SOURCE: Beach Business Bank

Beach Business Bank

April 26, 2011 09:07 ET

Beach Business Bank Reports Solid First Quarter Earnings

MANHATTAN BEACH, CA--(Marketwire - Apr 26, 2011) - Beach Business Bank (OTCBB: BBBC) (the "Bank") is pleased to report its results of operations for the first quarter of 2011.

First Quarter Highlights

--  Record After-Tax Earnings. For the first quarter, the Bank earned
    $490,000, a historical first quarter earnings record for the Bank. This
    represented 0.66% annualized return on Average Assets for the year to
    date, and 6.42% annualized return on Average Common Equity for the year
    to date.

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                                               Trailing 12
                First Quarter  First Quarter  Months Through
(U.S. Dollars)      2011           2010         03/31/2011   Full Year 2010
---------------------------------------------------------------------------
Net Income      $      490,000 $      352,000 $    1,756,000 $    1,618,000
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--  Net Loan Growth and Funding Quality.  Net Loan growth was flat in the
    1st Quarter.   Deposit growth was also flat during the quarter,
    although funding costs continued to decline, which contributed to the
    increase in the Bank's Net Interest Margin to 4.49%.  Non-interest
    bearing deposits increased from $41.8 million at the end of March 2010
    to $66.2 million at the end of March 2011.  The Bank's non-CD or "core"
    deposits remained very high at over 90% of total deposits at the end of
    the quarter.

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                                        03/31/2011          03/31/2011
% growth                              vs. 12/31/2010       vs. 03/31/2010
--------------------------------------------------------------------------
Net Loans                                       (0.2)%                14.2%
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Total Assets                                    (3.3)%                 8.7%
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Demand deposits (non-interest-bearing)           5.6 %                58.3%
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Non-CD - Core Deposits                          (2.5)%                16.4%
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Total Deposits                                  (2.9)%                11.6%
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--  During the quarter, the Bank hired a team of experienced bankers from
    the Torrance, CA area and, immediately following the quarter-end, the
    Bank opened a new Loan Production Office in Torrance.
--  Total new loan commitments in the quarter amounted to more than $14
    million.
--  Deposits totaled $256.5 million at the end of the quarter, as compared
    to $229.8 million at the end of the same quarter in 2010.
--  Total assets increased by $23.7 million, to $297.5 million at the end
    of the quarter, as compared to $273.8 million at the end of the same
    quarter in 2010.

Stronger Operating Performance


--------------------------------------------------------------------------
                                                      Trailing
                                 1Q 2011    1Q 2010   12 Months   FY 2010
--------------------------------------------------------------------------
Annualized Return on Average
 Assets                              0.66%      0.54%      0.60%      0.57%
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Annualized Return on Average
 Common Equity                       6.42%      4.82%      5.88%      5.48%
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Net Interest Margin                  4.49%      3.92%      4.09%      3.95%
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Efficiency Ratio                    80.22%     81.97%     68.18%     69.18%
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Tangible Book Value per Common
 Share                          $    7.56  $    7.19  $    7.40  $    7.45
--------------------------------------------------------------------------

"We are pleased to be able to report continued strong earnings and an improving Net Interest Margin, as the economy recovers," 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 thrilled to have a new team of bankers join us in the South Bay. They have hit the ground running, and our Board and Management are committed to helping them to succeed. While loan growth in the first quarter was sluggish, we see signs indicating improvement later in the year. We are pleased that our clients are reporting a positive tone to their businesses."

Loan Portfolio and Credit Quality

--  The Bank's Allowance for Loan & Lease Losses (ALLL) stood at $6.0
    million or 2.36% of loans outstanding at the quarter end.
--  As of the quarter end, non-accrual loans stood at $6.6 million, with no
    loans more than 30 days past due.
--  The Bank had net charge-offs of $184,000 in the quarter.  The Bank
    provided $254,000 to the ALLL in the quarter.
--  As of the quarter end, the aggregate of non-accrual loans, troubled
    debt restructured, and OREO measured as a percentage of Capital and
    Reserves (sometimes referred to as the Texas Ratio) stood at 22.45%.
--  At quarter-end, the Bank's Total Risk-based Capital Ratio was 16.28%,
    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 15.02%, compared to
    the regulatory minimum of 6.0%, and the Bank's Tier 1 Leverage Ratio
    was 12.26%, 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, 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.


                                    March 31,   December 31,    March 31,
                                      2011          2010          2010
Balance Sheet Results (In
 thousands), except per share
 data:
  Total Assets                    $    297,511  $    307,782  $    273,822
  Gross Loans                     $    254,574  $    255,737  $    224,596
  Loans Held for Sale             $          -  $        854  $          -
  Allowance for Loan Losses       $      6,012  $      5,942  $      6,903
  Total Net Loans                 $    248,561  $    248,941  $    217,693
  Total Deposits                  $    256,467  $    264,029  $    229,783
  Other Real Estate Owned         $        162  $        162  $      2,100
  Preferred Stock                 $      6,108  $      6,093  $      6,048
  Common Stock                    $     30,500  $     30,091  $     29,026
  Total Shareholders' Equity      $     36,608  $     36,184  $     35,074
  Net Loans to Deposits                  96.92%        94.29%        94.74%
  ALLL to Loans HTM                       2.36%         2.33%         3.07%
  Equity to Assets                       12.30%        11.76%        12.81%
  Ending Shares outstanding          4,036,984     4,036,984     4,036,984
  Ending Book Value per Common
   Share                          $       7.56  $       7.45  $       7.19


                                              Three Months Ended
                                    March 31,   December 31,    March 31,
                                      2011          2010          2010
Quarterly Operating Results (In
 thousands):
  Net Interest Income             $      3,182  $      3,007  $      2,483
  Non-interest Income             $        578  $        697  $        191
  Non-interest Expense            $      3,016  $      2,130  $      2,192
  Income Before Provision & Taxes $        744  $      1,574  $        482
  Provision for Loan Losses       $        254  $      1,014  $        130
  Income Tax Expense              $          -  $          -  $          -
  Net Income                      $        490  $        560  $        352
  Quarterly Return on Average
   Assets*                                0.66%         0.73%         0.54%
  Quarterly Return on Average
   Common Equity*                         6.42%         7.47%         4.82%
  Quarterly Net Interest Margin*          4.49%         4.05%         3.92%
  Quarterly Efficiency Ratio*            80.22%        57.50%        81.97%

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

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