Community Bank of the Bay Announces 2015 Fourth Quarter and Year-End Results

OAKLAND, CA--(Marketwired - Mar 14, 2016) - Community Bank of the Bay (OTCBB: CBYAA), a San Francisco Bay Area commercial bank with full service offices in Oakland and Danville, and two business offices in the Silicon Valley, reported unaudited earnings results for its fourth quarter and year ended December 31, 2015.

2015 Financial Highlights

• Pre-tax operating income for the quarter ending December 31, 2015 totaled $117 thousand, a decrease of $502 thousand, or 81 percent, from $619 thousand reported in 2014. Net profit after-tax for the quarter ended December 31, 2015 totaled $87 thousand, or $0.02 earnings per common share, compared to $441 thousand reported in 2014. The decrease in quarterly earnings was attributed to a $625 thousand increase in the provision for loan loss and a $160 thousand increase in professional fees from the same period a year ago. 
  
  
• 2015 pre-tax operating income totaled $2.2 million, approximately even with 2014. 2015 income taxes of $889 thousand resulted in after-tax net income of $1.3 million, or $0.30 earnings per common share, compared to 2014 after-tax earnings of $1.7 million when income taxes were only $500 thousand. 
  
  
• Total assets at December 31, 2015 were $241.3 million, an increase of $16.7 million, or 7.5 percent from $224.6 million at December 31, 2014. Average earning assets for the 2015 fourth quarter reached $235.5 million, an increase of $29.5 million, or 14.3 percent, compared with $205.9 million in the same period in 2014. 
  
  
• Deposits totaled $218 million at year-end and represented a decrease of $14.6 million or 6.3 percent from the third quarter and an increase of $19.1 million, or 9.6 percent from the prior year.
  
  
• Loans totaled $200.3 million at year-end and represented an increase of $8.5 million, or 4.5 percent from the third quarter and $25.2 million, or 14.4 percent from the prior year. 
  
  
• Non-performing assets increased $628 thousand to $4 million in the fourth quarter. 
  
  
• Net interest margin for the fourth quarter increased twenty basis points to 4.26 percent, compared with 4.05 percent for the third quarter and decreased fifteen basis points from 4.41 percent for the 2014 fourth quarter.
  
  
• Capital levels remain above FDIC "Well Capitalized" standards. December 31, 2015 equity of $22.6 million increased 7.3 percent from the prior year and resulted in common equity tier 1 capital ratio of 8.2 percent, and tier 1 capital and total capital ratio of 10.02 percent and 11.28 percent, respectively.
  
  

"While remaining profitable in the fourth quarter, the Bank incurred certain expenses that negatively impacted performance, including $153 thousand of one-time non-interest expenses associated with due diligence and related costs incurred in connection with consideration of various strategic opportunities. However, of greater impact were asset quality costs and professional fees attributed to one credit relationship. Management promptly took aggressive action regarding this credit resulting in fourth quarter loan charge-offs, related provisions and professional fees of approximately $579 thousand, which contributed significantly to the fourth quarter's increase in non-performing assets," said William S. Keller, President and Chief Executive Officer. "We are working diligently with this credit and look forward to providing an update at the time of our first quarter earnings release." 

About Community Bank of the Bay
Community Bank of the Bay (OTCBB: CBYAA) serves the financial needs of closely held businesses and professional service firms, as well as their owner-operators and non-profit organizations throughout the San Francisco Bay Area. Community Bank of the Bay is a member of the FDIC, an SBA Preferred Lender, and a CDARS depository institution, headquartered in Oakland, with offices in Danville, San Mateo and Campbell, CA. It is also California's first FDIC-insured certified Community Development Financial Institution and one of only three operating in the Northern California market. The bank is recognized for establishing the Bay Area Green Fund to provide financing to sustainable businesses and projects and supports environmentally responsible values. Additional information on the bank is available online at www.BankCBB.com.

Forward-Looking Statements
This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.

COMMUNITY BANK OF THE BAY

UNAUDITED SUMMARY FINANCIAL STATEMENTS

(In thousands except earnings per share)

		INCOME STATEMENT		Three Months Ended																						Year to Date
				2015				2015				Qtr over Qtr			2014				Year over Year			2015				2014				Year over Year
				Dec 31				Sept 30				% Change			Dec 31				% Change			Dec 31				Dec 31				% Change
Interest income				$	2,725			$	2,617			4.1	%		$	2,460			10.8	%		$	10,543			$	8,676			21.5	%
Interest expense					199				199			0.0	%			174			14.4	%			793				692			14.6	%
	Net interest income before provision				2,526				2,418			4.5	%			2,286			10.5	%			9,750				7,984			22.1	%
Provision for Loan Loss Reserve					850				50			1600.0	%			225			277.8	%			1,250				425			194.1	%
Net interest income after provision					1,676				2,368			-29.2	%			2,061			-18.7	%			8,500				7,559			12.4	%
Non-interest income					591				436			35.6	%			379			55.9	%			1,887				1,652			14.2	%
Non-interest expense					2,150				2,039			5.4	%			1,822			18.0	%			8,166				7,004			16.6	%
	Income before provision for income taxes				117				765			-84.7	%			618			-81.1	%			2,221				2,207			0.6	%
Provision for income taxes					30				319			-90.6	%			178			-83.1	%			889				500			77.8	%
	Net income			$	87			$	446			-80.5	%		$	440			-80.2	%		$	1,332			$	1,707			-22.0	%
Less: preferred dividends					20				20			0.0	%			20			0.0	%			81				81			0.0	%
	Net income available for common stockholders			$	67			$	426			-84.3	%		$	420			-84.0	%		$	1,251			$	1,626			-23.1	%
Basic earnings per common share					0.02				0.10			-84.3	%		$	0.10			-84.1	%		$	0.30			$	0.39			-23.3	%
Common shares outstanding EP					4,232,435				4,232,435							4,220,443							4,232,435				4,220,443
Return on average assets					0.11	%			0.67	%						0.64	%						0.54	%			0.81	%
Return on average common equity					1.45	%			9.40	%						10.05	%						7.05	%			10.18	%

COMMUNITY BANK OF THE BAY
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(In thousands except earnings per share)
		BALANCE SHEET	Three Months Ended
			2015				2015				Qtr over Qtr			2014				Year over Year
		ASSETS	Dec 31				Sept 30				% Change			Dec 31				% Change
Total cash and investments			$	36,407			$	59,523			-38.8	%		$	44,340			-17.9	%
Loans, net of unearned income				200,271				191,736			4.5	%			175,096			14.4	%
Loan loss reserve				(3,488	)			(3,129	)		11.5	%			(2,783	)		25.3	%
Other real estate owned				-				-			0.0	%			971			-
Other assets				8,135				7,836			3.8	%			6,947			17.1	%
	Total Assets			241,325				255,966			-5.7	%			224,571			7.5	%
		LIABILITIES AND SHAREHOLDERS EQUITY
Non-interest bearing deposits				72,390				81,415			-11.1	%			54,964			31.7	%
Interest bearing deposits				145,580				151,225			-3.7	%			143,857			1.2	%
	Total deposits			217,970				232,640			-6.3	%			198,821			9.6	%
Total borrowings and other liabilities				785				860			-8.7	%			4,714			-83.3	%
	Total Liabilities		$	218,755			$	233,500			-6.3	%		$	203,535			7.5	%
Total equity				22,570				22,466			0.5	%			21,036			7.3	%
Total Liabilities and Total Equity			$	241,325			$	255,966			-5.7	%		$	224,571			7.5	%
Book value per common share			$	4.37			$	4.35			0.6	%		$	4.02			8.7	%