Community Bank Reports Record Performance in Earnings to $25.6 Million

PASADENA, Calif.--(BUSINESS WIRE)--

Community Bank, an independent business bank with 17 business centers in Los Angeles, San Bernardino, Riverside, Ventura and Orange counties, today reported a 2.4% increase in net income to $6.9 million for the fourth quarter of 2012 compared to $6.7 million for the similar quarter in 2011. For the year ended December 31, 2012, the Bank reported record net income of $25.6 million compared to $25.2 million in 2011.

Net interest income for the fourth quarter of 2012 increased 2.1% over the prior year, totaling $23.9 million in 2012 versus $23.5 million in the prior year. For the year ended December 31, 2012, net interest income increased 0.9% over 2011, totaling $93.8 million in 2012 versus $93.0 million 2011. The improvement during 2012 was due to lower funding costs combined with earning asset growth which resulted in net interest margins of 3.35% and 3.51% for the fourth quarter and year ended December 31, 2012 respectively, compared to 3.70% and 3.75% for the fourth quarter and year ended December 31, 2011.

The Bank's reserve for loan losses as of December 31, 2012 was $34.9 million or 1.79% of total loans compared to $37.5 million or 2.12% of total loans as of December 31, 2011. The provision for loan losses totaled $0.0 million and $0.3 million for the fourth quarter and year ended December 31, 2012, respectively, compared to $1.2 million and $3.1 million for the fourth quarter and year ended December 31, 2011. The reduction in reserve levels is reflective of improving conditions in credit quality which is further evidenced by the 34.5% decrease in non-performing loans year over year.

Total loans as of December 31, 2012 increased to $1.94 billion as compared to $1.77 billion as of the prior year end. Total deposits as of December 31, 2012 increased to $2.21 billion as compared to $1.94 billion as of December 31, 2011. Community Bank's capital ratios continue to exceed regulatory requirements with Tier 1 Leverage, Tier 1 Risk-based Capital and Total Risk-based Capital Ratios of 8.17%, 10.21%, and 11.46%, respectively, as of December 31, 2012. Regulatory requirements for a “well-capitalized bank” are 5%, 6%, and 10%, respectively.

David Malone, Chairman of the Board. President and Chief Executive Officer, commented, “We have successfully increased earnings in a very challenging year. Despite a significant reduction in interest rate margin caused by continuing record low interest rates, the Bank recorded its highest earnings ever. Earnings were aided by very good loan growth and a reduction in the loan loss provision occasioned by improving credit quality. We are very pleased in achieving total assets of over $3 billion. We are very proud of this achievement and are grateful to reach a new milestone for the Bank.

“The Bank's capital ratios remain strong and coupled with continuing strong earnings allowed the Bank to pay record dividends of $35 million during the year. During 2012, the Bank added two new locations-West Los Angeles and Ventura County. We now have 17 business centers conveniently located throughout Southern California. During 2013 the Bank plans on introducing a new residential lending platform as well as enhancing and streamlining our SBA lending program.

“We thank all of our clients, shareholders, employees and vendors for their loyalty and support and wish all of you a year filled with prosperity and happiness.”

Community Bank, with assets of $3.1 billion, was founded in 1945 and is headquartered in Pasadena. The Bank is a regional Southern California Bank with offices in Anaheim, Burbank, Commerce, Corona, Fontana, Glendale, Huntington Beach, Irvine, Ontario, Pasadena, Redlands, Santa Clarita, Santa Fe Springs, South Bay, Ventura, West Los Angeles, and Woodland Hills. For more information, visit the Community Bank Website at www.cbank.com.

This press release contains certain forward-looking statements, including certain plans, expectations, goals and projections, which are subject to numerous assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature and extent of governmental actions and reforms; and rapidly changing technology and evolving banking industry standards.

COMMUNITY BANK
Financial Highlights - Income Statement and Ratios (Unaudited)
(Amounts in Thousands)
			For the quarters ended													For the year ended
			December 31,													December 31,
									Dollar				Percent									Dollar				Percent
INCOME STATEMENT				2012			2011		Change				Change				2012			2011		Change				Change
Interest income			$	29,266		$	28,827		$	439			1.5	%		$	114,825		$	115,854		$	(1,029	)		(0.9	%)
Interest expense				5,320			5,366			(46	)		(0.9	%)			20,978			22,805			(1,827	)		(8.0	%)
	Net interest income			23,946			23,461			485			2.1	%			93,847			93,049			798			0.9	%
Provision for loan losses				-			1,200			(1,200	)		(100.0	%)			300			3,100			(2,800	)		(90.3	%)
	Net interest income after provision			23,946			22,261			1,685			7.6	%			93,547			89,949			3,598			4.0	%
Non-interest income				4,103			3,953			150			3.8	%			11,255			13,218			(1,963	)		(14.9	%)
Non-interest expense				16,520			15,099			1,421			9.4	%			62,708			62,126			582			0.9	%
	Income before income tax			11,529			11,115			414			3.7	%			42,094			41,041			1,053			2.6	%
Income tax				4,663			4,407			256			5.8	%			16,469			15,874			595			3.7	%
	Net income		$	6,866		$	6,708		$	158			2.4	%		$	25,625		$	25,167		$	458			1.8	%

Financial Highlights - Balance Sheet (Unaudited)
(Amounts in Thousands)
			As of December 31,								Dollar				Percent
BALANCE SHEET				2012				2011			Change				Change
Cash and cash equivalents			$	82,400			$	35,626			$	46,774			131.3	%
Investments				949,604				723,694				225,910			31.2	%
Non-owner occupied real estate loans				640,462				637,928				2,534			0.4	%
Owner occupied real estate loans				800,501				678,106				122,395			18.0	%
	Total real estate loans			1,440,963				1,316,034				124,929			9.5	%
Commercial & industrial loans				472,594				416,132				56,462			13.6	%
Other loans				29,720				34,269				(4,549	)		(13.3	%)
	Total loans			1,943,277				1,766,435				176,842			10.0	%
Loan loss reserve				(34,876	)			(37,453	)			2,577			(6.9	%)
	Net loans			1,908,401				1,728,982				179,419			10.4	%
Other assets				120,236				113,020				7,216			6.4	%
	Total assets		$	3,060,641			$	2,601,322			$	459,319			17.7	%
	Earning assets		$	2,944,295			$	2,500,265			$	444,030			17.8	%
Non-interest bearing deposits			$	648,254			$	551,208			$	97,046			17.6	%
Interest bearing deposits				1,561,681				1,390,210				171,471			12.3	%
	Total deposits			2,209,935				1,941,418				268,517			13.8	%
Funds purchased/borrowed				578,000				378,000				200,000			52.9	%
Other liabilities				15,871				16,808				(937	)		(5.6	%)
	Total liabilities			2,803,806				2,336,226				467,580			20.0	%
Stockholders' equity				256,835				265,096				(8,261	)		(3.1	%)
	Total liabilities & stockholders' equity		$	3,060,641			$	2,601,322			$	459,319			17.7	%

Selected Financial Data and Highlights (Unaudited)
(Amounts in Thousands)
			For the quarters ended															For the year ended
			As of December 31,															As of December 31,
				2012				2011											2012				2011
Return on average equity				10.20	%			10.14	%										9.36	%			10.08	%
Return on average assets				0.93	%			1.02	%										0.92	%			0.97	%
Net interest margin				3.35	%			3.70	%										3.51	%			3.75	%
Efficiency ratio				59.88	%			55.08	%										59.96	%			58.60	%
Book value per common share																		$	82.17			$	88.31
Basic earnings per common share			$	2.22			$	2.24										$	8.39			$	8.38
Diluted earnings per common share			$	2.19			$	2.14										$	8.18			$	8.03
			As of December 31,								Minimum Ratios for a
CAPITAL RATIOS				2012				2011			Well-Capitalized Bank
Tier 1 leverage capital				8.17	%			9.56	%						5.00	%
Tier 1 risk-based capital				10.21	%			12.07	%						6.00	%
Total risk-based capital				11.46	%			13.33	%						10.00	%
Tier 1 common capital				10.20	%			11.93	%						N/A
			As of December 31,								Dollar				Percent
OTHER SELECTED DATA				2012				2011			Change				Change
Other real estate owned			$	4,728			$	6,182			$	(1,454	)		(23.5	%)
Nonperforming loans			$	40,140			$	61,264			$	(21,124	)		(34.5	%)
Reserve for loan losses to total loans				1.79	%			2.12	%						(15.6	%)
Reserve for loan losses to nonperforming loans				86.89	%			61.13	%						42.1	%
Nonperforming loans to total loans				2.07	%			3.47	%						(40.3	%)
Nonperforming assets to total assets				1.47	%			2.59	%						(43.2	%)