RAINIER PACIFIC FINANCIAL GROUP INC. 
By Rainier Pacific Financial Group, Inc. (the ?Company?) (NASDAQ GM:RPFG) announced today its second quarter results for the period ended June 30, 2007. Net income for the quarter ended June 30, 2007, was up 41.7% to $982,000, or $0.16 per diluted share, compared to net income of $693,000, or $0.12 per diluted share, for the same period in 2006. For the six months ended June 30, 2007, the Company's net income was $1.9 million, or $0.31 per diluted share, compared to net income of $1.3 million, or $0.23 per diluted share, for the same six month period in 2006.
The Company's revenue (i.e., net interest income before provisions for loan losses plus non-interest income) for the quarter ended June 30, 2007, was $8.8 million, compared to $8.3 million for the same period a year ago. Net interest income before the provision for loan losses for the quarter was $6.4 million, or 4.9% higher than the $6.1 million during the same period a year ago. For the quarter ended June 30, 2007, the Company's net interest margin improved slightly to 3.01%, compared to 2.96% for the quarter ended March 31, 2007, and 2.87% for the quarter ended June 30, 2006. The yield on the Company's interest-earning assets was 6.71% for the quarter ended June 30, 2007, compared to 6.69% and 6.22% for the quarters ended March 31, 2007, and June 30, 2006, respectively. For the quarter ended June 30, 2007, the Company's cost of interest-bearing liabilities was 4.11%, compared to 4.13% and 3.69% for the quarters ended March 31, 2007, and June 30, 2006, respectively.
Non-interest income was up 4.5% to $2.3 million for the quarter ended June 30, 2007, compared to $2.2 million for the same quarter in 2006. An increase of $104,000 in property and casualty insurance service fees during the second quarter of 2007, compared to the same quarter in 2006, accounted for most of the increase in non-interest income.
The Company continued to focus on managing operating expenses effectively. Non-interest expense was $7.1 million for the quarter ended June 30, 2007, and was unchanged compared to the quarters ended March 31, 2007, and June 30, 2006.
At June 30, 2007, the Company's total assets were $904.8 million, slightly higher than the $902.7 million at December 31, 2006. Total shareholders' equity at June 30, 2007, was $89.9 million, compared to $87.8 million at December 31, 2006.
In the second quarter ended June 30, 2007, the Company purchased and retired 10,000 shares of its outstanding shares of common stock at an average price of $20.70 per share. At June 30, 2007, the Company had the authority to purchase an additional 213,920 shares of common stock under its currently approved stock repurchase program.
The Company's book value and tangible book value per share as of June 30, 2007, were $14.63 and $14.11 per share, respectively, based upon 6,144,259 outstanding shares of common stock. The number of outstanding shares includes 132,482 restricted shares granted to participants under the Company's 2004 Management Recognition Plan that have not yet vested or were not ratably earned, and excludes 424,211 of unallocated shares held by the Rainier Pacific 401(k) Employee Stock Ownership Plan.
Total loans were $647.4 million at June 30, 2007, compared to $638.5 million at March 31, 2007, and $639.4 million at December 31, 2006, respectively. For the quarter ended June 30, 2007, the yield on loans was 7.27%, compared to 7.24% and 6.92% for the quarters ended March 31, 2007, and June 30, 2006, respectively. At June 30, 2007, the loan portfolio consisted of 33.3% commercial real estate loans, 24.6% multi-family real estate loans, 12.2% single-family real estate loans, 11.7% real estate construction loans, 8.6% consumer loans, 6.9% home equity loans, and 2.7% commercial business loans.
Total loan originations increased during the quarter ended June 30, 2007, to $61.1 million, compared to $40.4 million and $58.0 million for the quarters ended March 31, 2007, and June 30, 2006, respectively. Loan originations for the quarter ended June 30, 2007, were primarily comprised of commercial real estate and construction loans and increased business lending.
The Company sold $5.6 million of single-family fixed-rate real estate loans, which generated $66,000 in net gains during the quarter ended June 30, 2007, compared to $2.6 million in loan sales and $46,000 in net gains during the same period in 2006. The portfolio of loans serviced for others increased to $113.4 million at June 30, 2007, compared to $106.4 million at June 30, 2006.
Loan portfolio credit quality remained good during the second quarter. Net charge-offs were $191,000 for the quarter ended June 30, 2007, compared to $157,000 for the quarter ended March 31, 2007, and $227,000 for the quarter ended June 30, 2006. Loans more than 30 days delinquent as a percentage of total loans were 0.26% at June 30, 2007, unchanged compared to March 31, 2007, and slightly lower than the 0.28% at December 31, 2006. Non-performing loans (i.e., loans 90 days or more past due or non-accrual loans) were $217,000, or 0.03% of total loans, at June 30, 2007, compared to $224,000, or 0.04% of total loans, at March 31, 2007, and $241,000, or 0.04% of total loans, at December 31, 2006. Non-performing assets were $233,000, or 0.03% of total assets, at June 30, 2007, compared to $245,000, or 0.03% of total assets, at March 31, 2007, and $274,000 or 0.03% of total assets, at December 31, 2006. The Company's provision for loan losses was $150,000 for the quarter ended June 30, 2007, unchanged from the provision made for the quarters ended March 31, 2007, and June 30, 2006. The allowance for loan losses of $8.2 million at June 30, 2007, representing an allowance to total loans ratio of 1.27%, was slightly lower than the $8.3 million at both March 31, 2007, and December 31, 2006.
The investment securities portfolio at June 30, 2007, of $190.7 million (excluding $13.7 million in Federal Home Loan Bank of Seattle stock holdings), was less than the $194.5 million at March 31, 2007, and the $226.1 million at June 30, 2006. These declines reflect the Company's decision to gradually reduce the size of its investment portfolio, while increasing the loan portfolio component of its earnings assets.
Total deposits were $460.3 million at June 30, 2007, compared to $466.7 million at March 31, 2007, and $457.4 million at December 31, 2006. Core deposits (comprised of checking, savings, money market, and individual retirement accounts) increased $22.0 million to $242.4 million, or 52.7% of total deposits, as of June 30, 2007, compared to $220.4 million at of December 31, 2006. Brokered deposit balances were $50.6 million at June 30, 2007, compared to $49.9 million at March 31, 2007, and $50.9 million at December 31, 2006. For the quarter ended June 30, 2007, the average cost of interest-bearing deposits was 3.83%, compared to 3.89% for the quarter ended March 31, 2007, and 3.26% for the quarter ended June 30, 2006. The decrease in the second quarter of 2007 cost of interest-bearing deposits compared to the first quarter resulted from less aggressive pricing tactics, while the increased cost of interest-bearing deposits compared to the prior year was the result of higher short-term interest rates and enhanced competition for deposits in our local market.
?The operating environment remains challenging with the continuation of a relatively flat yield curve and aggressive local competition for both loans and customer deposits. These factors continue to create pressure on our ability to achieve growth in our loan and deposit portfolios, and to further expand our net interest margin. Despite these challenges, we are pleased with the improvement in our profitability and our ability to continue to restructure our loan portfolio, while maintaining very good loan quality, during the first half of 2007. Looking forward to the second half of the year, we will remain focused on maintaining credit quality, effectively managing operating expenses, and profitably growing our core business,? said John A. Hall, President and CEO.
Rainier Pacific Financial Group, Inc. is the bank holding company for Rainier Pacific Bank, a Tacoma, Washington-based state-chartered savings bank operating 14 full-service locations in the Tacoma-Pierce County and City of Federal Way market areas.
For additional information, visit Rainier Pacific's website at www.rainierpac.com.
Forward-looking statements:
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company's mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. The Company's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to, interest rate fluctuations; economic conditions in the Company's primary market area; demand for residential, commercial real estate, consumer, and other types of loans; success of new products; competitive conditions between banks and non-bank financial service providers; regulatory and accounting changes; technological factors affecting operations; pricing of products and services; and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Accordingly, these factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company undertakes no responsibility to update or revise any forward-looking statement.
Rainier Pacific Financial Group, Inc. & Subsidiary | ||||||||||||
Consolidated Statements of Condition | ||||||||||||
(Dollars in Thousands) | ||||||||||||
| ASSETS | ||||||||||||
| At June 30, | At March 31, | At December 31, | ||||||||||
| 2007 | 2007 | 2006 | ||||||||||
| Cash and cash equivalents | $ | 12,626 | $ | 12,452 | $ | 11,847 | ||||||
| Interest-bearing deposits with banks | 625 | 8,206 | 57 | |||||||||
| Securities available-for-sale | 141,543 | 143,541 | 145,110 | |||||||||
| Securities held-to-maturity (fair value of $47,453 at June 30, 2007; $50,108 at March 31, 2007; and $51,589 at December 31, 2006) | 49,110 | 50,950 | 52,652 | |||||||||
| Federal Home Loan Bank of Seattle (?FHLB?) stock, at cost | 13,712 | 13,712 | 13,712 | |||||||||
| Loans | 647,385 | 638,500 | 639,378 | |||||||||
| Less: allowance for loan losses | (8,235 | ) | (8,276 | ) | (8,283 | ) | ||||||
| Loans, net | 639,150 | 630,224 | 631,095 | |||||||||
| Premises and equipment, net | 33,858 | 33,913 | 34,383 | |||||||||
| Accrued interest receivable | 4,035 | 4,154 | 4,177 | |||||||||
| Other assets | 10,184 | 9,408 | 9,664 | |||||||||
| TOTAL ASSETS | $ | 904,843 | $ | 906,560 | $ | 902,697 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| LIABILITIES: | ||||||||||||
| Deposits | ||||||||||||
| Non-interest bearing | $ | 36,941 | $ | 36,418 | $ | 33,722 | ||||||
| Interest-bearing | 423,375 | 430,317 | 423,703 | |||||||||
| Total deposits | 460,316 | 466,735 | 457,425 | |||||||||
| Borrowed funds | 343,615 | 339,285 | 345,395 | |||||||||
| Corporate drafts payable | 4,200 | 6,053 | 3,537 | |||||||||
| Accrued compensation and benefits | 1,415 | 826 | 2,111 | |||||||||
| Other liabilities | 5,387 | 4,868 | 6,399 | |||||||||
| TOTAL LIABILITIES | 814,933 | 817,767 | 814,867 | |||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||
| Common stock, no par value: 49,000,000 shares authorized; 6,568,470 shares issued and 6,011,777 shares outstanding at June 30, 2007; 6,569,670 shares issued and 5,987,892 shares outstanding at March 31, 2007; and 6,587,670 shares issued and 5,971,913 shares outstanding at December 31, 2006 | 50,434 | 50,164 | 50,038 | |||||||||
| Unearned Employee Stock Ownership Plan (?ESOP?) shares | (4,242 | ) | (4,412 | ) | (4,582 | ) | ||||||
| Accumulated other comprehensive loss, net of tax | (480 | ) | (601 | ) | (806 | ) | ||||||
| Retained earnings | 44,198 | 43,642 | 43,180 | |||||||||
| TOTAL SHAREHOLDERS' EQUITY | 89,910 | 88,793 | 87,830 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 904,843 | $ | 906,560 | $ | 902,697 | ||||||
Rainier Pacific Financial Group, Inc. & Subsidiary | ||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||||||||||||||
| Loans | $ | 11,645 | $ | 10,414 | $ | 23,244 | $ | 20,407 | ||||||||||||||||||||||||||||||||
| Securities available-for-sale | 2,032 | 2,005 | 4,084 | 3,930 | ||||||||||||||||||||||||||||||||||||
| Securities held-to-maturity | 546 | 723 | 1,111 | 1,465 | ||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | 70 | 52 | 80 | 116 | ||||||||||||||||||||||||||||||||||||
| FHLB dividends | 20 | - | 34 | - | ||||||||||||||||||||||||||||||||||||
| Total interest income | 14,313 | 13,194 | 28,553 | 25,918 | ||||||||||||||||||||||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
| Deposits | 4,053 | 3,277 | 8,164 | 6,276 | ||||||||||||||||||||||||||||||||||||
| Borrowed funds | 3,841 | Share
© Business Wire - 2007
Rainier Pacific Financial Group, Inc. (Rainier Pacific Financial Group) is the holding company for Rainier Pacific Savings Bank (Rainier Pacific Bank or the Bank). The Company offers consumers an array of deposit and loan services through Rainier Pacific Bank, and offers automobile and homeowners' insurance, financial planning, and non-federally insured mutual fund and investment services through two operating units of the Bank doing business as Rainier Pacific Insurance Services and Rainier Pacific Financial Services. It also provides deposit and loan services to small businesses, and local builders of single-family residential homes in its local markets. As of December 31, 2008, Rainier Pacific Financial Group operated a retail network of 14 branches throughout the Tacoma-Pierce County market and the City of Federal Way, Washington State, with its corporate office located in the central business district of downtown Tacoma.
Sector
Banks
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