California Center Bank Reports Double-Digit Gains in Assets, Loans and Deposits; Announces Plans to Form Holding Company.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--July 19, 2002 California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Center Bank (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CLFC CLFC Creating Lasting Family Connections (New Hampshire) CLFC Clear Lake Fencing Club (Texas) ) today reported its expansion over the past twelve months resulted in strong balance sheet growth for the second quarter ended June June: see month. 30, 2002. Due to the higher 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. associated with its expanded branch network, second quarter net income decreased slightly to $1.9 million, or $0.27 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $2.0 million, or $0.29 per diluted share, for the same quarter of 2001. For the first six months of 2002, net income rose 1% to $4.1 million, or $0.58 per diluted share, compared to $4.0 million, or $0.58 per diluted share, in the same period of 2001. All per share results reflect the eleven percent stock dividend paid on March 18, 2002 to stockholders of record on March 1, 2002. "Our growth over the past twelve months has been exceptional. We have proven our ability to successfully serve several ethnic communities, which bodes well for the future of California Center Bank," said Seon Hong n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "California Center continues to achieve tremendous growth spurred by our 2001 expansion and the generally strong economy throughout Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, . Total assets increased 29.7% over the past year." At the end of the second quarter assets totaled $656.9 million compared to $506.3 million one year earlier. Gross loans grew a substantial 34.2% to $447.2 million compared to $333.4 million and total loans, net of the allowance for loan losses and unearned income Unearned Income Any income that comes from investments and other sources unrelated to employment services. Notes: Examples of unearned income include interest from a savings account, bond interest, tips, alimony, and dividends from stock. , reached $440.9 million at June 30, 2002 compared to $326.1 million one year earlier. SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government loan products increased 80.4% to $61.5 million, and now comprise To embrace, cover, or include; to confine within; to consist of. In the law governing patents—grants of an exclusive right or privilege to make, use, or sell an invention or product for a term of years—the term comprise 13.8% of the total loan portfolio compared to $34.1 million, or 10.2% of total loans, as of June 30, 2001. The Small Business Administration guarantees approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 75% of the amount of an SBA loan. "From time to time, we may sell some of the guaranteed portion of the SBA loans in our portfolio into the secondary market," added Kim. California Center is a member of the SBA Preferred Lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. Program. Deposits increased 31.9% to $589.0 million at the end of June compared to $446.6 million a year ago. Though increases were reported along all of the Bank's deposit products, interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid checking accounts grew 47.6% to $88.2 million. Non-interest bearing accounts still comprise 30.7% of total deposits, placing the Bank as one of the leaders in this category within its community. Total equity grew 18.6% to $56.3 million and book value per share was $8.24 at June 30, 2002 compared to $47.5 million and $7.13, respectively, at June 30, 2001. The bank achieved an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets and average equity of 1.22% and 14.02%, respectively for the second quarter of 2002. For the second quarter a year ago, the annualized return on average assets was 1.65% and the annualized return on average equity was 17.28%. For the first six months of 2002, the bank has produced an annualized return on average assets and average equity of 1.34% and 15.21%, respectively. "In order to improve the operating and financial flexibility of the bank, we are proceeding with the formation of a holding company structure. The board of directors believes this structure, along with our plans to become a Nasdaq listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → by the end of this year, will benefit California Center's shareholder value for the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. ," Kim added. "Asset quality has improved significantly. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. as a percentage of gross loans declined 174 basis points to .36% as of June 30, 2002 compared to the prior year level of 2.10%," said James Hong This biographical article or section needs additional references for verification. Please help [ to improve this article] by adding additional sources. Unverifiable material about living persons must be removed immediately, especially if potentially libelous or harmful. , Chief Lending Officer. "Near the end of last year we began aggressively charging off or normalizing problem assets." In the first half of 2002, California Center has added $500,000 to the allowance for loan losses (compared to $100,000 in the first half of last year) and recorded net charge offs of $124,000. The allowance for loan losses totaled $5.9 million, or 1.3% of gross loans, and amounts to 366.4% of non-performing loans at the end of June 2002. "Net interest income before loan loss allowance, a basic measure of bank profitability, increased 18.7% to $6.5 million for the quarter compared to $5.5 million for second quarter of last year. This increase was due primarily to the bank expanding its loan portfolio," said Kim. "Like many financial institutions operating within the current interest rate environment, California Center Bank's net interest margin compressed over the past year. Net interest margin for second quarter 2002 improved to 4.56% from 4.49% in the first quarter this year, but was down from the 4.97% margin attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. in the second quarter a year ago. Our balance sheet remains asset sensitive, which is impeding im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped our ability to expand our net interest margin while rates remain low." The average rate earned on interest-earning assets declined 208 basis points to 6.31% in the second quarter of 2002 compared to 8.50% for the second quarter 2001. As a result of the loan portfolio expansion, other loan related fee income more than doubled to $258,000 compared to $109,000 for second quarter 2001. Non-interest income increased 6.4% to $2.6 million for the second quarter and 12.6% to $5.6 million for the first half of 2002. Gains on sale of SBA loans increased to $301,000 for the first six months compared to $57,000 for the same period last year. While the branch expansion aided non-interest income growth, it also has led to increased non-interest expense. Non-interest expense rose to $5.6 million for second quarter compared to $4.7 million for the like quarter a year ago. The increases were primarily in salaries and employee benefits and occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy expenses, which grew 21.8% or $557,000 and 22.6% or $127,000, for the second quarter 2002, respectively. Business development costs increased $200,000 to $428,000 compared to second quarter 2001. The increase was primarily the result of promotion and advertisement ADVERTISEMENT. A 'notice' published either in handbills or in a newspaper. 2. The law in many instances requires parties to advertise in order to give notice of acts which are to be done; in these cases, the advertisement is in general equivalent to notice. costs associated with the branch expansion, which grew 49.7% or $82,000, and loan referral fees, which increased $118,000. In addition, professional outside services increased 28.0%, or $94,000, in the second quarter 2002 due to fees incurred relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Bank's pending SEC filing for Nasdaq listing and bank holding company formation cost. The Bank's efficiency ratio increased to 61.5% in the second quarter of 2002 compared to 58.2% for the same quarter a year ago. "Most of our five new branches, which we opened during the second quarter of 2001, are marginally mar·gin·al adj. 1. Of, relating to, located at, or constituting a margin, a border, or an edge: the marginal strip of beach; a marginal issue that had no bearing on the election results. 2. profitable or at a break-even operating level. We anticipate all of them will contribute to net profits in 2002," said Kim. "Additionally, as the new branches continue to operate and improve in profitability we expect the efficiency ratio will decline." California Center Bank is a community bank located in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , California. The Bank was founded in March 1986 and offers a full-range A Full-range loudspeaker drive unit is defined as a driver which reproduces as much of the audible frequency range as possible, with high-fidelity, within the boundaries imposed by the physical limitations of the specific design. of financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. . It specializes in commercial and SBA loans and trade finance products for multi-ethnic Adj. 1. multi-ethnic - involving several ethnic groups multiethnic social - living together or enjoying life in communities or organized groups; "a human being is a social animal"; "mature social behavior" and small business customers. The Bank now operates eleven branches throughout Southern California and three Loan Production Offices. The Bank's mission is to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. its return to shareholders by remaining a strong, independent, highly profitable, and growth-oriented provider of financial services distinguishing itself through its multi-ethnic focus, trade finance services, and high-touch, customized, and timely service. Further details about the Bank can be found at our web site, http://www.calcenterbank.com/. Forward Looking Statements The Bank wishes to take advantage of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 as to "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements in this release that are not historical facts. The bank's actual results may differ materially from those included in the 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. . For any question related to this report, please contact Y. H. Kim, SVP SVP S'il Vous Plaît (French: Please) SVP Senior Vice President SVP Schweizerische Volkspartei (Swiss People~s Party) SVP Society of Vertebrate Paleontology SVP Social Venture Partners SVP St Vincent de Paul & Controller at (213) 251-2250.
CONDENSED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(In thousands, except share and per share data)
6/30/02 6/30/01 12/31/01
Assets
Cash and due from banks 34,064 35,570 28,791
Federal funds sold 10,000 21,000 33,000
Money market fund 30,000 - 20,400
Securities available-for-sale 102,550 82,209 94,520
Securities held-to-maturity 15,750 19,928 14,926
Loans (Net of unearned income) 446,736 332,882 377,584
Allowance for loan losses (5,873) (6,805) (5,540)
---------------------------------
Net loans 440,863 326,077 372,044
Fixed assets 8,793 8,225 8,921
Other assets 14,861 13,317 13,397
Other real estate owned - - 674
---------------------------------
Total Assets $ 656,881 $ 506,326 $ 586,673
=================================
Liabilities and Stockholders' Equity
Non-interest bearing deposits 180,572 134,834 168,530
Interest Bearing deposits 408,436 311,770 356,840
---------------------------------
Total deposits 589,008 446,604 525,370
Other liabilities 11,591 12,248 9,913
---------------------------------
Total Liabilities 600,599 458,852 535,283
Stockholders' Equity 56,282 47,474 51,390
---------------------------------
Total Liabilities & stockholders'
equity $ 656,881 $ 506,326 $586,673
=================================
Book value per share (a) $ 8.24 $ 7.13 $ 7.58
Number of common shares outstanding
at period end (a) 6,831,269 6,654,775 6,775,930
=================================
(a) Adjusted to reflect eleven percent stock dividend declared in
2002.
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(In thousands, except share and per share data)
Quarter-ended Year to Date
June 30, June 30,
2002 2001 2002 2001
----------------------------------------------------------------------
Interest income $9,050 $ 9,157 $17,529 $ 18,196
Interest expense 2,525 3,659 5,000 7,469
--------------------------------------------
Net interest income 6,525 5,498 12,529 10,727
Provision for loan losses 400 0 500 100
--------------------------------------------
Net interest income after
Provision for loan losses 6,125 5,498 12,029 10,627
Non-interest income
Int'l banking service
fee 711 777 1,366 1,555
Service charges and fee 1,294 1,261 2,553 2,433
Gain on sale of loans (40) (26) 301 57
Other non interest
income 677 471 1,338 892
--------------------------------------------
Non-interest income 2,642 2,483 5,558 4,937
Non-interest expenses
Salaries and employee
benefits 3,113 2,556 6,270 5,191
Occupancy and furniture
and fixture expenses 690 563 1,359 964
Other non interest
expenses 1,834 1,528 3,354 2,716
--------------------------------------------
Non-interest expenses 5,637 4,647 10,983 8,871
--------------------------------------------
Income before income tax 3,130 3,334 6,604 6,693
Income taxes 1,216 1,333 2,548 2,675
--------------------------------------------
Net income 1,914 2,001 4,056 4,018
============================================
Other comprehensive
income (1) 712 128 542 362
Total comprehensive income 2,626 2,129 4,598 4,380
============================================
Income per share,
basic (2) 0.28 0.30 0.60 0.61
Income per share,
diluted (2) 0.27 0.29 0.58 0.58
Basic average common
shares Outstanding (2) 6,798,624 6,722,799 6,778,506 6,637,882
Diluted average common
shares Outstanding (2) 7,087,217 6,991,570 7,052,408 6,893,455
(1) Comprehensive income represents the unrealized gains (losses)
on securities available for sale and FMV of interest swap.
(2) Adjusted to reflect eleven percent stock dividend.
SELECTED FINANCIAL RATIOS (Unaudited)
Quarter Ended Year to Date
June 30, June 30,
--------------------------------
2002 2001 2002 2001
----------------------------------------------------------------------
Return on Average Assets 1.22% 1.65% 1.34% 1.72%
Return on Average Equity 14.02% 17.28% 15.21% 17.90%
Net interest margin 4.56% 4.97% 4.54% 5.01%
Efficiency ratio 61.49% 58.23% 60.73% 56.63%
SELECTED FINANCIAL INFORMATION (Unaudited)
(In thousands)
6/30/02 6/30/01 Change
-----------------------------
Loans
Real estate - construction $ 18,713 $ 4,833 287.2%
Real estate - commercial 199,672 138,625 44.0%
Commercial 96,503 91,459 5.5%
Consumer 37,030 33,010 12.2%
Trade Finance 33,488 31,275 7.1%
SBA 61,534 34,105 80.4%
Other 264 43 514.0%
Total loans - Gross 447,204 333,350 34.2%
Un-amortized deferred loan fees (468) (468) 0.0%
Allowance or loan losses (5,873) (6,805) -13.7%
-----------------------------
Total loans - net 440,863 326,077 35.2%
Deposits
Non-interest bearing $180,571 $ 134,834 33.9%
Interest bearing checking 88,184 59,742 47.6%
Savings 36,220 24,595 47.3%
Time deposits 284,033 227,433 24.9%
-----------------------------
Total deposits 589,008 446,604 31.9%
Non-performing assets
Loans past due 90 days or more and still
accruing interest - 25
Non-accrual loans 1,603 6,980
---------------------
Total non-performing loans 1,603 7,005
Other real estate owned - -
---------------------
Total non-performing assets 1,603 7,005
Allowance for Loan Losses 2002 2001
---------------------
Balance as of January 1, $5,497 $6,633
Provision for Loan Losses 500 100
Charge-offs Net of Recoveries (124) 72
---------------------
Balance as of June 30, $5,873 $6,805
6/30/02 6/30/01
-----------------------------
Selected Ratios
Non-accrual loans to gross loans 0.36% 2.09%
Non-performing assets to total loans and
OREO 0.36% 2.10%
Allowance for loan losses to gross loans 1.31% 2.04%
Allowance for loan losses to non-
performing loans 366.4% 97.14%
Total risk-based capital ratio 10.71% 13.80%
Tier 1 risk-based capital ratio 10.64% 12.55%
Tier 1 capital ratio 9.15% 9.73%
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