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Headline: Community Bank of the Bay reports strong 1st quarter earnings, as total assets, loans and deposits jump 24 percent and more
Publication: ( Press Release)
Dateline: May 1, 2006
Community Bank of the Bay reports strong 1st quarter earnings, as total assets, loans and deposits jump 24 percent and more
OAKLAND, Calif., (May 1, 2006) Community Bank of the Bay (CBYAA.OB) has reported strong earnings and asset growth for the first quarter, ending March 31, 2006. The bank’s earnings rose by $134,200 to a net of $75,000 ($0.04 cents per share,) compared to a loss of $59,200 in the same quarter of 2005. Total assets grew 26.2 percent to $56.5 million, compared to $44.8 million a year earlier.
The first quarter continued a trend of strong positive growth in the range of 24-27 percent in measures across the board – in increased deposits, loans, total staff, new programs and in the bank’s net interest margin. It was the fourth quarter in a row that the bank showed a profit – the first time that has happened in the bank’s 10-year history.
The growth in earnings might have been even greater but for the impact of income taxes. Because the bank is now regularly profitable, it must accrue for taxes. The benefit it receives from losses on previous operations offsetting its tax liability is minimal. “It’s one price of success,” noted Brian Garrett, Community Bank’s president and chief executive officer.
“While the market experienced a flat yield curve, which has challenged many financial institutions with narrow margins, ours has actually grown from 4.4 percent to 5.1 percent in the last year,” Garrett noted. “For that reason we are especially happy with these results.”
“Now that we have stabilized the operations of the bank, we can focus our efforts on solid growth, core operations and maximizing profits” Garrett said.
Community Bank of the Bay year-to-year growth
|
Q1-06 |
Q1-05 |
Earnings/loss for quarter |
$75,000 |
<$59,200> |
Total assets |
$56,546,000 |
$44,800,000 |
Total deposits |
$45,624,800 |
$36,274,000 |
Non-maturity deposits |
$22,274,700 |
$17,486,500 |
Total loans |
$31,201,700 |
$25,108,000 |
Net interest margin |
5.1% |
4.4% |
Total staff |
20 |
15 |
Total loans continued to show strong gains from 2005 to 2006, increasing 24 percent, to a total of $31.2 million outstanding. Wil Hobbs, the bank’s senior vice president and chief credit officer, remarked, “Our emphasis on strengthening the relationships between the bank and our clients and meeting client needs has been well received. To meet increased loan demand, we have recently added three new loan officers and a credit analyst. On the short term this will have an adverse impact on earnings, but we expect these new officers will produce significant gains in the third and fourth quarters.”
During the first quarter, the bank also reached agreement to purchase its office building. Garrett said the move represents “our intent to fully leverage our capital to realize our market potential.”
Purchase of the 23,000-square-foot three-story office building at 1750 Broadway “represents our commitment to Oakland,” Garrett said. The bank occupies 14,000 square feet within the building. The rest will be leased to the current occupant until the bank grows into it.
The building features a large two-story atrium lobby, and a convenient drive up ATM and night depository in the back parking lot, accessible from 19th Street where the bank provides free parking for customers in 25 surface parking spaces.
“We feel this building is truly unique and will be a major component of our growth in years to come,” Garrett said.
Deposits have also grown as the bank has decreased its reliance on higher-priced deposits, replacing them with a more stable core of deposits from the community. Total deposits grew by 26 percent from $36.3 million to $45.6 million. Non-maturity deposits increased 27 percent from $17.5 million to $22.3 million. “Since deposits are a prime determinant of a bank’s success, we pay special attention to growing this area,” Garrett said.
The Oakland 1st Fund has grown to $17 million and continues to receive very positive community feedback, Garrett said. Any depositor can ask that their money be used only for loans in Oakland by designating their account for Oakland 1st. “Being a good corporate citizen is very important to us” Garrett said. “We believe the Oakland 1st Fund embodies this feeling. We encourage individuals, corporations, and municipalities to deposit for the good of all.”
The bank also continues to develop new programs aimed at adding to the bank’s long-term performance and to its ability to serve its customers.
One of the most promising is a wholesale lending program, to address all forms of non-residential real estate lending in the East Bay. “We have hired an experienced officer, Thomas Mitchell, to head this up and it will be fully operational by mid-year,” Garrett said.
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