By Community 1st Bank (OTCBB:CFBN), with $197.8 million in assets, today reported net income of $368 thousand for the quarter ended December 31, 2012 resulting in net income of $831 thousand for the year ended December 31, 2012.
Robert C. Haydon commented, "The positive results of the quarter and year ended December 31, 2012 are extremely gratifying as it affirms the difficult first steps made in turning around our Bank. What a difference a year makes! Our commitment to exceeding our customers' expectations is translating into a strong and healthy community bank and an improving investment for our shareholders."
Total assets at December 31, 2012 were $197.8 million, an increase of $15.2 million, or 8.3%, from December 31, 2011. Community 1st Bank (the "Bank") was successful in growing loans from $72.9 million at December 31, 2011 to $87.1 million at December 31, 2012, an increase of $14.2 million, or 19.5%, enhancing the earning asset mix to higher yielding loans. The Bank also increased non-interest bearing deposits from $34.1 million at December 31, 2011 to $37.4 million at December 31, 2012, an increase of $3.4 million, or 10.0%, enhancing the deposit portfolio mix and improving the Bank's cost of funds. Total deposits increased from $152.9 million at December 31, 2011 to $169.4 million at December 31, 2012, an increase of $16.4 million, or 10.7%. When compared to the previous quarter, total assets increased $7.1 million, or 3.7%, from $190.7 million at September 30, 2012. Loans increased by $3.2 million, or 3.9%, from $83.9 million at September 30, 2012. Total deposits increased by $3.2 million, or 1.9%, from $166.2 million at September 30, 2012.
Operating Results - Quarter
The Bank reported net income for the quarter ended December 31, 2012 of $368 thousand, which included $150 thousand in provision for loan losses, $20 thousand in write-downs of other real estate owned, $250 thousand in reversal of the valuation allowance on deferred tax assets and $25 thousand in gain on sale of securities. This compares to a net loss of $1.3 million for the same period in 2011, which included $1.3 million in provision for loan losses, $119 thousand in write-downs of other real estate owned and $140 thousand in gain on sale of securities. Net income increased by $1.6 million, while the provision for loan losses decreased by $1.2 million, write-downs of other real estate owned decreased by $99 thousand, and gain on sale of securities decreased by $115 thousand as compared to the fourth quarter of 2011. The provisioning during the quarter ended December 31, 2012 was primarily a result of the loan growth experienced during the quarter while the OREO write-downs reflect adjustments expected in order to sell these properties.
Interest income increased by $306 thousand, or 21.0%, to total $1.8 million for the quarter ended December 31, 2012 compared to the same period in 2011, primarily driven by a change in the mix of our average earning assets to a greater percentage of higher yielding loans. Interest expense increased by $3 thousand, or 1.3%, to total $243 thousand for the quarter ended December 31, 2012 compared to the same period in 2011, driven by an increase in average interest bearing deposits outweighing the decrease in rates and the improved deposit portfolio mix. Net interest income increased by $303 thousand, or 24.9%, for the fourth quarter of 2012 compared to the same period in 2011. Non-interest expense decreased by $125 thousand, or 8.5%, to total $1.3 million for the quarter ended December 31, 2012 compared to the quarter ended December 31, 2011. The decrease in non-interest expense was primarily driven by a reduction in salaries and employee benefits expense from reducing overall staffing during the first quarter of 2012 as well as a reduction in collection costs corresponding to the substantial reduction in the Bank's non-performing loans.
Operating Results - Year
The Bank reported net income for the year ended December 31, 2012 of $831 thousand, which includes $780 thousand in provision for loan losses, $80 thousand in write-downs of other real estate owned, $250 thousand in reversal of the valuation allowance on deferred tax assets and gains on sale of securities of $566 thousand. This compares to a net loss of $2.5 million for the same period in 2011, which included $2.6 million in provision for loan losses, $247 thousand in write-downs of other real estate owned and a gain on sale of securities of $156 thousand. Net income increased by $3.4 million, while the provision for loan losses decreased by $1.8 million, write-downs of other real estate owned decreased by $167 thousand and gain on sale of securities increased by $410 thousand as compared to the year ended December 31, 2011.
Interest income increased by $745 thousand, or 12.5%, to total $6.7 million for the year ended December 31, 2012 compared to the same period in 2011 driven by the increase in average loans. Interest expense decreased by $18 thousand, or 1.8%, to total $979 thousand for the year ended December 31, 2012 compared to the same period in 2011. Net interest income increased by $763 thousand, or 15.4%, for the year ended December 31, 2012 compared to the same period in 2011. Non-interest expense decreased by $182 thousand, or 3.3%, to total $5.3 million for the year ended December 31, 2012 compared to the same period in 2011 driven by management's focus on reducing controllable costs, including compensation and occupancy expense.
Credit Quality
The allowance for loan losses at December 31, 2012 was $2.1 million, or 2.4% of gross loans, compared to $1.9 million, or 2.6% of gross loans at December 31, 2011. There were no loan charge-offs or recoveries for the quarter ended December 31, 2012 compared to loan charge-offs of $1.0 million with recoveries of $18 thousand for the same period in 2011. Loan charge-offs for the year ended December 31, 2012 were $593 thousand with recoveries of $12 thousand compared to loan charge-offs of $2.2 million with recoveries of $170 thousand for the same period in 2011. Nonperforming loans at December 31, 2012 were $2.3 million, or 1.2% of total assets, a reduction of $3.7 million, or 61.8%, from $6.0 million, or 3.3% of total assets, at December 31, 2011.
Capital
At December 31, 2012, the Bank had a Tier 1 Leverage Capital ratio of 10.5%, Tier 1 Risk-based Capital ratio of 16.9% and Total Risk-based Capital ratio of 18.2%. At December 31, 2011, the Tier 1 Leverage Capital ratio was 11.1%, Tier 1 Risk-based Capital ratio was 20.4% and Total Risk-based Capital ratio was 21.7%. The Bank's capital is in excess of that required to be considered "well-capitalized" by regulatory standards. The Bank has exited TARP-CPP by redeeming all shares issued to the U. S. Treasury at par, utilizing capital raised locally through a Fixed Rate Non-Cumulative Perpetual Convertible Series C Preferred Stock (the "Series C Preferred Stock") offering closed on December 18, 2012. 2,800 shares of the Series C Preferred Stock were issued at a $1,000 per share bearing dividends at a rate of 5% per annum. Each Series C Preferred Stock (i) may be converted at any time, at the option of the holder, and (ii) will be mandatorily converted after the third anniversary from the date of issuance into 363.63 shares of our common stock, which reflects an initial conversion price of $2.75 per share of our common stock.
Robert C. Haydon added, "Our commitment to building a strong balance sheet resulted in increased interest income while decreasing interest expense in 2012 compared to 2011 and increased non-interest income while decreasing non-interest expense; a significant achievement in all aspects. Our focus is on building on the successes of 2012 for strong growth and increased profitability in 2013."
Community 1st Bank is headquartered in Auburn, California, with branches in Roseville and Auburn, California. Community 1st Bank offers a wide range of business and consumer deposit products including remote deposit capture, health savings accounts, online 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 (Unaudited) | ||||||
| December 31, 2012 | December 31, 2011 | |||||
| ASSETS | ||||||
| Cash and due from banks | $ | 2,929,000 | $ | 3,037,000 | ||
| Interest-bearing deposits in other financial institutions | 5,000 | 15,000 | ||||
| Available-for-sale investment securities, at fair value | 98,574,000 | 101,736,000 | ||||
| Loans, less allowance for loan losses of $2,064,000 at | ||||||
| December 31, 2012 and $1,865,000 at December 31, 2011 | 85,042,000 | 71,026,000 | ||||
| Bank premises and equipment, net | 1,697,000 | 1,810,000 | ||||
| Other real estate owned | 973,000 | 990,000 | ||||
| Federal Home Loan Bank stock and other securities | 1,723,000 | 1,473,000 | ||||
| Bank-Owned Life Insurance Policies | 4,505,000 | - | ||||
| Accrued interest receivable and other assets | 2,319,000 | 2,466,000 | ||||
| Total assets | $ | 197,767,000 | $ | 182,553,000 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Deposits: | ||||||
| Non-interest bearing | $ | 37,446,000 | $ | 34,056,000 | ||
| Interest bearing | 131,907,000 | 118,872,000 | ||||
| Total deposits | 169,353,000 | 152,928,000 | ||||
| Borrowings | 5,595,000 | 8,360,000 | ||||
| Accrued interest payable and other liabilities | 1,134,000 | 1,024,000 | ||||
| Total liabilities | 176,082,000 | 162,312,000 | ||||
| Shareholders' equity | 21,685,000 | 20,241,000 | ||||
| Total liabilities and shareholders' equity | $ | 197,767,000 | $ | 182,553,000 | ||
| COMMUNITY 1ST BANK | |||||||||||
| STATEMENT OF OPERATIONS DATA (Unaudited) | |||||||||||
| For the Three Months Ended December 31, 2012 and 2011 | |||||||||||
| 2012 | 2011 | ||||||||||
| Interest income: | |||||||||||
| Interest and fees on loans | $ | 1,238,000 | $ | 1,025,000 | |||||||
Interest on investment securities and interest-bearing deposits | 524,000 | 430,000 | |||||||||
| Total interest income | 1,762,000 | 1,456,000 | |||||||||
| Interest expense: | |||||||||||
| Deposits | 241,000 | 239,000 | |||||||||
| Borrowings | 2,000 | 1,000 | |||||||||
| Total interest expense | 243,000 | 240,000 | |||||||||
| Net interest income | 1,519,000 | 1,216,000 | |||||||||
| Provision for loan losses | 150,000 | 1,300,000 | |||||||||
| Net interest income after provision for loan losses | 1,369,000 | (84,000 | ) | ||||||||
| Non-interest income: | |||||||||||
| Service charges and fees | 18,000 | 17,000 | |||||||||
| Gain on sales of available-for-sale investment securities | 25,000 | 140,000 | |||||||||
| Gain on sales of loans | - | 30,000 | |||||||||
| Other | 49,000 | 92,000 | |||||||||
| Total non-interest income | 92,000 | 279,000 | |||||||||
| Non-interest expense: | |||||||||||
| Salaries and employee benefits | 676,000 | 686,000 | |||||||||
| Occupancy and equipment | 153,000 | 178,000 | |||||||||
| Other | 514,000 | 604,000 | |||||||||
| Total non-interest expense | 1,343,000 | 1,468,000 | |||||||||
| Net income (loss) before income taxes | 118,000 | (1,273,000 | ) | ||||||||
| (Benefit) provision for income taxes | (250,000 | ) | - | ||||||||
| Net income (loss) | $ | 368,000 | $ | (1,273,000 | ) | ||||||
| Net income (loss) | $ | 368,000 | $ | (1,273,000 | ) | ||||||
| Preferred stock dividends and accretion of discount | 342,000 | 8,000 | |||||||||
| Net income (loss) available to common shareholders | $ | 26,000 | $ | (1,281,000 | ) | ||||||
| Basic income (loss) per share | $ | 0.00 | $ | (0.24 | ) | ||||||
| Weighted average number of shares outstanding | 5,449,242 | 5,449,242 | |||||||||
| COMMUNITY 1ST BANK | |||||||||||
| STATEMENT OF OPERATIONS DATA (Unaudited) | |||||||||||
| For the Year Ended December 31, 2012 and 2011 | |||||||||||
| 2012 | 2011 | ||||||||||
| Interest income: | |||||||||||
| Interest and fees on loans | $ | 4,531,000 | $ | 3,929,000 | |||||||
| |||||||||||
Interest on investment securities and interest-bearing deposits | 2,171,000 | 2,027,000 | |||||||||
| Total interest income | 6,702,000 | 5,957,000 | |||||||||
| Interest expense: | |||||||||||
| Deposits | 968,000 | 987,000 | |||||||||
| Borrowings | 11,000 | 10,000 | |||||||||
| Total interest expense | 979,000 | 997,000 | |||||||||
| Net interest income | 5,723,000 | 4,960,000 | |||||||||
| Provision for loan losses | 780,000 | 2,624,000 | |||||||||
| Net interest income after provision for loan losses | 4,943,000 | 2,336,000 | |||||||||
| Non-interest income: | |||||||||||
| Service charges and fees | 70,000 | 82,000 | |||||||||
| Gain on sales of available-for-sale investment securities | 566,000 | 156,000 | |||||||||
| Gain on sales of loans | 53,000 | 90,000 | |||||||||
| Other | 252,000 | 276,000 | |||||||||
| Total non-interest income | 941,000 | 604,000 | |||||||||
| Non-interest expense: | |||||||||||
| Salaries and employee benefits | 2,714,000 | 2,774,000 | |||||||||
| Occupancy and equipment | 599,000 | 658,000 | |||||||||
| Other | 1,990,000 | 2,053,000 | |||||||||
| Total non-interest expense | 5,303,000 | 5,485,000 | |||||||||
| Net income (loss) before income taxes | 581,000 | (2,545,000 | ) | ||||||||
| (Benefit) provision for income taxes | (250,000 | ) | - | ||||||||
| Net income (loss) | $ | 831,000 | $ | (2,545,000 | ) | ||||||
| Net income (loss) | $ | 831,000 | $ | (2,545,000 | ) | ||||||
| Preferred stock dividends and accretion of discount | 403,000 | 32,000 | |||||||||
| Net income (loss) available to common shareholders | $ | 428,000 | $ | (2,577,000 | ) | ||||||
| Basic income (loss) per share | $ | 0.08 | $ | (0.78 | ) | ||||||
| Weighted average number of shares outstanding | 5,449,242 | 3,296,342 | |||||||||
Community 1st Bank
Robert C. Haydon, 530-863-4801
President &
Chief Executive Officer
Fax: 530-863-4849
or
James J.
Kim, 530-863-4803
Executive Vice President & Chief Financial Officer
Fax:
530-863-4849
