THE DALLES, Ore., Nov. 16 /PRNewswire-FirstCall/ -- Columbia Bancorp CBBO, the bank holding company for Columbia River Bank, today announced a loss for the third quarter of 2009. The Bank has continued its efforts to reduce its concentration of residential construction and development lending by pursuing resolution of non-performing assets, aggressively recognizing loan losses and charging-off impairments. For the third quarter of 2009, Columbia recognized $20.3 million of provision for loan losses which, combined with $1.3 million of FDIC premiums and state assessments, resulted in a net loss of $21.9 million, or $2.18 per diluted share. "Our efforts to liquidate non-performing assets, combined with modest improvements in the real estate market, resulted in the sale of a number of properties, with additional sales closing in October," explained Terry Cochran, President and CEO of Columbia. "The support of our customers remains high, reflected in the growth of non-interest bearing deposits and over 1,300 retail accounts opened during the quarter. We were also pleased to add several seasoned and experienced bankers to our team, including two former bank executives."
During the quarter, Columbia announced the hiring of Andrew Gerlicher as Senior Vice President and Business Banking Team Leader for Central Oregon. Mr. Gerlicher, who has 27 years of banking experience, had previously been leading the formation of Crown Point National Bank in Bend, Oregon. He will oversee Columbia River Bank's credit staff in Central Oregon and assist with resolution of non-performing loans. In addition, Columbia hired Roy Lewis as Special Credits Officer to assist with the resolution of non-performing loans. Mr. Lewis has 40 years of banking experience which included serving as President of Hood River County Bank and two other community banks. He has also held the Chief Credit Officer position at two community banks.
Non-interest bearing deposits increased $9.1 million, or 5%, compared to June 30, 2009. Total deposits increased $17.3 million, or 2%, compared to June 30, 2009. During the quarter, Columbia River Bank introduced a new value-oriented checking account product allowing customers to take advantage of savings and discounts for a wide range of products and services, including restaurants, hotels and retail stores.
Columbia River Bank's liquid assets as a percentage of total assets measured 21.7% as of September 30, 2009, compared to 17.5% as of June 30, 2009. Columbia is investing excess liquidity in select higher earning assets while balancing against anticipated liquidity needs in the short-term.
Columbia's actions to add staffing and other resources to its management of non-performing assets are yielding positive results. During the quarter, eight other real estate owned ("OREO") properties were sold for $3.0 million and after quarter-end Columbia finalized agreements for additional sales of $3.4 million. Columbia is having success restructuring terms with qualifying borrowers in order to return loans to performing status. Columbia recognized $20.3 million in provision for loan losses during the third quarter of 2009, primarily due to losses on a previously identified problem agricultural credit, continued losses from residential construction and lot development loans and the application of higher estimated loss rates in its allowance methodology. Columbia also recognized $526,000 of impairment charges on OREO properties to adjust carrying amounts to updated appraisal values.
Non-performing assets totaled $123.2 million as of September 30, 2009, compared to $122.6 million as of June 30, 2009. Non-performing assets included non-accrual loans totaling $103.2 million as of September 30, 2009. Residential lot development and construction loans comprised 66% of non-accrual loans as of September 30, 2009. OREO totaled $15.2 million as of September 30, 2009, compared to $11.3 million as of June 30, 2009. During the third quarter, eight OREO properties totaling $3.0 million were sold at a net loss of $277,000; $8.1 million of foreclosed properties were added to OREO; and impairment charges of $526,000 were recognized on five properties to adjust carrying amounts to updated appraisal values. "Recent national and regional economic news reports a leveling off in residential real estate valuations. Another positive indicator is that loans in our portfolio past-due 30 - 89 days have declined significantly during the last quarter," said Craig Hummel, Chief Credit Officer, Columbia River Bank.
Columbia's net interest income totaled $6.8 million for the third quarter of 2009, compared to $6.6 million for the second quarter of 2009, a 2% increase primarily attributable to a decrease in interest expense associated with matured brokered deposits. The net interest margin declined slightly to 2.71% for the third quarter of 2009, compared to 2.74% for the second quarter of 2009. The decrease is primarily due to a shift in the earning asset mix from overall higher yielding loans to lower yielding cash and liquid investments resulting from Columbia's strategic initiative to maintain and improve liquidity. Columbia reversed $1.2 million of interest income from loans placed on non-accrual status. Interest income for the third quarter of 2009 would have been $2.6 million higher had non-accrual loans performed according to terms. Lower deposit rates and repayment of higher cost brokered deposits partially offset the decrease in the net interest margin. During the quarter, Columbia repaid $30.9 million of brokered certificates of deposit that had a weighted-average cost of 4.43%.
Columbia's quarterly report on Form 10-Q filed with the Securities and Exchange Commission includes additional information and discussion relating to its financial results for the quarter ended September 30, 2009. The Form 10-Q is available at http://www.columbiabancorp.com or a copy can be requested by emailing investorrelations@columbiabancorp.com or by calling 541/298.3191.
ABOUT COLUMBIA BANCORP
Columbia Bancorp (www.columbiabancorp.com) is the bank 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, Canby, and Newberg, Oregon, and in Goldendale, White Salmon, Sunnyside, Yakima, Pasco, Richland, and Vancouver, Washington. To supplement its community banking services, Columbia River Bank also provides brokerage services through CRB Financial Services Team.
FORWARD LOOKING STATEMENTS
This press release may contain 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 maintain and grow our deposit base in the face of continuing uncertainty surrounding the financial institutions industry and our markets in particular; our ability to acquire and maintain capital sufficient to absorb the losses inherent in our loan portfolio and support our continuing operations; our ability to raise additional capital to address the risk of exacerbated or protracted economic declines; our ability to estimate accurately the collectability of our loans and mitigate the potential risks associated with acquisition and sale of any underlying collateral; economic and other factors which affect the collectability of our loans generally; our ability to address the risks associated with the geographic and industry-specific concentrations of our loan portfolio; the impact of banking laws and regulations, competition, and fluctuations in market interest rates on Columbia's revenues and margins, management's ability to generate growth from core operations in the face of the announced staffing reductions, 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 on which the release was issued, 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.
SOURCE Columbia Bancorp
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