2008-07-25 23:45:11 -
www.mycommunityfirst.com - Prineville Bancorporation (OTCBB:PNVL), parent company for Community First Bank, today reported its results for the quarter ended June 30, 2008.
-- Net loss of $320,000 for the quarter, resulting in a year-to-date loss of $139,000 ($.05 per share) for the first six months of 2008.
-- Loan loss provision for the second
quarter of $450,000, an increase of $354,000 from the first quarter of 2008.
-- Allowance for Loan and Lease Losses (ALLL) increased to $2.4 million or 1.4% of outstanding loans.
-- Bank capital ratios remain above regulatory standards for "well capitalized" institutions with the Tier 1 Leverage capital ratio at 8.9% and Tier 1 Risk Based Capital at 10.6%.
Robin Freeman, President & CEO, stated, "The second quarter loss was a result of increased loan loss provision and a higher level of collection expenses related to non performing assets. The increased loan loss provision is not a result of loan losses actually incurred, but in recognition of a higher level of non-performing loans and declining collateral values. In addition, results were affected by the reversal of accrued interest for non performing loans, legal and collection expense, and expenditures incurred to enhance our position on certain credits.
"As economic and industry concerns continue, we want to reassure all that our Capital and Loan Loss Reserve levels remain strong. Our Team is focused on addressing the challenges of the current environment. Our loan portfolio remains diversified and solid, and in contrast to portfolios of other banks noted in the media, we have had no subprime mortgage exposure. Our loan portfolio reflects our confidence in local business and commercial clients who form the backbone of our Central Oregon Community. We continue to believe and invest in these relationships that we believe will ensure the future growth and success of our bank."
Freeman added, "In spite of the asset quality challenges, we experienced growth in customer relationships, loans and deposits in the second quarter of 2008. This growth is reflective of our community and customer focus. To take advantage of the opportunities in Central Oregon, during the second quarter we opened our eighth bank branch which is located in the Mill Quarter District in Bend, we established our Business Banking team to better service our larger deposit relationships and grow our deposit base, and we expanded our residential lending team."
Andy Phillips, Executive Vice President and Chief Credit Officer, added that, "Year-to-date provisions to the Allowance for Loan and Lease Loss (ALLL) total $546,000, with net credit losses charged against the ALLL year-to-date of $189,000. This has resulted in an increase in the Allowance for Loan Losses to $2.4 million, which is over 1.4% of loans outstanding.
"The level of past due loans has declined from March 31, 2008 as the backlog of loans that matured in the first quarter were either collected or renewed after a thorough underwriting process which incorporated a recognition of declining real estate values and potential stress to borrower cash flows. The increased provision is a reflection of downgraded credit ratings for a number of loans due to the continued weakness of real estate markets in Central Oregon. This approach is consistent with current industry trends and regulatory guidelines with respect to collateral dependent loans. Local real estate values and the economy have been weak and weakness in those areas is expected to continue. While this may result in loan loss provisions remaining at higher levels in the near term, the levels of costs related to collection are expected to decline."
John Hajovsky, Executive Vice President and Chief Operating Officer, commented, "Deposit volumes reflect continued growth, but rates of growth have slowed, in part due to the economy. Another reason deposit growth has slowed is that we enacted the initiative outlined in the first quarter of 2008 to allow high cost time deposits to expire by not offering high rates for these short term deposits. That strategy has led to continued improvement in the net interest margin."
Significant items as of June 30, 2008 are as follows:
-- Net loss for the second quarter of $320,000 compares to net income of $467,000 for the comparable second quarter ended June 30, 2007 and $181,000 for the first quarter 2008.
-- Total assets were $214.0 million as of June 30, 2008--an increase of 10.3% from June 30, 2007 and an increase of 2.2% from March 31, 2008.
-- Total deposits were $167.4 million as of June 30, 2008--an increase of 12.0% from June 30, 2007 and an increase of 4.4% from March 31, 2008.
-- Gross loans were $170.6 million as of June 30, 2008--an increase of 8.6% from June 30, 2007 and virtually unchanged from March 31, 2008.
To learn more, please visit our Investor Relations page on our website at www.MyCommunityFirst.com.
Prineville Bancorporation is the holding company for Community First Bank, which operates eight bank branches located in Prineville, Bend (3), Redmond, La Pine, Terrebonne and Madras, Oregon. Residential mortgage services are also offered through all bank branches. In addition investment and trust services are offered through Community First Investments.
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements based upon management's current expectations and beliefs concerning future developments and their potential effect on Prineville Bancorporation. There can be no assurances that future developments affecting Prineville Bancorporation will be the same as those anticipated by management.
Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These risks and uncertainties include, but are not limited to: (1) competitive pressures in the banking and financial industries; (2) changes in interest rate environment; (3) general economic conditions, nationally, regionally, and in operating markets; (4) changes in regulatory environment; (5) changes in business conditions and inflation; (6) changes in securities markets; and (7) future credit loss experience.
Prineville Bancorporation
John Hajovsky, 541-416-4400
hajovsky@MyCommunityFirst.com 
