BEO Bancorp 3Q Earnings Increase 5.7%
October 15 2008 - 8:00AM
Business Wire
BEO Bancorp (OTCBB:BEOB), and its subsidiary, Bank of Eastern
Oregon, continued with its steady and strong earnings result for
2008 with net income for 3Q2008 of $610,000, compared to 3Q2007
earnings of $577,000, an increase of 5.7%. YTD earnings were even
more impressive with 2008 YTD net income of $1,831,000, compared to
2007 YTD earnings of $1,616,000, an improvement of 13.3% year over
year. �We are very pleased with these interim results being posted
today,� said E. George Koffler, President and CEO of the holding
company. �Despite the significant financial headwinds we see
nationally and regionally, our team of dedicated bankers continues
to make good decisions that benefit us in the long run.� �Our
challenge, like many banks, is to maintain credit quality in these
tumultuous times,� said bank President and Chief Credit Officer,
Jeff Bailey. �We have consistently improved our regular monitoring
systems in the credit area and aggressively built up our loan loss
provision.� The bank booked a $500,000 recovery during the quarter
from a charged-off loan relationship in 2005, while also adding
$300,000 to the reserve from earnings. This was balanced by write
downs totaling $268,000 on loans secured by real estate, of which
the bank expects to recover about $115,000 in the fourth quarter.
The net effect of these activities was an increase in the loan loss
reserve balance from $2,001,000 on June 30, 2008, to $2,536,000 on
September 30, 2008. Loan totals increased 33% year over year to
$176,101,000, and the loan loss reserve ratio to total loans now
stands at 1.44%. �Strong profitability has allowed us to add
appropriately to the reserve while sustaining continued growth,�
added Bailey. Non-accrual loans grew from $760,886 to $1,726,303. A
bulk sale is expected to pay off the real estate loans noted above
during October and the remaining $760,886 is a well-secured
agricultural loan in a Chapter 12 bankruptcy. No loss is expected
on this credit. Non-performing assets increased from 0.46% to 1.02%
as a result of the non accruals and the classification of a single
construction and land development loan. That loan is well secured
and is expected to be performing in the fourth quarter. Deposit
liability growth continued slow and steady, ending the quarter at
$178,293,000, a 4% improvement year over year. �Our branch
operations staff continues to attract good quality, reasonable
priced deposits,� said Executive Vice President and Chief Operating
Officer, Gary Propheter. �We are also using a variety of strategies
to help depositors keep their nest egg safe and sound, including
FDIC insurance restructuring and our CDARS product that gives
customers access to $50,000,000 worth of FDIC coverage,� added
Propheter. Bank of Eastern Oregon opened a full-service branch in
Enterprise, Oregon, on October 14, building on its very successful
Loan Production Office in Wallowa County. Liquidity issues that
have caused a number of bank problems recently were aggressively
addressed during the quarter according to Executive Vice President
and Chief Financial Officer, Mark Lemmon. �We implemented a
multifaceted liquidity plan during the third quarter that assures
our ability to meet cash requirements and lending needs of our
customers. The plan has been rigorously tested and is sound,� said
Lemmon. Total assets of the bank grew to $222,605,000, a 12%
increase year over year. Capital growth was also a bright spot with
total equity at $20,056,000, an improvement of 12% year over year.
The bank continues to be well capitalized by FDIC standards. For
further information on the company or to access internet banking,
please visit our website at http://www.beobank.com. About BEO
Bancorp BEO Bancorp is the holding company for Bank of Eastern
Oregon, which operates 12 branches and two loan production offices
in nine eastern Oregon counties. Branches are located in Arlington,
Ione, Heppner, Condon, Irrigon, Boardman, Burns, John Day, Prairie
City, Fossil and Moro and Enterprise; loan production offices are
located in Hermiston and Ontario. Bank of Eastern Oregon also
operates a mortgage division and offers brokerage services through
BEO Financial Services. The bank�s website is www.beobank.com.
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 BEO Bancorp.
There can be no assurances that future developments affecting BEO
Bancorp 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. (7) Future credit loss experience.
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