-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D6T19XtyrPTutaBeHP9mropT97dAjUj/tYkgkPIUNtqQ96A0c+EXUtgzrQUgUwgc ZlmKo0qgyIEB2PY0KAtWig== 0000896595-06-000301.txt : 20061026 0000896595-06-000301.hdr.sgml : 20061026 20061026172637 ACCESSION NUMBER: 0000896595-06-000301 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061026 DATE AS OF CHANGE: 20061026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COWLITZ BANCORPORATION CENTRAL INDEX KEY: 0000894267 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 911529841 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23881 FILM NUMBER: 061166720 BUSINESS ADDRESS: STREET 1: 927 COMMERCE AVE CITY: LONGVIEW STATE: WA ZIP: 98632 BUSINESS PHONE: 2064239800 MAIL ADDRESS: STREET 1: 927 COMMERCE AVENUE CITY: LONGVIEW STATE: WA ZIP: 98632 8-K 1 f8kcwlz3qeacov.htm FORM 8-K f8kcwlz3qeacov.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    October 26, 2006 

Cowlitz Bancorporation
(Exact Name of Registrant as specified in its charter)

Washington    0-23881    91 - 529841 
(State or other jurisdiction of    (Commission File Number)    (IRS Employer Identification No.) 
incorporation)         

927 Commerce Ave.
Longview, Washington 98632
Address of Principal Executive Office and Zip Code

Registrant's telephone number including area code 360-423-9800

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

Item 2.02 Results of Operations and Financial Condition.

     On October 26, 2006, Cowlitz Bancorporation issued a press release announcing financial results for the third quarter of 2006. A copy of the press release is attached as Exhibit 99.1.

Item 9.01    Financial Statements and Exhibits. 
 
    (a)    Not applicable. 
    (b)    Not applicable. 
    (c)    Exhibits. 
        99.1 Press Release 
 
                                             

 SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

COWLITZ BANCORPORATION
(Registrant)
Date:    October 26, 2006    By:    /s/ Gerald L. Brickey 
            Gerald L. Brickey, Chief Financial Officer 

EX-99 2 f8kcwlz3qeaex.htm EXHIBIT 99.1 f8kcwlz3qeaex.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 99.1

October 26, 2006 12:00 p.m. Pacific Time
Company Press Release

SOURCE:
CONTACTS:

Cowlitz Bancorporation
Richard J. Fitzpatrick, Chief Executive Officer
Gerald L. Brickey, Chief Financial Officer
(360) 423-9800


Cowlitz Bancorporation Announces 77% Increase in Third Quarter 2006 Earnings

LONGVIEW, Wash., October 26, 2006 /PRNewswire/ --

FlashResults
Cowlitz Bancorporation (NASDAQ: CWLZ)
(Numbers in Thousands, Except Per Share Data)

        Three Months Ended           Nine Months Ended 
           September 30,        June 30,        September 30, 
         2006        2005           2006           2006           2005 
Net Interest Income    $    5,979    $   3,758    $      5,377    $   16,119    $   10,310 
Net Income    $    1,341    $   756    $      1,113    $   3,514    $   2,085 
Diluted EPS    $   0.26    $   0.17    $      0.22    $   0.69    $   0.48 
Total Period End Loans                            $   344,273    $   277,766 
Total Period End Deposits                            $   386,809    $   255,888 

Cowlitz Bancorporation (NASDAQ: CWLZ - news) today reported net income of $1,341,000 or $0.26 per diluted share for the third quarter of 2006, compared with net income of $756,000, or $0.17 per diluted share, during the same period of 2005. Net income for the third quarter of 2006 was up 77% over the same period last year. Earnings per diluted share for the third quarter of 2006 were up 53% over the same quarter last year, reflecting the issuance of common shares in conjunction with the fourth quarter 2005 acquisition of Asia-Europe-Americas Bancshares, Inc. (AEA). Net income for the first nine months of 2006 was $3,514,000, or $0.69 per diluted share, compared with $2,085,000, or $0.48 per diluted share, in the same period of 2005.

Richard J. Fitzpatrick, President and CEO of Cowlitz Bancorporation and its wholly-owned subsidiary, Cowlitz Bank, stated, “We are particularly pleased with the increase in earnings in light of the higher provision for credit losses this quarter. The provision for credit losses has kept pace with the growth in the loan portfolio and the allowance ratio has been maintained at 1.51% of total loans. Our net interest margin has remained strong, loan growth continued and our efficiency ratio improved significantly.” The Company’s return on assets increased to 1.22% in the third quarter of 2006 from 0.97% compared with the same quarter of last year and 1.10% in the second quarter of 2006. The Company’s efficiency ratio for third quarter of 2006 was 60.2% compared with 69.5% in the third quarter of 2005.

Total loans increased 51% from a year ago to $344.3 million at September 30, 2006, were up 27% from year-end 2005 and 5% from June 30, 2006. Total deposits were up 51% from the September 30, 2005 balance, 25% from year-end 2005 and 13% from June 30, 2006. The Company’s net interest margin was 6.04% in the third quarter of 2006, compared with 5.15% in the same quarter last year and 5.91% in the second quarter of 2006. Higher yields on earning assets in 2006 were primarily a function of steadily increasing market interest rates over the last two years. A significant portion of the Company’s loan portfolio is composed of variable rate loans tied to prime. The average cost of funds paid on interest-bearing liabilities for the third quarter of 2006 was 3.74%, compared with 2.58% in the third quarter of 2005 and 3.34% in the second quarter of 2006.

The provision for credit losses was $800,000 in the third quarter of 2006, compared with $310,000 in the third quarter of 2005 and $285,000 in the second quarter of 2006. The Company took a $500,000 charge-off on a non-performing

commercial loan in the third quarter of 2006, reducing total non-performing assets to $2.0 million at September 30, 2006 from $2.5 million at June 30, 2006. Other credit quality indicators of the loan portfolio remained stable or improved. Non-performing assets as a percentage of total assets was 0.44% at September 30, 2006. Of the total non-performing loans at September 30, 2006, $1.1 million, or 55%, is fully guaranteed by an agency of the U.S. government. The workout period for this loan is currently expected to extend to 2007.

Non-interest income in the third quarter of 2006 was $657,000 compared with $642,000 in the third quarter of 2005. In the third quarter of 2006, the Company sold several securities at a loss of $184,000 and replaced them with higher yielding securities. Excluding the loss on securities transactions in the third quarter of 2006 and the net gain of $28,000 from securities transactions and disposition of other real estate owned in the third quarter of 2005, non-interest income increased 37% to $841,000 in the third quarter of 2006 from $614,000 in the same period of 2005. The increase primarily reflected higher revenues from fee-based transaction services, expansion of the Company’s international trade finance capabilities and deposit account related service changes. Excluding the net loss of $123,000 from securities transactions and disposition of other real estate owned in the second quarter of 2006, non-interest income excluding securities transactions in the third quarter of 2006 was up 10%.

Non-interest expenses in the third quarter of 2006 were significantly higher compared with the third quarter of 2005, primarily a reflection of the overall higher level of staffing, occupancy, data processing and branch activities due to loan growth, two additional branches and the expansion of the Company’s international trade finance capabilities. Non-interest expenses in the third quarter 2006 also included a positive adjustment of $66,000 for the mark-to-market adjustment of the Company’s interest rate floor contract. In the second quarter of 2006, the Company recorded a write-down of $182,000 in non-interest expense for the mark-to-market of this contract. Excluding these adjustments to the fair value of the Company’s interest rate floor contract, total non-interest expenses were approximately flat between the second and third quarters of 2006.

Cowlitz Bancorporation is the holding company of Cowlitz Bank, which was established in 1977. In addition to its four branches in Cowlitz County Washington, Cowlitz Bank’s divisions include Bay Bank located in Bellevue, Seattle, and Vancouver, Washington; Portland and Wilsonville, Oregon; and Bay Mortgage. Cowlitz specializes in commercial and international banking services for Northwest businesses, professionals, and retail customers, and offers trust services in southwest Washington and Portland, Oregon.

Forward-Looking Statements
This press release contains forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those discussed in this press release as a result of risk factors identified in the Company's Form 10-K for the year ended December 31, 2005, and other filings with the SEC. Specific risks in this release relate to changes in the Company’s net interest margin.

FINANCIAL HIGHLIGHTS                                                   
                                                  
(Unaudited - $ in thousands except per share data)                                          
INCOME STATEMENT                  Quarter Ending                   Nine Months Ending  
        September 30,         September 30,         June 30,         September 30,         September 30,  
        2006         2005         2006         2006         2005  
Interest income    $   8,603     $   5,108     $   7,559     $   22,558     $   13,721  
Interest expense        2,624         1,350         2,182         6,439         3,411  
Net interest income        5,979         3,758         5,377         16,119         10,310  
Provision for credit losses        800         310         285         1,490         370  
Net interest income after provision                                                   
         for credit losses        5,179         3,448         5,092         14,629         9,940  
Non-interest income        657         642         642         2,060         1,822  
Non-interest expense        3,994         3,056         4,231         11,879         8,930  
Income before provision for income taxes        1,842         1,034         1,503         4,810         2,832  
Provision for income taxes        501         278         390         1,296         747  
Net income    $   1,341     $   756     $   1,113     $   3,514     $   2,085  
 
Earnings per share:                                                   
         Basic    $   0.27     $   0.18     $   0.23     $   0.73     $   0.50  
         Diluted    $   0.26     $   0.17     $   0.22     $   0.69     $   0.48  
Weighted average shares outstanding:                                                   
         Basic        4,881,525         4,186,783         4,842,911         4,832,629         4,179,239  
         Diluted        5,130,513         4,383,381         5,101,691         5,089,855         4,339,751  
Shares outstanding at period end        4,884,748         4,189,146         4,879,998         4,884,748         4,189,146  
Efficiency ratio (1)        60.2 %        69.5 %        70.3 %        65.3 %        73.6 % 
Number of full-time equivalent employees                                      129         107  
(1) Non-interest expense divided by net interest income plus non-interest income.                                
 
                  Quarter Ending                   Nine Months Ending  
        September 30,         September 30,         June 30,         September 30,         September 30,  
SELECTED AVERAGES        2006         2005         2006         2006         2005  
Average loans    $   337,942     $   221,602     $   306,319     $   306,738     $   206,086  
Average interest-earning assets        401,529         296,673         368,861         370,694         280,609  
Total average assets        440,278         312,311         405,724         407,606         295,453  
Average deposits        370,263         267,264         340,404         341,598         250,385  
Average interest-bearing liabilities        280,545         209,540         261,126         259,177         197,967  
Average equity        48,381         37,696         46,331         46,666         36,522  

        September 30,         September 30,         June 30,              
SELECTED BALANCE SHEET ACCOUNTS        2006         2005         2006              
Total assets    $   456,615     $   311,618     $   423,777              
Securities available for sale        54,158         52,480         54,955              
Loans:                                           
 Real estate secured:                                           
   One to four family residential        31,918         19,328         34,197              
   Multifamily        13,631         9,185         13,293              
   Construction        73,137         30,803         65,849              
   Commercial real estate        118,518         101,953         118,837              
         Total real estate        237,204         161,269         232,176              
 Commercial and industrial        104,609         64,579         94,772              
 Consumer and other        3,566         3,296         3,100              
        345,379         229,144         330,048              
 Deferred loan fees        (1,106 )        (1,378 )        (925 )             
 Loans, net of deferred loan fees        344,273         227,766         329,123              
Goodwill and other intangibles        1,899         852         1,897              
Deposits:                                           
 Non-interest-bearing demand        118,765         64,826         99,203              
 Savings and interest-bearing demand        93,198         75,501         93,814              
 Certificates of deposits        174,846         115,561         149,236              
   Total deposits        386,809         255,888         342,253              
Borrowings        694         2,926         16,132              
Junior subordinated debentures        12,372         12,372         12,372              
Stockholders' equity        49,940         37,534         47,481              
 
Book value per share    $   10.22     $   8.96     $   9.73              
Tangible book value per share    $   9.83     $   8.76     $   9.34              
Tier 1 leverage capital ratio (Q3-06 estimated)        13.66 %        15.63 %        14.47 %             
 
                  Quarter Ending               Nine Months Ending  
        September 30,         September 30,         June 30,     September 30,     September 30,  
RATIOS ANNUALIZED        2006         2005         2006     2006     2005  
Return on average assets        1.22 %        0.97 %        1.10 %    1.15 %    0.94 % 
Return on average equity        11.09 %        8.02 %        9.61 %    10.04 %    7.61 % 
Return on average tangible equity        11.55 %        8.21 %        10.08 %    10.47 %    7.79 % 
Average equity/average assets        10.99 %        12.07 %        11.42 %    11.45 %    12.36 % 
Yield on interest-earning assets (TE)        8.65 %        6.97 %        8.28 %    8.20 %    6.60 % 
Rate on interest-bearing liabilities        3.74 %        2.58 %        3.34 %    3.31 %    2.30 % 
Net interest spread (TE)        4.91 %        4.39 %        4.94 %    4.89 %    4.30 % 
Net interest margin (TE)        6.04 %        5.15 %        5.91 %    5.88 %    4.98 % 

        Quarter Ending         Nine Months Ending  
        September 30,         September 30,         September 30,         September 30,  
ALLOWANCE FOR CREDIT LOSSES        2006         2005         2006         2005  
Balance at beginning of period    $   5,367     $   3,935     $   4,668     $   3,796  
Provision for credit losses        800         310         1,490         370  
Recoveries        234         14         293         131  
Charge-offs        (918 )        (205 )        (968 )        (243 ) 
Balance at end of period    $   5,483     $   4,054     $   5,483     $   4,054  
Components                                         
 Allowance for loan losses                        $   5,208     $   3,874  
 Liability for unfunded credit commitments (1)                            275         180  
    Total allowance for credit losses                        $   5,483     $   4,054  
Allowance for loan losses/total loans                            1.51 %        1.70 % 
Allowance for credit losses/total loans                            1.59 %        1.78 % 
Allowance for credit losses/non-performing loans                            271 %        408 % 

(1)      In the first quarter of 2006, the Company reclassified a portion of the allowance for loan losses related to unfunded credit commitments to other liabilities on the balance sheet in accordance with GAAP and bank regulatory requirements.
Amounts for 2005 were reclassified for comparability.
 
        September 30,         September 30,         June 30,  
NON-PERFORMING ASSETS        2006         2005         2006  
Nonaccrual loans    $   2,021     $   993     $   2,459  
Other real estate owned        -         11         -  
Total non-performing assets    $   2,021     $   1,004     $   2,459  
Total non-performing assets/total assets        0.44 %        0.32 %        0.58 % 

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