Community Bank of the Bay Announces 66% Increase in Net Income for the 2014 Third Quarter

OAKLAND, CA--(Marketwired - Oct 30, 2014) - Community Bank of the Bay (OTCBB: CBYAA), a San Francisco Bay Area commercial bank with full service offices in Oakland and Danville, and two business offices in the Silicon Valley, reported net income of $632 thousand for the quarter ended September 30, 2014.

2014 Third Quarter Financial Highlights

• Net income after tax for the 2014 Third Quarter totaled $632 thousand, or $0.14 earnings per common share, a 66% increase over the 2013 Third Quarter. Pre-tax operating income totaled $793 thousand, an increase of $474 thousand, or 149 percent, from $318 thousand reported in the 2013 Third Quarter. 
• Total assets at September 30, 2014 were $192.0 million compared to $173.3 million at September 30, 2013. Average earning assets for the 2014 Third Quarter reached $180.3 million, an increase of $30.0 million, or 20.0 percent, compared with $150.3 the 2013 Third Quarter.
• Deposits decreased $2.6 million to $166.9 million from the prior quarter, and increased $16.3 million or 10.9 percent from the prior year.
• Loans increased $7.5 million to $152.8 million from the prior quarter, and increased $23.8 million or 18.5 percent from the prior year.
• Non-performing assets, including Other Real Estate Owned decreased $133 thousand to $3.3 million in the Third Quarter compared to Second Quarter, and represent 2.1 percent of total loans.
• Net interest margin increased fifty-three basis points to 4.58 percent, compared with 4.05 percent for the 2014 Second Quarter and decreased twenty-one basis points from 4.79 percent for the 2013 Third Quarter.
• Capital levels remain well above FDIC "Well Capitalized" standards. Third Quarter 2014 Equity of $20.5 million increased 11.7 percent from the prior year and resulted in Tier 1 Leverage of 10.92 percent and Tier 1 Risk-Based and Total Risk-Based Capital Ratios of 12.47 percent and 13.72 percent respectively.

"The year's strong loan growth and robust loan pipeline are contributing to recurring operating earnings and the goal of a record earnings year. Year to date pre tax operating income, excluding the Bank Enterprise Award, has increased 58% from 2013. We are also proud to announce that during the third quarter of 2014, Community Bank of the Bay was awarded a $355 thousand Bank Enterprise Award by the Community Development Financial Institution division of the U.S. Treasury Department. This is the sixth year in a row that Community Bank of the Bay has received the maximum award made available by the Fund, and is a testament to our commitment to our clients and communities," said William S. Keller, President and Chief Executive Officer. "With our continued improvement in profitability, we have been advised by our tax advisors that our bank has now fully utilized its deferred tax benefits relating to its net operating loss carryforwards and will begin incurring a tax obligation. They have recommended that we recast 2014 operating results using an estimated effective tax rate of 20% for the full year. The attached financial statements reflect this tax adjustment."

About Community Bank of the Bay

Community Bank of the Bay (OTCBB: CBYAA) serves the financial needs of closely held businesses and professional service firms, as well as their owner-operators and non-profit organizations throughout the San Francisco Bay Area. Community Bank of the Bay is a member of the FDIC, an SBA Preferred Lender, and a CDARS depository institution, headquartered in Oakland, with offices in Danville, San Mateo and Campbell, CA. It is also California's first certified depository Community Development Financial Institution and one of only three operating in the Northern California market. The bank is recognized for establishing the Bay Area Green Fund to provide financing to sustainable businesses and projects and supports environmentally responsible values. Additional information on the bank is available online at www.BankCBB.com.

Forward-Looking Statements
This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.

COMMUNITY BANK OF THE BAY
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(In thousands except earnings per share)
INCOME STATEMENT			2014 Three Months Ended												2013 Three Months Ended				Year Over Year Change
			September 30				June 30				March 31				September 30				%
Interest income			$	2,245			$	2,006			$	1,965			$	1,935			16.0	%
Interest expense				166				185				168				122			36.1	%
	Net interest income before provision			2,079				1,821				1,797				1,813			14.7	%
Provision for Loan Loss Reserve				100				50				50				219			-54.3	%
	Net interest income after provision			1,979				1,771				1,747				1,594			24.2	%
Non-interest income				564				348				360				433			30.3	%
Non-interest expense				1,750				1,770				1,661				1,709			2.4	%
	Income before provision for income taxes			793				349				446				318			149.4	%
Provision for income taxes				161				71				90				(63	)		-355.6	%
	Net income		$	632			$	278			$	356			$	381			65.9	%
Less: preferred dividends				32				32				32				32			0.0	%
	Net income avaiable for common stockholders		$	600			$	246			$	324			$	349			71.9	%
Basic earnigs per common share			$	0.14			$	0.06			$	0.08			$	0.08			70.9	%
Weighted average common shares outstanding				4,196,268				4,196,268				4,172,268				4,172,268
Return on average assets				1.31	%			0.54	%			0.70	%			0.85	%
Return on average common equity				15.3	%			6.4	%			8.5	%			10.3	%

COMMUNITY BANK OF THE BAY
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(In thousands except earnings per share)
BALANCE SHEET			2014  Three Months Ended												2013 Three Months Ended				Year Over Year Change
ASSETS		September 30					June 30				March 31			September 30					%
Total cash and investments			$	33,540			$	41,687			$	58,717			$	39,989			-16.1	%
Loans, net of unearned income				152,822				145,338				130,230				128,984			18.5	%
	Loan loss reserve			(2,562	)			(2,539	)			(2,505	)			(2,544	)		0.7	%
Other real estate owned				971				-				-				-
Other assets				7,246				6,916				6,847				6,897			5.1	%
	Total Assets			192,017				191,402				193,289				173,326			10.8	%
LIABILITIES AND SHAREHOLDERS EQUITY
Non-interest bearing deposits				54,317				58,875				60,123				60,140			-9.7	%
Intrest bearing deposits				112,551				110,559				109,223				90,392			24.5	%
	Total deposits			166,868				169,434				169,346				150,532			10.9	%
Total borrowings and other liabilities				4,632				2,082				4,493				4,427			4.6	%
	Total Liabilities		$	171,500			$	171,516			$	173,839			$	154,959			10.7	%
Shareholders equity				20,517				19,886				19,449				18,367			11.7	%
Total Liabilities and Shareholders Equity			$	192,017			$	191,402			$	193,288			$	173,326			10.8	%
Book value per common share			$	3.92			$	3.77			$	3.69			$	3.43			14.4	%