Community Bank Announces Record Level Earnings

Community Bank Announces Record Level Earnings

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 26.1% increase in net income to $7.4 million for the second quarter of 2013, representing the most profitable quarter in the Bank's 68 year history as compared to $5.9 million for the similar quarter in 2012. For the six months ended June 30, 2013, the Bank reported net income of $13.4 million also representative of record earnings as compared to $11.8 million for the same period last year.


Net interest income for the second quarter of 2013 increased 10.5% over the prior year, totaling $24.8 million in 2013 versus $22.5 million in the prior year. During the six months ended June 30, 2013, net interest income increased 6.6% over the prior year, totaling $48.2 million in 2013 versus $45.2 million 2012. The improvement in 2013 was due to a growth in earning assets versus 2012 but offset by lower net interest margins of 3.30% and 3.27% for the second quarter and six months ended June 30, 2013 respectively, compared to 3.47% and 3.56% for the second quarter and six months ended June 30, 2012.

The Bank's reserve for loan losses as of June 30, 2013 was $34.7 million or 1.74% of total loans compared to $35.4 million or 1.96% of total loans as of June 30, 2012. No provision for loan losses was required for either the six months ended June 30, 2013 or 2012. The reduction in reserve levels is reflective of improving conditions in credit quality which is further evidenced by the 26% decrease in non-performing loans for the first six months of 2013 compared to the same period in 2012.

Total loans as of June 30, 2013 increased to $2.0 billion compared to $1.8 billion as of June 30, 2012. Total deposits as of June 30, 2013 increased to $2.4 billion as compared to $2.1 billion as of June 30, 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 8.09%, 10.47%, and 11.73%, respectively, as of June 30, 2013. Regulatory requirements for a "well-capitalized bank" are 5%, 6%, and 10%, respectively.

David Malone, Chairman and Chief Executive Officer, commented, "I am extremely pleased with the Bank's performance for the six months ended June 30, 2013. Net income increased 14% versus the prior year period in the face of a very challenging economy and continued investment by the Bank in its new home mortgage lending initiative and enhancing the performance of its SBA platform.

Loan originations grew significantly in 2013 versus the prior period but the results were somewhat mitigated by increasing pressure on interest margins. The improving economy, especially in real estate has created income opportunities for the Bank as customers restructure their financing and repay previously non-performing loans. Net income was also positively impacted by the Bank's careful management of its securities portfolio which created additional income opportunities.

We see the economy continuing its slow improvement through the remainder of 2013. The Bank is committed to providing Southern California middle market companies with the best in banking services. Please visit or call one of our 17 business centers and experience true Partnership Banking®. We once again thank all our loyal customers and employees for their continued support."

Community Bank, with assets of $3.2 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

For the six months ended

June 30,

June 30,

Dollar

Percent

Dollar

Percent

INCOME STATEMENT

2013

2012

Change

Change

2013

2012

Change

Change

Interest income

$

30,406

$

27,704

$

2,702

9.8

%

$

59,148

$

55,613

$

3,535

6.4

%

Interest expense

5,577

5,238

339

6.5

%

10,941

10,396

545

5.2

%

Net interest income

24,829

22,466

2,363

10.5

%

48,207

45,217

2,990

6.6

%

Provision for loan losses

-

-

-

-

-

-

-

-

Net interest income after provision

24,829

22,466

2,363

10.5

%

48,207

45,217

2,990

6.6

%

Non-interest income

3,723

2,393

1,330

55.6

%

6,491

4,803

1,688

35.1

%

Non-interest expense

16,466

15,326

1,140

7.4

%

33,017

30,898

2,119

6.9

%

Income before income tax

12,086

9,533

2,553

26.8

%

21,681

19,122

2,559

13.4

%

Income tax

4,649

3,633

1,016

28.0

%

8,244

7,344

900

12.3

%

Net income

$

7,437

$

5,900

$

1,537

26.1

%

$

13,437

$

11,778

$

1,659

14.1

%

Financial Highlights - Balance Sheet (Unaudited)

(Amounts in Thousands)

As of June 30,

Dollar

Percent

BALANCE SHEET

2013

2012

Change

Change

Cash and cash equivalents

$

55,558

$

50,663

$

4,895

9.7

%

Investments

1,035,198

856,579

178,619

20.9

%

Non-owner occupied real estate loans

637,536

617,048

20,488

3.3

%

Owner occupied real estate loans

848,767

717,459

131,308

18.3

%

Total real estate loans

1,486,303

1,334,507

151,796

11.4

%

Commercial & industrial loans

479,541

441,079

38,462

8.7

%

Other loans

29,886

31,313

(1,427

)

(4.6

%)

Total loans

1,995,730

1,806,899

188,831

10.5

%

Loan loss reserve

(34,661

)

(35,440

)

779

(2.2

%)

Net loans

1,961,069

1,771,459

189,610

10.7

%

Other assets

120,694

114,565

6,129

5.3

%

Total assets

$

3,172,519

$

2,793,266

$

379,253

13.6

%

Earning assets

$

3,049,198

$

2,683,586

$

365,612

13.6

%

Non-interest bearing deposits

$

680,733

$

607,470

$

73,263

12.1

%

Interest bearing deposits

1,696,204

1,470,256

225,948

15.4

%

Total deposits

2,376,937

2,077,726

299,211

14.4

%

Funds purchased/borrowed

530,500

422,000

108,500

25.7

%

Other liabilities

14,713

15,554

(841

)

(5.4

%)

Total liabilities

2,922,150

2,515,280

406,870

16.2

%

Stockholders' equity

250,369

277,986

(27,617

)

(9.9

%)

Total liabilities & stockholders' equity

$

3,172,519

$

2,793,266

$

379,253

13.6

%

Selected Financial Data and Highlights (Unaudited)

(Amounts in Thousands)

For the quarters ended

For the six months ended

June 30,

June 30,

2013

2012

2013

2012

Return on average equity

11.47

%

8.62

%

10.45

%

8.71

%

Return on average assets

0.95

%

0.87

%

0.88

%

0.89

%

Net interest margin

3.30

%

3.47

%

3.27

%

3.56

%

Efficiency ratio

60.44

%

61.65

%

62.04

%

61.85

%

Book value per common share

$

80.10

$

91.15

Basic earnings per common share

$

2.38

$

1.93

$

4.30

$

3.88

Diluted earnings per common share

$

2.38

$

1.88

$

4.29

$

3.76

As of June 30,

Minimum Ratios for a

CAPITAL RATIOS

2013

2012

Well-Capitalized Bank

Tier 1 leverage capital

8.09

%

9.67

%

5.00

%

Tier 1 risk-based capital

10.47

%

12.05

%

6.00

%

Total risk-based capital

11.73

%

13.30

%

10.00

%

Tier 1 common capital

10.47

%

11.96

%

N/A

As of June 30,

Dollar

Percent

OTHER SELECTED DATA

2013

2012

Change

Change

Other real estate owned

$

4,530

$

7,679

$

(3,149

)

(41.0

%)

Nonperforming loans

$