Beverly Hills Bancorp Announces Second Quarter 2007 Results.CALABASAS, Calif. -- Beverly Hills Beverly Hills, city (1990 pop. 31,971), Los Angeles co., S Calif., completely surrounded by the city of Los Angeles; inc. 1914. The largely residential city is home to many motion-picture and television personalities. Bancorp Inc. (the "Company" or "BHBC") (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BHBC), the parent company of First Bank of Beverly Hills (the "Bank"), reported net income for the three months ended June 30, 2007 of $2.1 million, or $0.11 per diluted share, compared with $3.3 million, or $0.15 per diluted share, for the three months ended June 30, 2006. For the six months ended June 30, 2007, the Company's net income was $4.8 million, or $0.25 per diluted share, compared with $5.8 million, or $0.27 per diluted share, for the six months ended June 30, 2006. The decrease in net income from the quarter ended June 30, 2006 to the quarter ended June 30, 2007 was attributable to a $0.6 million decrease in net interest income, reflecting a significant increase in our cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , a $0.7 million increase in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , and a $0.7 million provision for loan losses, as compared with a $0.1 million loan loss recapture in the prior period. The Company's net interest income was $8.0 million for the second quarter of 2007, compared with $8.6 million for the second quarter of 2006. This decrease was due to a decline in the Company's net interest margin from 2.54% to 2.06%, which more than offset a $196.4 million increase in average net interest-earning assets in the 2007 period as compared with the 2006 period. The decline in the margin was primarily the result of increases in market interest rates during 2006 and 2007. Our net interest margin tends to decrease as interest rates rise since our interest-bearing liabilities reprice more frequently than our interest-earning assets. As a result, our weighted average cost of interest-bearing liabilities increased by 93 basis points to 5.11% for the three months ended June 30, 2007, compared with 4.18% for the three months ended June 30, 2006. This compares with an increase of 44 basis points in the yield on our interest-earning assets from 6.27% for the second quarter of 2006 to 6.71% for the second quarter of 2007. The financial results for the first six months of 2007 reflect a $1.8 million decline in net interest income as compared with the 2006 period, and a $0.8 million provision for loan losses in 2007. Other operating expenses, primarily legal fees, were reduced $0.6 million from the 2006 period. Net interest income for the six months ended June 30, 2007, totaled $15.7 million, compared with $17.5 million for the first six months of 2006. The $1.8 million decrease in net interest income resulted from a decline in the net interest margin to 2.03% for the six months ended June 30, 2007, as compared with 2.61% for the first six months of 2006. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. decreased by $1.6 million during the six months ended June 30, 2007 to $153.9 million, or $8.18 book value per diluted share. This decrease in equity was primarily due to cash dividends of $4.7 million and net after-tax unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. of $2.0 million on the Company's portfolio of available-for-sale securities. These decreases were partially offset by net income of $4.8 million, a $0.2 million increase in paid-in capital Paid-in capital Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc exercise of stock options, and a $0.1 million increase in paid-in capital representing stock-based compensation expense. Because the Company may utilize approximately $6.0 million of its net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carryforward per year, approximately $2.1 million of the Company's annual reported income tax expense will not be currently payable in cash. Other operating highlights for the three and six months ended June 30, 2007 included the following: * Loan originations for the three and six months ended June 30, 2007, totaled $67.9 million and $165.4 million, respectively, as compared with $63.2 million and $123.7 million, respectively, for the corresponding 2006 periods. At June 30, 2007, the Company had outstanding commitments to fund $220.6 million in new construction, commercial and multifamily loans Multifamily loans Loans usually represented by conventional mortgages on multi-family rental apartments. . * The Company's loan portfolio increased by $23.0 million to $1.06 billion during the first six months of 2007. The increase in the portfolio was due to the loan originations exceeding loan repayments of $125.3 million and loan participation sales of $16.3 million. * The Company recorded a loan loss provision of $661,000 for the second quarter of 2007, as compared with a loan loss recapture of $109,000 for the second quarter of 2006. For the six months ended June 30, 2007, the provision for loan losses was $846,000, compared with $69,000 in net loan loss recaptures for the corresponding 2006 period. At June 30, 2007, the ratio of the Company's allowance for loan losses to total loans was 0.79%, or an increase from the 0.74% ratio at December 31, 2006. * Total nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. at June 30, 2007, were $20.8 million, or 1.3% of total assets. The increase in nonperforming assets was due to one construction loan of $18.6 million that was placed on nonaccrual status in the second quarter of 2007. In October 2006, the Company purchased a participation in the loan that was for the construction of 94 semi-attached residences in Coachella, California Coachella is a city in Riverside County, California; it is the easternmost city in the region collectively known as the Coachella Valley (or the Palm Springs area). It is located 28 miles east of Palm Springs, 72 miles east of Riverside, and 130 miles east of Los Angeles. . The Company has recorded a notice of default and is pursuing legal remedies against the guarantors of the loan. * At June 30, 2007, the Company's deposits totaled $713.2 million, as compared with $850.9 million at December 31, 2006. The decrease in deposits resulted from the utilization of FHLB FHLB Federal Home Loan Bank advances as the Company's primary funding source. FHLB advances increased by $145.0 million during the first six months of 2007 to $641.3 million at June 30, 2007. * As of June 30, 2007, the Company and the Bank met all regulatory capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , and the Bank was "well capitalized" under applicable regulations. Financial Highlights The following table presents selected consolidated financial information for the Company for the periods indicated: [TABLE OMITTED] The following table presents selected consolidated financial information for the Company as of the dates indicated: [TABLE OMITTED] The following table presents selected unconsolidated financial information for the Bank for the periods indicated: [TABLE OMITTED] For further information, please see our website (www.bhbc.com) for our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. and related communications (available on or about August 9, 2007). This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. including financial projections, statements as to the plans and objectives of management for future operations, and statements as to the Company's future economic performance, financial condition and results of operations. These forward-looking statements are not historical facts but rather are based on current expectations, estimates, and projections about our industry, our beliefs and our assumptions. Words such as "may," "will," "anticipates," "expects," "intends," "plans," "believes," "seeks" and "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements. The Company's actual results may differ materially from those projected in these forward-looking statements as a result of a number of factors, including, but not limited to, the condition of the real estate market and the economy, changes in banking regulations, the availability and conditions of financing for loan pool acquisitions, mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. and other financial assets Financial assets Claims on real assets. as well as interest rates. Readers of this release are cautioned not to place undue reliance on these forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion