Clatsop Community Bank reports fourth quarter 2017 results
Seaside, OR – Clatsop Community Bank (OTC: CLAT), reported a net loss of $79,000 or $0.07 per diluted share, for the three months ended December 31, 2017, compared to net profit of $121,000, or $0.11 per diluted share, for the same period the year prior. For the twelve months ended December 31, 2017, the Bank reported a net profit of $373,000, or $0.34 per diluted share, compared to net profit of $515,000, or $0.48 per diluted share for the same period in 2016. Adjusting for the one-time extraordinary tax item, the Bank earned a net profit of $641,000, or $0.58 per diluted share.
“The Bank recorded a very strong quarter on a pre-tax basis,” said President and CEO Joe Schulte. “Fourth quarter NIBT was $234,000, as compared to $167,000 during the fourth quarter of 2016, an increase of 40.11%. Despite the extraordinary, one-time DTA write-down, we believe the tax law changes signed by President Trump during the quarter will be positive for earnings and capital going forward.”
As a result of the Tax Cuts and Job Act enacted December 22, 2017, Clatsop Community Bank was required to revalue its deferred tax assets and liabilities to account for the future impact of lower corporate tax rates and other provisions of the legislation. Based on its analysis, Clatsop recorded a one-time net tax charge of $268,000, primarily related to the revaluation of these deferred tax items. This increase in income tax expense is reflected in Clatsop’s operating results for the fourth quarter of 2017 and is in addition to the normal provision for income tax related to pre-tax net operating income.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recognized or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
Year-to-Date 2017 Financial Highlights:
Return on Average Assets (ROAA): 0.41%
Net Interest Margin (TE)(NIM): 3.93%
Efficiency Ratio: 74.57%
Total assets of $90.1 million as of December 31, 2017 increased $4.4 million, or 5.13%, compared to $85.7 million in assets a year ago.
Loans, net of unearned income, increased $6.7 million to $61.5 million at December 31, 2017, or 12.23% compared to $54.8 million a year ago. The allowance for loan losses as of December 31, 2017 at $641,000, or 1.04% of gross loans, increased $25,000 compared to the $616,000, or 1.12% of gross loans as of December 31, 2016. Year-to-date 2017, the Bank had no charge-offs and $5,000 in loan recoveries. For the same period the year prior, the Bank had $11,000 in charge-offs and $3,000 in loan recoveries.
“We are pleased with strong year-over-year loan growth while maintaining excellent asset quality” Said Chief Credit Officer Cindy Trask. “We are seeing our business community taking advantage of the pro-business environment through expansion. Competition for quality loans has been present throughout 2017 and is expected to continue into 2018,” she added.
The Bank had no other real estate owned (OREO) as of December 31, 2017 or December 31, 2016. The Bank also had no loans on non-accrual as of December 31, 2017 or December 31, 2016.
Deposits and Other Liabilities
Total deposits were $78.1 million as of December 31, 2017, which is an increase of $5.2 million, or 7.13%, compared to $72.9 million in total deposits as of December 31, 2016. Non-interest-bearing deposits increased by $2.8 million or 11.11%, while interest-bearing deposits increased by $2.4 million, or 5.03%, compared to December 31, 2016.
Total borrowings outstanding were $1.5 million as of December 31, 2017, a decrease of $1.0 million, or 40.0%, as compared to $2.5 million as of December 31, 2016.
Net-interest income continued to grow year-over-year. At $863,000 for the three months ended December 31, 2017, net-interest income increased $82,000, or 10.50% over the $781,000 in net-interest income for the same period in 2016. For the twelve months ended December 31, 2017, Net-interest income totaled $3.3 million, an increase of $307,000 or 10.11% compared to $3.0 million as of December 31, 2016. Net-interest margin (TE) at 4.06% for the three months ended December 31, 2017 was 0.16 percentage points higher than the 3.90% net-interest margin (TE) during the same period a year ago. For the twelve months ended December 31, 2017, Net-interest margin (TE) totaled 3.93%, 0.14 percentage points higher than the net-interest margin (TE) of 3.79% a year ago.
Non-interest income, for the three months ended December 31, 2017, at $72,000, decreased $15,000 or 17.24% compared to $87,000 during the same period in 2016. For the twelve months ended December 31, 2017, non-interest income totaled $310,000, a decrease of $3,000 or 0.96% compared to $313,000 as of December 31, 2016. Non-interest expense for the three months ended December 31, 2017, at $705,000, increased $4,000, or 0.57% over the $701,000 during the same period in 2016. For the twelve months ended December 31, 2017, non-interest expenses totaled $2.7 million, an increase of $90,000, or 3.42% compared to $2.6 million as of December 31, 2016.
CFO Steve McCoy said, “The Bank experienced a 10.5% increase year-over-year in our most important revenue component—net interest income. We have carefully managed the Bank’s interest rate risk to be positioned for increasing short-term rates. The Federal Reserve Open Market Committee is expected to continue to raise short term rates in 2019, an action that will continue to benefit Clatsop Community Bank.”
Equity and Capital
Stockholders’ equity, at $10.2 million as of December 31, 2017, increased $100,000, or 0.99% compared to December 31, 2016. The Bank remains categorized as well-capitalized under the regulatory framework for prompt corrective action. The Bank’s tier-one leverage ratio was 11.12% as of December 31, 2017, compared to 11.25% as of December 31, 2016, while its total risk-based capital ratio was 15.65% as of December 31, 2017, compared to 15.94% as of December 31, 2016. To be well-capitalized under prompt corrective action provisions, the Bank must maintain a tier-one leverage ratio of greater than 5.0%, and a total risk-based capital ratio of greater than 10.0%. The Common Equity Tier One ratio under Basel III (Standard Approach) as of December 31, 2017 was 14.72% compared to 14.99% as of December 31, 2016.
“The Board approved a small stock repurchase in late 2017 that resulted in approximately 28,000 shares being retired. This activity helped to stabilize the stock price and was accretive to the remaining shareholders as these shares were purchased at less than book value,” Schulte said. “The Bank continues to effectively compete in Clatsop county as the only true locally-owned community bank.”
About Clatsop Community Bank:
Information about the Company’s stock may be obtained through the OTCQB marketplace at www.otcmarkets.com. Clatsop Community Bank’s stock symbol is CLAT. Clatsop Community Bank was formed in 2008 to serve Clatsop County and neighboring counties as the only locally-owned and operated bank in the area. The Bank has been named among the “100 Best Companies to Work for in Oregon” by Oregon Business Magazine for 2009, 2010, 2011, 2012, 2013, 2014 and 2015. For more information about Clatsop Community Bank, visit our website at www.clatsopbank.com. Information contained in or linked to our website is not incorporated as a part of this release.
Certain statements in this release may constitute forward-looking statements within the definition of the “safe-harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to significant uncertainties, which could cause actual results to differ materially from those set forth in such statements. Forward-looking statements are those that incorporate management’s current expectations and plans based on information currently known to them. These statements can sometimes be identified by words such as “believe,” “estimate,” “anticipate,” “expect,” “intend,” “will,” “may,” “should,” or other similar phrases or words. Readers are cautioned not to place undue reliance on forward-looking statements. In particular, they should not be construed as assurances of a given level of performance or as promises of a given set of management’s actions. Some of the factors that could cause management to deviate from its current plans, or could cause the Company’s results to differ from current expectations, include the effect of localized or regional economic shifts that may affect the collectability of loans or the value of the collateral underlying those loans; the effects of laws, regulations, policies and government actions upon the Company’s assets and operations; sensitivity to the Northwestern Oregon geographic markets and events affecting those markets; and the impacts of new government initiatives upon us and our borrowers. The Company does not intend to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.