Categories: Wire Stories

Bay Community Bancorp Earns $1.63 Million in First Quarter 2022; Declares Quarterly Cash Dividend of $0.045 Per Share

OAKLAND, Calif., May 02, 2022 (GLOBE NEWSWIRE) — Bay Community Bancorp, (OTCPink: CBOBA) (the �Company”), parent company of Community Bank of the Bay, (the “Bank”) a San Francisco Bay Area commercial bank and certified Community Development Financial Institution (“CDFI”) with full-service offices in Oakland, Danville and San Mateo, today reported earnings of $1.62 million for the first quarter of 2022, compared to $1.68 million for the first quarter of 2021. Strong core loan and deposit growth, together with interest and fee income from the loan forgiveness phase of the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) loans, contributed to profitability for the quarter. All financial results are unaudited.

The Company’s Board of Directors declared a quarterly cash dividend of $0.045 per share. The dividend is payable on June 6, 2022 to shareholders of record on May 25, 2022. This marks the fifth consecutive, and first increase in the cash dividend payment since the Company initiated quarterly cash dividends on April 30, 2021.

“We reported another quarter of core loan growth and our ongoing outreach efforts to existing clients and prospects has produced a robust loan pipeline that we expect to recognize in the coming quarters,” stated William S. Keller, President and CEO. “Operating revenue increased during the first quarter compared to a year ago, driven by increased earning assets, lower overall cost of funds and stable DDA balances, while non-interest expenses, exclusive of last year’s PPP related offsets, increased 7.6% as we built capacity to support near term growth.”

Over the last two years, the Company was an active participant in the SBA PPP, resulting in over $158.0 million in PPP loans originated over the course of the two rounds of the program. As of March 31, 2022, the Company had received payments from the SBA for forgiveness of $141.4 million for 910 PPP borrowers. At quarter end, the Company had a total of $16.9 million in gross PPP loans remaining on its books. Approximately $596,000 of the fee income recognized during the first quarter of 2022 was related to these PPP loan payoffs, compared to $829,000 of the fee income recognized during the prior quarter. At March 31, 2022, approximately $445,000 in net unrecognized fee income remained to be recognized in relation to the PPP loan portfolio, which is predominantly expected during the next few quarters.

“Higher than typical liquidity levels, primarily due to larger deposit balances and the resulting effect on the mix of our earning assets, continued to pressure our net interest margin,” said Keller. “However, as PPP loan balances run off and we recognize the benefit of the March 16 rate increase enacted by the Federal Reserve, we expect to see our NIM improve in future quarters, especially with the potential for additional rate increases throughout the year.” The Company’s net interest margin was 3.58% in the first quarter of 2022, compared to 3.69% in the preceding quarter, and 3.74% in the first quarter a year ago. PPP loan fees and interest added 26 basis points to the net interest margin for the first quarter of 2022, compared to adding 34 basis points in the preceding quarter.

“Due to rebounding economic activity, especially in industry segments that were the most affected by the pandemic, and a $220,000 recovery of a previous charge off in one of those segments, the Company did not record a provision for loan losses for the quarter ended March 31, 2022,” said Mukhtar Ali, Chief Credit Officer. “Our loan loss reserves represent 1.31% of total non-guaranteed loans at March 31, 2022, compared to 1.36% a year earlier. We communicate with our borrows regularly and we continue to be impressed by their capabilities and resilience. As a result we believe that we have adequate provisions in place to navigate the ongoing economic transition.” The Bank had no past due loans or loans on deferral at March 31, 2022.

First Quarter 2022 Financial Highlights (at or for the period ended March 31, 2022)

  • Net income was $1.63 million in the first quarter of 2022, compared to $1.68 million in the first quarter a year ago, and $1.75 million in the preceding quarter. Earnings per share was $0.18 in the first quarter of 2022, compared to $0.20 in the prior quarter, and $0.19 in the first quarter a year ago.
  • Total assets increased $29.5 million, or 3.9%, to $791.6 million at March 31, 2022, compared to $762.1 million a year earlier, and increased $76.0 million, or 10.6%, compared to $715.6 million three months earlier. Average assets for the quarter totaled $759.4 million, an increase of $74.2 million, or 10.8%, from the first quarter a year ago and an increase of $18.1 million, or 2.4%, compared with the prior quarter.
  • Net interest income, before the provision for loan losses, increased 6.7% to $6.49 million in the first quarter of 2022, compared to $6.08 million in the first quarter a year ago. There was no provision for loan losses recorded in the first quarter of 2022, compared to a $250,000 provision for loan losses in the first quarter of 2021.
  • Non-interest income was $180,000 during the first quarter of 2022, compared to $208,000 for the first quarter a year ago, and $226,000 in the fourth quarter of 2021.
  • Operating revenue (net interest income before the provision for loan losses plus non-interest income) increased 6.1% to $6.67 million in the first quarter of 2021, compared to $6.29 million in the first quarter a year ago, and decreased 3.1% compared to $6.88 million in the fourth quarter of 2021.
  • Net interest margin for the first quarter was 3.58%, compared to 3.69% in the preceding quarter and 3.74% in the first quarter a year ago. The contraction in net interest margin in the first quarter of 2022 as compared to the prior quarter was largely due to the decrease in recognition of PPP origination fee income due to lower PPP loan forgiveness during the current quarter, compared to the prior quarter. Excluding all PPP-related income and balances, the net interest margin would have been 3.32% in the first quarter of 2022, and 3.35% in the fourth quarter of 2021. The average interest yield on non-PPP loans in the first quarter was 4.48%, compared to 4.56% in the prior quarter. The average cost of funds in the first quarter was 0.24%, a 1 basis point increase compared to the prior quarter and an 8 basis points decline compared to the prior year.
  • Loans net of unearned income were $521.7 million at March 31, 2022, compared to $541.6 million a year ago, and $538.8 million three months earlier. At March 31, 2022, net non-PPP loans totaled $504.8 million, a 0.9% increase compared to $500.2 million at December 31, 2021, and a 17.4% increase compared to $429.9 million at March 31, 2021. In addition, at March 31, 2022, the unused portion of credit commitments totaled $148.7 million compared to $139.4 million in the prior quarter and $96.0 million a year ago.
  • Total deposits increased $36.9 million, or 5.6%, to $698.5 million at March 31, 2022, compared to $661.6 million a year ago and increased $88.3 million, or 14.5%, compared to $610.2 million three months earlier. Noninterest bearing demand deposit accounts decreased 5.3% compared to a year ago and represented 34.6% of total deposits. Savings, NOW and money market accounts increased 25.22% compared to a year ago and represented 54.4% of total deposits. CDs decreased 25.6% when compared to a year ago and comprised 11.0% of the total deposit portfolio, at March 31, 2022. For the quarter, the overall Cost of Deposits was 24 basis points (“bp”) compared to 23 bp in the prior quarter, and 32 bp in the first quarter a year ago.
  • Asset quality remained exemplary with $22,440 of nonperforming loans at March 31, 2022, representing 0.004% of total loans. This compares to nonperforming loans at 0.005% of total loans at December 31, 2021, and 0.021% at March 31, 2021.
  • The allowance for loan losses was $6.50 million, or 1.25% of total loans at March 31, 2022, compared to $5.68 million, or 1.05% of total loans at March 31, 2021. The allowance, as a percentage of non-guaranteed loans, was 1.31% at March 31, 2022, compared to 1.36% a year ago. The allowance for loan losses reflects management’s assessment of the current economic environment.
  • Total equity increased 6.0% to $67.0 million as of March 31, 2022, compared to a year ago. The Bank’s capital levels remained well above FDIC “Well Capitalized” standards as of March 31, 2022, with a Tier 1 Common Equity capital ratio of 12.07%; Total risk-based capital ratio of 13.23%; and Tier 1 leverage ratio of 9.10%.
  • Book value per common share totaled $7.56 as of March 31, 2022, an increase of 5.0% from a year ago.
  • Declared a quarterly cash dividend of $0.045 per share. The dividend is payable June 6, 2022 to shareholders of record on May 25, 2022.

On December 14, 2021 at the annual Freedman’s Bank Forum in Washington, D.C. Secretary of the Treasury Janet L. Yellen and Vice President Kamala Harris announced that $8.7 billion in Emergency Capital Investments had been granted to 186 MDI and CDFI banks and credit unions to, among other things, provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities that may have been disproportionately impacted by the economic effects of the COVID-19 pandemic.

“We are proud to be one of only five banks and six credit unions in California to be approved by the US Treasury for investment under ECIP. We are currently working directly with Treasury to close their investment by June 30, 2022, at which time we will announce more details including the final investment amount,” said Keller. “We look forward to working with Treasury and are excited by the increased services and lending capabilities that we will be able to provide to our clients and the communities we serve as a result . Management and the board have worked diligently to prepare for this investment capital, and we are confident that any investment, whether it is preferred stock from Treasury or common stock from shareholders, will only serve to enhance our existing business model.”

For additional information on the ECIP Program please visit
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses/emergency-capital-investment-program

For additional information on the CDFI Rapid Response Program please visit
https://www.cdfifund.gov/programs-training/programs/rrp

About Bay Community Bancorp

Bay Community Bancorp (OTCPink: CBOBA) is the parent company of Community Bank of the Bay, a San Francisco Bay Area commercial bank with full-service offices in Oakland, Danville and San Mateo. Community Bank of the Bay 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 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
wkeller@BankCBB.com

FINANCIAL TABLES TO FOLLOW:

BAY COMMUNITY BANCORP
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(Dollars in thousands, except earnings per share)
                           
                           
        INCOME STATEMENT
Three Months Ended  
        2022   2021   Qtr over Qtr   2021   Qtr over Yr Ago Qtr  
        Mar 31   Dec 31   % Change   Mar 31   % Change  
                           
Interest income     $ 6,900     $ 7,051     -2.1 %   $ 6,574     5.0 %  
Interest expense       410       395     3.8 %     493     -16.8 %  
  Net interest income before provision   6,490       6,656     -2.5 %     6,081     6.7 %  
Provision for Loan Losses           200     -100.0 %     250     -100.0 %  
  Net interest income after provision   6,490       6,456     0.5 %     5,831     11.3 %  
                           
Non-interest income     180       226     -20.4 %     208     -13.5 %  
Non-interest expense     4,361       4,192     4.0 %     3,665     19.0 %  
  Income before provision for income taxes   2,309       2,490     -7.3 %     2,374     -2.7 %  
Provision for income taxes     683       736     -7.2 %     691     -1.2 %  
  Net income     $ 1,626     $ 1,754     -7.3 %   $ 1,683     -3.4 %  
                           
                           
Basic earnings per common share $ 0.18     $ 0.20     -7.3 %   $ 0.19     -4.5 %  
Weighted average common shares outstanding         8,871,052       8,871,052           8,765,089        
                           
Return on average assets     0.87 %     0.94 %         0.97 %      
Return on average common equity   9.72 %     10.33 %         10.65 %      
                           
                           

      BAY COMMUNITY BANCORP  
      UNAUDITED SUMMARY FINANCIAL STATEMENTS
      (Dollars in thousands, except book value per share)
                           
                           
  BALANCE SHEET   At Period End  
        2022   2021   Qtr over Qtr   2021   Year over Year  
  ASSETS     Mar 31   Dec 31   % Change   Mar 31   % Change  
                           
Total cash and investments $ 247,559     $ 164,326     50.7 %   $ 197,828     25.1 %  
Loans, net of unearned income   521,675       538,831     -3.2 %     541,589     -3.7 %  
  Loan loss reserve     (6,500 )     (6,281 )   3.5 %     (5,679 )   14.5 %  
Other assets       28,823       18,678     54.3 %     28,336     1.7 %  
  Total Assets     $ 791,557     $ 715,554     10.6 %   $ 762,074     3.9 %  
                           
  LIABILITIES AND SHAREHOLDERS EQUITY                  
                           
Non-interest bearing demand deposits   241,902       237,541     1.8 %     255,310     -5.3 %  
Interest bearing deposits     456,592       372,693     22.5 %     406,326     12.4 %  
  Total deposits       698,494       610,234     14.5 %     661,636     5.6 %  
Total borrowings and other liabilities   26,021       37,287     -30.2 %     37,216     -30.1 %  
  Total Liabilities     $ 724,515     $ 647,521     11.9 %   $ 698,852     3.7 %  
                           
Total equity       67,042       68,033     -1.5 %     63,222     6.0 %  
Total Liabilities and Total Equity $ 791,557     $ 715,554     10.6 %   $ 762,074     3.9 %  
                           
Book value per common share $ 7.56     $ 7.67     -1.5 %   $ 7.20     5.0 %  
                           

SELECTED FINANCIAL DATA              
(In thousands of dollars, except for ratios and per share amounts)          
Unaudited              
    At or for the Three Months Ended  
     2022     2021     2021   
    Mar 31   Dec 31   Mar 31  
ASSET QUALITY RATIOS              
Net (charge-offs) recoveries   $ 220     $     $ (268 )  
Net (charge-offs) recoveries to average loans     0.042 %     0.000 %     -0.051 %  
Non-performing loans as a % of loans     0.004 %     0.005 %     0.021 %  
Non-performing assets as a % of assets     0.003 %     0.003 %     0.015 %  
Allowance for loan losses as a % of total loans     1.25 %     1.17 %     1.05 %  
Allowance for loan losses as a % of total unguaranteed loans   1.31 %     1.28 %     1.36 %  
Allowance for loan losses as a % of non-performing loans     28966 %     23402 %     5069 %  
               
AVERAGE BALANCE SHEET DATA              
Average assets   $ 759,409     $ 741,266     $ 685,225    
Average total loans   $ 525,647     $ 521,103     $ 522,595    
Average total deposits   $ 660,149     $ 644,639     $ 581,577    
Average shareholders’ equity   $ 67,820     $ 67,395     $ 62,704    
               
FINANCIAL RATIOSSTATISTICS              
Return on average assets     0.87 %     0.94 %     0.97 %  
Return on average equity     9.72 %     10.33 %     10.65 %  
Net interest margin     3.58 %     3.69 %     3.74 %  
Efficiency ratio     65.38 %     60.91 %     58.28 %  
               

Alex

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