SOURCE: Beach Business Bank

Beach Business Bank

February 01, 2010 15:29 ET

Beach Business Bank Announces Profit for the Quarter

MANHATTAN BEACH, CA--(Marketwire - February 1, 2010) - Beach Business Bank (OTCBB: BBBC), the "Bank" reported earnings for the quarter ending December 31, 2009 of $143,000.

Total assets at the end of the period stood at $255 million, with total deposits at $212 million, including core deposits (defined as checking, money market, savings accounts, and retail certificates of deposit in amounts less than $100,000) of $185.7 million at December 31, 2009, compared to total assets of $231 million, total deposits of $173 million, and core deposits of $141.2 million at December 31, 2008. Non-interest bearing demand deposits totaled $32.5 million at December 31, 2009, compared to $31.5 million at December 31, 2008. Gross loans amounted to $217 million at December 31, 2009, compared to $199 million at December 31, 2008. Total new loan commitments in the quarter amounted to $45.6 million and $72.4 million for the year and more than $599.8 million in the period of five and one-half years that the Bank has been serving its communities. In conjunction with its application to open a new branch in Costa Mesa, CA, the Bank purchased $19 million in performing loans at the end of the year.

Because of loan loss provisioning earlier in the year, the Bank reported a net loss of $5.6 million for the year. The Bank's Allowance for Loan & Lease Losses stood at $6.9 million or 3.1% of loans outstanding at the year end. As of December 31, 2009, non-accrual loans stood at $6.0 million, there were no other loans more than 30 days past due, and Other Real Estate Owned (OREO) stood at $2.1 million. At September 30, 2009, non-accrual loans stood at $5.8 million, there were $3 thousand in other loans more than 30 days past due, and OREO stood at $2.5 million. As of December 31, 2009, the aggregate of non-accrual loans and OREO measured as a percentage of Capital and Reserves (sometimes referred to as the Texas Ratio) stood at 19.35%. Included in non-accrual loans is a loan in the amount of $2.0 million to an entity that is currently in bankruptcy. While the bankruptcy is expected to continue for at least two more quarters, the loan to value, based on a recent appraisal is less than 50% and the Bank expects to eventually recover its full principal and past due interest amounts, when the debtor is eventually discharged from bankruptcy.

At December 31, 2009, the Bank's regulatory capital measurements, the measures of a Bank's core strength, stood at Total Risk-based Capital Ratio of 15.53% for the Bank, compared to the regulatory minimum of 10.0% to be "Well Capitalized." The Bank's other regulatory Capital measurements also continued to be significantly above the regulatory minimums for Well Capitalized with the Bank's Tier 1 Risk-Based Capital of 14.26%, compared to the regulatory minimum of 6.0%, and the Bank's Tier 1 Leverage Ratio of 13.48%, compared to the regulatory minimum of 5.0%. The Bank's common shareholder equity, or tangible book value, stands at $28.7 million or $7.12 per share.

Robert Franko, President and Chief Executive Officer, commented, "We are pleased to be able to report a profit for the 4th quarter, and proud that our strong capital base and experienced management and Board of Directors position us to help our communities start the recovery from the worst recession since the 1930s. Anecdotal evidence among our client base leads us to believe that 2010 will be a turnaround year for California. We are fortunate to be in Los Angeles County, and soon to be opening a branch in Orange County, two of the largest and most diverse business communities in the United States. No strangers to economic downturns, these communities have historically recovered from recessions stronger than ever. While cautiously optimistic, we are clearly aware of double digit unemployment and all of the other fiscal problems in California. We look forward to Washington finally approving programs that will lead to an increase in private sector jobs in our markets. Opening our new Orange County office should provide excellent growth opportunities for the Bank in 2010. Strengthening our balance sheet has put us in a position to be able to consider acquiring other banks, whether in negotiated transactions or through the FDIC resolution process, if an opportunity should arise."

Jim Gray, the Bank's co-chairman, and one of only 15 members across the United States appointed to the FDIC's Advisory Committee on Community Banking, had this comment, "We know that 2010 will not be easy. Our Board and our management have been through downturns and recoveries. In this coming year, we plan to grow our terrific client base in our current markets, and we really look forward to expanding our operation into the exciting Orange County market."

Other selected financial data is included in the table below.

Financial statements in the form of the Bank's Call Report, as filed with the FDIC, will be available on the Bank's web site at, and should be available for review or downloading from the FDIC web site at in approximately four weeks. Beach Business Bank is headquartered at 1230 Rosecrans Avenue, Lobby Level, in Manhattan Beach, and has a second full-service office at 180 E. Ocean Blvd. in Long Beach, CA. The Bank has applied to open a third branch at 650 Town Center Drive in Costa Mesa, CA. The Bank is first and foremost a community business bank serving Los Angeles, Long Beach, and the South Bay, and soon, Orange County area residents and businesses. The Bank also has a division named The Doctors Bank®, which serves physicians and dentists nationwide. In addition, Beach Business Bank provides loans to small businesses, focused around the SBA 7(a), 504, and Express lending programs. For more information on the Bank, please visit or call 866-862-3878 or 310-536-2260; in Long Beach, call 562-435-8600.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

The financial information in this press release is based on our unaudited financial results. Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief, and current expectations of the Bank, its directors, or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements are subject to risks and uncertainties and therefore the Bank's actual results may differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that the Bank is subject to include, but are not limited to, risks related to the local and national economy, including fluctuations in interest rates and costs and changes in economic policy; the ability of the Bank to perform in accordance with its plans; competition; regulatory matters; and other risks detailed in its filings with the State of California Department of Financial Institutions and the Federal Deposit Insurance Corporation. The Bank cautions readers not to place undue reliance on any forward-looking statements. The Bank does not undertake, and specifically disclaims any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Summary Financial Information

The following tables present relevent financial data from Beach Business
Bank's recent performance.

                                                 December 31,  December 31,
                                                      2009         2008
                                                  -----------  -----------
Balance Sheet Results (In thousands), except per
 share data:
       Total Assets                               $   255,333  $   231,022
       Gross Loans                                $   217,361  $   199,315
       Loans Held for Sale                        $     1,026  $     1,780
       Allowance for Loan Losses                  $     6,870  $     5,104
       Total Net Loans                            $   209,465  $   192,431
       Total Deposits                             $   212,345  $   173,395
       Other Real Estate Owned                    $     2,100  $     2,500
       Preferred Stock                            $     6,033  $         -
       Common Stock                               $    28,736  $    34,409
       Total Shareholders' Equity                 $    34,769  $    34,409
       Net Loans to Deposits                            98.64%      110.98%
       ALLL to Loans HTM                                 3.18%        2.58%
       Equity to Assets                                 13.62%       14.89%
       Ending Shares outstanding                    4,036,984    4,036,984
       Ending Book Value per Common Share         $      7.12  $      8.52

                                                    Three Months Ended
                                                 December 31,  December 31,
                                                      2009         2008
                                                  -----------  -----------
Quarterly Operating Results (In thousands):
       Net Interest Income                        $     2,230  $     2,450
       Non-interest Income                        $       380  $       284
       Non-interest Expense**                     $     1,567  $     1,632
       Income Before Provision & Taxes            $     1,043  $     1,102
       Provision for Loan Losses                  $       900  $       812
       Income Tax Expense                         $         -  $         -
       Net Income                                 $       143  $       290
       Quarterly Return on Average Assets*               0.22%        0.50%
       Quarterly Return on Average Equity*               1.63%        3.39%
       Quarterly Net Interest Margin*                    3.46%        4.37%
       Quarterly Efficiency Ratio*                      60.04%        59.7%

                                                     Twelve Months Ended
                                                      2009         2008
                                                  -----------  -----------
YTD Operating Results (In thousands):
       Net Interest Income                        $     8,640  $     8,836
       Non-interest Income                        $       937  $     1,018
       Non-interest Expense**                     $     9,308  $    10,444
       Income Before Provision & Taxes            $       270  $      (590)
       Provision for Loan Losses                  $     5,820  $     2,786
       Income Tax Expense                         $         -  $         -
       Net Income                                 $    (5,550) $    (3,376)
       YTD Return on Average Assets*                    -2.22%       -1.53%
       YTD Return on Average Equity*                   -14.34%       -9.41%
       YTD Net Interest Margin*                          3.53%        4.16%
       YTD Efficiency Ratio*                            97.19%      105.99%
       YTD Efficiency Ratio (Absent
        OREO/Collection Charges)                        75.86%       78.92%
       ** Includes FDIC Special Assessment        $       132            -
       ** Includes OREO/Collection Charges        $     2,042  $     2,668
       *Percentages are reported on an annualized basis.
       Source: FDIC quarterly Call Reports for Beach Business Bank for
       the periods indicated.

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