Business & Finance
Mon, August 3, 2009Sun, August 2, 2009Fri, July 31, 2009Thu, July 30, 2009Wed, July 29, 2009Tue, July 28, 2009Mon, July 27, 2009Sun, July 26, 2009Fri, July 24, 2009Thu, July 23, 2009Wed, July 22, 2009Tue, July 21, 2009Mon, July 20, 2009Fri, July 17, 2009Thu, July 16, 2009Community Business Bank: Community Business Bank Reports 2009 Second Quarter Results
Published in Business and Finance on Friday, July 24th 2009 at 17:00 GMT, Last Modified on 2009-07-24 17:00:34 by Market Wire
WEST SACRAMENTO, CA--(Marketwire - July 24, 2009) - Community Business Bank (
"In light of the declining value of the real estate securing these two participation loans, management felt it was prudent to charge off these loans and move forward," said John DiMichele, President and CEO. "We have worked diligently to monitor and manage our loan portfolio, maintaining our long-standing practice of quickly identifying problem loans and working with borrowers to find solutions and bring loans to a current status. These efforts have resulted in a decrease in delinquency ratios, non-performing assets and other real estate owned."
Net interest income increased to $1.6 million in second quarter 2009 compared with $1.3 million the prior year. Total deposits declined slightly to $96.2 million at June 30, 2009 compared with $101.0 million in the second quarter of 2008. Noninterest income was $57,000 in the second quarter of 2009 compared with $115,000 in the prior year's second quarter, reflecting lower income related to gains on loan sales. Noninterest expense included approximately $268,000 of carrying costs related to troubled assets and a one-time FDIC insurance reserve assessment of $52,000. Total assets rose to $136.8 million compared with $135.1 million the prior year.
The Bank's capital ratios remain solid. Total Risk-Based Capital Ratio (RBC) was a strong 17.3% and its Equity Ratio at June 30, 2009 was 14.7%. This RBC figure represents almost $9 million in excess capital (i.e. the amount in reserve above the 10% "Well-Capitalized" level as defined by the regulators).
"Our initiatives to build core deposits, combined with our Liability Management program, which focuses on relationship pricing and the usage of low-cost funding sources, resulted in a robust net interest margin of 5.05%. We are well-positioned to continue relationship lending to quality business customers," said DiMichele. DiMichele said a low cost of funds has allowed the Bank to become more aggressive in its deposit pricing in 2009 as part of its overall strategy to boost core deposit relationships. In the past year, the Bank has also reduced its levels of brokered deposits by more than $25 million while increasing its CDARs deposits by almost $18 million. This was a conscious decision to become less reliant on potentially volatile funding sources while meeting its core customers' demand for fully-insured deposit sources that will stay in the community. The Bank's loan yield of 6.65% has stabilized in recent months as non-performing assets have leveled off and has started to increase as existing loans have renewed at current higher rates.
"We are currently recognizing higher operating profitability before nonrecurring expenses and loan loss provision than any time in the Bank's existence," noted DiMichele. "Our cost of funds is down almost 1.5% from last year and other expenses before loan loss provision and troubled asset costs have also been cut significantly. Although the majority of the carrying costs related to nonperforming assets and other real estate owned will continue through at least year-end, special assessments to the FDIC should not recur in the near future if at all and loan loss provisions should be reduced considerably from the level recorded during the first half of 2009."
Given the current economic environment, Management determined it was prudent to increase its Allowance for Loan and Lease Losses (ALLL) by $2.2 million in the second quarter of 2009. With this increased provision, the Bank's ALLL was 1.50% of gross loans at June 30, 2009. Nonperforming asset (NPA) levels have improved in recent months; total nonaccrual loans are currently just under $3 million, while Other Real Estate Owned (OREO) totals are $2.5 million. Meanwhile, delinquency totals have reduced significantly, which reflects the enhanced focus and diligent management of this area. The Bank's "Loans Past Due" total is $2.4 million at June 30, 2009, or 2.09% of total loans. The two loan participations that led to the charge-offs this quarter were initiated by other banks. The Bank is involved in other loan participations in which it is the lead bank that are performing as agreed with no issues.
"Credit quality has held up reasonably well in the agricultural, commercial & industrial and commercial real estate sectors," commented DiMichele. "The critical uncontrollable variable in the lending equation continues to be the lower real estate valuations that secure these loans. The Bank has a strong capital position and we are making significant inroads on managing our nonperforming assets and improving our funding mix, which will have a positive impact on earnings and shareholder value."
About Community Business Bank
The bank's market area includes the greater Yolo, Solano, Sacramento, Placer, San Joaquin and contiguous counties. The bank focuses on and provides highly personalized commercial banking services to the businesses, professionals and non-profit 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 Company's defined market, (4) the Company's ability to sustain its internal growth rate and to preserve its earning assets quality, and (5) government regulations. Although the Company 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 BALANCE SHEETS (Unaudited) - $ in thousands 6/30/2009 6/30/2008 ASSETS ---------- ---------- Cash & Due From $2,992 $1,338 Fed Funds Sold 6,565 - Investment Securities 5,667 3,835 Loans Net of Deferred Fees 115,695 127,565 Allowance for Loan Losses (1,731) (1,400) Net Loans 113,964 126,165 Premises and Equipments, Net 1,826 1,340 Accrued Interest Receivable 474 509 Other Real Estate Owned 2,492 - Other Assets 2,827 1,934 TOTAL ASSETS $136,807 $135,121 LIABILITIES & SHAREHOLDERS' EQUITY Non-interest Bearing Deposits 16,973 14,257 Interest Bearing Deposits 79,224 86,540 Total Deposits 96,197 100,797 Accrued expenses/other liabilities 1,597 1,285 Other borrowings 19,000 13,875 Total Liabilities 116,794 115,957 Total Shareholders' Equity 20,013 19,164 Total Liabilities and Shareholders' Equity $136,807 $135,121 CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - $ in thousands Six Months Ended 6/30/2009 6/30/2008 ---------- ----------- Net Interest Income $ 3,099 $2,572 Provision for Loan Loss 2,343 175 Non-Interest Income 106 205 Non-interest Expense 2,907 2,454 Income (Loss) Before Income Taxes (2,045) 148 Income Taxes 1 1 NET INCOME LOSS) $(2,046) $ 147 Diluted EPS (LPS) $ (0.95) $ 0.07 CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - $ in thousands Three Months Ended 6/30/2009 6/30/2008 ---------- ---------- Net Interest Income $ 1,582 $1,331 Provision for Loan Loss 2,234 150 Non-Interest Income 57 115 Non-interest Expense 1,520 1,191 Income (Loss) Before Income Taxes (2,115) 105 Income Taxes 1 1 NET INCOME (LOSS) $(2,116) $ 104 Diluted EPS (LPS) $ (0.99) $ 0.05
