Cascade Bancorp Reports Fourth Quarter 2015 Net Income Of $5.6 Million, Or $0.08 Per Share

Jan 27, 2016, 16:01 ET from Cascade Bancorp

BEND, Ore., Jan. 27, 2016 /PRNewswire/ -- Cascade Bancorp (NASDAQ: CACB) (the "Company" or "Cascade"), the holding company for Bank of the Cascades (the "Bank"), today announced its financial results for the three months and year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights

  • Net income for the fourth quarter of 2015 was $5.6 million, or $0.08 per share, compared to $5.1 million, or $0.07 per share, for the third quarter of 2015 ("linked quarter").
  • Loan growth was $40.6 million, or 9.8% annualized, during the fourth quarter, while organic loan growth1 was approximately $29.6 million, or 8.5% annualized. Organic loan growth for the full year was 11.8% with year-end gross loans at $1.7 billion.
  • Deposits at December 31, 2015 were flat compared to September 30, 2015. However, average deposits increased 8.0% (annualized) versus the linked quarter average. Checking balances were over 56.8% of total deposits with an overall cost of funds of 0.08%.
  • Fourth quarter net interest income was $0.6 million lower than the linked quarter primarily due to seasonally higher loan fees in the prior period. This resulted in a fourth quarter net interest margin ("NIM") of 3.52% as compared to 3.72% in the linked quarter. The lower NIM was also affected by the increasing volume of loans subject to interest rate swaps.
  • Fourth quarter results included a credit to the provision for loan losses of $2.0 million. Net charge offs for the period were $0.2 million compared to net recoveries of $3.1 million in the linked quarter and $6.4 million for the full year. The reserve for loan losses was 1.45% of total loans at period end.
  • Non-interest income for the fourth quarter of 2015 decreased compared to the linked quarter due primarily to $0.5 million higher securities gain in the linked quarter.
  • Non-interest expense for the fourth quarter was lower than linked quarter levels by $1.0 million, largely related to reduced human resource costs and lower professional and marketing expense.
  • Fourth quarter tax provision was 41.1% due to year-end true-up.
  • Stockholders' equity was $336.8 million at December 31, 2015, with book value per share of $4.63 and tangible book value per share2 of $3.45.
  • Fourth quarter return on average tangible assets3 was 0.91% compared to 0.85% in the linked quarter.
  • Fourth quarter return on average tangible stockholders' equity4 was 8.87% compared to 8.33% in the linked quarter.

Full Year 2015 Financial Highlights

  • Net income for 2015 was $20.6 million, or $0.29 per share, compared to $3.7 million, or $0.06 per share, for 2014.
  • Return on average tangible assets3 was 0.87% compared to 0.19%.
  • Return on average tangible stockholders' equity4 was 8.56% compared to 1.77%.
  • Year-over-year loan growth was 13.1%, while organic loan growth was approximately $149.7 million, or 11.8%, for the year.
  • Year-over-year deposit growth was 5.1%.

"I am very pleased with our results for the fourth quarter and full year 2015 as we delivered strong year-over-year growth in loans, deposits, revenue and profitability," said Terry Zink, President and CEO. "Our experienced banking team continued to capitalize on the strong growth markets that we enjoy in the Pacific Northwest, evidence of which can be seen in our full year 2015 organic loan growth of 11.8%.  More importantly, our new business pipeline remains robust and consumer activity has been strong, which provides optimism for continued progress in 2016."

Mr. Zink continued: "Beyond the favorable market backdrop that we are experiencing given healthy in-migration trends to our core geographies, we expect the Bank's growth in 2016 to be augmented by two important strategic initiatives that were put into place in the fourth quarter.  The first is our announced acquisition of 15 branches from Bank of America, representing approximately $700 million in core deposits. This transaction is expected to close in the first quarter of 2016 and provide earnings accretion in the back half of this year.  The second is our Seattle commercial banking center, which we opened with an experienced banking team that has strong knowledge of the local Seattle market. We are excited about the team's early progress, as they are off to a very strong start having quickly generated a healthy pipeline that we expect will begin to deliver results in the first quarter of 2016."

Branch Acquisition Update

During the fourth quarter of 2015, the Company entered into an agreement to purchase 15 branch locations in Oregon and southeast Washington from Bank of America, National Association. The recent balance of the deposits to be assumed by Cascade is approximately $700 million. No loans are included in the transaction.  Pending regulatory approval and the satisfaction of customary closing conditions, the transaction is on schedule to be completed in March 2016. After expected initial deposit attrition, the Company's total deposits could increase by nearly 30% to $2.65 billion with the transaction. The cost of these funds is expected to be similar to Cascade's current 0.08% rate. The purchase price paid to the seller will be approximately 2% of the balance of deposits at closing.

Management's goal is for the transaction to be accretive to earnings by up to 10%.  Achievement of this goal is targeted during the second half of 2016 under current assumptions including stable market interest rates. The transaction will increase net interest income over the course of the next several quarters as the acquired funds are deployed into investment securities and other earning assets. Over time, these investments will be replaced with organic loan growth, funding the strong loan growth we are experiencing across out footprint, including loans generated by our new commercial banking center in Seattle. The transaction is also targeted to enhance the Company's efficiency ratio by leveraging its existing infrastructure while increasing and diversifying non-interest revenue sources. It is estimated that the efficiency ratio will increase on an interim basis due to certain one-time integration costs but will improve to the mid-60% range by year end 2016. We expect our NIM ratio to contract at closing and then begin to rebound in the second half of the year as we execute our earning-asset deployment plans.

Financial Review The financial statements as of December 31, 2015 and 2014 are inclusive of purchase accounting adjustments to Home Federal Bancorp ("HFB") assets and liabilities, which were acquired on May 16, 2014. Year-over-year comparisons are significantly affected by the HFB-related results and one-time charges in 2014.

The financial highlights for the full year 2015 included net income of $20.6 million, up 450.7% compared to 2014. Strong loan and deposit growth are also evident as compared to the year ago period. Net interest income for the year 2015 increased with growth in earning assets, while non-interest revenues improved with growth in customer transaction volume across the diversified product set. Non-interest expenses for 2015 were down $6.9 million as compared to 2014, largely related to lower occupancy and professional services which were inflated in 2014 due to the acquisition of HFB.

Balance Sheet:

At December 31, 2015 as compared to September 30, 2015 and December 31, 2014

Total assets at December 31, 2015 were $2.5 billion, in-line with the linked quarter and up $126.9 million from the prior year. The increase from December 31, 2014 was due mainly to increased loan balances.

Decreases in cash and equivalents at December 31, 2015 relate mainly to increases in loan balances during the period. 

At December 31, 2015, investment securities classified as available-for-sale and held-to-maturity decreased to $449.7 million as compared to $472.5 million at December 31, 2014.  Fourth quarter investments were up modestly over the third quarter as management continues to time its investments carefully in pursuing its roll-down-the-curve strategies. The Company expects an increase in the 2016 securities portfolio when it deploys the core deposit funds to be acquired in the branch purchase discussed above.

For the full year, gross loans increased 13.1%, with growth diversified among commercial real estate, commercial and industrial, construction, and consumer residential loans. The latter included both retained and acquired adjustable rate mortgages ("ARMs").  For the full year, organic loan growth was $149.7 million or a rate of approximately 11.8%.  At December 31, 2015, gross loans were $1.7 billion, up $40.6 million from the linked quarter, or 9.8% annualized. 

The allowance for loan losses ("ALLL") at December 31, 2015 was $24.4 million as compared to $22.1 million at December 31, 2014. The increase is a result of year-to-date net recoveries of $6.4 million less a $4.0 million provision credit for 2015, including a fourth quarter credit of $2.0 million.   Net charge offs for the current quarter were a modest $0.2 million.

Federal Home Loan Bank ("FHLB") stock was $3.0 million at December 31, 2015 compared to $25.6 million at year end 2014.  The 2015 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 December 31, 2015 increased 5.1% to $2.1 billion compared to $2.0 billion at December 31, 2014.  The change includes a decline in time deposits of $61.4 million compared to a year ago related mainly to runoff in certificates of deposit acquired in the HFB transaction.  Deposits at December 31, 2015 were flat compared to the linked quarter but average total deposits for the quarter increased 8.0% as compared to the linked quarter average (annualized).   At year end, checking deposits were 56.8% of total deposits and the overall cost of funds for the fourth quarter and full year were 0.08% and 0.09%, respectively.

Total stockholders' equity at December 31, 2015 was $336.8 million compared to $315.5 million at December 31, 2014. This increase is primarily a result of 2015 net income of $20.6 million. Tangible common stockholders' equity5 was $251.3 million, or $3.45 per share, at December 31, 2015 as compared to $227.7 million, or $3.14 per share, at December 31, 2014. The ratios of common stockholders' equity to total assets and tangible common stockholders' equity to total assets6 were 13.65% and 10.18% at December 31, 2015, respectively, and 13.48% and 9.73% at December 31, 2014, respectively.

Income Statement: For the quarter ended December 31, 2015 as compared to the quarter ended September 30, 2015 (the linked quarter)

Net income for the fourth quarter of 2015 was $5.6 million, or $0.08 per share, compared to $5.1 million, or $0.07 per share, in the linked quarter. 

Both interest income and net interest income declined by $0.6 million, mainly due to the prior quarter's seasonally higher loan fees.  Cascade's markets are influenced by seasonal construction activity that typically peaks in the summer quarter and can affect the timing of loan fee recognition.  As a result, the fourth quarter NIM was 3.52% as compared to 3.72% in the linked quarter.  In addition to lower loan fees, the NIM was also reduced because of the cumulative success of our interest-rate swap loan book that will benefit from rising short-term interest rates. In addition, the lower NIM ratio was influenced by an increase in average earning assets deployed into low yielding Fed funds during the quarter (inflating the denominator of the ratio). Total interest income was $20.2 million for the three months ended December 31, 2015 as compared to $20.8 million in the linked quarter. The cost of funds was steady compared to the linked quarter at 0.08%.

Non-interest income for the fourth quarter of 2015 was $5.8 million, down from $6.4 million in the linked quarter mainly due to a $0.5 million gain on sale of securities in the prior period. Service and transaction related fees were modestly lower after reaching seasonal peaks in the summer quarter.  Customer swap revenues were modestly higher; revenue related to our Small Business Administration ("SBA") portfolio was softer. In addition, merchant servicing was down because an annual volume bonus was recorded in the linked period. Other income benefited from a fourth quarter recovery on disposition of a decommissioned branch facility.

Non-interest expense in the fourth quarter of 2015 was $18.1 million compared to $19.1 million in the linked quarter mainly due to lower human resource, professional service and marketing expenses.  Salary and benefit expense for the current quarter was down due to lower annual performance incentive accrual and a $0.3 million true-up of the liability for staff paid-time-off. The decrease in professional services expenses was driven by lower expenditures related to the Company's conversion to a single loan file imaging system. Occupancy expenses were steady on a linked quarter basis.

The income tax provision for the fourth quarter of 2015 was $3.9 million, representing a 41.1% effective tax rate for the period, including true-up of full year tax liability. Management estimates the 2016 tax rate at approximately 37.5%, slightly lower than the 39.4% statutory rate, reflecting the impact of permanent differences.

Income Statement: For the year ended December 31, 2015 compared to December 31, 2014

Net income for the year ended December 31, 2015 was $20.6 million as compared to $3.7 million for the year ago period. The 2014 results were lower, due in large part to the costs incurred in the HFB acquisition. In addition, improvements in 2015 earnings are attributable to higher net interest income arising from increased earning assets from the HFB acquisition, as well as significantly increased non-interest income.

Non-interest income for the year ended December 31, 2015 was $25.0 million, up from $20.2 million during the prior year. Much of the year-over-year improvement is related to the Company's increased customer base arising from the HFB acquisition, as well as the implementation and expansion of sales in its card, mortgage, interest rate swap, and SBA lines of business. This progress also reflects improvement in the local economies in its service areas.

Non-interest expense for the year ended December 31, 2015 was $74.4 million compared to $81.3 million in the year ago period. The decrease between the 2014 and 2015 periods relates primarily to the HFB acquisition costs incurred in 2014.

Income tax expense for the year ended December 31, 2015 was $12.5 million as compared to a tax expense of $0.2 million in the year ago period. The changes between the 2015 and 2014 periods relate to the tax impact of the HFB acquisition in 2014.

Asset Quality

Credit quality metrics were solid and remained stable for the current quarter. Net loan recoveries totaled $6.4 million year-to-date 2015, including fourth quarter net charge offs of $0.2 million. This compares to net loan recoveries of $3.1 million for the linked quarter and $0.7 million for the year ago quarter. With the reverse provision discussed above, the ratio of loan loss reserve to total loans was 1.45% as of December 31, 2015 as compared to 1.62% at September 30, 2015 and 1.48% at December 31, 2014.

At December 31, 2015, delinquent loans were 0.24% of the loan portfolio. This compares to 0.31% at September 30, 2015 and 0.27% at December 31, 2014. Non-performing assets as a percentage of total assets was 0.34% at December 31, 2015, as compared to 0.36% at September 30, 2015 and 0.64% at December 31, 2014. These low and stable performance ratios reflect continued improvement in economic conditions.

Cascade's strategic aim is to diversify its exposure to credit risk concentrations.  Geographic concentration risk arises because Cascade has a significant 'community bank' footprint in tier-2 markets that have been more dependent on real estate activity and may be more economically volatile than the diverse economies of larger metropolitan areas. Activities to diversify concentration risk include the purchase of investment securities as well as wholesale loan portfolios (purchased ARMs and shared national credits ("SNCs")) outside its footprint. For example, acquired ARMs are largely outside of Cascade's footprint in larger metro areas in the western U.S. and the SNC portfolio is diversified across geographies and industry groups.

The HFB acquired loans in 2014 were 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 HFB 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 fourth quarter and year-to-date 2015 results will be held today, January 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=117880 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, operate in Oregon, Idaho and Washington markets. Founded in 1977, Bank of the Cascades offers full-service community banking through 37 branches in Central, Southern and Northwest Oregon, as well as in the greater Boise/Treasure Valley, Idaho and Seattle, Washington areas. 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, organic loan growth, tangible book value per common share, return on average tangible assets, return on average tangible stockholders' equity, tangible common stockholders' 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 anticipated acquisition of branches from Bank of America, 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.

The 2014 financial data contained in this earnings release should be read in conjunction with the audited consolidated financial statements and related notes of Cascade Bancorp as of and for the fiscal year ended December 31, 2014, as contained in the Company's Annual Report on Form 10-K for such fiscal year.  The 2015 financial data contained in this earnings release should be read in conjunction with the audited consolidated financial statements and related notes of Cascade Bancorp as of and for the fiscal year ended December 31, 2015, when filed by the Company in its Annual Report on Form 10-K for such fiscal year.

 

CASCADE BANCORP

CONSOLIDATED BALANCE SHEETS

(In thousands) (Unaudited)

December 31, 2015

September 30, 2015

December 31, 2014

ASSETS

Cash and cash equivalents:

Cash and due from banks

$

46,354

$

47,007

$

39,115

Interest bearing deposits

31,178

77,823

43,701

Federal funds sold

273

273

273

Total cash and cash equivalents

77,805

125,103

83,089

Investment securities available-for-sale

310,262

296,139

319,882

Investment securities held-to-maturity

139,424

143,793

152,579

Federal Home Loan Bank (FHLB) stock

3,000

3,012

25,646

Loans held for sale

3,621

2,824

6,690

Loans, net

1,662,095

1,619,238

1,468,784

Premises and equipment, net

42,031

42,106

43,649

Bank-owned life insurance

54,450

54,185

53,449

Other real estate owned, net

3,274

3,871

3,309

Deferred tax asset, net

50,673

53,823

66,126

Core deposit intangible

6,863

7,068

7,683

Goodwill

78,610

78,610

80,082

Other assets

35,921

38,501

30,169

Total assets

$

2,468,029

$

2,468,273

$

2,341,137

LIABILITIES & STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Demand

$

727,730

$

749,927

$

619,377

Interest bearing demand

1,044,134

1,010,489

995,497

Savings

135,527

135,610

129,610

Time

175,697

186,969

237,138

Total deposits

2,083,088

2,082,995

1,981,622

Other liabilities

48,167

53,689

44,032

Total liabilities

2,131,255

2,136,684

2,025,654

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

452,925

452,350

450,999

Accumulated deficit

(117,772)

(123,339)

(138,351)

Accumulated other comprehensive income

1,621

2,578

2,835

Total stockholders' equity

336,774

331,589

315,483

Total liabilities and stockholders' equity

$

2,468,029

$

2,468,273

$

2,341,137

 

CASCADE BANCORP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands) (Unaudited)

Three Months Ended

Year Ended

December 31,

2015

September 30,

2015

December 31,

2014

December 31,

2015

December 31,

2014

Interest income:

Interest and fees on loans

$

17,215

$

17,788

$

16,688

$

68,484

$

58,155

Interest on investments

2,904

2,995

2,979

11,687

8,982

Other investment income

98

58

78

216

237

Total interest income

20,217

20,841

19,745

80,387

67,374

Interest expense:

Deposits:

Interest bearing demand

368

337

306

1,333

982

Savings

10

10

10

40

31

Time

51

83

341

493

1,270

Other borrowings

6

6

Total interest expense

429

430

657

1,872

2,289

Net interest income

19,788

20,411

19,088

78,515

65,085

Loan loss provision (recovery)

(2,000)

(4,000)

Net interest income after loan loss provision

21,788

20,411

19,088

82,515

65,085

Non-interest income:

Service charges on deposit accounts

1,285

1,326

1,297

5,121

4,621

Card issuer and merchant services fees, net

1,716

1,837

1,733

7,052

6,213

Earnings on BOLI

265

252

274

1,001

986

Mortgage banking income, net

528

624

506

2,617

2,296

Swap fee income

638

595

428

2,533

1,847

SBA gain on sales and fee income

234

554

590

1,294

1,120

Gain (loss) on sales of investments

(28)

503

475

Other income

1,134

693

1,644

4,880

3,088

Total non-interest income

5,772

6,384

6,472

24,973

20,171

Non-interest expense:

Salaries and employee benefits

10,711

11,315

9,833

43,744

41,421

Occupancy

1,294

1,123

1,587

5,200

9,131

Information technology

946

745

712

3,675

4,346

Equipment

397

390

500

1,539

1,963

Communications

545

560

623

2,130

2,263

FDIC insurance

275

342

460

1,321

1,517

OREO

57

122

(28)

68

988

Professional services

1,367

1,548

1,204

5,327

8,121

Card issuer

637

693

876

2,836

2,903

Insurance

149

183

185

732

1,214

Other expenses

1,737

2,049

1,586

7,824

7,474

Total non-interest expense

18,115

19,070

17,538

74,396

81,341

Income (loss) before income taxes

9,445

7,725

8,022

33,092

3,915

Income tax (provision) benefit

(3,878)

(2,626)

(2,982)

(12,513)

(178)

Net income (loss)

$

5,567

$

5,099

$

5,040

$

20,579

$

3,737

 

CASCADE BANCORP

NET INTEREST MARGIN

(In thousands) (Unaudited)

Three Months Ended December 31,

2015

2014

Average

Balance

Interest

Income/

Expense

Average

Yield or

Rates

Average Balance

Interest Income/ Expense

Average Yield or Rates

Assets

Investment securities

$

439,277

$

2,904

2.62

%

$

456,852

$

2,979

5.29

%

Interest bearing balances due from other banks

133,482

98

0.29

%

108,059

78

0.29

%

Federal funds sold

273

%

272

%

Federal Home Loan Bank stock

3,004

%

25,845

%

Loans

1,654,528

17,215

4.13

%

1,466,506

16,688

4.51

%

Total earning assets/interest income

2,230,564

20,217

3.60

%

2,057,534

19,745

3.81

%

Reserve for loan losses

(26,428)

(21,786)

Cash and due from banks

43,840

42,150

Premises and equipment, net

42,119

44,334

Bank-owned life insurance

54,292

53,284

Deferred tax asset

52,930

69,245

Goodwill

78,610

80,188

Core deposit intangible

6,935

7,755

Accrued interest and other assets

42,846

34,608

Total assets

$

2,525,708

$

2,367,312

Liabilities and Stockholders' Equity

Interest bearing demand deposits

$

1,071,760

368

0.14

%

$

990,249

306

0.12

%

Savings deposits

135,622

10

0.03

%

130,602

10

0.03

%

Time deposits

183,218

51

0.11

%

240,347

341

0.56

%

Other borrowings

1

%

%

Total interest bearing liabilities/interest expense

1,390,601

429

0.12

%

1,361,198

657

0.19

%

Demand deposits

748,254

647,822

Other liabilities

52,381

46,312

Total liabilities

2,191,236

2,055,332

Stockholders' equity

334,472

311,980

Total liabilities and stockholders' equity

$

2,525,708

$

2,367,312

Net interest income

$

19,788

$

19,088

Net interest spread

3.47

%

3.62

%

Net interest income to earning assets

3.52

%

3.68

%

 

CASCADE BANCORP

NET INTEREST MARGIN

(In thousands) (Unaudited)

Year Ended December 31,

2015

2014

Average

Balance

Interest

Income/

Expense

Average

Yield or

Rates

Average Balance

Interest Income/ Expense

Average Yield or Rates

Assets

Investment securities

$

454,258

$

11,687

2.57

%

$

346,235

$

8,982

2.59

%

Interest bearing balances due from other banks

80,096

216

0.27

%

92,104

237

0.26

%

Federal funds sold

273

%

128

%

Federal Home Loan Bank stock

12,315

%

19,882

%

Loans

1,594,082

68,484

4.30

%

1,272,426

58,155

4.57

%

Total earning assets/interest income

2,141,024

80,387

3.75

%

1,730,775

67,374

3.89

%

Reserve for loan losses

(24,640)

(21,533)

Cash and due from banks

43,214

37,152

Premises and equipment, net

42,796

40,109

Bank-owned life insurance

53,920

46,834

Deferred tax asset

58,937

61,364

Goodwill

78,940

48,723

Core deposit intangible

7,240

5,154

Accrued interest and other assets

38,043

29,155

Total assets

$

2,439,474

$

1,977,733

Liabilities and Stockholders' Equity

Interest bearing demand deposits

$

1,027,228

$

1,333

0.13

%

$

803,271

$

982

0.12

%

Savings deposits

133,440

40

0.03

%

101,419

31

0.03

%

Time deposits

202,293

493

0.24

%

203,817

1,270

0.62

%

Other borrowings

1,685

6

0.36

%

2,214

6

0.27

%

Total interest bearing liabilities/interest expense

1,364,646

1,872

0.14

%

1,110,721

2,289

0.21

%

Demand deposits

700,838

566,577

Other liabilities

47,433

35,158

Total liabilities

2,112,917

1,712,456

Stockholders' equity

326,557

265,277

Total liabilities and stockholders' equity

$

2,439,474

$

1,977,733

Net interest income

$

78,515

$

65,085

Net interest spread

3.62

%

3.69

%

Net interest income to earning assets

3.67

%

3.76

%

 

CASCADE BANCORP

ADDITIONAL FINANCIAL INFORMATION

(In thousands, except per share data) (Unaudited)

Three Months Ended

Year Ended

December 31, 2015

September 30, 2015

December 31, 2014

December 31, 2015

December 31, 2014

Share Data

Basic net income per common share

$

0.08

$

0.07

$

0.07

$

0.29

$

0.06

Diluted net income per common share

$

0.08

$

0.07

$

0.07

$

0.28

$

0.06

Book value per basic common share

$

4.63

$

4.56

$

4.35

$

4.63

$

4.35

Tangible book value per common share1

$

3.45

$

3.38

$

3.14

$

3.45

$

3.14

Basic average shares outstanding

71,882

71,868

71,676

71,789

62,265

Fully diluted average shares outstanding

72,473

71,969

71,832

72,617

62,340

Balance Sheet Detail

Gross loans

$

1,686,573

$

1,645,924

$

1,490,837

$

1,686,573

$

1,490,837

  Wholesale loans

$

268,417

$

257,417

$

222,383

$

268,417

$

222,383

  Total organic loans

$

1,418,156

$

1,388,507

$

1,268,454

$

1,418,156

$

1,268,454

Total deposits

$

2,083,088

$

2,082,995

$

1,981,622

$

2,083,088

$

1,981,622

  Non interest bearing

$

727,730

$

749,927

$

619,377

$

727,730

$

619,377

  Checking

$

1,183,274

$

1,197,521

$

1,056,284

$

1,183,274

$

1,056,284

  Money market

$

588,590

$

562,895

$

558,590

$

588,590

$

558,590

  Time

$

175,697

$

186,969

$

237,138

$

175,697

$

237,138

Key Ratios

Return on average stockholders' equity

6.60

%

6.16

%

6.41

%

6.30

%

1.41

%

Return on average tangible stockholders' equity2

8.87

%

8.33

%

8.93

%

8.56

%

1.77

%

Return on average assets

0.87

%

0.82

%

0.84

%

0.84

%

0.19

%

Return on average tangible assets3

0.91

%

0.85

%

0.88

%

0.87

%

0.19

%

Common stockholders' equity ratio

13.65

%

13.43

%

13.48

%

13.65

%

13.48

%

Tangible common stockholders' equity ratio4

10.18

%

9.96

%

9.73

%

10.18

%

9.73

%

Net interest spread

3.47

%

3.67

%

3.62

%

3.62

%

3.69

%

Net interest margin

3.52

%

3.72

%

3.68

%

3.67

%

3.76

%

Total revenue (net int. inc. + non int. inc.)

$

25,562

$

26,796

$

25,560

$

103,490

$

85,256

Efficiency ratio5

70.87

%

71.17

%

68.62

%

71.89

%

95.41

%

Loan to deposit ratio

79.79

%

77.74

%

74.12

%

79.79

%

74.12

%

Credit Quality Ratios

Reserve for loan losses

$

24,415

$

26,623

$

22,053

$

24,415

$

22,053

Reserve for loan losses to ending gross loans

1.45

%

1.62

%

1.48

%

1.45

%

1.48

%

Reserve for credit losses

$

24,855

$

27,063

$

22,493

$

24,855

$

22,493

Reserve for credit losses to ending gross loans

1.47

%

1.64

%

1.51

%

1.47

%

1.51

%

Non-performing assets ("NPAs")

$

8,396

$

8,915

$

15,047

$

8,396

$

15,047

NPAs to total assets

0.34

%

0.36

%

0.64

%

0.34

%

0.64

%

Delinquent >30 days to total loans (excl. NPAs)

0.24

%

0.31

%

0.27

%

0.24

%

0.27

%

Net (recoveries) charge-offs

$

208

$

(3,122)

$

(702)

$

(6,362)

$

(1,196)

Net loan (recoveries) charge-offs to average total loans

0.01

%

(0.19)%

(0.05)%

(0.40)%

(0.09)%

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)

December 31,

2015

September 30,

2015

December 31,

 2014

Bank Capital Ratios

Estimate

Tier 1 capital leverage ratio

9.25

%

8.97

%

7.51

%

Common equity Tier 1 ratio

11.35

%

11.10

%

n/a

Tier 1 risk-based capital ratio

11.35

%

11.10

%

9.73

%

Total risk-based capital ratio

12.60

%

12.36

%

10.98

%

Bancorp Capital Ratios

Tier 1 capital leverage ratio

9.40

%

9.13

%

7.66

%

Common equity Tier 1 ratio

11.53

%

11.32

%

n/a

Tier 1 risk-based capital ratio

11.53

%

11.32

%

9.91

%

Total risk-based capital ratio

12.79

%

12.58

%

11.16

%

 

Reconciliation of Non-GAAP Measures (unaudited):

Reconciliation of period end stockholders' equity to period end tangible stockholders' equity:

December 31, 2015

September 30, 2015

December 31, 2014

Total stockholders' equity

$

336,774

$

331,589

$

315,483

Core deposit intangible

6,863

7,068

7,683

Goodwill

78,610

78,610

80,082

Tangible stockholders' equity

$

251,301

$

245,911

$

227,718

Reconciliation of period end common stockholders' equity ratio to period end tangible common stockholders' equity ratio:

December 31, 2015

September 30, 2015

December 31, 2014

Total stockholders' equity

$

336,774

$

331,589

$

315,483

Total assets

$

2,468,029

$

2,468,273

$

2,341,137

Common stockholders' equity ratio

13.65

%

13.43

%

13.48

%

Tangible stockholders' equity

$

251,301

$

245,911

$

227,718

Total assets

$

2,468,029

$

2,468,273

$

2,341,137

Tangible common stockholders' equity ratio

10.18

%

9.96

%

9.73

%

Reconciliation of period end total stockholders' equity to period end tangible book value per common share:

December 31, 2015

September 30, 2015

December 31, 2014

Total stockholders' equity

$

336,774

$

331,589

$

315,483

Core deposit intangible

6,863

7,068

7,683

Goodwill

78,610

78,610

80,082

Tangible stockholders equity

$

251,301

$

245,911

$

227,718

Common shares outstanding

72,792,570

72,789,412

72,491,850

Tangible book value per common share

$

3.45

$

3.38

$

3.14

 

Quarter to date

Year to date

Reconciliation of return on average tangible stockholders' equity:

December 31, 2015

September 30,

2015

December 31, 2014

December 31, 2015

December 31, 2014

Average stockholders' equity

$

334,472

$

328,478

$

311,980

$

326,557

$

265,277

Average core deposit intangible

6,935

7,141

7,755

7,240

5,154

Average goodwill

78,610

78,610

80,188

78,940

48,723

Average tangible stockholders' equity

$

248,927

$

242,727

$

224,037

$

240,377

$

211,400

Net income

5,567

5,099

5,040

20,579

3,737

Return on average tangible stockholders' equity (annualized)

8.87

%

8.33

%

8.93

%

8.56

%

1.77

%

Quarter to date

Year to date

Reconciliation of return on average tangible assets:

December 31, 2015

September 30, 2015

December 31, 2014

December 31, 2015

December 31, 2014

Average total assets

$

2,525,708

$

2,471,910

$

2,367,312

$

2,439,474

$

1,977,733

Average core deposit intangible

6,935

7,141

7,755

7,240

5,154

Average goodwill

78,610

78,610

80,188

78,940

48,723

Average tangible assets

$

2,440,163

$

2,386,159

$

2,279,369

$

2,353,294

$

1,923,856

Net income

5,567

5,099

5,040

20,579

3,737

Return on average tangible assets (annualized)

0.91

%

0.85

%

0.88

%

0.87

%

0.19

%

 

Reconciliation of year-over-year total loan growth to organic loan growth (from December 31, 2014):

Year over year December 31, 2015

Total loan growth

$

195,736

Acquired loans growth

46,034

Organic loan growth

$

149,702

Reconciliation of quarterly total loan growth to organic loan growth (from September 30, 2015):

QTD December 31, 2015

Total loan growth

$

40,649

Acquired loans growth

11,000

Organic loan growth

$

29,649

 

 

SOURCE Cascade Bancorp



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