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.