July 28, 2017 PASADENA, Calif.- Community Bank (CYHT- OTC), founded in 1945, is an independent Southern California regional community bank, with assets of $3.7 billion, and headquartered in Pasadena with 16 business centers.
- Net income for the 2nd quarter and the first six months of 2017 was $8.4 million and $16.1 million, a 3.0% and 1.8% increase, respectively, over the same periods last year.
- In a strategic move to add high quality floating rate loans to its balance sheet, the Bank started to hold all of its SBA loans in the 4th quarter of 2016, instead of selling them in the secondary market for a fee. The incremental interest income and deferred loan costs on the SBA loans held during the six month period ending June 30, 2017, more than offset the decrease in fees from loan sales in the same period last year.
- The SBA hold strategy, along with strong commercial real estate production drove loans up $155.2 million or 6.2% to $2.6 billion at June 30, 2017 as compared to December 31, 2016, with $133.2 million of that growth coming during the 2nd quarter of 2017.
- Loan credit quality continues to improve as criticized and classified loan totals decreased year over year from $68.6 million at June 30, 2016 to $22.4 million at June 30, 2017. These positive factors translated to a lower reserve for loan losses at June 30, 2017 than at December 31, 2016.
- The Bank’s reserve for loan losses as of June 30, 2017 was $34.8 million or 1.31% of total loans compared to $35.1 million or 1.41% of total loans as of December 31, 2016. In the first six months of 2017, a net recovery of $600 thousand was recognized in the provision for loan losses compared to a provision of $2.25 million during the same period in 2016.
- Non-interest bearing deposits increased 8.4%, or $87.9 million to $1.135 billion at June 30, 2017 compared to $1.047 billion as of December 31, 2016, due to specialty deposit group efforts and other seasonal fluctuations. Partially offsetting this growth was a $23.0 million or 1.4% decrease in interest bearing deposits, resulting in a deposit growth of $64.9 million or 2.4% for the six month period ended June 30, 2017.
- Strong loan growth, combined with increases in non-interest bearing demand deposits, contributed to the positive growth in net interest income in the 2nd quarter of 2017 which was $29.9 million compared with $27.8 million in 1st quarter of 2017. The improved net interest margin for the quarter ended June 30, 2017 of 3.39%, compared to 1st quarter 2017 of 3.24%, was driven by higher asset yields.
- Net interest income decreased in the first six months of 2017 to $57.7 million from $58.1 million in the same period last year and the net interest margin decreased slightly to 3.32% from 3.33% in the same period. The decrease in net interest income and the net interest margin are primarily due to the June 2016 extension of $300 million of funding from overnight to 5 years. The extension of the funding was a strategic decision to reduce the interest rate risk profile of the Bank.
- Non-interest income decreased $3.5 million in the first six month of 2017 compared to the same period of 2016. This decline relates to lower gain on sales of SBA loans and the timing of certain OREO and fixed asset sales.
- Non-interest expense decreased $1.5 million in the first six month of 2017 compared to the same period of 2016, related to a decrease in salaries and employee benefits, increased deferrals of loan costs, and other smaller items.
- Community Bank’s capital ratios continue to exceed “well capitalized” regulatory requirements
- The Board of Directors declared a $0.50 per share cash dividend (aggregating $1.6 million) on its outstanding common stock for common shareholders of record as of August 15, 2017 and payable on or about September 1, 2017. This represents the eleventh consecutive quarter that the Bank has declared a dividend since introducing a formal dividend practice. The dividend was approved at the regularly scheduled Board of Directors meeting held on July 28, 2017.
CBank is pleased to include the following as market makers in Community Bank stock. Community Bank stock trades on OTC pink sheets under the ticket of CYHT. Contact information for our market makers is as follows:
Raymond James & Associates
John T. Cavender, SVP Financial Institutions
D.A. Davidson & Co.
Michael R. Natzic, Senior Vice President
Keefe Bruyette & Woods, a Stifel Company
Cathy Bellina, Equity Trader
Sandler O’Neill + Partners, L.P.
Tom Thurston, Principal
Joey Warmenhoven, Managing Director Community Banking Group
Community Bank, partnering to be YOUR community bank, has offices in Anaheim, Burbank, Century City, Commerce, Corona, Glendale, Huntington Beach, Irvine, Laguna Niguel, Ontario, Pasadena, Redlands, Santa Clarita, Santa Fe Springs, South Bay, 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.