<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number: 0-23322
CASCADE BANCORP
(Name of small business issuer in its charter)
Oregon 93-1034484
(State of Incorporation) (I.R.S. Employer Identification #)
1100 NW Wall Street, Bend, Oregon 97701
(541) 385-6205
(Address and telephone number of issuer's principal executive offices)
------------------
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 2,132,967 shares of no par
value Common Stock on October 31, 1996. --------------------------
- - ---------------------------------------
Transitional Small Business Disclosure Format (check one): Yes ; No X
--- ---
<PAGE>
CASCADE BANCORP
FORM 10-QSB
QUARTERLY REPORT
SEPTEMBER 30, 1996
INDEX
PART I: FINANCIAL INFORMATION PAGE
Condensed Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995. . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income for the nine months and three
months ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Changes in Stockholders' Equity
for the nine months ended September 30 1996 and 1995. . . . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . 7
Management's Discussion and Analysis of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
PART II: OTHER INFORMATION
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
2
<PAGE>
PART I
CASCADE BANCORP & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
1996 1995
------------ -------------
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 16,877,270 $ 14,012,461
Federal funds sold - 13,100,000
------------ -------------
Total cash and cash equivalents 16,877,270 27,112,461
Investment securities available-for-sale 31,392,658 9,965,676
Investment securities held-to-maturity 3,178,485 3,402,179
Loans, net 132,671,313 124,711,355
Mortgage loans held for sale 2,704,332 3,009,584
Premises and equipment, net 4,167,719 3,467,085
Accrued interest and other assets 7,578,538 5,893,932
------------ -------------
Total assets $198,570,315 $177,562,272
------------ -------------
------------ -------------
LIABILITIES & STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 52,163,856 $ 43,692,451
Interest bearing demand 86,701,865 80,186,924
Savings 13,458,304 13,149,653
Time deposits 17,612,981 15,409,039
------------ -------------
Total deposits 169,937,006 152,438,067
Long-term debt 5,000,000 5,000,000
Accrued interest and other liabilities 1,212,342 1,084,250
------------ -------------
Total liabilities 176,149,348 158,522,317
Stockholders' equity:
Common stock, no par value;
10,000,000 shares authorized;
2,132,967 issued and outstanding
(1,939,061-1995) 13,058,417 9,253,012
Retained earnings 9,266,364 9,734,936
Unrealized gains on investment securities
available-for-sale, net of deferred
income taxes 96,186 52,007
------------ -------------
Total stockholders' equity 22,420,967 19,039,955
------------ -------------
Total liabilities and stockholders'
equity $198,570,315 $177,562,272
------------ -------------
------------ -------------
See accompanying notes.
3
<PAGE>
CASCADE BANCORP & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
1996 1995 1996 1995
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $10,443,937 $ 8,923,887 $3,548,911 $ 3,316,932
Taxable interest on investments 708,200 1,016,321 396,681 289,627
Nontaxable interest on investments 75,346 96,981 24,679 28,213
Interest on federal funds sold 340,033 37,162 132,675 21,378
----------- ----------- ----------- -----------
Total interest income 11,567,516 10,074,351 4,102,946 3,656,150
Interest expense:
Deposits:
Interest bearing demand 1,850,785 1,761,504 657,185 619,991
Savings 213,529 233,518 73,548 73,736
Time 654,561 426,671 234,742 167,351
Other borrowings 261,050 372,476 88,489 123,924
----------- ----------- ------------ ------------
Total interest expense 2,979,925 2,794,169 1,053,964 985,002
----------- ----------- ------------ ------------
Net interest income 8,587,591 7,280,182 3,048,982 2,671,148
Loan loss provision 295,678 340,288 146,957 101,330
----------- ----------- ------------ ------------
Net interest income after loan loss provision 8,291,913 6,939,894 2,902,025 2,569,818
Noninterest income:
Service charges on deposit accounts 1,134,418 964,436 399,645 328,506
Mortgage loan origination and processing fees 734,926 491,309 233,626 209,665
Gains on sales of mortgage loans 356,905 250,081 115,708 106,260
Losses on sales of investment securities
available-for-sale - (173,937) - -
Other income 707,103 588,067 253,227 194,186
----------- ----------- ------------ ------------
Total noninterest income 2,933,352 2,119,956 1,002,206 838,617
Noninterest expense:
Salaries and employee benefits 3,160,222 2,667,922 1,145,061 1,096,127
Net occupancy and equipment 967,323 970,704 349,323 319,641
Other expenses 1,750,827 1,419,118 609,465 481,666
----------- ----------- ------------ ------------
Total noninterest expense 5,878,372 5,057,744 2,103,849 1,897,434
----------- ----------- ------------ ------------
Income before income taxes 5,346,893 4,002,106 1,800,382 1,511,001
Provision for income taxes 2,010,060 1,495,273 677,094 563,783
----------- ----------- ------------ ------------
Net income $ 3,336,833 $ 2,506,833 $ 1,123,288 $ 947,218
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
Net income per common share $ 1.56 $ 1.18 $ .53 $ .44
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>
See accompanying notes.
4
<PAGE>
CASCADE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
UNREALIZED
GAINS(LOSSES) TOTAL
COMMON RETAINED ON SECURITIES STOCKHOLDERS'
STOCK EARNINGS AVAILABLE-FOR-SALE EQUITY
----------- ----------- ------------------ -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 $ 7,093,607 $ 8,262,066 $(544,738) $14,810,935
10% stock dividend (176,278 shares)
declared in June 1995 2,159,405 (2,159,405) - -
Net change in unrealized gains (losses) on
securities available-for-sale - - 568,470 568,470
Net income - 2,506,833 - 2,506,833
----------- ----------- ---------- -----------
Balance at September 30, 1995 $ 9,253,012 $ 8,609,494 $ 23,732 $17,886,238
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
Balance at December 31, 1995 $ 9,253,012 $ 9,734,936 $ 52,007 $19,039,955
10% stock dividend (193,906 shares)
declared in June 1996 3,805,405 (3,805,405) - -
Net change in unrealized gains (losses) on
securities available-for-sale - - 44,179 44,179
Net income - 3,336,833 - 3,336,833
----------- ----------- ---------- -----------
Balance at September 30, 1996 $13,058,417 $ 9,266,364 $ 96,186 $22,420,967
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
</TABLE>
See accompanying notes.
5
<PAGE>
CASCADE BANCORP & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
------------ -------------
Net cash provided by operating activities $ 2,286,040 $ 686,132
Investing activities:
Purchases of investment securities
available-for-sale (23,838,205) -
Purchases of investment securities
held-to-maturity (978,645) -
Proceeds from maturities and calls of
investment securities available-for-sale 2,491,406 4,174,796
Proceeds from maturities of investment
securities held-to-maturity 1,243,215 1,070,000
Proceeds from sales of investment
securities available-for-sale - 7,784,500
Net increase in loans (7,898,731) (28,830,128)
Purchases of premises and equipment, net (1,039,210) (260,711)
------------ ------------
Net cash used in investing activities (30,020,170) (16,061,543)
Financing activities:
Net increase in deposits 17,498,939 17,757,924
Net decrease in short-term borrowings - (2,900,000)
Net increase in long-term debt - 5,000,000
------------ ------------
Net cash provided by financing
activities 17,498,939 19,857,924
------------ ------------
Net increase (decrease) in cash and cash
equivalents (10,235,191) 4,482,513
Cash and cash equivalents at beginning of
period 27,112,461 9,811,579
------------ ------------
Cash and cash equivalents at end of period $ 16,877,270 $(14,294,092)
------------ ------------
------------ ------------
See accompanying notes.
6
<PAGE>
CASCADE BANCORP & SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Unaudited)
1. BASIS OF PRESENTATION
The interim condensed consolidated financial statements include the
accounts of Cascade Bancorp (Bancorp), a bank holding company, and its
wholly-owned subsidiary, Bank of the Cascades (the Bank). All significant
intercompany accounts and transactions have been eliminated in consolidation.
The interim condensed consolidated financial statements are unaudited,
but include all adjustments, consisting of only normal accruals, which
Bancorp considers necessary for a fair presentation of the results of
operations for such interim periods. In preparing the condensed consolidated
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and income and expenses for the period. Actual
results could differ from those estimates.
The interim condensed consolidated financial statements should be read
in conjunction with the December 31, 1995 consolidated financial statements,
including the notes thereto, included in Bancorp's Annual Report to
Shareholders for 1995.
Certain amounts for 1995 have been reclassified to conform with the 1996
presentation.
2. INVESTMENT SECURITIES
Investment securities at September 30, 1996 and December 31, 1995
consisted of the following:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
SEPTEMBER 30, 1996 COST GAINS LOSSES VALUE
- - -------------------------------------- -------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Available-for-Sale
------------------
U.S. Government agencies . . . . . . $ 26,748,659 $ 136,843 $ 1,604 $ 26,883,898
U.S. Treasury securities . . . . . . 4,488,860 19,900 - 4,508,760
-------------- ---------- ---------- ------------
$ 31,237,519 $ 156,743 $ 1,604 $ 31,392,658
-------------- ---------- ---------- ------------
-------------- ---------- ---------- ------------
Held-to-Maturity
----------------
Obligations of state and
political subdivisions . . . . $ 1,896,721 $ 1,446 $ 40,737 $ 1,857,430
Other . . . . . . . . . . . . . . . . 1,281,764 - - 1,281,764
-------------- ---------- ---------- ------------
$ 3,178,485 $ 1,446 $ 40,737 $ 3,139,194
-------------- ---------- ---------- ------------
-------------- ---------- ---------- ------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
DECEMBER 31, 1996 COST GAINS LOSSES VALUE
- - -------------------------------------- -------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Available-for-Sale
------------------
U.S. Government agencies . . . . . . $ 5,394,386 $ 13,828 $ - $ 5,408,214
U.S. Treasury securities . . . . . . 4,487,408 70,054 - 4,557,462
-------------- ---------- ---------- ------------
$ 9,881,794 $ 83,882 $ - $ 9,965,676
-------------- ---------- ---------- ------------
-------------- ---------- ---------- ------------
Held-to-Maturity
----------------
Obligations of state and
political subdivisions . . . . $ 2,189,815 $ 16,527 $ - $ 2,206,342
Other . . . . . . . . . . . . . . . . 1,212,364 - - 1,212,364
-------------- ---------- ---------- ------------
$ 3,402,179 $ 16,527 - $ 3,418,706
-------------- ---------- ---------- ------------
-------------- ---------- ---------- ------------
</TABLE>
7
<PAGE>
3. LOANS AND RESERVE FOR LOAN LOSSES
The composition of the loan portfolio at September 30, 1996 and
December 31, 1995 was as follows:
1996 1995
------------ ------------
Commercial. . . . . . . . . . . . . $ 21,232,135 $ 21,710,608
Real Estate:
Construction . . . . . . . . . 37,244,646 33,983,778
Mortgage . . . . . . . . . . . 18,628,706 24,749,955
Commercial . . . . . . . . . . 43,375,307 31,018,825
Installment . . . . . . . . . . . . 14,381,803 15,271,595
------------ ------------
134,862,597 126,734,761
Less:
Reserve for loan losses. . . . 1,822,915 1,651,352
Deferred loan fees . . . . . . 368,369 372,054
------------ ------------
2,191,284 2,023,406
------------ ------------
Loans, net. . . . . . . . . . . . . $132,671,313 $124,711,355
------------ ------------
------------ ------------
Mortgage loans held for sale of $2,704,332 and $3,009,584 at September 30,
1996 and December 31, 1995, respectively, represent real estate mortgage
loans. These loans are recorded at cost which approximates market.
As of September 30, 1996 and December 31, 1995, the Bank also held
servicing rights to approximately $135,663,000 and $123,574,000,
respectively, in mortgage loans which have been sold to the Federal National
Mortgage Association. These mortgage loans are being serviced for the Bank
by another financial institution under a sub-servicing agreement. The sale
of these mortgage loans are subject to technical underwriting exceptions and
related repurchase risks. Such risks are considered in the determination of
the reserve for loan losses.
Effective January 1, 1996, the Bank prospectively adopted Statement of
Financial Accounting Standards (SFAS) No. 122, "Accounting for Mortgage
Servicing Rights" (SFAS 122). SFAS 122 requires the Bank to recognize as
separate assets the rights to service mortgage loans which are acquired
through loan origination activities subsequent to December 31, 1995.
Effective January 1, 1997 the Bank will be required to adopt the provisions
of Statement of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities" (SFAS 125). Although SFAS 125 supersedes SFAS 122, management
believes the effect of adopting SFAS 125 will not be significant. Other assets
in the accompanying balance sheet as of September 30, 1996 includes
approximately $390,000 for the capitalized mortgage servicing rights.
The fair value of the capitalized mortgage servicing rights was
determined based on estimates of the present value of expected future cash
flows and comparisons to current market transactions involving mortgage
servicing rights with similar portfolio characteristics. There were no
significant changes in the valuation allowance for capitalized mortgage
servicing rights during the nine months ended September 30, 1996. The
predominant risk characteristics of the underlying loans used to stratify the
capitalized mortgage servicing rights for purposes of measuring impairment
are note rates, terms and interest methods (i.e., fixed and variable).
Transactions in the reserve for loan losses for the nine months ended
September 30, 1996 and 1995 were as follows:
1996 1995
------------ ------------
Balance at beginning of period $ 1,651,352 $ 1,172,238
Provisions charged to operations 295,678 340,288
Loans charged off (134,798) (49,098)
Recoveries of loans previously
charged off 10,683 99,378
------------ -----------
Balance at end of period $ 1,822,915 $ 1,562,806
------------ -----------
------------ -----------
8
<PAGE>
The reserve for loan losses represents management's recognition of the
assumed risks of extending credit and the quality of the existing loan
portfolio. The reserve is maintained at a level considered adequate to
provide for potential loan losses based on management's assessment of various
factors affecting the portfolio. Such factors include loss experience,
review of problem loans, current economic conditions, and an overall
evaluation of the quality, risk characteristics and concentration of loans in
the portfolio. The reserve is increased by provisions charged to operations
and reduced by loans charged-off, net of recoveries.
Although a risk of nonpayment exists with respect to all loans, certain
specific types of risks are associated with different types of loans. Due to
the nature of the Bank's customer base and the growth experienced in the
Bank's market area, real estate is frequently a material component of
collateral for the Bank's loans. The expected source of repayment of these
loans is generally the operations of the borrower's business or personal
income; however, real estate provides an additional measure of security.
Risks associated with real estate loans include fluctuating land values,
local economic conditions, changes in tax policies, and a concentration of
loans within the Bank's market area.
The Bank mitigates risks on construction loans by generally lending
funds to customers that have been prequalified for long term financing and
who are using experienced contractors approved by the Bank. The commercial
real estate risk is further mitigated by making the majority of commercial
real estate loans to owner-occupied users of the property.
The Bank manages the general risks inherent in the loan portfolio by
following loan policies and underwriting practices designed to result in
prudent lending activities. The following table presents information with
respect to non-performing assets at September 30, 1996 and December 31, 1995
(dollars in thousands):
1996 1995
------------ ------------
Loans on non-accrual status $ 799 $ 45
Loans past due greater than 90 days
but not on non-accrual status 9 21
Other real estate owned - -
----- -----
Total non-performing assets $ 808 $ 66
----- -----
----- -----
Percentage of non-performing assets
to total assets .41% .04%
The accrual of interest on a loan is discontinued when, in management's
judgment, the future collectibility of principal or interest is in doubt.
Loans placed on nonaccrual status may or may not be contractually past due at
the time of such determination, and may or may not be secured. When a loan
is placed on nonaccrual status, it is the Bank's policy to reverse, and
charge against current income, interest previously accrued but uncollected.
Interest subsequently collected on such loans is credited to loan principal
if, in the opinion of management, full collectibility of principal is
doubtful. If interest on nonaccrual loans had been accrued, such income
would have been insignificant for the nine months ended September 30, 1996
and 1995.
At September 30, 1996, there were no potential problem loans, except as
discussed above, where known information about possible credit problems of
the borrower caused management to have serious doubts as to the ability of
such borrower to comply with the present loan repayment terms and which may
result in such loans being placed on a non-accrual basis.
4. LONG-TERM BORROWINGS
At September 30, 1996 and December 31, 1995, the Bank had $5.0 million
in long-term debt from the Federal Home Loan Bank of Seattle (FHLB) on a
three year note due in May 1998, with a fixed interest rate of 6.96%. The
borrowings from FHLB are secured by Bank assets.
9
<PAGE>
5. NET INCOME PER COMMON SHARE
Net income per common share is net income divided by the weighted
average shares outstanding for that period. The weighted average number of
common shares outstanding used to compute net income per common share, was
approximately 2,133,000 for the nine-month and three-month periods ended
September 30, 1996 and 1995. Weighted average shares outstanding consists of
common shares outstanding and common stock equivalents attributable to stock
options. Net income per common share and weighted average shares
outstanding have been restated to retroactively reflect 10% stock dividends
declared In June 1996 and 1995.
6. ADOPTION OF ADDITIONAL NEW ACCOUNTING STANDARDS
Effective January 1, 1996, Bancorp adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" (SFAS 121). SFAS 121 requires that long-lived assets, certain
identifiable intangibles, and goodwill related to those assets be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. SFAS 121 does not apply
to core deposit or credit card intangibles, mortgage servicing rights, or
deferred tax assets. Under SFAS 121, a loss is to be recognized to the extent
that the fair value of an impaired asset is less than the asset's carrying
amount. The effect of adopting SFAS 121 was not significant.
Effective January 1, 1996, Bancorp adopted SFAS 123, "Accounting for
Stock-Based Compensation" (SFAS 123). SFAS 123 establishes financial
accounting and reporting standards for stock-based employee compensation
plans. The effect of adopting SFAS 123 was not significant.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
The following discussion should be read in conjunction with Bancorp's
unaudited condensed consolidated financial statements and the notes thereto
for the nine-month and three-month periods ended September 30, 1996 and 1995
included in this report.
RESULTS OF OPERATIONS
Bancorp reported net income of approximately $3,337,000, or $1.56 per
share, for the nine months ended September 30, 1996, compared to net income
of approximately $2,507,000, or $1.18 per share, for the same period in 1995.
This represents an increase in net income of 33.1 percent. Net income for
the quarter ended September 30, 1996 was approximately $1,123,000, or $.53
per share, compared to net income of approximately $947,000, or $.44 per
share, for the same period in 1995, up 18.6 percent.
Net interest income increased 18.0 percent for the nine months and 14.2
percent for the three months ended September 30, 1996 as compared to the 1995
periods. The net increases during these periods resulted from increases in
interest income exceeding the increases in interest expense.
Total interest income increased approximately $1,493,000 for the nine
months and approximately $447,000 for the quarter ended September 30, 1996 as
compared to the 1995 periods. These increases were primarily the result of
increases in the volume of loans.
Total interest expense increased approximately $186,000 for the nine
months and approximately $69,000 for the quarter ended September 30, 1996 as
compared to the 1995 periods. These increases were primarily due to
increased volume in interest bearing demand and time deposits.
The loan loss provision decreased for the nine months and increased for
the quarter ended September 30, 1996 as compared to the loan loss provision
charged during the 1995 periods. The decrease during the nine months ended
September 30, 1996 was primarily due to a decrease in the volume of loan
growth. The increase during the quarter ended September 30, 1996 was
primarily the result of an increase in charged-off loan activity. Management
does not believe the charged-off loan activity in the quarter ended September
30, 1996 is indicative of any trends. Management believes the current loan
loss provision maintains the reserve for loan losses at an appropriate level.
The Bank's ratio of reserve for loan losses to total loans was 1.35 percent
at September 30, 1996 compared to 1.27 percent at December 31, 1995.
Total noninterest income increased 38.4 percent for the nine months and
19.5 percent for the quarter ended September 30, 1996 as compared to the 1995
periods. Although there were increases in all categories of noninterest
income, the increase for the nine months ended September 30, 1996 was
predominately due to increases in service charge income of approximately
$170,000 and mortgage loan origination and processing fees of approximately
$244,000 and a decrease in losses on sales on investment securities
available-for-sale of approximately $174,000. The increase for the quarter
ended September 30, 1996 was primarily due to increases in service charge
income of approximately $71,000 and other income of approximately $59,000.
Increases in service charge income during 1996 were primarily due to an
increase in the volume of deposit activity during the periods presented. The
increases in mortgage loan origination and processing fees for the nine
months ended September 30, 1996 was primarily due to increased mortgage loan
originations in conjunction with a more stable interest rate environment.
Total noninterest expense increased 16.2 percent for the nine months and
10.9 percent for the quarter ended September 30, 1996 as compared to the 1995
periods. These increases are primarily attributed to Bancorp's increased
size and activity levels.
Income tax expense increased between the periods presented primarily as
a result of higher pre-tax income.
11
<PAGE>
FINANCIAL CONDITION
Bancorp's total assets increased 11.8 percent to $198.6 million at
September 30, 1996 compared to $177.6 million at December 31, 1995, primarily
due to an increase in loans and investments which were funded by the increase
in deposits. During the quarter ended September 30, 1996 approximately $20
million in investment securities were purchased with excess funds from faster
prepayments then anticipated and strong deposit growth. Loan demand
continues to be steady with total loans increasing 6.5 percent to $134.9
million at September 30, 1996 compared to $126.7 million at December 31,
1995. Deposits increased 11.5 percent to $169.9 million at September 30,
1996 compared to $152.4 million at December 31, 1995.
CAPITAL RESOURCES
During the nine months ended September 30, 1996 Bancorp continued to
strengthen its capital resources as total capital increased to $22.4 million,
or 11.3 percent of total assets. The increase was primarily the result of
the Bank's net income for the nine months ended September 30, 1996.
At September 30, 1996, Bancorp had a Risk Based Capital Ratio of 15.61
percent and Tier 1 Capital Ratio of 14.42 percent. This was compared to
14.29 percent and 13.13 percent for Risk Based Capital and Tier 1 Capital,
respectively, at December 31, 1995.
PART II
OTHER INFORMATION
No other information is required to be reported for the quarter ended
September 30, 1996.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CASCADE BANCORP
-------------------------------
(Registrant)
Date 11/5/96 By /s/ Roger J. Shields
-------------------- ----------------------------
Roger J. Shields, President
Date 11/5/96 By /s/ Patricia L. Moss
-------------------- ----------------------------
Patricia L. Moss, Chief
Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0000865911
<NAME> CASCADE BANCORP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 16,871
<INT-BEARING-DEPOSITS> 6
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 31,393
<INVESTMENTS-CARRYING> 3,178
<INVESTMENTS-MARKET> 3,139
<LOANS> 134,863
<ALLOWANCE> 1,823
<TOTAL-ASSETS> 198,570
<DEPOSITS> 169,937
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,212
<LONG-TERM> 5,000
0
0
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<INTEREST-TOTAL> 11,568
<INTEREST-DEPOSIT> 2,719
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<EPS-PRIMARY> 1.56
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<ALLOWANCE-UNALLOCATED> 612
</TABLE>
