Local Banking Deposits Continue to Grow

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According to Robin B. Freeman, president & CEO of Prineville Bancorporation, parent company for Community First Bank, the community bank company recently held its annual meeting for shareholders where they reviewed the banks 2006 record-breaking performance. Freeman also announced that net income for the first quarter of 2007 is continuing its upward trend having increased 11 percent from first quarter 2006.  Net income for the first quarter was $358,000 or $0.31 per share.

Executive Vice President and Chief Financial Officer, John Hajovsky commented, “While the Central Oregon economy slowed in late 2006 and early 2007, we are pleased with the continued improvement in earnings and financial results.

Total assets for Community were $181.6 million as of March 31, 2007 and had increased 18.9 percent from one year ago. Deposits were $140.6 million as of March 31 and also increased by 8.3 percent. Loans increased 23.6 percent from one year ago.

Robert Berman, executive vice president and chief business development officer stated, “Our investment in Central Oregon continued in the first quarter of 2007 reflected by the recent opening of our new full service retail branch, loan processing center and corporate training facility / community room in Redmond in February.  In addition design and construction have begun on our second and third branch locations in downtown Bend and in the Mill Quarter district of Bend.”

LibertyBank also announced continued strong growth for the third quarter ended March 31.

Compared to one year ago, total assets rose 19 percent to $907 million; net loans receivable increased 20 percent to $828 million; and deposits rose 21 percent to $742 million. Earnings for the quarter were $2.9 million, up 19 percent from the same period one year ago.

“The bank experienced another quarter of solid loan production and strong demand for its deposit products,” says Bob Fenstermacher, president, CEO and chairman of LibertyBank. “And our recent investments in new and remodeled offices continue to help fuel future growth for the bank and the communities we serve.”

Wells Fargo & Company reported record diluted earnings per common share of $0.66 for first quarter 2007, up 10 percent from $0.60 in first quarter 2006. Net income was a record $2.24 billion, up 11 percent from $2.02 billion in first quarter 2006.
“Once again, our talented team delivered outstanding, industry-leading results with solid double-digit growth in revenue, net income and earnings per share,” said Chair and CEO Dick Kovacevich. “We achieved this broad-based, record breaking performance despite a downturn in some housing markets and a flat to inverted yield curve because our team members, guided by our vision and values, are relentlessly focused on satisfying all our customers’ financial needs and helping them succeed financially.”

Meanwhile Columbia Bancorp, the financial holding company for Columbia River Bank, announced reported that growth remains a top priority in 2007, despite an industry-wide net interest margin compression driven “by a flattening yield curve and an increase in our cost of funds,” according to Columbia Bancorp President and CEO Roger Christensen.

Columbia reported net income in the first quarter of $3.5 million compared to $3.7 million in the first quarter of 2006. “Our net interest margin has been gradually compressing since the second quarter of 2006,” explained Christensen. “Margin compression is a natural cycle in this business; this cycle will not dissuade our team from achieving the goal of building long term value for our customers, shareholders and employees,” he added.

Still revenue (net interest income plus non-interest income) grew for Columbia River Bank in the first quarter to $15.6 million, compared to $14.3 million in the same quarter a year ago, an increase of $1.3 million or 9 percent. However, the net interest margin for the first quarter dropped 55 basis points to 5.82 percent, compared to 6.37 percent in the first quarter 2006. Non-interest expense for the quarter rose to $9.0 million, up $1.2 million, or 16 percent, from $7.8 million in the same period last year.

Christiansen said the increase was due in large part to increased salary, benefit and occupancy expenses related to the Company’s expansion into Yakima, Pasco, Sunnyside and Vancouver, Washington.

For the bank with the largest market share in Central Oregon and despite some drop in shares prices, Cascade Bancorp (Bank of the Cascades) reported that earnings were up 22.6 percent over last year and net income: up 60.6 percent at $9.5 million however it was down compared to $10.2 million for the immediately preceding linked-quarter.

The year-over-year increase was largely due to Cascade’s inclusion of Farmers & Merchants State Bank (F&M) of Idaho which was acquired on April 20, 2006. The bank reported that net interest margin continued to compress at 5.34 percent for the quarter due to higher cost of funds and seasonal factors affecting average non-interest bearing deposits .

“Loan and deposit volumes turned upward towards the end of the first quarter of 2007, indicating we may be emerging from our seasonal slow period that has been exacerbated by the nationwide downturn in real estate,” said Patricia L. Moss, President and CEO. “It is a great advantage that Cascade’s markets are expected to have sustained population in-migration underpinning the economic vitality of the regions into the next decade.”

“Credit quality in our loan portfolio is performing relatively well despite the real estate downturn,” said Frank R. Weis, EVP and Chief Credit Officer. “We expect that the nationwide correction in real estate will ultimately benefit our markets by virtue of a more sustainable rate of economic growth in the months and years ahead.” He added, “We are carefully monitoring the progress of all our loans in the residential construction and development sector as borrowers adjust their business plans to reflect the changing pace of real estate activity.”

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