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California Bank of Commerce News


September 02, 2009

2Q 2009 Financial Summary


California Bank of Commerce Announces Results for the 2nd Quarter 2009.


 


LAFAYETTE, CA--(7/29/2009) –  California Bank of Commerce (OTCBB: CABC), a unique commercial bank in the San Francisco Bay Area targeting closely held businesses and professionals, today announced financial results for the second quarter ended June 30, 2009.


 


“On the eve of its second anniversary, despite the challenging environment we are all facing, California Bank of Commerce continues to build its loan and deposit portfolios.  The Bank is attracting new business relationships and deepening existing ones, while maintaining strong capital and liquidity positions,” said John Rossell III, President and CEO.


 


Second Quarter 2009 Highlights


·         Capital ratios substantially exceeded the regulatory standard for “well capitalized” with a Total Risk-Based Capital Ratio of 16.38%, Tier I Risk Based Capital Ratio of 15.09%, and Tier I Leverage Ratio of 16.10%.


·         Total Assets were $155 million as of June 30, 2009, up $52 million or 50% from $103 million on the same date one year ago, and up $17 million or 13% compared to $138 million on March 31, 2009.


·         Total Loans were $111 million as of June 30, 2009, up $57 million or over 100% from $54 million on the same date one year ago, and up $12 million or 12% compared to $99 million on March 31, 2009.


·         Total Deposits were $125 million at June 30, 2009, up $45 million or 56% from $80 million on the same date one year ago, and up $18 million or 17% compared to $107 million on March 31, 2009.


·         Non-Interest Bearing deposits were $27 million, representing 21% of Total Deposits at June 30, 2009 compared to $13 million or 17% of Total Deposits one year ago.  Non-Interest Bearing deposits grew by $5 million during the second quarter of 2009.


·         The Bank´s Net Interest Margin improved to 3.61% for the quarter ended June 30, 2009 compared to 2.96% during the second quarter of 2008 and compared to 3.17% during the first quarter of 2009.


·         Total Cash and Cash Equivalents stood at $24 million as of June 30, 2009, relatively unchanged from a year ago and from the previous quarter.


 


As a result of continuing economic weakness, the bank found it prudent to increase its Allowance for Loan and Lease Losses to 1.78% of Total Loans at June 30, 2009, compared to 1.45% as of June 30, 2008 and 1.52% at March 31, 2009.  The increase in the allowance was due to management´s assessment of the California economy and its potential impact on the Bank´s loan portfolio. The Bank had no loan losses during its almost two years in operation. At June 30, 2009, the Bank had no non-accrual or non-performing loans on its books.


 


Despite the burden of building its allowance for loan and lease losses, the Bank continued to make substantial progress toward breakeven, with strong growth in net interest income and careful management of controllable overhead.


 


The Bank reported a net loss for the second quarter of $693,984, which represented a $381,880 or 35% improvement over the loss in the second quarter of 2008.  Net Income during the second quarter 2009 was negatively impacted by the increase in the Bank´s contribution to the allowance for loan losses ($475,000) and by an FDIC special assessment that was levied on all banks during the quarter ($65,790).  Excluding the provision for loan losses and FDIC special assessment, the Bank reduced its 2009 second quarter loss by $607,670 compared to the second quarter 2008 and made a $313,139 improvement compared to the first quarter of 2009.


 


Second Quarter - Year Over Year Comparison


Net Interest Income was $1,257,184 for the second quarter 2009, up $663,292 over the same period in 2008. 


Commercial and Industrial (C & I) Loans, the core of the Bank´s business focus, reached $48 million at the end of the second quarter 2009, up $20 million or 73% from the end of the second quarter 2008.


Related to its loans to closely held businesses, the Bank´s portfolio of term commercial real estate loans reached $42 million at the end of the second quarter 2009, up $22 million from the end of the second quarter 2008. 


The Bank´s deposit composition improved over the second quarter 2008.  Core deposits reached $101 million at the end of the second quarter 2009, up $44 million from the end of the second quarter 2008.  Non-interest bearing demand deposits reached $27 million at the end of the second quarter 2009, growing $13 million over the previous 12 months. Interest Bearing core deposits were $74 million at the end of the second quarter, up $31 million from the end of the second quarter 2008.


Second Quarter 2009 Compared to First Quarter 2009


Net Interest Income increased by $215,281 from the first quarter 2009 as a result of strong earning asset growth and a higher net interest margin.


Commercial and Industrial (C & I) Loans increased $4 million or 10% to $48 million from $43 million at the end of the first quarter 2009. 


Core Deposits increased $9 million or 10% to $101 million from $92 million in the first quarter 2009.  Non-Interest Bearing Demand deposits increased $5 million or 26% to $27 million from $21 million in the first quarter 2009. Other interest bearing core deposits increased during the second quarter, by $4 million to $75 million, from $71 million at the end of the first quarter 2009. 


Capital and Liquidity


The Bank remains well capitalized with a Tier 1 Leverage Capital Ratio of 16.10% at June 30, 2009.  In addition, the Bank continues to maintain strong liquidity, with over $24 million in cash and cash equivalents at June 30, 2009.


“California Bank of Commerce is making solid progress toward breakeven and remains on plan for the year.  The Bank continues to be a favored choice of closely held Bay Area businesses. So, we intend to stay focused on serving established business and their owners and key employees.” said Rossell.


 




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