OAKLAND, Calif., May 01, 2024 (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 California’s first certified FDIC-insured Community Development Financial Institution (“CDFI”) with full-service offices in Oakland, Danville, San Jose and San Mateo, and a production office in San Francisco, today reported net income of $1.66 million for the first quarter of 2024, compared to $1.31 million for the fourth quarter and $1.94 million for the first quarter of 2023. All financial results are unaudited.
The Company’s Board of Directors increased its quarterly cash dividend by 10% to $0.055 per share. The dividend is payable June 4, 2024, to shareholders of record on May 23, 2024. This marks the thirteenth consecutive cash dividend payment, and third increase in the dividend payment since the Company initiated quarterly cash dividends on April 30, 2021.
“Our first quarter operating performance reflects good progress toward our plan to reinvest recent CDFI grant income into core deposit generating capabilities. These investments drove an almost 16% increase in non-interest bearing deposits and more modest loan growth that resulted in a 30 bp improvement in net interest margin quarter over quarter, and another 8 bp improvement in the month of March,” stated William S. Keller, CEO. “Last year’s loss of five Bay Area competitors almost simultaneous with our being awarded $2.9 million of CDFI-related grants created an unprecedented opportunity for us. Not only did we expand our branch network by adding a new full-service banking office in San Jose, relocating and expanding our San Mateo office and establishing a new San Francisco Production Office, we were able to attract talent that was previously unavailable. We are grateful that these professionals and their clients appreciated our unique story, capabilities and the safety and stability that comes with a capital position that ranks in the top three percent of our nationwide peer group. As the year progresses, we expect to continue to integrate and evaluate our expanded team and we will look for ways to further drive growth and improve operating efficiencies.”
“With these investments in place and gaining momentum, we decided to lean into our capital position by paying down $30.0 million in FHLB borrowings, which we were able to replace almost entirely with DDA account balances,” Keller continued. “In addition to improving our deposit mix and lowering our cost of funds we were able to recognize a $685 thousand gain by paying off the FHLB advance early.”
“Our commercial real estate loan portfolio continues to perform well” said Mukhtar Ali, President and Chief Credit Officer. “So far, the major price declines and foreclosures in commercial real estate in our markets have been centered in the larger downtown office properties where we have no direct exposure, so our loan portfolio remains extremely strong. Commercial real estate loans against office properties totaled $69.3 million at March 31, 2024, and represented 34.0% of capital. The non-owner occupied office segment consisted of 23 notes totaling $53.4 million and carried a weighted average loan-to-value of 40.9% at quarter end. All relationships in this category are performing as agreed. We are also pleased to report that soon after quarter end we successfully resolved our one large non-performing asset without any loss of principal and the full collection of accrued interest and fees.”
First Quarter 2024 Financial Highlights (at or for the period ended March 31, 2024)
- Net income was $1.66 million in the first quarter of 2024, compared to $1.94 million in the first quarter a year ago, and $1.31 million in the preceding quarter. Earnings per common share was $0.19 in the first quarter of 2024, compared to $0.22 in the first quarter a year ago, and $0.15 in the preceding quarter.
- Pre-tax, pre-provision, pre-CDFI grant income was $2.77 million in the first quarter of 2024, compared to $2.79 million in the year ago quarter, and $1.68 million in the fourth quarter of 2023.
- Total assets decreased $26.0 million, or 2.6%, to $983.1 million at March 31, 2024, compared to $1.01 billion a year earlier, and increased $8.10 million, or 0.8%, compared to $975.0 million three months earlier. Average assets for the quarter totaled $978.0 million, a decrease of $9.09 million, or 0.9%, from the first quarter a year ago and a decrease of $66.0 million, or 6.3%, compared with $1.04 billion the prior quarter.
- Net interest income, before the provision for credit losses, increased 7.9% to $8.26 million in the first quarter of 2024, compared to $7.66 million in the first quarter a year ago, and increased 1.1% compared to $8.17 million in the preceding quarter. There was a $374,000 provision for credit losses recorded in the first quarter of 2024. This compared to a $39,000 provision for credit losses in the first quarter of 2023, and a $106,000 negative provision for credit losses recorded for the preceding quarter.
- Noninterest income was $946,000 in the first quarter of 2024, compared to $248,000 in the first quarter of 2023, and $345,000 in the fourth quarter of 2023. $685,000 of the quarter’s income was due to a gain on the repayment of the FHLB advance.
- Operating revenue (net interest income before the provision for loan losses plus non-interest income) was $9.20 million in the first quarter of 2024, a 16.5% increase compared to $7.90 million in the first quarter a year ago, and an 8.1% increase compared to $8.51 million in the fourth quarter of 2023.
- Net interest margin was 3.46% in the first quarter, compared to 3.16% in the preceding quarter, and 3.28% in the first quarter a year ago. The 30 basis point increase in net interest margin during the first quarter of 2024 was due to an improved deposit mix and the decrease in deposit costs compared to the linked quarter. The average interest yield on loans in the first quarter of 2024 was 5.72%, compared to 5.42% in the year ago quarter and 5.69% in the prior quarter. The average cost of funds in the first quarter was 2.25%, a 31 basis point increase compared to the first quarter a year ago and a 16 basis point decrease compared to the prior quarter.
- Noninterest expense was $6.44 million in the first quarter of 2024, compared to $5.31 million in the first quarter of 2023, and $6.84 million in the fourth quarter of 2023. Noninterest expense during the current quarter and preceding quarter reflected expenses associated with the Company’s market expansion. Also impacting expenses during the preceding quarter was $322,000 of extraordinary charges associated with altered or otherwise unauthorized checks. The Company believes it has legal recourse against the bank of first deposit and is vigorously pursuing restitution.
- Loans, net of unearned income, increased $25.8 million, or 3.9%, to $692.6 million at March 31, 2024, compared to $666.9 million a year ago, and increased $16.2 million, or 2.4%, compared to $676.4 million three months earlier. In addition, at March 31, 2024, the unused portion of credit commitments totaled $144.3 million compared to $134.9 million in the prior quarter and $153.8 million a year ago.
- Total deposits increased $10.8 million, or 1.6%, to $671.2 million at March 31, 2024, compared to $660.4 million a year ago, and increased $37.3 million, or 5.9%, compared to $633.9 million three months earlier. Noninterest bearing demand deposit accounts increased 4.4% compared to a year ago and represented 30.5% of total deposits. Savings, NOW and money market accounts decreased 11.0% compared to a year ago and represented 38.3% of total deposits. Reflective of the rising interest rate environment, CDs increased 19.3% compared to a year ago and comprised 31.1% of the total deposit portfolio, at March 31, 2024. For the quarter, the overall cost of funds was 225 basis points compared to 241 basis points in the prior quarter, and 194 basis points in the first quarter a year ago.
- Asset quality remains strong with 1.011% nonperforming loans to gross loans at March 31, 2024. This compares to 1.056% of nonperforming loans to gross loans at December 31, 2023, and 0.021% of nonperforming loans to gross loans at March 31, 2023.
- The allowance for credit losses on loans was $6.52 million, or 0.94% of gross loans at March 31, 2024, compared to $6.48 million, or 0.97% of total loans at March 31, 2023. The allowance for credit losses reflects management’s assessment of the current economic environment.
- Primarily due to retained earnings, total equity increased 2.7% to $191.6 million as of March 31, 2024, compared to $186.6 million a year ago. The Bank’s capital levels remained well above FDIC “Well Capitalized” standards as of March 31, 2024, with a Tier 1 capital ratio of 25.2%; Common Equity Tier 1 capital ratio of 9.96%; Total capital ratio of 26.11%; and Leverage ratio of 20.20%.
- Book value per common share increased 7.4% to $8.44 as of March 31, 2024, compared to $7.86 per common share a year ago.
- Declared a quarterly cash dividend of $0.055 per share. The dividend is payable June 4, 2024, to shareholders of record on May 23, 2024.
On October 23, 2023, the Company’s board of directors adopted a share repurchase program authorizing the repurchase of up to 436,440 shares of the Company’s outstanding shares of Series A common stock. As of March 31, 2024, the Company had repurchased 202,000 outstanding shares of Series A common stock and 234,440 shares remain available under the repurchase program ending September 30, 2024.
In 2022 the Company completed a $119.4 million investment from the US Treasury Department. Treasury’s investment, made under the Emergency Capital Investment Program (“ECIP”), is in the form of non-cumulative Senior Perpetual Preferred Stock. For the first two years from the date of issuance of the dividend rate shall be zero percent (0%) per annum, and thereafter dividend payments begin accruing with a maximum dividend rate of two percent (2%) but may be reduced to one half percent (0.5%) based on the level of increased qualified lending undertaken by the Bank.
For additional information on the US Treasury’s ECIP Program please visit
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses/emergency-capital-investment-program
While the ECIP investment was a transformative event brought on by the unprecedented Federal response to the pandemic, the Bank has maintained a long and important relationship with the US Treasury’s CDFI Fund. Since its founding, the Bank has received 22 Bank Enterprise Awards and 2 grants totaling $13.5 million. All of these awards and grants support our lending and investment activities in low- and moderate-income communities, and we are now building capacity to actively participate in the Clean Communities Investment Accelerator (“CCIA”) program administered by the Environmental Protection Agency ("EPA") and authorized by the Inflation Reduction Act to “finance clean technology deployment in low-income and disadvantage communities, while simultaneously building the capacity of community lenders that serve those communities.” In March the EPA awarded $940 million in CCIA program funds to a coalition led by the Justice Climate Fund. As members of this coalition, we are eager to help deploy these funds in the communities we serve.
For additional information on the EPA’s Clean Communities Investment Accelerator Program please visit https://www.epa.gov/greenhouse-gas-reduction-fund/clean-communities-investment-accelerator
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, San Mateo and San Jose, and a production office in San Francisco. Community Bank of the Bay serves the financial needs of closely held businesses, professional service firms, real estate investors and developers 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, and is California’s first FDIC-insured certified Community Development Financial Institution. 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.
FINANCIAL TABLES TO FOLLOW:
| Bay Community Bancorp | ||||||||||||||||
| Quarterly Financial Summary (Unaudited) | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| Earnings and dividends: | Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |||||||||||
| Interest income | $ | 12,609 | $ | 13,297 | $ | 13,268 | $ | 12,278 | $ | 11,442 | ||||||
| Interest expense | 4,353 | 5,130 | 5,064 | 4,473 | 3,790 | |||||||||||
| Net interest income | 8,256 | 8,167 | 8,204 | 7,805 | 7,652 | |||||||||||
| Provision for credit losses, loans | 374 | (106 | ) | 626 | (96 | ) | 39 | |||||||||
| Noninterest income | 946 | 345 | 3,332 | 234 | 248 | |||||||||||
| Noninterest expense | 6,436 | 6,844 | 6,464 | 5,495 | 5,134 | |||||||||||
| Provision for income taxes | 735 | 462 | 1,322 | 786 | 784 | |||||||||||
| Net income | 1,657 | 1,312 | 3,124 | 1,854 | 1,943 | |||||||||||
| Share data: | ||||||||||||||||
| Basic earnings per common share | $ | 0.19 | $ | 0.15 | $ | 0.36 | $ | 0.21 | $ | 0.22 | ||||||
| Dividends declared per common share | 0.050 | 0.050 | 0.050 | 0.050 | 0.050 | |||||||||||
| Book value per common share | 8.44 | 8.56 | 8.14 | 7.92 | 7.86 | |||||||||||
| Common shares outstanding, 30,000,000 authorized | 8,560,956 | 8,580,956 | 8,771,302 | 8,728,802 | 8,728,802 | |||||||||||
| Average common shares outstanding | 8,562,055 | 8,684,272 | 8,756,981 | 8,728,802 | 8,728,802 | |||||||||||
| Balance sheet - average balances: | ||||||||||||||||
| Loans receivable, net | $ | 680,259 | $ | 667,896 | $ | 673,313 | $ | 662,470 | $ | 653,181 | ||||||
| PPP loans | 330 | 394 | 453 | 500 | 595 | |||||||||||
| Earning assets | 955,812 | 1,024,733 | 1,032,794 | 980,094 | 945,121 | |||||||||||
| Total assets | 977,981 | 1,043,990 | 1,058,475 | 1,021,564 | 987,071 | |||||||||||
| Deposits | 652,911 | 704,643 | 716,450 | 684,328 | 668,397 | |||||||||||
| Borrowings | 124,505 | 140,000 | 140,000 | 139,940 | 122,278 | |||||||||||
| Preferred equity (ECIP) | 119,413 | 119,413 | 119,413 | 119,413 | 119,413 | |||||||||||
| Shareholders' common equity | 72,325 | 69,889 | 68,947 | 68,088 | 65,676 | |||||||||||
| Ratios: | ||||||||||||||||
| Return on average assets | 0.68 | % | 0.50 | % | 1.17 | % | 0.73 | % | 0.80 | % | ||||||
| Return on average common equity | 9.19 | % | 7.45 | % | 17.98 | % | 10.92 | % | 12.00 | % | ||||||
| Yield on earning assets | 5.29 | % | 5.15 | % | 5.10 | % | 5.03 | % | 4.91 | % | ||||||
| Cost of interest-bearing deposits | 2.73 | % | 2.91 | % | 2.86 | % | 2.61 | % | 2.25 | % | ||||||
| Cost of funds | 2.25 | % | 2.41 | % | 2.35 | % | 2.18 | % | 1.94 | % | ||||||
| Net interest margin | 3.46 | % | 3.16 | % | 3.15 | % | 3.19 | % | 3.28 | % | ||||||
| Efficiency ratio | 69.90 | % | 81.03 | % | 76.15 | % | 68.10 | % | 64.99 | % | ||||||
| Asset quality: | ||||||||||||||||
| Net loan (charge-offs) recoveries to average loans | -0.002 | % | -0.009 | % | -0.085 | % | 0.004 | % | -0.023 | % | ||||||
| Nonperforming loans to gross loans | 1.011 | % | 1.056 | % | 1.057 | % | 1.131 | % | 0.021 | % | ||||||
| Nonperforming assets to total assets | 0.712 | % | 0.732 | % | 0.677 | % | 0.725 | % | 0.014 | % | ||||||
| Allowance for credit losses to gross loans | 0.94 | % | 0.92 | % | 0.93 | % | 0.92 | % | 0.95 | % | ||||||
| Bay Community Bancorp | ||||||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| Assets | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | |||||||||
| Cash and due from | $ | 89,302 | $ | 51,128 | $ | 77,823 | ||||||
| Interest bearing deposits | 9,478 | 9,926 | 11,166 | |||||||||
| Available-for-sale securities | 137,097 | 185,739 | 195,872 | |||||||||
| Held-to-maturity securities | 31,500 | 34,500 | 34,500 | |||||||||
| Allowance for credit losses, investments | (139 | ) | (96 | ) | - | |||||||
| Commercial | 66,992 | 62,628 | 129,800 | |||||||||
| PPP | 330 | 379 | 529 | |||||||||
| CRE (Owner occupied) | 144,406 | 144,468 | 109,128 | |||||||||
| CRE (Non-owner occupied) | 341,764 | 336,361 | 337,891 | |||||||||
| Construction and land | 82,640 | 76,904 | 50,793 | |||||||||
| Consumer and other | 58,233 | 57,433 | 40,496 | |||||||||
| Unearned fees, net | (1,726 | ) | (1,755 | ) | (1,773 | ) | ||||||
| Allowance for credit losses, loans | (6,523 | ) | (6,207 | ) | (6,479 | ) | ||||||
| Net Loans | 686,116 | 670,210 | 660,385 | |||||||||
| Premises and equipment | 3,458 | 1,145 | 993 | |||||||||
| Life insurance assets | 8,058 | 8,001 | 7,837 | |||||||||
| Accrued interest receivable and other assets | 18,252 | 14,472 | 20,565 | |||||||||
| Total assets | $ | 983,122 | $ | 975,025 | $ | 1,009,141 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | ||||||||||||
| Demand | $ | 204,805 | $ | 176,515 | $ | 196,131 | ||||||
| Saving, NOW and money market | 257,320 | 249,331 | 288,978 | |||||||||
| Time | 209,047 | 208,020 | 175,276 | |||||||||
| Total deposits | 671,172 | 633,866 | 660,385 | |||||||||
| FHLB Advances | 110,000 | 140,000 | 149,500 | |||||||||
| Interest payable and other liabilities | 6,495 | 8,297 | 11,376 | |||||||||
| Total liabilities | 787,667 | 782,163 | 821,261 | |||||||||
| Shareholders' Equity | ||||||||||||
| Preferred stock, $1,000 par value | 119,413 | 119,413 | 119,413 | |||||||||
| Common stock, without par value | 54,616 | 54,518 | 51,264 | |||||||||
| Retained earnings | 26,856 | 24,299 | 23,486 | |||||||||
| Accumulated other comprehensive income (expense) | (5,430 | ) | (5,368 | ) | (6,283 | ) | ||||||
| Total shareholders' equity | 195,455 | 192,862 | 187,880 | |||||||||
| Total liabilities and shareholders' equity | $ | 983,122 | $ | 975,025 | $ | 1,009,141 | ||||||
| Bay Community Bancorp | |||||||||||
| Consolidated Statements of Income (Unaudited) | |||||||||||
| (Dollars in thousands, except per share data) | |||||||||||
| Three Months Ended | |||||||||||
| Interest Income | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | ||||||||
| Loans | $ | 9,978 | $ | 9,670 | $ | 9,051 | |||||
| Securities | 1,759 | 2,014 | 1,894 | ||||||||
| Federal funds sold and deposits in banks | 872 | 1,613 | 497 | ||||||||
| Total interest income | 12,609 | 13,297 | 11,442 | ||||||||
| Interest Expense | |||||||||||
| Deposits | 3,104 | 3,723 | 2,551 | ||||||||
| Borrowings | 1,249 | 1,406 | 1,239 | ||||||||
| Total interest expense | 4,353 | 5,129 | 3,790 | ||||||||
| Net Interest Income | 8,256 | 8,168 | 7,652 | ||||||||
| Provision for Credit Losses | 374 | (106 | ) | 39 | |||||||
| Net Interest Income After Provision for Loan Losses | 7,882 | 8,274 | 7,613 | ||||||||
| Noninterest income | |||||||||||
| Service charges | 45 | 36 | 60 | ||||||||
| Gains on sale of loans | - | 75 | - | ||||||||
| Other | 901 | 234 | 188 | ||||||||
| Total noninterest income | 946 | 345 | 248 | ||||||||
| Noninterest Expense | |||||||||||
| Salaries and employee benefits | 3,911 | 3,727 | 3,134 | ||||||||
| Net occupancy and equipment expense | 524 | 572 | 311 | ||||||||
| Software and data processing fees | 726 | 808 | 514 | ||||||||
| Professional fees | 389 | 312 | 295 | ||||||||
| Marketing and business development | 181 | 235 | 168 | ||||||||
| FDIC insurance premiums | 138 | 149 | 75 | ||||||||
| Other | 567 | 1,034 | 637 | ||||||||
| Total noninterest expense | 6,436 | 6,837 | 5,134 | ||||||||
| Income before Income Tax | 2,392 | 1,782 | 2,727 | ||||||||
| Provision for Income Taxes | 735 | 470 | 784 | ||||||||
| Net Income | $ | 1,657 | $ | 1,312 | $ | 1,943 | |||||
| Basic Earnings Per Share | $ | 0.19 | $ | 0.15 | $ | 0.22 | |||||
| Bay Community Bancorp | ||||||||||||
| Additional Financial Information | ||||||||||||
| (Dollars in thousands except per share amounts)(Unaudited) | ||||||||||||
| Asset Quality Ratios and Data: | ||||||||||||
| Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | ||||||||||
| Nonaccrual loans (excluding restructured loans) | $ | 7,000 | $ | 7,141 | $ | 140 | ||||||
| Nonaccrual restructured loans | - | - | - | |||||||||
| Loans past due 90 days and still accruing | - | - | - | |||||||||
| Total non-performing loans | 7,000 | 7,141 | 140 | |||||||||
| OREO and other non-performing assets | - | - | - | |||||||||
| Total non-performing assets | $ | 7,000 | $ | 7,141 | $ | 140 | ||||||
| Nonperforming loans to gross loans | 1.011 | % | 1.056 | % | 0.021 | % | ||||||
| Nonperforming assets to total assets | 0.712 | % | 0.732 | % | 0.014 | % | ||||||
| Allowance for loan losses to gross loans | 0.94 | % | 0.92 | % | 0.97 | % | ||||||
| Performing restructured loans (RC-C) | $ | 120 | $ | 119 | $ | 122 | ||||||
| Net (charge-offs) recoveries quarter ending | $ | (16 | ) | $ | (60 | ) | $ | (150 | ) | |||
Contact:
William S. Keller, CEO
510-433-5404
[email protected]
