Independence Bank Announces First Quarter 2014 Financial Results

NEWPORT BEACH, Calif.--()--Independence Bank (OTCBB: IDPK) announced today unaudited net income of $777,000 or $0.16 per basic share for the quarter ended March 31, 2014, an increase of 58% as compared to $492,000 or $0.11 per basic share for the same period a year ago.

On January 31, 2014, the Bank successfully completed the merger with Premier Service Bank adding two Inland Empire branches, $58.1 million of loans, and $117.8 million of deposits. Related to the merger, Independence Bank incurred $1.8 million in acquisition expenses and booked a $1.4 million bargain purchased gain during the quarter.

“The Premier Service Bank integration, although in early stages, has gone well in all respects and we’re looking forward to a smooth conversion for customers this quarter,” said Chuck Thomas, Independence Bank President and Chief Executive Officer. “We intend to continue to deliver ongoing and sustainable growth, including in our new markets in Riverside County, with a carefully managed level of risk.”

Total loans were $310.2 million as of March 31, 2014, compared to $194.0 million at March 31, 2013, an increase of $116.2 million or 60%. In addition to the growth directly attributable to the merger, the bank also achieved solid internal loan growth this reporting period.

Total deposits were $337.0 million as of March 31, 2014, with non-interest bearing and NOW accounts totaling $91.0 million, compared to $200.7 million of total deposits and $34.0 million of non-interest bearing and NOW accounts at March 31, 2013.

The bank has strong capital ratios, including a 10.41% Tier 1 Leverage Ratio and 13.64% Total Risk Based Capital Ratio as of March 31, 2014. Independence Bank ended the quarter with a net interest margin of 4.42%, a return on average assets of 0.79% and a return on average equity of 7.43%. The bank’s book value per share was $9.51 at March 31, 2014, compared to $9.21 per share at March 31, 2013.

Independence Bank is a full service community bank, founded by highly experienced bankers and business leaders from Orange County. Founded in 2004, Independence Bank has sustained a successful business model of customer and community focus as well as significant growth during that time. Independence Bank now has six regional offices serving Orange and Riverside Counties in Southern California.

Statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, effects of interest rate changes, ability to control costs and expenses, impact of consolidation in the banking industry, financial policies of the US government, and general economic conditions.

                           
2014 1st Quarter Report
 
BALANCE SHEET
March 31, December 31, March 31,
  2014             2013             2013  
Assets (Unaudited) (Audited) (Unaudited)
Cash and cash equivalents $ 17,387,976 $ 4,901,823 $ 4,016,073
Investments 69,371,693 68,824,391 70,397,149
Loans, net 310,211,465 224,205,990 194,005,486
Property and equipment, net 1,946,720 1,638,182 1,683,965
Intangible Assets 1,092,333 - -
Other assets   18,975,865             11,911,191             10,210,798  
Total Assets $ 418,986,052           $ 311,481,577           $ 280,313,471  
Liabilities and Shareholders' Equity
Deposit accounts:
DDA and NOW 91,034,843 40,518,389 34,037,311
Savings and money market 177,994,275 117,267,875 103,311,462
Certificates of Deposit   67,973,544             72,114,194             63,324,544  
Total Deposits 337,002,662 229,900,458 200,673,317
Other borrowings 33,157,000 39,700,000 38,300,000
Other liabilities   3,189,730             1,432,216             1,069,715  
373,349,393 271,032,675 240,043,032
Shareholders' Equity:   45,636,659             40,448,902             40,270,440  
Total Liabilities and Shareholders' Equity $ 418,986,052           $ 311,481,577           $ 280,313,471  
 
Basic book value per share $ 9.51 $ 9.25 $ 9.21
 
 
RATIOS
 
Capital Ratios
Tier 1 leverage capital ratio 10.41 % 13.16 % 13.71 %
Tier 1 risk-based capital ratio 12.46 % 16.39 % 17.87 %
Total risk-based capital ratio 13.64 % 17.65 % 19.13 %
 
Asset Quality Ratios
Nonperforming loans as a % of total loans 1.31 % 0.06 % 3.59 %
Nonperforming assets as a % of total Assets 1.16 % 0.27 % 3.21 %
Classified assets as a % of total Assets 3.37 % 2.02 % 4.86 %
ALLL $ 4,178,503 $ 4,145,503 $ 4,093,355
ALLL as % of gross loans net of charge-offs 1.32 % 1.82 % 2.07 %
Net charge-off/(recovery) for the quarter $ (33,000 ) $ (29,745 ) $ (22,805 )
Net charge-off/(recovery) for the quarter as a % of total loans -0.01 % -0.01 % -0.01 %
 
 
STATEMENT OF EARNINGS
 
 
March 31, March 31,
  2014             2013  
(Unaudited) (Unaudited)
Interest income 4,198,240 3,282,191
Interest expense   358,943     366,259  
Net interest income 3,839,297 2,915,932
Provision for loan losses - 50,000
Other income 1,891,750 116,328
Other expenses   5,358,906     2,381,255  

OREO Operations, Net

  40,864     31,268  
Earnings before income taxes 331,278 569,738
Income taxes   (445,486 )   77,943  
Net earnings $ 776,763           $ 491,794  
 
Common shares issued and outstanding 4,798,795 4,371,220
Basic earnings per share $ 0.16 $ 0.11
Return on average assets (annualized) 0.79 % 0.68 %
Return on average equity (annualized) 7.43 % 4.89 %
Net interest margin 4.42 % 4.27 %
Efficiency ratio 93.51 % 78.53 %

Contacts

Independence Bank
Chuck Thomas
President, CEO
949-266-6011
cthomas@iBankCA.com
www.iBankCA.com
or
Matthew Terry
Vice President, Director of Marketing
949-266-6033
mterry@iBankCA.com
www.iBankCA.com

Release Summary

Independence Bank announces first quarter 2014 financial results.

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Contacts

Independence Bank
Chuck Thomas
President, CEO
949-266-6011
cthomas@iBankCA.com
www.iBankCA.com
or
Matthew Terry
Vice President, Director of Marketing
949-266-6033
mterry@iBankCA.com
www.iBankCA.com