15.06% 19.01%
Average equity / average assets 9.62% 9.69%
(1) Total common equity, less goodwill and other intangible assets, divided by
actual shares outstanding.
(2) Non-interest expense divided by net interest income and non-interest
income.
BALANCE SHEET
(Unaudited)
(In thousands)
Year Year
over to
Year Date
March 31, March 31, % December 31, %
ASSETS 2007 2006 Change 2006 Change
Cash and cash equivalents $93,497 $106,970 -13% $148,514 -37%
Investment securities 39,791 35,776 11% 37,704 6%
Loans:
Commercial loans 144,000 105,109 37% 136,582 5%
Agricultural loans 86,170 82,363 5% 86,218 -
Real estate loans 309,940 295,378 5% 347,526 -11%
Real estate loans -
construction 276,099 175,594 57% 212,826 30%
Consumer loans 11,982 13,201 -9% 12,540 -4%
Loans held for sale 8,323 4,079 104% 7,538 10%
Other loans 10,588 8,399 26% 10,212 4%
Total gross loans 847,102 684,123 24% 813,442 4%
Unearned loan fees (1,315) (1,404) 6% (1,428) 8%
Allowance for loan losses (10,055) (8,866) -13% (10,143) 1%
Net loans 835,732 673,853 24% 801,871 4%
Property and equipment, net 19,877 16,748 19% 18,089 10%
Goodwill 7,389 7,389 - 7,389 -
Other assets 20,159 15,977 26% 19,621 3%
Total assets $1,016,445 $856,713 19% $1,033,188 -2%
LIABILITIES
Deposits:
Non-interest bearing
demand deposits $217,299 $214,561 1% $235,037 -8%
Interest bearing demand
deposits 289,716 293,187 -1% 313,433 -8%
Savings accounts 35,356 42,666 -17% 35,456 -
Time certificates 351,994 172,183 104% 275,140 28%
Total deposits 894,365 722,597 24% 859,066 4%
Borrowings 20,424 47,416 -57% 74,138 -72%
Other liabilities 7,951 6,208 28% 8,966 -11%
Total liabilities 922,740 776,221 19% 942,170 -2%
Shareholders' equity 93,705 80,492 16% 91,018 3%
Total liabilities and
shareholders' equity 1,016,445 $856,713 19% $1,033,188 -2%
ADDITIONAL FINANCIAL INFORMATION
(Unaudited)
(In thousands, except ratios)
NON-PERFORMING ASSETS March 31, 2007 March 31, 2006
Delinquent loans on non-accrual status $3,421 $2,808
Delinquent loans on accrual status - -
Restructured loans 48 36
Total non-performing loans 3,469 2,844
Other real estate owned - -
Total non-performing assets $3,469 $2,844
Total non-performing assets / total assets 0.34% 0.33%
Quarter Ended
ALLOWANCE FOR CREDIT LOSSES March 31, 2007 March 31, 2006
Allowance for loan losses, beginning
of period $10,143 $9,526
Provision for loan losses 1,025 550
Recoveries 80 50
Charge offs (1,193) (570)
Reclassify liability for unfunded
loan commitments - (690)
Allowance for loan losses, end of
period 10,055 8,866
Liability for unfunded loan
commitments 838 -
Allowance for credit losses $10,893 $8,866
Allowance for loan losses / gross
loans 1.19% 1.30%
Allowance for credit losses / gross
loans 1.29% 1.40%
Non-performing loans / allowance for
loan losses 34.50% 32.08%
Quarter Ended
FINANCIAL PERFORMANCE March 31, 2007 March 31, 2006
Average interest-earning assets $904,693 $766,141
Average gross loans 827,908 686,339
Average assets 966,285 819,172
Average interest-bearing liabilities 654,611 531,185
Average interest-bearing deposits 617,226 501,250
Average deposits 832,297 707,348
Average liabilities 873,292 739,782
Average equity 92,993 79,390
SOURCE Columbia Bancorp
-0- 04/24/2007
/CONTACT: Roger L. Christensen, President and CEO, +1-541-298-6633, or
rchristensen@columbiabancorp.com, or Greg B. Spear, Executive Vice President,
CFO and CAO, +1-541/298-6612 or gspear@columbiabancorp.com, both of Columbia
Bancorp/
/Web site: http://www.columbiabancorp.com/ (CBBO)