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Premier Commercial Bancorp Reports Second Quarter 2014 Results

HILLSBORO, OR -- (Marketwired) -- 07/25/14 -- Premier Commercial Bancorp, the new name for Columbia Commercial Bancorp (OTCBB: CLBC), a single bank holding company for Premier Community Bank based in Hillsboro, Oregon (the Bank), reports a net profit of $508,000 for the six months ended June 30, 2014. Relative to $671,000 for the first six months of 2013, the decrease in net income for the period was attributed to an increase in troubled asset related expenses and changes in the net gains and losses on the sale of OREO properties. Earnings per diluted share for the six months ended June 30, 2014 was $0.09 compared to $0.18 per diluted share for the same six months of 2013 due to the reduced net income for the period as well as an increase in shares outstanding during 2014 from a common stock offering in late 2013 where almost 1.8 million shares were issued. Net income for second quarter 2014 of $250,000, or $0.04 per diluted share, was down slightly from the $258,000, or $0.05 per diluted share for the first quarter of 2014.

"Non-performing assets continue their steady decline while at the same time we are producing quality loan and core deposit growth. This growth along with an improved mix, not only strengthens both the asset and liability sides of the balance sheet but has been and will continue to bolster core earnings. The Company's equity also increased significantly over the past year from both retained earnings and a stock offering. And common equity will continue to grow further in this upcoming quarter as over $1.0 million of debt has recently been converted to common shares. The foundation of the Company is strong and the team continues to work toward additional successes," stated the Company's President and CEO, Rick A. Roby.

Earnings

Interest on earning assets was $7.0 million for the first six months of both 2014 and 2013. Increased interest income from the improvement in asset mix and increases in outstanding loans were offset by reduced loan rates from both scheduled repricings and rates on new loans relative to maturing loans and pay downs. Interest expense at $1.6 million for the first six months of 2014 was down $257,000, or 13.7%, when compared to the $1.9 million for the same period of 2013. The reduction in interest expense was directly attributable to a reduction in the amounts and rates paid on non-core deposits and repurchase agreements. Net interest income for the first six months of 2014 at $5.4 million was $270,000, or 5.3% higher than the same period for 2013. The improving net interest margin for 2014 relative to 2013 was reflective of the above changes and was 3.51% for the first six months of 2014 compared to 3.39% for 2013. Also reflected in the 2014 net interest income and margin was the collection of back interest on non-accrual loans during first quarter 2014 which resulted in a higher net interest margin for that quarter at 3.60% compared to second quarter 2014 at 3.43%. Excluding the collection of back interest on non-accrual loans, net interest margin for first quarter 2014 would have been 3.41%.

Noninterest income at $156,000 for second quarter 2014 and $153,000 for first quarter 2014, or $309,000 year-to-date, was consistent with the $300,000 for the first six months of 2013. Noninterest expense was $2.5 million for second quarter 2014 and was relatively consistent with the amount for first quarter 2014; however at $4.9 million for the first six months of 2014, noninterest expense was $431,000 higher than the amount for the same period of 2013. The increased noninterest expenses relate in part to increased personnel costs for both existing staff and strategic new hires to focus on specific product niches and new markets while the costs of managing and collecting/liquidating problem loans and OREO properties continue to exceed our expectations and budgeted amounts. Expenses related to problem loans and OREO were $140,000 and $192,000 for the first and second quarters of 2014, or $332,000 for the first six months of 2014 which was considerably higher than the $198,000 for the first six months of 2013. Moving forward it is expected these expenses will decrease as we continue to reduce the levels of both problematic loans and OREO properties.

Assets

Total Assets as of June 30, 2014 at $335.7 million were consistent with the 2013 year-end amount but were up $10.0 million, or 3.1%, when compared to the $325.7 million a year ago. Outstanding loans have steadily increased over the past year from $246.7 million as of June 30, 2013 to $251.5 million as of June 30, 2014. Loans secured by commercial buildings have increased $7.3 million, to $114.6 million, or 45.6% of the total loan portfolio. Loans secured by multi-family dwellings have also increased as they are now over $7.0 million compared to this time last year when they were $1.4 million. Non-real estate commercial and industrial (C&I) loans in aggregate have remained relatively consistent over the past year and were $75.2 million, or 29.9%, of the Bank's total loans as of June 30, 2014. Real estate acquisition, development, and construction loans at $30.4 million, or 12.1% of the total loan portfolio as of June 30, 2014, were down almost $3.0 million when compared to the $33.3 million as of June 30, 2013. "This reduction over the past year in real estate acquisition, development, and construction loans was primarily the result of eliminating the remnants from the economic downturn and now this portfolio is performing very well with no delinquencies and minimal adverse classifications," states Fred Johnson, the Company's Chief Credit Officer.

Consistent with March 31, 2014 and December 31, 2013, as of June 30, 2014 the Bank had no loans that were past due over 30 days and still accruing interest.

For the first six months of 2014, the Bank had $129,000 in loan recoveries relative to $99,000 in charge-offs, or $30,000 in net recoveries. For the full-year of 2013, the Bank had $309,000 in loan recoveries relative to $290,000 in charge-offs, or net recoveries of $19,000. The allowance for loan losses as of June 30, 2014 at $5.5 million, or 2.17% of total loans, was consistent with the December 31, 2013 amounts, but below the $6.2 million, or 2.51% of loans, at this time last year due to the Bank's $750,000 reverse loan loss provision taken during fourth quarter 2013. The Bank had no loan loss provision expense for the first six months of 2014 and none for the full twelve months of 2013.

Non-performing assets consist of loans on nonaccrual status and other real estate owned (OREO) which combined to $11.2 million, or 3.32% of total assets as of June 30, 2014 compared to $13.1 million, or 3.94% of total assets, as of March 31, 2014 and compared to $15.1 million, or 4.51% of total assets as of December 31, 2013. As of June 30, 2014 the Bank had $5.6 million in loans on nonaccrual status which consisted of four relationships (one borrower accounted for $5.0 million) and OREO was $5.6 million which consisted of 10 projects/properties with carrying amounts ranging from $45,000 to $2.9 million.

To improve earnings on excess liquidity, over the past year the Company's investments have grown by $8.8 million, or 25.5%, to $43.5 million. The growth in investments has been in short-duration securities to minimize interest rate risk and to provide cash flows for continued loan growth.

Deposits and Repurchase Agreements

Total deposits at $236.8 million as of June 30, 2014 continue to increase and were up $2.7 million, or 1.1%, relative to the $234.1 million as of December 31, 2013 and increased $8.6 million, or 3.8%, when compared to the $228.2 million as of June 30, 2013. "The Bank continues to be pleased with its core deposit growth initiatives which have resulted in almost $18.5 million of growth over the past year as during this same period the Bank's reliance on brokered and other non-traditional deposits decreased by nearly $10.0 million," states the Company's Chief Financial Officer, Bob Ekblad. As of June 30, 2014 the Bank had no brokered deposits and $37.2 million of non-traditional out-of-area deposits compared to June 30, 2013 when brokered deposits were $2.3 million and other non-traditional out-of-area deposits were $44.8 million.

Repurchase agreements are interest-bearing collateralized accounts typically utilized by larger clients for earnings and protection of excess funds. As these funds are more expensive and less beneficial than traditional deposits, the Bank has strategically been working to reduce the amounts held in these accounts; and as a result, the amount of client repurchase accounts as of June 30, 2014 at $13.8 million were down $5.0 million, or 26.6% relative to the $18.8 million as of June 30, 2013.

Borrowings, Equity and Capital

Within "Other Borrowings" as of June 30, 2014, the Company had $1,095,000 of 8.50% convertible notes that mature in December 2014. Recently the Company prepared and presented these note holders a special offering to convert the principal amount of their notes, plus interest that would have been earned through maturity, to common stock at $4.40 per share. Over these past few weeks of July 2014, substantially all note holders have accepted the conversion offering and the Company has retired $1,045,000 of these convertible notes and issued 247,595 common shares.

With continued earnings and $6.1 million in net proceeds from a stock offering during third quarter 2013, stockholders' equity for the Company at $29.6 million as of June 30, 2014 increased $7.7 million, or 35.4%, when compared to the $21.9 million as of June 30, 2013. At the Bank, capital levels showed a corresponding increase from retained earnings, a $4.4 million capital injection from the Company as a result of the third quarter 2013 stock offering, and reductions in disallowed assets for regulatory capital measurements. The Bank's leverage ratios and total risk-based capital ratios as of June 30, 2014 were 11.12% and 14.50%, respectively, compared to 10.65% and 14.23% as of December 31, 2013 and 9.41% and 12.59% as of June 30, 2013.

About Premier Commercial Bancorp:

In April 2014 the shareholders of Columbia Commercial Bancorp approved a proposal to amend its articles of incorporation to change its name to Premier Commercial Bancorp, which is reflective of the new name for its primary operating subsidiary, Premier Community Bank. Information about the Company's stock may be obtained through the OTCQB marketplace at www.otcmarkets.com. Premier Commercial Bancorp's stock symbol is currently CLBC; however this is scheduled to change soon to a ticker more reflective of the Company's new name.

Premier Commercial Bancorp was formed in 2002 as a holding company for Premier Community Bank, the new name for Columbia Community Bank, which was opened in 1999 by local business people to deliver loan and deposit product solutions through experienced and professional bankers to businesses, nonprofits, professionals, and individuals throughout Washington County and the greater Portland metropolitan area. The Bank has been named among the "100 Best Companies to Work for in Oregon" by Oregon Business Magazine for 2009, 2011, 2012 and 2013.

For more information about Premier Commercial Bancorp, or its subsidiary, Premier Community Bank, call (503) 693-7500 or visit our website at www.pcboregon.com. Information contained in or linked to our website is not incorporated as a part of this release.

Certain statements in this release may constitute forward-looking statements within the definition of the "safe-harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to significant uncertainties, which could cause actual results to differ materially from those set forth in such statements. Forward-looking statements are those that incorporate management's current expectations and plans based on information currently known to them. These statements can sometimes be identified by words such as "believe," "estimate," "anticipate," "expect," "intend," "will," "may," "should," or other similar phrases or words. Readers are cautioned not to place undue reliance on forward-looking statements. In particular, they should not be construed as assurances of a given level of performance or as promises of a given set of management's actions. Some of the factors that could cause management to deviate from its current plans, or could cause the Company's results to differ from current expectations, include the effect of localized or regional economic shifts that may affect the collectability of loans or the value of the collateral underlying those loans; the effects of laws, regulations, policies and government actions upon the Company's assets and operations; sensitivity to the Northwestern Oregon geographic markets and events affecting those markets; and the impacts of new government initiatives upon us and our borrowers. The Company does not intend to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

                        Consolidated Balance Sheet
                                  Unaudited
             (amounts in 000s, except per share data and ratios)

                                                    %                   %
                                                 Change              Change
                                 June 30,         2014    December    Year-
                                                   vs.       31,       to-
                            2014        2013      2013      2013      Date
                         ----------  ----------  ------  ----------  ------

ASSETS
  Cash & due from banks  $   25,348  $   28,230   -10.2% $   27,602    -8.2%
  Federal funds sold              -           -     0.0%          -     0.0%
  Investment Securities
   - Available for Sale      39,376      32,454    21.3%     39,471    -0.2%
  Investments - Other         4,085       2,188    86.7%      2,149    90.1%

  Gross loans               251,453     246,663     1.9%    248,434     1.2%
  Allowance for loan
   losses                    (5,452)     (6,183)  -11.8%     (5,422)    0.6%
                         ----------  ----------  ------  ----------  ------
    Net loans               246,001     240,480     2.3%    243,012     1.2%

  Other real estate
   owned                      5,568       6,836   -18.5%      7,598   -26.7%
  Other assets               15,338      15,532    -1.2%     15,294     0.3%
                         ----------  ----------  ------  ----------  ------

    Total Assets         $  335,716  $  325,720     3.1% $  335,126     0.2%
                         ==========  ==========  ======  ==========  ======

LIABILITIES
  Deposits               $  236,771  $  228,190     3.8% $  234,082     1.1%
  Repurchase agreements      13,830      18,848   -26.6%     16,530   -16.3%
  Federal funds
   purchased                      -           -     0.0%          -     0.0%
  FHLB borrowings            41,000      41,000     0.0%     41,000     0.0%
  Other borrowings            2,405       2,523    -4.7%      2,465    -2.4%
  Junior subordinated
   debentures                 8,248       8,248     0.0%      8,248     0.0%
  Other liabilities           3,841       5,027   -23.6%      4,355   -11.8%
                         ----------  ----------  ------  ----------  ------
    Total Liabilities       306,095     303,836     0.7%    306,680    -0.2%

STOCKHOLDERS' EQUITY         29,621      21,884    35.4%     28,446     4.1%
                         ----------  ----------  ------  ----------  ------
    Total Liabilities
     and Stockholders'
     Equity              $  335,716  $  325,720     3.1% $  335,126     0.2%
                         ==========  ==========  ======  ==========  ======

Shares outstanding at
 end-of-period            5,535,974   3,775,752           5,535,974
Book value per share     $     5.35  $     5.80          $     5.14
Allowance for loan
 losses to total loans         2.17%       2.51%               2.18%
Non-performing assets
 (non-accrual loans &
 OREO)                   $   11,171  $   14,041          $   15,136

Bank Tier 1 leverage
 ratio                        11.12%       9.41%              10.65%
Bank Tier 1 risk-based
 capital ratio                13.24%      11.33%              12.97%
Bank Total risk-based
 capital ratio                14.50%      12.59%              14.23%



                   Consolidated Statement of Operations
                                 Unaudited
             (amounts in 000s, except per share data and ratios)

                  Three Months Ended             Six Months Ended
                 --------------------          --------------------
                                          %                             %
                 6/30/2014  3/31/2014  Change  6/30/2014  6/30/2013  Change
                 ---------  ---------  ------  ---------  ---------  ------
INTEREST INCOME
  Loans          $   3,222  $   3,326    -3.1% $   6,548  $   6,669    -1.8%
  Investments          196        195     0.5%       391        260    50.4%
  Federal funds
   sold and
   other                19         16    18.8%        35         32     9.4%
                 ---------  ---------  ------  ---------  ---------  ------
    Total
     interest
     income          3,437      3,537    -2.8%     6,974      6,961     0.2%
                 ---------  ---------  ------  ---------  ---------  ------

INTEREST EXPENSE
  Deposits             283        285    -0.7%       568        783   -27.5%
  Repurchase
   agreements
   and federal
   funds
   purchased             7          9   -22.2%        16         43   -62.8%
  FHLB
   borrowings          412        408     1.0%       820        821    -0.1%
  Other
   borrowings           49         48     2.1%        97        100    -3.0%
  Junior
   subordinated
   debentures           55         62   -11.3%       117        128    -8.6%
                 ---------  ---------  ------  ---------  ---------  ------
    Total
     interest
     expense           806        812    -0.7%     1,618      1,875   -13.7%
                 ---------  ---------  ------  ---------  ---------  ------

NET INTEREST
 INCOME BEFORE
 PROVISION FOR
 LOAN LOSSES         2,631      2,725    -3.4%     5,356      5,086     5.3%

PROVISION FOR
 LOAN LOSSES             -          -     0.0%         -          -     0.0%
                 ---------  ---------  ------  ---------  ---------  ------

NET INTEREST
 INCOME AFTER
 PROVISION FOR
 LOAN LOSSES         2,631      2,725    -3.4%     5,356      5,086     5.3%

NON-INTEREST
 INCOME                156        153     2.0%       309        300     3.0%

NON-INTEREST
 EXPENSE             2,473      2,440     1.4%     4,913      4,482     9.6%

OREO VALUE
 ADJUSTMENTS &
 GAINS/(LOSSES)
 ON SALES - NET         47        (64) -173.4%       (17)        88  -119.3%
                 ---------  ---------  ------  ---------  ---------  ------

INCOME BEFORE
 PROVISION FOR
 INCOME TAXES          361        374    -3.5%       735        992   -25.9%

PROVISION FOR
 INCOME TAXES          111        116    -4.3%       227        321   -29.3%
                 ---------  ---------  ------  ---------  ---------  ------

NET INCOME       $     250  $     258    -3.1% $     508  $     671   -24.3%
                 =========  =========  ======  =========  =========  ======

Earnings per
 share - Basic   $    0.04  $    0.05          $    0.09  $    0.18

Earnings per
 share - Diluted $    0.04  $    0.05          $    0.09  $    0.18

Return on
 average equity       3.39%      3.62%              3.50%      6.17%
Return on
 average assets       0.30%      0.31%              0.31%      0.41%
Net interest
 margin               3.43%      3.60%              3.51%      3.39%
Efficiency ratio      88.7%      84.8%              86.7%      83.2%

CONTACT:

Rick A. Roby
President and Chief Executive Officer
503-693-7500
[email protected]

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