February 04, 2013 at 14:01 PM EST
Community Bank Reports Record Performance in Earnings to $25.6 Million

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 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 endedFor the year ended
December 31,December 31,
DollarPercentDollarPercent
INCOME STATEMENT20122011ChangeChange20122011ChangeChange
Interest income $ 29,266 $ 28,827 $ 439 1.5 % $ 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 income 23,946 23,461 485 2.1 % 93,847 93,049 798 0.9 %
Provision for loan losses - 1,200 (1,200 ) (100.0 %) 300 3,100 (2,800 ) (90.3 %)
Net interest income after provision 23,946 22,261 1,685 7.6 % 93,547 89,949 3,598 4.0 %
Non-interest income 4,103 3,953 150 3.8 % 11,255 13,218 (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 tax 11,529 11,115 414 3.7 % 42,094 41,041 1,053 2.6 %
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,DollarPercent
BALANCE SHEET20122011ChangeChange
Cash and cash equivalents $ 82,400 $ 35,626 $ 46,774 131.3 %
Investments 949,604 723,694 225,910 31.2 %
Non-owner occupied real estate loans 640,462 637,928 2,534 0.4 %
Owner occupied real estate loans 800,501 678,106 122,395 18.0 %
Total real estate loans 1,440,963 1,316,034 124,929 9.5 %
Commercial & industrial loans 472,594 416,132 56,462 13.6 %
Other loans 29,720 34,269 (4,549 ) (13.3 %)
Total loans 1,943,277 1,766,435 176,842 10.0 %
Loan loss reserve (34,876 ) (37,453 ) 2,577 (6.9 %)
Net loans 1,908,401 1,728,982 179,419 10.4 %
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 $ 444,030 17.8 %
Non-interest bearing deposits $ 648,254 $ 551,208 $ 97,046 17.6 %
Interest bearing deposits 1,561,681 1,390,210 171,471 12.3 %
Total deposits 2,209,935 1,941,418 268,517 13.8 %
Funds purchased/borrowed 578,000 378,000 200,000 52.9 %
Other liabilities 15,871 16,808 (937 ) (5.6 %)
Total liabilities 2,803,806 2,336,226 467,580 20.0 %
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,
2012201120122011
Return on average equity 10.20 % 10.14 % 9.36 % 10.08 %
Return on average assets 0.93 % 1.02 % 0.92 % 0.97 %
Net interest margin 3.35 % 3.70 % 3.51 % 3.75 %
Efficiency ratio 59.88 % 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 RATIOS20122011Well-Capitalized Bank
Tier 1 leverage capital 8.17 % 9.56 % 5.00 %
Tier 1 risk-based capital 10.21 % 12.07 % 6.00 %
Total risk-based capital 11.46 % 13.33 % 10.00 %
Tier 1 common capital 10.20 % 11.93 % N/A
As of December 31,DollarPercent
OTHER SELECTED DATA20122011ChangeChange
Other real estate owned $ 4,728 $ 6,182 $ (1,454 ) (23.5 %)
Nonperforming loans $ 40,140 $ 61,264 $ (21,124 ) (34.5 %)
Reserve for loan losses to total loans 1.79 % 2.12 % (15.6 %)
Reserve for loan losses to nonperforming loans 86.89 % 61.13 % 42.1 %
Nonperforming loans to total loans 2.07 % 3.47 % (40.3 %)
Nonperforming assets to total assets 1.47 % 2.59 % (43.2 %)

Contacts:

Community Bank
Nancy Karlson, Chief Financial Officer
(626) 568-2076
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