By Community 1st Bank (OTCBB:CFBN), with $211.6 million in total assets, today reported net income of $1.0 million for the quarter ended December 31, 2013 and net income of $1.9 million for the year ended December 31, 2013.
Robert C. Haydon, President and Chief Executive Officer commented, "The fourth quarter results show continued progress in building a balance sheet poised for profitability and success. The Bank is building momentum in loan and core deposit growth by exceeding expectations of our marketplace through the consistent delivery of high quality services to our clients."
Total assets at December 31, 2013 were $211.6 million, an increase of $13.8 million, or 7.0%, from December 31, 2012. Community 1st Bank (the "Bank") was successful in growing loans from $87.1 million at December 31, 2012 to $116.4 million at December 31, 2013, an increase of $29.3 million, or 33.6%, enhancing the earnings potential of the Bank. The Bank also increased non-interest bearing deposits from $37.4 million at December 31, 2012 to $52.7 million at December 31, 2013, an increase of $15.3 million, or 40.8%, enhancing the deposit portfolio mix and improving the Bank's cost of funds. Total deposits increased from $169.4 million at December 31, 2012 to $186.3 million at December 31, 2013, an increase of $16.9 million, or 10.0%. When compared to the previous quarter, loans increased by $11.1 million, or 10.5%, from $105.3 million at September 30, 2013. Total assets decreased $30.5 million, or 12.6%, from $242.1 million at September 30, 2013 driven by the decrease in total deposits of $23.1 million, or 11.0%, from $209.4 million at September 30, 2013. The decrease in deposits experienced since the last quarter was due to a temporary increase in deposits at September 30, 2013 as a result of a client's need to place a short-term non-interest bearing deposit during the third quarter.
Operating Results - Quarter
The Bank reported net income for the quarter ended December 31, 2013 of $1.0 million, which is net of a $900 thousand tax benefit related to the partial reversal of the valuation allowance on deferred tax assets, $45 thousand in provision for loan losses and $30 thousand in gains on sales of securities. This compares to net income of $368 thousand for the same period in 2012, which included a $250 thousand tax benefit related to the partial reversal of the valuation allowance on deferred tax assets, $150 thousand in provision for loan losses and $25 thousand in gains on sales of securities. Net income increased by $659 thousand, or 179.1%, while the reversal of valuation allowance on deferred tax assets increased by $650 thousand, or 260.0% and the provision for loan losses decreased by $105 thousand and gains on sales of securities increased by $5 thousand as compared to the fourth quarter of 2012.
Interest income increased by $52 thousand, or 3.0%, to total $1.8 million for the quarter ended December 31, 2013 compared to the same period in 2012, primarily driven by the increase in average loan balances outstanding. Interest expense decreased by $44 thousand, or 18.1%, to total $199 thousand for the quarter ended December 31, 2013 compared to the same period in 2012, driven by a decrease in average rates paid on interest bearing deposits and an improved deposit mix. Net interest income increased by $96 thousand, or 6.3%, for the fourth quarter of 2013 compared to the same period in 2012. Non-interest expense increased by $248 thousand, or 18.5%, to total $1.6 million for the quarter ended December 31, 2013 compared to the quarter ended December 31, 2012. The increase in non-interest expense was primarily driven by the addition of business production officers to achieve the Bank's growth initiatives and expand market share.
Operating Results - Year
The Bank reported net income for the year ended December 31, 2013 of $1.9 million, which is net of a $900,000 tax benefit related to the partial reversal of the valuation allowance on deferred tax assets, $355 thousand in provision for loan losses and gains on sales of securities of $604 thousand. This compares to net income of $831 thousand for the same period in 2012, which included a $250 thousand tax benefit related to the partial reversal of the valuation allowance on deferred tax assets, $780 thousand in provision for loan losses and gains on sales of securities of $566 thousand. Net income increased by $1.0 million, or 124.6%, while the provision for loan losses decreased by $425 thousand and gains on sales of securities increased by $38 thousand as compared to the year ended December 31, 2012.
Interest income increased by $356 thousand, or 5.3%, to total $7.1 million for the year ended December 31, 2013 compared to the same period in 2012 driven by the increase in average loans outstanding. Interest expense decreased by $151 thousand, or 15.4%, to total $828 thousand for the year ended December 31, 2013 compared to the same period in 2012. Net interest income increased by $507 thousand, or 8.9%, for the year ended December 31, 2013 compared to the same period in 2012. Non-interest expense increased by $668 thousand, or 12.6%, to total $6.0 million for the year ended December 31, 2013 compared to the same period in 2012 driven by the addition of business production officers and increased expenses to support the Bank's growth initiatives.
Credit Quality
The allowance for loan losses at December 31, 2013 was $2.7 million, or 2.3% of gross loans, compared to $2.1 million, or 2.4% of gross loans at December 31, 2012. Loan charge-offs for the quarter ended December 31, 2013 were $61 thousand with recoveries of $450 thousand compared to no loan charge-offs or recoveries for the same period in 2012. Loan charge-offs for the year ended December 31, 2013 were $180 thousand with recoveries of $471 thousand compared to loan charge-offs of $593 thousand with recoveries of $12 thousand for the same period in 2012. Nonperforming loans at December 31, 2013 were $1.5 million, or 0.7% of total assets representing a reduction of $0.8 million, or 33.1%, from $2.3 million, or 1.2% of total assets, at December 31, 2012.
The Bank's credit quality continues to improve with significant recoveries in the quarter ended December 31, 2013 as well as reduced nonperforming assets. The improvement in credit quality is due to management's focus on improving credit quality, maintaining high credit standards for new production, and improved economic conditions.
Capital
At December 31, 2013, the Bank had a Tier 1 Leverage Capital ratio of 9.4%, Tier 1 Risk-based Capital ratio of 14.0% and Total Risk-based Capital ratio of 15.3%. At December 31, 2012, the Tier 1 Leverage Capital ratio was 10.5%, Tier 1 Risk-based Capital ratio was 16.9% and Total Risk-based Capital ratio was 18.2%. The Bank's capital is in excess of that required to be considered "well-capitalized" by regulatory standards.
Robert C. Haydon, President and Chief Executive Officer added, "I give full credit for the Bank's success to our Relationship Managers and their support team. We have assembled a group of bankers who give us a competitive advantage. The Bank is well positioned to win in the marketplace resulting in improved financial performance and enhanced shareholder value."
Community 1st Bank is headquartered in Auburn, California, with branches in Roseville and Auburn and a loan production office in Sacramento, 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 | ||||||||
| December 31, 2013 | December 31, 2012 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 4,719,000 | $ | 2,934,000 | ||||
| Available-for-sale investment securities, at fair value | 80,665,000 | 98,574,000 | ||||||
| Loans, less allowance for loan losses of $2,710,000 at | ||||||||
| December 31, 2013 and $2,064,000 at December 31, 2012 | 113,679,000 | 85,042,000 | ||||||
| Bank premises and equipment, net | 1,559,000 | 1,697,000 | ||||||
| Interest receivable | 606,000 | 640,000 | ||||||
| Other real estate owned | 870,000 | 973,000 | ||||||
| Federal Home Loan Bank stock and other securities | 1,555,000 | 1,723,000 | ||||||
| Bank-owned life insurance policies | 4,675,000 | 4,505,000 | ||||||
| Other assets | 3,229,000 | 1,679,000 | ||||||
| Total assets | $ | 211,557,000 | $ | 197,767,000 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Deposits: | ||||||||
| Non-interest bearing | $ | 52,727,000 | $ | 37,446,000 | ||||
| Interest bearing | 133,575,000 | 131,907,000 | ||||||
| Total deposits | 186,302,000 | 169,353,000 | ||||||
| Borrowings | 3,365,000 | 5,595,000 | ||||||
| Interest payable and other liabilities | 605,000 | 1,134,000 | ||||||
| Total liabilities | 190,272,000 | 176,082,000 | ||||||
| Shareholders' equity | 21,285,000 | 21,685,000 | ||||||
| Total liabilities and shareholders' equity | $ | 211,557,000 | $ | 197,767,000 | ||||
| COMMUNITY 1ST BANK | ||||||||||
| STATEMENTS OF INCOME DATA (Unaudited) | ||||||||||
| For the Three Months Ended December 31, 2013 and 2012 | ||||||||||
| 2013 | 2012 | |||||||||
| Interest income: | ||||||||||
| Interest and fees on loans | $ | 1,436,000 | $ | 1,238,000 | ||||||
Interest on investment securities and interest-bearing deposits in other financial institutions | 378,000 | 524,000 | ||||||||
| Total interest income | 1,814,000 | 1,762,000 | ||||||||
| Interest expense: | ||||||||||
| Deposits | 197,000 | 241,000 | ||||||||
| Borrowings | 2,000 | 2,000 | ||||||||
| Total interest expense | 199,000 | 243,000 | ||||||||
| Net interest income | 1,615,000 | 1,519,000 | ||||||||
| Provision for loan losses | 45,000 | 150,000 | ||||||||
| Net interest income after provision for loan losses | 1,570,000 | 1,369,000 | ||||||||
| Non-interest income: | ||||||||||
| Service charges and fees | 17,000 | 18,000 | ||||||||
| Gain on sales of available-for-sale investment securities | 30,000 | 25,000 | ||||||||
| Other | 101,000 | 49,000 | ||||||||
| Total non-interest income | 148,000 | 92,000 | ||||||||
| Non-interest expense: | ||||||||||
| Salaries and employee benefits | 861,000 | 676,000 | ||||||||
| Occupancy and equipment | 156,000 | 153,000 | ||||||||
| Other | 574,000 | 514,000 | ||||||||
| Total non-interest expense | 1,591,000 | 1,343,000 | ||||||||
| Net income before benefit for income taxes | 127,000 | 118,000 | ||||||||
| Benefit for income taxes | (900,000 | ) | (250,000 | ) | ||||||
| Net income | $ | 1,027,000 | $ | 368,000 | ||||||
| Net income | $ | 1,027,000 | $ | 368,000 | ||||||
| Preferred stock dividends and accretion of discount | 35,000 | 342,000 | ||||||||
| Net income available to common shareholders | $ | 992,000 | $ | 26,000 | ||||||
| Common Share Data | ||||||||||
| Basic earnings per share | $ | 0.18 | $ | 0.00 | ||||||
| Diluted earnings per share | $ | 0.16 | $ | 0.00 | ||||||
| Weighted average shares outstanding | 5,449,242 | 5,449,242 | ||||||||
| Weighted average shares outstanding - diluted | 6,470,567 | 5,604,511 | ||||||||
| COMMUNITY 1ST BANK | ||||||||||
| STATEMENTS OF INCOME DATA | ||||||||||
| For the Years Ended December 31, 2013 (Unaudited) and 2012 | ||||||||||
| 2013 | 2012 | |||||||||
| Interest income: | ||||||||||
| Interest and fees on loans | $ | 5,272,000 | $ | 4,531,000 | ||||||
Interest on investment securities and interest-bearing deposits in other financial institutions | 1,786,000 | 2,171,000 | ||||||||
| Total interest income | 7,058,000 | 6,702,000 | ||||||||
| Interest expense: | ||||||||||
| Deposits | 822,000 | 968,000 | ||||||||
| Borrowings | 6,000 | 11,000 | ||||||||
| Total interest expense | 828,000 | 979,000 | ||||||||
| Net interest income | 6,230,000 | 5,723,000 | ||||||||
| Provision for loan losses | 355,000 | 780,000 | ||||||||
| Net interest income after provision for loan losses | 5,875,000 | 4,943,000 | ||||||||
| Non-interest income: | ||||||||||
| Service charges and fees | 66,000 | 70,000 | ||||||||
| Gain on sales of available-for-sale investment securities | 604,000 | 566,000 | ||||||||
| Other | 392,000 | 305,000 | ||||||||
| Total non-interest income | 1,062,000 | 941,000 | ||||||||
| Non-interest expense: | ||||||||||
| Salaries and employee benefits | 3,135,000 | 2,714,000 | ||||||||
| Occupancy and equipment | 607,000 | 599,000 | ||||||||
| Other | 2,229,000 | 1,990,000 | ||||||||
| Total non-interest expense | 5,971,000 | 5,303,000 | ||||||||
| Net income before benefit for income taxes | 966,000 | 581,000 | ||||||||
| Benefit for income taxes | (900,000 | ) | (250,000 | ) | ||||||
| Net income | $ | 1,866,000 | $ | 831,000 | ||||||
| Net income | $ | 1,866,000 | $ | 831,000 | ||||||
| Preferred stock dividends and accretion of discount | 138,000 | 403,000 | ||||||||
| Net income available to common shareholders | $ | 1,728,000 | $ | 428,000 | ||||||
| Common Share Data | ||||||||||
| Basic earnings per share | $ | 0.32 | $ | 0.08 | ||||||
| Diluted earnings per share | $ | 0.29 | $ | 0.08 | ||||||
| Weighted average shares outstanding | 5,449,242 | 5,449,242 | ||||||||
| Weighted average shares outstanding - diluted | 6,469,565 | 5,488,578 | ||||||||
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
