WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--CBBC Bancorp (OTCBB: CBBC) (the “Bank”) announced today the results for the year ended December 31, 2017, of $3.1 million, or $1.20 per diluted share, compared with operating net income at December 31, 2016, of $3.0 million, or $1.39 per diluted share. In the fourth quarter of 2017, the Bank expensed $610,000 of its deferred tax asset as a result of the Tax Cuts and Job Act of 2017. This nonrecurring charge of $0.24 per share will be offset with the lower corporate tax rates now in effect and should be recovered over the next year. The Bank retired 100% of its outstanding preferred stock at a 10% discount during the second quarter of 2016. This nonrecurring event favorably impacted the Bank’s earnings available to common stock shareholders by $0.17 per share.
For the fourth quarter of 2017, the Bank earned net income of $399,000, or $0.15 per diluted share, compared with net income of $749,000, or $0.30 per diluted share, for the same period ending December 31, 2016. During the fourth quarter of 2017 the Bank recorded $1.4 million in income tax expense ($758,000 without the $610,000 tax adjustment) compared to $445,000 in the fourth quarter of 2016. This nonrecurring event unfavorably impacted the Bank’s earnings available to common stock shareholders by $0.24 per share.
Net interest income increased to $12.6 million for the year ended December 31, 2017, compared with $11.0 million the prior year. This increase was due primarily to higher volume in loans and securities as of December 31, 2017, than in the prior year. The Bank’s YTD net interest margin dropped 13 basis points over this same time frame. The fourth quarter 2017 net interest margin actually increased 18 basis points to 4.12% from fourth quarter 2016 primarily due to higher loan yields. Total loans were $240.8 million and $211.3 million as of December 31, 2017, and December 31, 2016, respectively, representing an increase of $29.5 million, or 14%. Investment totals reflected an increase of $7.9 million, or 10%, ending 2017 at $88.5 million as compared to $80.6 million as of December 31, 2016.
The Bank realized an increase in deposits of $27.9 million, or 11%, as of December 31, 2017, compared with December 31, 2016. This deposit increase was primarily in DDA deposits, up $9.0 million, or 10%; time deposits, up $9.5 million, or 18%; and wholesale deposits, up $9.6 million, or 29%, as of December 31, 2017, as compared to December 31, 2016.
Noninterest income was $701,000 for the year ended December 31, 2017, as compared to $822,000 for the similar period in the prior year. This decrease of $121,000 was primarily due to lower levels of gains on loan sales. Gains on loan sales were lower by $89,000 at December 31, 2017, over year-end 2016. Noninterest expense for the year ended December 31, 2017, was $7.25 million, up $736,000 from December 31, 2016. This was primarily due to an increase of $503,000 in other noninterest expense due to higher professional fees (primarily merger-related costs), promotional-related expenses, and other operating and organizational expenses. The Bank’s efficiency ratio remained low, staying at 54% as of December 31, 2017, equal to 54% as of December 31, 2016.
Total assets as of December 31, 2017, were $335.6 million as compared with $303.8 million as of December 31, 2016, an increase of 11%. The Bank’s loan-to-deposit ratio as of December 31, 2017 was 84.7%, up from 82.4% as of December 31, 2016.
The Bank’s capital ratios remain very strong. Total risk-based capital ratio was 13.9% and the equity ratio was 9.8% as of December 31, 2017. These ratios were 13.2% and 9.9% respectively, as of December 31, 2016. The December 31, 2017, risk-based capital ratio reflects $7.8 million in excess capital (i.e., the amount in reserve above the 10% “Well-Capitalized” level as defined by the regulators).
The Bank’s ALLL was 1.05% as of December 31, 2017, down from 1.21% as of December 31, 2016. This decrease was due to stable loan quality and favorable economic conditions. The Bank did not recognize a provision for loan losses in 2017; a provision of $420,000 was recorded in 2016. The Bank’s total NPAs (nonaccrual loans + OREO) were zero as of December 31, 2017, consistent with the balance as of the same period in 2016.
About Community Business Bancorp
Community Business Bancorp’s market area includes the greater Yolo, Solano, Sacramento, San Joaquin, and contiguous counties. The Bank focuses on and provides highly personalized commercial banking services to businesses, professionals, and nonprofit organizations. The Bank's Call Reports are available for review or download directly from the FDIC website at www.fdic.gov, or through the link at the Bank's website at CommunityBizBank.com.
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties, and factors such as: (1) the impact of changes in interest rates, (2) fluctuation in economic conditions and continued deterioration of the real estate market, (3) competition in the Bank’s defined market, (4) the Bank’s ability to sustain its internal growth rate and to preserve its earning assets quality, and (5) government regulations. Although the Bank believes the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct.
FINANCIAL TABLES FOLLOW
|Cash and due from banks||$||2,518,586||$||2,830,307|
|Fed funds sold||109,000||6,157,000|
|Loans, net of unearned income||240,810,778||211,294,613|
|Less: Allowance for loan losses||(2,521,213||)||(2,555,695||)|
|Premises and equipment, net||377,733||172,117|
|Accrued interest receivable||1,397,232||1,133,291|
|Liabilities & Shareholders' Equity|
|Non-interest bearing deposits||102,692,092||93,699,214|
|Core deposits (including CDARs)||152,604,158||139,981,364|
|Accrued expenses / other liabilities||18,781,739||18,881,278|
|Total shareholders’ equity||32,519,283||29,196,458|
|Total liabilities & shareholders' equity||$||335,561,272||$||304,434,265|
|BV per share (net of OCI)||$||13.14||$||12.17|
|Net interest income||$||12,567,846||$||11,019,104|
|Provision for loan losses||0||420,000|
|Income before taxes||6,020,874||4,908,600|
|Diluted EPS-revised ||N/A||$||1.39|
|Return on Average Assets (ROAA)||0.97||%||1.12||%|
|Return on Average Equity (ROAE)||10.58||%||10.12||%|
|Net Interest Margin||4.04||%||4.17||%|
|Net interest income||$||3,465,547||$||2,905,343|
|Provision for loan losses||0||105,000|
|Income before taxes||1,767,248||1,194,252|
|Income taxes ||1,367,997||445,000|
|Diluted EPS-revised ||N/A||N/A|
|Return on Average Assets (ROAA)||0.47||%||0.99||%|
|Return on Average Equity (ROAE)||4.85||%||10.01||%|
|Net Interest Margin||4.12||%||3.94||%|
|:||Includes additional tax expense of $610,000, or $0.24 per share due to the revaluation of the Bank’s deferred tax asset in the fourth quarter of 2017 as a result of the Tax Cuts and Job Act of 2017.|
|:||Includes $0.17 increase in earnings per share due to discount received on repurchase of 100% of outstanding preferred stock in the second quarter of 2016.|