Cascade Financial Corporation ("Cascade Financial") (Nasdaq:CASB),
the parent company of Cascade Bank, today reported financial
results for the first quarter ended March 31, 2011, which included
improvements in overall credit quality metrics and an increase in
net interest margin. Cascade Financial's net loss totaled $2.6
million for the first quarter ended March 31, 2011, compared to a
net loss of $8.0 million in the preceding quarter. The provision
for loan losses for the quarter was $2.6 million, a 53.6% decrease
from the provision of $5.5 million in the preceding quarter.
Including accruals for preferred stock dividends and accretion
of issuance discount on preferred stock issued to the U.S.
Treasury, Cascade Financial reported a first quarter net loss
attributable to common stockholders of $3.3 million, or $0.27 per
diluted common share, compared to a net loss of $8.6 million, or
$0.70 per diluted common share, in the preceding quarter and a net
loss of $32.8 million, or $2.69 per diluted common share, for the
first quarter a year ago. Dividend accruals on preferred stock
issued to the U.S. Treasury under the Capital Purchase Program for
the first quarter of 2011 totaled $522,000, and the accretion of
the issuance discount on preferred stock for the quarter was
$119,000.
Significant items for the first quarter of 2011 include:
- Cascade Financial, Cascade Bank and Opus Bank announced the
signing of a definitive merger agreement;
- Net loss totaled $2.6 million compared to a net loss of $8.0
million in the preceding quarter;
- Provision for loan losses was $2.6 million, a 53.6% decrease on
a sequential quarter basis;
- Net charge-offs were $2.9 million, a 50.9% decrease on a
sequential quarter basis;
- Nonperforming assets to total assets declined to 4.63% from
5.51% on a sequential quarter basis;
- Total allowance for loan losses increased to 2.64% of total
loans, up from 2.62% three months earlier and 2.26% a year ago;
- A reduction in average interest rates paid on interest checking
and CDs combined to reduce the cost of deposits by 10 basis points
compared to the preceding quarter;
- Net interest margin was 2.66%, a 14 basis point improvement on
a sequential quarter basis; and
- Total risk-based capital ratio was 9.83%.
Over the past 18 months, Cascade Financial investigated
alternatives to raise capital in response to increased capital
ratios mandated by bank regulators. As a result of these
efforts, on March 4, 2011, Cascade Financial announced that Cascade
Financial, Cascade Bank and Opus Bank, Irvine, CA, entered into an
agreement and plan of reorganization, providing for Opus Bank to
acquire Cascade Financial and its principal operating subsidiary,
Cascade Bank, and for the merger of Cascade Bank into Opus
Bank. Under the agreement, holders of Cascade Financial common
stock will receive approximately $0.45 cash per share outstanding,
subject to customary closing conditions. Cascade Financial's
shareholders will be asked to approve the agreement with Opus Bank
at a special meeting of shareholders on May 31, 2011. The
transaction is expected to close in the latter part of the second
quarter of 2011.
"The economic recession severely impacted the Snohomish County
area and Cascade Bank," stated Carol K. Nelson, President and
CEO. "After carefully considering all options, the Board of
Directors and management determined Cascade Bank needed to
substantially increase its capital base to meet regulatory
requirements and remain competitive. The merger with Opus Bank
was the best option for our shareholders, customers and
employees."
Asset Quality
Nonperforming loans declined during the quarter to $35.2
million, or 3.59% of total loans at March 31, 2011, compared to
$48.1 million, or 4.82% of total loans in the preceding
quarter. Real Estate Owned (REO) decreased to $32.3 million at
March 31, 2011, compared to $34.4 million three months
earlier. Nonperforming assets were $67.5 million or 4.63% of
total assets at March 31, 2011, compared to $82.5 million or 5.51%
at the end of the preceding quarter, and $124.1 million or 7.34% a
year ago.
The first quarter provision for loan losses was $2.6 million,
with net charge-offs of $2.9 million. The provision for loan
losses was $5.5 million for the preceding quarter and $31.3 million
for the first quarter a year ago. The total allowance for loan
losses now stands at $25.8 million, or 2.64% of total loans at
quarter end, compared to $26.2 million, or 2.62% of total loans at
December 31, 2010, and $26.1 million, or 2.26% of total loans a
year ago.
The following table shows nonperforming loans versus total loans
in each category:
|
Balance at |
Nonperforming |
NPL as a % |
LOAN PORTFOLIO ($ in
000's) |
3/31/2011 |
Loans (NPL) |
of Loans |
Business |
$ 392,233 |
$ 2,818 |
0.7% |
R/E construction |
|
|
|
Spec construction |
23,033 |
8,502 |
36.9% |
Land acquisition and
development/land |
57,235 |
2,607 |
4.6% |
Commercial R/E construction |
2,332 |
-- |
0.0% |
Total R/E
construction |
82,600 |
11,109 |
13.4% |
Commercial R/E |
190,191 |
17,958 |
9.4% |
Multifamily |
89,461 |
-- |
0.0% |
Home equity/consumer |
29,270 |
746 |
2.5% |
Residential |
196,389 |
2,560 |
1.3% |
Total loans |
$ 980,144 |
$ 35,191 |
3.6% |
Nonperforming loans totaled $35.2 million at March 31, 2011 and
continued to be centered in real estate construction and commercial
real estate loans. Of total nonperforming loans, real estate
construction loans were $11.1 million and commercial real estate
loans were $18.0 million. The nonperforming real estate
construction category consists of eight borrower relationships, the
two largest of which totaled $7.6 million and $2.4 million,
respectively. The larger relationship is a loan for 70
completed condominiums in Tacoma, Washington, and the $2.4 million
relationship includes loans for 17 finished lots and three
completed spec homes in Lynnwood, Washington. Two borrower
relationships/loans comprise the nonperforming commercial real
estate loans, which include one retail center in Lacey, Washington,
and one office building in Seattle, Washington.
"During the first quarter of 2011, a total of $3.7 million in
loans were placed on nonaccrual status, $11.5 million were
converted to REO status, $2.1 million were paid off and $3.0
million were charged-off in connection with updated real estate
appraisals or evaluations during the period," said Rob Disotell,
EVP and Chief Credit Officer. "The pace of loans moving to
nonaccrual status has slowed steadily over the past four
quarters."
The following table reflects loans placed on nonaccrual status
for each of the last four quarters:
NONPERFORMING LOANS ($ in
000's) |
1Q2011 |
4Q 2010 |
3Q 2010 |
2Q 2010 |
1Q 2010 |
Additions |
$3,722 |
$7,406 |
$16,676 |
$24,727 |
$39,301 |
The following table shows the migration of nonperforming loans
through the portfolio in each category (3/31/11 compared to
12/31/10):
|
|
Additions |
Paydowns |
Charge-offs |
|
|
|
Balance at |
during |
during |
during |
Transfers |
Balance at |
NONPERFORMING LOANS ($ in
000's) |
3/31/11 |
quarter |
quarter |
quarter (1) |
to REO |
12/31/10 |
Business |
$ 2,818 |
$ 543 |
$ (874) |
$ (1,169) |
$ (29) |
$ 4,347 |
R/E construction |
|
|
|
|
|
|
Spec construction |
8,502 |
70 |
(659) |
(614) |
-- |
9,705 |
Land acquisition and
development/land |
2,607 |
991 |
(487) |
(745) |
-- |
2,848 |
Total R/E
construction |
11,109 |
1,061 |
(1,146) |
(1,359) |
-- |
12,553 |
Commercial R/E |
17,958 |
600 |
(83) |
51 |
(10,962) |
28,352 |
Multifamily |
-- |
-- |
-- |
-- |
-- |
-- |
Home equity/consumer |
746 |
429 |
(9) |
(245) |
(477) |
1,048 |
Residential |
2,560 |
1,089 |
(23) |
(304) |
-- |
1,798 |
Total |
$ 35,191 |
$ 3,722 |
$ (2,135) |
$ (3,026) |
$ (11,468) |
$ 48,098 |
|
|
|
|
|
|
|
(1) Excludes $52 related to
overdrawn checking accounts and recoveries of $204. |
The following table shows the change in REO during the
quarter:
|
|
Additions |
|
|
|
|
|
Balance at |
during |
Capitalized |
Paydowns/ |
Writedowns/ |
Balance at |
REO ($ in 000's) |
3/31/11 |
quarter |
Costs |
Sales |
Loss |
12/31/10 |
R/E construction |
|
|
|
|
|
|
Residential construction |
$ 363 |
$ -- |
$ 124 |
$ -- |
$ -- |
$ 239 |
Land acquisition &
development/land |
13,262 |
29 |
144 |
(9,401) |
(1,216) |
23,706 |
Total R/E
construction |
13,625 |
29 |
268 |
(9,401) |
(1,216) |
23,945 |
Commercial R/E |
15,521 |
10,962 |
165 |
(55) |
(525) |
4,974 |
Multifamily |
1,438 |
-- |
18 |
(182) |
(116) |
1,718 |
Residential |
1,727 |
477 |
36 |
(2,146) |
(415) |
3,775 |
Total |
$ 32,311 |
$ 11,468 |
$ 487 |
$ (11,784) |
$ (2,272) |
$ 34,412 |
"We continue to make strong progress in reducing nonperforming
assets (nonperforming loans plus REO). Total nonperforming
assets were down 18.2% from the prior quarter and 45.6% below the
same quarter last year. Nonperforming assets totaled $67.5
million, or 4.63% of total assets, compared to $124.1 million, or
7.34% of total assets, a year ago," said Disotell.
Loans delinquent 31-89 days and still accruing totaled $11.1
million, or 1.13% of total loans at March 31, 2011, compared to
$2.9 million, or 0.29% of total loans at December 31, 2010, and
$3.5 million, or 0.30% of total loans at March 31, 2010. All
of the delinquent loans totaling $11.1 million at March 31, 2011
were in the 30-59 day category and included $5.7 million in
business loans, $3.9 million in residential loans, and $1.4 million
in commercial real estate with the remainder in consumer
loans. Cascade Bank had two loans totaling $145,000 that were
90 days or more past due and still accruing interest at March 31,
2011.
Loan Portfolio
Cascade Bank's focus has been on reducing its real estate
construction loan exposure and as a result total loans decreased
from a year ago. The decrease was accomplished through
reducing new real estate construction loan origination except in a
few cases where a new loan would improve Cascade Bank's position on
an existing loan, and by working through the existing real estate
construction portfolio to secure payoffs and accelerating the
foreclosure process on problem loans where borrowers did not have
the financial capacity to repay their loans. At March 31,
2011, real estate construction loans were 8.4% of total loans,
compared to 17.8% at March 31, 2010. Total loans decreased
15.2%, or $175.8 million, on a year-over-year basis to $980.1
million at March 31, 2011.
The following table shows the changes in the loan portfolio in
each category (3/31/11 compared to 12/31/10 and 3/31/10):
LOAN PORTFOLIO ($ in
000's) |
March 31, 2011 |
December 31,
2010 |
March 31, 2010 |
One Year Change |
Business |
$ 392,233 |
$ 400,047 |
$ 457,426 |
-14.3% |
R/E construction |
|
|
|
|
Spec construction |
23,033 |
25,303 |
52,098 |
-55.8% |
Land acquisition and
development/land |
57,235 |
54,142 |
108,402 |
-47.2% |
Multifamily/custom
construction |
-- |
-- |
12,905 |
-100.0% |
Commercial R/E
construction |
2,332 |
2,333 |
31,996 |
-92.7% |
Total R/E
construction |
82,600 |
81,778 |
205,401 |
-59.8% |
Commercial R/E |
190,191 |
201,885 |
183,027 |
3.9% |
Multifamily |
89,461 |
89,350 |
89,920 |
-0.5% |
Home equity/consumer |
29,270 |
29,964 |
31,274 |
-6.4% |
Residential |
196,389 |
194,677 |
188,930 |
3.9% |
Total
loans |
$ 980,144 |
$ 997,701 |
$ 1,155,978 |
-15.2% |
Business loans decreased 14.3% from the prior year to $392.2
million at March 31, 2011. The decline in business loans is
primarily the result of lower demand by customers in the current
economic environment and is also due to Cascade Bank limiting loan
growth to conserve capital. Total real estate construction
loans outstanding decreased 59.8% to $82.6 million at March
31, 2011, compared to $205.4 million a year ago. Within this
category, spec construction declined 55.8% to $23.0 million and
land acquisition and development/land decreased 47.2% to $57.2
million at March 31, 2011, compared to one year
ago. Commercial real estate loans increased 3.9% from the
prior year to $190.2 million at March 31, 2011. Multifamily
loans decreased 0.5% from the prior year to $89.5 million at March
31, 2011. Home equity and consumer loans decreased 6.4% to
$29.3 million, while residential loans grew 3.9% to $196.4 million
at March 31, 2011, compared to a year ago.
Further details on changes during the first quarter are as
follows:
|
Balance at |
Additions/ |
Payments/ |
Reclassifi-- |
|
Transfers |
Balance at |
LOANS ($ in
000's) |
3/31/2011 |
Advances |
Payoffs |
cations |
Charge-offs (1) |
to REO |
12/31/2010 |
Business |
$ 392,233 |
$ 46,512 |
$ (52,487) |
$ (641) |
$ (1,169) |
$ (29) |
$ 400,047 |
R/E construction |
|
|
|
|
|
|
|
Spec construction |
23,033 |
892 |
(2,146) |
(402) |
(614) |
-- |
25,303 |
Land acquisition and
development/land |
57,235 |
6,733 |
(2,917) |
22 |
(745) |
-- |
54,142 |
Commercial R/E
construction |
2,332 |
-- |
(1) |
-- |
-- |
-- |
2,333 |
Total R/E
construction |
82,600 |
7,625 |
(5,064) |
(380) |
(1,359) |
-- |
81,778 |
Commercial R/E |
190,191 |
600 |
(1,383) |
-- |
51 |
(10,962) |
201,885 |
Multifamily |
89,461 |
70 |
(368) |
409 |
-- |
-- |
89,350 |
Home equity/consumer |
29,270 |
1,731 |
(1,681) |
(22) |
(245) |
(477) |
29,964 |
Residential |
196,389 |
5,395 |
(4,013) |
634 |
(304) |
-- |
194,677 |
Total loans |
980,144 |
61,933 |
(64,996) |
-- |
(3,026) |
(11,468) |
997,701 |
Deferred loan fees |
(3,879) |
55 |
-- |
-- |
-- |
-- |
(3,934) |
Allowance for loan losses |
(25,782) |
(2,550) |
-- |
-- |
2,874 |
-- |
(26,106) |
Loans,
net |
$ 950,483 |
$ 59,438 |
$ (64,996) |
$ -- |
$ (152) |
$ (11,468) |
$ 967,661 |
|
|
|
|
|
|
|
|
(1) Excludes $52 related to
overdrawn checking accounts and recoveries of $204. |
Investment Portfolio and Liquidity
The investment portfolio increased $4.5 million year-over-year,
and decreased $3.8 million from the preceding quarter, to $296.6
million at March 31, 2011. Interest-earning deposits,
including deposits at the Federal Reserve Bank, were $108.8 million
at March 31, 2011, down from $127.5 million the preceding quarter
and $152.4 million a year earlier as Cascade Financial reduced its
excess liquidity.
On October 21, 2010, Cascade Financial announced that it had
successfully completed a series of balance sheet restructuring
transactions which improved its financial position. The
transactions included the restructuring of Cascade Financial's
securities portfolio, prepayment and/or modification of Cascade
Financial's Federal Home Loan Bank (FHLB) advances, and the
purchase of interest rate caps designed to protect both the net
interest margin and stockholders' equity from potential future
rising interest rates. These transactions helped to improve
Cascade Financial's net interest margin and regulatory capital
position.
Deposits
Total deposits were $1.07 billion at March 31, 2011 compared to
$1.17 billion a year ago and $1.11 billion at December 31, 2010.
Personal checking balances were down $1.8 million for the quarter
and $118.1 million for the year. The change in personal
checking balances year-over-year was due to successful cross-sell
efforts and moving Main Street checking balances into lower
interest rate savings and MMDA accounts. Business checking
balances were down $14.4 million on a year-over-year basis
partially due to a planned reduction in public funds checking
accounts that require 100% collateralization. Savings and
money market balances increased $48.8 million, or 36.6% on a
year-over-year basis. The growth is net of a decline in public
funds money market accounts which also require 100%
collateralization. CDs decreased $19.4 million, or 3.4% on a
year-over-year basis and decreased $43.1 million for the quarter
primarily due to planned runoff of brokered CDs as required by the
Consent Order that Cascade Bank entered into with its
regulators.
The following table shows deposits in each category (3/31/11
compared to 12/31/10 and 3/31/10):
|
|
|
|
|
|
|
|
One Year |
DEPOSITS ($ in
000's) |
|
March 31,
2011 |
|
December 31,
2010 |
|
March 31,
2010 |
|
Change |
Personal checking accounts |
|
$ 235,492 |
|
$ 237,263 |
|
$ 353,610 |
|
-33.4% |
Business checking accounts |
|
101,693 |
|
100,303 |
|
116,090 |
|
-12.4% |
Total checking accounts |
|
337,185 |
|
337,566 |
|
469,700 |
|
-28.2% |
Savings and MMDA |
|
181,980 |
|
176,945 |
|
133,188 |
|
36.6% |
CDs |
|
549,922 |
|
593,043 |
|
569,370 |
|
-3.4% |
Total deposits |
|
$ 1,069,087 |
|
$ 1,107,554 |
|
$ 1,172,258 |
|
-8.8% |
Capital
Total stockholders' equity was $54.6 million as of March 31,
2011, compared to $58.5 million at December 31, 2010. Book
value was $1.39 per common share at March 31, 2011, and tangible
book value was $1.37 per common share. Cascade Financial had a
total risk-based capital ratio of 9.83% and a Tier 1 capital ratio
of 5.46% as of March 31, 2011.
Operating Results
Net interest income for the first quarter was down 8.9% to $8.8
million, compared to $9.7 million for the first quarter of 2010,
due primarily to a decline in the loan portfolio and lower yields
on securities available-for-sale. Total other income was $1.8
million for the quarter, compared to $1.9 million for the first
quarter a year ago.
Total other expenses were $10.7 million in the first quarter of
2011, compared to $9.2 million in the first quarter of 2010.
The increase was primarily due to the $1.6 million increase in REO
expenses, write-downs and losses.
For the quarter, total compensation and employee benefits were
down $269,000, or 7.3% as compared to the same quarter in
2010. Within this category, employee salary expense was down
$203,000, or 6.6%, and director's compensation expense was down
$15,000, or 11.4%. The reduction in employee salary expense
was related to an 8.0% reduction in the number of total employees
during the past 12 months.
Net Interest Margin
Cascade Financial's net interest margin was 2.66% for the first
quarter of 2011, compared to 2.52% in the immediate prior quarter
and 2.60% for the first quarter a year ago. The yield on
earning assets increased by 3 basis points compared to the
preceding quarter, while the cost of interest-bearing liabilities
declined by 9 basis points. The increase in the yield on
earning assets compared to the prior quarter was due to an increase
in the yield on total loans and investment securities and also due
to lower cash balances.
"In addition to lower deposit costs, the balance sheet
restructuring during the second half of 2010 had a positive impact
on our net interest margin by utilizing low-yielding cash balances
at the Federal Reserve Bank to prepay higher cost FHLB advances and
restructuring the remaining advances to further reduce funding
costs," said Debra L. Johnson, EVP and Chief Financial
Officer.
The following table depicts Cascade Financial's yield on earning
assets, its cost of funds on paying liabilities and the resulting
spread and margin:
|
1Q11 |
4Q10 |
3Q10 |
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
1Q09 |
Asset yield |
4.70% |
4.67% |
4.62% |
4.89% |
5.13% |
5.35% |
5.60% |
5.63% |
5.83% |
Liability cost |
2.14% |
2.23% |
2.44% |
2.46% |
2.60% |
2.65% |
2.63% |
2.74% |
3.02% |
|
|
|
|
|
|
|
|
|
|
Spread |
2.56% |
2.44% |
2.18% |
2.43% |
2.53% |
2.70% |
2.97% |
2.89% |
2.81% |
Margin |
2.66% |
2.52% |
2.26% |
2.49% |
2.60% |
2.79% |
3.03% |
3.01% |
3.03% |
About Cascade Financial
Established in 1916, Cascade Bank, the only operating subsidiary
of Cascade Financial, is a state chartered commercial bank
headquartered in Everett, Washington. Cascade Bank maintains
an "Outstanding" CRA rating and has proudly served the Puget Sound
region for over 90 years. Cascade Bank operates 22 full
service branches in Everett, Lynnwood, Marysville, Mukilteo,
Shoreline, Smokey Point, Issaquah, Clearview, Woodinville, Lake
Stevens, Bellevue, Snohomish, North Bend, Burlington and
Edmonds.
In November 2010, Cascade Bank was named Favorite Snohomish
County Company (with fewer than 250 employees) in NW.Jobs.com's
People's Picks campaign for the second year in a row. In April
2011, Cascade Bank was ranked #10 on the Puget Sound Business
Journal's list of largest Washington state banks.
Non-GAAP Financial Measures
This news release contains certain non-GAAP financial measures
in addition to results presented in accordance with Generally
Accepted Accounting Principles (GAAP). These measures include
tangible book value per share, efficiency ratio and tangible
capital/assets ratio. These measures should not be construed
as a substitute for GAAP measures; they should be read and used in
conjunction with Cascade Financial's GAAP financial
information. A reconciliation of the included non-GAAP
financial measures to GAAP measures is included elsewhere in this
release.
Forward-Looking Statements
This news release contains statements that are forward-looking
as defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are provided to assist in the
understanding of anticipated future financial results. However,
such forward-looking statements involve risks and uncertainties
relating to interest rates, approval and completion of the merger
with Opus Bank, regulatory enforcement actions to which Cascade
Financial and Cascade Bank are currently and may in the future be
subject, inability to attract and retain deposits, changes in
capital classifications, changes in the level of nonperforming
assets and charge-offs, and general market risks. For a discussion
of certain factors that may cause such forward-looking
statements to differ materially from Cascade Financial's
actual results, see the company's Annual Report on Form 10-K for
the year ended December 31, 2010, and other reports filed with the
Securities and Exchange Commission. Further, any forward-looking
statement speaks only as of the date on which it is made, and we
undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events.
BALANCE SHEET |
|
|
Quarter |
|
Year |
(Dollars in thousands) |
Mar. 31, 2011 |
Dec. 31, 2010 |
Change |
Mar. 31, 2010 |
Change |
(Unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
Cash on hand and in banks |
$ 4,486 |
$ 3,871 |
15.9% |
$ 4,371 |
2.6% |
Interest-earning deposits |
108,794 |
127,464 |
-14.6% |
152,440 |
-28.6% |
|
|
|
|
|
|
Securities available-for-sale, fair
value |
232,277 |
234,606 |
-1.0% |
247,240 |
-6.1% |
Securities held-to-maturity, amortized
cost |
52,419 |
53,912 |
-2.8% |
32,956 |
59.1% |
Federal Home Loan Bank (FHLB) stock |
11,920 |
11,920 |
0.0% |
11,920 |
0.0% |
Total securities |
296,616 |
300,438 |
-1.3% |
292,116 |
1.5% |
Loans |
|
|
|
|
|
Business |
392,233 |
400,047 |
-2.0% |
457,426 |
-14.3% |
R/E construction |
82,600 |
81,778 |
1.0% |
205,401 |
-59.8% |
Commercial R/E |
190,191 |
201,885 |
-5.8% |
183,027 |
3.9% |
Multifamily |
89,461 |
89,350 |
0.1% |
89,920 |
-0.5% |
Home equity/consumer |
29,270 |
29,964 |
-2.3% |
31,274 |
-6.4% |
Residential |
196,389 |
194,677 |
0.9% |
188,930 |
3.9% |
Total loans |
980,144 |
997,701 |
-1.8% |
1,155,978 |
-15.2% |
Deferred loan fees |
(3,879) |
(3,934) |
1.4% |
(3,872) |
-0.2% |
Allowance for loan losses |
(25,782) |
(26,106) |
1.2% |
(26,003) |
0.8% |
Loans, net |
950,483 |
967,661 |
-1.8% |
1,126,103 |
-15.6% |
Real estate owned (REO) |
32,311 |
34,412 |
-6.1% |
27,394 |
17.9% |
Premises and equipment, net |
13,127 |
13,325 |
-1.5% |
14,268 |
-8.0% |
Bank owned life insurance, net |
25,736 |
25,489 |
1.0% |
24,759 |
3.9% |
Goodwill |
-- |
-- |
N/A |
12,885 |
-100.0% |
Prepaid FDIC insurance premiums |
2,210 |
2,968 |
-25.5% |
6,071 |
-63.6% |
Federal income tax receivable |
-- |
-- |
N/A |
13,420 |
-100.0% |
Other assets |
23,442 |
22,706 |
3.2% |
16,434 |
42.6% |
Total assets |
$ 1,457,205 |
$ 1,498,334 |
-2.7% |
$ 1,690,261 |
-13.8% |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits |
|
|
|
|
|
Personal checking accounts |
$ 235,492 |
$ 237,263 |
-0.7% |
$ 353,610 |
-33.4% |
Business checking accounts |
101,693 |
100,303 |
1.4% |
116,090 |
-12.4% |
Total checking accounts |
337,185 |
337,566 |
-0.1% |
469,700 |
-28.2% |
Savings and money market accounts |
181,980 |
176,945 |
2.8% |
133,188 |
36.6% |
Certificates of deposit |
549,922 |
593,043 |
-7.3% |
569,370 |
-3.4% |
Total deposits |
1,069,087 |
1,107,554 |
-3.5% |
1,172,258 |
-8.8% |
FHLB advances |
159,000 |
159,000 |
0.0% |
239,000 |
-33.5% |
Securities sold under agreement to
repurchase |
145,000 |
145,000 |
0.0% |
146,065 |
-0.7% |
Junior subordinated debentures |
15,465 |
15,465 |
0.0% |
15,465 |
0.0% |
Junior subordinated debentures, fair
value |
1,500 |
1,500 |
0.0% |
3,341 |
-55.1% |
Other liabilities |
12,508 |
11,363 |
10.1% |
9,879 |
26.6% |
Total liabilities |
1,402,560 |
1,439,882 |
-2.6% |
1,586,008 |
-11.6% |
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
Preferred stock |
37,607 |
37,488 |
0.3% |
37,150 |
1.2% |
Common stock and paid in capital |
44,065 |
44,055 |
0.0% |
43,841 |
0.5% |
(Accumulated deficit) retained earnings |
(21,253) |
(17,965) |
-18.3% |
22,047 |
-196.4% |
Accumulated other comprehensive (loss)
gain |
(5,774) |
(5,126) |
-12.6% |
1,215 |
-575.2% |
Total stockholders'
equity |
54,645 |
58,452 |
-6.5% |
104,253 |
-47.6% |
Total liabilities and stockholders'
equity |
$ 1,457,205 |
$ 1,498,334 |
-2.7% |
$ 1,690,261 |
-13.8% |
STATEMENT OF OPERATIONS |
Quarter Ended |
Quarter Ended |
Quarter |
Quarter Ended |
Year |
(Dollars in thousands, except share and per
share amounts) |
Mar. 31, 2011 |
Dec. 31, 2010 |
Change |
Mar. 31, 2010 |
Change |
(Unaudited) |
|
|
|
|
|
Interest income |
$ 15,612 |
$ 16,242 |
-3.9% |
$ 19,131 |
-18.4% |
Interest expense |
6,788 |
7,482 |
-9.3% |
9,444 |
-28.1% |
Net interest income |
8,824 |
8,760 |
0.7% |
9,687 |
-8.9% |
Provision for loan losses |
2,550 |
5,500 |
-53.6% |
31,290 |
-91.9% |
Net interest income (loss) after
provision for loan losses |
6,274 |
3,260 |
92.5% |
(21,603) |
129.0% |
Other income |
|
|
|
|
|
Checking fees |
1,209 |
1,309 |
-7.6% |
1,263 |
-4.3% |
Service fees |
252 |
241 |
4.6% |
233 |
8.2% |
Bank owned life insurance, net |
247 |
225 |
9.8% |
237 |
4.2% |
Gain on sales/calls of securities |
-- |
3,998 |
-100.0% |
28 |
-100.0% |
Gain on sale of loans |
-- |
19 |
-100.0% |
26 |
-100.0% |
Fair value gains |
-- |
1,841 |
-100.0% |
-- |
N/A |
Other |
111 |
162 |
-31.5% |
125 |
-11.2% |
Total other income |
1,819 |
7,795 |
-76.7% |
1,912 |
-4.9% |
|
|
|
|
|
|
Total income (loss) |
8,093 |
11,055 |
-26.8% |
(19,691) |
141.1% |
Other expenses |
|
|
|
|
|
Compensation & employee benefits |
3,411 |
3,389 |
0.6% |
3,680 |
-7.3% |
Occupancy & equipment |
932 |
929 |
0.3% |
1,016 |
-8.3% |
FDIC insurance |
771 |
1,051 |
-26.6% |
853 |
-9.6% |
Business insurance |
341 |
386 |
-11.7% |
376 |
-9.3% |
Legal |
374 |
384 |
-2.6% |
162 |
130.9% |
B&O taxes |
248 |
351 |
-29.3% |
263 |
-5.7% |
REO expenses, writedowns &
losses |
2,587 |
4,956 |
-47.8% |
994 |
160.3% |
FHLB prepayment penalty |
-- |
4,808 |
-100.0% |
-- |
N/A |
Other operating expenses |
2,076 |
2,150 |
-3.4% |
1,893 |
9.7% |
Total other expenses |
10,740 |
18,404 |
-41.6% |
9,237 |
16.3% |
|
|
|
|
|
|
Net loss before provision for federal
income tax |
(2,647) |
(7,349) |
64.0% |
(28,928) |
90.8% |
|
|
|
|
|
|
Provision for federal income tax |
-- |
654 |
-100.0% |
3,211 |
-100.0% |
|
|
|
|
|
|
Net loss |
(2,647) |
(8,003) |
66.9% |
(32,139) |
91.8% |
|
|
|
|
|
|
Dividends on preferred stock |
522 |
515 |
1.4% |
499 |
4.6% |
Accretion of issuance discount on preferred
stock |
119 |
114 |
4.4% |
112 |
6.3% |
|
|
|
|
|
|
Loss attributable to common
stockholders |
$ (3,288) |
$ (8,632) |
61.9% |
$ (32,750) |
90.0% |
|
|
|
|
|
|
NET LOSS PER COMMON SHARE
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share, basic |
$ (0.27) |
$ (0.70) |
61.4% |
$ (2.69) |
90.0% |
Net loss per common share, diluted |
$ (0.27) |
$ (0.70) |
61.4% |
$ (2.69) |
90.0% |
|
|
|
|
|
|
Weighted average number of common shares
outstanding |
|
|
|
|
|
Basic |
12,271,529 |
12,271,529 |
|
12,165,167 |
|
Diluted |
12,271,529 |
12,271,529 |
|
12,165,167 |
|
(Dollars in thousands, except share and per
share amounts) |
|
|
|
(Unaudited) |
|
|
|
|
Quarter
Ended |
PERFORMANCE MEASURES AND
RATIOS |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Return on average common stockholders'
equity |
-63.77% |
-110.26% |
-137.53% |
Return on average tangible common
stockholders' equity* |
-64.36% |
-111.07% |
-159.35% |
Return on average assets |
-0.91% |
-2.25% |
-7.74% |
Efficiency ratio |
100.91% |
111.17% |
79.64% |
Net interest margin |
2.66% |
2.52% |
2.60% |
*Non-GAAP measurement |
|
|
|
|
Quarter
Ended |
AVERAGE BALANCES |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Average assets |
$ 1,472,514 |
$ 1,524,157 |
$ 1,715,524 |
Average earning assets |
1,345,884 |
1,380,489 |
1,512,046 |
Average total loans |
986,119 |
1,036,558 |
1,196,091 |
Average deposits |
1,082,490 |
1,116,588 |
1,169,309 |
Average stockholders' equity (including
preferred stock) |
58,439 |
68,477 |
133,652 |
Average common stockholders' equity
(excluding preferred stock) |
20,910 |
31,060 |
96,574 |
Average tangible common stockholders' equity
(excluding |
20,719 |
30,834 |
83,353 |
preferred stock and goodwill and
intangibles) |
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
ANALYSIS |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Total stockholders' equity |
$ 54,645 |
$ 58,452 |
$ 104,253 |
Less: preferred stock |
37,607 |
37,488 |
37,150 |
Total common stockholders' equity |
17,038 |
20,964 |
67,103 |
Less: goodwill and intangibles |
176 |
211 |
13,202 |
Tangible common stockholders' equity |
$ 16,862 |
$ 20,753 |
$ 53,901 |
|
|
|
|
Common stock outstanding |
12,271,529 |
12,271,529 |
12,171,529 |
Book value per common share |
$ 1.39 |
$ 1.71 |
$ 5.51 |
Tangible book value per common share |
$ 1.37 |
$ 1.69 |
$ 4.43 |
|
|
|
|
(Dollars in thousands) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
ASSET QUALITY |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Nonperforming loans (NPLs) |
$ 35,191 |
$ 48,098 |
$ 96,719 |
Nonperforming loans/total loans |
3.59% |
4.82% |
8.37% |
REO |
$ 32,311 |
$ 34,412 |
$ 27,394 |
Nonperforming assets |
$ 67,502 |
$ 82,510 |
$ 124,113 |
Nonperforming assets/total assets |
4.63% |
5.51% |
7.34% |
Net loan charge-offs in the quarter |
$ 2,874 |
$ 5,859 |
$ 31,187 |
Net charge-offs in the quarter/total
loans |
0.29% |
0.59% |
2.70% |
|
|
|
|
Allowance for loan losses |
$ 25,782 |
$ 26,106 |
$ 26,003 |
Plus: Allowance for off-balance sheet
commitments |
50 |
50 |
69 |
Total allowance for loan losses |
$ 25,832 |
$ 26,156 |
$ 26,072 |
Total allowance for loan losses/total
loans |
2.64% |
2.62% |
2.26% |
Total allowance for loan losses/nonperforming
loans |
73.41% |
54.38% |
26.96% |
|
|
|
|
Capital/asset ratio (including junior
subordinated debentures) |
5.13% |
5.32% |
7.66% |
Capital/asset ratio (Tier 1, including junior
subordinated debentures) |
5.46% |
5.55% |
6.75% |
Tangible cap/asset ratio (excluding preferred
stock and goodwill & intangibles) |
1.16% |
1.39% |
3.21% |
Total risk-based capital/risk-weighted asset
ratio |
9.83% |
9.98% |
11.00% |
|
|
|
|
|
Quarter
Ended |
INTEREST SPREAD ANALYSIS (AVERAGE
YIELDS) |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Yield on interest-earning deposits |
0.24% |
0.29% |
0.22% |
Yield on total loans |
5.72% |
5.58% |
5.48% |
Yield on investments |
2.30% |
2.20% |
4.14% |
Yield on earning assets |
4.70% |
4.67% |
5.13% |
|
|
|
|
Cost of deposits |
1.07% |
1.17% |
1.47% |
Cost of FHLB advances |
3.25% |
3.57% |
4.35% |
Cost of Federal Reserve borrowings |
0.00% |
0.00% |
0.25% |
Cost of securities sold under agreement to
repurchase |
5.95% |
5.95% |
5.94% |
Cost of junior subordinated debentures |
12.85% |
11.16% |
10.68% |
Cost of interest-bearing liabilities |
2.14% |
2.23% |
2.60% |
|
|
|
|
Net interest spread |
2.56% |
2.44% |
2.53% |
Net interest margin |
2.66% |
2.52% |
2.60% |
RECONCILIATION TO NON-GAAP FINANCIAL
MEASURES* |
|
|
|
(Dollars in thousands) |
|
|
|
(Unaudited) |
|
|
|
|
Quarter
Ended |
AVERAGE TANGIBLE COMMON STOCKHOLDERS'
EQUITY |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Loss attributable to common stockholders |
$ (3,288) |
$ (8,632) |
$ (32,750) |
|
|
|
|
Average stockholders' equity |
$ 58,439 |
$ 68,477 |
$ 133,652 |
Less: average preferred stock |
37,529 |
37,417 |
37,078 |
Average common stockholders' equity |
20,910 |
31,060 |
96,574 |
Less: average goodwill and intangibles |
191 |
226 |
13,221 |
Average tangible common stockholders' equity
(excluding preferred stock |
$ 20,719 |
$ 30,834 |
$ 83,353 |
and goodwill and
intangibles) |
|
|
|
Return on average tangible common
stockholders' equity (annualized) |
-64.36% |
-111.07% |
-159.35% |
|
|
|
|
|
Quarter
Ended |
EFFICIENCY RATIO |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Total other expenses |
$ 10,740 |
$ 18,404 |
$ 9,237 |
|
|
|
|
Net interest income |
$ 8,824 |
$ 8,760 |
$ 9,687 |
Other income |
1,819 |
7,795 |
1,912 |
Total income |
$ 10,643 |
$ 16,555 |
$ 11,599 |
|
|
|
|
Efficiency ratio |
100.91% |
111.17% |
79.64% |
|
|
|
|
TANGIBLE COMMON STOCKHOLDERS'
EQUITY |
Mar. 31, 2011 |
Dec. 31, 2010 |
Mar. 31, 2010 |
Total assets |
$ 1,457,205 |
$ 1,498,334 |
$ 1,690,261 |
Less: goodwill and intangibles |
176 |
211 |
13,202 |
Total tangible assets |
$ 1,457,029 |
$ 1,498,123 |
$ 1,677,059 |
|
|
|
|
Total stockholders' equity |
$ 54,645 |
$ 58,452 |
$ 104,253 |
Less: preferred stock |
37,607 |
37,488 |
37,150 |
Total common stockholders' equity |
17,038 |
20,964 |
67,103 |
Less: goodwill and intangibles |
176 |
211 |
13,202 |
Tangible common stockholders' equity |
$ 16,862 |
$ 20,753 |
$ 53,901 |
|
|
|
|
Tangible cap/asset ratio (excluding preferred
stock |
|
|
|
and goodwill and
intangibles) |
1.16% |
1.39% |
3.21% |
|
|
|
|
*Management believes that the presentation of
non-GAAP results provides useful information |
|
|
|
to investors regarding the effects on the
Company's reported results of operations. |
|
|
|
CONTACT: Investor Contacts:
Carol K. Nelson, CEO
Debra L. Johnson, CFO
Cascade Bank
425.339.5500
www.cascadebank.com
Cascade Financial Corp. (MM) (NASDAQ:CASB)
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Cascade Financial Corp. (MM) (NASDAQ:CASB)
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