Alpine Banks of Colorado announces financial results for second quarter 2024

GLENWOOD SPRINGS, Colo., July 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 quarter ended June 30, 2024. The Company reported net income of $11.7 million, or $108.89 per basic Class A common share and $0.73 per basic Class B common share, for second quarter 2024.

Highlights in second quarter 2024 include:

• Basic earnings per Class A common share increased 10.7%, or $10.57, during second quarter 2024.
• Basic earnings per Class A common share decreased 18.9%, or $25.42 compared to second quarter 2023.
• Basic earnings per Class B common share increased 10.7%, or $0.07, during second quarter 2024.
• Basic earnings per Class B common share decreased 18.9%, or $0.17 compared to second quarter 2023.
• Net interest margin for second quarter 2024 was 2.87%, compared to 2.81% in first quarter 2024, and 3.15% in second quarter 2023.

“Our second quarter results reflect continued improvement in our balance sheet position,” said Glen Jammaron, Alpine Banks of Colorado President and Vice Chairman. “During the quarter we increased our loan portfolio and successfully reduced the level of brokered deposits in our liability mix. For the remainder of 2024 we plan to focus on loan and deposit growth while retaining pricing discipline.”

Net Income

Net income for second quarter 2024 and first quarter 2024 was $11.7 million and $10.6 million, respectively. Interest income increased $1.7 million in second quarter 2024 compared to first quarter 2024, primarily due to increases in yields on the loan portfolio, the securities portfolio, and balances due from banks along with increased volume in the loan portfolio. These increases were slightly offset by decreases in volume in the securities portfolio and balances due from banks. Interest expense increased $0.9 million in second quarter 2024 compared to first quarter 2024, primarily due to increased cost of deposits. This increase was partially offset by decreases in costs on the Company’s trust preferred securities and other borrowings, and a decrease in volume of other borrowings and deposits. Noninterest income increased $1.1 million in second quarter 2024 compared to first quarter 2024, primarily due to increases in service charges on deposit accounts, and other income. Noninterest expense increased $0.04 million in second quarter 2024 compared to first quarter 2024, due to increases in other expenses slightly offset by decreases in salary and employee benefit expenses, occupancy expenses and furniture and fixture expenses. A provision for loan losses of $0.2 million was recorded in second quarter 2024 compared to a $0.7 million reversal of provision recorded in first quarter 2024.

Net income for the six months ended June 30, 2024, and June 30, 2023, was $22.3 million and $34.3 million, respectively. Interest income increased $13.4 million in the first six months of 2024 compared to the first six months of 2023, primarily due to increases in volume in the loan portfolio and balances due from banks, along with increases in yields on the loan portfolio, the securities portfolio, and balances due from banks. These increases were slightly offset by a decrease in volume in the securities portfolio. Interest expense increased $27.5 million in the first six months of 2024 compared to the first six months of 2023, 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 deposit balances. These increases were partially offset by a decrease in the volume of other borrowings. Noninterest income increased $1.4 million in the first six months of 2024 compared to the first six months of 2023, primarily due to increases in earnings on bank-owned life insurance, service charges on deposit accounts and other income. Noninterest expense increased $3.7 million in the first six months of 2024 compared to the first six months of 2023, due to increases in other expenses, salary and employee benefit expenses, and occupancy expenses. These increases were partially offset by decreases in furniture and fixtures expenses. Provision for loan losses decreased $1.3 million in the first six months of 2024 due to portfolio declines and a small volume of loan charge-offs, compared to the six months ended June 30, 2023.

Net interest margin increased from 2.81% to 2.87% from first quarter 2024 to second quarter 2024. Net interest margin for the six months ended June 30, 2024, and June 30, 2023, was 2.87% and 3.15%, respectively.

Assets

Total assets decreased $114.2 million, or 1.7%, to $6.47 billion as of June 30, 2024, compared to March 31, 2024, primarily due to decreased cash and due from banks and investment securities balances, partially offset by increased loans receivable. Total assets decreased $33.3 million, or 0.5%, from June 30, 2023, to June 30, 2024. The Alpine Bank Wealth Management* division had assets under management of $1.27 billion on June 30, 2024, compared to $1.12 billion on June 30, 2023, an increase of 13.2%.

Loans

Loans outstanding as of June 30, 2024, totaled $4.1 billion. The loan portfolio increased $37.5 million, or 0.9%, during second quarter 2024 compared to March 31, 2024. This increase was driven by a $14.0 million increase in commercial real estate loans, a $10.3 million increase in real estate construction loans, a $6.4 million increase in commercial and industrial loans, a $4.6 million increase in residential real estate loans, a $2.0 million increase in consumer loans, and a $0.3 million increase in other loans.

Loans outstanding as of June 30, 2024, reflected an increase of $25.9 million, or 0.6%, compared to loans outstanding of $4.0 billion on June 30, 2023. This growth was driven by a $45.2 million increase in commercial real estate loans, a $44.8 million increase in residential real estate loans, a $8.0 million increase in commercial and industrial loans, a $0.9 million increase in consumer loans, and a $0.3 million increase in other loans. This increase was slightly offset by a $74.1 million decrease in real estate construction loans.

Deposits

Total deposits decreased $117.9 million, or 2.0%, to $5.8 billion during second quarter 2024 compared to March 31, 2024, primarily due to a $110.7 million decrease in demand deposits, a $56.7 million decrease in certificate of deposit accounts, a $9.8 million decrease in savings accounts, and a $5.8 million decrease in interest-bearing checking accounts. This decrease was partially offset by a $65.1 million increase in money market accounts. Brokered certificates of deposit totaled $390.5 million on June 30, 2024, compared to $470.7 million on March 31, 2024. Noninterest-bearing demand accounts comprised 29.3% of all deposits on June 30, 2024, compared to 30.5% on March 31, 2024.

Total deposits of $5.8 billion on June 30, 2024, reflected an increase of $25.3 million, or 0.4%, compared to total deposits of $5.8 billion on June 30, 2023. This increase was due to a $76.7 million increase in certificate of deposit accounts and a $276.3 million increase in money market accounts. This increase was partially offset by a $126.5 million decrease in interest-bearing checking accounts, a $165.1 million decrease in demand deposits and a $36.1 million decrease in savings accounts. Brokered certificates of deposit totaled $390.5 million on June 30, 2024, compared to $531.0 million on June 30, 2023. Noninterest-bearing demand accounts comprised 29.2% of all deposits on June 30, 2024, compared to 32.2% on June 30, 2023.

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 June 30, 2024, the Bank’s Tier 1 Leverage Ratio was 9.54%, Tier 1 Risk-Based Capital Ratio was 14.00%, and Total Risk-Based Capital Ratio was 15.14%. On a consolidated basis, the Company’s Tier 1 Leverage Ratio was 8.96%, Tier 1 Risk-Based Capital Ratio was 13.16%, and Total Risk-Based Capital Ratio was 15.59% as of June 30, 2024.

Book value per share on June 30, 2024, was $4,492.95 per Class A common share and $29.95 per Class B common share, an increase of $124.14 per Class A common share and $0.83 per Class B common share from March 31, 2024.

Each Class A common share is entitled to one vote per share. Except as otherwise provided by the Colorado Business Corporation Act, each Class B common share has no voting rights.

Dividends

Each Class B common share has dividend and distribution rights equal to one-one hundred and fiftieth (1/150^th) of such rights of one Class A common share. Therefore, each one Class A common share is equivalent to 150 Class B common shares for purposes of the payment of dividends.

During second quarter 2024, the Company paid cash dividends of $30.00 per Class A common share and $0.20 per Class B common share. On July 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 July 29, 2024, to shareholders of record on July 22, 2024.

About Alpine Banks of Colorado

Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $6.5 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 five-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 non-voting 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.

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 potential future changes in the target range for the federal funds rate by the Board of Governors of the Federal Reserve;
• 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).

Key Financial Measures 06/30/2024

Statement of Income 06/30/2024

Statement of Financial Condition 06/30/2024

Statement of Comprehensive Income 06/30/2024