Centennial Bancorp Reports Second Quarter 2002 Results; Investors Teleconference Today.Business Editors Centennial Bancorp (Nasdaq:CEBC CEBC Center for Ethical Business Cultures (University of St. Thomas) CEBC Consulting Engineers of British Columbia CEBC Centre d'Études Biologiques de Chize CEBC Conselho Empresarial Brasil-China CEBC Centre For Evidence-Based Conservation ), holding company for Centennial Bank, reported second quarter 2002 consolidated net income of $2.65 million, or diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.11, a 25.6% increase compared to $2.11 million, or earnings per share of $.08 on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis for the quarter ended March 31, 2002. For the six months ended June June: see month. 30, 2002, consolidated net income was $4.76 million or earnings per share of $.19 on a diluted basis compared to $6.82 million, or earnings per share of $.26 on a diluted basis for the six months ended June 30, 2001. The six-month 2002 results include an added provision for loan losses of $1.1 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , or $1.8 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , reported and accounted for in first quarter of 2002. Without the increase in the provision, earnings per share would have been $.23 on a diluted basis for the six months ended June 30, 2002. "As the Northwest business recovery still appears tentative tentative, adj not final or definite, such as an experimental or clinical finding that has not been validated. and weak," commented Ted R. Winnowski, President and Chief Executive Officer of Centennial Bancorp and Centennial Bank, "our results, driven primarily by local middle-market The term middle-market may refer to either a type of newspaper or a type of company. A middle-market newspaper is one that attempts to cater to readers who want some entertainment value from their newspaper as well as adequate serious coverage of significant news and small business customers, are reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the prevailing conditions over the past quarter." Net interest margin for the quarter was 5.61%, as compared to 6.10% in the same quarter a year ago. The decrease reflects the re-pricing of renewed loans in a lower rate environment and a shift in the earning asset Earning asset An asset that generates income, e.g., income from rental property. mix to lower yielding assets. Centennial Bancorp's subsidiary, Centennial Bank, had an efficiency ratio of 52.28% year to date in 2002 versus 50.73% during the same period a year ago. This efficiency ratio remains among the strongest compared with other Northwest banks. Net loans totaled $609.77 million at June 30, 2002, as compared to $626.63 million at March 31, 2002 and $655.72 million at December December: see month. 31, 2001. The decline is attributable to the challenging business environment, resulting in weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. business loan demand, and
Centennial's adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something.immune adherence to strong credit underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. standards. "While the anticipated business recovery still appears to be in a formative formative /for·ma·tive/ (for´mah-tiv) concerned in the origination and development of an organism, part, or tissue. stage," said Ted Winnowski, "we are experiencing increased inquiries from customers for lending and related business banking services. Our steadily building commercial loan pipeline is an encouraging sign. To that extent, we have added to our group of seasoned commercial loan officers with some select new hires in expectation of better times and more activity to come." The allowance for loan losses as a percent of loans at June 30, 2002 totaled 1.97%, as compared to 1.53% at June 30, 2001. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. were $11.78 million at the end of the second quarter, representing 1.89% of total loans, down from $12.66 million at the end of the first quarter. Total assets of Centennial Bancorp on June 30, 2002 stood at $820.52 million, as compared to $827.39 million at March 31, 2002, and $814.62 million at December 31, 2001. Deposits were $698.04 million at June 30, 2002, as compared to $704.65 million at March 31, 2002 and $693.12 million at December 31, 2001. Six Month 2002 Results Summary -- Quarter end June 30, 2002 income of $2.65 million shows improvement over March quarter end, but lower than the same period in 2001. -- Six months ended June 30, 2002 income was $4.76 million, significantly below 2001's profitability, primarily due to first quarter's additional loan loss provision. -- Deposits were maintained in a narrow range and loans have not grown. As a business bank, among the top commercial lenders in the country, Centennial felt the downturn dramatically and first. -- Business loan activity suffered due to the economic climate in the first half of this year. Centennial maintained expenses while contracting the size of the bank, adhering to strong credit standards and limiting long-term commercial real estate lending. -- Indications are that Centennial has reached an economic ebb and that our main product line, consisting of good quality business loans, will fuel growth, as indicated by our recent pipeline improvement. New Products Available In other news, Centennial Bank announced that it has begun testing its internet-based cash management product, called Business Link Web, with select business customers. The product is expected for roll out in the fourth quarter of this year, and will offer a user-friendly user-friendly - Programmer-hostile. Generally used by hackers in a critical tone, to describe systems that hold the user's hand so obsessively that they make it painful for the more experienced and knowledgeable to get any work done. format that minimizes staff training time required by businesses to implement. Centennial Bank also is pleased to announce the availability of debit card debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. processing for merchants, complementing its host of other merchant bankcard bank·card n. A card issued by a bank authorizing the holder to receive bank services and often functioning as a debit card. services. The service is ideally suited to retail merchants with higher-volume transaction business. More information is available through our Business Services Group at 503/968-7301. Investors Teleconference Scheduled Today at 11:00 AM PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT Mr. Winnowski and members of Centennial Bancorp's senior management will discuss the Company's 2002 second quarter results of operations via teleconference today at 11:00 AM Pacific Daylight Time (PDT). The session will include discussion of quarter-end financial results, business outlook and credit quality, and is expected to last about an hour. Shareholders and other interested individuals can call toll-free 1-888/636-8212 to attend this teleconference. A period for questions will be provided. The session will be recorded, and an audio replay will be made available two hours after the session ends. The replay access phone number is 1-800/642-1687. You will be asked to provide the conference identification number: 4621490, followed by the pound sign. This information also will be posted on the Centennial Bank website -- www.centennialbank.com. About Centennial Bancorp Centennial Bancorp is a bank holding company organized in 1981, whose subsidiary is Centennial Bank. Both Centennial Bancorp and Centennial Bank are headquartered in Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. . Centennial Bank is a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. commercial bank, focusing on small and middle-market businesses, which currently operates twenty-three banking offices. Fourteen are in the Portland metropolitan area The Portland-Vancouver, Oregon-Washington, Metropolitan Statistical Area, also known as the Portland metropolitan area or Greater Portland, is an urban area in the U.S. states of Oregon and Washington centered around the city of Portland, Oregon. ; two in Vancouver, Washington
Vancouver, Washington is a city on the north bank of the Columbia River, in the state of Washington, USA. It is the county seat of Clark County. ; one in Salem Salem, in the Bible Salem (sā`ləm) [Heb.,=peace], in the Bible, royal city of Melchizedek, traditionally identified with Jerusalem. Salem, city, India Salem, city (1991 pop. ; and six in Lane County. The Bank also operates four mortgage-lending offices, and seven commercial banking centers directed to the needs of middle market commercial customers. Centennial Bank is currently celebrating its twenty-fifth year of operations. Centennial Bancorp's common stock is traded on the NASDAQ National Market, and is included in the Russell 2000 Index Russell 2000 Index An index measuring the performance of the 2,000 smallest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. under the symbol "CEBC." For more information, please contact Centennial Bancorp, One SW Columbia Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. Street, Suite 900, Portland, Oregon 97258. Telephone: 503/973-5556; Fax: 503/973-5557. Web address: www.centennialbank.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995, including statements concerning the continued financial performance of the company and its plans and opportunities for future growth. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expected. Specific risks include, but are not limited to, general business and economic conditions, competitive factors, pricing pressures, interest rate changes, and other factors listed from time to time in Centennial Bancorp's SEC reports.
FINANCIAL HIGHLIGHTS
(In thousands, except per-share data and ratios)
(Unaudited)
Three Months Ended Six Months Ended
--------------------------------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
--------------------------------------------
CONDENSED STATEMENTS OF
INCOME:
Interest Income $ 13,873 $ 18,549 $ 28,489 $ 38,535
Interest Expense 3,406 6,695 6,879 14,567
--------------------------------------------
Net Interest Income 10,467 11,854 21,610 23,968
Provision for Loan Losses 975 975 3,750 1,925
Net Interest Income after
Provision for Loan
Losses 9,492 10,879 17,860 22,043
--------------------------------------------
Noninterest Income 1,499 1,550 3,277 2,948
Noninterest Expense 6,710 7,244 13,418 14,010
--------------------------------------------
Income before Income Taxes 4,281 5,185 7,719 10,981
--------------------------------------------
Provision for Income Taxes 1,631 2,012 2,960 4,157
--------------------------------------------
Net Income $ 2,650 $ 3,173 $ 4,759 $ 6,824
============================================
Earnings per Common Share
Basic $ 0.11 $ 0.13 $ 0.19 $ 0.27
Diluted $ 0.11 $ 0.12 $ 0.19 $ 0.26
Weighted Average Shares
Outstanding
Basic 24,733 25,281 24,796 25,270
Diluted 25,221 25,874 25,309 25,844
OPERATING PERFORMANCE:
Average Interest-Earning
Assets $ 757,906 $ 786,894 $ 757,317 $ 784,136
Average Non-Interest-
Earning Assets 65,311 62,824 63,337 62,318
--------------------------------------------
Total Average Assets $ 823,217 $ 849,718 $ 820,654 $ 846,454
============================================
Average Interest-Bearing
Liabilities $ 591,950 $ 612,860 $ 586,190 $ 619,848
Average Non-Interest-
Bearing Liabilities 130,977 140,882 134,131 132,737
--------------------------------------------
Total Average
Liabilities 722,927 753,742 720,321 752,585
Average Equity 100,290 95,976 100,333 93,869
--------------------------------------------
Total Average Liabilities
and Equity $ 823,217 $ 849,718 $ 820,654 $ 846,454
============================================
PERFORMANCE RATIOS:
Interest Rate Spread 5.09% 5.11% 5.24% 5.18%
Net Interest Margin 5.61% 6.10% 5.82% 6.22%
Return on Average Assets 1.29% 1.50% 1.17% 1.63%
Return on Average Equity 10.60% 13.26% 9.57% 14.66%
Efficiency Ratio 56.08% 54.04% 53.91% 52.05%
FINANCIAL HIGHLIGHTS
(In thousands, except per-share data and ratios)
(Unaudited)
----------------------
June 30, June 30,
2002 2001
----------------------
CONDENSED BALANCE SHEETS:
Investment Securities $ 91,946 $ 78,522
Loans, Net 609,771 657,245
Total Assets 820,522 853,500
Total Deposits 698,043 741,991
Total Shareholders' Equity 100,473 97,537
Book Value per Share 4.08 4.05
Tangible Book Value per
Share 3.79 3.73
ASSET QUALITY:
Loans Past Due 90 Days or
More $ 166 $ 49
Loans on Non-Accrual
Status 11,609 7,771
----------------------
Total Non-performing
Loans 11,775 7,820
Other Real Estate Owned 1,663 413
----------------------
Total Non-performing
Assets $ 13,438 $ 8,233
======================
Non-performing Assets /
Total Assets 1.64% 0.96%
Non-performing Loans /
Total Loans 1.89% 1.17%
Non-performing Loans /
Total Assets 1.44% 0.92%
Quarter Ended
----------------------
June 30, June 30,
2002 2001
----------------------
CHANGES IN THE ALLOWANCE
FOR LOAN LOSSES:
Balance at Beginning of
Period $ 12,436 $ 9,894
Provision for Loan Losses 975 975
Loans Charged Off (1,210) (669)
Loans Recovered 24 11
----------------------
Balance at End of Period $ 12,225 $ 10,211
======================
Net Charge-Offs to Average
Gross Loans 0.19% 0.10%
Loan Loss Allowance /
Gross Loans 1.97% 1.53%
Loan Loss Allowance / Non-
performing Loans 104% 131%
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