SOURCE: Beach Business Bank

Beach Business Bank

July 25, 2011 09:00 ET

Beach Business Bank Reports Another Record Quarter

MANHATTAN BEACH, CA--(Marketwire - Jul 25, 2011) - Beach Business Bank (OTCBB: BBBC) (the "Bank") is pleased to report its results of operations for the second quarter of 2011.

Second Quarter Highlights

  • Record After-Tax Earnings. For the second quarter, the Bank earned $508,000, an historical second quarter earnings record for the Bank. This represented 0.67% annualized return on Average Assets for the quarter, and 6.58% annualized return on Average Common Equity for the quarter.
(U.S. Dollars) Second Quarter 2011 Second Quarter 2010 Trailing 12 Months Through 06/30/2011 Full Year 2010
Net Income $ 508,000 $ 256,000 $ 2,008,000 $ 1,618,000
  • Net Loan Growth and Funding Quality. Net Loans declined in the 2nd Quarter, as a result of certain sizable payoffs. Deposit growth was 2.59% during the quarter, although funding costs continued to decline, which allowed the Bank's Net Interest Margin to remain stable at 4.47%. Non-interest bearing deposits increased from $43.9 million at the end of June 2010 to $62.9 million at the end of June 2011. The Bank's non-CD or "core" deposits remained very high at 90.4% of total deposits at the end of the quarter.
% growth 06/30/2011 vs.
12/31/2010
06/30/2011 vs. 06/30/2010
Net Loans (2.5) % 2.0 %
Total Assets (1.2) % 7.9 %
Demand deposits (non-interest-bearing) 0.3 % 43.3 %
Non-CD -- Core Deposits 0.4 % 15.0 %
Total Deposits (0.4) % 12.0 %
  • The Bank's recently hired team of experienced bankers from the South Bay began to produce meaningful increases in loans and deposits from their new Office in Torrance.
  • Despite the decline in overall loans, total new loan commitments in the quarter amounted to more than $18.8 million, an increase of 33.6% over the first quarter.
  • Deposits totaled $263.1 million at the end of the quarter, as compared to $234.9 million at the end of the same quarter in 2010.
  • Total assets increased by $22.3 million, to $304.2 million at the end of the quarter, as compared to $281.9 million at the end of the same quarter in 2010.

Stronger Operating Performance

2Q 2011 2Q 2010 Trailing 12 Months FY 2010
Annualized Return on Average Assets 0.67 % 0.38 % 0.66 % 0.57 %
Annualized Return on Average Common Equity 6.58 % 3.50 % 6.64 % 5.48 %
Net Interest Margin 4.47 % 3.98 % 4.21 % 3.95 %
Efficiency Ratio 75.43 % 68.52 % 70.1 % 69.18 %
Tangible Book Value per Common Share $ 7.66 $ 7.24 $ 7.49 $ 7.45

"We are pleased to be able to report continued strong earnings and an increase in new loan commitments. Our philosophy is to build our Bank one good client at a time, and I am pleased to see so many strong prospects coming over to bank with us," commented Jim Gray, the co-chairman of the Bank's board of directors.

Robert Franko, president and chief executive officer of the Bank, commented, "We are very gratified to see how well our clients, who survived the recession, have recently been able to grow their businesses during this recovery. Finding good quality, new clients is still a challenge. However, many of our existing clients have been referring their friends and associates to our Bank, thanks to the excellent service they have received from our outstanding bankers."

Loan Portfolio and Credit Quality

  • The Bank's Allowance for Loan & Lease Losses (ALLL) stood at $6.0 million or 2.4% of loans outstanding at the quarter-end.
  • As of the quarter-end, non-accrual loans stood at $4.7 million, with no loans more than 30 days past due.
  • The Bank had net charge-offs of $348,000 in the quarter. The Bank provided $432,000 to the ALLL in the quarter.
  • At the quarter-end, the Bank's Total Risk-based Capital Ratio was 16.62%, 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; for example the Bank's Tier 1 Risk-Based Capital was 15.35%, compared to the regulatory minimum of 6.0%, and The Bank's Tier 1 Leverage Ratio was 12.12%, compared to the regulatory minimum of 5.0%.

Capital Transactions

  • As announced separately on July 6, 2011, the Bank repurchased 1,500 of the 6,000 shares of the Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A (the "Series A Preferred Stock") that the Bank had issued to the Treasury on January 30, 2009 under the TARP Capital Purchase Program, thereby reducing the preferred equity of the Bank by $1.5 million.

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 www.beachbusinessbank.com, and should be available for review or downloading from the FDIC web site at www.fdic.gov 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, and a Loan Production Office at 21250 Hawthorne Blvd. in Torrance, 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 www.beachbusinessbank.com 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.
June 30, 2011 December 31, 2010 June 30, 2010
Balance Sheet Results (In thousands), except per share data:
Total Assets $ 304,209 $ 307,782 $ 281,916
Gross Loans $ 248,744 $ 255,737 $ 243,894
Loans Held for Sale $ - $ 854 $ -
Allowance for Loan Losses $ 6,020 $ 5,942 $ 6,029
Total Net Loans $ 242,724 $ 248,941 $ 237,865
Total Deposits $ 263,111 $ 264,029 $ 234,949
Other Real Estate Owned $ - $ 162 $ -
Preferred Stock $ 6,123 $ 6,093 $ 6,063
Common Stock $ 30,927 $ 30,091 $ 29,231
Total Shareholders' Equity $ 37,050 $ 36,184 $ 35,294
Net Loans to Deposits 92.25 % 94.29 % 101.24 %
ALLL to Loans HTM 2.42 % 2.33 % 2.47 %
Equity to Assets 12.18 % 11.76 % 12.52 %
Ending Common Shares outstanding 4,036,984 4,036,984 4,036,984
Ending Book Value per Common Share $ 7.66 $ 7.45 $ 7.24
Three Months Ended
June 30, 2011 December 31, 2010 June 30, 2010
Quarterly Operating Results (In thousands):
Net Interest Income $ 3,302 $ 3,007 $ 2,646
Non-interest Income $ 525 $ 697 $ 486
Non-interest Expense $ 2,887 $ 2,130 $ 2,146
Income Before Provision & Taxes $ 940 $ 1,574 $ 986
Provision for Loan Losses $ 432 $ 1,014 $ 730
Income Tax Expense $ - $ - $ -
Net Income $ 508 $ 560 $ 256
Quarterly Return on Average Assets* 0.67 % 0.73 % 0.38 %
Quarterly Return on Average Common Equity* 6.58 % 7.46 % 3.50 %
Quarterly Net Interest Margin* 4.47 % 4.05 % 3.98 %
Quarterly Efficiency Ratio* 75.43 % 57.50 % 68.52 %
Six Months Ended
June 30, 2011 June 30, 2010
YTD Operating Results (In thousands):
Net Interest Income $ 6,484 $ 5,129
Non-interest Income $ 1,104 $ 677
Non-interest Expense $ 5,904 $ 4,338
Income Before Provision & Taxes $ 1,684 $ 1,468
Provision for Loan Losses $ 686 $ 860
Income Tax Expense $ - $ -
Net Income $ 998 $ 608
YTD Return on Average Assets* 0.67 % 0.46 %
YTD Return on Average Common Equity* 6.55 % 4.19 %
YTD Net Interest Margin* 4.48 % 3.95 %
YTD Efficiency Ratio* 77.81 % 74.71 %
*Percentages are reported on an annualized basis.
Source: FDIC quarterly Call Reports for Beach Business Bank for the periods indicated.

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