Market Overview

Community Bank Reports Year-to-Date Earnings of $18.8 Million

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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 2.6% increase in net income to $7.0 million for the third quarter of 2012 compared to $6.8 million for the similar quarter in 2011. For the nine months ended September 30, 2012, the Bank reported net income of $18.8 million compared to $18.5 million for the same period last year.

Net interest income for the third quarter of 2012 increased 5.4% over the prior year, totaling $24.7 million in 2012 versus $23.4 million in the prior year. During the nine months ended September 30, 2012, net interest income increased 0.4% over the prior year, totaling $69.9 million in 2012 versus $69.6 million in 2011. The improvement during 2012 was largely driven by lower funding costs combined with an increase in earning asset growth at compressed rates which resulted in net interest margins of 3.57% and 3.56% for the third quarter and nine months ended September 30, 2012 respectively, compared to 3.66% and 3.77% for the third quarter and nine months ended September 30, 2011.

The Bank's reserve for loan losses as of September 30, 2012 was $35.3 million or 1.89% of total loans compared to $36.4 million or 2.06% of total loans as of September 30, 2011. The provision for loan losses totaled $0.3 million for the third quarter and nine months ended September 30, 2012, compared to 0.3 million and $1.9 million for the third quarter and nine months ended September 30, 2011. The lower provisioning needs is a direct reflection of continued improvements in asset quality.

Total loans as of September 30, 2012 increased from the prior year quarter at $1.87 as compared to $1.77 billion as of September 30, 2011. Total deposits as of September 30, 2012 increased to $2.16 billion as compared to $1.99 billion as of September 30, 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 9.42%, 11.90%, and 13.16%, respectively, as of September 30, 2012. Regulatory requirements for a “well-capitalized bank” are 5%, 6%, and 10%, respectively.

David Malone, President and Chief Executive Officer, commented, “The Bank's profitability in 2012, although good, was negatively affected by the low interest rate environment. This was evidenced by a reduction in net interest margin in 2012 versus 2011. Our loan pipeline continues strong but customers seem reluctant to initiate capital spending programs prior to the November elections. The uncertainty occasioned by the so-called ‘fiscal cliff' coupled with possible income tax increases has made all of us cautious.

“The Bank continues to enjoy a strong capital base with excess liquidity. We also are optimistic about the future and expect good operating results through the remainder of the year. We encourage our customers to vote on November 6th. We are fortunate to live in a Democracy that allows the freedom to render our opinion at the ballot box.”

Community Bank, with assets exceeding $2.9 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 nine months ended
September 30, September 30,
Dollar Percent Dollar Percent
INCOME STATEMENT   2012     2011   Change Change   2012     2011   Change Change
 
Interest income $ 29,946 $ 29,088 $ 858 2.9 % $ 85,559 $ 87,027 $ (1,468 ) (1.7 %)
Interest expense   5,262     5,660     (398 ) (7.0 %)   15,658     17,439     (1,781 ) (10.2 %)
Net interest income 24,684 23,428 1,256 5.4 % 69,901 69,588 313 0.4 %
Provision for loan losses   300     300     -   -     300     1,900     (1,600 ) (84.2 %)
Net interest income after provision 24,384 23,128 1,256 5.4 % 69,601 67,688 1,913 2.8 %
Non-interest income 2,349 2,774 (425 ) (15.3 %) 7,152 9,265 (2,113 ) (22.8 %)
Non-interest expense   15,290     14,723     567   3.9 %   46,188     47,027     (839 ) (1.8 %)
Income before income tax 11,443 11,179 264 2.4 % 30,565 29,926 639 2.1 %
Income tax   4,462     4,375     87   2.0 %   11,806     11,467     339   3.0 %
Net income $ 6,981   $ 6,804   $ 177   2.6 % $ 18,759   $ 18,459   $ 300   1.6 %
 
 
Financial Highlights - Balance Sheet (Unaudited)
(Amounts in Thousands)
 
As of September 30, Dollar Percent
BALANCE SHEET   2012     2011   Change Change
Cash and cash equivalents $ 54,402 $ 45,883 $ 8,519 18.6 %
Investments 908,441 719,868 188,573 26.2 %
Non-owner occupied real estate loans 619,365 651,916 (32,551 ) (5.0 %)
Owner occupied real estate loans   753,801     640,170     113,631   17.8 %
Total real estate loans 1,373,166 1,292,086 81,080 6.3 %
Commercial & industrial loans 465,473 437,645 27,828 6.4 %
Other loans   30,289     37,544     (7,255 ) (19.3 %)
Total loans 1,868,928 1,767,275 101,653 5.8 %
Loan loss reserve   (35,307 )   (36,387 )   1,080   (3.0 %)
Net loans 1,833,621 1,730,888 102,733 5.9 %
Other assets   112,764     110,925     1,839   1.7 %
Total assets $ 2,909,228   $ 2,607,564   $ 301,664   11.6 %
 
Earning assets $ 2,795,349 $ 2,500,489 $ 294,860 11.8 %
 
Non-interest bearing deposits $ 614,880 $ 546,340 $ 68,540 12.5 %
Interest bearing deposits   1,545,444     1,444,046     101,398   7.0 %
Total deposits 2,160,324 1,990,386 169,938 8.5 %
Funds purchased/borrowed 443,000 344,280 98,720 28.7 %
Other liabilities   17,143     13,555     3,588   26.5 %
Total liabilities 2,620,467 2,348,221 272,246 11.6 %
Stockholders' equity   288,761     259,343     29,418   11.3 %

Total liabilities & stockholders' equity

$ 2,909,228   $ 2,607,564   $ 301,664   11.6 %
 
 
Selected Financial Data and Highlights (Unaudited)
(Amounts in Thousands)
 
For the quarters ended For the nine months ended
September 30, September 30,
  2012     2011     2012     2011  
Return on average equity 9.78 % 10.61 % 9.08 % 10.06 %
Return on average assets 0.97 % 1.02 % 0.92 % 0.96 %
Net interest margin 3.57 % 3.66 % 3.56 % 3.77 %
Efficiency ratio 56.56 % 56.19 % 60.00 % 59.83 %
 
Book value per common share $ 94.69 $ 86.31
Basic earnings per common share $ 2.29 $ 2.27 $ 6.17 $ 6.14
Diluted earnings per common share $ 2.23 $ 2.17 $ 5.99 $ 5.89
 
As of September 30, Minimum Ratios for a
CAPITAL RATIOS   2012     2011   Well-Capitalized Bank
Tier 1 leverage capital 9.42 % 9.22 % 5.00 %
Tier 1 risk-based capital 11.90 % 11.81 % 6.00 %
Total risk-based capital 13.16 % 13.07 % 10.00 %
Tier 1 common capital 11.82 % 11.67 % N/A
 
As of September 30, Dollar Percent
OTHER SELECTED DATA   2012     2011   Change Change
Other real estate owned $ 7,025 $ 6,373 $ 652 10.2 %
Nonperforming loans $ 43,679 $ 60,253 $ (16,574 ) (27.5 %)
Reserve for loan losses to total loans 1.89 % 2.06 % (8.3 %)
Reserve for loan losses to nonperforming loans 80.83 % 60.39 % 33.8 %
Nonperforming loans to total loans 2.34 % 3.41 % (31.4 %)
Nonperforming assets to total assets 1.74 % 2.56 % (32.0 %)

Community Bank
David Malone, President and Chief Executive Officer
626-568-2001

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