BEND, Ore., April 27, 2016 /PRNewswire/ -- Cascade Bancorp
(NASDAQ: CACB) ("Company" or "Cascade"), the holding company for
Bank of the Cascades ("Bank"), today announced its financial
results for the three months ended March 31,
2016.
First Quarter 2016 Financial Highlights
- Net income for the first quarter of 2016 was $1.9 million, or $0.03 per share, compared to $5.6 million, or $0.08 per share, for the fourth quarter of 2015
which included a $2.0 million
($0.02 per share) credit to loan loss
provision.
- The first quarter 2016 earnings were reduced by non-recurring
items netting $3.1 million (pretax),
or $0.03 per share (after tax). These
items mainly relate to costs incurred in connection with the
acquisition and integration of 15 Bank of America branches as well
as expenses related to the consolidation of several branch
locations, partially offset by out-sized earnings on investment
securities called during the period.
- At March 31, 2016, gross loans
were $1.8 billion compared to
$1.7 billion at year-end 2015. First
quarter organic loan growth1 was $49.7 million, or 14.1% annualized.
- Total deposits rose 23.7%, or $493.0
million, compared to the fourth quarter of 2015 ("linked
quarter") mainly due to the $469.9
million in total deposits assumed in the Bank of America
branch acquisition.
- Cost of funds remained stable in the current quarter at 0.09%
as compared to the linked quarter at 0.08%.
- Overall revenue was up at a double-digit annualized pace,
including net interest income of $22.2
million, up $2.4 million, or
12.0%, from the linked quarter. The current quarter included
$1.5 million in additional interest
revenue on called securities.
- Net interest margin ("NIM") was 3.80% for the first quarter of
2016, compared to 3.52% in the linked quarter. Adjusted to exclude
the aforementioned interest on called securities, the NIM for the
March quarter was 3.54%2.
- Net loan recoveries for the first quarter were $0.02 million. Allowance for loan losses ("ALLL")
at quarter end was 1.37% of gross loans. No provision or credit for
loan losses was recorded in the current quarter.
- At March 31, 2016, stockholders'
equity was $339.7 million, with book
value per share of $4.67 and tangible
book value3 per share of $3.35.
- Return on average tangible assets4 was 0.31%
compared to 0.91% in the linked quarter.
- Return on average tangible stockholders' equity5 was
3.07% compared to 8.87% in the linked quarter.
Recent Event
- On April 26, 2016, the Company
entered into a definitive agreement to acquire Prime Pacific
Financial Services for an aggregate merger consideration of
approximately $17.1 million, or
$1.79 per Prime Pacific common share.
Prime Pacific is a greater
Seattle metro market bank with
$119.4 million in assets which will
leverage Cascade's strategy of supporting metro commercial lending
growth by leveraging our low-cost core deposits.
"This quarter's accomplishments represent a solid start to 2016,
giving us momentum to accelerate our financial returns in the
future," said Terry Zink, President
and CEO of Cascade Bancorp. "The highlight of the quarter was
the successful closing and customer conversion of the acquired Bank
of America branches located in Oregon and southwest Washington. This
transaction provides the opportunity to drive both enhanced fee
revenue as well as the reinvestment of the low cost deposits
assumed in the branch acquisition into higher yielding loans
through the balance of the year. Thus far, our new customer
transaction volumes have been strong and we see the potential for
further growth as our bankers effectively transition these
customers to Cascade's higher touch community bank model.
Importantly, as of mid-April we have retained approximately 97% of
the $469.9 million in deposits that
we acquired and our cost of funds is projected to be about 9 basis
points going forward with over half of our deposits in checking
accounts."
Bank of the Cascades President, Chip
Reeves added, "We were also pleased with our double digit
organic loan growth during the quarter, which was driven by
originations in our Portland and
newly opened Seattle commercial
banking centers. Our strategy of redeploying a low cost deposit
base into fast-growing metropolitan markets has been a strong
success. In fact, our Seattle team has ramped their loan pipeline
and production more quickly than expected and are currently a full
quarter ahead of projections. Looking to the balance of 2016,
we will continue to opportunistically hire experienced bankers,
such as our March hiring of five bankers in Idaho, to further augment organic loan
growth."
Financial Review
Bank of America Branch Acquisition:
The financial statements as of March 31,
2016 are inclusive of approximately $469.9 million in deposit liabilities assumed in
connection with the acquisition of 15 Bank of America branches (the
"branch acquisition"). The transaction closed on March 4, 2016. The following comparative balance
sheet and income statement information is notably affected by the
branch acquisition, including certain one-time charges recorded in
connection with the transaction.
Balance Sheet:
At March 31, 2016 as compared
to December 31, 2015 and March 31, 2015
Total assets at March 31, 2016
were $3.0 billion compared to
$2.5 billion for the prior quarter
and $2.4 billion a year ago, with the
increase over prior periods due primarily to assets assumed with
the closing of the branch acquisition during the current
quarter.
Cash equivalents at March 31, 2016
were at $343.5 million due to
increased deposits assumed in the branch acquisition. This
compares to $77.8 million and
$59.8 million for the linked quarter
and year ago quarter, respectively.
Investment securities classified as available-for-sale and
held-to-maturity increased $123.3
million to $572.9 million at
March 31, 2016 as compared to
$449.7 million at December 31, 2015 and $466.3 million a year ago. The increase is
due to the redeployment of cash assumed in the branch acquisition
into securities and adjustable rate mortgages ("ARMs") during the
current quarter. The deployment of a significant portion of
remaining cash from the branch acquisition is expected to continue
during the second quarter. Anticipated yields on these new
earning assets are targeted to average 2.25% in aggregate with
lower yields on floating rate assets and higher yields on ARMs,
whole loan purchases, and other fixed rate securities.
Gross loans at March 31, 2016,
were $1.8 billion, up $96.5 million, or 23.0% (annualized), from the
linked quarter with the most significant growth visible in
commercial real estate, consumer residential, commercial and
industrial ("C&I") and construction loans. The increase
over linked quarter includes both organic loan growth and purchased
loans related to deployment of funds received in the branch
acquisition. Organic loan growth was 14.1% (annualized) for the
March 2016 quarter and was largely
centered in our C&I and commercial portfolios. The
purchased ARM portfolio totaled $154.5
million at March 31, 2016.
Shared national credit loan balances were $160.6 million at March
31, 2016 compared to $168.4
million for the linked quarter and $204.9 million a year earlier. Wholesale loan
portfolios are designed to diversify the Company's overall loan
portfolio by geography industry and loan type.
The ALLL at March 31, 2016 was
steady at $24.4 million as compared
to December 31, 2015 with recoveries
effectively offsetting charge offs for the period. See
additional discussion in "Asset Quality" below.
FHLB stock was $3.1 million at
March 31, 2016 compared to
$3.0 million at year end 2015 and
$25.4 million for the year ago
period. The year over year reduction was due to changes in
FHLB membership stock requirements in connection with the Seattle
FHLB merging with Des Moines FHLB in the second quarter of
2015.
Total deposits as of March 31,
2016 increased 23.7% to $2.6
billion compared to $2.1
billion as of December 31,
2015, and $2.0 billion as of
March 31, 2015. These increases
were mainly attributable to the $469.9
million of deposits assumed in the branch acquisition.
Non-interest bearing deposits were $867.6
million, or 33.7% of total deposits. Combined with
interest checking balances, total checking balances were 55.4% of
total deposits. Money market and saving accounts were 36.1%
while CDs were 8.5% of total deposits.
The overall cost of funds for the quarter was 0.09% including
some borrowing costs related to the purchase of securities in
anticipation of the branch acquisition. Management estimates
cost of funds should approximate 9 basis points going forward.
Total stockholders' equity at March 31,
2016 was $339.7 million
compared to $336.8 million at
December 31, 2015. This increase is
primarily a result of the first quarter 2016 net income of
$1.9 million. Tangible common
stockholders' equity6 was $244.0
million, or $3.35 per share,
at March 31, 2016, as compared to
$251.3 million, or $3.45 per share, at December 31, 2015. The ratios of common
stockholders' equity to total assets and tangible common
stockholders' equity to total assets7 were 11.39% and
8.18% at March 31, 2016,
respectively, and 13.65% and 10.18% at December 31, 2015, respectively.
Income Statement:
Linked Quarter Comparison: Quarter ended March 31, 2016 as compared to the quarter ended
December 31, 2015
Net income for the first quarter of 2016 was $1.9 million, or $0.03 per share, compared to $5.6 million, or $0.08 per share, for the linked quarter.
The current quarter included approximately $3.1 million in net pretax non-recurring items,
mainly related to costs incurred in connection with the branch
acquisition, such as customer integration and IT conversion
expenses, as well as certain branch consolidation costs. These
costs were partially offset by out-sized earnings on investment
securities called during the period.
Net interest income for the first quarter 2016 was up
$2.4 million, or 12.0%, compared to
the linked quarter. The current quarter includes $1.5 million in generally non-recurring interest
on called securities. Excluding this item, net interest
income improved $0.9 million, or
4.4%, from the linked quarter due to an increase in average earning
assets. Of this, loan discount accretion was up $0.2 million from the linked quarter due to a
higher rate of loan payoffs on the acquired Home Federal Bancorp
portfolio.
NIM was 3.80% for the first quarter of 2016, compared to 3.52%
in the linked quarter. Excluding the aforementioned
extra-interest on called securities, the NIM for the March quarter
was 3.54%. The NIM is expected to decline in succeeding
quarters as a result of the increase in lower yielding cash and
cash equivalents that occurred with the closing of the branch
acquisition.
Non-interest income for the first quarter of 2016 was
$5.5 million, compared to
$5.8 million in the linked quarter.
Service fees were higher on a linked quarter basis mainly owing to
higher transaction volumes including those from acquired branch
customers during the month of March. SBA and mortgage
related revenues were seasonally flat, while customer swap activity
was higher than the linked quarter. Other income was lower by
$0.5 million in gain on sale of a
decommissioned branch in the linked quarter.
Non-interest expense in the first quarter of 2016 was
$24.5 million compared to
$18.1 million in the linked quarter
mainly due to the effects of the one-time acquisition and
integration costs incurred with the branch acquisition that totaled
approximately $2.3 million. In
addition, non-recurring costs of $1.3
million were incurred to consolidate four branch locations,
including contract breakage and severance. Current quarter
expenses included $0.3 million in
settlement of several contract issues. Numerous non-interest
expense line items were impacted by these generally non-recurring
items. Human resource expenses included $0.8 million related to acquired branch
employees, including healthcare and other benefits, retention and
conversion success initiatives, and the above mentioned branch
consolidation and severance items. Salary costs included one month
of recurring salary and benefit expense for the new branch
staff. Current quarter IT related expenses were higher than
in the linked quarter due to one-time systems conversion
expenditures of $0.4 million.
Occupancy was higher due to costs associated with the new branches
and certain branch consolidations. Professional services were
also elevated mainly due to conversion related costs.
There was no provision for loan loss in the current quarter as
compared to a credit to the provision of $2.0 million in the linked quarter. As
discussed in "Asset Quality" below, the current quarter includes
largely offsetting charge-offs and recoveries, including
$3.3 million of gross recoveries on
previously charged-off loans offset by a $2.7 million write-down on a loan in the oil and
gas sector. The income tax provision for the first quarter of
2016 was $1.2 million, representing a
37.4% effective tax rate for the period, slightly lower than
statutory due to the impact of permanent differences.
Comparison with year ago period: For the three ended
March 31, 2016 and 2015
Net income for the first quarter of 2016 was $1.9 million, or $0.03 per share, compared to $5.1 million, or $0.07 per share, for the first quarter of
2015. Lower net income is mainly due to the one-time costs
incurred in connection with the branch acquisition as described
above.
Net interest income for the first quarter 2016 was higher than
the year ago period primarily due to $1.5
million in non-recurring interest on called securities in
the current period, as well as well net revenues arising from
higher earning assets in the current period.
Non-interest income for the three months ended March 31, 2016 was $5.5
million, down from $6.1
million during the year ago period. Year-over-year
improvements were largely transaction volume related with service
fees, card and interest rate swap revenues up somewhat as a result
of strengthening economies in our service areas. Mortgage,
SBA and other income were off slightly as compared to the year ago
period, with the decrease in other income related to a gain on sale
of decommissioned branches in the first quarter of 2015.
Non-interest expense in the three months ended March 31, 2016 was $24.5
million compared to $18.8
million in the respective year ago period. Higher expense
during the three months ended March 31,
2016 compared to the year ago period relate primarily to
one-time costs incurred in connection with the branch
acquisition.
Income tax expense in the three months ended March 31, 2016 was $1.2
million as compared to $3.1
million in the year ago period.
Asset Quality
For the quarter ended March 31,
2016, loan charge offs were offset by recoveries, and there
was no provision for loan losses during the period. This
resulted in a ratio of Loan Loss Reserve to total loans of 1.37% of
total loans at March 31, 2016
compared to 1.45% at December 31,
2015 and 1.48% at March 31,
2015. Recoveries totaled $3.3
million, mainly arising from recovery on a loan that was
previously charged off. This was offset by a $2.7 million charge off related to certain
downgrades in the oil and mining sector. Risk-rating downgrades
were partially offset by several upgrades of previously adversely
risk rated credits. The Company's aggregate mining and energy
exposure is less than 1.0% of total loans with ample reserves
allocated to these credits. Credit metrics affected by these
changes include non-performing assets as a percentage of total
assets at 0.49% at March 31, 2016, as
compared to 0.34% at December 31,
2015 and 0.53% at March 31,
2015. Classified loans totaled $49.5
million, or 2.8% of total loans, at March 31, 2016 compared to $39.5 million, or 2.3% of total loans, at
December 31, 2015. At March 31, 2016, delinquent loans were 0.30% of
the loan portfolio. This compares to 0.24% at December 31, 2015 and 0.17% at March 31, 2015.
Acquired loans are recorded at fair value with no reserve
provisions brought forward in accordance with purchase accounting
principles. The net fair value adjustment to acquired loans from
the Home Federal Bancorp acquisition was $6.0 million, consisting of an interest rate and
a credit mark which will be accreted over the life of the loans
(approximately 10 years).
Conference Call
As previously announced, a conference call and webcast
discussing the first quarter 2016 results will be held today,
April 27, 2016 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Stockholders, analysts
and other interested parties are invited to join the webcast by
registering at http://public.viavid.com/index.php?id=119173 in or
the live conference call by dialing (877) 407-4018 prior to
2:00 p.m. Pacific Time.
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 the Pacific Northwest. Founded in
1977, Bank of the Cascades offers full-service community banking
through 51 branches in Oregon,
Idaho and Washington. 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 website at
www.botc.com.
NON-GAAP FINANCIAL MEASURES
This release contains certain non-GAAP financial measures.
The Company's management uses these non-GAAP financial measures,
specifically efficiency ratio, adjusted net interest margin,
organic loan growth, tangible book value per common share, tangible
common equity ratio to total assets and tangible stockholders'
equity, as important measures of the strength of its capital and
its ability to generate earnings on its tangible capital invested
by its shareholders. Management believes presentation of
these non-GAAP financial measures provides useful supplemental
information to our investors and others that contributes to a
proper understanding of the financial results and capital levels of
the Company. Management also uses these non-GAAP financial measures
in making financial, operating and planning decisions and in
evaluating the Company's performance. These non-GAAP disclosures
should not be viewed as a substitute for financial results
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. Reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP financial measures
are included in the table at the end of this release under the
caption "Reconciliation of Non-GAAP Financial Measures."
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
Cascade Bancorp's success in managing such risks and uncertainties
and could cause actual results to differ materially from those
projected and/or adversely affect our results of operations and
financial condition. Such factors could include: local and
national economic conditions; housing/real estate market prices,
employment and wages rates, as well as historically low interest
rates and/or the rate of change in such rates. Such
factors, depending on severity, could adversely affect credit
quality, collateral values, including real estate collateral and
OREO (other real estate owned) properties, investment values,
liquidity, the pace of loan growth and /or originations, the
adequacy of reserves for loan losses including the trend and amount
of loan charge offs and delinquency rates. These factors may be
exacerbated by our concentration of operations in the States of
Oregon, Idaho and Washington generally, and Central, Southern
and Northwest Oregon, as well as
the greater Boise/Treasure
Valley, Idaho and greater
Seattle, Washington areas,
specifically; 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 Cascade Bancorp's reports filed with or furnished to the
Securities and Exchange Commission (the "SEC"); 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
(including, without limitation, the Dodd-Frank Wall Street Reform
and Consumer Protection Act) 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 our financial
condition. Such forward-looking statements also include, but are
not limited to, statements about our strategy to expand our loan
portfolio to markets outside our branch network, including
Portland, Oregon and Seattle, Washington; and our ability to
execute our business plan. Additional risks and uncertainties are
identified and discussed in Cascade Bancorp's reports filed with or
furnished to the SEC and available at the SEC's website at
www.sec.gov. However, you should be aware that these factors
are not an exhaustive list, and you should not assume these are the
only factors that may cause our actual results to differ materially
from our expectations. These forward-looking statements speak only
as of the date of this release. Cascade Bancorp undertakes no
obligation to update or publish revised forward-looking statements
to reflect the impact of events or circumstances that may arise
after the date hereof, except as required by applicable law.
Readers should carefully review all disclosures filed or furnished
by Cascade Bancorp from time to time with the SEC.
Information contained herein, other than information at
December 31, 2015, and for the twelve
months then ended, is unaudited. All financial data should be read
in conjunction with the notes to the consolidated financial
statements of Cascade Bancorp and subsidiary as of and for the
fiscal year ended December 31, 2015,
as contained in the Company's Annual Report on Form 10-K for such
fiscal year.
1
|
Organic loan growth
is a non-GAAP measure defined as total loan growth less acquired
loans during the period. See the last page of this release for a
reconciliation of organic loan growth.
|
|
|
2
|
Adjusted NIM is a
non-GAAP measure. See reconciliation of adjusted NIM at the
end of this release.
|
|
|
3
|
Tangible book value
per common share is a non-GAAP measure defined as total
stockholders' equity, less the sum of core deposit intangible
("CDI") and goodwill, divided by total number of shares
outstanding. See the last page of this release for a
reconciliation of tangible book value per common share.
|
|
|
4
|
Return on average
tangible assets is a non-GAAP measure defined as average total
assets, less the sum of average CDI and goodwill, divided by net
income. See the last page of this release for a reconciliation of
return on average tangible assets.
|
|
|
5
|
Return on average
tangible stockholders' equity is a non-GAAP measure defined as
average total stockholders' equity, less the sum of average CDI and
goodwill, divided by net income. See last page of this release for
a reconciliation of return on average tangible stockholders'
equity.
|
|
|
6
|
Tangible
stockholders' equity is a non-GAAP measure defined as total
stockholders' equity, less the sum of CDI and goodwill. See the
last page of this release for a reconciliation of tangible
stockholders' equity.
|
|
|
7
|
Tangible common
stockholders' equity to total assets is a non-GAAP measure defined
as total stockholders' equity, less the sum of core deposit
intangible ("CDI") and goodwill, divided by total assets. See the
last page of this release for a reconciliation of tangible common
stockholders' equity to total assets.
|
CASCADE
BANCORP
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands)
(Unaudited)
|
|
|
March
31,
2016
|
|
December
31,
2015
|
|
March
31,
2015
|
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
54,510
|
|
|
$
|
46,354
|
|
|
$
|
43,417
|
|
Interest bearing
deposits
|
|
288,740
|
|
|
31,178
|
|
|
16,117
|
|
Federal funds
sold
|
|
273
|
|
|
273
|
|
|
273
|
|
Total cash and cash
equivalents
|
|
343,523
|
|
|
77,805
|
|
|
59,807
|
|
Investment securities
available-for-sale
|
|
428,909
|
|
|
310,262
|
|
|
317,761
|
|
Investment securities
held-to-maturity
|
|
144,029
|
|
|
139,424
|
|
|
148,573
|
|
Federal Home Loan
Bank (FHLB) stock
|
|
3,137
|
|
|
3,000
|
|
|
25,369
|
|
Loans held for
sale
|
|
4,246
|
|
|
3,621
|
|
|
1,474
|
|
Loans, net
|
|
1,758,598
|
|
|
1,662,095
|
|
|
1,547,531
|
|
Premises and
equipment, net
|
|
45,115
|
|
|
42,031
|
|
|
43,274
|
|
Bank-owned life
insurance
|
|
54,708
|
|
|
54,450
|
|
|
53,692
|
|
Other real estate
owned, net
|
|
3,274
|
|
|
3,274
|
|
|
4,830
|
|
Deferred tax asset,
net
|
|
49,387
|
|
|
50,673
|
|
|
62,630
|
|
Core deposit
intangible
|
|
13,085
|
|
|
6,863
|
|
|
7,478
|
|
Goodwill
|
|
82,594
|
|
|
78,610
|
|
|
78,610
|
|
Other
assets
|
|
51,400
|
|
|
35,921
|
|
|
31,992
|
|
Total
assets
|
|
$
|
2,982,005
|
|
|
$
|
2,468,029
|
|
|
$
|
2,383,021
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Demand
|
|
$
|
867,646
|
|
|
$
|
727,730
|
|
|
$
|
677,515
|
|
Interest bearing
demand
|
|
1,317,725
|
|
|
1,044,134
|
|
|
992,545
|
|
Savings
|
|
170,745
|
|
|
135,527
|
|
|
134,146
|
|
Time
|
|
219,922
|
|
|
175,697
|
|
|
210,990
|
|
Total
deposits
|
|
2,576,038
|
|
|
2,083,088
|
|
|
2,015,196
|
|
Other
liabilities
|
|
66,242
|
|
|
48,167
|
|
|
45,826
|
|
Total
liabilities
|
|
2,642,280
|
|
|
2,131,255
|
|
|
2,061,022
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Preferred stock, no
par value; 5,000,000 shares authorized; none issued or
outstanding
|
|
—
|
|
|
—
|
|
|
—
|
|
Common stock, no par
value; 100,000,000 shares authorized
|
|
453,626
|
|
|
452,925
|
|
|
451,449
|
|
Accumulated
deficit
|
|
(115,832)
|
|
|
(117,772)
|
|
|
(133,233)
|
|
Accumulated other
comprehensive income
|
|
1,931
|
|
|
1,621
|
|
|
3,783
|
|
Total stockholders'
equity
|
|
339,725
|
|
|
336,774
|
|
|
321,999
|
|
Total liabilities and
stockholders' equity
|
|
$
|
2,982,005
|
|
|
$
|
2,468,029
|
|
|
$
|
2,383,021
|
|
CASCADE
BANCORP
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands)
(Unaudited)
|
|
Three Months
Ended
|
|
|
March
31,
2016
|
|
December
31,
2015
|
|
March
31,
2015
|
|
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
17,920
|
|
|
$
|
17,215
|
|
|
$
|
16,494
|
|
Interest on
investments
|
|
4,618
|
|
|
2,904
|
|
|
2,983
|
|
Other investment
income
|
|
156
|
|
|
98
|
|
|
33
|
|
Total interest
income
|
|
22,694
|
|
|
20,217
|
|
|
19,510
|
|
|
|
|
|
|
|
|
Interest
expense:
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Interest bearing
demand
|
|
413
|
|
|
368
|
|
|
312
|
|
Savings
|
|
11
|
|
|
10
|
|
|
10
|
|
Time
|
|
85
|
|
|
51
|
|
|
224
|
|
Other
borrowings
|
|
26
|
|
|
—
|
|
|
—
|
|
Total interest
expense
|
|
535
|
|
|
429
|
|
|
546
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
22,159
|
|
|
19,788
|
|
|
18,964
|
|
Loan loss provision
(recovery)
|
|
—
|
|
|
(2,000)
|
|
|
(2,000)
|
|
Net interest income
after loan loss provision
|
|
22,159
|
|
|
21,788
|
|
|
20,964
|
|
|
|
|
|
|
|
|
Non-interest
income:
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
1,372
|
|
|
1,285
|
|
|
1,261
|
|
Card issuer and
merchant services fees, net
|
|
1,835
|
|
|
1,716
|
|
|
1,643
|
|
Earnings on
BOLI
|
|
258
|
|
|
265
|
|
|
242
|
|
Mortgage banking
income, net
|
|
495
|
|
|
528
|
|
|
788
|
|
Swap fee
income
|
|
666
|
|
|
638
|
|
|
515
|
|
SBA gain on sales and
fee income
|
|
174
|
|
|
234
|
|
|
362
|
|
Loss on sales of
investments
|
|
—
|
|
|
(28)
|
|
|
—
|
|
Other
income
|
|
656
|
|
|
1,134
|
|
|
1,311
|
|
Total non-interest
income
|
|
5,456
|
|
|
5,772
|
|
|
6,122
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
13,029
|
|
|
10,711
|
|
|
11,130
|
|
Occupancy
|
|
2,680
|
|
|
1,294
|
|
|
1,366
|
|
Information
technology
|
|
1,397
|
|
|
946
|
|
|
938
|
|
Equipment
|
|
448
|
|
|
397
|
|
|
357
|
|
Communications
|
|
610
|
|
|
545
|
|
|
541
|
|
FDIC
insurance
|
|
377
|
|
|
275
|
|
|
398
|
|
OREO
|
|
212
|
|
|
57
|
|
|
57
|
|
Professional
services
|
|
1,598
|
|
|
1,367
|
|
|
957
|
|
Card
issuer
|
|
909
|
|
|
637
|
|
|
863
|
|
Insurance
|
|
175
|
|
|
149
|
|
|
209
|
|
Other
expenses
|
|
3,083
|
|
|
1,737
|
|
|
2,004
|
|
Total non-interest
expense
|
|
24,518
|
|
|
18,115
|
|
|
18,820
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
3,097
|
|
|
9,445
|
|
|
8,266
|
|
Income tax
provision
|
|
(1,157)
|
|
|
(3,878)
|
|
|
(3,148)
|
|
Net income
|
|
$
|
1,940
|
|
|
$
|
5,567
|
|
|
$
|
5,118
|
|
CASCADE
BANCORP
|
NET INTEREST
MARGIN
|
|
(In thousands)
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
Average
Balance
|
|
Interest
Income/
Expense
|
|
Average
Yield or
Rates
|
|
Average
Balance
|
|
Interest
Income/
Expense
|
|
Average
Yield or
Rates
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
$
|
508,533
|
|
|
$
|
4,618
|
|
|
3.65
|
%
|
|
$
|
467,149
|
|
|
$
|
2,983
|
|
|
2.59
|
%
|
Interest bearing
balances due from other banks
|
115,612
|
|
|
156
|
|
|
0.54
|
%
|
|
48,964
|
|
|
33
|
|
|
0.27
|
%
|
Federal funds
sold
|
273
|
|
|
—
|
|
|
—
|
%
|
|
273
|
|
|
—
|
|
|
—
|
%
|
Federal Home Loan
Bank stock
|
3,898
|
|
|
—
|
|
|
—
|
%
|
|
25,578
|
|
|
—
|
|
|
—
|
%
|
Loans
|
1,720,086
|
|
|
17,920
|
|
|
4.19
|
%
|
|
1,512,769
|
|
|
16,494
|
|
|
4.42
|
%
|
Total earning
assets/interest income
|
2,348,402
|
|
|
22,694
|
|
|
3.89
|
%
|
|
2,054,733
|
|
|
19,510
|
|
|
3.85
|
%
|
Reserve for loan
losses
|
(26,591)
|
|
|
|
|
|
|
(23,556)
|
|
|
|
|
|
Cash and due from
banks
|
49,250
|
|
|
|
|
|
|
41,069
|
|
|
|
|
|
Premises and
equipment, net
|
42,090
|
|
|
|
|
|
|
43,536
|
|
|
|
|
|
Bank-owned life
insurance
|
54,558
|
|
|
|
|
|
|
53,549
|
|
|
|
|
|
Deferred tax
asset
|
49,781
|
|
|
|
|
|
|
66,318
|
|
|
|
|
|
Goodwill
|
78,653
|
|
|
|
|
|
|
79,951
|
|
|
|
|
|
Core deposit
intangible
|
6,800
|
|
|
|
|
|
|
7,550
|
|
|
|
|
|
Accrued interest and
other assets
|
35,625
|
|
|
|
|
|
|
35,625
|
|
|
|
|
|
Total
assets
|
$
|
2,638,568
|
|
|
|
|
|
|
$
|
2,358,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
demand deposits
|
$
|
1,129,592
|
|
|
413
|
|
|
0.15
|
%
|
|
$
|
996,267
|
|
|
312
|
|
|
0.13
|
%
|
Savings
deposits
|
146,257
|
|
|
11
|
|
|
0.03
|
%
|
|
131,504
|
|
|
10
|
|
|
0.03
|
%
|
Time
deposits
|
186,316
|
|
|
85
|
|
|
0.18
|
%
|
|
224,792
|
|
|
224
|
|
|
0.40
|
%
|
Other
borrowings
|
22,846
|
|
|
26
|
|
|
0.46
|
%
|
|
278
|
|
|
—
|
|
|
—
|
%
|
Total interest
bearing liabilities/interest expense
|
1,485,011
|
|
|
535
|
|
|
0.14
|
%
|
|
1,352,841
|
|
|
546
|
|
|
0.16
|
%
|
Demand
deposits
|
763,496
|
|
|
|
|
|
|
642,391
|
|
|
|
|
|
Other
liabilities
|
50,825
|
|
|
|
|
|
|
45,071
|
|
|
|
|
|
Total
liabilities
|
2,299,332
|
|
|
|
|
|
|
2,040,303
|
|
|
|
|
|
Stockholders'
equity
|
339,236
|
|
|
|
|
|
|
318,472
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
2,638,568
|
|
|
|
|
|
|
$
|
2,358,775
|
|
|
|
|
|
Net interest
income
|
|
|
$
|
22,159
|
|
|
|
|
|
|
$
|
18,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
|
|
|
3.74
|
%
|
|
|
|
|
|
3.69
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
to earning assets
|
|
|
|
|
3.80
|
%
|
|
|
|
|
|
3.74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
CASCADE
BANCORP
|
ADDITIONAL
FINANCIAL INFORMATION
|
(In thousands,
except per share data) (Unaudited)
|
|
|
|
|
|
|
March
31,
2016
|
|
December
31,
2015
|
|
March
31,
2015
|
Share
Data
|
|
|
|
|
|
|
Basic net income per
common share
|
|
$
|
0.03
|
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
Diluted net income
per common share
|
|
$
|
0.03
|
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
Book value per basic
common share
|
|
$
|
4.67
|
|
|
$
|
4.63
|
|
|
$
|
4.44
|
|
Tangible book value
per common share1
|
|
$
|
3.35
|
|
|
$
|
3.45
|
|
|
$
|
3.26
|
|
Basic average shares
outstanding
|
|
71,884
|
|
|
71,882
|
|
|
71,673
|
|
Fully diluted average
shares outstanding
|
|
72,153
|
|
|
72,473
|
|
|
71,851
|
|
Balance Sheet
Detail
|
|
|
|
|
|
|
Gross
loans
|
|
$
|
1,783,028
|
|
|
$
|
1,686,573
|
|
|
$
|
1,570,775
|
|
Wholesale
loans
|
|
$
|
315,163
|
|
|
$
|
268,417
|
|
|
$
|
266,533
|
|
Total organic
loans
|
|
$
|
1,467,865
|
|
|
$
|
1,418,156
|
|
|
$
|
1,304,242
|
|
Total
deposits
|
|
$
|
2,576,038
|
|
|
$
|
2,083,088
|
|
|
$
|
2,015,196
|
|
Non interest
bearing
|
|
$
|
867,646
|
|
|
$
|
727,730
|
|
|
$
|
677,515
|
|
Total checking
balances
|
|
$
|
1,426,471
|
|
|
$
|
1,183,274
|
|
|
$
|
1,119,220
|
|
Money
market
|
|
$
|
758,899
|
|
|
$
|
588,590
|
|
|
$
|
550,840
|
|
Time
|
|
$
|
219,922
|
|
|
$
|
175,697
|
|
|
$
|
210,990
|
|
Key
Ratios
|
|
|
|
|
|
|
Return on average
stockholders' equity
|
|
2.30
|
%
|
|
6.60
|
%
|
|
6.52
|
%
|
Return on average
tangible stockholders' equity2
|
|
3.07
|
%
|
|
8.87
|
%
|
|
8.99
|
%
|
Return on average
assets
|
|
0.30
|
%
|
|
0.87
|
%
|
|
0.88
|
%
|
Return on average
tangible assets3
|
|
0.31
|
%
|
|
0.91
|
%
|
|
0.91
|
%
|
Common stockholders'
equity ratio
|
|
11.39
|
%
|
|
13.65
|
%
|
|
13.51
|
%
|
Tangible common
stockholders' equity ratio4
|
|
8.18
|
%
|
|
10.18
|
%
|
|
9.90
|
%
|
Net interest
spread
|
|
3.74
|
%
|
|
3.47
|
%
|
|
3.69
|
%
|
Net interest
margin
|
|
3.80
|
%
|
|
3.52
|
%
|
|
3.74
|
%
|
Total revenue (net
int. inc. + non int. inc.)
|
|
$
|
27,615
|
|
|
$
|
25,562
|
|
|
$
|
25,086
|
|
Efficiency
ratio5
|
|
88.79
|
%
|
|
70.87
|
%
|
|
75.02
|
%
|
Loan to deposit
ratio
|
|
68.27
|
%
|
|
79.79
|
%
|
|
76.79
|
%
|
Credit Quality
Ratios
|
|
|
|
|
|
|
Reserve for loan
losses
|
|
$
|
24,430
|
|
|
$
|
24,415
|
|
|
$
|
23,244
|
|
Reserve for loan
losses to ending gross loans
|
|
1.37
|
%
|
|
1.45
|
%
|
|
1.48
|
%
|
Reserve for credit
losses
|
|
$
|
24,870
|
|
|
$
|
24,855
|
|
|
$
|
23,684
|
|
Reserve for credit
losses to ending gross loans
|
|
1.39
|
%
|
|
1.47
|
%
|
|
1.51
|
%
|
Non-performing assets
("NPAs")
|
|
$
|
14,638
|
|
|
$
|
8,396
|
|
|
$
|
12,732
|
|
NPAs to total
assets
|
|
0.49
|
%
|
|
0.34
|
%
|
|
0.53
|
%
|
Delinquent >30
days to total loans (excl. NPAs)
|
|
0.30
|
%
|
|
0.24
|
%
|
|
0.17
|
%
|
Net (recoveries)
charge-offs
|
|
$
|
(15)
|
|
|
$
|
208
|
|
|
$
|
(3,191)
|
|
Net loan (recoveries)
charge-offs to average total loans
|
|
—
|
%
|
|
0.01
|
%
|
|
(0.21)
|
%
|
1
|
Tangible book value
per common share is a non-GAAP measure defined as total
stockholders' equity, less the sum of core deposit intangible
("CDI") and goodwill, divided by total number of shares
outstanding. See below for reconciliation of tangible book
value per common share.
|
2
|
Return on average
tangible stockholders' equity is a non-GAAP measure defined as
average total stockholders' equity, less the sum of average CDI and
goodwill, divided by net income. See below for a reconciliation of
return on average tangible stockholders' equity.
|
3
|
Return on average
tangible assets is a non-GAAP measure defined as average total
assets, less the sum of average CDI and goodwill, divided by net
income. See below for a reconciliation of return on average
tangible assets.
|
4
|
Tangible common
stockholders' equity ratio is a non-GAAP measure defined as total
stockholders' equity, less the sum of CDI and goodwill, divided by
total assets. See below for a reconciliation of tangible common
stockholders' equity ratio.
|
5
|
The efficiency ratio
is a non-GAAP ratio that is calculated by dividing non-interest
expense by the sum of net interest income and non-interest income.
Other companies may define and calculate this data
differently.
|
CASCADE
BANCORP
|
ADDITIONAL
FINANCIAL INFORMATION (continued)
|
(In thousands,
except per share data) (Unaudited)
|
|
|
|
|
|
|
|
March
31,
2016
|
|
December
31,
2015
|
|
March
31,
2015
|
Bank Capital
Ratios
|
|
Estimate
|
|
|
|
|
Tier 1 capital
leverage ratio
|
|
8.48
|
%
|
|
9.25
|
%
|
|
8.56
|
%
|
Common equity Tier 1
ratio
|
|
10.22
|
%
|
|
11.35
|
%
|
|
10.55
|
%
|
Tier 1 risk-based
capital ratio
|
|
10.22
|
%
|
|
11.35
|
%
|
|
10.55
|
%
|
Total risk-based
capital ratio
|
|
11.41
|
%
|
|
12.60
|
%
|
|
11.82
|
%
|
Bancorp Capital
Ratios
|
|
|
|
|
|
|
Tier 1 capital
leverage ratio
|
|
8.64
|
%
|
|
9.40
|
%
|
|
8.76
|
%
|
Common equity Tier 1
ratio
|
|
10.42
|
%
|
|
11.53
|
%
|
|
10.81
|
%
|
Tier 1 risk-based
capital ratio
|
|
10.42
|
%
|
|
11.53
|
%
|
|
10.81
|
%
|
Total risk-based
capital ratio
|
|
11.60
|
%
|
|
12.79
|
%
|
|
12.08
|
%
|
Reconciliation of
Non-GAAP Measures (unaudited):
|
|
|
|
|
|
|
|
|
Reconciliation of
period end stockholders' equity to period end tangible
stockholders' equity:
|
|
|
|
March
31,
2016
|
|
December 31,
2015
|
|
March
31,
2015
|
Total stockholders'
equity
|
|
|
|
$
|
339,725
|
|
|
$
|
336,774
|
|
|
$
|
321,999
|
|
Core deposit
intangible
|
|
|
|
13,085
|
|
|
6,863
|
|
|
7,478
|
|
Goodwill
|
|
|
|
82,594
|
|
|
78,610
|
|
|
78,610
|
|
Tangible
stockholders' equity
|
|
|
|
$
|
244,046
|
|
|
$
|
251,301
|
|
|
$
|
235,911
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
period end common stockholders' equity ratio to period end tangible
common stockholders' equity ratio:
|
|
|
|
March
31,
2016
|
|
December 31,
2015
|
|
March
31,
2015
|
Total stockholders'
equity
|
|
|
|
$
|
339,725
|
|
|
$
|
336,774
|
|
|
$
|
321,999
|
|
Total
assets
|
|
|
|
$
|
2,982,005
|
|
|
$
|
2,468,029
|
|
|
$
|
2,383,021
|
|
Common stockholders'
equity ratio
|
|
|
|
11.39
|
%
|
|
13.65
|
%
|
|
13.51
|
%
|
Tangible
stockholders' equity
|
|
|
|
$
|
244,046
|
|
|
$
|
251,301
|
|
|
$
|
235,911
|
|
Total
assets
|
|
|
|
$
|
2,982,005
|
|
|
$
|
2,468,029
|
|
|
$
|
2,383,021
|
|
Tangible common
stockholders' equity ratio
|
|
|
|
8.18
|
%
|
|
10.18
|
%
|
|
9.90
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
period end total stockholders' equity to period end tangible book
value per common share:
|
|
|
|
March
31,
2016
|
|
December 31,
2015
|
|
March
31,
2015
|
Total stockholders'
equity
|
|
|
|
$
|
339,725
|
|
|
$
|
336,774
|
|
|
$
|
321,999
|
|
Core deposit
intangible
|
|
|
|
13,085
|
|
|
6,863
|
|
|
7,478
|
|
Goodwill
|
|
|
|
82,594
|
|
|
78,610
|
|
|
78,610
|
|
Tangible stockholders
equity
|
|
|
|
$
|
244,046
|
|
|
$
|
251,301
|
|
|
$
|
235,911
|
|
Common shares
outstanding
|
|
|
|
72,774,980
|
|
|
72,792,570
|
|
|
72,472,034
|
|
Tangible book value
per common share
|
|
|
|
$
|
3.35
|
|
|
$
|
3.45
|
|
|
$
|
3.26
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
return on average tangible stockholders' equity:
|
|
|
|
March
31,
2016
|
|
December 31,
2015
|
|
March
31,
2015
|
Average stockholders'
equity
|
|
|
|
$
|
339,236
|
|
|
$
|
334,472
|
|
|
$
|
318,472
|
|
Average core deposit
intangible
|
|
|
|
6,800
|
|
|
6,935
|
|
|
7,550
|
|
Average
goodwill
|
|
|
|
78,653
|
|
|
78,610
|
|
|
79,951
|
|
Average tangible
stockholders' equity
|
|
|
|
$
|
253,783
|
|
|
$
|
248,927
|
|
|
$
|
230,971
|
|
Net income
|
|
|
|
1,940
|
|
|
5,567
|
|
|
5,118
|
|
Return on average
tangible stockholders' equity (annualized)
|
|
|
|
3.07
|
%
|
|
8.87
|
%
|
|
8.99
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
return on average tangible assets:
|
|
|
|
March
31,
2016
|
|
December 31,
2015
|
|
March
31,
2015
|
Average total
assets
|
|
|
|
$
|
2,638,568
|
|
|
$
|
2,525,708
|
|
|
$
|
2,358,775
|
|
Average core deposit
intangible
|
|
|
|
6,800
|
|
|
6,935
|
|
|
7,550
|
|
Average
goodwill
|
|
|
|
78,653
|
|
|
78,610
|
|
|
79,951
|
|
Average tangible
assets
|
|
|
|
$
|
2,553,115
|
|
|
$
|
2,440,163
|
|
|
$
|
2,271,274
|
|
Net income
|
|
|
|
1,940
|
|
|
5,567
|
|
|
5,118
|
|
Return on average
tangible assets (annualized)
|
|
|
|
0.31
|
%
|
|
0.91
|
%
|
|
0.91
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
adjusted net interest margin:
|
|
|
|
|
|
|
|
March
31,
2016
|
Net interest
margin
|
|
|
|
|
|
|
|
3.80
|
%
|
Impact to net
interest margin of $1.5 million interest income on called
securities
|
|
|
|
|
|
|
|
0.26
|
%
|
Adjusted net interest
margin
|
|
|
|
|
|
|
|
3.54
|
%
|
Reconciliation of
year-over-year total loan growth to organic loan growth (from March
31, 2015):
|
|
Year over
year
March 31,
2016
|
Total loan
growth
|
|
$
|
212,253
|
|
Acquired loan
growth
|
|
48,630
|
|
Organic loan
growth
|
|
$
|
163,623
|
|
Reconciliation of
quarterly total loan growth to organic loan growth (from December
31, 2015):
|
|
QTD March
31,
2016
|
Total loan
growth
|
|
$
|
96,455
|
|
Acquired loan
growth
|
|
46,746
|
|
Organic loan
growth
|
|
$
|
49,709
|
|
Photo -
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visit:http://www.prnewswire.com/news-releases/cascade-bancorp-reports-first-quarter-2016-results-including-470-million-deposit-acquisition-double-digit-revenue-and-organic-loan-growth-300258661.html
SOURCE Cascade Bancorp