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Alpine Banks of Colorado (ALPIB) reported a net income of $11.0 million for the fourth quarter of 2023, with basic earnings per Class A common share decreasing by 6.1%, and net interest margin decreasing to 2.84%. The company's total assets decreased by 0.8% to $6.42 billion, while total deposits decreased by 2.2% to $5.7 billion. However, the company remains 'well capitalized' with capital ratios exceeding minimum requirements.
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GLENWOOD SPRINGS, Colo., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Alpine Banks of Colorado (OTCQX: ALPIB) (“Alpine” or the “Company”), the holding company for Alpine Bank (the “Bank”), today announced results (unaudited) for the fourth quarter and the year ended December 31, 2023. The Company reported net income of $11.0 million, or $102.26 per basic Class A common share and $0.68 per basic Class B common share, for fourth quarter 2023.
Highlights in fourth quarter 2023 and the year ended December 31, 2023, include:
Basic earnings per Class A common share decreased 6.1%, or $6.59, during fourth quarter 2023.
Basic earnings per Class A common share decreased 24.3%, or $169.39, during the 12 months ended December 31, 2023.
Basic earnings per Class B common share decreased 6.1%, or $0.04, during fourth quarter 2023.
Basic earnings per Class B common share decreased 24.3%, or $1.13, during the 12 months ended December 31, 2023.
Net interest margin for fourth quarter 2023 was 2.84%, compared to 2.87% in third quarter 2023, and 3.69% in fourth quarter 2022.
“December 31st marked the finale of the 50th Anniversary Celebration for Alpine Banks of Colorado. We have been proud to serve the people of Colorado for the last fifty years and look forward to what comes ahead. Amid our anniversary celebration events and a challenging environment for all bankers, Alpine has been creating our Vision 2030 plan to guide us into the future,” said Glen Jammaron, President and Vice Chairman. “Alpine continues to benefit from a strong customer deposit base by operating as a true community bank. In fact, over 90% of our deposit funding is generated from within our local communities.”
Net Income Net income for fourth quarter 2023 and third quarter 2023 was $11.0 million and $11.7 million, respectively. Interest income increased $0.5 million in fourth quarter 2023 compared to third quarter 2023, primarily due to an increase in volume in the loan portfolio and increases in yields on the loan portfolio, the securities portfolio, and balances due from banks. These increases were slightly offset by decreases in volume in the securities portfolio and balances due from banks. Interest expense increased $1.7 million in fourth quarter 2023 compared to third quarter 2023, primarily due to increases in costs on the Company’s trust preferred securities, other borrowings, and cost of deposits, partially offset by decreases in volume of other borrowings and deposit balances. Noninterest income increased $0.6 million in fourth quarter 2023 compared to third quarter 2023, due to increases in earnings on bank-owned life insurance and service charges on deposit accounts. These increases were slightly offset by a decrease in other income. Noninterest expense increased $1.7 million in fourth quarter 2023 compared to third quarter 2023, due to increases in salaries and employee benefit expenses, other expenses and occupancy expenses, slightly offset by a decrease in furniture and fixture expenses. A provision for loan losses of $2.7 million was recorded in fourth quarter 2023 compared to a $0.3 million provision for loan losses recorded in the third quarter 2023.
Net income for the twelve months ended December 31, 2023, and December 31, 2022, was $57.0 million and $73.4 million, respectively. Interest income increased $62.1 million in 2023 compared to 2022, primarily due to an increase in volume in the loan portfolio and increases in yields on the loan portfolio, the securities portfolio, and balances due from banks. These increases were slightly offset by decreases in volume in the securities portfolio and balances due from banks. Interest expense increased $70.3 million in 2023 compared to 2022, primarily due to increases in costs on the Company’s trust preferred securities, other borrowings, and cost of deposits, along with increases in volume in other borrowings and deposit balances. Noninterest income increased $5.9 million in 2023 compared to 2022, primarily due to increases in other income, earnings on life insurance, and service charges on deposit accounts. In addition, noninterest income in 2022 was negatively impacted by realized losses on the sale of the Bank’s equity investment in a bond fund. Noninterest expense increased $16.6 million in 2023 compared to 2022, due to increases in other expenses, salary and employee benefit expenses, furniture and fixtures expenses, and occupancy expenses. Provision for loan losses increased $1.1 million in 2023 due to portfolio growth and a small volume of loan charge-offs, compared to the twelve months ended December 31, 2022.
Net interest margin decreased from 2.87% to 2.84% from third quarter 2023 to fourth quarter 2023. Net interest margin for the twelve months ended December 31, 2023, and December 31, 2022, was 3.09% and 3.34%, respectively.
Assets Total assets decreased $48.5 million, or 0.8%, to $6.42 billion as of December 31, 2023, compared to September 30, 2023, primarily due to decreased cash and due from banks, investment securities balances and deferred tax assets, partially offset by increased loans receivable. Total assets grew $102.3 million, or 1.6%, from December 31, 2022, to December 31, 2023. The Alpine Bank Wealth Management* division had assets under management of $1.15 billion on December 31, 2023, compared to $1.10 billion on December 31, 2022, an increase of 4.8%.
During fourth quarter 2023 the Company restructured a portion of its investment portfolio by selling low-yielding available for sale (“AFS”) securities with a book value of $89.1 million, resulting in a pre-tax net loss of $9.7 million. The net proceeds from the sale of AFS securities were reinvested into higher-yielding AFS securities during fourth quarter 2023. Concurrent with the AFS securities sale the Company sold its Visa Class B shares for a pre-tax net gain of $10.1 million.
Loans Loans outstanding as of December 31, 2023, totaled $4.0 billion. The loan portfolio increased $10.6 million, or 0.3%, during fourth quarter 2023 compared to September 30, 2023. This increase was driven by a $50.9 million increase in commercial real estate loans and a $0.1 million increase in other loans. This increase was slightly offset by a $25.4 million decrease in real estate construction loans, a $8.0 million decrease in commercial and industrial loans, a $5.3 million decrease in residential real estate loans, and a $1.9 million decrease in consumer loans.
Loans outstanding as of December 31, 2023, reflected an increase of $148.3 million, or 3.8%, compared to loans outstanding of $3.9 billion on December 31, 2022. This growth was driven by a $97.6 million increase in commercial real estate loans, a $69.9 million increase in residential real estate loans, and a $0.2 million increase in other loans. This increase was slightly offset by a $17.2 million decrease in real estate construction loans, a $1.4 million decrease in commercial and industrial loans, and a $1.2 million decrease in consumer loans.
Effective January 1, 2023, the Bank adopted the Financial Accounting Standards Board’s (FASB) Accounting Standard Update (ASU) 2016-13, commonly known as the current expected credit loss (CECL) model. Upon adoption, the Bank recorded no change in the beginning allowance for credit losses - loans. However, the adoption of ASU 2016-13 resulted in an $8.6 million increase to its allowance for credit losses – unfunded loan commitments. The increase was recorded net of tax as a reduction to retained earnings as of the adoption date.
Deposits Total deposits decreased $130.2 million, or 2.2%, to $5.7 billion during fourth quarter 2023 compared to September 30, 2023, primarily due to a $84.8 million decrease in demand deposits, a $69.4 million decrease in interest-bearing checking accounts, a $14.8 million decrease in money market accounts, and a $7.4 million decrease in savings accounts. The decrease was partially offset by a $46.2 million increase in certificate of deposit accounts.
Total deposits of $5.7 billion on December 31, 2023, reflected an increase of $181.4 million, or 3.3%, compared to total deposits of $5.5 billion on December 31, 2022. This increase was due to a $919.6 million increase in certificate of deposit accounts and a $60.5 million increase in money market accounts. This increase was partially offset by a $428.6 million decrease in demand deposits, a $318.1 million decrease in interest-bearing checking accounts and a $52.0 million decrease in savings accounts. Brokered certificates of deposit totaled $531.0 million on December 31, 2023. Noninterest-bearing demand accounts comprised 30.6% of all deposits on December 31, 2023, compared to 39.4% on December 31, 2022.
Capital The Bank continues to be designated as a “well capitalized” institution as its capital ratios exceed the minimum requirements for this designation. As of December 31, 2023, the Bank’s Tier 1 Leverage Ratio was 9.44%, Tier 1 Risk-Based Capital Ratio was 13.76% and Total Risk-Based Capital Ratio was 14.92%. On a consolidated basis, the Company’s Tier 1 Leverage Ratio was 9.02%, Tier 1 Risk-Based Capital Ratio was 13.15% and Total Risk-Based Capital Ratio was 15.42% as of December 31, 2023.
Book value per share on December 31, 2023, was $4,323.90 per Class A common share and $28.83 per Class B common share, an increase of $306.96 per Class A common share and $2.05 per Class B common share from September 30, 2023.
Dividends During fourth quarter 2023, the Company paid cash dividends of $30.00 per Class A common share and $0.20 per Class B common share. On January 11, 2024, the Company declared cash dividends of $30.00 per Class A common share and $0.20 per Class B common share payable on January 29, 2024, to shareholders of record on January 22, 2024.
About Alpine Banks of Colorado Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $6.4 billion, independent, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. Alpine Bank employs 890 people and serves 170,000 customers with personal, business, wealth management*, mortgage, and electronic banking services across Colorado’s Western Slope, mountains and Front Range. Alpine Bank has a 5-star rating – meaning it has earned a superior performance classification – from BauerFinancial, an independent organization that analyzes and rates the performance of financial institutions in the United States. Shares of the Class B nonvoting common stock of Alpine Banks of Colorado trade under the symbol “ALPIB” on the OTCQX® Best Market. Learn more at www.alpinebank.com.
*Alpine Bank Wealth Management services are not FDIC insured, may lose value, and are not guaranteed by the Bank.
Contacts:
Glen Jammaron
Eric A. Gardey
President and Vice Chairman
Chief Financial Officer
Alpine Banks of Colorado
Alpine Banks of Colorado
2200 Grand Avenue
2200 Grand Avenue
Glenwood Springs, CO 81601
Glenwood Springs, CO 81601
(970) 384-3266
(970) 384-3257
A note about forward-looking statements This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “reflects,” “believes,” “can,” “would,” “should,” “will,” “estimates,” “continues,” “expects” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding our evaluation of macro-environment risks, Federal Reserve rate management, and trends reflecting things such as regulatory capital standards and adequacy. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statement include, but are not limited to:
The ability to attract new deposits and loans;
Demand for financial services in our market areas;
Competitive market-pricing factors;
Changes in assumptions underlying the establishment of allowances for loan losses and other estimates;
Effects of future economic, business and market conditions, including higher inflation;
Adverse effects of public health events, such as the COVID-19 pandemic, including governmental and societal responses;
Deterioration in economic conditions that could result in increased loan losses;
Actions by competitors and other market participants that could have an adverse impact on expected performance;
Risks associated with concentrations in real estate-related loans;
Risks inherent in making loans, such as repayment risks and fluctuating collateral values;
Market interest rate volatility, including changes to the federal funds rate;
Stability of funding sources and continued availability of borrowings;
Geopolitical events, including acts of war, international hostilities and terrorist activities;
Assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, which may prove unreliable, inaccurate, or not predictive of actual results;
Actions of government regulators, including the recent and potential future interest rate hikes by the Board of Governors of the Federal Reserve Board;
Sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs;
Any increases in FDIC assessments;
Risks associated with potential cybersecurity incidents, data breaches or failures of key information technology systems;
The ability to maintain adequate liquidity and regulatory capital, and comply with evolving federal and state banking regulations;
Changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth;
The ability to recruit and retain key management and staff;
The ability to raise capital or incur debt on reasonable terms; and
Effectiveness of legislation and regulatory efforts to help the U.S. and global financial markets.
There are many factors that could cause actual results to differ materially from those contemplated by forward-looking statements. Any forward-looking statement made by us in this press release or in any subsequent written or oral statements attributable to the Company are expressly qualified in their entirety by the cautionary statements above. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Key Financial Measures The attached tables highlight the Company’s key financial measures for the periods indicated (unaudited).
What was Alpine Banks of Colorado's net income for the fourth quarter of 2023?
Alpine Banks of Colorado reported a net income of $11.0 million for the fourth quarter of 2023.
What was the percentage decrease in basic earnings per Class A common share for Alpine Banks of Colorado in the fourth quarter of 2023?
Basic earnings per Class A common share decreased by 6.1% for Alpine Banks of Colorado in the fourth quarter of 2023.
What was the net interest margin for Alpine Banks of Colorado in the fourth quarter of 2023?
The net interest margin for Alpine Banks of Colorado in the fourth quarter of 2023 was 2.84%.
What was the percentage change in total assets for Alpine Banks of Colorado from December 31, 2022, to December 31, 2023?
Total assets grew by 1.6% for Alpine Banks of Colorado from December 31, 2022, to December 31, 2023.
What were the capital ratios for Alpine Banks of Colorado as of December 31, 2023?
As of December 31, 2023, Alpine Banks of Colorado's Tier 1 Leverage Ratio was 9.44%, Tier 1 Risk-Based Capital Ratio was 13.76%, and Total Risk-Based Capital Ratio was 14.92%.
