Albina Community Bancorp Reports First Quarter Loss; Pre-Tax, Pre-Provision Earnings...

Albina Community Bancorp Reports First Quarter Loss; Pre-Tax, Pre-Provision
Earnings Increase 72%

PORTLAND, Ore., Oct. 30, 2009 (GLOBE NEWSWIRE) -- Albina Community Bancorp
(OTCBB:ACBC), Portland's only certified community development bank today
reported that following a $2.9 million provision for loan losses and a non-cash
valuation allowance for the deferred tax asset of $1.2 million, the company lost
$2.8 million, or $(2.09) per common share, for the third quarter ended September
30, 2009, compared to a $1.7 million loss, or $(1.29) per common share in the
preceding quarter, when the provision was $2.3 million. In the third quarter a
year ago, net income totaled $105,000, or $0.10 per share, with a loan loss
provision of $980,000. The company's core earnings, defined as pre-tax,
pre-provision earnings, increased 72% for the third quarter of 2009 to $1.9
million from $1.1 million in the third quarter a year ago.

Year-to-date, Albina has recorded a total provision for loan losses of $7.1
million contributing to a net loss of $5.6 million, or $(2.09) per common share,
compared to a loss of $867,000, or $(0.81) per common share, in the like period
a year ago, with a loan loss provision of $3.0 million. Year-to-date, core
earnings were $1.7 million compared to core earnings of $1.6 million for the
first nine months of 2008.

The U.S. Department of the Treasury's Community Development Financial
Institutions Fund (CDFI Fund) recently released its fiscal year (FY) 2010 Notice
of Funding Availability (NOFA) for its CDFI Program, which if appropriated will
make available $113 million to the CDFI's across the country. "We are delighted
by this potential funding and intend to submit our application for the FY 2010
CDFI Program before the November 18 deadline," said Robert McKean, President and
Chief Executive Officer. "If we are fortunate enough to be recommended, we could
be eligible to receive additional funding. Awards from the CDFI Program allow us
to continue our mission in providing much needed capital to small businesses in
our communities as we all work together through this economic recovery." Albina
Community Bancorp has received CDFI funding in 8 of the past 9 years. In the
third quarter, the U.S. Treasury's Community Development Financial Institutions
Fund's Financial Assistance Program awarded Albina with two cash awards totaling
$2.2 million, and in the third quarter a year ago it awarded Albina with
$675,000.

Third Quarter 2009 Financial Highlights: (for the quarter ended September 30,
2009 compared to September 30, 2008)

-- Deposits grew 14% to $179.9 million up from $157.9 million.

-- Total assets increased 5% to $218.7 million up from $208.3
million.

-- Gross loans were $151.3, down 6% from $161.8 in the same
quarter a year ago.

-- Albina is one of the top producers of SBA loans in the Portland
District.

-- Albina was awarded $2.2 million in CDFI funding in the third
quarter.

-- Allowance for loan losses increased to $3.7 million, or 2.45%
of total loans.
Capital Adequacy and Liquidity

At September 30, 2009, capital ratios for Albina Bank continued to exceed
regulatory definitions for adequately capitalized banks with Tier 1 leverage at
5.52%, Tier 1 risk-based at 7.74% and Total risk-based capital at 9.00%.

"To meet our customer needs, we maintain high levels of liquidity by holding
liquid securities and through our available lines of credit at the Federal Home
Loan Bank and the Federal Reserve Bank," added McKean. "Our investment portfolio
consists entirely of investment grade securities that have an average life of
less than three years. Excess liquidity will be invested in securities until the
underlying time deposits mature or loan originations increase."

Credit Quality

Nonperforming assets (NPAs), consisting of nonperforming loans, other real
estate owned (OREO), and loans delinquent 90 days or more, increased during the
quarter to $16.9 million, or 7.7% of total assets, at September 30, 2009, from
$15.3 million, or 6.8% of total assets in the preceding quarter, and up from
$10.2 million, or 4.9% of assets a year ago. "We are increasingly encouraged by
people expressing interest in the properties we hold in our portfolio, and we
continue to market them," continued McKean. "We sold one small commercial
building out of OREO this quarter for a $6,000 gain."

Nonperforming loans (NPLs) increased to $15.4 million, or 10.18% of total loans
at September 30, 2009, compared to $13.4 million, or 8.65% of total loans, three
months earlier, and $10.2 million, or 6.32% of total loans, from a year ago.
"Although we continue to witness economic stress in our communities, sales of
residential units are improving, particularly in the low to moderate price
ranges," commented McKean. "Standard & Poor released its Case-Shiller report
this week, which showed that the Portland Metropolitan market home prices have
climbed for three months in a row. We are also noticing a lot more activity in
land and development projects, as major developers are beginning to return to
the market."

Net charge-offs totaled $2.6 million, or 1.71% of average loans in the third
quarter quarter, and $2.0 million, or 1.30% of average loans for the linked
quarter, and $1.2 million, or 0.78% of average loans in the third quarter of
2008. Year-to-date, net charge-offs totaled $6.1 million, or 3.88% of average
loans, and $1.5 million, or 0.99% of average loans in the like period a year
ago. The allowance for loan and lease losses (ALLL) totaled $3.7 million, or
2.45% of total loans at September 30, 2009, compared to $3.4 million or 2.19% of
total loans at June 30, 2009 and $3.1 million, or 1.90% of total loans a year
ago.

Balance Sheet Results

Total assets increased 5% to $218.7 million at September 30, 2009, compared with
$208.3 million at September 30, 2008. Loans, net of reserves, decreased $11.1
million from a year ago to $147.6 million.

The loan portfolio remains well-diversified with a wide variety of borrowers and
collateral; over 75% of the portfolio is secured by real estate, both
residential and commercial. Consumer loan participations were down 27%
year-over-year standing at $11.7 million. Commercial loan participations
declined 5% year-over-year to $20.9 million. Consumer and commercial loan
participations provide additional earnings and diversification for the portfolio
and account for approximately 22% of the total loan portfolio. More than 39% of
Albina's commercial real estate loans are owner-occupied.

(Dollars in As of the Date Ended
thousands) -------------------------------------------------------
Sept. 30, June 30, Sept. 30,
2009 2009 2008
-------------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans

Commercial
business $ 23,101 15.3% $ 24,222 15.6% $ 21,495 13.3%
R/E
construction 15,702 10.4% 16,630 10.7% 29,158 18.0%
Commercial
R/E 76,595 50.6% 76,419 49.4% 78,530 48.5%
Multifamily
residential 4,365 2.9% 3,864 2.5% 2,976 1.8%
One to four
family
residential 18,690 12.4% 19,865 12.8% 12,653 7.8%
Consumer 13,149 8.7% 14,152 9.1% 17,410 10.8%
Unearned
Loan Fees (321) -0.2% (308) -0.2% (468) -0.3%
--------- --------- ---------
Total Loans 151,281 100.0% 154,844 100.0% 161,754 100.0%
"Albina is one of the top producers of SBA loans, and we are funding a good
volume of relatively small dollar amount SBA loans. With the rebound in the
secondary market, we will be selling the guaranteed portion of the SBA loans we
originate, producing quality non-interest income for the bank," continued
McKean. "Our success in this area is twofold: we are making loans from which we
generate fee income, and we secure the full corresponding deposit relationship.
As a result, we are growing deposits organically while building our core
business operations and establishing strong customer relationships."

At September 30, 2009, total deposits grew 14% to $179.9 million up from $157.9
million a year ago. Noninterest bearing deposits accounted for 15% of total
deposits and interest bearing and savings accounts accounted for 25% of
deposits, and time certificates were 60% of total deposits at quarter end. "We
continue to attract more home-grown deposits, establishing full-service banking
relationships with our customers, which in turn supports our community
development and urban renewal," said McKean. "The increase in the number of core
deposit relationships was a direct result of our SBA lending activity and new
customers who are looking for a local community banking solution." The ratio of
loans to deposits at September 30, 2009 was 82% compared with 101% at September
30, 2008.

The investment securities portfolio more than doubled to $40.7 million from
$17.9 million a year ago, as Albina sought to take advantage of increased credit
spreads available in investment securities. All securities held by Albina are
investment grade securities issued by U.S. Government Sponsored Enterprises
(GSE). Shareholder equity at September 30, 2009, totaled $7.3 million, or $5.53
per share, compared to $12.5 million, or $9.37 per share a year ago.

Operating Results

Revenue, consisting of net interest income and noninterest income, was $4.3
million in the third quarter of 2009, compared to $1.7 million in the preceding
quarter and $2.7 million in the third quarter a year ago. Albina's net interest
income, before the provision for loan losses, was $1.5 million in the third
quarter of 2009, compared to $1.4 million, before the provision in the prior
quarter, and $1.7 million in the third quarter a year ago. After the $2.9
million provision for loan losses, third quarter 2009 net interest loss was $1.4
million, down from net interest income of $718,000 a year ago, which included a
provision for loan losses of $980,000.

"With interest rates at historically low levels, our securities portfolio has
increased in value," said Jim Schlotfeldt, Chief Financial Officer. Realized
gain on sale from investments of $179,000 increased non-interest income in the
third quarter of 2009.

Albina's net interest margin in the quarter was 3.17% compared to 2.85% in the
second quarter this year and 3.73% in the third quarter a year ago. "As we
continue to carry an elevated level of non-accruals, our net interest margin
will be impacted," added Schlotfeldt. The reversal of accrued interest from
non-performing assets reduced interest income by $439,000 in the quarter and was
responsible for the compression in the net interest margin by 92 basis points.
Year-to-date, the reversal of accrued interest totaled $1.3 million, or 92 basis
points.

Non-interest expense for the third quarter increased 44% to $2.4 million
compared to $1.6 million for the like quarter a year ago. The 44% increase in
total non-interest expense for the third quarter reflects higher ongoing FDIC
insurance premiums and additional legal and professional expenses associated
with managing the loan portfolio. The efficiency ratio for the quarter improved
to 55.61% from 59.87% in the third quarter a year ago.

The income tax expense for the quarter ended September 30, 2009 was $1.7
million, which included a non-cash charge of $1.2 million as a valuation
allowance for the deferred tax asset, as compared to an income tax expense of
$16,000 in the third quarter a year ago, and an income tax benefit of $844,000
in the second quarter of 2009.

Due to the capital structure of the company, preferred shareholders participated
in the per share loss during the quarter and year-to-date periods. "Our original
shareholders, owners of the Preferred A and B series, had reached their maximum
participation in our earnings stream in prior years," said Schlotfeldt. "With
the recent losses, however, our retained earnings have fallen below their
earnings participation threshold. Consequently, the loss per share allocated to
common shareholders was lower by $0.48 in the third quarter and $0.99 in the
nine months ended September 30, 2009. On a pro rata basis, future losses will
continue to be allocated between preferred and common shareholders and future
earnings will be reduced until preferred shareholders reach the $100 per
preferred share liquidation preference."

About Albina Community Bancorp

Albina Community Bank is a locally owned, full-service, independent commercial
bank committed to investing in individuals, families, businesses and local
neighborhoods. The bank promotes community development by providing products and
services and banking solutions that are directed towards improving the social or
economic conditions of underserved peoples or residents of distressed
communities. Albina offers a wide range of competitive banking solutions, while
also maintaining its mission to promote jobs, growth of small businesses, and
wealth in our local Portland neighborhoods.

Albina Community Bank opened in December 1995 as the sole subsidiary of Albina
Community Bancorp. Albina is one of approximately 50 commercial banks across the
United States certified by the U.S. Treasury Department's Community Development
Financial Institutions Fund as a community development financial institution.
Albina is the only CDFI-certified commercial bank headquartered in Oregon.
Albina operates from five local Portland locations including offices at: 2002
Northeast Martin Luther King Jr. Boulevard; 8040 North Lombard in the St. Johns
neighborhood of North Portland; 4020 Northeast Fremont Street in the Beaumont
neighborhood; 5636 Northeast Sandy Boulevard in the Rose City Park neighborhood
of the International District; and 430 Northwest 10th Avenue in Portland's Pearl
District; and a remote ATM at New Columbia in North Portland. For more
information about Albina Community Bank, please call 503-287-7537 or visit
www.albinabank.com.

This release contains forward-looking statements within the meaning of the
Private Securities Litigation Act of 1995, including statements concerning the
continued financial performance of the company and its plans and opportunities
for future growth. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially than
those expected. Specific risks include, but are not limited to, general business
and economic conditions, competitive factors, pricing pressures, further
interest rate changes, and other factors listed from time to time in Albina
Community Bancorp's regulatory reports.

Albina Community Bancorp
Balance Sheet
(Dollars in thousands) As of the Date Ended
----------------------------------------
Sept. 30, June 30, Sept. 30, Annual
2009 2009 2008 %Change
----------------------------------------
(unaudited)(unaudited)(unaudited)
ASSETS

Cash and due from banks $ 469 $ 434 $ 496 -6%
Interest-bearing deposits 12,616 7,596 4,074 210%
Federal funds sold 94 121 8,698 -99%
-------------------------------
Total cash and cash
equivalents 13,179 8,151 13,268 -1%

Time deposits with other
banks 4,233 4,333 4,731 -11%
Investment securities 40,713 47,119 17,863 128%
Federal Home Loan Bank Stock 1,325 1,325 1,361 -3%

Loans
Albina originated loans 118,721 121,794 123,720 -4%
Commercial participations
purchased 20,889 20,387 22,065 -5%
Consumer participations
purchased 11,670 12,662 15,969 -27%
-------------------------------
Total loans 151,281 154,844 161,754 -6%

Allowance for loan and lease
losses (3,703) (3,395) (3,066) 21%
-------------------------------
Net loans 147,578 151,448 158,688 -7%

Property and equipment, net 5,423 5,506 5,751 -6%
Other real estate owned 1,491 1,928 -- 0%
Other assets 4,735 5,973 6,677 -29%
-------------------------------
-------------------------------
Total assets $ 218,678 $ 225,785 $ 208,340 5%
===============================

LIABILITIES AND EQUITY

Deposits
Non-interest bearing
deposits $ 26,356 $ 22,756 $ 22,363 18%
Interest-bearing accounts 41,377 39,087 44,955 -8%
Savings accounts 4,690 4,355 3,982 18%
Time certificates 107,440 112,470 86,589 24%
-------------------------------
Total deposits 179,864 178,668 157,889 14%

Notes payable 23,331 29,356 30,293 -23%
Subordinated debentures 6,186 6,186 6,186 0%
Other liabilities 2,000 1,720 1,469 36%
-------------------------------
Total liabilities 211,380 215,929 195,836 8%

Shareholders' equity:
Preferred stock 2,482 2,482 2,482 0%
Common stock 8,605 8,597 8,567 0%
Retained earnings (4,067) (1,315) 1,573 -359%
Accum. other comp. income 278 92 (118) -335%
-------------------------------
Total shareholders' equity 7,298 9,856 12,503 -42%
-------------------------------
-------------------------------

Total liabilities and equity $ 218,678 $ 225,785 $ 208,340 5%
===============================

FINANCIAL RATIOS
Loans / deposits 82.05% 84.77% 100.51%
Non-performing loans / total
loans 10.18% 8.65% 6.32%
Reserve / loans 2.45% 2.19% 1.90%
Tangible book value per share $ 5.53 $ 7.48 $ 9.37

Albina Community Bancorp
Income Statement
(Dollars in thousands,
except per-share data) Three Months Ended
----------------------------------------------
Sept. 30, June 30, Sept. 30,
----------------------------------------------
2009 2009 2008 % Chg
----------------------------------
(Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
Interest and fees
on loans $ 2,320 $ 2,411 $ 2,660 -13%
Interest on investment
securities 356 252 209 70%
Other interest income 41 43 74 -45%
----------------------------------
Total interest income 2,717 2,707 2,943 -8%

INTEREST EXPENSE
Interest on deposits 880 965 882 0%
Interest on borrowings 322 375 364 -12%
----------------------------------
Total interest
expense 1,202 1,340 1,245 -3%
----------------------------------

NET INTEREST INCOME 1,516 1,367 1,698 -11%
Loan loss provision 2,910 2,300 980 197%
----------------------------------
Net interest income
after provision (1,394) (933) 718 -294%

NON-INTEREST INCOME
Service charges
and fees 186 181 185 1%
Government payments
and contracts 2,211 -- 675 227%
Loan fees on brokered
loans -- -- 8 -100%
Merchant & card
interchange income 70 64 70 1%
Realized gain/(loss)
on sale of investment
securities 179 -- -- NM
Other income 105 109 107 -2%
----------------------------------
Total non-interest
income 2,750 353 1,045 163%

NON-INTEREST EXPENSE
Salaries and employee
benefits 710 764 902 -21%
Occupancy and
equipment 185 186 190 -3%
Legal and professional 227 254 104 118%
Marketing 39 64 64 -40%
Data processing 185 192 164 13%
Other 1,026 500 218 372%
----------------------------------
Total non-interest
expense 2,372 1,960 1,642 44%

PRETAX INCOME (1,016) (2,540) 121 -942%
Provision for
income taxes 1,735 (844) 16 10879%
----------------------------------

NET INCOME $ (2,751) $ (1,696) $ 105 -2721%
==================================

Earnings per share:
Basic $ (2.09) $ (1.29) $ 0.10 -2190%
Diluted $ (2.09) $ (1.29) $ 0.10 -2190%

Weighted average
shares outstanding:
Basic 1,070,355 1,069,867 1,068,991 0%
Diluted 1,070,355 1,069,867 1,070,630 0%

FINANCIAL RATIOS
Return on average
assets -1.22% -0.75% 0.05%
Return on average
equity -25.03% -14.72% 0.81%
Efficiency ratio 55.61% 113.94% 59.87%
Net interest margin 3.17% 2.85% 3.73%

(Dollars in thousands,
except per-share data) Nine Months Ended
----------------------------------
Sept. 30, Sept. 30,
----------------------------------
2009 2008 % Chg
----------------------
(Unaudited) (Unaudited)

INTEREST INCOME
Interest and fees on loans $ 7,142 $ 8,214 -13%
Interest on investment securities 821 527 56%
Other interest income 125 222 -44%
----------------------
Total interest income 8,088 8,963 -10%

INTEREST EXPENSE
Interest on deposits 2,840 2,845 0%
Interest on borrowings 1,043 1,020 2%
----------------------
Total interest expense 3,883 3,865 0%
----------------------

NET INTEREST INCOME 4,205 5,098 -18%
Loan loss provision 7,055 3,030 133%
----------------------
Net interest income after
provision (2,850) 2,068 -238%

NON-INTEREST INCOME
Service charges and fees 573 507 13%
Government payments and contracts 2,211 675 227%
Loan fees on brokered loans -- 54 -100%
Merchant & card interchange income 185 222 -17%
Realized gain/(loss) on sale of
investment securities 179 13 1275%
Other income 320 308 4%
-----------------------
Total non-interest income 3,467 1,779 95%

NON-INTEREST EXPENSE
Salaries and employee benefits 2,255 2,945 -23%
Occupancy and equipment 562 566 -1%
Legal and professional 684 330 107%
Marketing 140 232 -40%
Data processing 547 548 0%
Other 1,814 638 185%
----------------------
Total non-interest expense 6,004 5,259 14%

PRETAX INCOME (5,386) (1,386) 289%
Provision for income taxes 193 (519) -137%
----------------------

NET INCOME $ (5,579) $ (867) 544%
======================

Earnings per share:
Basic $ (2.09) $ (0.81) 158%
Diluted $ (2.09) $ (0.81) 158%

Weighted average shares
outstanding:
Basic 1,069,861 1,068,768 0%
Diluted 1,069,861 1,075,086 0%

FINANCIAL RATIOS
Return on average assets -2.47% -0.44%
Return on average equity -50.76% -6.69%
Efficiency ratio 78.25% 76.19%
Net interest margin 2.97% 3.81%

Albina Community Bancorp
Selected Highlights
(Dollars in
thousands) As of the Date Ended
----------------------------------------------------
Sept. 30, June 30, Sept. 30,
2009 2009 2008
----------------------------------------------------
(unaudited) (unaudited) (unaudited)
Loans

Commercial
business $ 23,101 15.3% $ 24,222 15.6% $ 21,495 13.3%
R/E construction 15,702 10.4% 16,630 10.7% 29,158 18.0%
Commercial R/E 76,595 50.6% 76,419 49.4% 78,530 48.5%
Multifamily
residential 4,365 2.9% 3,864 2.5% 2,976 1.8%
One to four
family
residential 18,690 12.4% 19,865 12.8% 12,653 7.8%
Consumer 13,149 8.7% 14,152 9.1% 17,410 10.8%
Unearned Loan
Fees (321) -0.2% (308) -0.2% (468) -0.3%
-------- -------- --------
Total Loans 151,281 100.0% 154,844 100.0% 161,754 100.0%

ASSET QUALITY
Non-Performing
loans:
Loans past due
90 days or more 140 152 761
Non-accrual
loans 15,253 13,243 9,458
-------- -------- --------
Total
non-performing
loans 15,393 13,395 10,219
OREO 1,491 1,928 --
-------- -------- --------
Total non
performing
assets $ 16,885 $ 15,323 $ 10,219
--------- -------- --------

Non performing
assets / total
assets 7.72% 6.79% 4.91%

Beginning ALLL -
from previous
FYE $ 2,736 $ 2,736 $ 1,556
Provision for
loan loss
expense 7,055 4,145 3,030
Loan charge
offs (6,356) (3,637) (1,661)
Loan recoveries 268 151 141
-------- -------- --------
(Charge offs),
net of
recoveries (6,088) (3,486) (1,520)
-------- -------- --------
Ending ALLL
- YTD 3,703 3,395 3,066
-------- -------- --------

Average Loans
Quarter 152,422 156,752 158,280
YTD 156,939 159,235 154,192
Net charge-off
Quarter 2,603 2,037 1,229
YTD 6,088 3,486 1,520
Net charge-offs
as % of Average
loans
Quarter 1.71% 1.30% 0.78%
YTD 3.88% 2.19% 0.99%

Non-accrual
loans
Residential
Development 11,409 9,324 4,672
Commercial Real
Estate 3,437 3,547 4,733
Commercial/
Industrial 406 372 53
-------- -------- --------
Total
Non-accrual
loans 15,253 13,243 9,458
-0-
CONTACT: Albina Community Bancorp
Robert L. McKean, President & CEO
(503) 288-7280
Jim Schlotfeldt, Chief Financial Officer
(503) 288-8495