Alpine Banks of Colorado announces financial results for Q4 2023 and year-end 2023

GLENWOOD SPRINGS, Colo., Jan. 25, 2023 (GLOBE NEWSWIRE) — Alpine Banks of Colorado (OTCQX: ALPIB) (“Alpine” or the “Company”), the holding company for Alpine Bank, today announced results (unaudited) for the fourth quarter and the year ended December 31, 2023. The Company reported net income of $13.6 million, or $132.94 per basic Class A common share and $0.89 per basic Class B common share for the fourth quarter 2023, and net income of $59.6 million, or $579.63 per basic Class A common share and $3.86 per basic Class B common share for the year ended December 31, 2023.

Achievements in the fourth quarter and the year ended December 31, 2023 include:

Fourth quarter 2023 achievements

• Book value per Class A common share increased 1.6%, or $63.66 to $4,072.89 per share, versus third quarter 2023
• Book value per Class B common share increased 1.6%, or $0.42 to $27.15 per share, versus third quarter 2023
• Organic loan growth during fourth quarter 2023 was 5.1%, or $160.6 million, versus third quarter 2023
• Core deposit growth during fourth quarter 2023 was 2.1%, or $116.6 million, versus third quarter 2023

Year 2023 achievements

• Book value per Class A common share increased 11.6%, or $422.05 to $4,072.89 per share, versus year-end 2020
• Book value per Class B common share increased 11.6%, or $2.81 to $27.15 per share, versus year-end 2020
• Organic loan growth during 2023 was 10.1%, or $304.4 million, versus year-end 2020
• Core deposit growth during 2023 was 22.4%, or $1.0 billion, versus year-end 2020

“Alpine finished off another strong year with all-time highs in total assets and annual net income. None of our success would be possible without the continued commitment and dedication of our employees,” said Alpine Banks of Colorado President and Vice Chairman, Glen Jammaron. “2023 turned out to be more tumultuous than any of us had originally anticipated. Through it all, our employees again rose to the challenge. Every day they provided outstanding service and worked to meet the needs of our customers. We look forward to 2023 with renewed optimism. With continued community acceptance of our special brand of banking, we currently anticipate more growth and future success.”

Net income

Net income for fourth quarter 2023 and third quarter 2023 was $13.6 million and $16.2 million, respectively. Interest income increased $0.3 million in fourth quarter 2023 compared to third quarter 2023 primarily due to an increase in volume in the securities and loan portfolios and an increase in yield on balances due from banks. This increase was slightly offset by a decrease in yield on the loan and securities portfolios and a decrease in volume in balances due from banks. Interest expense decreased $12,000 in fourth quarter 2023 compared to third quarter 2023 primarily due to a decrease in yield on deposits and the Company’s trust preferred securities, slightly offset by an increase in volume in deposits. Noninterest income increased $0.1 million in fourth quarter 2023 compared to third quarter 2023 primarily due to an increase in service charges on deposit accounts, slightly offset by decreases in income generated by Mortgage Banking activities and fee income. Noninterest expense increased $3.7 million in fourth quarter 2023 compared to third quarter 2023, due to increases in other expenses, salaries and employee benefits, occupancy expense and furniture and fixture expense. No provision for loan losses was recorded in fourth quarter 2023 or third quarter 2023, primarily due to asset quality improvement during the period and continued improvements in the economic environment.

Net income for the 12 months ended December 31, 2023 and December 31, 2020, was $59.6 million and $51.1 million, respectively. Interest income increased $12.1 million in the 12 months of 2023 compared to the 12 months of 2020, primarily due to an increase in volume in loans, securities and balances due from banks, slightly offset by decreased yields on loans, securities and balances due from banks. Interest expense decreased $0.4 million in the 12 months of 2023 compared to the 12 months of 2020, primarily due to a decrease in yield on deposits and the Company’s trust preferred securities, slightly offset by an increase in volume in deposits and an increase in yield and volume in the Company’s subordinated notes. Noninterest income decreased $0.3 million in the 12 months of 2023 compared to the 12 months of 2020, primarily due to a decrease in income generated by mortgage banking activities, unrealized losses on equity securities, and a decrease in earnings on life insurance. This decrease was slightly offset by increases in fee income, other income and services charges on deposit accounts. Noninterest expense increased $8.2 million in the 12 months of 2023 compared to the 12 months of 2020, primarily due to an increase in salary and employee benefit expenses, other expenses, and furniture and fixtures expenses, slightly offset by a decrease in occupancy expenses. Provision for loan losses decreased $6.9 million in the 12 months of 2023 compared to the 12 months of 2020, primarily due to asset quality improvement during the period and continued improvements in the economic environment.

Net interest margin decreased from 3.00% to 2.90% from third quarter 2023 to fourth quarter 2023. Net interest margin for fourth quarter 2023 net of the Paycheck Protection Program (“PPP”) loan influence was 2.82% compared to third quarter 2023 net interest margin net of the PPP loan influence of 2.90%. Net interest margin for the 12 months ended December 31, 2023 and December 31, 2020, was 3.09% and 3.72%, respectively.

Assets

As of December 31, 2023, total assets were $6.2 billion, an increase of 1.8% or $107.4 million from third quarter 2023. Total assets increased in fourth quarter 2023 from third quarter 2023 due to organic loan growth, strategic growth in the securities portfolio and core deposit increases. Total assets grew 20.0%, or $1.0 billion, from December 31, 2020 to December 31, 2023. Alpine Bank’s Wealth Management Division* had assets under management of $1.15 billion on December 31, 2023, compared to $1.04 billion on December 31, 2020, an increase of 10.4%.

Loans

Loans outstanding as of December 31, 2023 totaled $3.4 billion. The loan portfolio increased $98.7 million or 3.0% during fourth quarter 2023 compared to September 30, 2023. This increase was driven by a $70.5 million increase in residential real estate loans, a $36.5 million increase in real estate construction loans and a $0.4 million increase in other loans. This increase was slightly offset by a decrease in consumer loans of $5.1 million, a decrease in commercial and industrial loans of $4.2 million, and a decrease in commercial real estate loans of $0.7 million during fourth quarter 2023 compared to September 30, 2023. The decrease in commercial and industrial loans includes $61.9 million in PPP loan forgiveness pay-downs processed in fourth quarter 2023. Loans outstanding net of PPP loans as of December 31, 2023 reflected an increase of $160.6 million, or 5.1%, compared to loans outstanding net of PPP loans of $3.2 billion on September 30, 2023.

Loans outstanding as of December 31, 2023 reflected an increase of $167.0 million, or 5.2%, compared to loans outstanding of $3.2 billion on December 31, 2020. This growth was driven by a $100.6 million increase in commercial real estate loans, an $86.7 million increase in residential real estate loans, a $33.5 million increase in real estate construction loans, and a $0.3 million increase in other loans. This year-over-year growth was slightly offset by a decrease in commercial and industrial loans of $48.2 million and a decrease in consumer loans of $7.2 million. The decrease in commercial and industrial loans includes $137.4 million in PPP loan forgiveness pay-downs. Loans outstanding net of PPP loans as of December 31, 2023, reflected an increase of $304.4 million, or 10.1%, compared to loans outstanding net of PPP loans of $3.0 billion on December 31, 2020.

Deposits

Total deposits increased $116.5 million, or 2.1%, to $5.6 billion during fourth quarter 2023 compared to September 30, 2023, primarily due to an $81.6 million increase in money fund accounts, a $53.1 million increase in interest checking accounts, and a $9.2 million increase in savings accounts. This increase was slightly offset by a $19.6 million decrease in demand accounts and a $7.9 million decrease in certificate of deposit accounts. Fourth quarter 2023 deposit growth is partially reflective of PPP loan activity and a high amount of liquidity in the general market.

Total deposits of $5.6 billion on December 31, 2023 reflected an increase of $1.0 billion or 22.4% compared to total deposits of $4.6 billion on December 31, 2020. This increase was due to a $493.3 million increase in demand deposits, a $329.5 million increase in money fund accounts, a $207.6 million increase in interest checking accounts, and a $24.5 million increase in savings accounts, slightly offset by a $27.6 million decrease in certificate of deposit accounts.

Capital ratios

The Company’s banking subsidiary, Alpine Bank (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 8.01%, Tier 1 Risk-Based Capital Ratio was 12.67% and Total Risk-Based Capital Ratio was 13.77%. On a consolidated level, the Company’s Tier 1 Leverage Ratio was 7.66%, Tier 1 Risk-Based Capital Ratio was 12.12% and Total Risk-Based Capital Ratio was 14.50% as of December 31, 2023.

Dividends

During fourth quarter 2023, Alpine paid cash dividends of $24.00 per Class A common share and $0.16 per Class B common share. On January 13, 2023, Alpine declared a dividend of $27.00 per Class A common share and $0.18 per Class B common share, payable on January 31, 2023. The Board of Directors believes that the increase in common share cash dividends for first quarter 2023 compared to fourth quarter 2023 is appropriate based upon Alpine’s financial performance and more stabilized current economic conditions.

COVID-19 pandemic response

The Company continues to respond to the COVID-19 pandemic as circumstances change. No Bank branches are currently closed to customers due to COVID-19 outbreaks. Back office personnel returned to the office on July 6, 2023.

In order to support its customer base, Alpine enacted a 90-day loan payment deferral program in late March 2020. Both principal and interest payments during the period were deferred to the end of the loan. As the 90-day deferral period came to an end, Alpine reviewed options to extend the deferral period for up to 180 days as provided for in regulatory guidance. Reviews for an additional 90-day extension for each borrower’s deferral period included an analysis of the borrower’s plan and ability to resume normal payments when the deferral period ended. As of June 30, 2020, $823.0 million of the loan portfolio (26.5%) was active in the loan deferral program. The majority of borrowers did not require a second 90-day deferral period. On December 31, 2020, only $29.3 million (0.9%) of the loan portfolio remained in a deferral status. As of December 31, 2023, one loan for $5,700 was on a COVID-19 deferral status.

The Company actively participated in round one of the PPP loan program. As of December 31, 2023, Alpine had outstanding balances of $4.0 million in Round 1 PPP loans. The Company entered into a contract with a third-party technology provider to assist with the Round 1 PPP loan forgiveness process for our borrowers. The web portal for processing Round 1 PPP forgiveness was activated in September 2020. Forgiveness activity began in the fourth quarter 2020 and the Bank has processed $306.2 million in Round 1 PPP forgiveness approvals from the SBA as of December 31, 2023. The Company began actively participating in round two of the PPP loan program in late January, 2023. Alpine issued 1,965 Round 2 PPP loans during the first half of 2023, with combined original balances of $162.1 million. The Company has processed $107.5 million in Round 2 PPP forgiveness approvals from the SBA during 2023, resulting in a total outstanding balance of Round 2 PPP loans of $54.6 million as of December 31, 2023.

About Alpine Banks of Colorado

Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $6.2 billion, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. With banking offices across Colorado, Alpine Bank employs more than 785 people and serves more than 160,000 customers with personal, business, wealth management*, mortgage and electronic banking services. Alpine Bank has a 5-star rating for financial strength by BauerFinancial, Inc., the nation’s leading bank rating firm. The 5-star rating is BauerFinancial’s highest rating for financial institutions. 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.

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,” “believes,” “estimates,” “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 or guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statement include:

• The ability to attract new deposits and loans;
• Demand for financial services in our market areas;
• Competitive market-pricing factors;
• The adverse effects of public health events, such as the current COVID-19 pandemic, including governmental and societal responses;
• Statements regarding the expected impact of the stock split of our Class B common shares in December 2020;
• 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 our expected performance;
• Risks associated with concentrations in real estate-related loans;
• Market interest rate volatility;
• Stability of funding sources and continued availability of borrowings;
• Risk associated with potential cyber threats;
• 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 speaks only as of the date on which it is made. 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 tables in the links below highlight Alpine’s key financial measures for the periods indicated (unaudited).

Key Financial Measures 12/31/2021

Statement of Income 12/31/2021

Statement of Financial Condition 12/31/2021

Statement of Comprehensive Income 12/31/2021