ONTARIO, Calif., Feb. 13 /PRNewswire-FirstCall/ -- ICB Financial (OTC Bulletin Board: ICBN) Financial Performance highlights for the year and quarter ended December 31, 2008 include:
-- Net income of $313,000 for the year ended December 31, 2008; this represents a decrease of 67% when compared to the $963,000 for the year ended December 31, 2007. -- Provision for loan and lease losses was $2,700M for 2008 versus $480M for 2007. -- Total assets increased 1.4%; $253.1 million as of December 31, 2008 compared to $249.5 million a year earlier, an increase of $3.5 million. -- Gross interest revenue of $14.6 million for 2008 compared to $15.4 million for 2007, a decrease of 4.9%. -- Total loans including Available for Sale at December 31, 2008 were up $18.9 million over December 31, 2007, representing a 10% increase over the previous year. -- Total deposits at December 31, 2008 were down 1.7% or $3.6 million compared to December 31, 2007. -- Earnings per fully diluted common share for 2008 were $0.06 compared to $0.16 for the same period in 2007, a decrease of 63%. -- Return on average assets for 2008 was 0.13% compared to 0.43% in 2007, a decrease of 52.7% for the year. -- Efficiency ratio was down to 72.9% in 2008 from 84.0% in 2007, an improvement of 13.2%. -- Non-performing assets increased to 2.08% of total assets at December 31, 2008 compared to 1.22% at December 31, 2007. -- Important Bank Ratios: -- Total Risk-Based Capital - 13.74%; minimum for well capitalized under regulatory guidelines is 10.00%. -- Tier 1 Leverage Capital - 10.79%; minimum for well capitalized under regulatory guideline is 5.0% -- ALLL as a percent of HTM loans - 1.40% -- Net charge-offs for 2008 as a percent of 2008 average total loans - 1.0% -- Total OREO, Delinquent and Non-accrual loans to total risk based capital - 26.4%, which is also equivalent to 3.8% of total loans at 12-31-08. -- Average Net Interest Margin for 2008 was a healthy 4.60% Letter to Our Customers and Shareholders Financial Results for the year ended December 31, 2008
Headlines can be misleading and in a time of financial crisis, that can make matters worse. Pick up a newspaper, or listen to the news on TV or radio and what you hear are reports of a "banking" crisis and severe market turmoil. There is no doubt now that we are in a recession and a few very knowledgeable financial "experts" are warning that the economy may be nearing a period of depression.
And these predictions and pronouncements of gloom and doom for the financial services industry have be punctuated by the closing of some of our competitors here in the Inland Empire, who in recent history were some of the finest community financial institutions in the Country.
Due to our record of staying the course of conservative banking principles, ICB Financial and its subsidiary, Inland Community Bank, N.A. - are safe and sound. Every account is insured by the FDIC, currently up to $250,000 with additional protection for joint accounts. And every dollar in a non-interest bearing transaction account is fully insured by the FDIC with no limit to the insurance coverage.
But most importantly, Inland Community Bank, N.A. is operated by banking professionals who know how to run the Bank so that the insurance coverage afforded by the FDIC should never be needed.
ICB remains strong and "well capitalized" which mean that the Bank holds more capital than the banking regulations require. In addition ICB has received the preliminary approval of the US Treasury Department to participate in its TARP Capital Program which would add an additional capital cushion to the Bank to be used in the event that economic conditions continue to deteriorate in our market. Participation in this program has been limited to banks considered to be strong, viable banking entities with a future of continued community service to their respective markets. The Board of Directors of the Company will decide shortly whether to participate in this program.
Maintaining asset quality remains a priority for Management and as a result of the continuous monitoring of problem assets the Bank has added $2.7 million to its Allowance for Loan and Lease Losses during 2008. Net losses charged to the allowance were $1.97 million during the year and we will continue to make further additions to this reserve as needed until the economy reverses its downward slide. We all know that our financial system is being tested, but let us also remember that the system has and will show resiliency.
Recent market events have further highlighted the need for sound liquidity risk management practices and ICB has improved it liquidity measures by supplementing traditional static balance sheet ratios with forward-looking dynamic measures. The Bank performs stress testing using stress scenarios which are incorporated into a comprehensive Contingent Funding Plan. This planning has resulted in a minimal use of "wholesale" funding and at year end less than 17% of total funding was provided by wholesale sources, which consisted of brokered deposits and FHLB advances.
The Bank's operating departments have re-emphasized the basic fundamentals of banking and by granular analysis of existing operations have created new operating efficiencies that have contributed to increases in the income generated from operations. Extraordinary efforts implemented by Senior Management have also helped to slash non-interest expenses which have been reduced by more than 16% for 2008. These reductions in overhead expenses will be critical to the increased profitability of the Bank in the years ahead and Management will be diligent in pursing additional expense reductions in 2009.
Finally, the tangible book value (TBV) per share increased to $5.53 per share on December 31, 2008, an increase of 2% from the December 31, 2007 value of $5.42 per share. As we noted in previous earnings releases, this increase was due in part to a successful stock repurchase program early in 2008 which reduced the number of shares outstanding by 356,450 shares or 6.5%.
We remain concerned over the lack of trust which seems to be covering the entire financial services industry. This uncertainty has resulted in depressed share prices throughout the entire industry and we would like to assure our shareholders that in the case of ICB Financial, these depressed values are not reflective of the true condition of the Company.
The ICB team of banking professionals is working hard to help assure that an investment in ICB Financial will be rewarding for years to come. We continue to emphasize the basic fundamentals of banking and managing the risks associated with business banking. Every member of our team has worked hard to ensure that our customers receive the best service possible and to assure each customer that any deposit made in the Inland Community Bank, regardless of size, is safe and sound.
Our primary objective will continue to be to maintain a strong Company supported by a great team of employees. As mentioned previously, we will soon make the decision regarding acceptance of additional capital from the US Treasury. Whatever the final decision, please be assured that it will be made with the best interest of our shareholders and customers in mind and if this capital is accepted it will be used to help businesses in our community.
Thank you once again for your support during this difficult time and while we do not know when this market turbulence will subside, we will remain focused on meeting the needs of our business community.
James S. Cooper President and Chief Executive Officer Consolidated Balance Sheets Unaudited - Internally Prepared (in thousands) Dec 2008 to As of As of Dec 2007 As of Dec 31, Dec 31, Percentage Dec 31, 2008 2007 Change 2006 -------- -------- ------ -------- Assets Total cash and due from banks Noninterest-bearing balances, coin and currency $6,111 $9,355 -34.7% $11,263 Interest bearing balances 9,979 13,103 -23.8% 4,052 Held to maturity securities - held to maturity 3,001 8,583 -65.0% 13,241 Available for sale securities 4,099 848 383.4% 1,231 Federal funds sold - 7,885 -100.0% 10,700 Loans held for sale (at the lower of cost or market) 9,520 - 0.0% - Loans, net of unearned income 198,125 188,690 5.0% 141,875 Less: Allowance for loan losses (2,627) (1,974) 33.1% (1,622) ------ ------ ---- ------ Net loans 205,018 186,716 9.8% 140,253 ------- ------- --- ------- Premises and fixed assets - net 10,181 10,281 -1.0% 10,416 Other real estate owned and investments in OREO 1,688 600 181.3% - Intangible assets Goodwill 2,280 2,280 0.0% 2,280 Core deposit intangibles 1,094 1,396 -21.6% 1,991 Other assets 9,679 8,508 13.8% 6,670 ----- ----- ---- ----- Total Assets $253,130 $249,555 1.4% $202,097 ======== ======== === ======== Liabilities and Capital Deposits Noninterest-bearing $57,277 $68,177 -16.0% $69,314 Interest bearing 154,576 147,315 4.9% 100,390 ------- ------- --- ------- Total deposits 211,853 215,492 -1.7% 169,704 ------- ------- ---- ------- Advances from FHLB San Francisco 9,000 - 100.0% - Other liabilities 1,504 1,652 -9.0% 1,083 ----- ----- ---- ----- Total liabilities 222,357 217,144 2.4% 170,787 ------- ------- --- ------- Equity capital Common stock 5,108 5,459 -6.4% 5,417 Surplus 21,611 23,246 -7.0% 23,150 Retained earnings 3,998 3,714 7.6% 2,751 Accumulated other comprehensive income (loss) 56 (8) -800.0% (8) -- -- ------ -- Total Equity Capital 30,773 32,411 -5.1% 31,310 ------ ------ ---- ------ Total Liabilities and Equity Capital $253,130 $249,555 1.4% $202,097 ======== ======== === ======== Consolidated Statements of Income Unaudited - Internally Prepared (in thousands) 12 Months 12 Months ended ended 4th 4th Dec 31, Dec 31, Percentage Quarter Quarter Percentage 2008 2007 Change 2008 2007 Change -------- -------- ------ ---- ---- ------ Interest Income on: Total interest and fees on loans $13,911 $14,069 -1.1% $3,427 $3,778 -9.3% Interest on investment securities 376 549 -31.5% 89 18 394.4% Interest on federal funds sold 108 617 -82.5% 10 166 -94.0% Other interest income 284 207 37.2% 65 193 -66.3% --- --- ---- -- --- ----- Total interest income 14,679 15,442 -4.9% 3,591 4,155 -13.6% ------ ------ ---- ----- ----- ----- Interest Expense: Interest paid on deposits 4,391 4,661 -5.8% 1,055 1,410 -25.2% ----- ----- ---- ----- ----- ----- Total interest expense 4,391 4,661 -5.8% 1,055 1,410 -25.2% ----- ----- ---- ----- ----- ----- Net interest income $10,288 $10,781 -4.6% $2,536 $2,745 -7.6% Provision for Possible Loan Losses 2,700 480 462.5% 1,055 85 1141.2% ----- --- ----- ----- -- ------ Net Interest Income after ALLL Provision 7,588 10,301 -26.3% 1,481 2,660 -44.3% Total non- interest income 1,530 1,487 2.9% 395 457 -13.6% Total non- interest expense 8,616 10,302 -16.4% 2,129 2,326 -8.5% ----- ------ ----- ----- ----- ---- Income before income taxes 502 1,486 -66.2% (253) 791 -132.0% Applicable income taxes 189 523 -63.9% (91) 291 -131.3% --- --- ----- --- --- ------ Net income $313 $963 -67.5% $(162) $500 -132.4% ==== ==== ===== ===== ==== ====== SELECTED FINANCIAL RATIOS AND PER SHARE DATA Per Common Share Data Earnings per share - basic $0.06 $0.18 -65.3% $(0.03) $0.09 -134.6% Earnings per share - diluted $0.06 $0.16 -63.0% $(0.03) $0.09 -134.0% Actual shares outstanding 5,107,731 5,458,796 -6.4% 5,107,731 5,458,796 -6.4% Weighted Average Shares Outstanding 5,195,557 5,430,772 -4.3% 5,195,557 5,458,796 -4.8% Shares outstanding - (fully diluted) 5,346,572 5,619,196 -4.9% 5,346,572 5,619,196 -4.9% Financial Ratios Return on Average Assets 0.13% 0.43% -70.4% -0.5% 0.80% -165.5% Return on Average Equity (Note 1) 0.99% 3.02% -67.2% -0.5% 6.21% -108.5% Yield on Earning Assets 6.73% 7.90% -14.8% 6.46% 7.58% -14.8% Efficiency ratio 72.9% 84.0% -13.2% 72.6% 72.6% 0.0% Loan to deposit ratio 98.0% 87.6% 11.9% 98.0% 87.6% 11.9% ALLL as a percent of Total Loans (Includes OBS reserve) 1.38% 1.10% 25.5% 1.38% 1.06% 29.8% Nonperforming assets - in thousands $5,264 $3,050 72.6% $5,264 $3,050 72.6% Nonperforming loans as a percent of total assets 2.08% 1.22% 70.2% 2.08% 1.22% 70.5% Book value per share $6.02 $5.94 1.5% $6.02 $5.94 1.5% Tangible book value per share $5.53 $5.42 2.0% $5.53 $5.42 2.0%
For further information, please contact Thomas O. Griel of ICB Financial, +1-909-481-8706
