ONTARIO, Calif., July 16 /PRNewswire-FirstCall/ -- ICB Financial (OTC Bulletin Board: ICBN) Financial Performance highlights for the quarter ended June 30, 2009 include:
-- Second Quarter 2009 Net Income increased 147% to $256,000 from a first quarter loss of ($538,000). -- Total assets increased 8.6%; $274.8 million as of June 30, 2009 compared to $252.9 million a year earlier, an increase of $21.9 million. -- Total loans including Available for Sale increased 3.8%; $217.0 million as of June 30, 2009 compared to $208.9 million a year earlier, an increase of $8.1 million. -- Total deposits at June 30, 2009 were up 17.9%, or $35.7 million, to $236.0 million compared to $200.2 million at June 30, 2008. -- Efficiency ratio at June 30, 2009 increased to 86.0% from 73.3% at June 30, 2008. As in the first quarter of 2009, this increase was due in large part to an OREO impairment loss of $418M in 2009 and an increase in the FDIC insurance expense from $75M in the first half of 2008 to $345M in the same period in 2009. -- Non-performing assets increased to 3.6% of total assets at June 30, 2009, from 2.6% at June 30, 2008, an increase of $3.2 million. -- Gross interest revenue for the first half 2009 was $6.9 million compared to $7.5 million for 2008, a decrease of 8.6%; this drop in gross interest income was mainly attributable to a 175 basis point drop in the prime interest rate from 5.0% in 2008 to 3.25% in 2009. -- Provision for loan and lease losses was $1.1 million for the first half of 2009 versus $.480 million the same period in 2008. -- Net loss for the first half of 2009 was ($282M); this was a decrease of 140.5% when compared to the net income of $696M for the first half of 2008. This decrease in income was due primarily to the increase in the provision for loan losses of $620M. -- Net loss per common share for the first half of 2009 was ($0.06) compared to net income of $0.13 for the first half of 2008, a decrease of 142%. -- Other important Bank Ratios: -- Total Risk-Based Capital - 15.1%; minimum for well capitalized banks under regulatory guidelines is 10.00%. -- Tier 1 Leverage Capital - 10.4%; minimum for well capitalized banks under regulatory guideline is 5.0%. -- ALLL as a percent of HTM loans - 1.65% -- Total OREO, Delinquent and Non-accrual loans to total risk based capital - 38.1%, which is also equivalent to 5.7% of total loans at June 30, 2009. -- Average Net Interest Margin for the first half of 2009 was a healthy 4.12% Letter to Our Customers and Shareholders Financial Results for the first six months ended June 30, 2009
As we look forward to the end of 2009 and to the new year that will follow, we have begun our planning to be prepared if the economy continues to experience turbulence into next year. Although we are generally optimistic about the business climate in California and the Inland Empire, in the best interest of the Company we must be realistic and plan for a less than robust recovery for the economy in the coming year until current trends and conditions begin moderating.
The burden of increasing regulation on banks in these troubled times places a cloud over the prospect of a vibrant recovery. The FDIC special assessment which burdened the Bank's earnings in the first half of the year may be repeated in the last half of 2009 combined with stricter standards on write downs, deposit rates and risk management policies.
Given the limitations, both present and future, that are influencing the operations of the Company, we are pleased that the second quarter of 2009 has shown improvement in performance. Although year-to-date earnings remain at a loss of ($282M), operating earnings for the 2nd quarter of the year produced net income of $256M, an improvement of 147.6% over the first quarter of the year.
And, in the last twelve months it is important to note that Inland Community Bank and ICB Financial have provided over $3.7 million in loan loss provisioning which has positioned our ALLL balance at 1.65% of total outstanding loans at June 30.
Identification of problem assets has been a high priority for the Bank and although non-performing assets have increased 47% over the last year, we are confident that the steep decline in asset quality is beginning to slow and that for the remainder of 2009 we will see a leveling of the total non-performing assets if not a significant decline from the current $9.95 million level.
Management of our net interest margin has been essential to our present and future success. For the last year the Bank's net interest margin has averaged 4.29%, which is well above our current peer group, and we continue to be particularly mindful of our rate structures for both deposits and loans.
We are also continuing to focus our efforts on reducing non-interest expenses and have recently completed our third round of staff reductions which will produce additional annualized savings in excess of $400M. These staff reductions were extremely difficult, but were necessary for the long term success of the Bank. We are confident that we are staffed at a level which will allow us to still provide superior service to our customers while improving the efficiency of our operations.
Capital levels continue to be a major priority for bank regulators and with the capital received early in the year through the US Treasury's TARP program both Inland Community Bank and ICB Financial are well capitalized and able to expand if and when opportunities become available.
Our primary objective continues to be to maintain a strong financially sound institution, staffed by a great team of committed employees providing exceptional service to our customers and thereby providing increased value to our shareholders.
We thank our customers and shareholders again for their continued support. James S. Cooper President and Chief Executive Officer Consolidated Balance Sheets Unaudited - Internally Prepared (in thousands) June 08 December 08 to to June 09 June 09 As of As of Percentage As of Percentage 6/30/2009 6/30/2008 Change 12/31/08 Change --------- --------- ------ -------- ------ Assets Total cash and due from banks Noninterest- bearing balances, coin and currency $10,189 $10,886 -6.4% $6,111 66.7% Interest bearing balances 13,208 594 2123.6% 9,979 32.4% Held to maturity securities 2,860 6,163 -53.6% 3,001 -4.7% Available for sale securities 9,111 2,302 295.8% 4,099 122.3% Federal funds sold - 2,905 -100.0% - 0.0% Loans held for sale (lower of cost or market) 29,643 - 0.0% 9,520 211.4% Loans held for investment Loans, net of unearned income 187,391 208,924 -10.3% 198,125 -5.4% Less: Allowance for loan losses (2,947) (2,331) 26.4% (2,727) 8.1% ------ ------ ---- ------ --- Net loans 184,444 206,593 -10.7% 195,398 -5.6% ------- ------- ----- ------- ---- Premises and fixed assets - net 10,012 10,191 -1.8% 10,181 -1.7% Other real estate owned 1,281 622 100.0% 1,688 -24.1% Intangible assets Goodwill 2,280 2,280 0.0% 2,280 0.0% Core deposit intangibles 1,042 1,245 -16.3% 1,094 -4.8% Other assets 10,736 9,147 17.4% 9,584 12.0% ------ ----- ---- ----- ---- Total Assets $274,806 $252,928 8.6% $252,935 8.6% ======== ======== === ======== === Liabilities and Capital Deposits Noninterest- bearing $62,287 $65,158 -4.4% $57,277 8.7% Interest bearing 173,712 135,080 28.6% 154,576 12.4% ------- ------- ---- ------- ---- Total deposits 235,999 200,238 17.9% 211,853 11.4% ------- ------- ---- ------- ---- Accrued interest payable 623 451 38.1% 581 7.2% Borrowings from the FHLB - 20,500 100.0% 9,000 -100.0% Other liabilities 1,449 677 114.0% 732 98.0% ----- --- ----- --- ---- Total liabilities $238,071 $221,866 7.3% $222,166 7.2% -------- -------- --- -------- --- Equity capital Preferred Stock - 6,300 shares outstanding at 6/30/09 6,300 - 100.0% - 100.0% Common stock - 5,107,731 outstanding at 6/30/09 5,108 5,106 0.0% 5,108 0.0% Surplus 21,611 21,608 0.0% 21,611 0.0% Retained earnings 3,713 4,381 -15.2% 3,994 -7.0% Accumulated other comprehensive income (loss) 3 (33) 100.0% 56 -94.6% --- --- ----- -- ----- Total Equity Capital 36,735 31,062 18.3% 30,769 19.4% ------ ------ ---- ------ ---- Total Liabilities and Equity Capital $274,806 $252,928 8.6% $252,935 8.6% ======== ======== === ======== === Consolidated Statements of Income Unaudited - Internally Prepared (in thousands) 2nd Year to Year to Quarter Date Date % ended 6/30/09 6/30/08 Change 6/30/09 ------- ------- ------ ------- Interest Income on: Total interest and fees on loans $6,527 $7,087 -7.9% $3,379 Interest on investment securities 212 192 10.4% 122 Interest on federal funds sold 2 74 -97.3% - Other interest income 150 183 -18.0% 76 --- --- ----- -- Total interest income 6,891 7,536 -8.6% 3,577 ----- ----- ---- ----- Interest Expense: Interest paid on deposits 1,854 2,165 -14.4% 907 Interest paid on borrowings 23 118 -80.5% 13 -- --- ----- -- Total interest expense 1,877 2,283 -17.8% 920 ----- ----- ----- --- Net interest income $5,014 $5,253 -4.5% $2,657 Provision for Possible Loan Losses and OBS reserve 1,100 480 129.2% 180 ----- --- ----- --- Net Interest Income after ALLL Provision 3,914 4,773 -18.0% 2,477 Total non-interest income 864 719 20.2% 443 Total non-interest expense 5,056 4,377 15.5% 2,350 ---- ----- ------ --- Net Income before applicable income taxes (278) 1,115 -124.9% 570 Applicable income tax expense (benefit) (120) 419 -128.6% 210 ---- --- ------ --- Net Income (loss) before preferred dividend expense $(158) $696 -122.7% $360 Preferred stock dividend expense (124) - 0.0% (104) ----- ---- - ---- Net income (loss) $(282) $696 -140.5% $256 ----- ---- ------ ---- 2nd Qtr 08 1st 2nd to 2nd Qtr Quarter Quarter 09 ended % ended % 3/31/09 Change 6/30/08 Change ------- ------ ------- ------- Interest Income on: Total interest and fees on loans $3,148 7.3% $3,460 -2.3% Interest on investment securities 90 35.6% 93 31.2% Interest on federal funds sold 2 -100.0% 30 -100.0% Other interest income 74 2.7% 52 46.2% -- --- -- ---- Total interest income 3,314 7.9% 3,635 -100.0% ----- --- ----- ------ Interest Expense: Interest paid on deposits 947 -4.2% 980 -7.4% Interest paid on borrowings 10 30.0% 118 -89.0% -- ---- --- ----- Total interest expense 957 -3.9% 1,098 -16.2% --- ---- ----- ----- Net interest income $2,357 12.7% $2,537 4.7% Provision for Possible Loan Losses and OBS reserve 920 -80.4% 264 -31.8% --- ----- --- ----- Net Interest Income after ALLL Provision 1,437 72.4% 2,273 9.0% Total non-interest income 421 5.2% 303 46.2% Total non-interest expense 2,706 -13.2% 2,217 6.0% ---- ----- ----- --- Net Income before applicable income taxes (848) 167.2% 359 58.8% Applicable income tax expense (benefit) (330) 163.6% 138 52.2% ---- ----- --- ---- Net Income (loss) before preferred dividend expense $(518) 169.5% $221 62.9% Preferred stock dividend expense (20) 420.0% - 100.0% ----- ----- ---- ---- Net income (loss) $(538) 147.6% $221 15.8% ----- ----- ---- ---- SELECTED FINANCIAL RATIOS AND PER SHARE DATA Per Common Share Data Earnings per share - basic $(0.06) $0.13 -142.5% $0.05 Earnings per share - diluted $(0.06) $0.13 -142.5% $0.05 Shares outstanding - (actual) 5,107,731 5,106,346 0.0% 5,107,731 Weighted Average Shares Outstanding 5,107,731 5,284,146 -3.3% 5,107,731 Shares outstanding - (fully diluted) 5,107,731 5,440,546 -6.1% 5,107,731 Financial Ratios Return on Average Assets -0.21% 0.60% -135.6% 0.39% Return on Average Equity -1.84% 4.38% -142.1% 3.35% Yield on earning assets 5.66% 6.38% -11.3% 5.68% Efficiency ratio 86.0% 73.3% 17.4% 75.8% Loan to deposit ratio 90.7% 103.0% -11.9% 90.7% ALLL as a percent of HFI Loans (Includes OBS reserve) 1.65% 1.20% 37.7% 1.65% Non-performing assets - in thousands $9,955 $6,761 47.2% $9,955 Non-performing assets as a percent of total assets 3.62% 2.67% 35.5% 3.62% Book value per share $5.96 $6.09 -2.2% $5.96 Tangible book value per share $5.31 $5.40 -1.7% $5.47 Per Common Share Data Earnings per share - basic $(0.11) 147.6% $0.04 15.8% Earnings per share - diluted $(0.10) 149.0% $0.04 23.1% Shares outstanding - (actual) 5,107,731 0.0% 5,106,346 0.0% Weighted Average Shares Outstanding 5,107,731 0.0% 5,284,146 -3.3% Shares outstanding - (fully diluted) 5,268,131 -3.0% 5,440,546 -6.1% Financial Ratios Return on Average Assets -0.79% 50.9% 0.34% 15.8% Return on Average Equity -0.01% 99.7% 2.79% 20.1% Yield on earning assets 5.64% 0.7% 6.38% -11.0% Efficiency ratio 97.4% -22.2% 78.1% -2.9% Loan to deposit ratio 91.7% -1.1% 103.0% -11.9% ALLL as a percent of HFI Loans (Includes OBS reserve) 1.41% 17.2% 1.16% 42.5% Non-performing assets - in thousands $9,644 3.2% $6,761 47.2% Non-performing assets as a percent of total assets 3.32% 9.2% 2.70% 34.2% Book value per share $5.92 0.6% $6.08 -2.0% Tangible book value per share $5.43 0.8% $5.39 1.5% Contact: Tom Griel 909-483-8882 tgriel@inlandcommunitybank.com
ICB Financial
CONTACT: Tom Griel of ICB Financial, +1-909-483-8882,
tgriel@inlandcommunitybank.com
