BEND, Oregon, Nov. 3, 2010 /PRNewswire-FirstCall/ --
Highlights and Summary of Performance – Third Quarter of 2010
- Third Quarter Net Loss Per Share: ($0.12) per share or ( $3.4 million) compared to a net loss of ($0.01) per share or ( $0.3 million) for the linked-quarter and ($0.45) or ( $12.6 million) for the year-ago quarter.
- Credit Quality: Non-performing assets (NPA's) decrease 7.6% to $129.5 million compared to $140.1 million for the linked-quarter and decreased over 34% compared to $197.3 million for the year-ago period.
- Credit Quality: Reserve for credit losses was at $52.5 million or 4.11% of total loans, compared to $58.7 million or 4.35% for the linked-quarter and $53.8 million or 3.21% for the year-ago period.
- Credit Quality: Net charge-offs were $9.2 million compared to $4.9 million for the linked-quarter and $31.3 million for the year-ago period.
- Liquidity: The Company maintains a strong primary liquidity ratio of over 25%.
- Net Interest Margin (NIM): The NIM was 3.51% compared to 3.60% for the linked-quarter and 3.13% for the year-ago quarter.
Cascade Bancorp ("Cascade") (Nasdaq: CACB) The Company had a net loss of ($0.12) per share or ( $3.4 million) for the third quarter 2010, compared to ($0.01) per share or ( $0.3 million) for the linked-quarter. Compared to the linked-quarter the increased loss primarily resulted from lower net interest income of $1.1 million which was related to the decline in earning loan volumes and an IRS related tax adjustment of $1.1 million. Non-interest income decreased $0.8 million during the third quarter of 2010 when compared to the linked-quarter mainly due to a reduction in mortgage revenue of approximately $0.4 million. When compared to the year-ago period non-interest income was down $5.1 million primarily due to a one-time $3.2 million gain recorded on the sale of the Bank's credit card merchant business recorded in the year-ago period. Compared to the linked-quarter, non-interest expense was down by $1.0 million or 5.5% because of lower FDIC and OREO related expenses. In addition, salaries and benefits cost were down $0.2 million or 3.1% from the prior quarter. As compared to the year-ago quarter, noninterest expenses were down by $8.5 million primarily due to decreases in OREO expenses of $6.1 million, salary expenses of $1.1 million and other expenses of $1.1 million for the quarter compared to the year-ago quarter. Reserve for credit losses was approximately $52.5 million or 4.11% of gross loans compared to approximately $59.3 million or 3.83% at December 31, 2009 (as amended). NPA's decreased to $129.5 million compared to $140.1 million for the linked-quarter and delinquent loans decreased to 0.48% of gross loans compared to 0.75% for the linked-quarter and 0.65% at December 31, 2009. Net charge-offs were $9.2 million for the third quarter of 2010 up from $4.9 million for the linked-quarter, mainly due to the linked-quarter included $5.1 million in recoveries as compared to the current quarter's recoveries of $0.6 million.
Patricia L. Moss, CEO, commented, "We are pleased that our strategic focus and efforts to improve our financial condition continue to provide progress for the Bank. Importantly, non-performing assets continue to reflect stabilization and our credit quality has improved. We remain sincerely appreciative of the loyalty of our customers, employees and community partnerships which have proven enduring in a difficult time."At September 30, 2010, the Bank's Tier 1 leverage, Tier 1 risk-based capital and total risk-based capital ratios were 3.91%, 5.24% and 6.53%, respectively. These capital ratios are relatively stable compared to the linked-quarter, however, they do not meet regulatory benchmarks for "adequately-capitalized." Regulatory benchmarks for an "adequately-capitalized" designation are 4%, 4% and 8% for Tier 1 leverage, Tier 1 risk-based capital and total risk-based capital, respectively. "Well-capitalized" benchmarks are 5%, 6%, and 10% for Tier 1 leverage, Tier 1 risk-based capital and total risk-based capital, respectively. However, pursuant to the Order, the FDIC has required the Bank to maintain a Tier 1 leverage ratio of at least 10%, rather than the benchmark 5%, to be considered "well-capitalized". Tier 1 leverage, Tier 1 risk-based capital and total risk-based capital ratios at the Holding Company level are lower than that at the Bank, primarily because holding company ratios disallow inclusion of trust preferred debentures which qualify as capital at the Bank. Accordingly, the Company's Tier 1 leverage, Tier risk-based and total risk-based capital ratios were 0.34%, 0.45% and 0.90%, respectively as of September 30, 2010. At September 30, 2010, Cascade's loan portfolio was approximately $1.3 billion, down $72.2 million and $399.1 million when compared to the linked-quarter and a year-ago, respectively. Loans have declined primarily due to loan payoffs, reduced demand owing to economic contraction, loan charge-offs and management's strategic loan reduction program to mitigate credit risk and preserve capital. Total deposits at September 30, 2010, were $1.5 billion, down $87.2 million or 5.5% from the linked-quarter and down $354.1 million or 19.2% compared to the year-ago quarter. In general, deposit balances have declined due to the combination of adverse customer effects of current economic conditions and some migration to too-big-to-fail banks due to uncertainty. Linked-quarter declines were primarily in interest bearing demand (NOW) accounts totaling $59.9 million primarily resulting from the Bank's managed reduction of Oregon public funds. The Bank's focused efforts to retain and serve its valued customer base has allowed the Bank to maintain its market share lead position in its primary Deschutes County market, as reported in the FDIC recent 2010 deposit market share report. To provide ongoing customer assurance, nearly 100% of the Bank's deposits are covered by FDIC insurance and the Company' participation in the FDIC's TAG program. In that regard, effective July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed and FDIC deposit-insurance has been permanently increased to $250,000 effective immediately. The Transaction Guarantee Program (TAG) has been extended to December 31, 2012. The TAG program currently provides unlimited FDIC insurance for non-interest bearing accounts, IOLTAs, and interest-bearing checking accounts with an interest rate of .25 or less, this coverage is separate and in addition to the general limit. Effective December 31, 2010, the TAG program will no longer include or provide unlimited insurance for low-interest NOW accounts or IOLTAs (0.25 interest rate or less). These accounts will be subject to the standard $250,000 coverage. The Net Interest Margin (NIM) was 3.51% for the third quarter of 2010 compared to 3.60% for the linked-quarter and 3.13% for the year-ago period. The linked-quarter decline was mainly due to decreases in loans fees and lower rates on short term interest bearing deposits. Interest bearing deposits (including funds held at the Federal Reserve Bank (FRB)) held for liquidity purposes totaled $302.8 million or approximately 17% of total assets at September 30, 2010 compared to $319.6 million at December 31, 2009. During the quarter interest bearing funds held at FRB had the effect of lowering the Company's NIM by approximately 52 basis points because such assets presently earn a low overnight rate of 0.25% which is below the average cost of funds. The Company is required to hold liquid funds per the terms of the Order. In addition, the NIM for this quarter was affected by approximately 7 basis points due to interest reversals on loans placed into a non-performing status. About Cascade Bancorp and Bank of the Cascades Cascade Bancorp (NASDAQ: CACB), headquartered in Bend, Oregon and its wholly-owned subsidiary, Bank of the Cascades, operates in Oregon and Idaho markets. Founded in 1977, Bank of the Cascades offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/ Salem and Boise/ Treasure Valley. The Bank has a business strategy that focuses on delivering the best in community banking for the financial well-being of customers and shareholders. It executes its strategy through the consistent delivery of full relationship banking focused on attracting and retaining value driven customers. For further information, please visit our web site at http://www.botc.com. FORWARD-LOOKING STATEMENTS This release contains forward-looking statements about Cascade Bancorp's plans and anticipated results of operations and financial condition. These statements include, but are not limited to, our plans, objectives, expectations and intentions and are not statements of historical fact. When used in this report, the word "expects," "believes," "anticipates," "could," "may," "will," "should," "plan," "predicts," "projections," "continue" and other similar expressions constitute forward-looking statements, as do any other statements that expressly or implicitly predict future events, results or performance, and such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain risks and uncertainties and the Company's success in managing such risks and uncertainties could cause actual results to differ materially from those projected, including among others, the risk factors described in our annual report on Form 10-K/A filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2009, as well as the following factors: our inability to comply in a timely manner with the regulatory order with the Federal Deposit Insurance Corporation ("FDIC") and the Oregon Division of Finance and Corporate Securities ("DFCS"), and the written agreement entered into with the Federal Reserve Bank and DFCS, under which we are currently operating, could lead to further regulatory sanctions or orders, which could further restrict our operations and negatively affect our results of operations and financial condition; local and national economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our results of operations and financial condition; the local housing/real estate market could continue to decline for a longer period than we anticipate; the risks presented by a continued economic recession, which could continue to adversely affect credit quality, collateral values, including real estate collateral and OREO properties, investment values, liquidity and loan originations, reserves for loan losses and charge offs of loans and loan portfolio delinquency rates and may be exacerbated by our concentration of operations in the States of Oregon and Idaho generally, and the Oregon communities of Central Oregon, Northwest Oregon, Southern Oregon and the greater Boise area, specifically; we are seeking additional capital to augment capital levels or ratios or improve liquidity, but capital or liquidity may not be available on acceptable terms or at all; interest rate changes could significantly reduce net interest income and negatively affect funding sources; competition among financial institutions could increase significantly; competition or changes in interest rates could negatively affect net interest margin, as could other factors listed from time to time in the Company's SEC reports; the reputation of the financial services industry could further deteriorate, which could adversely affect our ability to access markets for funding and to acquire and retain customers; and existing regulatory requirements, changes in regulatory requirements and legislation and our inability to meet those requirements, including capital requirements and increases in our deposit insurance premium, could adversely affect the businesses in which we are engaged, our results of operations and financial condition. These forward-looking statements speak only as of the date of this release. The Company undertakes no obligation to publish revised forward-looking statements to reflect the occurrence of unanticipated events or circumstances after the date hereof. Readers should carefully review all disclosures filed by the Company from time to time with the SEC. SOURCE Cascade Bancorp