Clatsop Community Bank reports third quarter 2016 results

Seaside, OR – Clatsop Community Bank (OTC: CLAT), reported a net profit of $127,000 or $0.12 per diluted share, for the three months ended September 30, 2016, compared to net profit of $182,000, or $0.17 per diluted share, for the same period the year prior.  For the nine months ended September 30, 2016, the Bank reported a net profit of $396,000, or $0.37 per diluted share, compared to net profit of $471,000, or $0.44 per diluted share for the same period in 2015.

“Management is pleased to report continued profitability in Q3 2016,” said President and CEO Joe Schulte. “Core profitability continues to grow as does our asset base and book value per share.”

Year-to-Date 2016 Financial Highlights:

Return on Average Assets (ROAA): 0.62%
Net Interest Margin (TE)(NIM): 3.85%
Efficiency Ratio: 78.80%

Assets

Total assets of $87.6 million as of September 30, 2016 increased $7.0 million, or 8.68%, compared to $80.6 million in assets a year ago.

Loans, net of unearned income, increased $1.7 million to $54.1 million at September 30, 2016, or 3.24% compared to $52.4 million a year ago. The allowance for loan losses as of September 30, 2016 at $615,000, or 1.14% of gross loans, decreased $10,000 compared to the $625,000, or 1.19% of gross loans as of September 30, 2015. Year-to-date 2016, the Bank had $11,000 in charge-offs and $3,000 in loan recoveries. For the same period the year prior, the Bank had $1,000 in charge-offs and $23,000 in loan recoveries.

“Asset quality remains very strong, while competition and pricing for quality loan relationships continues to be robust,” said Chief Credit Officer Cindy Trask. We are pleased that our personalized, single-point-of-contact business model allows us to offer customized lending solutions to our business clients. We also continue to support the growth and expansion of small- to medium-size businesses through various SBA program loans,” she added.

The Bank had no other real estate owned (OREO) as of September 30, 2016, compared to $30,000 on September 30, 2015. The Bank had no loans on non-accrual as of September 30, 2016, compared to 0.09% of loans net of unearned income as of September 30, 2015.

Deposits and Other Liabilities

Total deposits were $77.1 million as of September 30, 2016, which is an increase of $6.4 million, or 9.05%, compared to $70.7 million in total deposits as of September 30, 2015. Non-interest-bearing deposits increased by $5.4 million or 22.50%, while interest-bearing deposits increased by $1.0 million, or 2.14%, compared to September 30, 2015.

There were no borrowings outstanding as of September 30, 2016 or September 30, 2015

Earnings

Net-interest income continued to grow year-over-year. At $762,000 for the three months ended September 30, 2016, net-interest income increased $13,000, or 1.74% over the $749,000 in net-interest income for the same period in 2015. For the nine months ended September 30, 2016, Net-interest income totaled $2.3 million, an increase of $95,000 or 4.39% compared to $2.2 million as of September 30, 2015. Net-interest margin (TE) at 3.90% for the three months ended September 30, 2016 was 0.23 percentage points lower than the 4.13% net-interest margin (TE) during the same period a year ago. For the nine months ended September 30, 2016, Net-interest margin (TE) totaled 3.85%, 0.12 percentage points lower than the net-interest margin (TE) of 3.97% a year ago.

Non-interest income, for the three months ended September 30, 2016, at $75,000, decreased $13,000 or 14.77% compared to $88,000 during the same period in 2015. For the nine months ended September 30, 2016, non-interest income totaled $226,000, a decrease of $84,000 or 27.10% compared to $310,000 as of September 30, 2015. Non-interest expense for the three months ended September 30, 2016, at $669,000, increased $70,000, or 11.69% over the $599,000 during the same period in 2015. For the nine months ended September 30, 2016, non-interest expenses totaled $1.9 million, an increase $137,000, or 7.63% compared to $1.8 million as of September 30, 2015.

CFO Steve McCoy said, “Despite net interest margin compression of 12 basis points, the Bank still increased net interest income, a key revenue component. This is due to large deposit growth in the form of non-interest bearing deposits,” he explained. “The Bank is experiencing pressure in the form of expense creep due to ever-increasing regulatory and compliance costs, IT and cybersecurity costs, as well as labor expenses resulting from a very tight job market. These factors, among others, have resulted in higher expenses in 2016. Despite this pressure, and the reduction of one-time gains year-over-year, the Bank continues to expand earnings, particularly in net-interest income.”

Equity and Capital

Stockholders’ equity, at $10.2 million as of September 30, 2016, increased $500,000, or 5.15% compared to September 30, 2015. The Bank remains categorized as well-capitalized under the regulatory framework for prompt corrective action. The Bank’s tier-one leverage ratio was 11.41% as of September 30, 2016, compared to 11.79% as of September 30, 2015, while its total risk-based capital ratio was 16.08% as of September 30, 2016, compared to 15.69% as of September 30, 2015. 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 September 30, 2016 was 15.12%.

“Our talented team of bankers continues to seek relationship-based deposit growth and high quality loan opportunities within Clatsop County,” Schulte said. “Core net-interest income continues to grow as we execute our community-based, small- to medium-sized business strategy in order to continue to increase owners’ equity and add value for all stakeholders.”

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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.