Community Bank Reports Record Earnings For 2014 of $25.8 Million

Community Bank, an independent community bank with 17 offices serving businesses and consumers in southern California, reported record net income of $25.8 million for the year ended December 31, 2014, the largest reported net income in the Company’s sixty-nine year history.

“This is a watershed mark for Community Bank,” said David R. Misch, the Bank’s Chief Executive Officer. “We are proud of having achieved record earnings while investing in the future of the Bank”, continued Misch.

Highlights of the full year results are as follows:

- Net income for the full year was $25.8 million versus $24.9 million the prior year. The record earnings occurred despite fewer gains on sale in 2014 versus 2013 and one-time costs, in excess of $2.0 million, associated with repositioning the Bank for future growth.

- Total loans as of December 31, 2014 increased 11.0% to $2.3 billion as compared to $2.1 billion as of the prior year end. For the first time in the Company’s history, commercial and industrial loans topped $500 million.

- Non-interest bearing deposits increased 20.9% or $152.7 million. Total deposits increased 3.2% to $2.6 billion as of December 31, 2014 as compared to $2.5 billion as of December 31, 2013.

- The Bank’s reserve for loan losses as of December 31, 2014 was $35.3 million or 1.55% of total loans compared to $34.4 million or 1.68% of total loans as of December 31, 2013.

- No provision for loan losses was required in 2014, reflective of continuing improvement in credit quality, as evidenced by the 39.2% decrease in non-performing loans year over year.

- The Bank’s capital ratios continue to exceed the regulatory requirements for a well-capitalized bank with Tier 1 Leverage, Tier 1 Risk-based Capital and Total Risk-based Capital Ratios of 8.24%, 10.62%, and 11.87%, respectively, as of December 31, 2014.

Charles McCluer and Charles Cook, both board members and representatives of the family that owns the Bank, echoed Misch’s comments. “It is amazing to see how the Bank has developed over the years,” commented Mr. Cook. Mr. McCluer added, “It is a testament to the vision Charlie and Howard Cook had many years ago. I am sure they would be very proud.”

Community Bank, with assets exceeding $3.5 billion, was founded in 1945 and is headquartered in Pasadena. The Bank is a regional Southern California Bank with offices in Anaheim, Burbank, Century City, Commerce, Corona, Fontana, Glendale, Huntington Beach, Irvine, Ontario, Pasadena, Redlands, Santa Clarita, Santa Fe Springs, South Bay, Ventura, and Woodland Hills. For more information, visit the Community Bank Website at www.cbank.com.

This press release may contain certain forward-looking statements, including certain plans, expectations, goals and projections (including statements relating to growth, profitability and future dividends), which are subject to numerous assumptions, risks and uncertainties. You can identify such forward-looking statements by use of the terms “believes”, plus”, “expects”, “anticipates”, “intends”, “hopes”, “should”, “estimates”, or words of similar meaning. 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; the condition of our loan portfolio; competitive pressures on product pricing and services; our income and level of profitability; success and timing of business strategies; changes in consumer confidence; the nature and extent of governmental actions, and legislative reforms; the impact of regulatory and legal proceedings and rapidly changing technology and evolving banking industry standards.

COMMUNITY BANK
Financial Highlights - Income Statement and Ratios (Unaudited)
(Amounts in Thousands)
For the quarters endedFor the year ended
December 31,December 31,
DollarPercentDollarPercent
INCOME STATEMENT20142013ChangeChange20142013ChangeChange
Interest income $ 32,456 $ 30,341 $ 2,115 7.0 % $ 125,093 $ 119,433 $ 5,660 4.7 %
Interest expense 4,426 5,583 (1,157 ) (20.7 %) 18,994 22,180 (3,186 ) (14.4 %)
Net interest income 28,030 24,758 3,272 13.2 % 106,099 97,253 8,846 9.1 %
Provision for loan losses - - - - - - - -
Net interest income after provision 28,030 24,758 3,272 13.2 % 106,099 97,253 8,846 9.1 %
Non-interest income 4,039 2,319 1,720 74.2 % 11,992 11,040 952 8.6 %
Non-interest expense 20,508 18,252 2,256 12.4 % 75,592 67,661 7,931 11.7 %
Income before income tax 11,561 8,825 2,736 31.0 % 42,499 40,632 1,867 4.6 %
Income tax 4,549 3,357 1,192 35.5 % 16,693 15,727 966 6.1 %
Net income $ 7,012 $ 5,468 $ 1,544 28.2 % $ 25,806 $ 24,905 $ 901 3.6 %
Financial Highlights - Balance Sheet (Unaudited)
(Amounts in Thousands)
As of December 31,DollarPercent
BALANCE SHEET20142013ChangeChange
Cash and cash equivalents $ 46,819 $ 46,418 $ 401 0.9 %
Investments 1,156,983 1,146,692 10,291 0.9 %
Non-owner occupied real estate loans 713,449 636,587 76,862 12.1 %
Owner occupied real estate loans 967,821 907,323 60,498 6.7 %
Total real estate loans 1,681,270 1,543,910 137,360 8.9 %
Commercial & industrial loans 563,008 483,462 79,546 16.5 %
Other loans 35,981 27,637 8,344 30.2 %
Total loans 2,280,259 2,055,009 225,250 11.0 %
Loan loss reserve (35,329 ) (34,444 ) (885 ) 2.6 %
Net loans 2,244,930 2,020,565 224,365 11.1 %
Other assets 136,987 136,925 62 0.0 %
Total assets $ 3,585,719 $ 3,350,600 $ 235,119 7.0 %
Earning assets $ 3,458,899 $ 3,217,445 $ 241,454 7.5 %
Non-interest bearing deposits $ 882,601 $ 729,887 $ 152,714 20.9 %
Interest bearing deposits 1,714,189 1,786,375 (72,186 ) (4.0 %)
Total deposits 2,596,790 2,516,262 80,528 3.2 %
Funds purchased/borrowed 670,500 565,500 105,000 18.6 %
Other liabilities 21,832 15,360 6,472 42.1 %
Total liabilities 3,289,122 3,097,122 192,000 6.2 %
Stockholders' equity 296,597 253,478 43,119 17.0 %

Total liabilities & stockholders' equity

$ 3,585,719 $ 3,350,600 $ 235,119 7.0 %
Selected Financial Data and Highlights (Unaudited)
(Amounts in Thousands)
For the quarters endedFor the year ended
As of December 31,As of December 31,
2014201320142013
Return on average equity 9.48 % 8.40 % 9.22 % 9.71 %
Return on average assets 0.79 % 0.66 % 0.75 % 0.79 %
Net interest margin 3.27 % 3.09 % 3.20 % 3.19 %
Efficiency ratio 65.73 % 67.06 % 64.49 % 63.32 %
Book value per common share $ 94.81 $ 81.16
Basic earnings per common share $ 2.24 $ 1.75 $ 8.26 $ 7.97
Diluted earnings per common share $ 2.24 $ 1.74 $ 8.25 $ 7.95
As of December 31,Minimum Ratios for a
CAPITAL RATIOS20142013Well-Capitalized Bank
Tier 1 leverage capital 8.24 % 8.01 % 5.00 %
Tier 1 risk-based capital 10.62 % 10.52 % 6.00 %
Total risk-based capital 11.87 % 11.77 % 10.00 %
Tier 1 common capital 10.62 % 10.51 % N/A
As of December 31,DollarPercent
OTHER SELECTED DATA20142013ChangeChange
Other real estate owned $ 5,055 $ 6,089 $ (1,034 ) (17.0 %)
Nonperforming loans $ 15,256 $ 25,073 $ (9,817 ) (39.2 %)
Reserve for loan losses to total loans 1.55 % 1.68 % (7.7 %)
Reserve for loan losses to nonperforming loans 231.57 % 137.37 % 68.6 %
Nonperforming loans to total loans 0.67 % 1.22 % (45.1 %)
Nonperforming assets to total assets 0.57 % 0.93 % (38.7 %)

Contacts:

Community Bank
Nancy Karlson, Chief Financial Officer
(626) 568-2076

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