Market Overview

CBBC Bancorp Reports September 30, 2017 Quarter-End Results

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CBBC Bancorp (OTC:CBBC) announced today the results of its wholly
owned subsidiary, Community Business Bank (the "Bank"), reported
operating net income for the quarter ended September 30, 2017, of
$944,000, or $0.36 per diluted share, compared with operating net income
in the third quarter of 2016 of $787,000, or $0.31 per diluted share.
YTD net income at September 30, 2017, was $2.7 million, or $1.05 per
diluted share, compared to $2.3 million at September 30, 2016, or $0.91
per diluted share.

Net interest income increased to $3.2 million in the third quarter of
2017 compared with $2.8 million in the third quarter of the prior year.
This increase was due primarily to higher volume in loans and securities
as of September 30, 2017 than in the prior year. Total loans were $242.2
million and $205.9 million as of September 30, 2017, and 2016,
respectively, representing an increase of $36.3 million, or 18%.
Investment totals reflected an increase of $7.0 million, or 10%, ending
the third quarter of 2017 at $78.1 million as compared to $71.1 million
as of September 30, 2016. The Bank's overall net interest margin
declined slightly from 4.07% in the third quarter of 2016 to 4.02% in
the third quarter of 2017.

The Bank realized an increase in deposits of $24.9 million, or 10%, as
of September 30, 2017, compared with September 30, 2016. This deposit
increase was primarily in savings and money market, up $10.0 million, or
19% and time deposits, up $6.5 million, or 12%, while DDA deposits were
up $3.6 million, or 4%, as of September 30, 2017 over the same time
period in 2016. Wholesale deposits were up $4.8 million, or 12%, as of
September 30, 2017, as compared to September 30, 2016, reflecting an
increase of $5.6 million in brokered deposits and a decrease of $0.8
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 $21,850,000
in September 30, 2017, from $7.5 million at September 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 $223,000 for the quarter ended September 30,
2017, as compared to $281,000 for the similar period in the prior year.
The decrease of $58,000 was primarily due to lower gains on loan sales
received in the current year's third quarter as opposed to the same
quarter in 2016. Noninterest expense for the quarter ended September 30,
2017, was $1.9 million, up $188,000 from September 30, 2016. This was
primarily due to an increase of approximately $128,000 in data
processing, consulting, and advertising expense as the Bank added new
products and services. The Bank's QTD efficiency ratio is 54% as of
September 30, 2017, equal to the 54% as of September 30, 2016.

Total assets as of September 30, 2017, were $325.5 million as compared
with $284.4 million as of September 30, 2016, an increase of 14%. The
Bank's loan-to-deposit ratio as of September 30, 2017, was 90.5%, up
from 84.8% as of September 30, 2016.

The Bank's capital ratios remain very strong. Total risk-based capital
ratio was 14.0% and the equity ratio was 10.5% as of September 30, 2017.
These ratios were 13.6% and 10.6% respectively, as of September 30,
2016. The September 30, 2017, risk-based capital ratio reflects $8.4
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 1.04% as of September 30, 2017, down from 1.19% as
of September 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 third quarter of 2017; a provision of $105,000 was
recorded in the third 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 September 30, 2017. The overall dollars in reserve actually
increased from $2.45 million as of September 30, 2016, to $2.52 million
as of September 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 September 30, 2017, consistent
with the balance as of the same period in 2016. Nonaccrual loans were
zero as of September 30, 2017, equal to the balance as of the end of the
third quarter of 2016. OREO balance was zero as of September 30, 2017,
consistent with the balance as of September 30, 2016. Meanwhile,
delinquency totals at the end of the third quarter of 2017 were zero,
also consistent with the balance as of the end of the third 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 www.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.

FINANCIAL TABLES FOLLOW

 
Consolidated
       
Actual Actual
Sep 2017     Sep 2016
Assets
Cash and due from banks $ 936,883 $ 1,644,039
Fed funds sold 273,000 2,962,000
Investment securities 78,054,539 71,071,387
 
Loans, net of unearned income 242,205,137 205,863,167
Less: Allowance for loan losses   (2,521,213)       (2,450,695)
Net loans 239,683,924 203,412,472
Premises and equipment, net 407,607 143,272
Accrued interest receivable 1,615,429 1,327,736
Other assets   4,501,090       3,861,333
Total Assets $ 325,472,472     $ 284,422,239
 
Liabilities & Shareholders' Equity
Noninterest-bearing deposits 91,062,569 88,948,955
Interest-bearing deposits:
Core deposits (including CDARs) 145,902,922 128,745,776
Brokered deposits   30,683,000       25,033,963
Total deposits 267,648,491 242,728,694
Accrued expenses/other liabilities   25,339,487       12,079,123
Total Liabilities 292,987,978 254,807,817
Total Shareholders' Equity   32,484,494       29,614,422
Total Liabilities & Shareholders' Equity $ 325,472,472     $ 284,422,239
             
BV per share (net of OCI)     $ 12.93     $ 11.83
 
YTD YTD
Actual Actual
Sep 2017     Sep 2016
Net interest income $ 9,102,299 $ 8,113,760
Provision for loan losses 0 315,000
Noninterest income 592,892 635,419
Noninterest expense   5,441,565       4,719,832
Income before taxes 4,253,626 3,714,347
Income taxes   1,568,000       1,425,800
Net income $ 2,685,626     $ 2,288,547
Basic EPS $ 1.10 $ 0.93
Diluted EPS $ 1.05 $ 0.91
Diluted EPS-revised [1] N/A $ 1.08
             
Return on Average Assets (ROAA) 1.16% 1.17%
Return on Average Equity (ROAE) 11.47% 10.15%
Net interest margin       4.00%       4.25%

 

QTD QTD
Actual Actual
Sep 2017     Sep 2016
Net interest income $ 3,166,288 $ 2,751,259
Provision for loan losses 0 105,000
Noninterest income 222,935 280,971
Noninterest expense   1,862,345       1,674,654
Income before taxes 1,526,878 1,252,576
Income taxes   583,000       466,000
Net income $ 943,878     $ 786,576
Basic EPS $ 0.38 $ 0.32
Diluted EPS $ 0.36 $ 0.31
Diluted EPS-revised [1]* N/A N/A
             
Return on Average Assets (ROAA) 1.17% 1.14%
Return on Average Equity (ROAE) 11.48% 10.71%
Net interest margin       4.02%       4.07%
 

[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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