Community Bank Reports 2% Increase in 2013 First Quarter Earnings to $6.0 Million

Community Bank Reports 2% Increase in 2013 First Quarter Earnings to $6.0 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% increase in net income to $6.0 million for the first quarter of 2013 compared to $5.9 million for the similar quarter in 2012.

Net interest income for the first quarter of 2013 increased 2.8% over the prior year, totaling $23.4 million in 2013 versus $22.8 million in the prior year. The improvement in 2013 was due to a growth in our earning assets versus 2012 but offset by lower net interest margin in 2013 to 3.23% versus 3.65% in the comparable 2012 quarter.


The Bank's reserve for loan losses as of March 31, 2013 was $34.8 million or 1.77% of total loans compared to $36.9 million or 2.12% of total loans as of March 31, 2012. No provision for loan losses was required for either the first quarter of 2013 or 2012. The reduction in reserve levels is reflective of improving conditions in credit quality which is further evidenced by the 33% decrease in non-performing loans for the current quarter compared to the first quarter of 2012.

Total loans as of March 31, 2013 increased to $2.0 billion compared to the prior year of $1.7 billion. Total deposits as of March 31, 2013 increased from the prior year quarter at $2.3 billion compared to $2.0 billion as of March 31, 2012. 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 8.10%, 10.29%, and 11.55%, respectively, as of March 31, 2013. Regulatory requirements for a "well-capitalized bank" are 5%, 6%, and 10%, respectively.

David Malone, Chairman and Chief Executive Officer, commented, "In an extremely competitive and uncertain economic environment coupled with falling interest margins the Bank was able to have a very good earnings quarter, slightly exceeding the results for the comparable prior year quarter.

"We achieved this performance through a combination of increasing loan volume occasioned by innovative structuring that benefited our customers as well as the Bank, an improvement in fee income and carefully managing a larger securities portfolio. At the same time we were able to invest in future growth initiatives-namely our new residential mortgage product, a streamlined SBA program and finally our new Business Centers.

"We see the economy this year as one of uneven growth but bolstered by a recovering housing market. We continue to believe that our strong capital base together with our outstanding customer service will allow the Bank to fully participate in the economic recovery.

"As always, we thank our wonderful customers and our dedicated employees who serve them."

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, Warner Center and West Los Angeles. 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

2013

2012

Change

Change

Interest Income

$

28,742

$

27,909

$

833

3.0

%

Interest Expense

5,364

5,158

206

4.0

%

Net interest income

23,378

22,751

627

2.8

%

Provision for loan losses

-

-

-

-

Net interest income after provision

23,378

22,751

627

2.8

%

Non-interest income

2,768

2,410

358

14.9

%

Non-interest expense

16,551

15,572

979

6.3

%

Income before income tax

9,595

9,589

6

0.1

%

Income tax

3,595

3,711

(116

)

(3.1

%)

Net income

$

6,000

$

5,878

$

122

2.1

%

Financial Highlights - Balance Sheet (Unaudited)

(Amounts in Thousands)

As of March 31,

Dollar

Percent

BALANCE SHEET

2013

2012

Change

Change

Cash and cash equivalents

$

48,076

$

68,705

$

(20,629

)

(30.0

%)

Investments

977,719

773,195

204,524

26.5

%

Non-owner occupied real estate loans

638,419

609,361

29,058

4.8

%

Owner occupied real estate loans

814,654

676,831

137,823

20.4

%

Total real estate loans

1,453,073

1,286,192

166,881

13.0

%

Commercial & industrial loans

484,360

424,447

59,913

14.1

%

Other loans

28,062

32,254

(4,192

)

(13.0

%)

Total loans

1,965,495

1,742,893

222,602

12.8

%

Loan loss reserve

(34,812

)

(36,943

)

2,131

(5.8

%)

Net loans

1,930,683

1,705,950

224,733

13.2

%

Other Assets

118,471

119,523

(1,052

)

(0.9

%)

Total assets

$

3,074,949

$

2,667,373

$

407,576

15.3

%

Earning assets

$

2,960,647

$

2,553,278

$

407,369

16.0

%

Non-interest bearing deposits

$

649,873

$

594,352

$

55,521

9.3

%

Interest bearing deposits

1,656,540

1,441,324

215,216

14.9

%

Total deposits

2,306,413

2,035,676

270,737

13.3

%

Funds purchased/borrowed

493,000

333,000

160,000

48.0

%

Other liabilities

17,010

27,749

(10,739

)

(38.7

%)

Total liabilities

2,816,423

2,396,425

419,998

17.5

%

Stockholders' equity

258,526

270,948

(12,422

)

(4.6

%)

Total liabilities & stockholders' equity

$

3,074,949

$

2,667,373

$

407,576

15.3

%

Selected Financial Data and Highlights (Unaudited)

(Amounts in Thousands)

For the quarters ended

March 31,

2013

2012

Return on average equity

9.41

%

8.80

%

Return on average assets

0.80

%

0.91

%

Net interest margin

3.23

%

3.65

%

Efficiency ratio

63.72

%

62.05

%

Book value per common share

$

82.71

$

88.83

Basic earnings per common share

$

1.92

$

1.95

Diluted earnings per common share

$

1.91

$

1.88

As of March 31,

Minimum Ratios for a

CAPITAL RATIOS

2013

2012

Well-Capitalized Bank

Tier 1 leverage capital

8.10

%

9.83

%

5.00%

Tier 1 risk-based capital

10.29

%

12.35

%

6.00%

Total risk-based capital

11.55

%

13.60

%

10.00%

Tier 1 common capital

10.29

%

12.26

%

N/A

As of March 31,

Dollar

Percent

OTHER SELECTED DATA

2013

2012

Change

Change

Other real estate owned

$

3,375

$

4,632

$

(1,257

)

(27.1

%)

Nonperforming loans

$

38,120

$

57,270

$

(19,150

)

(33.4

%)

Reserve for loan losses to total loans

1.77

%

2.12

%

(16.5

%)

Reserve for loan losses to nonperforming loans

91.32

%

64.51

%

41.6

%

Nonperforming loans to total loans

1.94

%

3.29

%

(41.0

%)

Nonperforming assets to total assets

1.35

%

2.32

%

(41.8

%)



Community Bank
Nancy L. Karlson, Executive Vice President and Chief Financial Officer
626-568-2076

KEYWORDS: United States North America California

INDUSTRY KEYWORDS:

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