Cascade Bancorp, the holding company for Bank of the Cascades, announced that 2012 wzs a year of consecutive quarterly profitability with net income of $1.3 million or $0.03 per share for the quarter ended December 31, 2012 and net income of $6.0 million or $0.13 per share for the full year 2012. The full details of the Company’s 2012 results were filed in the Company’s annual report on Form 10-K on March 25, 2013.
“We are pleased to announce that 2012 was a year of consecutive quarterly profitability, as well as full year profitability. 2012 was a year of transition and achievement of priorities as our bankers focused efforts on delivering consumer, mortgage, and business loan and deposits services. We also focused on continuing to improve our asset quality. Our progress was underscored with the removal of the Regulatory Order on March 7, 2013,” said Terry Zink, President and Chief Executive Officer. Zink continued, “As a Northwest community bank with over $1 billion in assets, we are proud of our long-standing history of quality service and commitment to our communities. We believe that our accomplishments in 2012 laid the foundation for continued growth, as we look forward to serving our communities and delivering the advantages of local banking in 2013.”
2012 Full Year Results:
In 2012 the Company recorded net income of $6.0 million or $0.13 per share. This compared to a net loss of ($47.3) million or ($1.08) per share for 2011. The return to profitability in 2012 is mainly attributable to significantly reduced credit costs, including a substantially lower loan loss provision and reduced cost incurred in disposition of OREO for 2012 as compared to 2011. The Company recorded a $1.1 million loan loss provision in 2012, significantly less than the $75.0 million loan loss provision made in 2011. 2012 OREO related expenses declined by $16.2 million compared to the prior year. 2012 also benefited from revitalized residential mortgage originations which contributed to an increase in mortgage banking income $3.8 million above the 2011 level.
The 2011 $75.0 million loan loss provision referenced above was mainly attributable to charge offs ensuing from its 2011 bulk sale of $110.0 million of certain non-performing and substandard loans undertaken to improve the asset quality of the bank. Elevated loan loss provision in 2011 was partially offset by a $32.8 million gain on the extinguishment of Trust Preferred debt in that year.
Full year 2012 net interest income declined $5.5 million or 10.0 percent from 2011 mainly due to lower outstanding loan balances. The Company’s net interest margin (“NIM”) increased to 4.11 percent for 2012 compared to 3.85 percent for 2011 primarily due to lower cost of funds associated with borrowings and time deposits.
Non-interest expense decreased $27.4 million or 32.9 percent compared to 2011 and was lower in virtually all categories in 2012. Much of the reduction was a result of lower credit related costs that reflect the improving economy.
At December 31, 2012, total assets were $1.3 billion materially unchanged from December 31, 2011. Total net loans declined $24.1 million to $829.1 million at December 31, 2012 compared to $853.2 million at December 31, 2011. The lower loan balance at December 31, 2012 was primarily a result of payoffs and pay-downs of borrowers. A renewed focus on loan growth enabled the Bank to increase its loan portfolio during the second half of 2012, and it anticipates continued progress in 2013. The investment portfolio increased to $259.4 million at December 31, 2012 as compared to $212.0 million a year earlier as the Company deployed excess liquidity into securities. OREO balances at December 31, 2012 were $6.6 million compared to $21.3 million at December 31, 2011, a $14.7 million or 69.2 percent decline from December 31, 2011.
Total deposits decreased $10.6 million or 1.0 percent at December 31, 2012 as compared to December 31, 2011. Core checking, savings and money market deposits increased 2.2 percent from year ago levels, partially offsetting a $31.6 million decline in time deposits over the respective periods.