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Community 1st Bank Reports Results for the Year Ended December 31, 2013

  Community 1st Bank Reports Results for the Year Ended December 31, 2013

Business Wire

AUBURN, Calif. -- January 30, 2014

Community 1st Bank (OTCBB:CFBN), with $211.6 million in total assets, today
reported net income of $1.0 million for the quarter ended December 31, 2013
and net income of $1.9 million for the year ended December 31, 2013.

Robert C. Haydon, President and Chief Executive Officer commented, “The fourth
quarter results show continued progress in building a balance sheet poised for
profitability and success. The Bank is building momentum in loan and core
deposit growth by exceeding expectations of our marketplace through the
consistent delivery of high quality services to our clients.”

Total assets at December 31, 2013 were $211.6 million, an increase of $13.8
million, or 7.0%, from December 31,2012. Community 1st Bank (the “Bank”) was
successful in growing loans from $87.1 million at December 31, 2012 to $116.4
million at December 31, 2013, an increase of $29.3 million, or 33.6%,
enhancing the earnings potential of the Bank. The Bank also increased
non-interest bearing deposits from $37.4 million at December 31, 2012 to $52.7
million at December 31, 2013, an increase of $15.3 million, or 40.8%,
enhancing the deposit portfolio mix and improving the Bank’s cost of funds.
Total deposits increased from $169.4 million at December 31, 2012 to $186.3
million at December 31,2013, an increase of $16.9 million, or 10.0%. When
compared to the previous quarter, loans increased by $11.1 million, or 10.5%,
from $105.3 million at September 30,2013. Total assets decreased $30.5
million, or 12.6%, from $242.1 million at September 30, 2013 driven by the
decrease in total deposits of $23.1 million, or 11.0%, from $209.4 million at
September 30, 2013. The decrease in deposits experienced since the last
quarter was due to a temporary increase in deposits at September 30, 2013 as a
result of a client’s need to place a short-term non-interest bearing deposit
during the third quarter.

Operating Results - Quarter

The Bank reported net income for the quarter ended December 31, 2013 of $1.0
million, which is net of a $900 thousand tax benefit related to the partial
reversal of the valuation allowance on deferred tax assets, $45 thousand in
provision for loan losses and $30 thousand in gains on sales of securities.
This compares to net income of $368 thousand for the same period in 2012,
which included a $250 thousand tax benefit related to the partial reversal of
the valuation allowance on deferred tax assets, $150 thousand in provision for
loan losses and $25 thousand in gains on sales of securities. Net income
increased by $659 thousand, or 179.1%, while the reversal of valuation
allowance on deferred tax assets increased by $650 thousand, or 260.0% and the
provision for loan losses decreased by $105 thousand and gains on sales of
securities increased by $5 thousand as compared to the fourth quarter of 2012.

Interest income increased by $52 thousand, or 3.0%, to total $1.8 million for
the quarter ended December 31,2013 compared to the same period in 2012,
primarily driven by the increase in average loan balances outstanding.
Interest expense decreased by $44 thousand, or 18.1%, to total $199 thousand
for the quarter ended December 31,2013 compared to the same period in 2012,
driven by a decrease in average rates paid on interest bearing deposits and an
improved deposit mix. Net interest income increased by $96 thousand, or 6.3%,
for the fourth quarter of 2013 compared to the same period in 2012.
Non-interest expense increased by $248 thousand, or 18.5%, to total $1.6
million for the quarter ended December 31,2013 compared to the quarter ended
December 31, 2012. The increase in non-interest expense was primarily driven
by the addition of business production officers to achieve the Bank’s growth
initiatives and expand market share.

Operating Results - Year

The Bank reported net income for the year ended December 31, 2013 of $1.9
million, which is net of a $900,000 tax benefit related to the partial
reversal of the valuation allowance on deferred tax assets, $355 thousand in
provision for loan losses and gains on sales of securities of $604 thousand.
This compares to net income of $831 thousand for the same period in 2012,
which included a $250 thousand tax benefit related to the partial reversal of
the valuation allowance on deferred tax assets, $780 thousand in provision for
loan losses and gains on sales of securities of $566 thousand. Net income
increased by $1.0 million, or 124.6%, while the provision for loan losses
decreased by $425 thousand and gains on sales of securities increased by $38
thousand as compared to the year ended December 31, 2012.

Interest income increased by $356 thousand, or 5.3%, to total $7.1 million for
the year ended December 31, 2013 compared to the same period in 2012 driven by
the increase in average loans outstanding. Interest expense decreased by $151
thousand, or 15.4%, to total $828 thousand for the year ended December
31,2013 compared to the same period in 2012. Net interest income increased by
$507 thousand, or 8.9%, for the year ended December 31, 2013 compared to the
same period in 2012. Non-interest expense increased by $668 thousand, or
12.6%, to total $6.0 million for the year ended December 31, 2013 compared to
the same period in 2012 driven by the addition of business production officers
and increased expenses to support the Bank’s growth initiatives.

Credit Quality

The allowance for loan losses at December 31, 2013 was $2.7 million, or 2.3%
of gross loans, compared to $2.1 million, or 2.4% of gross loans at December
31, 2012. Loan charge-offs for the quarter ended December 31, 2013 were $61
thousand with recoveries of $450 thousand compared to no loan charge-offs or
recoveries for the same period in 2012. Loan charge-offs for the year ended
December 31,2013 were $180 thousand with recoveries of $471 thousand compared
to loan charge-offs of $593 thousand with recoveries of $12 thousand for the
same period in 2012. Nonperforming loans at December 31,2013 were $1.5
million, or 0.7% of total assets representing a reduction of $0.8 million, or
33.1%, from $2.3 million, or 1.2% of total assets, at December 31, 2012.

The Bank’s credit quality continues to improve with significant recoveries in
the quarter ended December 31, 2013 as well as reduced nonperforming assets.
The improvement in credit quality is due to management’s focus on improving
credit quality, maintaining high credit standards for new production, and
improved economic conditions.

Capital

At December 31, 2013, the Bank had a Tier 1 Leverage Capital ratio of 9.4%,
Tier 1 Risk-based Capital ratio of 14.0% and Total Risk-based Capital ratio of
15.3%. At December 31, 2012, the Tier 1 Leverage Capital ratio was 10.5%, Tier
1 Risk-based Capital ratio was 16.9% and Total Risk-based Capital ratio was
18.2%. The Bank’s capital is in excess of that required to be considered
“well-capitalized” by regulatory standards.

Robert C. Haydon, President and Chief Executive Officer added, “I give full
credit for the Bank’s success to our Relationship Managers and their support
team. We have assembled a group of bankers who give us a competitive
advantage. The Bank is well positioned to win in the marketplace resulting in
improved financial performance and enhanced shareholder value.”

Community 1^st Bank is headquartered in Auburn, California, with branches in
Roseville and Auburn and a loan production office in Sacramento, California.
Community 1^st Bank offers a wide range of business and consumer deposit
products including remote deposit capture, health savings accounts, online
banking, and cash management services. The Bank also offers a full complement
of loan products, including commercial, consumer, and real estate loans. For
more information about the Bank, visit the Bank’s website at
www.community1bank.com.

Forward-Looking Statements

Statements concerning future performance, developments or events, expectations
for growth and income forecasts, and any other guidance on future periods,
constitute forward-looking statements that are subject to a number of risks
and uncertainties. Actual results may differ materially from stated
expectations. Specific factors include, but are not limited to, loan
production, competitive pressure in the banking industry, balance sheet
management, net interest margin variations, the ability to control costs and
expenses, changes in the interest rate environment and financial policies of
the United States government and general economic conditions. The Bank
disclaims any obligation to update any such factors.

COMMUNITY 1ST BANK
BALANCE SHEETS
                                                         
                                                             
                                       December 31, 2013     December 31, 2012
                                       (Unaudited)
                                                             
ASSETS
Cash and cash equivalents              $   4,719,000         $   2,934,000
Available-for-sale investment              80,665,000            98,574,000
securities, at fair value
Loans, less allowance for loan
losses of $2,710,000 at
December 31, 2013 and $2,064,000 at        113,679,000           85,042,000
December 31, 2012
Bank premises and equipment, net           1,559,000             1,697,000
Interest receivable                        606,000               640,000
Other real estate owned                    870,000               973,000
Federal Home Loan Bank stock and           1,555,000             1,723,000
other securities
Bank-owned life insurance policies         4,675,000             4,505,000
Other assets                              3,229,000            1,679,000
                                                             
Total assets                           $   211,557,000       $   197,767,000
                                                             
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Non-interest bearing                   $   52,727,000        $   37,446,000
Interest bearing                          133,575,000          131,907,000
                                                             
Total deposits                             186,302,000           169,353,000
                                                             
Borrowings                                 3,365,000             5,595,000
Interest payable and other                605,000              1,134,000
liabilities
                                                             
Total liabilities                          190,272,000           176,082,000
                                                             
Shareholders' equity                      21,285,000           21,685,000
                                                             
Total liabilities and shareholders'    $   211,557,000       $   197,767,000
equity
                                                                 

COMMUNITY 1ST BANK
STATEMENTS OF INCOME DATA (Unaudited)
For the Three Months Ended December 31, 2013 and 2012
                                                            
                                                                             
                                               2013              2012
Interest income:
Interest and fees on loans                     $ 1,436,000       $ 1,238,000
Interest on investment securities and
interest-bearing deposits in other              378,000         524,000   
financial institutions
                                                                             
Total interest income                           1,814,000       1,762,000 
                                                                             
Interest expense:
Deposits                                         197,000           241,000
Borrowings                                      2,000           2,000     
                                                                             
Total interest expense                          199,000         243,000   
                                                                             
Net interest income                              1,615,000         1,519,000
                                                                             
Provision for loan losses                       45,000          150,000   
                                                                             
Net interest income after provision for         1,570,000       1,369,000 
loan losses
                                                                             
Non-interest income:
Service charges and fees                         17,000            18,000
Gain on sales of available-for-sale              30,000            25,000
investment securities
Other                                           101,000         49,000    
                                                                             
Total non-interest income                       148,000         92,000    
                                                                             
Non-interest expense:
Salaries and employee benefits                   861,000           676,000
Occupancy and equipment                          156,000           153,000
Other                                           574,000         514,000   
                                                                             
Total non-interest expense                      1,591,000       1,343,000 
                                                                             
Net income before benefit for income taxes       127,000           118,000
Benefit for income taxes                        (900,000  )      (250,000  )
                                                                             
Net income                                     $ 1,027,000      $ 368,000   
                                                                             
Net income                                     $ 1,027,000       $ 368,000
Preferred stock dividends and accretion of      35,000          342,000   
discount
                                                                             
Net income available to common                 $ 992,000        $ 26,000    
shareholders
                                                                             
Common Share Data
Basic earnings per share                       $ 0.18            $ 0.00
Diluted earnings per share                     $ 0.16            $ 0.00
                                                                             
Weighted average shares outstanding              5,449,242         5,449,242
Weighted average shares outstanding -            6,470,567         5,604,511
diluted
                                                                             
                                                                             
COMMUNITY 1ST BANK
STATEMENTS OF INCOME DATA
For the Years Ended December 31, 2013 (Unaudited) and 2012
                                                                             
                                                                             
                                               2013              2012
Interest income:
Interest and fees on loans                     $ 5,272,000       $ 4,531,000
Interest on investment securities and
interest-bearing deposits in other              1,786,000       2,171,000 
financial institutions
                                                                             
Total interest income                           7,058,000       6,702,000 
                                                                             
Interest expense:
Deposits                                         822,000           968,000
Borrowings                                      6,000           11,000    
                                                                             
Total interest expense                          828,000         979,000   
                                                                             
Net interest income                              6,230,000         5,723,000
                                                                             
Provision for loan losses                       355,000         780,000   
                                                                             
Net interest income after provision for         5,875,000       4,943,000 
loan losses
                                                                             
Non-interest income:
Service charges and fees                         66,000            70,000
Gain on sales of available-for-sale              604,000           566,000
investment securities
Other                                           392,000         305,000   
                                                                             
Total non-interest income                       1,062,000       941,000   
                                                                             
Non-interest expense:
Salaries and employee benefits                   3,135,000         2,714,000
Occupancy and equipment                          607,000           599,000
Other                                           2,229,000       1,990,000 
                                                                             
Total non-interest expense                      5,971,000       5,303,000 
                                                                             
Net income before benefit for income taxes       966,000           581,000
Benefit for income taxes                        (900,000  )      (250,000  )
                                                                             
Net income                                     $ 1,866,000      $ 831,000   
                                                                             
Net income                                     $ 1,866,000       $ 831,000
Preferred stock dividends and accretion of      138,000         403,000   
discount
                                                                             
Net income available to common                 $ 1,728,000      $ 428,000   
shareholders
                                                                             
Common Share Data
Basic earnings per share                       $ 0.32            $ 0.08
Diluted earnings per share                     $ 0.29            $ 0.08
                                                                             
Weighted average shares outstanding              5,449,242         5,449,242
Weighted average shares outstanding -            6,469,565         5,488,578
diluted

Contact:

Community 1st Bank
Robert C. Haydon, 530-863-4801
President & Chief Executive Officer
Fax: (530) 863-4849
or
James J. Kim, 530-863-4803
Executive Vice President & Chief Financial Officer
Fax: (530) 863-4849
 
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