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Community Bank Reports Revision to Earnings for the 4th Quarter and Year Ended December 31, 2016

PASADENA, Calif.--(BUSINESS WIRE)--

Community Bank (OTC Pink: CYHT) founded in 1945, is an independent Southern California regional community bank with assets of $3.6 billion, 17 business centers and its headquarters in Pasadena.

Community Bank today announced revised earnings for the fourth quarter and year ended December 31, 2016. Subsequent to the publication of our press release on January 31, 2017 and prior to the completion of our audited financial statements, we identified credit impairment in the financial condition of one loan customer that relates to conditions that existed at December 31, 2016.

Accordingly, we have adjusted our reported financial results to reflect this change. The adjustment consists of charging off $4.5 million of this collateral dependent loan, adding $3.048 million to the provision for loan losses and placing the remaining loan principal balance of $9.378 million on non-accrual status as of December 31, 2016. These adjustments reduced our reported earnings for the fourth quarter and year ended December 31, 2016 by $1.766 million, to $4.2 million and $26.8 million, respectively.

We believe the credit situation with this customer is isolated, customer specific and not indicative of general business conditions in our market area or the Bank’s overall credit quality and processes.

Community Bank’s audited financial statements for 2016 are being published simultaneously on our website at www.cbank.com. Revised financial highlights are included with this press release.

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

D.A. Davidson & Co.

John T. Cavender, SVP Financial Institutions Michael R. Natzic, Senior Vice President
415-616-8935 1-800-288-2811

John.cavender@raymondjames.com

mnatzic@dadco.com

http://www.raymondjames.com

https://dadavidson.com

 

Keefe Bruyette & Woods, a Stifel Company

Sandler O’Neill + Partners, L.P.

Cathy Bellina, Equity Trader Tom Thurston, Principal
212-887-8996 1-212-466-8027

cbellina@kbw.com

tthurston@sandleroneill.com

www.kbw.com

http://www.sandleroneill.com/

 

Wedbush Securities

Joey Warmenhoven, Managing Director Community Banking Group
1-866-662-0351

Joey.warmenhoven@wedbush.com

https://www.wedbush.com/

 

Community Bank, partnering to be YOUR community bank, has offices in Anaheim, Burbank, Century City, Commerce, Corona, Fontana, 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. Such forward looking statement are identified by words such as “believes”, “should”, “will”, “expect”, “anticipate” and similar expressions. 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.

 
COMMUNITY BANK - FINANCIAL HIGHLIGHTS
(Unaudited) Revised March 28, 2017
(Amounts in Thousands, except per share data)
 
      For the Quarters Ended                   For the Years Ended            
December 31, December 31,
      Dollar Percent       Dollar Percent
INCOME STATEMENT 2016 2015 Change Change 2016 2015 Change Change
 
Interest income $ 31,976 $ 30,630 $ 1,346 4.4 % $ 128,384 $ 125,468 $ 2,916 2.3 %
Interest expense   3,488   2,765   723   26.1 %   13,357   14,129   (772 ) (5.5 %)
Net interest income 28,488 27,865 623 2.2 % 115,027 111,339 3,688 3.3 %
Provision for loan losses   3,498   -   3,498   -     6,948   -   6,948   -  
Net interest income after provision 24,990 27,865 (2,875 ) (10.3 %) 108,079 111,339 (3,260 ) (2.9 %)
Non-interest income 1,972 3,212 (1,240 ) (38.6 %) 13,307 17,701 (4,394 ) (24.8 %)
Non-interest expense   20,537   17,307   3,230   18.7 %   78,328   84,224   (5,896 ) (7.0 %)
Income before income tax 6,425 13,770 (7,345 ) (53.3 %) 43,058 44,816 (1,758 ) (3.9 %)
Income tax   2,197   5,077   (2,880 ) (56.7 %)   16,235   17,051   (816 ) (4.8 %)
Net income $ 4,228 $ 8,693 $ (4,465 ) (51.4 %) $ 26,823 $ 27,765 $ (942 ) (3.4 %)
 
                 
As of December 31, Dollar Percent
BALANCE SHEET 2016       2015 Change Change
Cash and cash equivalents $ 47,552 $ 48,907 $ (1,355 ) (2.8 %)
Investments 913,781 958,392 (44,611 ) (4.7 %)
Non-owner occupied real estate loans 823,621 834,671 (11,050 ) (1.3 %)
Owner occupied real estate loans   1,078,652     986,007     92,645   9.4 %
Total real estate loans 1,902,273 1,820,678 81,595 4.5 %
Commercial & industrial loans 545,332 588,956 (43,624 ) (7.4 %)
Other loans   46,902     18,291     28,611   156.4 %
Total loans 2,494,507 2,427,925 66,582 2.7 %
Loan loss reserve   (35,166 )   (36,327 )   1,161   (3.2 %)
Net loans 2,459,341 2,391,598 67,743 2.8 %
Other assets   164,285     151,358     12,927   8.5 %
Total assets $ 3,584,959   $ 3,550,255   $ 34,704   1.0 %
 
Earning assets $ 3,423,176   $ 3,409,689   $ 13,487   0.4 %
 
Non-interest bearing deposits $ 1,047,221 $ 916,753 $ 130,468 14.2 %
Interest bearing deposits   1,634,773     1,672,689     (37,916 ) (2.3 %)
Total deposits 2,681,994 2,589,442 92,552 3.6 %
Funds purchased/borrowed 543,000 625,000 (82,000 ) (13.1 %)
Other liabilities   32,256     24,911     7,345   29.5 %
Total liabilities 3,257,250 3,239,353 17,897 0.6 %
Stockholders' equity   327,709     310,902     16,807   5.4 %

Total liabilities & stockholders' equity

$ 3,584,959   $ 3,550,255   $ 34,704   1.0 %
 
                   
For the Quarters Ended For the Years Ended
December 31, December 31,
PERFORMANCE AND PER SHARE DATA 2016       2015 2016       2015
Return on average equity 5.01 % 11.11 % 8.07 % 9.08 %
Return on average assets 0.47 % 0.99 % 0.74 % 0.79 %
 
Earning Asset Yields 3.75 % 3.65 % 3.72 % 3.72 %
Cost of Funds   0.41 %   0.33 %   0.39 %   0.42 %
Net interest margin   3.34 %   3.32 %   3.33 %   3.30 %
 
Efficiency ratio 67.4 % 55.7 % 61.1 % 68.1 %
 
Book value per common share $ 104.76 $ 99.38 $ 104.76 $ 99.38
Basic earnings per common share $ 1.35 $ 2.78 $ 8.57 $ 8.88
Diluted earnings per common share $ 1.35 $ 2.78 $ 8.57 $ 8.88
Employee head count 432 416 432 416
 

Note: Audited financial statements are published on the website at www.CBank.com

 
 
COMMUNITY BANK - FINANCIAL HIGHLIGHTS
(Unaudited) Revised March 28, 2017
(Amounts in Thousands)
 
     

December 31,

      Minimum Ratios for a
CAPITAL RATIOS 2016       2015 Well-Capitalized Bank
Tier 1 leverage capital 9.36 % 8.97 %       5.00 %
Tier 1 risk-based capital 10.88 % 10.57 % 8.00 %
Total risk-based capital 12.08 % 11.82 % 10.00 %
Common equity tier 1 capital 10.88 % 10.57 % 6.50 %
 
 
 

December 31,

Dollar Percent
OTHER SELECTED DATA 2016 2015 Change Change
Other real estate owned $ 3,000 $ 8,089 $ (5,089 ) (62.9 %)
Nonperforming loans $ 16,189 $ 11,979 $ 4,210 35.1 %
Reserve for loan losses to total loans 1.41 % 1.50 % (6.0 %)
Reserve for loan losses to nonperforming loans 217.22 % 303.26 % (28.4 %)
Nonperforming loans to total loans 0.65 % 0.49 % 32.7 %
Nonperforming assets to total assets 0.54 % 0.57 % (5.3 %)
 
                                   
For the Quarters Ended For the Years Ended
December 31, December 31,
      Dollar Percent       Dollar Percent
2016 2015 Change Change 2016 2015 Change Change
 
Non-interest income
Service charges on deposits $ 955 $ 958 $ (3 ) (0.3 %) $ 3,838 $ 4,084 $ (246 ) (6.0 %)
Fees and commissions 576 530 46 8.7 % 2,234 2,166 68 3.1 %
Bank owned life insurance 393 444 (51 ) (11.5 %) 1,576 1,539 37 2.4 %
Gain on sale of OREO - - - - 1,795 - 1,795 -
Gain on sale of securities - - - - 83 5,302 (5,219 ) (98.4 %)
Gain on sale of loans 6 1,297 (1,291 ) (99.5 %) 3,599 4,368 (769 ) (17.6 %)
Other non-interest income   42   (17 )   59   (347.1 %)   182   242   (60 ) (24.8 %)
Total non-interest income $ 1,972 $ 3,212   $ (1,240 ) (38.6 %) $ 13,307 $ 17,701 $ (4,394 ) (24.8 %)
 
Non-interest expense
Salary and employee benefits 14,692 12,400 2,292 18.5 % 53,834 50,221 3,613 7.2 %
Other expense 5,845 4,907 938 19.1 % 24,494 22,589 1,905 8.4 %
Debt termination expense   -   -     -   -     -   11,414   (11,414 ) (100.0 %)
Total non-interest expense $ 20,537 $ 17,307   $ 3,230   18.7 % $ 78,328 $ 84,224 $ (5,896 ) (7.0 %)
 

Note: Audited financial statements are published on the website at www.CBank.com

 
 
COMMUNITY BANK - FINANCIAL HIGHLIGHTS
AVERAGE BALANCE SHEET AND YIELDS
(Unaudited) Revised March 28, 2017
 
      Year Ended             Year Ended      
(In thousands)       December 31, 2016               December 31, 2015        
Average       Yield/ Average       Yield/
Balance       Interest       Rate Balance       Interest       Rate
INTEREST EARNING ASSETS
Loans and leases $ 2,508,726 $ 106,463 4.24 % $ 2,314,701 $ 98,969 4.28 %
Investment securities 927,427 21,827 2.35 % 1,036,900 26,446 2.55 %
FFSold/Fed balances/Due from Time   19,261         94       0.48 %   20,914         53       0.25 %
Total Earning Assets 3,455,414 128,384 3.72 % 3,372,515 125,468 3.72 %
 
Nonearning assets   145,502   137,192
 
Total Assets $ 3,600,916 $ 3,509,707
 
INTEREST BEARING LIABILITIES
Time deposits 617,508 4,380 0.71 % 677,495 4,165 0.61 %
Demand/MM accounts 1,019,231 3,324 0.33 % 1,019,962 3,170 0.31 %
Savings and other   39,347         19       0.05 %   37,162         18       0.05 %
Total Interest Bearing Deposits 1,676,086 7,723 0.46 % 1,734,619 7,353 0.42 %
 

Federal funds purchased/ borrowed funds

  557,743         5,634       1.01 %   547,649         6,776       1.24 %
 
Total Interest Bearing Liabilities 2,233,829 13,357 0.60 % 2,282,268 14,129 0.62 %
 
Non-interest bearing deposits 1,007,703 900,987

 

Accrued interest payable and other liabilities

  27,167   20,812
 
Total Liabilities 3,268,699 3,204,067
Shareholders' equity   332,217   305,640

 

Total Liabilities and Shareholders' Equity

$ 3,600,916 $ 3,509,707
 
 
Net Interest Spread 3.12 % 3.10 %
 
Effect of noninterest-bearing sources 0.21 % 0.20 %
 
 
Net Interest Income and Margin $ 115,027       3.33 % $ 111,339       3.30 %
 
Note: The tax effective net interest margin is approximately 5 basis points higher for both 2016 and 2015.
 

Note: Audited financial statements are published on the website at www.CBank.com

 

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