GLENWOOD SPRINGS. Colo., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Alpine Banks of Colorado (OTCQX: ALPIB) (“Alpine” or the “Company”), the holding company for Alpine Bank, today announced results (unaudited) for the third quarter ended September 30, 2020. The Company reported net income of $13.5 million, or $131.22 per basic common share for the third quarter 2020. Achievements in the third quarter 2020 include:
- Book Value per Share increased3.1% or $106.99 to $3,534.34 per share vs.second quarter2020
- Loanbalances duringthird quarter 2020 increased 2.7% or $84.0 million vs.second quarter2020
- Deposit balances duringthird quarter 2020 increased 11.6% or$474.4 million vs.second quarter2020
- Total Assets surpassed $5 billionduring the third quarter 2020
- Qualified to trade Class B nonvoting shares on theOTCQX® Best Market
President and Vice Chairman Glen Jammaron stated, “Alpine’s communities continue step up and confront the challenges of today head on. We are proud to be members of such resilient and dynamic communities. Alpine’s financial performance reflects the perseverance of the many customers, community members, shareholders and coworkers we interact with on a daily basis.”
Mr. Jammaron continued, “During the third quarter 2020, Alpine continued to promote liquidity for our shareholders by participating in several investor events, upgrading to the OTCQX® Best Market and setting in motion a 150-for-1 stock split of our Class B shares. We plan to continue looking for ways to make our shares more accessible to our current shareholders, institutional investors and community supporters.”
Net income for the third quarter 2020 and the second quarter 2020 was $13.5 million and $12.5 million, respectively. Interest income decreased $5.0 million in the third quarter 2020 compared to the second quarter 2020 primarily due to a decrease in loan and securities yields slightly offset by an increase in loan and securities volume. Loan yields were unusually high in the second quarter 2020 due to the booking of $5.6 million in Paycheck Protection Program (PPP) fees. Interest expense increased $0.4 million in the third quarter 2020 compared to the second quarter 2020 due to an increase in interest expense on the Subordinated Notes issued towards the end of the second quarter 2020. Noninterest income increased $4.9 million in the third quarter 2020 compared to the second quarter 2020 primarily due to an increase in fee income and income generated by Mortgage Banking activities. Noninterest expense increased $3.6 million in the third quarter 2020 compared to the second quarter 2020 primarily due to an increase in expenses related to Mortgage Banking activities and an increase in FDIC insurance. Provision for loan losses decreased $5.4 million in the third quarter 2020 compared to the second quarter 2020.
Net income for the nine months ended September 30, 2020 and 2019 was $36.9 million and $44.1 million, respectively. Interest income decreased $0.2 million for the first nine months of 2020 compared to the first nine months of 2019 primarily due to a decrease in yield on loans, the securities portfolio and cash and due from banks, slightly offset by an increase in loan volume. Interest expense decreased $1.2 million for the first nine months of 2020 compared to the first nine months of 2019 primarily due to decreased interest rates on deposit accounts slightly offset by an increase in volume. Noninterest income increased $4.3 million for the first nine months of 2020 compared to the first nine months of 2019 primarily due to an increase in income generated by Mortgage Banking activities. Noninterest expense increased $4.7 million for the first nine months of 2020 compared to the first nine months of 2019 primarily due to an increase in salary and employee benefit expenses. Provision for loan losses increased $9.7 million in the first nine months of 2020 compared to the first nine months of 2019 primarily due to management’s response to address the ongoing uncertainties and potential effects of COVID-19.
Net interest margin decreased from 4.26% to 3.23% from the second quarter 2020 to the third quarter 2020. Net interest margin for the second quarter 2020 was substantially influenced by the bank’s PPP loan fee income. The third quarter 2020 PPP loan portfolio yield was 1.20% compared to the second quarter 2020 PPP loan portfolio yield of approximately 10.0%, which was the result of significant fee income realized during the second quarter. Net interest margin for the third quarter 2020 net of the PPP loan influence was 3.38% compared to the second quarter 2020 net interest margin net of the PPP loan influence of 3.88%. For the first nine months of 2020, net interest margin decreased to 3.87% from 4.49% for the same period in 2019. Net interest margin for the first nine months of 2020 net of the PPP loan influence was 3.81%. Net interest margin was also negatively impacted by the large amount of assets being held in cash and due from banks at near zero interest rates.
As of September 30, 2020, total assets were $5.1 billion, an increase of 33.6% or $1.3 billion from September 30, 2019. Total assets increased $0.5 billion in the third quarter 2020 from the second quarter 2020 due to organic loan growth along with core deposit increases. Alpine’s Wealth Management Division had assets under management of $0.98 billion on September 30, 2020, compared to $0.96 billion on September 30, 2019, an increase of 2.2%.
Loans outstanding as of September 30, 2020 totaled $3.2 billion. The loan portfolio increased $84.0 million or 2.7% during the third quarter 2020 compared to June 30, 2020. This growth was primarily driven by the Residential Real Estate loan portfolio, which increased $45.0 million during the third quarter 2020 primarily due to an increase in one-to-four family residential loans. In addition, Commercial Real Estate loans grew $26.1 million, Commercial and Industrial loans grew $8.0 million and Real Estate Construction loans grew $4.2 million during the third quarter 2020 from the second quarter 2020.
Total deposits increased $474.5 million to $4.6 billion during the third quarter 2020 compared to June 30, 2020, primarily due to a $298.7 million increase in Demand accounts, a $116.4 million increase in Interest Checking accounts, a $111.0 million increase in Money Fund accounts, and a $4.3 million increase in Savings accounts. This was slightly offset by a $55.9 million decrease in Certificates of Deposit accounts related to the maturity of three brokered CDs. The remaining $20.7 million of outstanding brokered CDs will mature early in the fourth quarter 2020. The third quarter 2020 deposit growth was not reflective of PPP loan activity and is attributable to the high amount of liquidity in the general market.
The Company’s banking subsidiary, Alpine Bank (the “Bank”), continues to be designated as a “well capitalized” institution as its capital ratios exceed the minimum requirements for this designation. As of September 30, 2020, the Bank’s Tier 1 Leverage Ratio was 8.36%, Tier 1 Risk-Based Capital Ratio was 12.55% and Total Risk-Based Capital Ratio was 13.64%. On a consolidated level, the Company’s Tier 1 Leverage Ratio was 8.54%, Tier 1 Risk-Based Capital Ratio was 12.81% and Total Risk-Based Capital Ratio was 15.46% as of September 30, 2020.
During the third quarter 2020, Alpine paid a $16.00 per common share cash dividend, which was equivalent to the second quarter 2020 dividend, but a decrease from $31.00 per common share paid during the first quarter 2020. This decrease was a result of the numerous challenges and uncertainty presented by the COVID-19 pandemic. On October 8, 2020, Alpine declared a dividend of $18.00 per common share payable on October 26, 2020. The Board of Directors believes that the $2.00 per common share cash dividend increase for the fourth quarter 2020 compared to the third quarter 2020 is appropriate based upon Alpine’s financial performance and more stabilized current economic conditions.
COVID-19 Pandemic Response
The Company continues to respond to the COVID-19 pandemic as circumstances change. All branches are currently open to customers. We had no closures due to positive COVID tests in the third quarter 2020. Remote work for the majority of back office personnel is expected to continue through at least the end of 2020.
In order to support our customer base, Alpine enacted a 90-day loan payment deferral program in late March. Both principal and interest payments during the period were deferred to the end of the loan. As the 90-day deferral period came to an end, Alpine reviewed options to extend the deferral period for up to 180 days as provided for in regulatory guidance. Reviews for an additional 90-day extension to the deferral period included an analysis of the borrower’s plan and ability to resume normal payments when the deferral period ends. As of June 30, 2020, $823.0 million of the loan portfolio (26.5%) was active in the loan deferral program. The majority of borrowers did not require a second 90-day deferral period. As of September 30, 2020, $123.9 million (3.9%) of the loan portfolio remains on a COVID-19 deferral status.
The Company actively participated in the PPP loan program. As of September 30, 2020, Alpine had outstanding balances of $308.6 million in PPP loans. We have entered into a contract with a third party technology provider to assist with the PPP loan forgiveness process for our borrowers. Our web portal for processing PPP forgiveness was activated in September 2020. Activity has been slow, and we have not yet received any approvals from the SBA. We currently anticipate that the vast majority of our PPP loans will be forgiven in the fourth quarter 2020.
Stock Split of Class B Shares
Alpine has scheduled a Special Meeting of Stockholders to be held on November 12, 2020. The purpose of the meeting is to approve amended and restated Articles of Incorporation to increase the number of Alpine’s authorized Class B nonvoting common shares, effect a 150-for-1 stock split of the Class B shares and provide that dividends payable on the Class B shares shall equal 1/150th of any dividends paid on Alpine’s Class A voting shares, among other things. If approved by shareholders, the amended and restated Articles of Incorporation and the related Class B stock split will become effective upon filing with the Colorado Secretary of State which Alpine anticipates will occur on December 1, 2020.
About Alpine Banks of Colorado
Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $5.1 billion, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. With 40 banking offices across Colorado, Alpine Bank employs more than 760 people and serves more than 160,000 customers with personal, business, wealth management*, mortgage and electronic banking services. Alpine Bank has a 5-star rating for financial strength by BauerFinancial, Inc., the nation’s leading bank rating firm. The 5-star rating is BauerFinancial’s highest rating for financial institutions. Learn more at www.alpinebank.com.
*Alpine Bank Wealth Management services are not FDIC insured, may lose value and are not guaranteed by the bank.
|Contacts:||Glen Jammaron||Eric Gardey|
|President and Vice Chairman||Chief Financial Officer|
|Alpine Banks of Colorado||Alpine Banks of Colorado|
|2200 Grand Avenue||2200 Grand Avenue|
|Glenwood Springs, CO 81601||Glenwood Springs, CO 81601|
|(970) 384-3266||(970) 384-3257|
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding our evaluation of macro-environment risks, Federal Reserve rate management, and trends reflecting things such as regulatory capital standards and adequacy. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward- looking statements. They are neither statements of historical fact or guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statement include:
- the ability to attract new deposits and loans;
- demand for financial services in our market areas;
- competitive market-pricing factors;
- the adverse effects of public health events, such as the current COVID-19 pandemic, including governmental and societal responses;
- statements regarding the expected timing and impact of the stock split of our Class B common shares;
- deterioration in economic conditions that could result in increased loan losses;
- actions by competitors and other market participants that could have an adverse impact on our expected performance;
- risks associated with concentrations in real estate-related loans;
- market interest rate volatility;
- stability of funding sources and continued availability of borrowings;
- risk associated with potential cyber threats;
- changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth;
- the ability to recruit and retain key management and staff;
- the ability to raise capital or incur debt on reasonable terms; and
- effectiveness of legislation and regulatory efforts to help the U.S. and global financial markets.
There are many factors that could cause actual results to differ materially from those contemplated by forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Key Financial Measures
Click the following links for tables that highlight Alpine’s key financial measures for the quarter indicated.
CONTACT: Eric Gardey, Chief Financial Officer
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