Community Bank Reports Year-to-Date Earnings of $18.8 Million

Community Bank Reports Year-to-Date Earnings of $18.8 Million

PASADENA, Calif.--(BUSINESS WIRE)-- Community Bank, an independent business bank with 17 business centers in Los Angeles, San Bernardino, Riverside, Ventura and Orange Counties, today reported a 2.6% increase in net income to $7.0 million for the third quarter of 2012 compared to $6.8 million for the similar quarter in 2011. For the nine months ended September 30, 2012, the Bank reported net income of $18.8 million compared to $18.5 million for the same period last year.


Net interest income for the third quarter of 2012 increased 5.4% over the prior year, totaling $24.7 million in 2012 versus $23.4 million in the prior year. During the nine months ended September 30, 2012, net interest income increased 0.4% over the prior year, totaling $69.9 million in 2012 versus $69.6 million in 2011. The improvement during 2012 was largely driven by lower funding costs combined with an increase in earning asset growth at compressed rates which resulted in net interest margins of 3.57% and 3.56% for the third quarter and nine months ended September 30, 2012 respectively, compared to 3.66% and 3.77% for the third quarter and nine months ended September 30, 2011.

The Bank's reserve for loan losses as of September 30, 2012 was $35.3 million or 1.89% of total loans compared to $36.4 million or 2.06% of total loans as of September 30, 2011. The provision for loan losses totaled $0.3 million for the third quarter and nine months ended September 30, 2012, compared to 0.3 million and $1.9 million for the third quarter and nine months ended September 30, 2011. The lower provisioning needs is a direct reflection of continued improvements in asset quality.

Total loans as of September 30, 2012 increased from the prior year quarter at $1.87 as compared to $1.77 billion as of September 30, 2011. Total deposits as of September 30, 2012 increased to $2.16 billion as compared to $1.99 billion as of September 30, 2011. Community Bank's capital ratios continue to exceed regulatory requirements with Tier 1 Leverage, Tier 1 Risk-based Capital and Total Risk-based Capital Ratios of 9.42%, 11.90%, and 13.16%, respectively, as of September 30, 2012. Regulatory requirements for a "well-capitalized bank" are 5%, 6%, and 10%, respectively.

David Malone, President and Chief Executive Officer, commented, "The Bank's profitability in 2012, although good, was negatively affected by the low interest rate environment. This was evidenced by a reduction in net interest margin in 2012 versus 2011. Our loan pipeline continues strong but customers seem reluctant to initiate capital spending programs prior to the November elections. The uncertainty occasioned by the so-called 'fiscal cliff' coupled with possible income tax increases has made all of us cautious.

"The Bank continues to enjoy a strong capital base with excess liquidity. We also are optimistic about the future and expect good operating results through the remainder of the year. We encourage our customers to vote on November 6th. We are fortunate to live in a Democracy that allows the freedom to render our opinion at the ballot box."

Community Bank, with assets exceeding $2.9 billion, was founded in 1945 and is headquartered in Pasadena. The Bank is a regional Southern California Bank with offices in Anaheim, Burbank, Commerce, Corona, Fontana, Glendale, Huntington Beach, Irvine, Ontario, Pasadena, Redlands, Santa Clarita, Santa Fe Springs, South Bay, Ventura, West Los Angeles and Woodland Hills. 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

For the nine months ended

September 30,

September 30,

Dollar

Percent

Dollar

Percent

INCOME STATEMENT

2012

2011

Change

Change

2012

2011

Change

Change

Interest income

$

29,946

$

29,088

$

858

2.9

%

$

85,559

$

87,027

$

(1,468

)

(1.7

%)

Interest expense

5,262

5,660

(398

)

(7.0

%)

15,658

17,439

(1,781

)

(10.2

%)

Net interest income

24,684

23,428

1,256

5.4

%

69,901

69,588

313

0.4

%

Provision for loan losses

300

300

-

-

300

1,900

(1,600

)

(84.2

%)

Net interest income after provision

24,384

23,128

1,256

5.4

%

69,601

67,688

1,913

2.8

%

Non-interest income

2,349

2,774

(425

)

(15.3

%)

7,152

9,265

(2,113

)

(22.8

%)

Non-interest expense

15,290

14,723

567

3.9

%

46,188

47,027

(839

)

(1.8

%)

Income before income tax

11,443

11,179

264

2.4

%

30,565

29,926

639

2.1

%

Income tax

4,462

4,375

87

2.0

%

11,806

11,467

339

3.0

%

Net income

$

6,981

$

6,804

$

177

2.6

%

$

18,759

$

18,459

$

300

1.6

%

Financial Highlights - Balance Sheet (Unaudited)

(Amounts in Thousands)

As of September 30,

Dollar

Percent

BALANCE SHEET

2012

2011

Change

Change

Cash and cash equivalents

$

54,402

$

45,883

$

8,519

18.6

%

Investments

908,441

719,868

188,573

26.2

%

Non-owner occupied real estate loans

619,365

651,916

(32,551

)

(5.0

%)

Owner occupied real estate loans

753,801

640,170

113,631

17.8

%

Total real estate loans

1,373,166

1,292,086

81,080

6.3

%

Commercial & industrial loans

465,473

437,645

27,828

6.4

%

Other loans

30,289

37,544

(7,255

)

(19.3

%)

Total loans

1,868,928

1,767,275

101,653

5.8

%

Loan loss reserve

(35,307

)

(36,387

)

1,080

(3.0

%)

Net loans

1,833,621

1,730,888

102,733

5.9

%

Other assets

112,764

110,925

1,839

1.7

%

Total assets

$

2,909,228

$

2,607,564

$

301,664

11.6

%

Earning assets

$

2,795,349

$

2,500,489

$

294,860

11.8

%

Non-interest bearing deposits

$

614,880

$

546,340

$

68,540

12.5

%

Interest bearing deposits

1,545,444

1,444,046

101,398

7.0

%

Total deposits

2,160,324

1,990,386

169,938

8.5

%

Funds purchased/borrowed

443,000

344,280

98,720

28.7

%

Other liabilities

17,143

13,555

3,588

26.5

%

Total liabilities

2,620,467

2,348,221

272,246

11.6

%

Stockholders' equity

288,761

259,343

29,418

11.3

%

Total liabilities & stockholders' equity

$

2,909,228

$

2,607,564

$

301,664

11.6

%

Selected Financial Data and Highlights (Unaudited)

(Amounts in Thousands)

For the quarters ended

For the nine months ended

September 30,

September 30,

2012

2011

2012

2011

Return on average equity

9.78

%

10.61

%

9.08

%

10.06

%

Return on average assets

0.97

%

1.02

%

0.92

%

0.96

%

Net interest margin

3.57

%

3.66

%

3.56

%

3.77

%

Efficiency ratio

56.56

%

56.19

%

60.00

%

59.83

%

Book value per common share

$

94.69

$

86.31

Basic earnings per common share

$

2.29

$

2.27

$

6.17

$

6.14

Diluted earnings per common share

$

2.23

$

2.17