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COLUMBIA BANKING SYSTEM REPORTS 74-PERCENT 1992 EARNINGS INCREASE -- $1.07 PER SHARE

 BELLEVUE, Wash., Feb. 2 /PRNewswire/ -- Columbia Banking System Inc. (NASDAQ: COLB) today reported 1992 earnings increased 74 percent over the previous year. Earnings for the year which ended Dec. 31, 1992, increased to $956,000 from $548,000 in 1991. Per-share earnings increased 13 percent, from 95 cents in 1991 to $1.07 in 1992. On a fully diluted basis, earnings were 87 cents per share.
 Columbia Banking System Inc., the holding company for Columbia Bank, FSB, and its mortgage banking subsidiary, Columbia First Service, earned $119,000 or 10 cents per share in 1992's fourth quarter compared with a loss of $4,000 or 1 cent per share in the same period in 1991. Earnings per share for the fourth quarter and the full year reflect a two-for-one stock split effected in March 1992 and an additional 604,740 shares of common stock sold to the public in July 1992.
 "Our earnings for the year were strong despite our extensive investment in growth activities," said Arnold G. Espe, chairman of Columbia Banking System. "During the year we achieved significant milestones: We invested in a major data processing conversion; we moved our administrative headquarters to Bellevue; we established Columbia First Service to engage in residential mortgage banking, and we acquired the mortgage capabilities of the former Drake Mortgage Corp. of Bellevue and Seattle. These expansion activities should contribute favorably to future growth."
 Columbia Bank's total assets on Dec. 31, 1992, were $139.5 million compared with $100.3 million on Dec. 31, 1991, an increase of 39 percent. Shareholders' equity in Columbia Banking System increased to $10.3 million and book value was $9.07 per share, compared with shareholders' equity of $4.8 million and book value per share of $8.99 on Dec. 31, 1991. In July 1992, Columbia Banking System raised net proceeds of $9.7 million through its initial public offering, consisting of the sale of 604,740 shares of common stock and $5.75 million in convertible notes.
 "Our well-capitalized position allows us to continue implementation of our business plan. We will continue with our expansion activity and with the development of our 'Customer First Service' culture," said Espe. "Our overhead relative to assets and revenues continues to represent a challenge, in part due to significant expenses incurred during 1992. We recently hired a number of experienced senior managers who should provide valuable assistance in achieving our performance objectives. A major priority in 1993 is to manage our overhead commensurate with both short- and long-term objectives. Given the relative magnitude of certain expansion activities, as well as positioning for the future, shareholders should continue to expect some quarter-to-quarter earnings volatility. While we are highly motivated to produce short-term results, our primary objective is long-term shareholder value."
 The bank's reserve for possible loan losses at year-end 1992 was $1,245,000, or 229 percent of nonperforming loans and 1.15 percent of total loans. The value of other real estate owned on Dec. 31, 1992, increased to $2.95 million, compared with $2.52 million one year ago. More than 80 percent of the other real estate owned is centered in one property, which the bank is seeking to sell. This property generates reasonable net operating income. Net interest income after provision for loan losses in 1992 was $3,579,000, an increase of 61 percent from $2,227,000 in 1991. Total deposits on Dec. 31, 1992, were $100.3 million, an increase of 33 percent from $75.3 million at the end of 1991.
 Columbia Bank, primarily through its mortgage banking subsidiary, Columbia First Service, originated more than $50 million in one-to-four family residential mortgages in 1992. "This volume is particularly encouraging since Columbia First Service did not commence operations until the late spring of 1992," noted Espe.
 "The acquisition of Drake Mortgage in September also gives us the capability to provide competitive mortgage products to a wider market." Residential loans generated through Columbia First Service are either held in the bank's portfolio or they are sold in the secondary market.
 "In 1992, we continued to emphasize the importance of diversifying our loan portfolio through increased commercial and consumer lending activities," said Espe. During the year, Columbia Bank increased commercial loans 127 percent, to $12.5 million from $5.5 million on Dec. 31, 1991. Consumer loans grew to $4.2 million compared to $1.3 million on Dec. 31, 1991. Total loans were $107 million on Dec. 31, 1992, an increase of 37 percent from $78 million at 1991's year end.
 At the time of the earnings announcement, Espe also said that Columbia Banking System was unable to reach a definitive agreement regarding its previously announced intent to purchase First American State Bank, headquartered in Centralia, Wash. "We will be moving ahead with our plans to bring Columbia National Bankshares Inc., parent company of Columbia National Bank, located in Longview, Wash., into the Columbia Banking System Inc. family. We expect that transaction, which is subject to shareholder approval, to be completed by mid-year 1993," added Espe.
 Columbia Banking System Inc. operates Columbia Bank, FSB, with four offices in western Washington: two in Longview, one in Woodland and one in Bellevue. Columbia First Service, the bank's mortgage subsidiary, began operations last May in Bellevue and now, after acquiring Drake Mortgage, has additional offices in Longview and Seattle.
 COLUMBIA BANKING SYSTEM INC.
 CONSOLIDATED BALANCE SHEETS
 (In thousands)
 Dec. 31: 1992 1991
 ASSETS
 Cash and Cash Equivalents:
 Cash and due from banks $ 4,326 $ 1,570
 Interest-bearing deposits with
 Federal Home Loan Bank 7,787 6,944
 Total cash and cash equivalents 12,113 8,514
 Short-term investments, at market 4,220 --
 Mortgage-backed securities, at cost
 (market value of $3,529 and $4,557,
 respectively) 3,328 4,337
 Loans receivable, (net of allowance
 for estimated loan losses of
 $1,245 and $1,127, respectively) 107,440 78,192
 Interest receivable 676 656
 Real estate owned 2,954 2,523
 Federal Home Loan Bank stock, at cost 1,639 1,455
 Premises and equipment, net 4,714 3,238
 FSLIC assistance receivable 365 629
 Prepaid expenses and other assets 2,083 806
 Total $139,532 $100,350
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Liabilities:
 Deposits $100,263 $ 75,334
 Advances from Federal Home Loan Bank 18,000 15,000
 Advances from borrowers for taxes and
 insurance 318 361
 Other liabilities 675 763
 Subordinated capital notes 4,225 4,117
 Convertible subordinated notes 5,750 --
 Total liabilities 129,231 95,575
 Stockholders' Equity:
 Preferred stock, no par value;
 2,000,000 shares authorized,
 none issued -- --
 Common stock, no par value;
 10,000,000 shares authorized,
 1,135,740 and 531,000 shares
 issued and outstanding,
 respectively 7,418 2,848
 Retained earnings 2,883 1,927
 Total shareholders' equity 10,301 4,775
 Total $139,532 $100,350
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands)
 Year Ended Dec. 31: 1992 1991
 Interest Income:
 Loans and mortgage-backed securities $ 9,565 $ 7,578
 Investments 493 444
 Total interest income 10,058 8,022
 Interest Expense:
 Deposits 4,246 4,269
 Advances from Federal Home Loan Bank 1,328 1,147
 Other borrowings 735 379
 Total interest expense 6,309 5,795
 Net interest income 3,749 2,227
 Provision for loan losses 170 --
 Net interest income after provision
 for loan losses 3,579 2,227
 Noninterest Income:
 Service charges and other fees 456 471
 Income from real estate activities, net 138 163
 Gains on sale of real estate owned 90 324
 Gains on sale of branch 64 --
 Other 335 434
 Total 1,083 1,392
 Noninterest Expense:
 Compensation and employee benefits 1,649 1,367
 Occupancy for company operations 498 261
 Regulatory premiums and assessments 192 149
 Data processing 129 138
 Advertising expense 237 154
 Other professional services expense 117 62
 Other 884 926
 Total 3,706 3,057
 Income before income taxes 956 562
 Provision for income taxes -- 14
 Net income $ 956 $ 548
 Net income per share 1.07 0.95
 Fully diluted net income per share 0.87 --
 Average common and common equivalent
 shares outstanding 892 577
 Fully diluted average common and
 common equivalent shares outstanding 1,411 --
 FINANCIAL HIGHLIGHTS
 (In thousands, except per-share data)
 Fourth Quarter Full Year
 Ended Dec. 31: 1992 1991 1992 1991
 Interest income $2,840 $2,118 $10,058 $8,022
 Interest expense $1,671 $1,523 $ 6,309 $5,795
 Net interest income after
 provision for loan losses $1,129 $ 595 $ 3,579 $2,227
 Other income $ 246 $ 392 $ 1,083 $1,392
 Other expense $1,274 $ 996 $ 3,706 $3,057
 Income before income taxes $ 101 $ (9) $ 956 $ 562
 Net income $ 119 $ (4) $ 956 $ 548
 Net income per share:
 Primary $ 0.10 -- $ 1.07 $ 0.95
 Fully diluted $ 0.10 -- $ 0.87 --
 Weighted average shares
 outstanding (primary) 1,185 -- 892 577
 Dec. 31: 1992 1991
 Total assets $139,532 $100,350
 Net loans receivable $107,440 $ 78,192
 Shareholders' equity $ 10,301 $ 4,775
 Book value per share $ 9.07 $ 8.99
 Net worth ratio (shareholders'
 equity to total assets) (percents) 7.38 4.76
 -0- 2/2/93
 /CONTACT: Gayle Cloud of Cloud Public Relations, 206-453-5583, for Columbia Banking System; or Arnold G. Espe, chairman, 206-646-5370, or J. Mike Dunn, vice president, director of marketing, 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

SW-LM -- SE001 -- 1648 02/02/93 07:51 EST
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