Community Bank Reports Record Performance in Earnings to $25.6 Million

Community Bank Reports Record Performance in Earnings to $25.6 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 2.4% increase in net income to $6.9 million for the fourth quarter of 2012 compared to $6.7 million for the similar quarter in 2011. For the year ended December 31, 2012, the Bank reported record net income of $25.6 million compared to $25.2 million in 2011.

Net interest income for the fourth quarter of 2012 increased 2.1% over the prior year, totaling $23.9 million in 2012 versus $23.5 million in the prior year. For the year ended December 31, 2012, net interest income increased 0.9% over 2011, totaling $93.8 million in 2012 versus $93.0 million 2011. The improvement during 2012 was due to lower funding costs combined with earning asset growth which resulted in net interest margins of 3.35% and 3.51% for the fourth quarter and year ended December 31, 2012 respectively, compared to 3.70% and 3.75% for the fourth quarter and year ended December 31, 2011.

The Bank's reserve for loan losses as of December 31, 2012 was $34.9 million or 1.79% of total loans compared to $37.5 million or 2.12% of total loans as of December 31, 2011. The provision for loan losses totaled $0.0 million and $0.3 million for the fourth quarter and year ended December 31, 2012, respectively, compared to $1.2 million and $3.1 million for the fourth quarter and year ended December 31, 2011. The reduction in reserve levels is reflective of improving conditions in credit quality which is further evidenced by the 34.5% decrease in non-performing loans year over year.

Total loans as of December 31, 2012 increased to $1.94 billion as compared to $1.77 billion as of the prior year end. Total deposits as of December 31, 2012 increased to $2.21 billion as compared to $1.94 billion as of December 31, 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 8.17%, 10.21%, and 11.46%, respectively, as of December 31, 2012. Regulatory requirements for a "well-capitalized bank" are 5%, 6%, and 10%, respectively.

David Malone, Chairman of the Board. President and Chief Executive Officer, commented, "We have successfully increased earnings in a very challenging year. Despite a significant reduction in interest rate margin caused by continuing record low interest rates, the Bank recorded its highest earnings ever. Earnings were aided by very good loan growth and a reduction in the loan loss provision occasioned by improving credit quality. We are very pleased in achieving total assets of over $3 billion. We are very proud of this achievement and are grateful to reach a new milestone for the Bank.

"The Bank's capital ratios remain strong and coupled with continuing strong earnings allowed the Bank to pay record dividends of $35 million during the year. During 2012, the Bank added two new locations-West Los Angeles and Ventura County. We now have 17 business centers conveniently located throughout Southern California. During 2013 the Bank plans on introducing a new residential lending platform as well as enhancing and streamlining our SBA lending program.

"We thank all of our clients, shareholders, employees and vendors for their loyalty and support and wish all of you a year filled with prosperity and happiness."

Community Bank, with assets of $3.1 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

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.

Financial Highlights - Income Statement and Ratios (Unaudited)
(Amounts in Thousands)
For the quarters endedFor the year ended
December 31, December 31, 
INCOME STATEMENT 2012 2011ChangeChange  2012 2011Change Change
Interest income$29,266$28,827$4391.5%$114,825$115,854$(1,029)(0.9%)
Interest expense 5,320 5,366 (46)(0.9%) 20,978 22,805 (1,827)(8.0%)
Net interest income23,94623,4614852.1%93,84793,0497980.9%
Provision for loan losses - 1,200 (1,200)(100.0%) 300 3,100 (2,800)(90.3%)
Net interest income after provision23,94622,2611,6857.6%93,54789,9493,5984.0%
Non-interest income4,1033,9531503.8%11,25513,218(1,963)(14.9%)
Non-interest expense 16,520 15,099 1,421 9.4% 62,708 62,126 582 0.9%
Income before income tax11,52911,1154143.7%42,09441,0411,0532.6%
Income tax 4,663 4,407 256 5.8% 16,469 15,874 595 3.7%
Net income$6,866$6,708$158 2.4%$25,625$25,167$458 1.8%
Financial Highlights - Balance Sheet (Unaudited)
(Amounts in Thousands)
  As of December 31, Dollar Percent
BALANCE SHEET 2012   2011 ChangeChange
Cash and cash equivalents$82,400$35,626$46,774131.3%
Non-owner occupied real estate loans640,462637,9282,5340.4%
Owner occupied real estate loans 800,501  678,106  122,395 18.0%
Total real estate loans1,440,9631,316,034124,9299.5%
Commercial & industrial loans472,594416,13256,46213.6%
Other loans 29,720  34,269  (4,549)(13.3%)
Total loans1,943,2771,766,435176,84210.0%
Loan loss reserve (34,876) (37,453) 2,577 (6.9%)
Net loans1,908,4011,728,982179,41910.4%
Other assets 120,236  113,020  7,216 6.4%
Total assets$3,060,641 $2,601,322 $459,319 17.7%
Earning assets$2,944,295$2,500,265$444,03017.8%
Non-interest bearing deposits$648,254$551,208$97,04617.6%
Interest bearing deposits 1,561,681  1,390,210  171,471 12.3%
Total deposits2,209,9351,941,418268,51713.8%
Funds purchased/borrowed578,000378,000200,00052.9%
Other liabilities 15,871  16,808  (937)(5.6%)
Total liabilities2,803,8062,336,226467,58020.0%
Stockholders' equity 256,835  265,096  (8,261)(3.1%)

Total liabilities & stockholders' equity

$3,060,641 $2,601,322 $459,319 17.7%
Selected Financial Data and Highlights (Unaudited)
(Amounts in Thousands)
 For the quarters endedFor the year ended
As of December 31, As of December 31,
 2012  2011  2012  2011 
Return on average equity10.20%10.14%9.36%10.08%
Return on average assets0.93%1.02%0.92%0.97%
Net interest margin3.35%3.70%3.51%3.75%
Efficiency ratio59.88%55.08%59.96%58.60%
Book value per common share$82.17$88.31
Basic earnings per common share$2.22$2.24$8.39$8.38
Diluted earnings per common share$2.19$2.14$8.18$8.03
As of December 31,Minimum Ratios for a
CAPITAL RATIOS 2012  2011 Well-Capitalized Bank
Tier 1 leverage capital8.17%9.56%5.00%
Tier 1 risk-based capital10.21%12.07%6.00%
Total risk-based capital11.46%13.33%10.00%
Tier 1 common capital10.20%11.93%N/A
As of December 31,DollarPercent
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