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

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 ended
March 31,
INCOME STATEMENT 2013  2012 ChangeChange
Interest Income$28,742$27,909$8333.0%
Interest Expense 5,364  5,158  206 4.0%
Net interest income23,37822,7516272.8%
Provision for loan losses -  -  - - 
Net interest income after provision23,37822,7516272.8%
Non-interest income2,7682,41035814.9%
Non-interest expense 16,551  15,572  979 6.3%
Income before income tax9,5959,58960.1%
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,DollarPercent
BALANCE SHEET 2013  2012 ChangeChange
Cash and cash equivalents$48,076$68,705$(20,629)(30.0%)
Non-owner occupied real estate loans638,419609,36129,0584.8%
Owner occupied real estate loans 814,654  676,831  137,823 20.4%
Total real estate loans1,453,0731,286,192166,88113.0%
Commercial & industrial loans484,360424,44759,91314.1%
Other loans 28,062  32,254  (4,192)(13.0%)
Total loans1,965,4951,742,893222,60212.8%
Loan loss reserve (34,812) (36,943) 2,131 (5.8%)
Net loans1,930,6831,705,950224,73313.2%
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$407,36916.0%
Non-interest bearing deposits$649,873$594,352$55,5219.3%
Interest bearing deposits 1,656,540  1,441,324  215,216 14.9%
Total deposits2,306,4132,035,676270,73713.3%
Funds purchased/borrowed493,000333,000160,00048.0%
Other liabilities 17,010  27,749  (10,739)(38.7%)
Total liabilities2,816,4232,396,425419,99817.5%
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 equity9.41%8.80%
Return on average assets0.80%0.91%
Net interest margin3.23%3.65%
Efficiency ratio63.72%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 capital8.10%9.83%5.00%
Tier 1 risk-based capital10.29%12.35%6.00%
Total risk-based capital11.55%13.60%10.00%
Tier 1 common capital10.29%12.26%N/A
As of March 31,DollarPercent
OTHER SELECTED DATA 2013  2012 ChangeChange
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 loans1.77%2.12%(16.5%)
Reserve for loan losses to nonperforming loans91.32%64.51%41.6%
Nonperforming loans to total loans1.94%3.29%(41.0%)
Nonperforming assets to total assets1.35%2.32%(41.8%)

Community Bank
Nancy L. Karlson, Executive Vice President and Chief Financial Officer

KEYWORDS:   United States  North America  California


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