Financial Highlights
Total assets, total deposits, and net loans all increased from prior year levels. Total assets exceeded the billion dollar milestone at quarter-end for the first time.
Third quarter 2019 earnings represented strongest quarterly performance of the year.
Retained earnings further strengthened robust capital position.
President's Statement
This quarter represents the first time Commercial Bank of California’s total assets have exceeded the billion dollar milestone at the end of a reporting period, and CBC’s positive momentum increased in the third quarter of 2019. Once again, CBC’s strong growth in assets, loans, and deposits drove improved performance. The net interest income resulting from that growth in turn led to our strengthening operating results for the period.
Our balance sheet growth is evidence of our continued progress in growing into the higher salary expense levels resulting from earlier additions to the Bank’s management team. In addition to meeting regulatory expectations associated with our billion dollar status, we expect this firm foundation to support our growth now and in the years to come.”
While CBC’s robust financial condition and advanced technology have long been our hallmarks, it is our unique approach to personal service that is increasingly making us the bank of choice for businesses and professionals in Southern California. Progress continues on our system enhancements that will make us even more accessible and easy to deal with. And in the near future, we expect to roll out our new technology solutions to help our business clients better manage the sales process and deliver superior service to their customers. As always, our focus is on further enhancing the banking experience which we deliver to our valued clients, and thus contributing to their success.
As the year progresses, we continue to experience the economic volatility that has characterized the recent past. Recently, Interest rates have begun to decline after several years of gradual increases. While the extent and duration of this movement is uncertain, what is clear is that it will present its own set of challenges. Thanks to our financial strength and flexibility, CBC is well positioned to weather financial storms, and capitalize on opportunities that emerge. Our confidence in Commercial Bank of California’s future has never been stronger.
Ash Patel, President & CEO
STATEMENTS OF CONDITION (UNAUDITED)
| (000s omitted) | September 30, 2019 | September 30, 2018 |
Assets: |
||
| Cash and due from banks | $19,246 | $29,721 |
| Interest bearing deposits with banks | 122,633 | 108,820 |
| Federal funds sold | 2,500 | 2,500 |
| Cash and cash equivalents | 144,379 | 141,041 |
| Investment securities | 91,641 | 91,807 |
| Loans | 746,207 | 652,526 |
| Less: allowance for loan and lease losses | (10,012) | (10,044) |
| Loans, net | 736,195 | 642,482 |
| Premises and equipment – net | 3,374 | 3,454 |
| Other real estate owned | - | - |
| Accrued interest receivable and other assets | 41,146 | 37,993 |
| Total assets | $1,016,735 | $916,777 |
LIABILITIES AND CAPITAL: |
||
| Non-interest bearing demand deposits | 442,019 | 317,187 |
| Interest bearing demand deposits | 44,595 | 45,739 |
| Savings and money market deposits | 383,300 | 388,909 |
| Time deposits | 31,134 | 58,682 |
| Total deposits | 901,048 | 810,517 |
| Federal Home Loan Bank advances | - | - |
| Accrued interest payable and other liabilities | 12,372 | 11,950 |
| Total liabilities | $913,420 | $822,467 |
| Stated capital | 83,830 | 83,830 |
| Retained earnings | 18,976 | 12,281 |
| Accumulated other comprehensive income (loss) | 509 | (1,801) |
| Total capital | $103,315 | $94,310 |
| Total liabilities and capital | $1,016,735 | $916,777 |
STATEMENTS OF OPERATIONS (UNAUDITED)
| Nine Months | Nine Months | |
| Ended | Ended | |
| (000's omitted) | September 30, 2019 | September 30, 2018 |
| Interest on loans | $30,494 | $26,092 |
| Interest on deposits with banks | 2,300 | 1,490 |
| Interest on investment securities | 1,703 | 1,527 |
| Other interest income | 228 | 34 |
| Total interest income | 34,725 | 29,143 |
| Interest on deposits | 4,674 | 2,735 |
| Interest on FHLB advances | 12 | 112 |
| Total interest expense | 4,686 | 2,847 |
| Net interest income | 30,039 | 26,296 |
| Provision for loan losses | 75 | 625 |
| Net interest income after provision for loan losses | 29,964 | 25,671 |
| Other operating income | 8,152 | 9,329 |
| Salaries and related benefits | 19,581 | 16,255 |
| Occupancy expenses | 3,234 | 2,849 |
| Other expenses | 7,695 | 7,311 |
| Total other operating expenses | 30,510 | 26,415 |
| Income before provision for income taxes | 7,606 | 8,585 |
| Provision for income taxes | 2,208 | 2,513 |
| Net income | $5,398 | $6,072 |
This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein may constitute forward-looking statements. Although Commercial Bank of California believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from Commercial Bank of California’s expectations include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic and business areas in which Commercial Bank of California conducts its operations.