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COLUMBIA BANKING SYSTEM REPORTS 46-PERCENT INCREASE IN 1993 FIRST-QUARTER EARNINGS

 BELLEVUE, Wash., April 30 /PRNewswire/ -- Columbia Banking System, Inc. (NASDAQ: COLB) today reported first-quarter 1993 earnings of $416,000, compared with $285,000 for the first quarter of 1992, an increase of 46 percent. Fully diluted per-share earnings for the quarter ended March 31, 1993 were 31 cents compared with 49 cents per share, as adjusted in the first quarter of 1992.
 According to A.G. Espe, chairman, president and chief executive officer of Columbia Banking System, earnings for the first quarter of 1993 included for the first time the effect of applying Financial Accounting Standard (FAS) 109 (accounting for income taxes). The cumulative effect of adopting the accounting change, offset by the tax effect of the change in the first quarter of 1993, was to increase net income by $122,000. Income for the first quarter of 1993 before income taxes and before the cumulative effect of the accounting change was $294,000, or 25 cents per share.
 Per-share earnings for the first quarter of 1992 reflect a two-for- one stock split effected in March 1992. In July 1992, Columbia Banking System raised additional equity through its initial public offering consisting of the sale of 604,740 shares of common stock and $5.75 million in convertible notes. First-quarter 1993 earnings per share reflect the public offering and the issuance of 69,160 shares of common stock on conversion of convertible notes.
 "Our earnings for the quarter, our third as a public company, reflect management's commitment to achieving our expansion plans while maintaining credit quality and building systems to measure and manage risk and costs," said Espe. "During the quarter, we reduced Columbia Savings Bank's overhead ratio from 3.60 percent in December 1992 to 2.90 percent in March 1993. Our continuing commitment to more-efficient operations should have a positive impact on our bottom line."
 Net interest income after the provision for loan losses for the first quarter of 1993 was $1,096,000, an increase of 54 percent from $713,000 in the first quarter of 1992. Non-interest income increased to $486,000 from $250,000 in 1992, largely due to the sale of mortgage backed securities. Non-interest expense in the first quarter of 1993 was $1,288,000, an increase of 90 percent from $678,000 in the first quarter of 1992. Principal contributors to the increase in non-interest expense were compensation and employee benefits and occupancy for company operations. Columbia First Service, the mortgage banking subsidiary, accounted for $281,000 of the expense increase. Columbia First Service was not in operation during the first quarter of 1992. During the first quarter of 1992, non-interest expense benefited from the sale of other real estate amounting to $75,000. Absent these two items, non-interest expense increased 34 percent which was due primarily to the addition of management personnel during 1992 and the installation of a new computer system.
 Columbia Banking System's total assets on March 31, 1993 were $145.6 million, compared with $102.2 million on March 31, 1992, an increase of 42 percent. Total loans net of allowances for losses grew to $111.0 million on March 31, 1993, a 32-percent increase over the same quarter of 1992, when total loans were $83.8 million. Total deposits on March 31, 1993 rose to $101.2 million from the previous year's $75.6 million. Shareholders' equity in Columbia Banking System increased to $11.4 million and book value was $9.46 per share, compared with shareholders' equity of $5.1 million and book value of $8.90 per share on March 31, 1992. The bank's allowance for possible loan losses on March 31, 1993 was $1,241,000 or 91 percent of non-performing loans and 1.1 percent of total loans. Other real estate owned increased 0.5 percent to $2.97 million. More than 80 percent of the other real estate owned continues to be centered in one property, which the bank is seeking to sell, and which generates reasonable net operating income.
 "Our well-capitalized position will continue to be beneficial to us as we pursue our expansion activity," said Espe. "We are anticipating significant growth throughout the remainder of this year. We expect to enter the Pierce County market this summer through Columbia National Bank, which, as previously announced, will be headed by W.W. (Bill) Philip. Much effort is going into the Pierce County expansion project at this time, and we hope to be off to a big start in that market in the near future. Given the relative magnitude of our expansion efforts, we expect some quarter-to-quarter earnings volatility will continue. Our focus continues to be on long-term shareholder value."
 Columbia Bank, primarily through its mortgage banking subsidiary, Columbia First Service, originated more than $22 million in one-to-four family residential mortgages during the first quarter of 1993. "This volume reflects a strengthening market," noted Espe. "For an institution our size, we are pleased with our real estate loan production. Although Columbia First Service lost $145,000 during the quarter ended March 31, 1993, we expect it will operate profitably during the second quarter of 1993." Residential loans generated through Columbia First Service are either held in the bank's portfolio or they are sold in the secondary market.
 Espe also reported that the previously announced agreement to acquire Columbia National Bankshares, Inc., headquartered in Longview, Wash., has been amended by the parties to establish a maximum exchange value of approximately $2.9 million, which equates to $14 per share for the Columbia Banking System common stock to be issued in the transaction. The parties also agreed that all outstanding shares of Columbia National Bankshares, Inc. and of Columbia National Bank (other than shares for which dissenter's rights are perfected or those that are held by Columbia National Bankshares, Inc.) will be exchanged for common stock of Columbia Banking System. The parties anticipate that up to 208,000 shares of Columbia stock will be issued in connection with the transaction.
 Columbia Banking System, Inc. operates Columbia Bank, FSB, which has four offices in Western Washington: two in Longview, one in Woodland and one in Bellevue. Columbia First Service, the bank's mortgage subsidiary, acquired the former Drake Mortgage in 1992. It now has offices in Bellevue, Seattle and Longview.
 COLUMBIA BANKING SYSTEM INC.
 FINANCIAL HIGHLIGHTS
 (In thousands, except per-share data)
 First Quarter Ended March 31: 1993 1992
 Interest income $2,770 $2,204
 Interest expense 1,614 1,466
 Non-interest expense 1,288 678
 Net interest income after provision
 for loan losses 1,096 713
 Income before income taxes and cumulative
 effect of FAS 109 accounting changes 294 285
 Income taxes and cumulative effect of
 accounting changes, net 122 0
 Net income 416 285
 Net Income Per Share:
 Primary 0.35 0.49
 Fully diluted 0.31 0.49
 March 31, Dec. 31, March 31,
 1993 1992 1992
 Total assets $145,615 $139,532 $102,208
 Net loans receivable 111,023 107,440 83,762
 Shareholders' equity 11,403 10,301 5,060
 Book value per share $ 9.46 $ 9.07 $ 8.90
 Net worth ratio (shareholders'
 equity to total assets) 7.83 7.38 4.95
 Market price of common stock
 at period end 13-3/4 9-1/2 --
 Common Shares Outstanding:
 At period end 1,205 1,136 531
 Average primary 1,198 892 580
 Average fully diluted 1,648 1,411 580
 -0- 4/30/93
 /CONTACT: Gayle Cloud of Cloud Public Relations, 206-453-5583, for Columbia Banking System, Inc.; or Arnold G. Espe, chairman, 206-646-5370, or J. Mike Dunn, vice president, marketing director, 206-646-5373, or after hours, 206-488-4874, both of Columbia Banking System, Inc./
 (COLB)


CO: Columbia Banking System Inc. ST: Washington IN: FIN SU: ERN

LM-AL -- SE001 -- 3029 04/30/93 07:56 EDT
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