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CBBC Bancorp Reports December 31, 2016, Results

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WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--

CBBC Bancorp (OTCBB: CBBC) ("the Bank") today reported net income for the year ending December 31, 2016, of $3.04 million, or $1.20 per diluted share, compared to $2.35 million at December 31, 2015, or $1.05 per diluted share. The Bank retired 100% of its outstanding preferred stock at a 10% discount during the second quarter of 2016. This nonrecurring event favorably impacted the Bank's earnings available to common stock shareholders by $0.17 per share. This increased the December 31, 2016, YTD earnings to $1.37 per diluted share. Year-end 2016 earnings per share data also reflect the impact of approximately 300,000 more shares outstanding than a year ago due to the exercise of 100% of the stock options in a plan that expired in December 2015.

For the fourth quarter of 2016, the Bank earned net income of $749,000, or $0.29 per diluted share, compared with net income of $727,000, or $0.32 per diluted share, for the same period ending December 31, 2015. During the fourth quarter of 2016, the Bank recorded $445,000 in income tax expenses compared to $467,000 in the fourth quarter of 2015.

Net interest income increased to $11.02 million for the year ending December 31, 2016, compared with $9.09 million the prior year. This increase was due primarily to higher volume in loans and securities as of December 31, 2016, than in the prior year. The Bank was able to maintain its YTD net interest margin in a challenging interest rate environment as well, actually increasing it by five basis points over this same time frame. The fourth-quarter 2016 net interest margin decreased 19 basis points to 3.95% from fourth-quarter 2015 primarily due to the faster prepayments on the Bank's mortgage-backed securities portfolio caused by rapid upward movement in longer-term rates after the election. Total loans were $211.3 million and $172.3 million as of December 31, 2016 and 2015, respectively, representing an increase of $39.0 million, or 23%. Investment totals reflected an increase of $6.7 million, or 9%, ending 2016 at $81.1 million as compared to $74.4 million as of December 31, 2015.

The Bank realized an increase in deposits of $54.7 million, or 27%, as of December 31, 2016, compared with December 31, 2015. This deposit increase was primarily in DDA deposits, up $26.7 million, or 34%, time deposits, up $22.0 million, or 68%, savings and money market deposits, up $5.7 million, or 10%, and wholesale deposits, up $0.3 million, or 1%, as of December 31, 2016, as compared to December 31, 2015.

Noninterest income was $822,000 for the year ending December 31, 2016, as compared to $697,000 for the similar period in the prior year. This increase of $126,000 was primarily due to higher other noninterest income - gains on loan sales were higher by $142,000 at December 31, 2016, over year-end 2015. Noninterest expense for the year ending December 31, 2016, was $6.51 million, up $474,000 from December 31, 2015. This was primarily due to an increase of $333,000 in other noninterest expenses due to higher professional fees, promotional-related and other operating and organizational expenses. The Bank's efficiency ratio improved, declining to 54% as of December 31, 2016, down from 61% as of December 31, 2015, primarily due to the improved balance sheet performance.

Total assets as of December 31, 2016, were $304.3 million as compared with $250.6 million as of December 31, 2015, an increase of 21%. The Bank's loan-to-deposit ratio as of December 31, 2016, was 82.4%, down from 85.5% as of December 31, 2015.

The Bank's capital ratios remain very strong. The total risk-based capital ratio was 13.2% and the equity ratio was 9.9% as of December 31, 2016. These ratios were 16.9% and 12.1%, respectively, as of December 31, 2015. The December 31, 2016, risk-based capital ratio reflects $6.0 million in excess capital (i.e., the amount in reserve above the 10% "Well-Capitalized" level as defined by the regulators). In the second quarter of 2016, the Bank repurchased its $4.2 million outstanding preferred stock at a discount.

The Bank's ALLL was 1.21% as of December 31, 2016, down from 1.24% as of December 31, 2015. This decrease was due to new loan volume and not a result of any loan losses. Due to this increased loan volume, the Bank began recognizing a provision for loan losses in 2016 after suspending this provision for the last several years. Despite this increased loan volume and the reduction in the overall ratio, our calculations indicate the Bank continued to have an excess (unallocated reserves) in its ALLL as of December 31, 2016. The overall dollars in reserve actually increased from $2.14 million as of December 31, 2015, to $2.56 million as of December 31, 2016, due primarily to the renewed loan loss provisions of $420,000 recorded in 2016. The Bank's total NPAs (nonaccrual loans + OREO) were zero as of December 31, 2016, consistent with the balance as of the same period in 2015. Nonaccrual loans were zero as of December 31, 2016, equal to the balance as of the end of 2015. The OREO balance was zero as of December 31, 2016, consistent with the balance as of December 31, 2015.

About Community Business Bank

The Bank's market area includes the Greater Yolo, Solano, Sacramento, San Joaquin, and contiguous counties. The Bank focuses on and provides highly personalized commercial banking services to businesses, professionals, and nonprofit organizations. The Bank's Call Reports are available for review or download directly from the FDIC website at www.fdic.gov or through the link at the Bank's website at CommunityBizBank.com.

Forward-Looking Statement

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the Bank achieving its projected efficiency ratio and addressing its preferred stock. These forward-looking statements involve known and unknown risks, uncertainties, and factors such as: (1) the impact of changes in interest rates; (2) fluctuation in economic conditions and continued deterioration of the real estate market; (3) competition in the Company's defined market; (4) the Company's ability to sustain its internal growth rate and to preserve its earning assets quality; and (5) government regulations. Although the Company believes the expectations reflected in these forward-looking statements are reasonable, it can give no assurance these expectations will prove to have been correct.

FINANCIAL TABLES FOLLOW

 
Consolidated
       
 
Dec. 2016   Dec. 2015
Assets
Cash and due from banks $ 2,834,640 $ 936,432
Fed funds sold 6,157,000 36,000
Investment Securities 81,130,620 74,388,523
Loans, net of unearned income 211,294,613 172,309,525
Less: Allowance for loan losses   (2,555,695 )     (2,135,695 )
Net Loans 208,738,918 170,173,830
Premises and equipment, net 172,117 180,839
Accrued interest receivable 1,133,291 928,647
Other assets   4,127,858       3,939,823  
Total Assets $ 304,294,444     $ 250,584,094  
 
Liabilities & Shareholders' Equity
Noninterest-Bearing Deposits $ 93,699,214 $ 70,264,792
Interest-Bearing Deposits:
Core Deposits (including CDARs) 139,973,342 118,886,204
Brokered Deposits   22,675,951       12,457,247  
Total Deposits 256,348,507 201,608,243
Accrued expenses/other liabilities   18,418,576       18,554,714  
Total Liabilities 274,767,083 220,162,957
Total Shareholders' Equity   29,527,361       30,421,137  
Total Liabilities & Shareholders' Equity $ 304,294,444     $ 250,584,094  
             
BV per share (net of preferred stock) $ 11.89 $ 12.06
BV per share (net of preferred stock, OCI)       $ 12.17     $ 12.17  
 
 
YTD YTD
Dec. 2016   Dec. 2015
Net Interest Income $ 11,019,104 $ 9,093,441
Provision for loan losses 420,000 0
Noninterest Income 822,295 696,555
Noninterest Expense   6,512,799       6,038,620  
Income Before Taxes 4,908,600 3,751,376
Income Taxes   1,870,800       1,401,000  
Net Income $ 3,037,800     $ 2,350,376  
Diluted EPS $ 1.20 $ 1.05
Diluted EPS-revised* $ 1.37 $ 1.05
             
Return on Average Assets (ROAA) 1.12 % 1.03 %
Return on Average Equity (ROAE) 10.12 % 8.76 %
Net Interest Margin         4.17 %     4.12 %

 

 
QTD QTD
Dec. 2016   Dec. 2015
Net Interest Income $ 2,905,343 $ 2,520,138
Provision for loan losses 105,000 0
Noninterest Income 186,876 417,441
Noninterest Expense   1,792,967       1,743,591  
Income Before Taxes 1,194,252 1,193,988
Income Taxes   445,000       467,000  
Net Income $ 749,252     $ 726,988  
Diluted EPS $ 0.29 $ 0.32
             
Return on Average Assets (ROAA) 0.99 % 1.16 %
Return on Average Equity (ROAE) 10.01 % 10.05 %
Net Interest Margin         3.95 %     4.14 %
 

* Note: Includes $0.17 increase in earnings per share due to discount received on repurchase of 100% of outstanding preferred stock in the second quarter of 2016.

Community Business Bank
John DiMichele, CEO
916-830-9580
or
Mark Day, CFO
916-830-3582

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