Community Bancorp Announces 24.4% Increase in Second Quarter Earnings and 43.2% Increase Year to Date.LAS VEGAS Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. -- Community Bancorp (Nasdaq: CBON) Highlights for the Second Quarter 2005 --Second quarter earnings of $2.0 million, up 24.4% from $1.6 million in the second quarter 2004 --Diluted Earnings Per Share of $0.29, excluding the impact of SARs SARS or severe acute respiratory syndrome, communicable viral disease that can progress to a potentially fatal pneumonia. The first symptoms of SARS are usually a high fever, headache and body aches, sore throat, and mild respiratory symptoms; expense accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of $677 thousand ($447 thousand net of taxes), 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. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. would have been $0.36. --Loan growth of $61 million in the second quarter and $68 million or 16.8% year to date. --Net Interest Margin increased 17.9% to 5.09% compared to 4.32% in the second quarter 2004 --New Markets: Loan Production Offices opened in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. and Phoenix Highlights for the Six Month Period ending June June: see month. 30, 2005 --YTD earnings of $4.4 million, up 43.2% from $3.1 million for the first six months of 2004 --Basic Earnings Per Share of $0.65 and Diluted Earnings Per Share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.64 --Loan growth of $133 million or 39.3% from June 30, 2004 to June 30, 2005 --Net Interest Margin increased 4.8% to 4.79% for the first six months compared to 4.57% for the same period 2004 --Efficiency ratio improved, decreasing to 54.9% at June 30, 2005 compared to 58.7% a year ago --Credit Quality continued to be very strong with 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. that were only 0.13% of total loans Financial Performance Community Bancorp, the parent company of Community Bank of Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). , headquartered in Las Vegas, announced strong growth and financial results for the quarter and six months ended June 30, 2005. Net Income for the second quarter of 2005 was up 24.4% to $2.0 million compared to $1.6 million for the comparable quarter last year. Improvement in the company's net interest margin, the asset sensitivity of the balance sheet, an improved efficiency ratio (decreasing to 54.9% for the first half of 2005 compared to 58.7% for the same period in 2004), and loan growth of 39.3% period-over-period were all factors contributing to the strong growth in earnings. Basic and Diluted Earnings Per Share of $0.65 and $0.64, respectively, for the first half of 2005 were comparable to the $0.66 and $0.64 for the like period in 2004 despite the 44% growth in shares outstanding resulting from the company's initial public offering in December December: see month. of 2004. Second quarter return on equity was 10.0% compared to 19.1% for the year-ago quarter due to the increase in equity from the company's initial public offering in December 2004. Return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). for the second quarter was 1.32% compared to 1.22% for the second quarter of 2004. Return on equity and return on assets were 11.0% and 1.44% for the six month period in 2005 compared to 18.8% and 1.28% for the same period 2004. "We are very pleased with our results year to date with strong growth in the balance sheet and earnings. Core profitability was even stronger than reported as our earnings over the last three quarters have been significantly impacted by the expense accrual for Stock Appreciation Rights (SARs) granted in the year 2000. The financial impact for this quarter was $0.07 per share after tax. However, future quarter accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. will have little impact on earnings since almost 90% of the SARs are maturing and being paid out this month," said Ed Jamison, president and chief executive officer. "We remain committed to our strategic objective of becoming the premier, high performing community bank serving our market. In the second quarter, we made another move consistent with our business strategy, which was the announcement of the signing of a definitive agreement to acquire Bank of Commerce, a $167 million Henderson-based bank. We look forward to welcoming their employees and customers to our organization." Loan Growth and Credit Quality Loan growth was very strong, increasing 39.3% to $471.1 million from a base of $338.2 million a year ago. "With the hiring of Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Ford as the chief credit officer in January January: see month. 2005, we have since been able to hire seven highly regarded lending professionals," said Lawrence Scott Lawrence Scott (born 1943) is from Trinidad & Tobago. novelist currently living in Londonand Trinidad. He is presently a Senior Research Fellow at The Academy for the Arts, Letters, Culture and Public Affairs at the University of Trinidad & Tobago (UTT) , EVP EVP Executive Vice President EVP EGR (Exhaust Gas Recirculation) Valve Position Sensor EVP Electronic Voice Phenomenon EVP Europäische Volkspartei (Germany) EVP Employee Value Proposition and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "This team of lenders with more than 120 years of collective lending experience, has produced an unprecedented momentum of lending opportunities for us, as represented by second quarter results." The company's credit quality continued to improve with non-performing loans at just 0.13% of total loans, while net charge-offs for the quarter were $178 thousand. The allowance for loan losses was 1.29% of outstanding loans at quarter end. "We are particularly pleased with the strong credit quality evident in our growing portfolio of loans," said Don Bigger, EVP and chief credit administrator. "In all of our markets, our lending professionals continue to demonstrate credit discipline and mature underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. skills while bringing a depth of local knowledge to their respective customers and markets." Deposit Growth As of June 30, 2005, deposits declined 4.2% to $504.1 million, compared to $526.0 million a year ago, and were up 5.8% year to date compared to the deposit balance of $476.2 million 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. 2004. The decline in deposits was anticipated with our advance knowledge of one customer's intended withdrawals, which totaled approximately $37 million over the past year. Net Interest Income and Net Interest Margin Net interest income increased 33.7% to $7.4 million for the second quarter 2005 as compared to $5.5 million for second quarter 2004. The increase was attributed to a 13.5% increase in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin for the second quarter 2005, as well as an increase in our net interest margin. The company reported net interest margin (NIM nim 1 tr. & intr.v. nimmed, nim·ming, nims Archaic To steal; pilfer. [Middle English nimen, to take, from Old English niman; see ) for its second quarter of 5.09% up from 4.32% for the same period a year earlier and 4.79% for the first half of 2005 compared to 4.57% for the same period in 2004. The increase in net interest margin is attributed to loan growth and the Federal Reserve's recent rise in short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. rates. The Fed has increased short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. nine times within the past year. Provision for Loan Losses As a result of conducting the quarterly allowance calculation analysis, which considers asset quality, loan growth, changes in loan mix and other qualitative factors, it was determined that a $91 thousand addition to the provision for loan losses was necessary for the second quarter of 2005. No provision for loan losses was taken during the second quarter 2004. The company's non-performing loans to total loans decreased to 0.13% at June 30, 2005 compared to 0.95% at June 30, 2004. Additionally, the company reported net charge-offs of $178 thousand for the second quarter 2005 compared to net charge-offs of $7 thousand for the same period in 2004. "Based on the level and trend of non-performing and classified assets, and the composition of such assets, the allowance has been reduced to the level of 1.29% of total loans and is considered adequate and is in line with supervisory standards and peer group norms," said Bigger. Non-Interest Income and Expense Non-Interest Income for the second quarter of 2005 was up 20.0% to $419 thousand compared to the comparable quarter of 2004. This increase consisted of $127 thousand from an increase in cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. of bank owned life insurance purchased in July July: see month. 2004 partially offset with a decrease in loan brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and referral fees of $61 thousand. The decline in loan brokerage and referral fees was caused by the reduction of staff in the residential mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real department during the third quarter of 2004. Non-Interest Expense for the second quarter of 2005 increased by 35.4% or $1.2 million to $4.6 million compared to the same quarter in 2004. Expense increases were primarily attributed to a $677 thousand adjustment to the accrual for stock appreciation rights based on the fair value of the company's stock as of June 30, 2005, an increase in salary and employee benefits of $409 thousand and an increase in professional fees of $139 thousand. This is the last quarter in which a significant adjustment to the accrual for the stock appreciation rights is expected as 90% of the stock appreciation rights mature and will be paid out in July of 2005. The salary and employee benefits increased with the successful hiring of a chief credit officer in January 2005 followed by seven experienced lenders during the first half of 2005. Professional fees increased in order to ensure compliance with laws and regulations that we are now subject to as a public company. Bank of Commerce On May 19, 2005, the company announced the acquisition of Bank of Commerce, a community bank headquartered in Henderson Henderson. 1 City (1990 pop. 25,945), seat of Henderson co., NW Ky., on the Ohio River, in an oil, coal, tobacco, corn, and livestock area; founded 1797, inc. as a city 1867. , Nev. The merger of Bank of Commerce into Community Bank of Nevada will produce an institution with approximately $800 million in assets and nine full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. branches. Jamison noted: "Fifty percent of the consideration to be paid in the transaction will be paid in our stock and fifty percent in cash. We expect that this mix will enhance our return on equity in future quarters. We just received Federal Reserve approval of the merger and we expect the combination to be completed late in the third quarter or early fourth quarter of 2005." Business Strategy Community Bancorp (headquartered in Las Vegas) strives to be a high performing bank holding company 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. benefit of its shareholders, customers and employees. The company, through its principal subsidiary, Community Bank of Nevada, implements its strategy by focusing on meeting the commercial banking needs associated with the population and economic growth of the greater Las Vegas area and by combining outstanding service, competitive financial products, local expertise and advanced technology to best serve the needs of its customers. Founded in 1995, Community Bank of Nevada offers full-service community banking through five branches, in the City of Las Vegas
The City of Las Vegas , Henderson, and unincorporated Adj. 1. unincorporated - not organized and maintained as a legal corporation unorganised, unorganized - not having or belonging to a structured whole; "unorganized territories lack a formal government" Clark County Clark County is the name of twelve counties in the United States of America:
n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. Clark County. The company consistently ranks among the top performing banks in the state of Nevada and western region. For further information on the company, please visit our Web site at www.communitybanknv.com. 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. Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, balance sheet management, the economic condition of the Las Vegas market, net interest margin, the ability to control costs and expenses, interest rate changes and financial policies of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. government, and general economic conditions. Additional information on these and other factors that could affect financial results are included in our Securities and Exchange Commission filings. When used in this release, the words or phrases such as "will likely result in," "management expects that," "will continue," "is anticipated," "estimate," "projected," or similar expressions, are intended to identify "forward-looking statements" within the meaning 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 ("PSLRA PSLRA Private Securities Litigation Reform Act PSLRA Public Service Labour Relations Act (Canada) "). Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . This statement is included for the express purpose of protecting Community Bancorp and PSLRA's safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions.
COMMUNITY BANCORP
Selected Consolidated Financial Highlights
(In thousands, except per share data and ratios; unaudited)
-----------------------------
Three Months Ended
June 30, %
2005 2004 Change
---------- ---------- -------
Income Statement Data
Interest and dividend income $9,676 $7,255 33.37%
Interest expense 2,306 1,744 32.22%
Net interest income 7,370 5,511 33.73%
Loan loss provision 91 0
Net interest income after loan
loss provision 7,279 5,511 32.08%
Noninterest income 419 346 21.10%
Noninterest expense 4,641 3,425 35.50%
Income before income taxes 3,057 2,432 25.70%
Provision for income taxes 1,037 808 28.34%
Net income $2,020 $1,624 24.38%
Share Data (2)
Basic earnings per common share $0.30 $0.35 -14.29%
Diluted earnings per common share $0.29 $0.34 -14.71%
Book value per common share $12.09 $7.27 66.30%
Basic average shares outstanding 6,752,678 4,661,650 44.86%
Fully diluted average shares
outstanding 6,869,685 4,794,721 43.28%
Key Ratios
Return on average total
shareholders' equity 9.99% 19.08% -47.66%
Return on average total assets 1.32% 1.22% 8.31%
Net interest spread 4.31% 3.83% 12.53%
Net interest margin (3) 5.09% 4.32% 17.89%
Total revenue (net int inc + non
int inc) $7,789 $5,857 32.99%
Efficiency ratio (4) 59.58% 58.48% 1.89%
Capital Ratios
Average shareholders' equity to
average assets 13.25% 6.37% 2.30%
Leverage ratio 15.88% 8.64% 88.70%
Total risk-based capital ratio 18.70% 13.82% 52.10%
---------- ---------- -------
COMMUNITY BANCORP
Selected Consolidated Financial Highlights
(In thousands, except per share data and ratios; unaudited)
------------------------------
Six Months Ended
June 30, %
2005 2004 Change
-------- ---------- --------
Balance Sheet Data (at period end)
Investment securities $85,060 $70,925 19.93%
Loans, gross 471,107 338,201 39.30%
Allowance for loan losses 6,068 5,683 6.77%
Total assets 651,131 577,429 12.76%
Total deposits 504,062 525,959 -4.16%
Non-interest bearing deposits 129,231 146,330 -11.69%
Core Deposits (1) 446,009 473,431 -5.79%
Total shareholders' equity 81,636 34,294 138.05%
Income Statement Data
Interest and dividend income $18,382 $14,314 28.42%
Interest expense 4,482 3,366 33.16%
Net interest income 13,900 10,948 26.96%
Loan loss provision 91 222 -59.01%
Net interest income after loan
loss provision 13,809 10,726 28.74%
Noninterest income 795 719 10.57%
Noninterest expense 8,064 6,851 17.71%
Income before income taxes 6,540 4,594 42.36%
Provision for income taxes 2,138 1,521 40.57%
Net income $4,402 $3,073 43.25%
Share Data (2)
Basic earnings per common share $0.65 $0.66 -1.52%
Diluted earnings per common
share $0.64 $0.64 0.00%
Book value per common share $12.09 $7.34 64.65%
Basic average shares
outstanding 6,750,973 4,658,699 44.91%
Fully diluted average shares
outstanding 6,870,482 4,783,170 43.64%
Key Ratios
Return on average total
shareholders' equity 11.03% 18.78% -41.27%
Return on average total assets 1.44% 1.23% 17.27%
Net interest spread 4.05% 4.06% -0.25%
Net interest margin (3) 4.79% 4.57% 4.81%
Total revenue (net int inc + non
int inc) $14,695 $11,667 25.95%
Efficiency ratio (4) 54.88% 58.72% -6.55%
Asset Quality Ratios
Non-performing loans to total
loans (5) 0.13% 0.95% -86.04%
Allowance for loan losses to
total loans 1.29% 1.68% -23.23%
Non-performing assets (6) 626 3,870 -83.82%
Non-performing assets to total
assets 0.10% 0.67% -85.66%
Net charge-offs to average
loans 0.04% -0.01% -500.00%
Capital Ratios
Average shareholders' equity to
average assets 13.05% 6.55% 2.30%
Leverage ratio 15.88% 8.64% 88.70%
Total risk-based capital ratio 18.70% 13.82% 52.10%
-------- ---------- --------
Notes:
-------
(1) Core deposits include all demand, interest bearing demand,
savings plus time deposits of amounts less than $100,000.
(2) Adjusted to reflect a 5:1 stock split declared in September
2004.
(3) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
(4) Efficiency ratio is noninterest expense (excluding loan loss
provision) divided by (net interest income + noninterest
income).
(5) Nonperforming loans are defined as loans that are past due 90
days or more plus loans placed in non-accrual status and
restructured loans.
(6) Nonperforming assets are defined as loans that are past due
90 days or more, nonaccrual loans and other real estate
owned.
Total Shares Outstanding as of 6/30/05: 6,754,847
=========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion