MEDFORD, Ore., Aug. 11, 2009 (GLOBE NEWSWIRE) -- PremierWest Bancorp (Nasdaq:PRWT) announced results for the second quarter of 2009 as follows:
For the three months ended June 30, 2009:
* Loss per common share for the three month period of $1.15 on net loss of $28.6 million, compared with earnings per common share of $0.02 on net income of $579 thousand for the same period in 2008. * Strong capital position with all regulatory ratios well above published requirements for "Well Capitalized" status with risk-based capital at 11.55%. * Net interest margin of 4.33%. * Non-performing loans of $103.4 million and other real estate owned of $14.6 million. * Provision expense of $50.4 million and charge-offs, net of recoveries, of $35.7 million. * Reserve for loan and lease losses of $40.3 million or 3.36% of gross loans. * Efficiency ratio of 78.4%.
For the six months ended June 30, 2009:
* Loss per common share for the six month period of $1.32 on net loss of $32.5 million, compared with earnings per common share of $0.10 on net income of $2.3 million for the same period in 2008. * Net interest margin of 4.37%. * Growth in deposits of $37.5 million, 6.2% annualized growth, with significant growth occurring in core deposit categories. * Provision expense of $61.1 million and charge-offs, net of recoveries, of $37.9 million.
James M. Ford, President and Chief Executive Officer, remarked, "We are very disappointed with our operating results. The recession has proven to be far more long-lasting than anticipated, and our profitability has been adversely affected. We have continued to increase our loan loss reserve through added provision expense in response to an increasing level of non-performing loans. On the brighter side, the source of our ultimate earnings power, net interest margin, has remained strong at 4.33%. We know that recessions ultimately subside, and we believe the bulk of the additional expenses associated with the credit issues we have faced in recent months will subside as well. In the meantime, we are working very hard to resolve borrower issues and to reduce the level of non-performing assets."
CREDIT QUALITY AND NON-PERFORMING ASSETS
During the quarter just ended, we recorded $50.4 million in provision expense and charged-off $36.0 million of non-performing loans. Recoveries of previously charged-off loans totaled $241 thousand for the quarter. Our reserve for loan and lease losses totaled $40.3 million or 3.36% of gross loans. Non-performing loans rose to $103.4 million or 8.6% of gross loans at June 30, 2009.
The table below summarizes the Company's non-performing loans (NPL) by loan type and geographic region:
Total non-performing loans by type and geographic region (Dollars in 000's) June 30, 2009 ----------------------------------------------------- Non-performing Loans ----------------------------------------------------- Mid- Southern Central Northern Sacramento Oregon Oregon California Valley Totals* ----------------------------------------------------- Agricultural /Farm $ -- $ -- $ 391 $ -- $ 391 C&I 4,634 562 -- 2,306 7,502 CRE 18,308 22,266 1,887 12,039 54,500 Residential RE construction 5,269 9,264 7,464 12,423 34,420 Residential RE 2,681 -- 1,667 2,024 6,372 Consumer RE -- -- -- -- -- Consumer 105 123 7 -- 235 ------------------------------------------------------ Total non- performing loans $ 30,997 $ 32,215 $ 11,416 $ 28,792 $ 103,420 ====================================================== Non-performing loans to total loans 5.9% 13.4% 7.5% 10.4% 8.6% Total funded loans $526,722 $241,290 $152,771 $275,715 $1,196,498 June 30, 2009 ------------------------ Percent NPL to Funded Funded Loan Loan Totals by Totals Category ---------------------------------------- Agricultural /Farm $ 49,580 0.8% C&I 236,178 3.2% CRE 754,601 7.2% Residential RE construction 41,253 83.4% Residential RE 31,860 20.0% Consumer RE 33,080 0.0% Consumer 49,946 0.5% ------------ Total non- performing loans $1,196,498 ============ * Excludes Other category comprised of credit cards, overdrafts, leases and other adjustments such as deferred loan fees, etc., in the amount of $4.6 million.
The Company's principal source of credit stress is real estate related loans. Borrowers either involved in real estate or having secured loans with real estate have been vulnerable to both the ongoing economic downturn and to declining real estate values. Over 92 percent of our non-performing loan total of $103.4 million is directly related to real estate in the form of commercial or residential real estate development loans. At June 30, 2009, more than $22.3 million of our real estate related non-performing loans remain current as to principal and interest payments, but were placed on non-accrual status due to the absence of evidence supporting the borrowers' ongoing ability to discharge their loan obligations.
Ongoing actions taken to address the credit situation include:
* Credit monitoring activities have escalated since the beginning of the fourth quarter of 2008 to provide early warning of possible borrower distress that could lead to loan payment defaults. The pre-emptive credit monitoring and early warnings are intended to provide additional time to seek viable alternatives with the borrower. For those borrowers who have experienced payment problems and wish to seek a workable arrangement with the Company, management and staff are actively involved in seeking loan restructuring and other loan modification options and obtaining additional collateral coverage. We believe that these actions have and will continue to facilitate recovery strategies with cooperative borrowers. In those instances where alternatives have been exhausted or determined to be impractical and default under the terms of the loans has occurred, foreclosure actions are pursued. * An evaluation of a significant portion of our loan portfolio was completed during the second quarter by the independent firm that had conducted a similar review of our acquisition and development portfolio during the fourth quarter of 2008 to confirm the reliability of our internal reviews. * Senior management continues to actively guide our line managers in dealing with resolution of non-performing asset problems.
Rich Hieb, Senior Executive Vice President, stated, "Resolving the numerous problem loans will take a considerable amount of effort and time, but our efforts are producing results. We were active in marketing and selling smaller OREO properties throughout the second quarter with dispositions totaling $1.9 million. Following the end of the quarter, we were successful in selling one of our non-performing loans for $5.5 million. In addition, we have recently seen the removal of a legal impediment to foreclosure of a number of high value properties for which foreclosure is planned. This should enable us to complete the foreclosure on these properties and proceed with selling the collateral."
LOAN AND DEPOSIT GROWTH
Gross loans as of June 30, 2009 were $1.20 billion, down $46.9 million from the balance as of December 31, 2008. Charge-offs of non-performing loans with no significant offset from new loan generation were the principal reason for the decline.
Deposits at June 30, 2009 were $1.25 billion, up $37.5 million from year end 2008. The increase was largely the result of ongoing branch campaigns to stimulate core deposit growth. Non-interest bearing demand deposits were up over the year end 2008 total by $15.3 million to a total of $244.1 million or 19.5% of total deposits. Non-interest bearing demand deposits have been growing at an annualized rate of 13.4% since the end of 2008. Similarly, the total of NOW, money market and savings accounts grew by $17.7 million, or an 8.5% annualized rate, to a total of $434.3 million. Joe Danelson, Executive Vice President & Chief Banking Officer, remarked, "I am extremely pleased with the results our branch personnel have achieved. Their personable approach with bank customers, both existing and potential, is producing growth that is key to our ongoing success, particularly as the current recession ends."
NET INTEREST INCOME
Net interest income was relatively strong during the second quarter of 2009 at $14.3 million, despite the impact on yields from higher non-performing loan totals. Net interest margin was 4.33% during the second quarter, down slightly from the 4.41% recorded during the preceding quarter.
Yield on earning assets for the quarter just ended was 5.82% compared to 6.13% for the immediately preceding quarter. The cost of average total deposits and borrowings for the quarter ended June 30, 2009 was 1.54% compared to 1.79% for the quarter ended March 31, 2009.
Mike Fowler, Executive Vice President & Chief Financial Officer, commented, "Despite a highly competitive deposit gathering environment in both Oregon and California and high levels of non-performing loans, our net interest margin has remained relatively strong this year. Since this is the primary engine of our profitability, I am optimistic that a transition to our historical rates of return is simply awaiting resolution of the recession and related credit issues."
NON-INTEREST INCOME
During the second quarter of 2009, PremierWest recorded non-interest income of $2.6 million, up $124 thousand from the preceding quarter and unchanged from the same period last year. The increase from the previous quarter was primarily related to increased saleable mortgage loan fees and deposit service charge growth.
NON-INTEREST EXPENSE
Non-interest expense during the quarter just ended was $13.2 million, an increase of $645 thousand or 5.1% when compared to the preceding quarter and 9.0% when compared to the same period of 2008. The principal increases in non-interest expense were the special deposit fee assessment imposed by the FDIC to restore the deposit insurance fund and increased problem loan and OREO expenses. The FDIC assessment added $581 thousand to second quarter expenses while problem loan and OREO expenses were up $215 thousand from the immediately preceding quarter.
CAPITAL OUTLOOK
PremierWest remained "Well Capitalized" by published regulatory standards as of June 30, 2009. Nonetheless, our Board of Directors concluded that the common dividend should be eliminated until such time as we see a return to profitability and we satisfy the dividend payment conditions accompanying our acceptance of TARP Capital Purchase Program funding. It is essential that the Company maintain a strong capital position in order to prosper over the long run.
Jim Ford commented, "We've shown resilience in the face of adversity in recent times given the extended recession and the credit environment. For the first time, we have begun to hear cautious optimism from public commentators regarding moderation in the rate of decline in economic activity and the likelihood of economic growth during the second half of 2009. While we still have a number of challenges through which we must work, notably reducing the level of non-performing assets, we have the team, the work ethic and the game plan to accomplish what we must. With resumption of more normal economic times, I expect that we will be positioned to resume our historical levels of financial performance and returns to our shareholders. We are focused on that objective and are working very hard to speed the recovery in profitability to PremierWest Bancorp."
ABOUT PREMIERWEST BANCORP
PremierWest Bancorp (Nasdaq:PRWT) is a financial services holding company headquartered in Medford, Oregon, and operates primarily through its subsidiary PremierWest Bank. PremierWest Bank offers expanded banking-related services through two subsidiaries, Premier Finance Company and PremierWest Investment Services, Inc.
PremierWest Bank was created following the merger of the Bank of Southern Oregon and Douglas National Bank in May, 2000. In April, 2001, PremierWest Bancorp acquired Timberline Bancshares, Inc. and its wholly-owned subsidiary, Timberline Community Bank, with eight branch offices located in Siskiyou County in northern California. In January, 2004, PremierWest acquired Mid Valley Bank with five branch offices located in the northern California counties of Shasta, Tehama and Butte. In January 2008, PremierWest acquired Stockmans Financial Group, and its wholly-owned subsidiary, Stockmans Bank, with five full service banking offices in the Sacramento, California area. During the last several years, PremierWest expanded into the Klamath Falls and Central Oregon communities of Bend and Redmond, and into Yolo, Butte, and Placer counties in California. Most recently, PremierWest acquired two new branches, one in Grass Valley, California and the other in Davis, California.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including those set forth from time to time in PremierWest's filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. We make forward-looking statements in this press release about the prospects for earnings growth, deposit and loan growth, capital levels, our dividend program, expected peer rankings, the effective management of our credit quality, the collectability of identified non-performing loans and the adequacy of our Allowance for Loan Losses.
PREMIERWEST BANCORP FINANCIAL HIGHLIGHTS (All amounts in 000's, except per share data) (unaudited) STATEMENT OF OPERATIONS AND EARNINGS (LOSS) AND PER COMMON SHARE DATA For the Three Months Ended June 30 2009 2008 Change % Change -------- --------- -------- --------- Interest income $ 19,231 $ 22,716 $ (3,485) -15.3% Interest expense 4,920 6,977 (2,057) -29.5% -------- --------- -------- Net interest income 14,311 15,739 (1,428) -9.1% Loan loss provision 50,390 5,225 45,165 864.4% Non-interest income 2,590 2,600 (10) -0.4% Non-interest expense 13,246 12,152 1,094 9.0% -------- --------- -------- Pre-tax income (loss) (46,735) 962 (47,697) -4958.1% Provision (benefit) for income taxes (18,750) 314 (19,064) -6071.3% -------- --------- -------- Net income (loss) $(27,985) $ 648 $(28,633) -4418.7% ======== ========= ======== Net income (loss) $(27,985) $ 648 $(28,633) -4418.7% Less preferred dividend and discount accretion (614) (69) (545) 789.9% -------- --------- -------- Net income (loss) applicable to common shareholders $(28,599) $ 579 $(29,178) -5039.4% ======== ========= ======== Basic earnings (loss) per common share(1) $ (1.15) $ 0.02 $ (1.17) -5850.0% ======== ========= ======== Diluted earnings (loss) per common share(1) $ (1.15) $ 0.02 $ (1.17) -5850.0% ======== ========= ======== Average common shares outstanding--basic(1) 24,766,928 23,509,708 1,257,220 5.3% Average common shares outstanding--diluted(1) 24,766,928 23,516,299 1,250,629 5.3% For the Three Months Ended March 31, 2009 Change % Change --------- --------- --------- Interest income $ 20,059 $ (828) -4.1% Interest expense 5,666 (746) -13.2% -------- --------- Net interest income 14,393 (82) -0.6% Loan loss provision 10,700 39,690 370.9% Non-interest income 2,466 124 5.0% Non-interest expense 12,601 645 5.1% -------- --------- Pre-tax income (loss) (6,442) (40,293) -625.5% Provision (benefit) for income taxes (2,835) (15,915) -561.4% -------- --------- Net income (loss) $ (3,607) $ (24,378) -675.9% ======== ========= Net income (loss) $ (3,607) $ (24,378) -675.9% Less preferred dividend and discount accretion (372) (242) 65.1% -------- --------- Net income (loss) applicable to common shareholders $ (3,979) $ (24,620) -618.7% ======== ========= Basic earnings (loss) per common share(1) $ (0.16) $ (0.99) -618.8% ======== ========= Diluted earnings (loss) per common share(1) $ (0.16) $ (0.99) -618.8% ======== ========= Average common shares outstanding--basic(1) 24,766,495 433 0.0% Average common shares outstanding--diluted(1) 24,766,495 433 0.0% For the Six Months Ended June 30 2009 2008 Change % Change -------- --------- -------- --------- Interest income $ 39,290 $ 45,654 $ (6,364) -13.9% Interest expense 10,586 14,848 (4,262) -28.7% -------- --------- -------- Net interest income 28,704 30,806 (2,102) -6.8% Loan loss provision 61,090 8,300 52,790 636.0% Non-interest income 5,056 4,850 206 4.2% Non-interest expense 25,847 23,626 2,221 9.4% -------- --------- -------- Pre-tax income (loss) (53,177) 3,730 (56,907) -1525.7% Provision (benefit) for income taxes (21,585) 1,279 (22,864) -1787.6% -------- --------- -------- Net income (loss) $(31,592) $ 2,451 $(34,043) -1388.9% ======== ========= ======== Net income (loss) $(31,592) $ 2,451 $(34,043) -1388.9% Less preferred dividend and discount accrection (941) (138) (803) 581.9% -------- --------- -------- Net income (loss) applicable to common shareholders $(32,533) $ 2,313 $(34,846) -1506.5% ======== ========= ======== Basic earnings (loss) per common share(1) $ (1.32) $ 0.10 $ (1.42) -1420.0% ======== ========= ======== Diluted earnings (loss) per common share(1) $ (1.32) $ 0.10 $ (1.42) -1420.0% ======== ========= ======== Average common shares outstanding--basic(1) 24,720,994 22,739,017 1,981,977 8.7% Average common shares outstanding--diluted(1) 24,720,994 22,789,760 1,931,234 8.5% (1) Share and per share amounts adjusted for the 5% stock dividend, effective April 15, 2009, for the periods presented. SELECTED FINANCIAL RATIOS (annualized) (unaudited) For the Three Months For the Three Months Ended Ended June 30 March 31, 2009 2008 Change 2009 Change ------ ------ ------ -------- ------- Yield on average gross loans (1) 6.11% 7.10% (0.99) 6.32% (0.21) Yield on average investments (1) 1.75% 4.01% (2.26) 2.22% (0.47) Total yield on average earning assets (1) 5.82% 7.02% (1.20) 6.13% (0.31) Cost of average interest bearing deposits 1.78% 2.65% (0.87) 2.11% (0.33) Cost of average borrowings 5.83% 4.83% 1.00 3.88% 1.95 Cost of average total deposits and borrowings 1.54% 2.23% (0.69) 1.79% (0.25) Cost of average interest bearing liabilities 1.90% 2.74% (0.84) 2.19% (0.29) Net interest spread 3.92% 4.28% (0.36) 3.94% (0.02) Net interest margin (1) 4.33% 4.89% (0.56) 4.41% (0.08) Net (charge-offs) recoveries to average gross loans -2.88% -0.33% (2.55) -0.17% (2.71) Allowance for loan losses to gross loans 3.36% 1.92% 1.44 2.07% 1.29 Allowance for loan losses to non- performing loans 38.97% 60.06% (21.09) 30.54% 8.43 Non-performing loans to gross loans 8.61% 3.19% 5.42 6.78% 1.83 Non-performing assets to total assets 7.98% 2.81% 5.17 6.24% 1.74 Return on average common equity -67.16% 1.28% (68.44) -9.29% (57.87) Return on average assets -7.45% 0.18% (7.63) -0.98% (6.47) Efficiency ratio(2) 78.38% 66.26% 12.12 74.74% 3.64 For the Six Months Ended June 30 2009 2008 Change ------ ------ ------ Yield on average gross loans (1) 6.22% 7.34% (1.12) Yield on average investments (1) 1.94% 3.88% (1.94) Total yield on average earning assets (1) 5.98% 7.25% (1.27) Cost of average interest bearing deposits 1.94% 2.91% (0.97) Cost of average borrowings 4.63% 5.40% (0.77) Cost of average total deposits and borrowings 1.67% 2.44% (0.77) Cost of average interest bearing liabilities 2.04% 3.01% (0.97) Net interest spread 3.94% 4.24% (0.30) Net interest margin (1) 4.37% 4.91% (0.54) Net (charge-offs) recoveries to average gross loans -3.03% -0.35% (2.68) Allowance for loan losses to gross loans 3.36% 1.92% 1.44 Allowance for loan losses to non- performing loans 38.97% 60.06% (21.09) Non-performing loans to gross loans 8.61% 3.19% 5.42 Non-performing assets to total assets 7.98% 2.81% 5.17 Return on average common equity -37.67% 2.68% (40.35) Return on average assets -4.25% 0.34% (4.59) Efficiency ratio (2) 76.56% 66.26% 10.30 (1) Tax equivalent (2) Non-interest expense divided by net interest income plus non-interest income PREMIERWEST BANCORP FINANCIAL HIGHLIGHTS (All amounts in 000's, except per share data) (unaudited) BALANCE SHEET At June 30 2009 2008 Change % Change ---------- ---------- ---------- -------- Fed funds sold and investments $ 87,047 $ 38,708 $ 48,339 124.9% ---------- ---------- ---------- Gross loans, net of deferred fees 1,199,776 1,272,858 (73,082) -5.7% Allowance for loan losses (40,300) (24,423) (15,877) 65.0% ---------- ---------- ---------- Net loans 1,159,476 1,248,435 (88,959) -7.1% Other assets 231,517 202,787 28,730 14.2% ---------- ---------- ---------- Total assets $1,478,040 $1,489,930 $ (11,890) -0.8% ========== ========== ========== Non-interest-bearing deposits $ 244,083 $ 234,672 $ 9,411 4.0% Interest-bearing deposits 1,004,688 986,139 18,549 1.9% ---------- ---------- ---------- Total deposits 1,248,771 1,220,811 27,960 2.3% Borrowings 30,960 66,433 (35,473) -53.4% Other liabilities 12,289 14,398 (2,109) -14.6% Stockholders' equity 186,020 188,288 (2,268) -1.2% ---------- ---------- ---------- Total liabilities and stockholders' equity $1,478,040 $1,489,930 $ (11,890) -0.8% ========== ========== ========== Period end common shares outstanding 24,766,928 23,517,672 1,249,256 5.3% Period end common shares outstanding, all preferred shares or warrant converted to common(1) 25,857,313 24,746,093 1,111,220 4.5% Book value per common share (excluding preferred) $ 5.83 $ 7.63 $ (1.80) -23.6% Tangible book value per common share (excluding preferred) $ 3.02 $ 4.46 $ (1.44) -32.3% Allowance for loan losses: Balance beginning of period $ 17,157 $ 11,450 $ 5,707 49.8% Acquired from Stockmans Bank merger -- 9,112 (9,112) nm Provision for loan losses 61,090 8,300 52,790 636.0% Net (charge-offs) recoveries (37,947) (4,439) (33,508) 754.9% ---------- ---------- ---------- Balance end of period $ 40,300 $ 24,423 $ 15,877 65.0% ========== ========== ========== Non-performing assets: Loans in nonaccrual status $ 103,185 $ 40,532 $ 62,653 154.6% Impaired loans in process of collection -- -- -- nm Other real estate owned 14,588 1,244 13,344 1072.7% 90-days past due not on non-accrual 235 130 105 80.8% ---------- ---------- ---------- Total non-performing assets $ 118,008 $ 41,906 $ 76,102 181.6% ========== ========== ========== Balance Sheet at March 31, 2009 Change % Change ---------- ---------- -------- Fed funds sold and investments $ 79,037 $ 8,010 10.1% ---------- ---------- Gross loans, net of deferred fees 1,237,518 (37,742) -3.0% Allowance for loan losses (25,659) (14,641) 57.1% ---------- ---------- Net loans 1,211,859 (52,383) -4.3% Other assets 205,875 25,642 12.5% ---------- ---------- Total assets $1,496,771 $ (18,731) -1.25% ========== ========== Non-interest-bearing deposits $233,447 $10,636 4.6% Interest-bearing deposits 1,005,865 (1,177) -0.1% ---------- ---------- Total deposits 1,239,312 9,459 0.8% Borrowings 30,965 (5) 0.0% Other liabilities 12,079 210 1.7% Stockholders' equity 214,415 (28,395) -13.2% ---------- ---------- Total liabilities and stockholders' equity $1,496,771 $ (18,731) -1.3% ========== ========== Period end common shares outstanding 24,766,928 -- 0.0% Period end common shares outstanding, all preferred shares or warrant converted to common (1) 25,857,313 -- 0.0% Book value per common share (excluding preferred) $ 6.98 $ (1.15) -16.5% Tangible book value per common share (excluding preferred) $ 4.05 $ (1.03) -25.4% Allowance for loan losses: Balance beginning of period $ 17,157 $ -- 0.0% Acquired from Stockmans Bank merger -- -- nm Provision for loan losses 10,700 50,390 470.9% Net (charge-offs) recoveries (2,198) (35,749) 1626.4% ---------- ---------- Balance end of period $ 25,659 $ 14,641 57.1% ========== ========== Non-performing assets: Loans in nonaccrual status $ 69,045 $ 34,140 49.4% Impaired loans in process of collection 14,207 (14,207) -100.0% Other real estate owned 9,362 5,226 55.8% 90-days past due not on non-accrual 761 (526) -69.1% ---------- ---------- Total non-performing assets $ 93,375 $ 24,633 26.4% ========== ========== (1) The June 30, 2008 shares includes 11,000 shares of Series A preferred stock issued November 17, 2003 as if converted into common stock at a conversion ratio of 106.35 to 1 for a total of 1,169,925 common shares increased by the April 2009 5% stock dividend. The March 31, 2009 and June 30, 2009 shares include 1,090,385 shares related to the U.S. Treasury Troubled Asset Relief Program (TARP) Capital Purchase Program warrant. For the Three Months Ended June 30 2009 2008 Change % Change ---------- ---------- ---------- -------- Average fed funds sold and investments $ 89,791 $ 36,971 $ 52,820 142.9% Average gross loans, including mortgages held for sale $1,241,117 $1,269,596 $ (28,479) -2.2% Average total assets $1,506,252 $1,474,619 $ 31,633 2.1% Average non-interest- bearing deposits $ 240,744 $ 238,714 $ 2,030 0.9% Average interest- bearing deposits $1,009,095 $ 978,391 $ 30,704 3.1% Average total deposits $1,249,839 $1,217,105 $ 32,734 2.7% Average total borrowings $ 30,962 $ 45,580 $ (14,618) -32.1% Average stockholders' equity $ 212,322 $ 190,771 $ 21,551 11.3% Average common equity $ 170,796 $ 181,181 $ (10,385) -5.7% For the three months ended March 31, 2009 Change % Change ------------ ---------- --------- Average fed funds sold and investments $ 61,489 $ 28,302 46.0% Average gross loans, including mortgages held for sale $1,266,886 $ (25,769) -2.0% Average total assets $1,489,512 $ 16,740 1.1% Average non-interest-bearing deposits $ 234,259 $ 6,485 2.8% Average interest-bearing deposits $ 997,552 $ 11,543 1.2% Average total deposits $1,231,812 $ 18,027 1.5% Average total borrowings $ 50,335 $ (19,373) -38.5% Average stockholders' equity $ 195,293 $ 17,029 8.7% Average common equity $ 173,619 $ (2,823) -1.6% For the Six Months Ended June 30 Average fed funds sold and investments $ 75,718 $ 35,921 $ 39,797 110.8% Average gross loans, including mortgages held for sale $1,254,522 $1,235,248 $ 19,274 1.6% Average total assets $1,497,928 $1,444,148 $ 53,780 3.7% Average non-interest- bearing deposits $ 237,520 $ 230,522 $ 6,998 3.0% Average interest- bearing deposits $1,003,356 $ 950,961 $ 52,395 5.5% Average total deposits $1,240,875 $1,181,483 $ 59,392 5.0% Average total borrowings $ 40,595 $ 39,917 $ 678 1.7% Average stockholders' equity $ 206,029 $ 182,291 $ 23,738 13.0% Average common equity $ 174,400 $ 172,701 $ 1,699 1.0% LOANS BY CATEGORY (All amounts in 000's) (unaudited) 6/30/ 3/31/ 12/31/ 9/30/ 6/30/ 2009 2009 2008 2008 2008 ---------------------------------------------------------- Agricultural /Farm $ 49,580 $ 42,626 $ 48,640 $ 47,473 $ 60,009 Commercial and Industrial 236,178 265,305 253,107 265,776 272,689 Commercial Real Estate - Owner Occupied 262,031 261,646 265,965 253,668 246,048 Commercial Real Estate - Non-Owner Occupied 533,823 556,075 567,119 592,125 584,328 Consumer /Other 118,164 111,866 111,741 108,836 109,784 ---------------------------------------------------------- Gross loans, net of deferred fees $1,199,776 $1,237,518 $1,246,572 $1,267,878 $1,272,858 ========================================================== Commercial Real Estate Owner Occupied ---------- Commercial Term $ 235,081 $ 235,199 $ 236,951 $ 219,977 $ 211,532 Commercial Con- struction 19,051 16,370 16,778 20,284 20,001 Single Family Residential Con- struction Oregon 450 1,180 1,599 1,071 1,271 California 7,449 8,897 10,637 12,336 13,244 ---------------------------------------------------------- Total Owner Occupied $ 262,031 $ 261,646 $ 265,965 $ 253,668 $ 246,048 ========================================================== Non-Owner Occupied ---------- Commercial Term $ 323,699 $ 322,008 $ 321,168 $ 302,638 $ 300,737 Commercial Con- struction 40,548 41,602 45,155 62,491 64,519 Single Family Residential Con- struction Oregon Pre-Sold 1,286 1,359 1,100 3,093 2,962 Specu- lative 1,455 2,310 3,098 4,937 6,940 Builder Inven- tory 11,775 13,507 15,158 18,526 10,987 ---------------------------------------------------------- Total Oregon 14,516 17,176 19,356 26,556 20,889 ---------------------------------------------------------- California Pre-Sold 1,870 1,718 1,977 1,779 701 Specu- lative 3,316 3,407 3,643 4,033 5,542 Builder Inven- tory 13,652 16,321 12,370 11,131 13,578 ---------------------------------------------------------- Total Califor- nia 18,838 21,446 17,990 16,943 19,821 ---------------------------------------------------------- Commercial - Land Acquisition and Development 27,521 31,119 32,167 30,749 25,059 Commercial - Land Only 48,155 47,163 48,751 48,925 56,418 Residential - Land Acquisition and Development 60,546 75,561 82,532 103,823 96,885 ---------------------------------------------------------- Total Non-Owner Occupied $ 533,823 $ 556,075 $ 567,119 $ 592,125 $ 584,328 ========================================================== NONPERFORMING LOANS BY REGION AND TYPE (All amounts in 000's) (unaudited) Other Real Estate Owned 6/30/ 3/31/ 12/31/ By Geographic Region 2009 2009 2008 -------------------- ------------------------------- Mid-Central Oregon $ 7,975 $ 2,111 $ -- Southern Oregon 1,578 5,368 2,540 Northern California 148 -- -- Greater Sacramento 4,887 1,883 1,883 Other -- -- -- ------------------------------- Total Other Real Estate Owned $ 14,588 $ 9,362 $ 4,423 =============================== Non Performing Loans 6/30/ 3/31/ 12/31/ By Geographic Region 2009 2009 2008 -------------------- ------------------------------- Mid-Central Oregon $ 32,215 $ 16,717 $ 19,338 Southern Oregon 30,997 31,641 27,854 Northern California 11,416 15,166 18,376 Greater Sacramento 28,792 19,941 15,610 Other -- 548 1,437 -------------------------------- Total Nonperforming Loans $ 103,420 $ 84,013 $ 82,615 ================================ By Loan Type ----------------- Agricultural/Farm $ 391 $ 391 $ 493 Commercial and Industrial 7,502 4,003 5,154 Commercial Real Estate - Owner Occupied Single Family Residential Construction Oregon -- -- 162 California 409 439 439 Other 5,149 5,932 5,029 Commercial Real Estate - Non-Owner Occupied Oregon 11,081 8,235 12,754 California 6,565 594 594 Single Family Residential Construction Oregon 13,041 8,729 9,595 California 16,811 14,269 9,715 Commercial - Land Acquisition and Development 13,324 11,208 7,164 Commercial - Land Only 6,429 1,498 1,498 Residential - Land Acquisition and Development 10,531 14,224 14,601 Commercial Construction - Multiplex (5+) 5,541 5,543 5,543 Other 6,411 6,830 6,830 Consumer/Other 235 2,118 3,044 -------------------------------- Total Nonperforming Loans $ 103,420 $ 84,013 $ 82,615 ================================