AUBURN, Calif.--(BUSINESS WIRE)--Community 1st Bank (OTCBB:CFBN), with $243.4 million in assets, today reported net income of $334 thousand for the quarter ended September 30, 2015.
James J. Kim, President and CEO commented, “The results for our bank are very encouraging for the third quarter and nine months ended September 30, 2015. We have continued to improve earnings and grow non-interest bearing deposits, while building the necessary infrastructure to support our long-term goals and strategies. Further, we have completed the mailing for a special meeting of our Shareholders, which is scheduled for November 16, 2015. The purpose of this meeting is to vote on the creation of a holding company to support the continued growth of our bank.”
Total assets at September 30, 2015 were $243.4 million, representing an increase during the quarter of $11.8 million, or 5.1%, from $231.6 million at June 30, 2015. Community 1st Bank (“the Bank”) was successful in growing non-interest bearing deposits by $3.5 million, or 5.9%, from $59.1 million at June 30, 2015 to $62.6 million at September 30, 2015. Loans grew by $597 thousand, or 0.4%, from $154.4 million at June 30, 2015 to $155.0 million at September 30, 2015. Total deposits increased by $11.7 million, or 5.7%, from $207.1 million at June 30, 2015 to $218.8 million at September 30, 2015.
When compared to September 30, 2014, total assets increased by $20.2 million, or 9.1%, primarily due to the increase in loans of $21.3 million or 15.9% when compared to September 30, 2014. Total deposits increased from $200.3 million at September 30, 2014, to $218.8 million at September 30, 2015, an increase of $18.6 million, or 9.3% and non-interest bearing deposits increased from $60.3 million at September 30, 2014, to $62.6 million at September 30, 2015.
Operating Results - Quarter
The Bank reported net income for the quarter ended September 30, 2015 of $334 thousand, which includes no provision for loan losses, and no gains or losses related to loan or security sales. This compares favorably to net income of $289 thousand for the same period in 2014, which included $130 thousand in provision for loan losses, gain on sales of loans of $11 thousand, and gain on sales of securities of $132 thousand. Net income increased by $45 thousand, while the provision for loan losses decreased by $130 thousand, and gain on sales of loans decreased by $11 thousand, and gain on sales of securities decreased by $132 thousand compared to the third quarter of 2014.
Interest income increased by $215 thousand, or 10.9%, to total $2.2 million for the quarter ended September 30, 2015 compared to the same period in 2014. The growth in interest income was driven by the growth in the loan portfolio, more than offsetting the decrease in interest income from investment securities. Interest expense increased by $19 thousand, or 8.6%, to total $240 thousand for the quarter ended September 30, 2015 compared to the same period in 2014. Net interest income increased by $196 thousand, or 11.1%, for the third quarter of 2015 compared to the same period in 2014. The net interest margin for the quarter ended September 30, 2015 was 3.66% representing an increase of 13 basis points from 3.53% for the quarter ended September 30, 2014. The increase in interest income and the net interest margin was driven by the increase in average loans outstanding.
Operating Results - Year
The Bank reported net income for the nine month period ended September 30, 2015 of $950 thousand, which includes no provision for loan losses, gain on sales of loans of $163 thousand, and loss on sales of securities of $96 thousand. This compares favorably to net income of $433 thousand for the same period in 2014, which included $180 thousand in provision for loan losses, gain on sales of loans of $3 thousand, and gains on sales of securities of $132 thousand. Net income increased by $517 thousand, while the provision for loan losses decreased by $180 thousand, gain on sale of loans increased by $160 thousand, and loss on sale of securities increased by $228 thousand as compared to the nine month period ended September 30, 2014.
Interest income increased by $834 thousand, or 14.9%, to total $6.4 million for the nine month period ended September 30, 2015 compared to the same period in 2014. Interest expense increased by $4 thousand, or 0.6%, to total $678 thousand for the nine month period ended September 30, 2015 compared to the same period in 2014. Net interest income increased by $830 thousand, or 16.8%, for the nine month period ended September 30, 2015 compared to the same period in 2014. Non-interest expense decreased by $132 thousand, or 2.7%, to total $4.7 million for the nine month period ended September 30, 2015 compared to the same period in 2014. The net interest margin for the nine month period ended September 30, 2015 was 3.64% representing an increase of 39 basis points from 3.25% for the period ended September 30, 2014. The increase in interest income and net interest margin was driven by the increase in loans outstanding.
Credit Quality
The allowance for loan losses at September 30, 2015 was $2.7 million, or 1.8% of gross loans, compared to $2.4 million, or 1.8% of gross loans at September 30, 2014. There were no loan charge-offs for the quarter ended September 30, 2015 and recoveries of less than $1 thousand compared to loan charge-offs of $98 thousand with recoveries of $10 thousand for the same period in 2014. Loan charge-offs for the nine month period ended September 30, 2015 was $320 thousand with recoveries of $461 thousand compared to loan charge-offs of $534 thousand with recoveries of $42 thousand for the same period in 2014.
Nonperforming loans at September 30, 2015 were $230 thousand, or 0.09% of total assets, representing a decrease of $3.9 million, or 94.4%, from September 30, 2014 and other real estate owned at September 30, 2015 was $4.0 million, representing an increase of $3.2 million, or 409.6%. Nonperforming loans at September 30, 2015 decreased by $3.6 million, or 94.1%, from $3.9 million at December 31, 2014 and other real estate owned increased by $3.3 million, or 416.1%, from $783 thousand at December 31, 2014. The decrease in nonperforming loans and subsequent increase in other real estate owned was related to one large credit that was foreclosed on and transferred from nonperforming loans into other real estate owned during the first quarter of 2015.
Capital
The Bank continues to maintain a strong capital position under Basel III, with Common Equity Tier 1 ratio of 11.3%, Tier 1 Leverage ratio of 9.8%, Tier 1 Risk-based Capital ratio of 12.3% and Total Risk-based Capital ratio of 13.6% at September 30, 2015. The Bank’s capital is in excess of that required to be considered “well-capitalized” by regulatory standards.
James J. Kim, President and Chief Executive Officer, commented, “Community 1st Bank is well positioned to continue its balance sheet growth and improve core earnings by repositioning earning assets towards higher yielding loans and lowering the cost of our funding base by our continued focus on increasing non-interest bearing deposits. We will be able to continue our growth with the formation of the holding company to be voted on at the upcoming Shareholders’ Meeting.”
Community 1st Bank is headquartered in Auburn, California, with branches in Roseville and Auburn and a loan production office in Sacramento, California. Community 1st Bank offers a wide range of business and consumer deposit products including remote deposit capture, health savings accounts, online banking, mobile banking and cash management services. The Bank also offers a full complement of loan products, including commercial, consumer, and real estate loans. For more information about the Bank, visit the Bank’s website at www.community1bank.com.
Forward-Looking Statements
Statements concerning future performance, developments or events, expectations for growth and income 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, loan production, competitive pressure in the banking industry, balance sheet management, net interest margin variations, the ability to control costs and expenses, changes in the interest rate environment and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors.
| COMMUNITY 1ST BANK | |||||||||||||
| BALANCE SHEETS | |||||||||||||
| 9/30/15 | 12/31/14* | 9/30/14 | |||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||
| ASSETS | |||||||||||||
| Cash and cash equivalents | $ | 19,132,000 | $ | 12,563,000 | $ | 13,958,000 | |||||||
| Federal funds sold | 1,671,000 | 152,000 | 383,000 | ||||||||||
| Held-to-maturity investment securities, at book value | 1,620,000 | ||||||||||||
| Available-for-sale investment securities, at fair value | 54,883,000 | 59,710,000 | 63,746,000 | ||||||||||
| Loans held for sale | - | 652,000 | - | ||||||||||
|
Loans, less allowance for loan losses of $2,740,000 at June 30, 2015, $2,599,000 at December 31, 2014 and $2,398,000 at September 30, 2014 |
152,288,000 | 144,104,000 | 131,369,000 | ||||||||||
| Bank premises and equipment, net | 1,339,000 | 1,459,000 | 1,498,000 | ||||||||||
| Interest receivable | 551,000 | 624,000 | 547,000 | ||||||||||
| Other real estate owned | 4,041,000 | 783,000 | 793,000 | ||||||||||
| Federal Home Loan Bank stock and other securities | 1,328,000 | 1,576,000 | 1,576,000 | ||||||||||
| Bank-owned life insurance policies | 4,948,000 | 4,834,000 | 4,794,000 | ||||||||||
| Other assets | 3,228,000 | 3,568,000 | 2,911,000 | ||||||||||
| Total assets | $ | 243,409,000 | $ | 230,025,000 | $ | 223,195,000 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
| Non-interest bearing | $ | 62,605,000 | $ | 58,995,000 | $ | 60,289,000 | |||||||
| Interest bearing | 156,231,000 | 147,055,000 | 139,984,000 | ||||||||||
| Total deposits | 218,836,000 | 206,050,000 | 200,273,000 | ||||||||||
| Interest payable and other liabilities | 639,000 | 551,000 | 642,000 | ||||||||||
| Total liabilities | 219,475,000 | 206,601,000 | 200,915,000 | ||||||||||
| Shareholders' equity | 23,934,000 | 23,424,000 | 22,280,000 | ||||||||||
| Total liabilities and shareholders' equity | $ | 243,409,000 | $ | 230,025,000 | $ | 223,195,000 | |||||||
| *Derived from audited Financial Statements | |||||||||||||
| COMMUNITY 1ST BANK | |||||||||||||||||||||||
| STATEMENTS OF INCOME (Unaudited) | |||||||||||||||||||||||
| For the Three Months Ended: | For the Nine Months Ended: | ||||||||||||||||||||||
| 9/30/15 | 6/30/15 | 9/30/14 | 9/30/15 | 9/30/14 | |||||||||||||||||||
| Interest income: | |||||||||||||||||||||||
| Interest and fees on loans | $ | 1,941,000 | $ | 1,856,000 | $ | 1,629,000 | $ | 5,556,000 | $ | 4,639,000 | |||||||||||||
|
Interest on investment securities and interest-bearing deposits in other financial institutions |
255,000 | 309,000 | 352,000 | 885,000 | 968,000 | ||||||||||||||||||
| Total interest income | 2,196,000 | 2,165,000 | 1,981,000 | 6,441,000 | 5,607,000 | ||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||
| Deposits | 240,000 | 223,000 | 221,000 | 678,000 | 674,000 | ||||||||||||||||||
| Total interest expense | 240,000 | 223,000 | 221,000 | 678,000 | 674,000 | ||||||||||||||||||
| Net interest income | 1,956,000 | 1,942,000 | 1,760,000 | 5,763,000 | 4,933,000 | ||||||||||||||||||
| Provision for loan losses | - | - | 130,000 | - | 180,000 | ||||||||||||||||||
| Net interest income after provision for loan losses | 1,956,000 | 1,942,000 | 1,630,000 | 5,763,000 | 4,753,000 | ||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||
| Service charges and fees | 10,000 | 12,000 | 15,000 | 34,000 | 45,000 | ||||||||||||||||||
| Gain on sales of loans | - | 99,000 | 11,000 | 163,000 | 3,000 | ||||||||||||||||||
| (Loss) gain on sales of available-for-sale investment securities | - | (96,000 | ) | 132,000 | (96,000 | ) | 132,000 | ||||||||||||||||
| Other | 112,000 | 111,000 | 108,000 | 337,000 | 301,000 | ||||||||||||||||||
| Total non-interest income | 122,000 | 126,000 | 266,000 | 438,000 | 481,000 | ||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||
| Salaries and employee benefits | 815,000 | 818,000 | 828,000 | 2,468,000 | 2,591,000 | ||||||||||||||||||
| Occupancy and equipment | 150,000 | 150,000 | 146,000 | 435,000 | 424,000 | ||||||||||||||||||
| Other | 591,000 | 576,000 | 633,000 | 1,766,000 | 1,786,000 | ||||||||||||||||||
| Total non-interest expense | 1,556,000 | 1,544,000 | 1,607,000 | 4,669,000 | 4,801,000 | ||||||||||||||||||
| Net income before income taxes | $ | 522,000 | $ | 524,000 | $ | 289,000 | $ | 1,532,000 | $ | 433,000 | |||||||||||||
| Provision for taxes | 188,000 | 198,000 | - | 582,000 | - | ||||||||||||||||||
| Net income | $ | 334,000 | $ | 326,000 | $ | 289,000 | $ | 950,000 | $ | 433,000 | |||||||||||||
| Net income | $ | 334,000 | $ | 326,000 | $ | 289,000 | $ | 950,000 | $ | 433,000 | |||||||||||||
| Preferred stock dividends | 35,000 | 35,000 | 35,000 | 105,000 | 105,000 | ||||||||||||||||||
| Net income available to common shareholders | $ | 299,000 | $ | 291,000 | $ | 254,000 | $ | 845,000 | $ | 328,000 | |||||||||||||
| Common Share Data | |||||||||||||||||||||||
| Basic earnings per share | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.06 | |||||||||||||
| Diluted earnings per share | $ | 0.05 | $ | 0.05 | $ | 0.04 | $ | 0.15 | $ | 0.05 | |||||||||||||
| Weighted average shares outstanding | 5,494,937 | 5,494,937 | 5,477,180 | 5,494,937 | 5,460,880 | ||||||||||||||||||
| Weighted average shares outstanding - diluted | 6,518,940 | 6,516,721 | 6,495,362 | 6,516,191 | 6,479,062 | ||||||||||||||||||
