SOURCE: Beach Business Bank

Beach Business Bank

January 31, 2011 09:00 ET

Beach Business Bank Reports Record 12 Month Earnings

MANHATTAN BEACH, CA--(Marketwire - January 31, 2011) - Beach Business Bank (OTCBB: BBBC) (the "Bank") is pleased to report its results of operations for the fourth quarter of 2010, and the full year 2010.

Fourth Quarter Highlights

  • Record After-Tax Earnings. For the full year, the Bank earned $1,619,000, an historical earnings record for the Bank. All three of the Bank's offices: Manhattan Beach, Long Beach and Orange County, performed well in the quarter and for the year. This represented 0.57% return on Average Assets for the year, and 5.48% return on Common Equity for the year.
(U.S. Dollars)   Fourth Quarter
2010
  Fourth Quarter
2009
  Full Year
2010
  Full Year
2009
 
Net Income   $ 560,000   $ 143,000   $ 1,619,000   ($5,550,000 )
  • Pre-Tax, Pre-Provision Earnings. For the full year, the Bank earned $4,013,000, before Loan Loss Provision and Taxes. This represented 1.41% return on Average Assets when measured for the entire year, and 13.58% return on Common Equity for the year.

  • Loan Growth and Improving Funding Quality. The Bank's SBA lending to small businesses showed especially strong growth in the 4th Quarter. Deposit growth was also strong during the quarter and throughout the year. Non-interest bearing deposits increased from $49.1 million at the end of September 2010 to $62.7 million at the end of the year. The Bank's non-CD based deposits remained very high at 89.7% of total deposits at the end of the year.

% growth   12/31/2010 vs. 9/30/2010     12/31/2010 vs. 12/31/2009  
Net Loans   4.48 %   17.82 %
Total Assets   1.76 %   20.55 %
Demand deposits (non-interest-bearing)   27.69 %   94.58 %
Total Deposits   1.44 %   24.49 %
  • Total new loan commitments in the quarter amounted to more than $39 million. 
  • Deposits totaled $264.0 million at the end of the year, as compared to $212.1 million at year-end 2009. 
  • Total assets increased by $52.5 million, to $307.8 million at year-end, as compared to $255.3 million at year-end 2009. 

Stronger Operating Performance

    4Q 2010     3Q 2010     4Q 2009     FY 2010     FY 2009  
Annualized Return on Average Assets     0.73 %     0.60 %     0.22 %     0.57 %     (2.22 )%
Annualized Return on Average Common Equity     7.47 %     6.08 %     1.97 %     5.48 %     (16.71 )%
Net Interest Margin     4.05 %     3.85 %     3.46 %     3.95 %     3.53 %
Efficiency Ratio     57.50 %     65.79 %     62.93 %     69.18 %     97.37 %
Tangible Book Value per Common                                         
Share   $ 7.42     $ 7.30     $ 7.16     $ 7.42     $ 7.16  

"We are pleased to be able to report record year earnings," commented Jim Gray, the co-chairman of the Bank's board of directors. He continued, "Our commitment to the small businesses in our market area was really front and center this Quarter with more than $39 million in new loan commitments and $11.0 million in loan growth on the Balance Sheet."

Robert Franko, president and chief executive officer of the Bank, commented, "By all measurements, this past year's performance was terrific. It was even more remarkable considering the general state of the California economy. Our skilled professionals are the banking partners that our clients need to support their growth plans. Together with our clients, we are working to revitalize the California economy."

Loan Portfolio and Credit Quality

  • The Bank's Allowance for Loan & Lease Losses (ALLL) stood at $5.9 million or 2.3% of loans outstanding at the quarter end. 
  • As of the quarter end, non-accrual loans stood at $6.7 million, with less than $10,000 in loans more than 30 days past due. 
  • The Bank had net charge-offs of $1.3 million in the quarter. The Bank provided $1,014,000 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 23.86%. 
  • At year-end, the Bank's Total Risk-based Capital Ratio was 14.97%, 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 13.71%, compared to the regulatory minimum of 6.0%, and The Bank's Tier 1 Leverage Ratio was 11.80%, compared to the regulatory minimum of 5.0%. 

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. 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.       
               
      December 31, 2010     December 31, 2009  
Balance Sheet Results (In thousands), except per share data:            
  Total Assets   $ 307,782     $ 255,321  
  Gross Loans   $ 255,737     $ 217,361  
  Loans Held for Sale   $ 854     $ 1,026  
  Allowance for Loan Losses   $ 5,942     $ 6,870  
  Total Net Loans   $ 248,941     $ 209,465  
  Total Deposits   $ 264,029     $ 212,083  
  Other Real Estate Owned   $ 162     $ 2,100  
  Preferred Stock   $ 6,093     $ 6,033  
  Common Stock   $ 30,091     $ 28,900  
  Total Shareholders' Equity   $ 36,184     $ 34,933  
  Net Loans to Deposits     94.29 %     98.77 %
  ALLL to Loans HTM     2.33 %     3.18 %
  Equity to Assets     11.76 %     13.68 %
  Ending Shares outstanding     4,055,972       4,036,984  
  Ending Book Value per Common Share   $ 7.42     $ 7.16  
                   
        Three Months Ended  
        December 31, 2010       December 31, 2009  
Quarterly Operating Results (In thousands):                
  Net Interest Income   $ 3,007     $ 2,230  
  Non-interest Income   $ 697     $ 583  
  Non-interest Expense   $ 2,130     $ 1,770  
  Income Before Provision & Taxes   $ 1,574     $ 1,043  
  Provision for Loan Losses   $ 1,014     $ 900  
  Income Tax Expense   $ -     $ -  
  Net Income   $ 560     $ 143  
  Quarterly Return on Average Assets*     0.73 %     0.22 %
  Quarterly Return on Average Common Equity*     7.47 %     1.97 %
  Quarterly Net Interest Margin*     4.05 %     3.46 %
  Quarterly Efficiency Ratio*     57.50 %     62.93 %
                   
        Twelve Months Ended  
        December 31, 2010       December 31, 2009  
YTD Operating Results (In thousands):                
  Net Interest Income   $ 10,916     $ 8,640  
  Non-interest Income   $ 2,106     $ 1,643  
  Non-interest Expense   $ 9,009     $ 10,013  
  Income Before Provision & Taxes   $ 4,013     $ 270  
  Provision for Loan Losses   $ 2,394     $ 5,820  
  Income Tax Expense   $ -     $ -  
  Net Income   $ 1,619     $ (5,550 )
  YTD Return on Average Assets*     0.57 %     -2.22 %
  YTD Return on Average Common Equity*     5.48 %     -16.71 %
  YTD Net Interest Margin*     3.95 %     3.53 %
  YTD Efficiency Ratio*     69.18 %     97.37 %
                   
  Pre-Tax, Pre-Provision ROAA     1.41 %     0.11 %
  Pre-Tax, Pre-Prov Return on Ave Common Equity*     13.58 %     0.81 %
                   
                   
  *Percentages are reported on an annualized basis.                
  Source: FDIC quarterly Call Reports for Beach Business Bank for the periods indicated.  

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