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CBBC Bancorp Declares Special Dividend; Reports June 30, 2017, Quarter-End Results

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CBBC Bancorp (OTC:CBBC) announced today that on July 20, 2017, the
Board of Directors declared a special dividend payment on its shares of
common stock in the amount of $0.35 per share. This special cash
dividend will be payable to shareholders of record at the close of
business on August 4, 2017, and payments will be made on August 11, 2017.

CBBC Bancorp also announced the results of its wholly-owned subsidiary,
Community Business Bank (the "Bank"), which reported net income for the
quarter ended June 30, 2017, of $952,000, or $0.37 per diluted share,
compared with net income in the second quarter of 2016 of $870,000, or
$0.34 per diluted share. YTD net income at June 30, 2017, was $1.7
million, or $0.68 per diluted share, compared to $1.5 million at June
30, 2016, or $0.60 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 second quarter 2016 QTD earnings to $0.51 per diluted
share and the June 30, 2016 YTD earnings to $0.77 per diluted share.

Net interest income increased to $3.1 million in the second quarter of
2017 compared with $2.8 million in the second quarter of the prior year.
This increase was due primarily to higher volume in loans and securities
as of June 30, 2017, than in the prior year. Total loans were $233.8
million and $194.6 million as of June 30, 2017 and 2016, respectively,
representing an increase of $39.2 million, or 20%. Investment totals
reflected an increase of $12.8 million, or 21%, ending the second
quarter of 2017 at $74.2 million as compared to $61.4 million as of June
30, 2016. The Bank's overall net interest margin dropped from 4.53% in
the second quarter of 2016 to 4.05% in the second quarter of 2017. While
our deposits continue to grow, the growth is not at the same rate as
that of the Bank's loans. This imbalance has led to a higher cost of
funds and, along with a lower earning asset yield (due to a flatter
yield curve and competition in our market), has resulted in a compressed
net interest margin.

The Bank realized an increase in deposits of $14.9 million, or 7%, as of
June 30, 2017, compared with June 30, 2016. This deposit increase was
primarily in DDA deposits, up $14.7 million, or 18%, Savings and money
market, up $9.3 million, or 17%, and Time deposits, up $8.3 million, or
17%, as of June 30, 2017, over the same time period in 2016. Wholesale
deposits were down $17.5 million, or 44%, as of June 30, 2017, as
compared to June 30, 2016, reflecting a decrease of $14.8 million in
brokered deposits and $2.7 million in CDARs deposits. Management made a
short-term strategic decision to utilize FHLB advances this quarter in
lieu of brokered deposits for its wholesale funding needs, primarily due
to strong dividend income from this source. FHLB advances increased to
$36,500,000 in June 30, 2017, from zero in June 30, 2016. The wholesale
funding strategy also slightly inflates the Bank's loan-to-deposit ratio
for the current quarter as well, as reported below.

Noninterest income was $274,000 for the quarter ended June 30, 2017, as
compared to $255,000 for the similar period in the prior year. The
increase of $20,000 was primarily due to stronger service charge income
received in the current year's second quarter. Noninterest expense for
the quarter ended June 30, 2017, was $1.8 million, up $307,000 from June
30, 2016. This was primarily due to an increase of approximately
$252,000 in salaries and employee benefits, as we filled open positions
(7.5 full-time equivalent positions) in the Bank in order to meet the
requirements resulting from our balance sheet growth. The Bank's QTD
efficiency ratio is 54% as of June 30, 2017, up from 48% as of June 30,
2016 (this reflects the overhead increase discussed).

Total assets as of June 30, 2017, were $314.2 million as compared with
$259.8 million as of June 30, 2016, an increase of 21%. The Bank's
loan-to-deposit ratio as of June 30, 2017, was 96.6%, up from 85.7% as
of June 30, 2016.

The Bank's capital ratios remain very strong. Total risk-based capital
ratio was 13.9% and the equity ratio was 10.5% as of June 30, 2017.
These ratios were 14.2% and 10.9% respectively, as of June 30, 2016. The
June 30, 2017, risk-based capital ratio reflects $9.6 million in excess
capital (i.e., the amount in reserve above the 10% "Well-Capitalized"
level as defined by the regulators).

The Bank's ALLL was 1.08% as of June 30, 2017, down from 1.21% as of
June 30, 2016. This decrease was due to new loan volume and not a result
of any loan losses. The Bank did not recognize a provision for loan
losses in the first half of 2017; a provision of $105,000 was recorded
in the second quarter of 2016. Despite the increased loan volume and the
reduction in the overall ratio, our calculations indicate that the Bank
continues to have an excess (unallocated reserves) in its ALLL as of
June 30, 2017. The overall dollars in reserve increased from $2.35
million as of June 30, 2016 to $2.52 million as of June 30, 2017, due
primarily to the renewed loan loss provisions of $420,000 recorded in
2016. The Bank's total NPAs (nonaccrual loans + OREO) are zero as of
June 30, 2017, consistent with the balance as of the same period in
2016. Nonaccrual loans were zero as of June 30, 2017, equal to the
balance as of the end of the second quarter of 2016. OREO balance was
zero as of June 30, 2017, consistent with the balance as of June 30,
2016. Meanwhile, delinquency totals at the end of the second quarter of
2017 were zero, also consistent with the balance as of the end of the
second quarter of 2016.

About Community Business Bancorp

Community Business Bancorp'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. 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 Bank's defined market, (4) the Bank's ability to
sustain its internal growth rate and to preserve its earning assets
quality, and (5) government regulations. Although the Bank believes the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that these expectations will prove
to have been correct.

Consolidated
   
Actual
Jun 2017
  Actual
Jun 2016
Assets
Cash and due from banks $ 2,486,478 $ 795,237
Fed funds sold 236,000 410,000
Investment Securities 74,151,729 61,361,018
Loans, net of unearned income 233,750,076 194,551,717
Less: Allowance for loan losses   (2,521,213 )     (2,345,695 )
Net Loans 231,228,863 192,206,022
Premises and equipment, net 411,202 158,835
Accrued interest receivable 1,256,163 1,052,388
Other assets   4,433,335       3,788,198  
Total Assets $ 314,203,770     $ 259,771,698  
 
Liabilities & Shareholders' Equity
Non-Interest Bearing Deposits 86,660,874 74,811,448
Interest bearing Deposits:
Core Deposits (including CDARs) 145,357,591 127,592,482
Brokered Deposits   10,000,000       24,755,000  
Total Deposits 242,018,465 227,158,930
Accrued expenses / other liabilities   39,905,388       3,919,443  
Total Liabilities 281,923,853 231,078,373
Total Shareholders Equity   32,279,917       28,693,325  
Total Liabilities & Shareholders' Equity $ 314,203,770     $ 259,771,698  
         
BV per share (net of OCI)   $ 12.86     $ 11.58  
 
YTD
Actual
Jun 2017
  YTD
Actual
Jun 2016
Net Interest Income $ 5,936,010 $ 5,362,501
Provision for loan losses 0 210,000
NonInterest Income 369,958 354,448
NonInterest Expense   3,579,220       3,045,178  
Income Before Taxes 2,726,748 2,461,771
Income taxes   985,000       959,800  
Net Income $ 1,741,748     $ 1,501,971  
Basic EPS $ 0.72 $ 0.61
Diluted EPS $ 0.68 $ 0.60

Diluted EPS-revised [1]*

N/A $ 0.77
         
Return on Average Assets (ROAA) 1.15 % 1.19 %
Return on Average Equity (ROAE) 11.46 % 9.88 %
Net Interest Margin     4.00 %     4.35 %

 

QTD
Actual
Jun 2017
  QTD
Actual
Jun 2016
Net Interest Income $ 3,053,221 $ 2,832,018
Provision for loan losses 0 105,000
NonInterest Income 274,357 254,708
NonInterest Expense   1,820,017       1,513,069  
Income Before Taxes 1,507,561 1,468,657
Income taxes   556,000       599,000  
Net Income $ 951,561     $ 869,657  
Basic EPS $ 0.39 $ 0.35
Diluted EPS $ 0.37 $ 0.34
Diluted EPS-revised [1]* N/A $ 0.51
         
Return on Average Assets (ROAA) 1.24 % 1.36 %
Return on Average Equity (ROAE) 12.16 % 11.60 %
Net Interest Margin     4.05 %     4.53 %

[1]: 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.

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