OAKLAND, Calif., Feb. 07, 2023 (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 increased 36.1% to a record $2.39 million for the fourth quarter of 2022, compared to $1.76 million for the fourth quarter of 2021. Strong core loan growth, combined with deployment of the $119.4 million preferred stock investment from the US Treasury Department contributed to profitability for the fourth quarter of 2022. All financial results are unaudited.
For the year 2022, net income increased 8.7% to a record $8.06 million, compared to $7.41 million in 2021, which included a non-recurring $1.83 million CDFI grant. Strong earning asset growth, including a 21.8% increase in core loans contributed to record profitability for the year.
The Companys Board of Directors declared a quarterly cash dividend of $0.045 per share. The dividend is payable on March 6, 2023, to shareholders of record on February 24, 2023. This marks the eighth consecutive quarterly cash dividend since the Company initiated quarterly cash dividends on April 30, 2021.
Total assets increased $260.5 million, or 36.4% in 2022, mainly due to a $95.7 million increase in deposits and the proceeds from the $119.4 million preferred capital raise. As those funds were deployed into core loans and other earning assets, our fourth quarter and full year 2022 results were a measurable improvement from the prior year, stated William S. Keller, President and CEO. Since our founding, we have sought to generate economic growth and opportunity by investing in economically disadvantaged communities. In the fourth quarter we booked 43 new loans with total commitments of $104.5 million. True to our mission, 29 of those loans, totaling $75.5 million were in targeted communities and represent the kind of market-based investment opportunities that the US Treasury sought to enable when it developed the preferred stock investment program.
The growth in earning assets also helped keep our net interest margin stable compared to the prior quarter. The Companys net interest margin was 3.57% in the fourth quarter of 2022, which was a 9 basis point increase compared to the preceding quarter, and a 12 basis point decrease compared to 3.69% in the fourth quarter a year ago, when PPP loan fees and interest added 50 basis points to the margin, said Keller. While we have been successful in managing our net interest margin, we have not been immune to the liquidity and deposit pricing pressures resulting from the Federal Reserves increasing interest rate program. These challenges became more pronounced in December 2022 when certain client transactions resulted in a drawdown of bank balances. Replacing those balances with higher cost alternatives pressured our overall Cost of Funds and in December our total funding costs increased to 1.48% versus 1.16% for the entire quarter. While we should see a measured rebound of the year end seasonal outflow in business deposit accounts, we do recognize deposit growth as the key challenge going forward, and we are devoting significant attention to it.
Credit quality remains strong and we are well positioned to transition to the CECIL loan loss methodology. However, additional loan growth or potential adjustments to the loan loss model inputs, most specifically a rising unemployment rate, will require additional provisions, said Mukhtar Ali, Chief Credit Officer. At December 31, 2022, our loan loss reserves represent 1.06% of total non-guaranteed loans, compared to 1.28% a year earlier. The Bank had $1.49 million of loans past due 30 days or more at December 31, 2022.
Fourth Quarter 2022 Financial Highlights (at or for the period ended December 31, 2022)
On June 7, 2022, the Company announced that it had completed a $119.4 million investment from the US Treasury Department. Treasurys 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 Senior Perpetual Preferred Stock 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%) and the dividend rate may be reduced to one half percent (0.5%) based on the level of increased qualified lending undertaken by the Bank. On October 18, 2021 Treasury announced that 204 credit unions, banks, and savings and loan holding companies applied for total investments of over $12.88 billion under the ECIP Program and that the demand exceeded the amount available by $4.13 billion.
On December 14, 2021, the US Treasury announced it would invest $8.7 billion in up to 186 Minority Depository Institutions (MDI) and CDFI banks and credit unions to accelerate the recovery of small businesses, minority-owned businesses, and consumers, especially those in low-income and underserved communities that may have been disproportionately impacted by the economic effects of the COVID-19 pandemic. The Bank previously announced that it was one of only five banks and six credit unions in California to be approved by the US Treasury for an ECIP investment.
While the ECIP capital investment was an extraordinary event brought on by the Federal response to the pandemic, the Bank has maintained a long and important relationship with the US Treasurys CDFI Fund since inception. Since our founding, we have received twenty-one Bank Enterprise Awards and a Rapid Response Grant totaling over $10.6 million in support of our lending activities in low to moderate income communities, said Keller. In addition, in September we submitted our application to participate in the CDFI Funds $1.75 billion Equitable Recovery Program, and we are excited by the opportunity this program offers to the communities we serve.
For additional information on the US Treasurys 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 Funds Rapid Response Program please visit
https://www.cdfifund.gov/programs-training/programs/rrp
For additional information on the CDFI Funds Equitable Recovery Program please visit
https://www.cdfifund.gov/programs-training/programs/erp
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 Californias 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.
FINANCIAL TABLES TO FOLLOW:
Bay Community Bancorp | |||||||||||||||||
Quarterly Financial Summary (Unaudited) | |||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
Earnings and dividends: | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | ||||||||||||
Interest income | $ | 11,099 | $ | 9,151 | $ | 7,756 | $ | 6,900 | $ | 7,051 | |||||||
Interest expense | 2,354 | 1,377 | 544 | 410 | 395 | ||||||||||||
Net interest income | 8,745 | 7,774 | 7,212 | 6,490 | 6,656 | ||||||||||||
Provision for loan losses | – | – | 400 | – | 200 | ||||||||||||
Noninterest income | 253 | 205 | 376 | 180 | 226 | ||||||||||||
Noninterest expense | 5,609 | 4,835 | 4,583 | 4,361 | 4,192 | ||||||||||||
Provision for income taxes | 1,001 | 930 | 769 | 683 | 736 | ||||||||||||
Net income | 2,388 | 2,214 | 1,836 | 1,626 | 1,754 | ||||||||||||
Share data: | |||||||||||||||||
Basic earnings per common share | $ | 0.28 | $ | 0.25 | $ | 0.21 | $ | 0.18 | $ | 0.20 | |||||||
Dividends declared per common share | 0.045 | 0.045 | 0.045 | 0.045 | 0.040 | ||||||||||||
Book value per common share | 7.50 | 7.27 | 7.50 | 7.56 | 7.67 | ||||||||||||
Common shares outstanding, 30,000,000 authorized | 8,728,802 | 8,591,052 | 8,871,052 | 8,871,052 | 8,871,052 | ||||||||||||
Average common shares outstanding | 8,664,401 | 8,685,400 | 8,871,052 | 8,871,052 | 8,871,052 | ||||||||||||
Balance sheet – average balances: | |||||||||||||||||
Loans receivable, net | $ | 627,608 | $ | 584,807 | $ | 530,579 | $ | 493,238 | $ | 467,401 | |||||||
PPP loans | 1,215 | 4,289 | 8,900 | 26,894 | 48,887 | ||||||||||||
Earning assets | 972,965 | 885,777 | 797,259 | 735,506 | 716,749 | ||||||||||||
Total assets | 999,316 | 910,388 | 825,631 | 759,409 | 741,266 | ||||||||||||
Deposits | 764,127 | 697,174 | 695,945 | 660,149 | 644,639 | ||||||||||||
Borrowings | 42,652 | 19,500 | 24,170 | 23,589 | 23,619 | ||||||||||||
Preferred equity (ECIP) | 119,413 | 119,413 | 31,494 | – | – | ||||||||||||
Shareholders’ common equity | 63,038 | 65,688 | 66,833 | 67,820 | 67,395 | ||||||||||||
Ratios: | |||||||||||||||||
Return on average assets | 0.95 | % | 0.96 | % | 0.89 | % | 0.87 | % | 0.94 | % | |||||||
Return on average common equity | 15.03 | % | 13.37 | % | 11.02 | % | 9.72 | % | 10.33 | % | |||||||
Yield on earning assets | 4.53 | % | 4.10 | % | 3.90 | % | 3.80 | % | 3.90 | % | |||||||
Cost of interest-bearing deposits | 1.49 | % | 1.08 | % | 0.40 | % | 0.27 | % | 0.26 | % | |||||||
Cost of funds | 1.16 | % | 0.76 | % | 0.30 | % | 0.24 | % | 0.23 | % | |||||||
Net interest margin | 3.57 | % | 3.48 | % | 3.63 | % | 3.58 | % | 3.69 | % | |||||||
Efficiency ratio | 62.34 | % | 60.60 | % | 60.40 | % | 65.38 | % | 60.91 | % | |||||||
Asset quality: | |||||||||||||||||
Net loan (charge-offs) recoveries to average loans | -0.003 | % | 0.001 | % | 0.000 | % | 0.042 | % | 0.000 | % | |||||||
Nonperforming loans to gross loans | 0.046 | % | 0.000 | % | 0.000 | % | 0.004 | % | 0.005 | % | |||||||
Nonperforming assets to total assets | 0.031 | % | 0.000 | % | 0.000 | % | 0.003 | % | 0.004 | % | |||||||
Allowance for loan losses to gross loans | 1.05 | % | 1.16 | % | 1.17 | % | 1.25 | % | 1.16 | % |
Bay Community Bancorp | |||||||||||||
Consolidated Balance Sheets (Unaudited) | |||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||
Assets | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | ||||||||||
Cash and due from | $ | 40,934 | $ | 177,930 | $ | 81,942 | |||||||
Interest bearing deposits | 11,165 | 11,165 | 11,160 | ||||||||||
Available-for-sale securities | 209,763 | 172,662 | 53,010 | ||||||||||
Held-to-maturity securities | 34,500 | 34,500 | 18,000 | ||||||||||
Commercial | 128,221 | 122,397 | 131,428 | ||||||||||
PPP | 666 | 2,000 | 38,631 | ||||||||||
CRE (Owner occupied) | 113,450 | 109,200 | 107,823 | ||||||||||
CRE (Non-owner occupied) | 327,478 | 276,469 | 182,310 | ||||||||||
Construction and land | 51,731 | 51,863 | 44,164 | ||||||||||
Consumer and other | 37,990 | 37,514 | 37,708 | ||||||||||
Unearned fees, net | (1,857 | ) | (1,653 | ) | (2,262 | ) | |||||||
Allowance for loan losses | (6,889 | ) | (6,911 | ) | (6,281 | ) | |||||||
Net Loans | 650,790 | 590,879 | 533,521 | ||||||||||
Premises and equipment | 1,046 | 1,092 | 1,292 | ||||||||||
Life insurance assets | 7,785 | 7,732 | 7,579 | ||||||||||
Accrued interest receivable and other assets | 20,050 | 18,290 | 9,050 | ||||||||||
Total assets | $ | 976,033 | $ | 1,014,250 | $ | 715,554 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||||
Liabilities | |||||||||||||
Deposits | |||||||||||||
Demand | $ | 203,014 | $ | 228,651 | $ | 237,541 | |||||||
Saving, NOW and money market | 355,282 | 427,259 | 295,401 | ||||||||||
Time | 147,613 | 147,671 | 77,292 | ||||||||||
Total deposits | 705,909 | 803,581 | 610,234 | ||||||||||
FHLB Advances | 74,500 | 19,500 | 33,500 | ||||||||||
Interest payable and other liabilities | 10,750 | 9,285 | 3,786 | ||||||||||
Total liabilities | 791,159 | 832,366 | 647,520 | ||||||||||
Shareholders’ Equity | |||||||||||||
Preferred stock, $1,000 par value | 119,413 | 119,413 | – | ||||||||||
Common stock, without par value | 51,264 | 49,500 | 51,768 | ||||||||||
Retained earnings | 22,001 | 21,111 | 16,531 | ||||||||||
Accumulated other comprehensive income (expense) | (7,804 | ) | (8,140 | ) | (265 | ) | |||||||
Total shareholders’ equity | 184,874 | 181,884 | 68,034 | ||||||||||
Total liabilities and shareholders’ equity | $ | 976,033 | $ | 1,014,250 | $ | 715,554 |
Bay Community Bancorp | ||||||||||||||||
Consolidated Statements of Income (Unaudited) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Interest Income | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |||||||||||
Loans | $ | 8,375 | $ | 7,384 | $ | 6,620 | $ | 28,808 | $ | 24,972 | ||||||
Securities | 1,877 | 1,384 | 368 | 4,697 | 1,114 | |||||||||||
Federal funds sold and deposits in banks | 847 | 383 | 63 | 1,562 | 244 | |||||||||||
Total interest income | 11,099 | 9,151 | 7,051 | 35,067 | 26,330 | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 2,026 | 1,273 | 260 | 4,020 | 1,180 | |||||||||||
Borrowings | 328 | 104 | 135 | 665 | 595 | |||||||||||
Total interest expense | 2,354 | 1,377 | 395 | 4,685 | 1,775 | |||||||||||
Net Interest Income | 8,745 | 7,774 | 6,656 | 30,382 | 24,555 | |||||||||||
Provision for Loan Losses | – | – | 200 | 400 | 850 | |||||||||||
Net Interest Income After Provision for Loan Losses | 8,745 | 7,774 | 6,456 | 29,982 | 23,705 | |||||||||||
Noninterest income | ||||||||||||||||
Service charges | 50 | 54 | 42 | 214 | 161 | |||||||||||
Gains on sale of loans | – | – | – | – | – | |||||||||||
Government grant | – | – | – | 171 | 1,826 | |||||||||||
Other | 203 | 151 | 184 | 467 | 624 | |||||||||||
Total noninterest income | 253 | 205 | 226 | 852 | 2,611 | |||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 3,046 | 2,815 | 2,502 | 11,233 | 9,545 | |||||||||||
Net occupancy and equipment expense | 337 | 342 | 298 | 1,214 | 1,236 | |||||||||||
Software and data processing fees | 637 | 615 | 501 | 2,327 | 1,857 | |||||||||||
Professional fees | 270 | 223 | 157 | 843 | 605 | |||||||||||
Marketing and business development | 240 | 166 | 83 | 699 | 375 | |||||||||||
FDIC insurance premiums | 62 | 38 | 123 | 312 | 492 | |||||||||||
Other | 1,017 | 636 | 528 | 2,763 | 1,660 | |||||||||||
Total noninterest expense | 5,609 | 4,835 | 4,192 | 19,391 | 15,770 | |||||||||||
Income before Income Tax | 3,389 | 3,144 | 2,490 | 11,443 | 10,546 | |||||||||||
Provision for Income Taxes | 1,001 | 930 | 736 | 3,382 | 3,132 | |||||||||||
Net Income | $ | 2,388 | $ | 2,214 | $ | 1,754 | $ | 8,061 | $ | 7,414 | ||||||
Basic Earnings Per Share | $ | 0.28 | $ | 0.25 | $ | 0.20 | $ | 0.92 | $ | 0.84 |
Bay Community Bancorp | ||||||||||||
Additional Financial Information | ||||||||||||
(Dollars in thousands except per share amounts)(Unaudited) | ||||||||||||
Asset Quality Ratios and Data: | ||||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | ||||||||||
Nonaccrual loans (excluding restructured loans) | $ | 301 | $ | – | $ | 27 | ||||||
Nonaccrual restructured loans | – | – | – | |||||||||
Loans past due 90 days and still accruing | – | – | – | |||||||||
Total non-performing loans | 301 | – | 27 | |||||||||
OREO and other non-performing assets | – | – | – | |||||||||
Total non-performing assets | $ | 301 | $ | – | $ | 27 | ||||||
Nonperforming loans to gross loans | 0.046% | 0.000% | 0.005% | |||||||||
Nonperforming assets to total assets | 0.031% | 0.000% | 0.004% | |||||||||
Allowance for loan losses to gross loans | 1.05% | 1.16% | 1.16% | |||||||||
Performing restructured loans (RC-C) | $ | 123 | $ | 124 | $ | 127 | ||||||
Net (charge-offs) recoveries quarter ending | $ | (21 | ) | $ | 8 | $ | – |
Contacts: William S. Keller, President & CEO
510-433-5404
wkeller@BankCBB.com
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