Community Bancorp Announces 79% Increase in Third Quarter Earnings and 55% Increase Year to Date and Completes the Acquisition of Bank of Commerce.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 Third Quarter 2005 --Third quarter earnings of $2.7 million, up 78.5% from $1.5 million in the third quarter 2004. --Basic 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 $0.38 was impacted by the issuance of 608,522 shares related to the Bank of Commerce acquisition, one time expenses related to the merger and the opening of a new branch. --Community Bancorp completes the acquisition of Bank of Commerce, contributing $145 million in tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. . --Loan growth of $168 million, of which $104 million resulted from the Bank of Commerce acquisition, and $64 million was organic growth (13.6% internal growth over 2nd quarter loans). --Deposit growth of $175 million, of which $118 million related to the merger, and $57 million of organic growth (11.3% internal growth over 2nd quarter deposits). --Net Interest Margin increased 20.6% to 5.44% compared to 4.51% in the third quarter 2004. --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. being only 0.2% of total loans as compared to 0.9% in the third quarter of 2004. --The Company closed a $20 million private placement of trust-preferred securities A Trust preferred security is a security possessing characteristics of both equity and debt issues. A company creates trust-preferred securities by creating a trust and issuing debt to the new entity, while the trust issues the trust preferred securities. to provide capital for continued growth. --The Company opened a new branch in July July: see month. of 2005, bringing the total number of branches to nine after the Bank of Commerce acquisition. Highlights for the Nine Month Period ending September September: see month. 30, 2005 --YTD earnings of $7.1 million, up 54.8% from $4.6 million for the first nine months of 2004. --Basic Earnings Per Share of $1.03 and Diluted Earnings Per Share of $1.02. --Loan growth of $250.5 million or 64.5% from September 30, 2004 to September 30, 2005, of which $146.5 million was organic growth. --Net Interest Margin increased 10.6% to 5.03% for the first nine months compared to 4.55% for the same period 2004. --Efficiency ratio improved, decreasing to 54.8% at September 30, 2005 compared to 58.7% a year ago. FINANCIAL PERFORMANCE: Community Bancorp (the Company) (Nasdaq:CBON), the Las Vegas-based community bank holding company for 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). with $842.6 million in total assets, today announced strong growth and financial results for the quarter and nine months ended September 30, 2005. Net Income for the third quarter of 2005 was up 78.5% to $2.7 million compared to $1.5 million for the comparable quarter last year. Factors contributing to the increases in net income for the quarter and nine month period included the Bank of Commerce acquisition which closed on August 26, 2005, strong organic loan and deposit growth, the asset sensitivity of the balance sheet and an increase in the net interest margin. Basic and diluted earnings per share of $1.03 and $1.02, respectively, for the first nine months of 2005 were up compared to $0.98 and $0.95 for the like period in 2004 despite the 46% growth in basic average shares outstanding resulting from the Company's initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) in December December: see month. 2004, and the August 2005 acquisition of Bank of Commerce. Third quarter return on equity was 12.1% compared to 16.9% for the year-ago quarter, partially due to the additional equity issued in the IPO and the acquisition of Bank of Commerce. 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 third quarter was 1.48% compared to 1.09% for the third quarter of 2004. Return on equity and return on assets were 11.4% and 1.46% for the nine month period in 2005 compared to 18.1% and 1.18% for the same period 2004. "We are very pleased with our results year to date with strong growth in the balance sheet and earnings. The increase in short term rates has really benefited the Bank, as our net interest margin has improved to 5.44% due to the asset sensitivity of our balance sheet. Our internal growth has been particularly strong and we augmented that growth with an in-market acquisition in the third quarter. The full impact of our organic growth and the acquisition is expected to be more fully integrated into the earnings stream in the fourth quarter," said Ed Jamison, President and Chief Executive Officer. BANK OF COMMERCE MERGER: Community Bancorp acquired Bank of Commerce as of the close of business on August 26, 2005. As of such date, Bank of Commerce had $145 million in tangible assets, $104 million in loans, and $118 million in deposits. The shareholders of Bank of Commerce who elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. cash received a value of $33.00 per share; those who elected stock in Community Bancorp received 1.0039 shares of Community Bancorp common stock for each share of Bank of Commerce common stock; and those who elected a combination of the two received the appropriate allocations of the elections made. The transaction was valued at $40 million. Community Bancorp issued 608,522 shares in the acquisition. LOAN GROWTH AND CREDIT QUALITY: Loan growth was very strong, increasing 64.5% to $638.8 million from a base of $388.2 million a year ago. The acquisition of Bank of Commerce added $104 million to this amount at the date of merger, while organic loan growth was $64 million for the quarter. "With the depth of talented personnel, we were able to experience parallel success with merger integration and internal growth in the third quarter," 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. . "We had high expectations of seamless See seamless integration. merger integration, while maintaining strong loan growth. With a team of seasoned bankers, the merger was completed with a most successful integration of customers, cultures, employees and 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 . Despite the tremendous time commitment to this effort, our internal growth was the greatest increase during a single quarter in the ten year history of the Bank. With the addition of eight new lenders in 2005, we have fully deployed their talents which should continue to drive strong production going forward." The Company's credit quality continued to improve with non-performing loans at just 0.2% of total loans, while net recoveries for the quarter were $48 thousand. The allowance for loan losses was 1.22% of outstanding loans at quarter end. "We are encouraged by the breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is and depth of experience and knowledge in our lending personnel," said Don Bigger, EVP and Chief Credit Administrator. "This robust credit culture permeates all levels of the bank, and is evidenced in the strong credit quality reflected in third quarter numbers." DEPOSIT GROWTH: As of September 30, 2005, deposits increased 41.1% to $679.1 million, compared to $481.5 million a year ago, and were up 42.6% year to date compared to the deposit balance of $476.3 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 merger with Bank of Commerce contributed $118.2 million, or 58.3% of the growth since year end. Total demand deposits increased to 73.9% of total deposits year to date compared to 72.2% at year-end 2004. Non-interest bearing demand deposits increased from 25.6% at year-end to 26.2% of total deposits as of September 30, 2005. NET INTEREST INCOME AND NET INTEREST MARGIN: Net interest income increased 57.3% to $9.2 million for the third quarter 2005 as compared to $5.9 million for third quarter 2004. The increase was attributed to a 30.3% increase in average earning assets for the third quarter 2005 and increases in the yields on those assets, as well as an increase in our net interest margin to 5.44%. 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 third quarter of 5.44%, up from 4.51% for the same period a year earlier, and 5.03% for the nine months of 2005 compared to 4.55% for the same period in 2004. The increase in net interest margin is attributed to strong organic loan growth, the asset sensitivity of the Company's balance sheet 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 Federal Reserve 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. six times during 2005. "The increase in gross interest income, reflecting the strong organic loan growth in the second and third quarter, was also significant. Interest and dividend income for the third quarter represented 40.6% of year to date interest and dividend income. This is 29.8% increase over the second quarter figures. The increase in interest and dividend income, coupled with the rate sensitive balance sheet, positions the Bank to benefit from the current rate environment. Continued organic growth and added synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. from the acquisition will likely enhance our revenue stream," stated Mr. Jamison. 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 qualitative /qual·i·ta·tive/ (kwahl´i-ta?tiv) pertaining to quality. Cf. quantitative. qualitative pertaining to observations of a categorical nature, e.g. breed, sex. factors, it was determined that a $725 thousand addition to the provision for loan losses was appropriate based on organic growth for the third quarter of 2005. A provision for loan losses of $360 thousand was taken during the third quarter 2004. The Company's non-performing loans to total loans decreased to 0.2% at September 30, 2005 compared to 0.3% at September 30, 2004. Additionally, the Company reported net charge-offs of $108 thousand for the nine months ended September 30, 2005 compared to net charge-offs of $164 thousand for the same period in 2004. "A continuing trend of declining delinquencies and classified assets, combined with a strong local economy, warranted a reduction in the allowance to a level of 1.22%. With strong organic loan growth, a substantial amount of earnings were directed to the provision for loan loss to maintain the integrity of our allowance. This level of loan loss provision is considered sound and is in line with both national and local peer group analysis and, most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , the current portfolio," states Mr. Bigger. NON INTEREST INCOME Non-interest income is derived from the execution/processing business, the advisory business and any principal business that does not appear on the balance sheet. Financial institutions that wish to maximize execution/processing income depend on volume and efficiency for profits. AND EXPENSE: Non-interest income for the third quarter of 2005 was up 79.1% to $677 thousand compared to the comparable quarter of 2004. This increase consisted of $176 thousand from service charges and other income, $31 thousand in the 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 2004, and an increase 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 $56 thousand. Non-interest expense for the third quarter of 2005 increased by 47.7%, or $1.8 million, to $5.4 million compared to the same quarter in 2004. Expense increases were primarily attributed to an increase in salary and employee benefits of $1.1 million, increased occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal of $263 thousand, an increase in advertising and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most of $126 thousand, professional fees of $66 thousand, and core deposit intangible amortization of $63 thousand. Salaries and employee benefits increased as a result of the hiring of experienced loan officers and members of executive management during 2005, as well as the addition of four new branches this quarter, including the new Russell Russell, English noble family. It first appeared prominently in the reign of Henry VIII when John Russell, 1st earl of Bedford, 1486?–1555, rose to military and diplomatic importance. and I-215 branch, and the three newly acquired Bank of Commerce branches. 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 , equipment and depreciation expense were up from the addition of the four offices. Professional fees increased in order to ensure compliance with laws and regulations that we are now subject to as a public company. In addition, the amortization of the core deposit intangible associated with the acquisition increased expenses by $63 thousand. The efficiency ratio improved from the second quarter 2005, despite additional costs associated with the merger and the opening of the Russell branch in July. For the third quarter of 2005, the efficiency ratio was 54.7%, as compared to 59.6% in the second quarter of 2005. "Overall, we are encouraged with the quarterly performance considering all the elements of organic loan growth, the acquisition and the opening of our ninth office, the work necessary for SOX (1) (Schema for Object-oriented XML) An XML schema developed by Veo Systems and Muzino Communications, which was submitted to the W3C. SOX is based on DTD, but adds data typing and reuse mechanisms. compliance, and the overall growth of the Bank. We are positioned to continue our strategic plan and move forward in a dynamic growth marketplace," said Mr. Jamison. BUSINESS STRATEGY: Community Bancorp (headquartered in Las Vegas, Nevada), 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 full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. community banking through 9 branches, in the City of Las Vegas
The City of Las Vegas , 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. 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, Nevada Clark County is a county located in the U.S. state of Nevada. It is the most populous county in Nevada (2006 population estimate 1,912,654), and contains the city of Las Vegas. . 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 Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute 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. 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, loan quality, 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 theses 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. website at http://www.communitybanknv.com.
COMMUNITY BANCORP
Selected Consolidated Financial Highlights
(In thousands, except per share data and ratios; unaudited)
Three Months Ended
September 30, %
Balance Sheet Data (at period end) 2005 2004 Change
---------- ---------- ------
Investment securities
Loans, gross
Allowance for loan losses
Goodwill & core deposit
intangible
Total assets
Total deposits
Non-interest bearing
deposits
Core Deposits (1)
Total shareholders' equity
Income Statement Data
Interest and dividend income $ 12,561 $ 7,553 66.30%
Interest expense 3,326 1,681 97.86%
Net interest income 9,235 5,872 57.27%
Loan loss provision 725 360 101.39%
Net interest income after loan
loss provision 8,510 5,512 54.39%
Noninterest income 677 378 79.10%
Noninterest expense 5,421 3,671 47.67%
Income before income taxes 3,766 2,219 69.72%
Provision for income taxes 1,080 714 51.26%
Net income $ 2,686 $ 1,505 78.47%
Share Data (2)
Basic earnings per common
share $ 0.38 $ 0.32 18.75%
Diluted earnings per common
share $ 0.38 $ 0.31 22.58%
Book value per common share $ 14.14 $ 7.83 80.59%
Basic average shares
outstanding 6,986,350 4,696,323 48.76%
Fully Diluted average shares
outstanding 7,083,755 4,871,347 45.42%
Key Ratios
Return on average total
shareholders' equity 12.09% 16.90% -28.46%
Return on average total assets 1.48% 1.09% 36.13%
Net interest spread 4.59% 4.00% 14.75%
Net interest margin (3) 5.44% 4.51% 20.62%
Total revenue (net int inc +
non int inc) $ 9,912 $ 6,250 58.59%
Efficiency ratio (4) 54.69% 58.74% -6.89%
Asset Quality Ratios
Non-performing loans to total
loans (5)
Allowance for loan losses to
total loans
Non-performing assets (6)
Non-performing assets to
total assets
Net charge off's to average
loans
Capital Ratios
Average shareholders' equity to
average assets 12.27% 6.47% 89.64%
Leverage ratio 15.44% 8.86% 74.27%
Total risk-based capital
ratio 16.70% 12.94% 29.06%
---------- ---------- ------
Nine Months Ended
September 30, %
Balance Sheet Data (at period end) 2005 2004 Change
---------- ---------- ------
Investment securities $ 98,123 $ 87,492 12.15%
Loans, gross 638,785 388,247 64.53%
Allowance for loan losses 7,774 5,827 33.41%
Goodwill & core deposit
intangible 23,271 - 100.00%
Total assets 842,578 535,533 57.33%
Total deposits 679,124 481,479 41.05%
Non-interest bearing
deposits 178,138 127,555 39.66%
Core Deposits (1) 597,173 433,967 37.61%
Total shareholders' equity 104,145 36,998 1 81.49%
Income Statement Data
Interest and dividend income $ 30,943 $ 21,867 41.51%
Interest expense 7,808 5,047 54.71%
Net interest income 23,135 16,820 37.54%
Loan loss provision 816 582 40.21%
Net interest income after loan
loss provision 22,319 16,238 37.45%
Noninterest income 1,472 1,097 34.18%
Noninterest expense 13,485 10,522 28.16%
Income before income taxes 10,306 6,813 51.27%
Provision for income taxes 3,218 2,235 43.98%
Net income $ 7,088 $ 4,578 54.83%
Share Data (2)
Basic earnings per common
share $ 1.03 $ 0.98 5.10%
Diluted earnings per common
share $ 1.02 $ 0.95 7.37%
Book value per common share $ 14.14 $ 7.83 80.59%
Basic average shares
outstanding 6,830,294 4,671,332 46.22%
Fully Diluted average shares
outstanding 6,942,435 4,812,654 44.25%
Key Ratios
Return on average total
shareholders' equity 11.40% 18.10% -37.02%
Return on average total assets 1.46% 1.18% 23.73%
Net interest spread 4.25% 4.04% 5.20%
Net interest margin (3) 5.03% 4.55% 10.55%
Total revenue (net int inc +
non int inc) $ 24,607 $ 17,917 37.34%
Efficiency ratio (4) 54.80% 58.73% -6.68%
Asset Quality Ratios
Non-performing loans to total
loans (5) 0.19% 0.34% -44.12%
Allowance for loan losses to
total loans 1.22% 1.50% -18.71%
Non-performing assets (6) $ 1,189 $ 3,469 -65.72%
Non-performing assets to
total assets 0.14% 0.65% -78.39%
Net charge off's to average
loans 0.02% 0.05% -60.00%
Capital Ratios
Average shareholders' equity to
average assets 12.76% 6.50% 96.31%
Leverage ratio 15.44% 8.86% 74.27%
Total risk-based capital
ratio 16.70% 12.94% 29.06%
---------- -----------------
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 9/30/05: 7,363,362
===========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion