Desert Community Bank Releases Second-Quarter 2001 Earnings.Business Editors VICTORVILLE, Calif.--(BUSINESS WIRE)--July 11, 2001 Ronald L. Wilson Wilson, city (1990 pop. 36,930), seat of Wilson co., E N.C., in a rich agricultural region; inc. 1849. It is a commercial and industrial center with a large tobacco market. Manufactures include textile goods (especially clothing), metal products, and processed foods. , president and chief executive officer of Desert Community Bank (Nasdaq:DCBK) in Victorville, released the following information regarding the bank's second-quarter results. Interest rates continued their downward spiral spiral /spi·ral/ (spi´ral) 1. helical; winding like the thread of a screw. 2. helix; a winding structure. through the end of the second quarter. This has caused the bank's net interest margin to suffer. Nevertheless, the bank's net earnings continue to reflect improvement. More important, the prospects for the second half of 2001 are encouraging. In the first half of this year, the bank's net earnings of $1,540,210 reflected an improvement of 2.39 percent over last year. The board and management factored the anticipated squeeze Squeeze 1. In financial terms, a period of time when borrowing is difficult. 2. In general business terms, times when increasing costs cannot be passed onto consumers. The decrease in profits is said to be caused by a "squeeze" on profit margins. on the net interest margin in the budget process, which projected net earnings of $1,408,081. The actual result as of June June: see month. 30, 2001, was 9.40 percent better than projected. In July July: see month. and August 2000, the bank offered competitive Time Certificate of Deposit rates of 7.07 percent. While loan rates declined in the first half of this year, the bank could not adjust the pricing on several million in TCDs. This will change dramatically in the second half. TCDs in the 6.75 percent-to-7.00 percent range have begun to mature. The interest rate paid on renewals is in the 4.50 percent-to- 4.75 percent range. This will clearly have a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact on the bank's second-half net interest margin performance, although the bank will continue to face declining loan interest rates. In the first half, the bank also contributed $192,500 more than budgeted to the provision for loan losses. This is not indicative indicative: see mood. of a potential problem, but a prudent contribution to the reserve in light of continuing discussions about a "slowing national economy." A slowing economy is far from what the bank is seeing in the marketplace it serves. The High Desert Region of San Bernardino San Bernardino, city, United States San Bernardino (săn bûr'nədē`nō), city (1990 pop. 164,164), seat of San Bernardino co., S Calif., at the foot of the San Bernardino Mts.; inc. 1854. County continues to witness resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. from the recession the area experienced from the middle-to-late '90s. Opportunity abounds in this region, as evidenced by a record $50 million in loan applications at the end of May 2001. On June 26, 2001, the bank's board approved a cash dividend of 10 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. to holders of record Aug. 31, 2001. The dividend will be paid on Sept. 28, 2001. The 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. value of earnings per share increased slightly in the first half of 2001 compared with the first half of 2000. As of June 30, 2001, the fully 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 totaled $1.17, compared with $1.16 on June 30, 2000.
DESERT COMMUNITY BANK
Financial Highlights
(dollars in thousands)
Balance Sheet
As of
June 30, 2001
Assets:
Securities -- available for sale $ 23,265
Federal funds sold 25,225
Loans 230,042
Allowance for loans losses (2,907)
Net loans 227,135
Total earning assets 275,625
Cash & noninterest-earning deposits 18,374
Premises and equipment, net of
accumulated depreciation and
amortization 11,643
Other real estate owned 392
Other assets 10,095
Total assets $ 316,129
Liabilities:
Noninterest-bearing demand $ 77,990
Interest-bearing demand 111,056
Savings 21,475
Time deposits under $100,000 45,119
Time deposits $100,000 and over 31,476
Total deposits 287,116
Other liabilities 1,192
Total liabilities 288,308
Stockholders' equity:
Common stock, authorized 4,687,500
shares in 2001 and 2000: issued
and outstanding: 1,239,110 in 2001
and 1,191,260 in 2000 10,694
Undivided profits 16,979
Accumulated other comprehensive income 148
Total shareholders' equity 27,821
Total liabilities and shareholders'
equity $ 316,129
Statement of Earnings
2nd quarter ended
June 30,
2001 2000
Interest income and fees:
Interest/fees on loans/leases $ 5,636 $ 5,104
Interest on securities 340 468
Interest on federal funds sold 296 148
Total interest income 6,272 5,720
Interest expense 2,240 1,868
Net interest income 4,032 3,852
Provision for loan losses 430 500
Noninterest income:
Service fee income 631 670
Gain on sale of loans 94 173
Gain/loss on sale of securities 0 0
Other noninterest income 325 228
Total noninterest income 1,050 1,071
Noninterest expense:
Salaries and employee benefits 1,597 1,466
Occupancy expense 509 470
Other noninterest expense 1,360 1,248
Total noninterest expense 3,466 3,184
Earnings before income taxes 1,186 1,239
Income taxes 488 471
Net income $ 698 $ 768
Per-share data:
Net income per share -- basic $ 0.56 $ 0.65
Average number of shares of common
stock outstanding during quarter 1,239,210 1,185,710
Net income per share -- fully diluted $ 0.53 $ 0.59
Average number of shares of common stock
and common stock equivalents (options)
outstanding during quarter 1,320,917 1,300,787
DESERT COMMUNITY BANK
Statement of Earnings
Six Months Ended June 30, 2000 and 2001
YTD 2001 YTD 2000
Interest income and fees
Interest/fees on loans/leases $ 11,328 $ 9,807
Interest on securities 779 928
Interest on Federal Funds Sold 471 254
Total interest income 12,578 10,989
Interest expense 4,492 3,570
Net interest income 8,086 7,419
Provision for loan losses 655 800
Noninterest income
Service fee income 1,359 1,354
Gain on sale of loans 100 256
Gain/loss on sale of securities 1 0
Other noninterest income 568 417
Total noninterest income 2,028 2,027
Noninterest expense
Salaries and employee benefits 3,205 2,899
Occupancy expense 1,028 934
Other noninterest expense 2,598 2,387
Total noninterest expense 6,831 6,220
Earnings before income taxes 2,628 2,426
Income Taxes 1,088 922
Net income $ 1,540 $ 1,504
Per Share Data:
Net income per share -- basic $ 1.24 $ 1.27
Average number of shares of common
stock oustanding during quarter 1,239,210 1,185,710
Net income per share -- fully diluted $ 1.17 $ 1.16
Average number of shares of common
stock and common stock equivalents
(options) outstanding during quarter 1,320,917 1,300,787
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