Community Bank, a leading Southern California business bank, independently owned and operated for over six decades, with assets of $2.5 billion, today reported net income for the first quarter of 2009 of $2.5 million as compared to $5.7 million for the same quarter last year. Return on average equity and return on average assets for the first quarter of 2009 were 4.38% and 0.42%, as compared to 10.11% and 1.11%, for the first quarter of 2008.
The Bank has, during this last year, experienced robust loan and deposit growth evidencing our increasing market penetration even in this turbulent economy. Total loans as of March 31, 2009 were $1.8 billion, representing an increase of approximately $226.0 million or 14.6% over March 31, 2008. Total deposits on March 31, 2009 were $1.9 billion, representing an increase of approximately $438.0 million or 30.0% over March 31, 2008.
While we have experienced marked increases in a number of key balance sheet components, the movement in the Treasury yield curve over the past year has eliminated the potential benefit one would expect to see on the Bank’s net interest income. In that context, net interest income for the first quarter of 2009 was $18.4 million as compared to $18.8 million for the same period last year.
The Bank’s reserve for loan losses as of March 31, 2009 was $25.5 million or 1.44% of total loans as compared to $21.6 million or 1.39% on March 31, 2008. The Bank’s provision for loan losses for the first quarter of 2009 was $3.0 million as compared to $1.0 million for the comparable quarter in 2008. The increase in the reserve for loan losses was cautionary and deemed prudent given the uncertain economic outlook.
Non-interest Income was $1.8 million for the quarter ended March 31, 2009 as compared to $3.2 million for the comparable quarter of last year. The decrease is primarily attributable to a $1.1 million gain on sale of securities recorded in the quarter ended March 31, 2008.
Non-interest Expense was $13.4 million for the first quarter as compared to $11.7 million for the first quarter of the preceding year. The increase is primarily attributable to a $783,000 increase in compensation and benefits driven by operational growth and the development of new product lines, coupled with a $666,000 increase in the Bank’s FDIC assessment.
The Bank’s capital ratios remain exceptionally strong with Tier 1 Leverage, Tier 1 Risk Based Capital and Total Risk Based Capital Ratios of 9.20%, 11.09%, and 12.35%, as of March 31, 2009. All three ratios exceed the regulatory requirement for a well-capitalized bank which are 5%, 6% and 10%, for Tier 1 Leverage, Tier 1 Risk Based Capital and Total Risk Based Capital Ratios, respectively.
David Malone, President and Chief Executive Officer, commented that, “Community Bank is very pleased with its financial performance. Total loans are up 14.6% over the comparable 2008 period and the Bank enjoyed good profitability. We expect a gradual return to sustained earnings growth as pressure abates on interest margins and the need to provide for possible credit losses.
“Given that the Bank is well capitalized, we see this as an opportunity to not only assist our customers through a most difficult economic period, but also grow our business with new clients whose current banking relationship cannot adequately provide for their needs.”
Community Bank is a regional business bank, founded in 1945, providing for the financial service requirements of a broad range of Southern California clients. The Bank, headquartered in Pasadena, provides Partnership Banking ® services through a high quality staff of professionals with offices in Anaheim, Burbank, Commerce, Corona, Fontana, Glendale, Ontario, Pasadena, Redlands, Santa Clarita, Santa Fe Springs, South Bay and Yucaipa. For more information, visit the Community Bank Website at www.cbank.com.
This press release contains certain forward-looking statements, including certain plans, expectations, goals and projections, which are subject to numerous assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature and extent of governmental actions and reforms; and rapidly changing technology and evolving banking industry standards.
COMMUNITY BANK | ||||||||||||||
Financial Highlights - Income Statement and Ratios (Unaudited) | ||||||||||||||
(Amounts in Thousands) | ||||||||||||||
For the quarters ended | ||||||||||||||
March 31, | ||||||||||||||
Dollar | Percent | |||||||||||||
INCOME STATEMENT | 2009 | 2008 | Change | Change | ||||||||||
Interest Income | $ | 31,034 | $ | 29,820 | $ | 1,214 | 4.1 | % | ||||||
Interest Expense | 12,642 | 11,060 | 1,582 | 14.3 | % | |||||||||
Net interest income | 18,392 | 18,760 | (368 | ) | (2.0 | %) | ||||||||
Provision for loan losses | 2,958 | 1,024 | 1,934 | 188.9 | % | |||||||||
Net interest income after provision | 15,434 | 17,736 | (2,302 | ) | (13.0 | %) | ||||||||
Non-interest income | 1,804 | 2,025 | (221 | ) | (10.9 | %) | ||||||||
Realized gain on security sales | - | 1,133 | (1,133 | ) | (100.0 | %) | ||||||||
Non-interest expense | 13,432 | 11,669 | 1,763 | 15.1 | % | |||||||||
Income before income tax | 3,806 | 9,225 | (5,419 | ) | (58.7 | %) | ||||||||
Income tax | 1,281 | 3,546 | (2,265 | ) | (63.9 | %) | ||||||||
Net income | $ | 2,525 | $ | 5,679 | $ | (3,154 | ) | (55.5 | %) | |||||
Financial Highlights - Balance Sheet (Unaudited) | ||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||
As of March 31, | Dollar | Percent | ||||||||||||||
BALANCE SHEET | 2009 | 2008 | Change | Change | ||||||||||||
Cash and cash equivalents | $ | 180,725 | $ | 54,869 | $ | 125,856 | 229.4 | % | ||||||||
Investments | 471,590 | 473,225 | (1,635 | ) | (0.3 | %) | ||||||||||
Loans | 1,776,962 | 1,550,960 | 226,002 | 14.6 | % | |||||||||||
Loan loss reserve | (25,541 | ) | (21,615 | ) | (3,926 | ) | 18.2 | % | ||||||||
Net loans | 1,751,421 | 1,529,345 | 222,076 | 14.5 | % | |||||||||||
Other Assets | 106,830 | 94,764 | 12,066 | 12.7 | % | |||||||||||
Total assets | $ | 2,510,566 | $ | 2,152,203 | $ | 358,363 | 16.7 | % | ||||||||
Earning assets | $ | 2,398,679 | $ | 2,029,685 | $ | 368,994 | 18.2 | % | ||||||||
Non-interest bearing deposits | $ | 440,645 | $ | 413,242 | $ | 27,403 | 6.6 | % | ||||||||
Interest bearing deposits | 1,458,625 | 1,048,032 | 410,593 | 39.2 | % | |||||||||||
Total deposits | 1,899,270 | 1,461,274 | 437,996 | 30.0 | % | |||||||||||
Funds purchased/borrowed | 359,557 | 447,557 | (88,000 | ) | (19.7 | %) | ||||||||||
Other liabilities | 15,513 | 15,581 | (68 | ) | (0.4 | %) | ||||||||||
Total liabilities | 2,274,340 | 1,924,412 | 349,928 | 18.2 | % | |||||||||||
Stockholders' equity | 236,226 | 227,791 | 8,435 | 3.7 | % | |||||||||||
Total liabilities & stockholders' equity | $ | 2,510,566 | $ | 2,152,203 | $ | 358,363 | 16.7 | % | ||||||||
Selected Financial Data and Highlights (Unaudited) | |||||||||||||||
(Amounts in Thousands) | |||||||||||||||
For the quarters ended | |||||||||||||||
March 31, | |||||||||||||||
2009 | 2008 | ||||||||||||||
Return on average equity | 4.38 | % | 10.11 | % | |||||||||||
Return on average assets | 0.42 | % | 1.11 | % | |||||||||||
Net interest margin | 3.18 | % | 3.87 | % | |||||||||||
Efficiency ratio | 66.51 | % | 56.14 | % | |||||||||||
Book value per common share | $ | 78.57 | $ | 75.15 | |||||||||||
Basic earnings per common share | $ | 0.83 | $ | 1.87 | |||||||||||
Diluted earnings per common share | $ | 0.81 | $ | 1.80 | |||||||||||
As of March 31, | Minimum Ratios for a | ||||||||||||||
CAPITAL RATIOS | 2009 | 2008 | Well-Captalized Bank | ||||||||||||
Tier 1 leverage capital | 9.20 | % | 10.94 | % | 5.00 | % | |||||||||
Tier 1 risk-based capital | 11.09 | % | 12.34 | % | 6.00 | % | |||||||||
Total risk-based capital | 12.35 | % | 13.52 | % | 10.00 | % | |||||||||
As of March 31, | Dollar | Percent | |||||||||||||
OTHER SELECTED DATA | 2009 | 2008 | Change | Change | |||||||||||
Other real estate owned | $ | 12,063 | $ | 200 | $ | 11,863 | 5931.5 | % | |||||||
Nonperforming loans | $ | 26,808 | $ | 16,339 | $ | 10,469 | 64.1 | % | |||||||
Reserve for loan losses to total loans | 1.44 | % | 1.39 | % | 3.6 | % | |||||||||
Reserve for loan losses to nonperforming loans | 95.27 | % | 132.29 | % | (28.0 | %) | |||||||||
Nonperforming loans to total loans | 1.51 | % | 1.05 | % | 43.8 | % | |||||||||
Nonperforming assets to total assets | 1.55 | % | 0.77 | % | 101.3 | % |
Contacts:
Community Bank
Nancy L. Karlson, CFO
626-568-2076