2011 Q2 Release
PO Box 39
Heppner, OR 97836
BEO Bancorp reports 2nd quarter earnings
Jeff Bailey, President and CEO (541) 676-0201
Mark Lemmon, EVP & CFO, (541) 676-0201
Heppner, Oregon, (July 14, 2011) BEO Bancorp (OTCBB:BEOB) and its subsidiary, Bank of Eastern Oregon, announced 2nd quarter 2011 consolidated net income of $325,000 or $0.35 per share, compared to $459,000 or $0.50 per share for 2nd quarter 2010. Year to date earnings were $827,000 in 2011 as compared to $903,000 for the same period in 2010. The relatively comparable earnings were achieved despite a $545,000 provision for loan losses recognized in the second quarter of 2011, an expectedly non-recurring charge related primarily to an individual credit. Total assets were $251.6 million virtually unchanged year over year. Net loans of $199.59 million were up 6.4% from the same period in 2010, while deposits were at $222.6 million, up 2.1% year over year.
“We continue to take aggressive steps in writing down problem assets when necessary. The $545,000 provision is not indicative of overall weakness in the portfolio, but rather a lingering effect of an already identified problem credit,” said president and CEO, Jeff Bailey.
Chief Financial Officer, Mark Lemmon, said “Shareholders’ equity is up 7.6% year over year as a result of continued profitability and prudent capital management. Year to date Return on Average Assets is 0.66% and Return on Average Equity is 10.26%. The bank’s capital ratios, a key regulatory barometer of a bank’s overall health, are even stronger now than before the economic downturn.” Lemmon went on to say, “Increased loans and deposits bode well for our strong net interest margin, which dictates overall profitability.”
Chief Operations Officer, Gary Propheter, said “We are pleased with our continued deposit growth in the face of the prolonged, depressed interest rate cycle. We believe this reflects customer confidence in the stability and financial strength of Bank of Eastern Oregon, the best capitalized bank in eastern Oregon.”
“Quarter end past due loans were minimal and we have seen progress in moving some of the non-performing assets off of our books,” said EVP and Chief Credit Officer, E. George Koffler. “We see continued strength in our agricultural loan portfolio. The cool and wet spring has set the stage for a very productive grain harvest. Cattle prices continue to be strong and summer grazing conditions are some of the best that I can remember,” added Koffler.
“We have noticed increased loan demand across our system. Our agricultural loans are at an all time high and overall loan portfolio quality continues to improve. The hard work of our employees and the continued support of our shareholders and customers are greatly appreciated. Our expectation is that these factors will continue to add value to our shareholders and the communities we serve,” concluded Bailey.
For further information on the company or to access internet banking, please visit our website at 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, 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.
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.