SOURCE: Beach Business Bank

Beach Business Bank

April 26, 2010 11:20 ET

Beach Business Bank Reports Strong Earnings Growth for the First Quarter

MANHATTAN BEACH, CA--(Marketwire - April 26, 2010) - Beach Business Bank (OTCBB: BBBC) (the "Bank") is pleased to report its results of operations for the first quarter of 2010.

During the quarter, the Bank recorded after tax earnings of $352,000, compared to $143,000 for the prior quarter and $103,000 for the same quarter in the prior year, increases of 146.7% and 240.9% respectively.

The financial results demonstrated 3.9% growth in net loans over the previous quarter, and 11.3% growth in net loans over the same quarter of the prior year. Total new loan commitments in the quarter amounted to more than $28 million. Non-interest bearing demand deposits totaled $42.0 million at quarter end, an increase of 29.2% over the prior quarter end, and an increase of 39.9% over the same period in the prior year. Overall deposits totaled $230.0 million at quarter end, an increase of 8.3% over the prior quarter end, and an increase of 25.4% over the same period in the prior year. Total assets increased 18.15%, or $42.1 million, to $273.8 million at quarter-end, as compared to $231.8 million for the same quarter end last year.

"We finally believe that we are seeing some break in the devastating effects of unemployment and the recession on Southern California," commented Jim Gray, the co-chairman of the Bank's board of directors. He continued, "we are very pleased to be able to report this strong growth in earnings for the first quarter of 2010. We are particularly proud to be able to be originating many quality loans to worthy businesses in our market area. We are finding new credit opportunities from clients who want the personal service of a community business bank like ours, rather than the impersonal service of a larger bank."

Robert Franko, president and chief executive officer of the Bank, commented, "This quarter we especially benefitted from our new Orange County office. In addition to the relationships they brought with them, this team of experienced bankers has been prolific at developing new business opportunities for the Bank. Our strong capital base, combined with our outstanding employees, continues to be a source of strength to our clients in what is still an uncertain economic climate. We have been particularly pleased with the strong growth in new core deposit relationships."

The Bank's Allowance for Loan & Lease Losses (ALLL) stood at $6.9 million or 3.07% of loans outstanding at the quarter end. As of the quarter end, non-accrual loans stood at $6.3 million, loans more than 30 days past due stood at $2.6 million, and Other Real Estate Owned (OREO) stood at $2.1 million. At the prior quarter end, non-accrual loans stood at $6.0 million, there were no other loans more than 30 days past due, and OREO stood at $2.1 million. The Bank had net charge-offs of $96,000 in the quarter. The Bank provided $130,000 to the ALLL in the quarter. As of the quarter end, 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 19.86%. 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 may continue for a few 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 the quarter end, the Bank's regulatory capital measurements, the measures of a Bank's core strength, stood at Total Risk-based Capital Ratio of 15.35% 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 14.08%, compared to the regulatory minimum of 6.0%, and the Bank's Tier 1 Leverage Ratio of 13.43%, compared to the regulatory minimum of 5.0%. The Bank's common shareholder equity, or tangible book value, stands at $29.0 million or $7.19 per share. 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 shortly after the end of this month.

Beach Business Bank is headquartered at 1230 Rosecrans Avenue, Lobby Level, in Manhattan Beach, and has two other full-service offices at 180 E. Ocean Blvd. in Long Beach, CA and at 650 Town Center Drive in Costa Mesa, CA. The Bank is first and foremost a community business bank serving Los Angeles, Long Beach, the South Bay and Orange County 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) and Express lending programs. For more information on the Bank, please visit or call toll-free to (866) 862-3878.

"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.

                                      March 31,     December    March 31,
                                         2010       31, 2009       2009
                                     -----------  -----------  -----------
Balance Sheet Results (In
 thousands), except per share data:
       Total Assets                  $   273,822  $   255,333  $   231,756
       Gross Loans                   $   224,596  $   217,361  $   200,465
       Loans Held for Sale           $         -  $     1,026  $         -
       Allowance for Loan Losses     $     6,903  $     6,870  $     4,861
       Total Net Loans               $   217,693  $   209,465  $   195,604
       Total Deposits                $   230,048  $   212,345  $   183,507
       Other Real Estate Owned       $     2,100  $     2,100  $     2,966
       Preferred Stock               $     6,048  $     6,033  $     5,991
       Common Stock                  $    29,026  $    28,900  $    34,537
       Total Shareholders' Equity    $    35,074  $    34,933  $    40,528
       Net Loans to Deposits               94.63%       98.64%      106.59%
       ALLL to Loans HTM                    3.07%        3.18%        2.42%
       Equity to Assets                    12.81%       13.68%       17.49%
       Ending Shares outstanding       4,036,984    4,036,984    4,036,984
       Ending Book Value per Common
        Share                        $      7.19  $      7.16  $      8.56

                                               Three Months Ended
                                      March 31,     December    March 31,
                                         2010       31, 2009       2009
                                     -----------  -----------  -----------
Quarterly Operating Results (In
       Net Interest Income           $     2,483  $     2,230  $     2,215
       Non-interest Income           $       191  $       380  $       232
       Non-interest Expense          $     2,192  $     1,567  $     2,318
       Income Before Provision &
        Taxes                        $       482  $     1,043  $       128
       Provision for Loan Losses     $       130  $       900  $        25
       Income Tax Expense            $         -  $         -  $         -
       Net Income                    $       352  $       143  $       103
       Quarterly Return on Average
        Assets*                             0.54%        0.22%        0.18%
       Quarterly Return on Average
        Equity*                             3.99%        1.63%        1.07%
       Quarterly Net Interest
        Margin*                             3.92%        3.46%        4.02%
       Quarterly Efficiency Ratio*         81.97%       60.04%       94.76%

*Percentages are reported on an annualized basis.
Source: FDIC quarterly Call Reports for Beach Business Bank for the periods

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