California Center Bank Reports Strong Balance Sheet Growth for 2001; Net Income Totaled $7.8 Million for the Year.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Feb. 13, 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 strong balance sheet growth for the fourth quarter and year ended December December: see month. 31, 2001. The company added five branches to its network in the second quarter, which contributed to the 32% increase in deposits and 23% growth in total loans. Net income for the fourth quarter declined to $2.0 million compared to $2.2 million in the fourth quarter of 2000 due to net interest margin compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. followed by the continuous rate cuts by the Federal Reserve and higher non-interest expenses associated with operating more branches. Net income for 2001 was $7.8 million compared to $8.4 million in the prior year. Total assets increased 30% to $587 million at December 31, 2001, compared to $452 million a year earlier. Gross loans grew to $378 million compared to $309 million at December 31, 2000. Commercial real estate loans grew to $162 million, or 43% of total loans. Commercial loans increased slightly to $96 million, or 25% of total loans. Real estate construction loans increased to $13 million, or 3% of total loans, compared to $1.3 million at the end of 2000. Deposits, which helped fund loan growth, increased 32% to $525 million. Non-interest bearing deposits reached $169 million, or 32% of total deposits. Book value per share improved to $8.42 at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. compared to $7.20 at the end of 2000. "In 2001 we expanded our presence in the 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, market in order to facilitate asset and profit growth and better serve our customers," 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. . "Deposit-gathering activity at the new branches is very strong and is exceeding our expectations. Although those branches have led to increased operating costs operating costs npl → gastos mpl operacionales , we anticipate they will contribute to profits by the second quarter of 2002." Loan quality remains strong. Non-performing assets at year-end significantly improved compared to third quarter levels, but increased from a year ago. Non-performing assets at December 31 totaled $2.1 million, or 0.56% of total loans and OREO (Other Real Estate Owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most ), compared to $6.8 million, or 1.88% of gross loans and OREO at the end of September September: see month. and $1.1 million, or 0.36% of total loans and OREO, one year ago. California Center successfully disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of two 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. in the fourth quarter. "We received full payment on one loan and foreclosed the collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although on the second loan, selling the related OREO property for a profit," said Kim. "During January January: see month. 2002, we disposed the only OREO, with a book value of $674,000, for a substantial gain." The ratio of non-performing assets without the OREO was 0.39% as of December 31, 2001. Net charge-offs and provision for loan losses for the year totaled $2.3 million and $1.2 million, respectively, while the amounts in 2000 were $428,000 and $500,000 respectively. "We believe the allowance for loan losses are adequate in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the current economic condition," said Don Lee, Chief Credit Officer. The ratio of allowance for loan losses to gross loans was 1.47% as of December 31, 2001, which is lower than 2.14% of December 31, 2000 but higher than that of the peer group average of 1.36%. "The Bank made a cumulative adjustment relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc deferred tax assets during the fourth quarter 2001, so our fourth quarter provision was only $483,000 and $4.3 million for the entire year of 2001. As a result, our effective tax rate for the year was 36% in 2001, compared to 39% in 2000. The decrease in the effective tax rate was also affected by an increase of tax advantaged securities during 2001," explained Y.H. Kim, Controller. Revenue (net interest income plus non-interest income) increased 15% in the quarter to $9.3 million compared to the fourth quarter of 2000. Revenue rose 10% for the year to $33.2 million. Higher service fee income contributed to the strong growth. Non-interest income rose 40% for the fourth quarter and 21% for the year. The increases in the fourth quarter are primarily due to increase of $351,000 in services fee income, $291,000 in gain on sale of 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 Loans, $197,000 in gains from sale of securities, and $191,000 in gains from sale of OREO. "As interest rates dropped over the past twelve months, our yield on interest-earning assets declined more rapidly than 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. . Consequently, our margins compressed," explained Seon Hong Kim. Net interest margin was 4.79% for the year compared to 5.92% last year. "Using an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , we locked in higher, fixed interest rates which should even out our interest spread and give us relief over the next several quarters." Non-interest (operating) expense rose 29% for the fourth quarter to $5.8 million and increased 25% for the year to $19.9 million, due to costs related to operating five additional branches. Salaries and wages, 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 , and especially telephone and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a costs contributed to the increase. "Although the new branches added to 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. , they contributed $55 million to our deposit growth since their opening," said Seon Hong Kim. "Higher operating costs associated with the new branches have caused a decline in our performance ratios. We remain confident that as the branches begin to contribute to profits in 2002 those ratios will improve," said Seon Hong Kim. Return on average assets was 1.52% for 2001 and return on average equity was 16.3%. The efficiency ratio was 59.9% for the twelve months ended December 31, 2001, compared to 52.9% a year earlier. Founded in 1986, California Center Bank, is a community bank offering 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 operates 11 branches throughout Southern California and three Loan Production Offices located in Phoenix, Seattle Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. and Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. . Further information about California Center Bank can be found at www.calcenterbank.com. This release contains forward looking statements regarding future events, including: the ability to grow revenues, control costs, improve net interest margin and operating results, the success of new branches, and other forecasts and statements of expectations regarding operating performance. Actual results may differ materially from those projected in such 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. .
CONSOLIDATED STATEMENT OF INCOME
(unaudited)(dollars in thousands, except per share data)
Quarter Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
-------------------------------------------
Interest Income $8,939 $9,415 $36,123 $32,898
Interest Expense 2,909 3,655 13,749 11,697
-------------------------------------------
Net Interest Income 6,030 5,760 22,374 21,201
Provision for Loan Losses 1,000 - 1,200 500
-------------------------------------------
Net Interest Income After
Provision for Loan Losses 5,030 5,760 21,174 20,701
Non-Interest Income
Int'l Banking Service Fee 670 773 2,923 3,077
Service Fees 1,865 1,514 6,924 5,694
Gain on Sale of Loans 302 11 574 161
Gain on Sale of Securities 197 - 197 -
Gain on Sale of OREO 191 - 191 -
-------------------------------------------
Total Non-Interest Income 3,225 2,298 10,808 8,932
Non-Interest Expense
Salaries & Employee
Benefits 3,323 2,593 11,378 9,643
Occupancy & Furniture
& Fixture Expenses 650 436 2,239 1,510
Other Non-Interest
Expenses 1,798 1,447 6,259 4,777
-------------------------------------------
Total Non-Interest
Expense 5,771 4,476 19,876 15,930
Income Before Income Tax 2,483 3,582 12,107 13,703
Income Tax 483 1,425 4,347 5,301
-------------------------------------------
Net Income $2,000 $2,157 $7,760 $8,402
============================================
Other Comprehensive
Income(1) $(868) $434 $9 (9)
-------------------------------------------
Total Comprehensive
Income(1) $1,132 $2,591 $7,769 $8,393
============================================
Net Income per Share,
Basic $0.34 $0.36 $1.27 $1.39
============================================
Net Income per Share,
Diluted $0.33 $0.34 $1.25 $1.35
============================================
Basic Average Common
Shares Outstanding 5,960,846 6,064,226 6,044,131 6,047,303
Diluted Average Common
Shares Outstanding 6,146,774 6,327,216 6,216,728 6,223,133
(1) Includes unrealized gains/losses on securities
available-for-sale and is not used in computing net income per share
Selected Financial Ratios
Quarter Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
-------------------------------------------
Return on Average Assets 1.40% 1.97% 1.52% 2.14%
Return on Average Equity 15.6% 20.7% 16.3% 21.5%
Net Interest Margin 4.62% 5.78% 4.79% 5.92%
Net Interest Spread 3.61% 3.83% 3.36% 4.05%
Efficiency Ratio 62.4% 55.6% 59.9% 52.9%
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(dollars in thousands)
Dec. 31, Dec. 31, Annual
2001 2000 Change
(unaudited)
-------------------------------------
Assets
Cash & Due From Banks $29,391 $28,870 2%
Federal Funds Sold 33,000 19,200 72%
Money Market Fund 20,000 -
Securities Available-for-Sale 94,520 45,267 109%
Securities Held-to-Maturity 14,926 34,197 -56%
Loans (Net of Unearned Income) 377,584 309,257 22%
Allowance for Loan Losses (5,540) (6,633) -16%
-------------------------------------
Net Loans 372,044 302,624 23%
Other Real Estate Owned 674 -
Fixed Assets 8,921 6,767 32%
Other Assets 13,197 14,903 -1%
-------------------------------------
Total Assets $586,673 $451,828 30%
=====================================
Liabilities & Stockholders' Equity
Non-Interest-Bearing Deposits $168,530 $124,468 35%
Interest Bearing Deposits 356,840 273,024 31%
-------------------------------------
Total Deposits 525,370 397,492 32%
Other Liabilities 9,913 11,427 -13%
Total Liabilities 535,283 408,919 31%
Stockholders' Equity 51,390 42,909 20%
-------------------------------------
Total Liabilities &
Stockholders' Equity $586,673 $451,828 30%
=====================================
Book Value per Share $8.42 $7.20 17%
Number of Common Shares 6,104,441 5,960,145 2%
Selected Financial Information
(in thousands, except percentage data)
12/31/01 12/31/00
-------------------------------------
Loans
Real estate - Construction 12,851 1,276
Real estate - Commercial 161,670 114,284
Commercial 95,730 91,339
Consumer 35,128 27,666
Trade finance 26,830 34,841
SBA 45,816 38,523
Other 22 1,728
-------------------------------------
Total gross loan 378,047 309,657
Unamortized deferred loan fees (463) (400)
Allowance for loan loss (5,540) (6,633)
-------------------------------------
Total Loans, net 372,044 302,624
Deposits
Non-Interest Bearing $168,530 $124,468
Interest Bearing Checking 77,690 52,269
Savings 30,253 22,570
Time Deposits 248,897 198,185
-------------------------------------
Total Deposits $525,370 $397,492
Non-Performing Assets
Loans Past Due 90 Days or
More & Still Accruing
Interest $ - $ -
Non-Accrual Loans 1,461 1,123
Total Non-Performing Loans 1,461 1,123
Other Real Estate Owned 674 -
-------------------------------------
Total Non-Performing Assets $2,135 $1,123
Allowance for Loan Losses
Balance at beginning of period 6,633 $6,561
Provision for Loan Losses 1,200 500
Charge-Offs (Net of Recoveries) (2,293) (428)
-------------------------------------
Balance at end of period $5,540 $6,633
Selected Ratios
12/31/01 12/31/00
-------------------------------------
Non-Accrual Loans to Gross Loans 0.39% 0.36%
Non-Performing Assets to Total
Loans & OREO 0.56% 0.36%
Allowance for Loan Loss to
Gross Loans 1.47% 2.14%
Allowance for Loan Losses to
Non-Performing Loans 379% 591%
Total Risk-Based Capital Ratio 13.0% 14.8%
Tier 1 Risk-Based Capital Ratio 11.8% 13.6%
Tier 1 Leverage Ratio 9.1% 9.9%
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