LOANS INCREASE 23%
ASSETS INCREASE 22%
ONTARIO, Calif., April 30 /PRNewswire-FirstCall/ -- ICB Financial (OTC
Bulletin Board: ICBN) Financial Performance highlights for the quarter ended
March 31, 2009 include:
-- Total assets increased 22.1%; $291.5 million as of March 31, 2009
compared to $238.7 million a year earlier, an increase of $52.7
million.
-- Total loans including Available for Sale increased 23.1%; $230.5
million
as of March 31, 2009 compared to $187.3 million a year earlier, an
increase of $43.3 million.
-- Total deposits at March 31, 2009 were up 7.2%, or $11.7 million, to
$218.6M compared to $203.9 million at March 31, 2008.
-- Efficiency ratio at March 31, 2009 increased to 97.4% from 72.6% at
December 31, 2008 and from 69.0% a year earlier. This increase was due
in large part to an OREO impairment loss of $368M in 2009 and an
increase in the FDIC insurance expense from $37M in the first quarter
of
2008 to $165M in the same period in 2009.
-- Non-performing assets increased to 3.31% of total assets at March 31,
2009, from 2.35% at December 31, 2008, and 1.50% of total assets at
March 31, 2008.
-- Gross interest revenue for the first quarter 2009 was $3.3 million
compared to $3.9 million for 2008, a decrease of 15.0%; this drop in
gross interest income was mainly attributable to a 200 basis point
drop
in the prime interest rate from March 2008 to March 2009.
-- Provision for loan and lease losses was $920M for the first quarter of
2009 versus $216M for the same quarter ended March 31, 2008.
-- Net loss for the first quarter ended March 31, 2009 was ($538,000);
this
was a decrease of 213% when compared to the net income of $475,000 for
the quarter ended March 31, 2008.
-- Net loss per common share for the first quarter of 2009 was ($0.11)
compared to net income of $0.09 for the same period in 2008, a
decrease
of 222%.
-- Other important Bank Ratios:
-- Total Risk-Based Capital - 14.19%; minimum for well capitalized
banks under regulatory guidelines is 10.00%.
-- Tier 1 Leverage Capital - 10.95%; minimum for well capitalized
banks
under regulatory guideline is 5.0%.
-- ALLL as a percent of HTM loans - 1.41%
-- Total OREO, Delinquent and Non-accrual loans to total risk based
capital - 33.9%, which is also equivalent to 4.7% of total loans
at
March 31, 2009.
-- Average Net Interest Margin for the first quarter of 2009 was a
healthy 4.01%
Letter to Our Customers and Shareholders
Financial Results for the quarter ended March 31, 2009
Economists are theorizing that the economy is in the middle of a contraction
that will push economic growth into negative territory in 2009 for the first
time in decades, and others have recently cautioned that "the worst thing for
the economy would be to assume that the worst is over". In light of such a
dire forecast, bankers in the Inland Empire will probably agree that this is
the worst financial downturn in recent memory.
To help ICB to prosper through these economic conditions, we are taking the
necessary steps to position the Company to remain financially stable for as
long as it takes the US economy and the California economy to recover. We
also realize that this slump has been made much worse by panic and despair,
fearing that the financial system was on the brink of collapse, so it is
incumbent upon us not to over react but to proceed with planned and deliberate
actions that serve to assure the continued health and stability of the
Company.
Toward this end we have taken actions in the first quarter of 2009 designed to
strengthen the Company and the Bank. In the first quarter we applied for and
received from the US Treasury an infusion of additional capital through the
Treasury's TARP program. Participation in this program has been limited to
banks considered to be strong and viable banking entities with a future of
continued community service to their respective markets. We did not feel that
these funds were needed to support future growth or for the safety and
soundness of the Company. This resulted in an addition of $6 million to the
capital of the Company, $2 million of which was immediately added to the
capital of Inland Community Bank, and the remainder was invested by the
Company to be available should it be required by the Bank.
Also during the first quarter we have taken the posture to identify potential
risks in our loan portfolio and have provided aggressively for those risks.
Having identified these risks we added an additional $920M to the Allowance
for Loan Losses during the quarter, and we are continuing our review of the
portfolio to assure that we are carrying all of our significant loans at their
fair value. A regulatory examination conducted recently also confirmed the
validity of our loan grading process and the adequacy of our reserve for loan
losses.
Increased concern is again being echoed around exposures to commercial real
estate loans, and losses from commercial real estate are reported to be the
next "economic shoe to drop". We do not believe at this time that significant
further deterioration will occur in the portfolio; however, continuous review
of our loan portfolio will be a top priority for Senior Management and
additions to our Allowance for Loan Losses will be made as conditions require.
The recent closings of Southern California financial institutions, which were
our competitors, have created new opportunities for the Bank, and in response,
we have instituted a new business development program designed to capitalize
on these changes in the banking environment. ICB is unique in its service to
small businesses, and we are endeavoring to communicate and demonstrate our
service potential to new customers.
Our recent efforts have contributed to a 7% increase in deposits and a 23%
increase in loans over the last year. We hope to continue this controlled
growth in both loans and deposits for the remainder of 2009.
Every new and existing account in ICB continues to be insured by the FDIC,
currently up to $250,000 with additional protection for joint accounts, and
every dollar in a non-interest bearing transaction account (checking account)
is still fully insured by the FDIC with no limit to the insurance coverage.
Bank closings have also served to highlight the need to constantly monitor the
Bank's liquidity position and to have plans that provide for actions to be
taken in cases of emergencies. The Bank's contingency plans document in
detail the steps to be taken in the event of emergencies, such as pandemic flu
outbreaks and other emergencies, which can strain the Bank's resources. Stress
testing using various scenarios is performed periodically, and the Bank is
prepared to continue to provide customer service under the most conceivable
emergencies.
The Bank's operating departments continue to emphasize cost reductions that
have contributed to increases in the income generated from operations.
Non-interest expenses had been reduced by more than 16%, but increases in
uncontrollable expenses such as FDIC insurance expense, have made it difficult
to continue these efficiencies into 2009. We will continue to review and
reduce all operating expenses where possible.
Our primary objective will continue to be to maintain a strong Company
supported by a great team of employees providing exceptional service to our
customers. By concentrating our efforts on these goals we will provide
increased value to our shareholders. We thank you for your support toward this
end.
James S. Cooper
President and Chief Executive Officer
Consolidated Balance Sheets
Unaudited - Internally Prepared
(in thousands)
March 08 December 08
to to
March 09 March 09
As of As of Percentage As of Percentage
3/31/2009 3/31/2008 Change 12/31/08 Change
Assets
Total cash and
Due from banks
Noninterest-
bearing
balances, coin
and
currency $15,034 $11,908 26.3% $6,111 146.0%
Interest bearing
balances 12,981 1,782 628.5% 9,979 30.1%
Held to maturity
securities - held
to maturity 3,410 7,045 -51.6% 3,001 13.6%
Available for sale
securities 7,151 765 834.8% 4,099 74.5%
Federal funds sold - 8,960 -100.0% - 0.0%
Loans held for
sale (lower of
cost or market) 29,967 - 0.0% 9,520 214.8%
Loans held for
investment
Loans , net of
unearned income 200,577 187,247 7.1% 198,125 1.2%
Less: Allowance
for loan losses (2,725) (2,098) 29.9% (2,627) 3.7%
Net loans 197,852 185,149 6.9% 195,498 1.2%
Premises and fixed
assets - net 10,116 10,256 -1.4% 10,181 -0.6%
Other real estate
owned 1,194 600 100.0% 1,688 -29.3%
Intangible assets
Goodwill 2,280 2,280 0.0% 2,280 0.0%
Core deposit
intangibles 1,068 1,321 -19.2% 1,094 -2.4%
Other assets 10,485 8,714 20.3% 9,679 8.3%
Total Assets $291,538 $238,780 22.1% $253,130 15.2%
Liabilities and Capital
Deposits
Noninterest-
bearing $59,883 $64,982 -7.8% $57,277 4.5%
Interest
bearing 158,790 138,946 14.3% 154,576 2.7%
Total deposits 218,673 203,928 7.2% 211,853 3.2%
Accrued interest
payable 604 577 4.7% 581 4.0%
Borrowings from
the FHLB 35,000 - 100.0% 9,000 288.9%
Other liabilities 1,010 1,416 -28.7% 923 9.4%
Total liabilities $255,287 $205,921 24.0% $222,357 14.8%
Equity capital
Preferred
Stock - 6,300
shares outstanding
at 3-31-09 6,000 - 0.0% - 0.0%
Common stock -
5,107,731
outstanding at
3/31/09 5,108 5,459 -6.4% 5,108 0.0%
Surplus 21,611 23,239 -7.0% 21,611 0.0%
Retained earnings 3,456 4,168 -17.1% 3,998 -13.6%
Accumulated other
Comprehensive
income (loss) 76 (7) 100.0% 56 35.7%
Total Equity Capital 36,251 32,859 10.3% 30,773 17.8%
Total Liabilities
and Equity Capital $291,538 $238,780 22.1% $253,130 15.2%
Consolidated Statements of Income
Unaudited - Internally Prepared
(in thousands)
1st 1st
Quarter Quarter 4th
ended ended Percentage Quarter Percentage
3/31/09 3/31/08 Change 2008 Change
Interest Income on:
Total interest
and fees on loans $3,148 $3,627 -13.2% $3,427 -8.1%
Interest on
investment securities 90 99 -9.1% 89 1.1%
Interest on federal
funds sold 2 44 -95.5% 10 -80.0%
Other interest
income 74 131 -43.5% 65 13.8%
Total interest
income 3,314 3,901 -15.0% 3,591 -7.7%
Interest Expense:
Interest paid
on deposits 947 1,184 -20.0% 1,042 -9.1%
Interest paid
on borrowings 10 1 900.0% 13 -23.1%
Total interest
expense 957 1,185 -19.2% 1,055 -9.3%
Net interest income $2,357 $2,716 -13.2% $2,536 -7.1%
Provision for
Possible Loan
Losses and OBS
reserve 920 216 100.0% 1,055 -12.8%
Net Interest Income
after ALLL Provision 1,437 2,500 -42.5% 1,481 -3.0%
Total non-interest
income 421 416 1.2% 395 6.6%
Total non-interest
expense 2,706 2,160 25.3% 2,129 27.1%
Net Income before
applicable income
taxes (848) 756 -212.2% (253) 235.2%
Applicable income
tax expense
(benefit) (330) 281 -217.4% (91) 262.6%
Net Income (loss) before
preferred dividend
expense $(518) $475 -209.1% $(162) 219.8%
Preferred stock
dividend expense (20) - 100.0% -
Net income (loss) $(538) $475 -213.3% $(162) 232.1%
SELECTED FINANCIAL RATIOS AND PER SHARE DATA
Per Common Share Data
Earnings per share
- basic (0.11) 0.09 -221.0% 0.09 -215.0%
Earnings per share
- diluted (0.10) 0.08 -232.3% 0.08 -224.8%
Shares outstanding
- (actual) 5,107,731 5,458,796 -6.4% 5,107,731 0.0%
Weighted Average
Shares
Outstanding 5,107,731 5,458,796 -6.4% 5,195,557 -1.7%
Shares
outstanding
- (fully
diluted) 5,268,131 6,155,384 -14.4% 5,346,572 -1.5%
Financial Ratios
Return on Average
Assets -0.79% 0.78% -201.7% -0.50% 58.0%
Return on Average
Equity -0.01% 5.81% -100.1% -0.50% -98.7%
Yield on earning
assets 4.23% 5.12% -17.5% 6.46% -34.6%
Efficiency ratio 97.4% 69.0% -41.2% 72.6% -34.2%
Loan to deposit
ratio 91.7% 91.8% -0.1% 98.0% -6.4%
ALLL as a percent of
Total Loans
(Includes
OBS reserve) 1.41% 1.14% 23.7% 1.38% 2.2%
Non-performing
assets
- in thousands $9,644 $2,815 242.6% $5,952 313.6%
Non-performing
assets
as a percent of
total assets 3.31% 1.18% 180.6% 2.35% 40.7%
Book value per share $5.92 $6.02 -1.6% $6.02 -1.6%
Tangible book value
per share $5.27 $5.36 -1.7% $5.36 -1.7%
Tom Griel
909-483-8882
SOURCE ICB Financial
Tom Griel of ICB Financial, +1-909-483-8882
