Orange County Business Bank Announces Financial Results

IRVINE, Calif.--(BUSINESS WIRE)--Orange County Business Bank (the “Bank”) (OTCBB: OCBB) announced financial results for the three months and nine months ended September 30, 2012.

The Bank’s net income for the three months ended September 30, 2012 was $693 thousand versus a net loss of $84 thousand for the same period in 2011. The Bank reported net income for the first nine months of 2012 of $567 thousand versus a net loss of $221 thousand for the same period in 2011.

The Bank’s net interest income for the three months ended September 30, 2012 was $1.0 million versus $1.3 million a year ago. The difference of $300 thousand in net interest income was primarily driven by a decrease in the total loans outstanding. As the economy has stagnated, the Bank has not been able to replace the loans that have paid off. The provision for loan and lease losses was a benefit of $1 million. Non-interest income for the three months ended September 30, 2012 was $420 thousand versus $166 thousand for the same period last year as the Bank repositioned its investment securities portfolio and earned increased gains from the corresponding sale of securities comparing this quarter to the same quarter a year ago. Non-interest expense was up for the third quarter of 2012 over the same period in 2011, $1.8 million versus $1.6 million, respectively due to restructuring costs and legal fees.

Net interest income after the release of reserves from the allowance for loan and lease losses for the nine months ended September 30, 2012 was $4.5 million versus $4.2 million for the same period in 2011. The difference of $300 thousand was due to a decrease in loan interest income. Non-interest income for the first nine months of 2012 was $1.1 million versus $485 thousand for the same period in 2011 due to the increase in gains on sales of investment securities. Non-interest expense was $5.0 million for the nine months ended September 30, 2012 versus $4.9 million for the same period in 2011.

As of September 30, 2012, the Bank had a ratio of Shareholders’ Equity to Total Assets of 22.6%. At September 30, 2012, the Bank’s assets totaled $172.5 million, with loans totaling $78.8 million, and deposits totaling $117.5 million. The Bank’s capital ratios continued to far exceed regulatory guidelines for “well-capitalized” institutions at September 30, 2012.

Orange County Business Bank offers complete relationship banking services for locally owned and operated businesses, professional practices and commercial/industrial companies of Orange County and adjacent markets. The Bank’s services include a broad selection of depository as well as business loans and commercial real estate financing products uniquely designed for each client. The Bank maintains its administrative offices at 17901 Von Karman, Suite 100, Irvine, California 92614. The Bank’s website is www.ocbusinessbank.com.

This press release includes ‘forward-looking’ statements within the meaning of Section 27A of the Securities Act. All of the statements contained in this press release, other than statements of historical fact, should be considered forward-looking statements, including but not limited to, any statements which may concern (i) the Bank’s strategies, objectives and plans for expansion of its operations, product and services, and growth of its portfolio of loans, deposits and investments, (ii) the Bank’s beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Bank, (iii) the Bank’s beliefs as to the adequacy of the allowance for loan losses, and (iv) the Bank’s beliefs and expectations of the future operating results. Although the Bank believes the expectation reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All subsequent written and oral forward-looking statements by or attributable to the Bank or persons acting on its behalf are expressly qualified in their entirety by this qualification. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are not intended to give any assurance as to future results. The Bank undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

	As of and for the						As of and for the
	Three Months Ended September 30,						Nine Months Ended September 30,
		2012			2011			2012			2011
Operating Data
Interest income	$	1,291,000		$	1,605,000		$	4,206,000		$	5,117,000
Interest expense		250,000			300,000			752,000			935,000
Net interest income		1,041,000			1,305,000			3,454,000			4,182,000
Reduction in allowance for loan and lease losses		(1,000,000	)		-			(1,000,000	)		-
Net interest income after reduction in allowance
for loan and lease losses		2,041,000			1,305,000			4,454,000			4,182,000
Non-interest income		420,000			166,000			1,107,000			485,000
Non-interest expense		1,768,000			1,591,000			4,994,000			4,924,000
Income before provision for income taxes		693,000			(120,000	)		567,000			(257,000	)
Provision for income taxes		-			(36,000	)		-			(36,000	)
Net income	$	693,000		$	(84,000	)	$	567,000		$	(221,000	)
Per Share Data and Other Ratios
Net Earnings (loss) – Basic	$	0.15		$	(0.02	)	$	0.12		$	(0.05	)
Return (loss) on Average Assets		1.59	%		(0.18	%)		0.44	%		(0.16	%)
Return (loss) on Average Equity		7.28	%		(0.88	%)		1.98	%		(0.77	%)
Net Interest Margin		2.48	%		2.84	%		2.82	%		3.06	%
	September 30, 2012			December 31, 2011
Balance Sheet Data and Related Ratios
Total Assets	$	172,547,000		$	168,690,000
Total Loans		78,812,000			103,536,000
Allowance for Loan Losses (ALLL)		1,928,000			2,849,000
Investment Securities		48,848,000			34,688,000
Total Deposits		117,500,000			108,267,000
Total Shareholders’ Equity		39,001,000			38,365,000
ALLL as a Percentage of Total Loans		2.45	%		2.75	%
Book Value	$	8.25		$	8.12
Actual Number of Shares Outstanding		4,724,576			4,724,576