Community Bank of the Bay Earns a Record $4.07 Million for 2019; Loans Grow 27% and Deposits Increase 22% Year-Over-Year

OAKLAND, Calif., Feb. 03, 2020 (GLOBE NEWSWIRE) -- Community Bank of the Bay (OTCPink: CBYAA), a San Francisco Bay Area commercial bank with full-service offices in Oakland, Danville and San Mateo, today reported that net income available to common shareholders increased 47.8% to a record $4.07 million for the year 2019, compared to $2.76 million in 2018.  For the fourth quarter of 2019, net income available to common shareholders increased 39.0% to $1.06 million, compared to $764,000 in the fourth quarter a year ago.  Improved asset quality, including a lower loan loss provision, top line revenue growth, and loan and deposit growth contributed to record profitability for the year.  All financial results are unaudited.

“Our 2019 financial results reflect the strength and stability of our banking franchise and the markets we serve.  We are achieving the benchmarks of our growth plan that saw us double the size of the Bank since 2016,” said William S. Keller, President and CEO.  “As a result, we produced record net income for the year, while maintaining excellent asset quality and a healthy net interest margin.  We generated 27% year-over-year loan growth and 22% deposit growth due to the excellent work of our lending and deposit gathering teams.  Our strong balance sheet growth is also reflective of how our unique twenty-two-year history, starting out as California’s first FDIC-insured Certified Development Financial Institution (“CDFI”), resonates with today’s business and non-profit leaders.  As we enter 2020, we are well positioned to deliver service to our clients, support for our communities and return for our shareholders.”

Fourth Quarter 2019 Financial Highlights (at or for the period ended December 31, 2019)

• Net income increased 39.0% to $1.06 million in the fourth quarter of 2019 compared to $764,000 in the fourth quarter a year ago.  Earnings per share for the quarter improved to $0.12 compared to $0.10 in the fourth quarter a year ago.
  
  
• Pre-tax core earnings excluding gains on SBA loan sales, Bank Enterprise Awards and loan loss provisions, increased $495,000, or 44.6% to totaled $1.61 million in the fourth quarter, compared to $1.11 million in the fourth quarter a year ago.
  
  
• Net interest income increased 20.5% to $4.66 million in the fourth quarter of 2019, compared to $3.87 million in the fourth quarter a year ago.  The strong improvement in operating net income in the fourth quarter of 2019 compared to the same quarter a year ago reflects a $1.16 million increase in net interest income and a $150,000 decrease in the provision for loan loss reserve, offset by a $331,000 increase in noninterest expenses.
  
  
• Net interest margin for the fourth quarter totaled 4.02% compared with 4.36% for the prior quarter and 4.06% in the fourth quarter a year ago.  The reduction in margin from the prior quarter was primarily due to 34 basis point decrease in the average yield on earning assets, while the cost of funds remained steady compared to the prior quarter.   
  
  
• Net loans increased $84.3 million, or 26.7%, to $399.7 million at year-end, compared to $315.4 million a year ago, and grew $4.4 million, or 1.4%, compared to $395.3 million three months earlier.  The last twelve month’s loan growth was generally distributed among four key loan categories with $22.8 million in commercial real estate loans, $22.6 million in construction loans, $14.1 million in commercial and industrial loans and $21.1 million in participations or acquired loans, all of which are fully guaranteed by federal or state agencies. 
  
  
• Total deposits increased $72.9 million, or 22.3% to $399.2 million at December 31, 2019, compared to a year ago. Deposits decreased when compared to $400.8 million three months earlier, primarily due to normal fourth quarter seasonality in DDA accounts, as clients take year-end distributions and prepare for other tax related events. Non-interest bearing deposits increased 28.7% year over year and represent 33.5% of total deposits at year end. 
  
  
• Assets totaled $493.4 million at December 31, 2019, a $102.7 million increase, or 26.3%, compared to $390.7 million a year earlier, and a $1.96 million increase, compared to $491.4 million three months earlier.  Average earning assets for the quarter totaled $460.5 million, an increase of $25.5 million, or 5.8%, compared with the prior quarter end, and an increase of $82.3 million, or 21.7%, from the fourth quarter a year ago.
  
  
• Asset quality remained excellent with only $151,000 of nonperforming loans at December 31, 2019, representing 0.04% of total loans.  This compares to nonperforming loans at 0.14% of total loans at December 31, 2018, and 0.19% at September 30, 2019.  Nonperforming assets (“NPAs”) were 0.03% at the end of the fourth quarter, down from 0.12% a year ago and 0.15% three months earlier.  The improvement in NPAs reflects the stability of the loan portfolio and paydowns in principal balances.
  
  
• Net charge-offs were $1,000 in the fourth quarter of 2019, compared to $118,000 in the fourth quarter a year ago.
  
  
• Allowance for loan losses, as a percentage of total loans, was 1.03% at December 31, 2019, compared to 1.08%, at December 31.
  
  
• Total equity as of December 31, 2019 of $56.1 million increased $1.2 million, or 2.3%, from the prior quarter end.  The Bank’s capital levels are well above FDIC “Well Capitalized” standards as of December 31, 2019, with a total capital ratio of 14.65%, a tier 1 capital ratio of 13.62%, a common equity tier 1 capital ratio of 13.62%, and a tier 1 leverage ratio of 11.57%. 
  
  
• Book value per common share totaled $6.43 as of December 31, 2019, an increase of 10.5% from a year ago. 

“We continue to take advantage of the bank consolidation in our markets by executing on our strategy to hire key talent who are attracted to our unique organization,” said Keller.  “The relocation of our Danville office, now located at 740 Camino Ramon, opened on schedule earlier this month.  This new location will continue to provide us with excellent client accessibility, while adding much needed space to accommodate the staffing needs required for our growing organization.”

About Community Bank of the Bay

Community Bank of the Bay (OTCPink: CBYAA) serves the financial needs of closely held businesses and professional service firms, as well as their owner-operators and non-profit organizations throughout the San Francisco Bay Area.  Community Bank of the Bay is a member of the FDIC, an SBA Preferred Lender, and a CDARS depository institution, headquartered in Oakland, with full-service branches in Danville and San Mateo.  It is also California’s first FDIC-insured certified Community Development Financial Institution and one of only three operating in the Bay Area.  The bank is recognized for establishing the Bay Area Green Fund to provide financing to sustainable businesses and projects and supports environmentally responsible values.  Additional information on the bank is available online at www.BankCBB.com.

Forward-Looking Statements

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.

Contacts:	William S. Keller, President & CEO,
	510-433-5404
	[e-mail]

FINANCIAL TABLES TO FOLLOW:

COMMUNITY BANK OF THE BAY
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(Dollars in thousands, except earnings per share)
	INCOME STATEMENT			Three Months Ended
				2019				2019				Qtr over Qtr			2018				Qtr over Yr Ago Qtr
				December 31				September 30				% Change			December 31				% Change
Interest income				$	5,778			$	5,828			-0.9	%		$	4,620			25.1	%
Interest expense				1,113				1,054				5.6	%		749				48.6	%
Net interest income before provision				4,665				4,774				-2.3	%		3,871				20.5	%
Provision for Loan Losses				50				200				-75.0	%		200
Net interest income after provision				4,615				4,574				0.9	%		3,671				25.7	%
Non-interest income				248				430				-42.3	%		449				-44.8	%
Non-interest expense				3,307				3,117				6.1	%		2,976				11.1	%
Income before provision for income taxes				1,556				1,887				-17.5	%		1,144				36.0	%
Provision for income taxes				494				588				-16.0	%		370				33.5	%
Net income				$	1,062			$	1,299			-18.2	%		$	774			37.2	%
Less: preferred dividends				-				-				0.0	%		10				-100.0	%
Net income available for common stockholders				$	1,062			$	1,299			-18.2	%		$	764			39.0	%
Basic earnings per common share				$	0.12			$	0.15			-18.3	%		$	0.10			25.7	%
Weighted average common shares outstanding				8,696,448				8,690,355							7,864,255
Return on average assets					0.88	%			1.13	%						0.77	%
Return on average common equity					7.58	%			9.50	%						6.61	%

COMMUNITY BANK OF THE BAY
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(Dollars in thousands, except book value per share)
	BALANCE SHEET			At Period End
				2019			2019			Qtr over Qtr			2018			Year over Year
	ASSETS			December 31			September 30			% Change			December 31			% Change
Total cash and investments				$	81,737		$	85,070		-3.9	%		$	68,592		19.2	%
Loans, net of unearned income				399,687			395,275			1.1	%		315,367			26.7	%
Loan loss reserve				(4,106)			(4,057)			1.2	%		(3,400)			20.8	%
Other assets				16,055			15,100			6.3	%		10,112			58.8	%
Total Assets				$	493,373		$	491,388		0.4	%		$	390,671		26.3	%
	LIABILITIES AND SHAREHOLDERS EQUITY
Non-interest bearing demand deposits				133,744			153,541			-12.9	%		103,911			28.7	%
Interest bearing deposits				265,503			247,205			7.4	%		222,442			19.4	%
Total deposits				399,247			400,746			-0.4	%		326,353			22.3	%
Total borrowings and other liabilities				38,059			35,814			6.3	%		16,642			128.7	%
Total Liabilities				$	437,306		$	436,560		0.2	%		$	342,995		27.5	%
Total equity				56,067			54,828			2.3	%		47,676			17.6	%
Total Liabilities and Total Equity				$	493,373		$	491,388		0.4	%		$	390,671		26.3	%
Book value per common share				$	6.43		$	6.31		2.0	%		$	5.82		10.5	%
Period End Shares Outstanding				8,714,438			8,690,355						8,187,766

SELECTED FINANCIAL DATA
(In thousands of dollars, except for ratios and per share amounts)
Unaudited
		At or for the Three Months Ended
		2019			2019			2018
		December 31			September 30			December 31
ASSET QUALITY RATIOS
Net (charge-offs) recoveries		(1)			33			(118)
Net (charge-offs) recoveries to average loans		-0.0003	%		0.0087	%		-0.0388	%
Non-performing loans as a % of loans		0.04	%		0.19	%		0.14	%
Non-performing assets as a % of assets		0.03	%		0.15	%		0.12	%
Allowance for loan losses as a % of total loans		1.03	%		1.03	%		1.08	%
Allowance for loan losses as a % of non-performing loans		2721	%		550	%		749	%
AVERAGE BALANCE SHEET DATA
Average assets		481,388			455,086			393,671
Average total loans		396,615			380,819			304,889
Average total deposits		389,270			364,641			331,385
Average shareholders' equity		55,615			54,239			45,844
FINANCIAL RATIOS\STATISTICS
Return on average equity		0.88	%		1.13	%		0.77	%
Return on average assets		7.58	%		9.50	%		6.61	%
Net interest margin		4.02	%		4.36	%		4.29	%
Efficiency ratio		67.31	%		59.90	%		68.88	%
Efficiency ratio (excl BEA Award)		67.31	%		62.87	%		72.81	%
NPL / NPA		150.9			737.773			453.695