California Bank of Commerce Announces Results for the 3rd Quarter 2008
LAFAYETTE, CA--(Marketwire - October 10, 2008) - California Bank of Commerce (OTCBB: CABC), a
unique commercial bank in the San Francisco Bay Area targeting middle
market businesses and professionals, today announced financial results for
the quarter end September 30, 2008, with strong growth in both loans and
deposits. At the end of the third quarter, Total Assets were up by 20%
over the end of the second quarter, 2008. Total Loans grew 45% and Total
Deposits grew 19% over the same period. The Bank was negatively affected by
the Government's GSE takeovers. The Bank is Well Capitalized according to
regulatory guidelines and exhibits capital ratios that are in the upper
quartile of banks in general.
Total Assets at September 30, 2008 stood at $124 million, up $21 million
from $103 million at June 30, 2008. During the same period, Total Loans
reached $78 million, up $24 million from $54 million at June 30, 2008.
Commercial & Industrial (C&I) loans grew 32% reaching $36 million on
September 30, 2008 versus $27 million on June 30, 2008. C&I loans are the
Bank's core credit product. The Bank also makes Commercial Real Estate,
construction and Small Business Administration Guaranteed Loans. The
Bank's loan portfolio remains healthy, with no reported delinquent or
non-performing loans as of September 30, 2008.
At September 30, 2008, the Bank had $25.3 million of cash and cash
equivalents on its balance sheet and had in place back-up credit facilities
with the Federal Reserve Bank, the Federal Home Loan Bank and several
correspondent banks. Despite a challenging rate and margin environment,
the Bank remains on target with regard to the execution of its strategic
While many Banks are struggling with deposit gathering, California Bank of
Commerce continues to grow and diversify its deposit base. Total deposits
reached $95 million at September 30, 2008, increasing $15 million from June
Following the September GSE takeover announcement by the U.S. Treasury
Department and the Federal Housing Finance Agency with respect to Fannie
Mae and Freddie Mac, the Bank recorded a non-cash charge to earnings of
approximately $2 million ($0.74 per share), representing the entirety of
the Bank's holdings of preferred securities issued by Fannie Mae. Under the
Federal takeover plan, these securities remain outstanding, but currently
trade below 10% of their par value and no longer pay a dividend. The Bank
expects that the loss will result in a future tax benefit.
This write-off does not affect the Bank's status as "Well Capitalized," per
Bank President and CEO John Rossell remarked: "In our initial offering of
common stock, we raised $27.5 million in capital, $7.5 million in excess of
the amount stipulated in our regulatory filing. Extraordinary market
events, like the GSE takeover, are one of the reasons we chose to retain
additional capital. The Bank's growth and progress continues to exceed
plan and we have ample capital, cash and back-up credit facilities to
continue to execute our plan."
The Bank does not hold any other common or preferred stock issued by Fannie
Mae or Freddie Mac.
Excluding the extraordinary item, the Bank demonstrated favorable progress
toward eliminating its start-up related operating losses. The Bank's net
loss for the quarter ending September was reduced 25% or $266,000, as
compared with quarter-end June 2008. The Bank's net interest margin
improved to 3.15% for the 3rd quarter as compared to 2.96% in the 2nd
quarter, while net interest income for the quarter grew 41% or $244,000
compared to the quarter ending June. "While other Banks are reducing their
lending, we continue to emphasize taking care of our customers and
prospects. As a result, we are gaining market share relative to the
competition," said Rossell.
"The Bank continues to win in the marketplace for both loans and deposits.
Our new business pipeline remains strong for both business loans and
deposits. The bank continues to be well capitalized, and our liquidity
remains very healthy. In short, the Bank is exceeding our ambitious goals
for 2008," said John E. Rossell III, president and CEO California Bank of
About California Bank of Commerce
California Bank of Commerce was designed and built to provide a unique
banking experience for businesses, entrepreneurs, and their families.
California Bank of Commerce provides a broad range of commercial banking
and advisory services to mid-market businesses and professionals throughout
the San Francisco Bay Area. For more information on California Bank of
Commerce and our unique banking experience, call us at 925-283-2265, or
visit us at www.californiabankofcommerce.com.
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