Profile: Cascade Bancorp (CACB.O)

Cascade Bancorp (Bancorp) is a chartered financial holding company. Bancorp conducts its activities through its wholly owned subsidiary, Bank of the Cascades (the Bank), which provides a range of commercial and retail banking services. At December 31, 2008, the Company conducted full-service community banking through 33 branches, including 11 in Central Oregon, three in the Salem/Keizer area, six in Southern Oregon, one office in Portland, and 12 branches serving the Boise area. The Banks activities include lending and deposit functions, including commercial, construction, real estate, installment, credit card and mortgage loans; checking, money market, time deposit and savings accounts; Internet banking and bill payment; automated teller machines, and safe deposit facilities. Additionally, the Bank originates and sells mortgage loans into the secondary market and offers trust and investment services.

Lending Activities

As of December 31, 2008, Cascade’s loan portfolio amounted to $1.96 billion. Net loans represent 84% of total assets as of December 31, 2008. The Company makes substantially all of its loans to customers located within the Company’s service areas. Cascade’s loan portfolio has historically been concentrated in real estate related loans. The Company's loan portfolio consists of residential land development loans, residential construction loans, commercial construction loans and commercial real estate loans. Residential land development loans are made to developers for the purpose of acquiring raw land and/or for the subsequent development and sale of residential lots. These loans accounted for $199,418,000 of total loans. Residential construction loans are used for financing of homeowner or builder construction of new residences where the obligor generally intends to own the home upon construction (pre-sold), or builder construction of homes for resale (speculative construction).

Sources of Funds

As of December 31, 2008, the Bank's total deposits were $1.8 billion. Core relationship deposits are the primary source of the Bank’s liquidity. As such, the Bank focuses on deposit relationships with local business and consumer clients who maintain multiple accounts and services at the Bank. A further source of funds and liquidity is the Bank’s capability to borrow from reliable counterparties. The Bank utilizes its investment securities, certain loans and FHLB Stock to provide collateral to support its borrowing needs. One source of wholesale funding is brokered deposits. At December 31, 2008, its brokered deposits were $147.9 million. The Bank’s primary counterparty for borrowing purposes is the FHLB. The FHLB had extended the Bank a secured line of credit of $838.6 million that may be accessed for short or long-term borrowings given sufficient qualifying collateral.

Investment Activities

Investment securities held by the Company are classified as either available-for-sale or held-to-maturity. Investment securities classified as available for sale amounted to $10,480,000 as of December 31, 2008, and consisted of United States Agency mortgage-backed securities, United States Government and agency securities, obligations of state and political subdivisions, United States Agency asset-backed securities, equity securities, and mutual fund. Investment securities classified as held-to-maturity amounted to $2,211,000 and consisted of obligations of state and political subdivisions.