ONTARIO, Calif., April 2, 2012 /PRNewswire/ -- ICB Financial (OTC Bulletin Board: ICBN), today reported financial results for the three and twelve months ended December 31, 2011.
In spite of the economic conditions in the Inland Empire and an $800,000 third quarter charge related to the settlement with the FDIC, ICB Financial (the Company) is poised for a positive 2012. We have seen stabilization on the asset side of the balance sheet and our deposits remain strong. The Company's earnings for 2011 were negatively impacted by an $800,000 charge associated with the FDIC settlement and related legal fees and an additional $530,000 one-time extra valuation charge resulting in additional provisions in the third quarter. For the year ended December 31, 2011 ICB Financial recorded a net loss of $776,000. Assets at December 31, 2011 were $227.3 million, which was $40.7 million less than those at December 31, 2010 of $268.1 million.
On an annualized basis our net interest margins have increased slightly to 4.09% at December 31, 2011, as we have allowed higher cost interest-bearing deposits to roll off the books and brought on new loans at competitive market interest rates. We are pleased to say that our net interest margin remains among the top 25% of banks in our peer group, stated James S. Cooper, President and Chief Executive Officer of ICB Financial.
We are expanding our market presence with a new branch as well, states Mr. Cooper. We are pleased to announce that we have received regulatory approval and signed a lease for a full service branch in the Pasadena area. Improvements are scheduled to be completed early April 2012. We are presently operating a Loan & Deposit Production office in Pasadena, which will close with the formal opening of the new full service Pasadena Office.
Mr. Cooper states, credit quality continues to be at the forefront of our priorities. Our ratio of allowance for loan and lease losses (ALLL) to total loans net of available for sale loans was 2.94% for the twelve months ended of 2011 compared to 2.57% at December 31, 2010.
Lastly, our capital ratios continue to be more than 150% above the regulatory requirement to be considered well capitalized. At December 31, 2011, the Bank's total risk based capital ratio was 17.26% compared to the regulatory requirement of 10.0%.
2011 Fourth Quarter and Year-To-Date Highlights
- The Bank's total risk-based capital ratio was 17.26% at December 31, 2011, which is above the regulatory standard of 10.00% for well-capitalized financial institutions.
- Cash and cash equivalents and investments were $31.2 million at December 31, 2011 compared to $79.8 million at December 31, 2010. The reduction was primarily due to the roll off of deposits at higher than market rates of interest and investment into a program of available for sale loans to better utilize liquidity by investing in higher yielding interest earning assets.
- Total loans including loans held for sale increased $9.7 million, or 5.7%, to $178.2 million at December 31, 2011 from $168.5 million at December 31, 2010 primarily due to loan pay downs and an increase in our available for sale loan program.
- As of December 31, 2011, the ALLL was $4.2 million, or 2.94% of loans net of available for sale, compared to $4.3 million, or 2.57% of loans, at December 31, 2010.
- Non-performing loans at December 31, 2011 totaled $10.6 million compared to $9.2 million at December 31, 2010.
- Net interest margin has remained stable at 4.09% at December 31, 2011 compared to 4.08% at December 31, 2010.
- For the three and twelve months ended December 31, 2011 the Company recorded a net loss of $117,000, or ($0.02) per diluted share, and $776,000, or ($0.15) per diluted share, respectively, compared to net income of $136,000, or $0.03 per diluted share and net income of $886,000, or $0.17 per diluted share, respectively, for the three and twelve month's ended December 31, 2010.
Capital Adequacy
At December 31, 2011, the Company's stockholders' equity totaled $31.7 million compared to $31.7 million at December 31, 2010. There was no change in equity as the unrealized gain (loss) on our available for sale investment portfolio at December 31, 2011 was a $13,000 gain, offsetting the loss of $699,000 at December 31, 2010. At December 31, 2011, the Bank's total risk-based capital ratio, tier 1 capital ratio, and leverage ratios were 17.26%, 15.99%, and 11.64%, respectively, and were well above the regulatory requirements for well-capitalized financial institutions of 10.00%, 6.00%, and 5.00%, respectively.
Balance Sheet
Total assets decreased 15.2%, or $40.7 million, to $227.3 million at December 31, 2011, from $268.1 million at December 31, 2010. The decrease in total assets was primarily attributable to payoffs and loan amortization and to a lesser extent loan charge-offs. We also realized a significant reduction in the investment portfolio as many of our callable securities reached their call dates and were called. The Company used most of that excess liquidity to participate in an available for sale loan program. The total balance in those loans held for sale was $34.0 million at December 31, 2011. Cash and cash equivalents decreased $20.9 million to $16.8 million at December 31, 2011 from $37.7 million at December 31, 2010. Total loans, excluding loans held for sale, at December 31, 2011 were $144.1 million compared to $168.5 million at December 31, 2010, representing a decrease of $24.4 million, or 14.5%. This decrease in loans was primarily attributable to loan amortization and pay offs and, to a lesser extent, loan charge-offs.
Total liabilities decreased by $40.7 million, to $195.6 million at December 31, 2011, as compared to $236.4 million at December 31, 2010. This was primarily due to a $13.6 million decrease in other time deposits, which matured and rolled off the books at a higher than current market rate of interest. At December 31, 2011, total deposits were $193.3 million compared to $235.0 million at December 31, 2010, representing a decrease of 17.8% or $41.7 million. This decrease was primarily due to the maturity and roll off of some large time deposits where rates were well above current market. There was a decrease in non-interest bearing demand deposits, and interest bearing deposits of $6.2 million and $18.6 million, respectively. Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits, were $144.9 million and $169.7 million at December 31, 2011 and December 31, 2010, respectively, representing a decrease of $24.8 million, or 14.6%.
Credit Quality
Allowance and Provision for Loan and Lease Losses
The ALLL was $4.2 million, or 2.95% of our total loan portfolio, at December 31, 2011 compared to $4.3 million or 2.57% at December 31, 2010. The provisions to the ALLL were $50,000 and $1,440,000 for the three and twelve months ended December 31, 2011, compared to $185,000 and $585,000, respectively, for the same periods last year. During the three and twelve months ended December 31, 2011, we realized net charge-offs of $345,000 and $1,665,000, respectively, compared to $239,000 and $571,000 during the same periods last year. Management believes that the ALLL as of December 31, 2011 was adequate to absorb known and inherent risks in the loan portfolio.
Non-Performing Assets
Non-performing assets, which include non-performing loans and real estate acquired through foreclosure, totaled $11.5 million at December 31, 2011 compared to $10.4 million at December 31, 2010. The ratio of non-performing assets to total assets at December 31, 2011 was 5.06% compared to 3.87% at December 31, 2010. This increase is primarily due to the reduction in total assets.
Non-performing loans totaled $10.6 million and $9.2 million at December 31, 2011 and December 31, 2010, respectively. At December 31, 2011, non-accrual loans consisted of commercial loans totaling $465,397, commercial real estate mortgage loans totaling $9,292,393, residential junior mortgage loans totaling $62,678 and residential senior mortgage loans totaling $690,339. As a percentage of our total loan portfolio, the amount of non-performing loans was 6.19% and 5.74% at December 31, 2011 and December 31, 2010, respectively.
Net Interest Income and Margin
For the three and twelve months ended December 31, 2011, average interest-earning assets were $218.5 million and $229.5 million, respectively, generating net interest income of $2.3 million and $8.0 million, respectively. For the three and twelve months ended December 31, 2010, average interest-earning assets were $255.0 million and $255.3 million, generating net interest income of $2.2 million and $9.9 million, respectively.
The Company's net interest margin for the three and twelve months ended December 31, 2011, respectively, was 4.19% and 4.09% compared to 3.77% and 4.08% for the same periods last year, representing an increase of 42 basis points and 1 basis point, respectively. The increase in the three months was mainly due to the investment of idle cash in loans held for sale, which yielded a much higher return than in previous periods.
Non-Interest Income
Non-interest income was $471,000 for the quarter ended December 31, 2011 compared to $398,000 for the quarter ended December 31, 2010. For the twelve months ended December 31, 2011, non-interest income was $1.8 million compared to $1.8 million for the same period last year.
Non-Interest Expense
Non-interest expense was $2.9 million for the three months ended December 31, 2011 compared to $2.1 million for the three months ended December 31, 2010. Non-interest expense was $10.7 million for the twelve months ended December 31, 2011 compared to $9.6 million for the twelve months ended December 31, 2010, representing an increase of approximately $1.1 million or 11.3%. This increase was due primarily to the FDIC settlement for $500,000 and the associated legal cost of almost $300,000.
Income Tax Provision
Income tax benefit was $141,000 for the three months ended December 31, 2011 compared to a provision of $318,000 for the three months ended December 31, 2010. Income tax benefit was $491,000 for the twelve months ended December 31, 2011 compared to a provision of $850,000 for the twelve months ended December 31, 2010, representing a decrease of $1.3 million.
Net Income
For the three months ended December 31, 2011, the Company recorded a net loss of $117,000 or ($0.02) per diluted share compared to a net income of $136,000, or $0.03 per diluted share for the same period of 2010.
For the twelve months ended December 31, 2011 the Company recorded a net loss of $776,000 or ($.15) per diluted share compared to net income of $886,000, or $0.17 per diluted share for the same period of 2010. During the twelve months ended December 31, 2011, net income was negatively impacted by an additional provision for loan losses of $530,000 as well as a $500,000 charge for the FDIC settlement and $300,000 in legal fees associated with that settlement.
Safe Harbor
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a further decline in economic conditions, (3) increased competition among financial service providers, and (4) government regulation. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason.
SUMMARY FINANCIAL INFORMATION
The following tables present relevant financial data from the Company's recent performance (dollars in thousands, except per share data):
ICB FINANCIAL | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands, except per share data) | |||||||
December 31, | December 31, | ||||||
2011 | 2010 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and equivalents | $ 14,793 | $ 35,668 | |||||
Time deposits in other financial institutions | 1,993 | 1,989 | |||||
Investment securities - available-for-sale, at fair value | 14,395 | 42,161 | |||||
Loans held-for-sale, at the lower of cost or market | 34,073 | - | |||||
Loans, net of allowance of $4,240 and $4,338, respectively | 139,892 | 164,197 | |||||
Other real estate owned, net of allowance of $0 and $143, respectively | 1,002 | 1,183 | |||||
Premises and equipment, net | 9,215 | 9,521 | |||||
Accrued interest | 106 | 635 | |||||
Federal Home Loan Bank and Federal Reserve Bank Stock | 2,161 | 2,293 | |||||
SBA servicing asset | 34 | 31 | |||||
Income tax receivable | 1,440 | 1,982 | |||||
CDI asset, net | 348 | 867 | |||||
Other assets | 7,853 | 7,526 | |||||
Total assets | $ 227,305 | $ 268,053 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Deposits | |||||||
Demand | $ 58,770 | $ 65,015 | |||||
Money Market, NOW and savings | 86,130 | 104,706 | |||||
Time deposits greater than $100 | 33,151 | 36,470 | |||||
Other time deposits | 15,207 | 28,770 | |||||
Total deposits | 193,258 | 234,961 | |||||
Other borrowings | 1,800 | - | |||||
Accrued interest | 166 | 275 | |||||
Other liabilities | 418 | 1,118 | |||||
Total liabilities | 195,642 | 236,354 | |||||
Stockholders' equity: | |||||||
Preferred stock, 10,000,000 shares authorized; $0.01 par value | |||||||
per share; $1,000 per share liquidation preference; 6,300 | |||||||
shares issued and outstanding at December 31, 2011, and | |||||||
2010, respectively | 6,300 | 6,300 | |||||
Common Stock, 10,000,000 shares authorized; $1 par value; | |||||||
5,145,153 and 5,122,647 shares issued and outstanding | |||||||
December 31, 2011 and 2010, respectively | 5,145 | 5,123 | |||||
Paid-in capital | 21,680 | 21,644 | |||||
Accumulated deficit | (1,475) | (699) | |||||
Accumulated other comprehensive (loss) income | 13 | (669) | |||||
Total stockholders' equity | 31,663 | 31,699 | |||||
Total liabilities and stockholders' equity | $ 227,305 | $ 268,053 | |||||
ICB FINANCIAL | ||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||
December 31, | December 31, | |||||||||
2011 | 2010 | 2011 | 2010 | |||||||
(Unaudited) | (Unaudited) | |||||||||
Interest income: | ||||||||||
Interest and fees on loans | $ 2,468 | $ 2,678 | $ 9,984 | $ 12,137 | ||||||
Interest on investment securities | 119 | 259 | 804 | 764 | ||||||
Federal funds sold | 12 | 13 | 77 | 38 | ||||||
Interest on deposits with financial institutions | 4 | 12 | 76 | 177 | ||||||
Total interest income | 2,603 | 2,962 | 10,941 | 13,116 | ||||||
Interest expense: | ||||||||||
NOW and money market deposits | 121 | 183 | 550 | 818 | ||||||
Savings | 1 | 1 | 4 | 4 | ||||||
Time deposits greater than $100 | 29 | 20 | 297 | 522 | ||||||
Other time deposits | 146 | 322 | 609 | 1,251 | ||||||
Other interest expense | - | 3 | - | 7 | ||||||
Total interest expense | 297 | 529 | 1,460 | 2,602 | ||||||
Net interest income | 2,306 | 2,433 | 9,481 | 10,514 | ||||||
Provision for credit losses | 50 | 185 | 1,440 | 585 | ||||||
Net interest income after provision for credit losses | 2,256 | 2,248 | 8,041 | 9,929 | ||||||
Non-interest income: | ||||||||||
Servicing fees | 295 | 305 | 922 | 1,094 | ||||||
Gain on sale of AFS securities | - | 37 | 19 | 60 | ||||||
Gain on sale of SBA | 121 | - | 270 | - | ||||||
Other non-interest income | 55 | 56 | 600 | 684 | ||||||
Total non-interest income | 471 | 398 | 1,811 | 1,838 | ||||||
Non-interest expense: | ||||||||||
Salaries and employee benefits | 1,257 | 1,328 | 4,907 | 5,290 | ||||||
Occupancy | 147 | 104 | 523 | 475 | ||||||
Valuation allowance for other real estate owned | - | - | - | 770 | ||||||
Furniture and equipment | 59 | 71 | 261 | 294 | ||||||
Amortization of CDI | 130 | 30 | 519 | 122 | ||||||
Other | 1,294 | 562 | 4,521 | 2,693 | ||||||
Total non-interest expense | 2,887 | 2,095 | 10,731 | 9,644 | ||||||
(Loss) earnings before income taxes | (160) | 551 | (879) | 2,123 | ||||||
Income taxes | (141) | 318 | (491) | 850 | ||||||
Net (loss) earnings | (19) | 233 | (388) | 1,273 | ||||||
Preferred stock dividend | 98 | 97 | 388 | 387 | ||||||
Net (loss) earnings available to common stockholders | $ (117) | $ 136 | $ (776) | $ 886 | ||||||
Basic earnings per share | $ (0.02) | $ 0.03 | $ (0.15) | $ 0.17 | ||||||
Weighted average shares for basic earnings calculation | 5,128,404 | 5,122,647 | 5,128,404 | 5,122,647 | ||||||
Diluted earnings per share | $ (0.02) | $ 0.03 | $ (0.15) | $ 0.17 | ||||||
Weighted average shares for diluted earnings calculation | 5,128,404 | 5,122,647 | 5,128,404 | 5,122,647 | ||||||
ICB FINANCIAL | |||||||||
SELECTED RATIOS AND OTHER DATA | |||||||||
(Dollars in thousands, except per share data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December 31, | December 31, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Performance Ratios | |||||||||
Return on average assets (1) | -0.20% | 0.20% | -0.31% | 0.32% | |||||
Return on average stockholders' equity (1) | -1.47% | 1.67% | -2.50% | 2.79% | |||||
Return on average tangible common stockholders' equity (1) | -1.86% | 2.14% | -3.21% | 3.61% | |||||
Efficiency ratio (2) | 103.98% | 74.02% | 95.04% | 78.07% | |||||
Yields and Costs | |||||||||
Net interest margin | 4.19% | 3.77% | 4.09% | 4.08% | |||||
Average yield on interest-earning assets | 4.77% | 4.65% | 4.77% | 5.14% | |||||
Average cost of interest-bearing liabilities | 0.58% | 0.87% | 0.68% | 1.06% | |||||
Average yield on securities | 3.11% | 2.68% | 2.80% | 2.37% | |||||
Average cost of C.D.'s | 1.40% | 2.03% | 1.64% | 2.46% | |||||
Asset Quality | |||||||||
Net charge-offs | $ 345 | $ 239 | $ 1,665 | $ 571 | |||||
Net charge-offs to average loans receivable, net (1) | 0.83% | 0.52% | 1.04% | 0.30% | |||||
(1)Computed on an annualized basis. | |||||||||
(2)Total general and administrative expense divided by net interest income plus non-interest income. | |||||||||
As of | As of | ||||||||
December 31, | December 31, | ||||||||
2011 | 2010 | ||||||||
Asset Quality | |||||||||
Non-accrual loans | $ 10,619 | $ 9,179 | |||||||
Non-accrual loans to total loans | 5.96% | 5.45% | |||||||
Non-performing assets to total assets (1) | 5.11% | 3.87% | |||||||
Allowance for loan losses | $ 4,240 | $ 4,338 | |||||||
Allowance for loan losses to non-accrual loans | 39.93% | 47.26% | |||||||
Allowance for loan losses to gross loans (3) | 2.94% | 2.57% | |||||||
Classified assets to Tier 1 Cap + ALLL + OBS | 62.68% | 59.73% | |||||||
Capital | |||||||||
Stockholders' equity to assets ratio | 13.93% | 11.83% | |||||||
Tier 1 capital ratio * | 11.64% | 10.06% | |||||||
Tier 1 risk based capital * | 15.99% | 14.87% | |||||||
Total risk based capital * | 17.26% | 16.13% | |||||||
Shares outstanding at end of period | 5,145,153 | 5,122,647 | |||||||
Tangible book value per share outstanding (2) | $ 4.86 | $ 4.79 | |||||||
(1)Non-performing assets consist of 90 days delinquent, non-accrual loans and real estate acquired through foreclosure | |||||||||
(2)Stated book value minus CDI and Preferred A and B shares (TARP) | |||||||||
(3)Gross loans not including loan available for sale | |||||||||
*Inland Community Bank | |||||||||
SOURCE ICB Financial
