Community First Bank Releases First Quarter Earnings

Prineville, OR – Prineville Bancorporation (OTTB: PNVL.OB), parent company for Community First Bank, today reported its results for the quarter ended March 31, 2008

Robin B. Freeman, President & CEO stated, "As a result of challenging market conditions and a slowing Central Oregon economy, net income for the first quarter was down 50% from the comparable first quarter of 2007. To help the national economy and real estate markets, the Federal Reserve lowered interest rates 100 basis points late in 2007 and continued with a 200 basis point reduction in the first quarter of 2008. This has led to a temporary compression in the net interest margin as the rapid decline in the prime lending rate has affected the yield on earning assets faster than the re-pricing of deposit liabilities. We expect to see improvement in the net interest margin in the 2nd quarter. Our capital ratios remain strong and we see opportunities to further market share in the Central Oregon market with our expanded market presence. Growth rates in loans and deposits from the first quarter of last year exceeded 14%, but the rate of growth slowed in late 2007.   Highlights include":

 

•          Net income of $181,000 for the first quarter - $.07 per share

•          Net income for the first quarter 2008 compares to $359,000 or $.14 for the first quarter of 2007

•         Total assets were $209.3 million as of March 31, 2008 - an increase of 15.4% from March 31, 2007 and 1.0% from December 31, 2007.

•         Total deposits were $160.4 million as of March 31, 2008 - an increase of 14.1% from March 31, 2007 but virtually unchanged from December 31, 2007.

•         Gross loans were $170.0 million as of March 31, 2008 - an increase of 18.7% from March 31, 2007 and an increase of 1.8% from December 31, 2007.

 

John Hajovsky, Executive Vice President and Chief Operating Officer commented, "We have been actively managing margin by allowing high cost time deposits to roll off. This has led to slower deposit growth, but an improvement in the net interest margin late in the first quarter. In addition, overhead has increased as branch expansion continues. The remodeling of our Prineville and Terrebonne facilities are complete and our new Mill Quarter building will be completed in the second quarter. Growth in overhead and staffing levels, which have increased due to our expansion into the Redmond and Bend markets, will slow for the remainder of 2008. We are seeing improvement in net interest margin and non-interest income levels."

 

Andy Phillips, Executive Vice President and Chief Credit Officer reported that "While past due and non-performing assets have increased in the first quarter, loss expectations have not increased significantly. Loan losses and loan loss provisions are consistent with previous quarters. We believe that the Allowance for Loan Losses, which was increased to $2,081,000 and was 1.22% of loans, remains adequate. The current economic environment has dictated a tightening of credit underwriting and a heightened focus to address credits experiencing stress in a timely manner. Being pro-active and aggressive will result in a higher level of adversely rated loans, but should lower the potential for surprises." 

First Quarter 2008 Financial Statement

Prineville Bancorporation is the holding company for Community First Bank, which operates eight bank branches located in Prineville, Bend, Redmond, La Pine, Terrebonne and Madras, Oregon, and a loan production office in Bend offering residential and commercial real estate loans. Residential mortgage services are also offered through all bank branches. In addition investment and trust services are offered through Community First Investments.

 

FORWARD-LOOKING STATEMENTS

The statements contained in this release that are not historical facts are forward-looking statements based upon management's current expectations and beliefs concerning future developments and their potential effect on Prineville Bancorporation. There can be no assurances that future developments affecting Prineville Bancorporation will be the same as those anticipated by management.

 

Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These risks and uncertainties include, but are not limited to: (1) competitive pressures in the banking and financial industries; (2) changes in interest rate environment; (3) general economic conditions, nationally, regionally, and in operating markets; (4) changes in regulatory environment; (5) changes in business conditions and inflation; (6) changes in securities markets; and (7) future credit loss experience.

 

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For more information, please contact:

John Hajovsky
555 NW Third Street
Prineville, OR 97754
541-447-4106