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Community 1st Bancorp Reports Results for the Quarter Ended September 30, 2017

AUBURN, Calif.--(BUSINESS WIRE)-- Community 1st Bancorp (OTC Markets:CFBN), with $411.4 million in total assets, today reported net income of $648 thousand, or $0.10 per diluted share, for the quarter ended September 30, 2017 compared to $365 thousand, or $0.06 per diluted share, for the quarter ended September 30, 2016. Community 1st Bancorp (“the Company”) reported net income of $1.6 million, or $0.24 per diluted share, for the nine months ended September 30, 2017 compared to $902 thousand, or $0.14 per diluted share, for the nine months ended September 30, 2016.

James J. Kim, President and CEO commented, “The results for our Company are outstanding for the third quarter ended September 30, 2017. We have generated significant improvement to earnings and great growth in non-interest bearing deposits. These outstanding results are due to the best team of bankers in our region consistently exceeding expectations of the marketplace.”

As an update to the previously announced transaction with First Foundation Inc. (NASDAQ:FFWM), all required regulatory approvals have been received and the closing of the acquisition is expected to occur in November 2017, subject to the receipt of our shareholder approval.

Total assets at September 30, 2017 were $411.4 million, representing an increase of $60.6 million, or 17.3%, from $350.8 million at September 30, 2016. The Company was successful in growing loans by $39.5 million, or 21.0% from $188.3 million at September 30, 2016 to $227.7 million at September 30, 2017. Non-interest bearing deposits grew by $22.7 million, or 19.1%, from $119.0 million at September 30, 2016 to $141.7 million at September 30, 2017. Total deposits increased by $55.4 million, or 17.3% from $319.9 million at September 30, 2016 to $375.3 million at September 30, 2017. Total assets increased by $52.8 million from $358.6 million at December 31, 2016, and loans increased by $18.6 million from $209.1 million at December 31, 2016. Total deposits increased by $49.4 million, from $325.9 million at December 31, 2016 and non-interesting bearing deposits increased by $25.7 million, from $116.0 million at December 31, 2016.

Operating Results - Quarter

Net income was $648 thousand for the quarter ended September 30, 2017 compared to $365 thousand for the quarter ended September 30, 2016. During the quarter ended September 30, 2017, the Company’s net interest income totaled $3.0 million compared to $2.4 million for the quarter ended September 30, 2016. The Company did not book any provision for loan losses, non-interest income was $142 thousand, and non-interest expense was $2.1 million for the quarter ended September 30, 2017, compared to zero provision for loan losses, non-interest income was $140 thousand, and non-interest expense was $1.9 million for the quarter ended September 30, 2016.

Interest income totaled $3.6 million for the quarter ended September 30, 2017, representing an increase of $799 thousand when compared to $2.8 million for the quarter ended September 30, 2016. Interest expense totaled $515 thousand for the quarter ended September 30, 2017, representing an increase of $124 thousand over the $391 thousand for the quarter ended September 30, 2016. Net interest income was $3.0 million for the quarter ended September 30, 2017, compared to $2.4 million for the same period in 2016. The net interest margin for the quarter ended September 30, 2017 was 3.14% compared to 2.98% for the quarter ended September 30, 2016, representing an increase of 16 basis points.

Operating Results - Year

The Company reported net income for the nine month period ended September 30, 2017 of $1.6 million, or $0.24 per diluted share, which includes a provision for loan losses of $120 thousand. This compares to net income of $902 thousand, or $0.14 per diluted share, for the same period in 2016, which includes no provision for loan losses. Net interest income was $8.7 million for the nine month period ended September 30, 2017, an increase of $2.2 million, or 33.3%, compared to $6.52 million for the same period ended September 30, 2016. Non-interest income was $416 thousand for the nine month period ended September 30, 2017, compared to $405 thousand for the same period ended September 30, 2016. Non-interest expense increased by $744 thousand, or 13.5%, to total $6.3 million for the nine month period ended September 30, 2017 compared to $5.5 million for the same period ended September 30, 2016.

Interest income increased by $2.5 million, or 32.8%, to total $10.2 million for the nine month period ended September 30, 2017, compared to $7.7 million for the same period ended September 30, 2016. Total interest expense increased by $352 thousand, or 30.6%, to total $1.5 million for the nine month period ended September 30, 2017, compared to $1.2 million for the same period ended September 30, 2016, as the Company issued $3.0 million in additional subordinated debt in December 2016 that increased the Company’s cost of funds. Net interest income increase by $2.2 million, or 33.3%, for the nine month period ended September 30, 2017 compare to the same period in 2016. The net interest margin for the nine month period ended September 30, 2017 was 3.18%, representing an increase of 19 basis points from 2.99% for the same period ended September 30, 2016.

Credit Quality

The allowance for loan losses at September 30, 2017 was $3.1 million, or 1.36% of gross loans, compared to $2.8 million, or 1.46% of gross loans, at September 30, 2016. The Company provided $120 thousand to its allowance for loan and lease losses, it had charge-offs of $17 thousand and recoveries totaled $7 thousand for the nine month period ended September 30, 2017, compared to no provision, loan charge-offs of zero with recoveries of $12 thousand for the same period in 2016. Nonperforming loans at September 30, 2017 were $281 thousand, or 0.06% of total assets, compared to $694 thousand, or 0.23% of total assets at September 30, 2016. Other real estate owned at September 30, 2017 was $248 thousand, compared to OREO being $4.0 million at September 30, 2016.

Capital

The Company and Community 1st Bank (the “Bank”) continues to maintain a strong capital position under Basel III. The Company had Common Equity Tier 1 ratio of 10.7%, Tier 1 Leverage ratio of 7.0%, Tier 1 Risk-based Capital ratio of 10.7% and Total Risk-based Capital ratio of 14.9% at September 30, 2017. The Bank had Common Equity Tier 1 ratio of 13.3%, Tier 1 Leverage ratio of 8.9%, Tier 1 Risk-based Capital ratio of 13.3% and Total Risk-based Capital ratio of 14.5% at September 30, 2017.

James J. Kim, President and Chief Executive Officer, commented, “Community 1st Bancorp’s balance sheet infrastructure and team of bankers positions it well for strong earnings and continued success.”

Community 1st Bank is headquartered in Auburn, California, with branches in Roseville, Auburn and Sacramento, California. Community 1st Bank offers a wide range of business and consumer deposit products including remote deposit capture, health savings accounts, online banking, mobile 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 BANCORP
CONSOLIDATED BALANCE SHEETS
9/30/17 12/31/16* 9/30/16
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $ 52,785,000 $ 20,001,000 $ 47,372,000
Federal funds sold 3,775,000 1,914,000 1,430,000
Available-for-sale investment securities, at fair value 117,417,000 114,310,000 100,864,000

Loans, less allowance for loan losses of $3,096,000 at September 30, 2017, $2,986,000 at December 31,2016 and $2,754,000 at September 30, 2016

224,620,000 206,156,000 185,500,000
Bank premises and equipment, net 1,694,000 1,778,000 1,677,000
Interest receivable 1,088,000 941,000 879,000
Other real estate owned 248,000 3,559,000 3,955,000
Federal Home Loan Bank stock and other securities 2,116,000 1,368,000 1,368,000
Bank-owned life insurance policies 5,244,000 5,136,000 5,098,000
Other assets 2,421,000 3,421,000 2,620,000

Total assets

$ 411,408,000 $ 358,584,000 $ 350,763,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest bearing $ 141,668,000 $ 115,950,000 $ 119,000,000
Interest bearing 233,620,000 209,945,000 200,856,000
Total deposits 375,288,000 325,895,000 319,856,000
Subordinated debentures 7,854,000 7,841,000 4,898,000
Interest payable and other liabilities 1,257,000 600,000 733,000
Total liabilities 384,399,000 334,336,000 325,487,000
Shareholders' equity 27,009,000 24,248,000 25,276,000
Total liabilities and shareholders' equity $ 411,408,000 $ 358,584,000 $ 350,763,000
*Derived from audited Consolidated Financial Statements
COMMUNITY 1ST BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three Months Ended: For the Nine Months Ended:
9/30/17 6/30/17 9/30/16 9/30/17 9/30/16
Interest income:
Interest and fees on loans $ 2,743,000 $ 2,686,000 $ 2,197,000 $ 7,944,000 $ 6,294,000

Interest on investment securities and interest-bearing deposits in other financial institutions

816,000 757,000 563,000 2,252,000 1,381,000
Total interest income 3,559,000 3,443,000 2,760,000 10,196,000 7,675,000
Interest expense:
Deposits 375,000 351,000 288,000 1,064,000 844,000
Subordinated debentures 140,000 145,000 103,000 440,000 308,000
Total interest expense 515,000 496,000 391,000 1,504,000 1,152,000
Net interest income 3,044,000 2,947,000 2,369,000 8,692,000 6,523,000
Provision for loan losses - 25,000 - 120,000 -
Net interest income after provision for loan losses 3,044,000 2,922,000 2,369,000 8,572,000 6,523,000
Non-interest income:
Service charges and fees 14,000 16,000 21,000 48,000 53,000
Other 128,000 119,000 119,000 368,000 352,000
Total non-interest income 142,000 135,000 140,000 416,000 405,000
Non-interest expense:
Salaries and employee benefits 1,072,000 1,057,000 997,000 3,156,000 2,893,000
Occupancy and equipment 195,000 194,000 215,000 597,000 547,000
Other 793,000 915,000 721,000 2,515,000 2,084,000
Total non-interest expense 2,060,000 2,166,000 1,933,000 6,268,000 5,524,000

Net income before provision for taxes

$ 1,126,000 $ 891,000 $ 576,000 $ 2,720,000 $ 1,404,000
Provision for taxes 478,000 359,000 211,000 1,138,000 502,000
Net income $ 648,000 $ 532,000 $ 365,000 $ 1,582,000 $ 902,000
Common Share Data
Basic earnings per share $ 0.10 $ 0.08 $ 0.06 $ 0.24 $ 0.14
Diluted earnings per share $ 0.10 $ 0.08 $ 0.06 $ 0.24 $ 0.14
Weighted average shares outstanding 6,524,741 6,524,741 6,524,741 6,524,741 6,523,421
Weighted average shares outstanding - diluted 6,680,498 6,630,666 6,555,049 6,644,607 6,536,223

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Community 1st Bancorp
James J. Kim, 530-863-4803
President & Chief Executive Officer
Fax: 530-863-4849
or
Kevin R. Watson, 530-863-4815
Executive Vice President & Chief Financial Officer
Fax: 530-863-4849

Source: Community 1st Bancorp