City Bank Announces Strong Earnings for 1st Quarter 2007
12 Abril 2007 - 5:27PM
Business Wire
City Bank (NASDAQ:CTBK) today announced strong earnings of $10.38
million for the quarter ended March 31, 2007, reflecting an
increase of 26.32% over $8.21 million for the same period in 2006.
All prior period results have been restated for the 3-for-2 stock
split on December 22, 2006, with no effect on net income or
shareholders� equity. The Bank�s diluted net income per share
reflects an increase of 24.49% to $.65 from $.52 in the first
quarter of the prior year. Net interest income was $19.94 million
for the first quarter of 2007 compared to $16.18 million for the
prior period in 2006, reflecting an increase of 23.20%. The
increased net interest income was primarily due to continued growth
in average loan balances from $807.11 million to $1.01 billion.
Loan growth was the major factor that resulted in the Bank�s strong
record earnings for the three months ended March 31, 2007. Three
Months Highlights (In thousands, except ratios) � March 31 2007
March 31 2006 Total Assets $ 1,116,060� $ 900,558� Total Loans $
1,039,910� $ 807,236� Net Income $ 10,367� $ 8,214� Non-Performing
Assets $ 2,674� $ 4,095� Net Interest Margin 7.52% 7.61% Return on
Average Assets (ROA) 3.87% 3.79% Return on Average Equity (ROE)
21.03% 18.16% Average Equity to Average Assets 18.39% 20.88% Result
of Operations Interest income for the first quarter of 2007 was up
33.33% from the comparable period in 2006 due to strong loan
volume. The increase of $197.98 million or 24.53% in average
outstanding loans contributed to the majority of this increase. The
average yield on loans for the first quarter of 2007 was 11.25%, up
from 10.57% during first quarter 2006 and the net interest margin
reflects a slight decrease of 1.18% to 7.52% from 7.61%.
Nonperforming assets at March 31, 2007 have been reduced from $4.10
million to $2.68 million, a reduction of 34.63% from March 31,
2006. The ratio of nonperforming assets to total assets at March
31, 2007 decreased to .24% from .45% at March 31, 2006. Interest
expense for the first quarter of 2007 was up 62.94% from the
comparable period in 2006. Average cost of deposits for the first
quarter of 2007 increased to 4.23%, up from 3.21% for the first
quarter of 2006, reflecting a higher interest rate environment.
Average time deposits for the first quarter of 2007 were $566.59
million, resulting in a 57.40% increase over the comparable quarter
in 2006 of $359.97 million. Noninterest income of $818 thousand
reflects a net decrease of $183 thousand or 18.28% for the first
quarter of 2007 from the first quarter of 2006. The majority of
this decrease was due to a decrease of $153 thousand in net gains
from sale of loans compared to the first quarter 2006. SBA loan
servicing income also decreased by $19 thousand compared to the
first quarter of 2006. Noninterest expense of $4.62 million in the
first quarter of 2007 reflects a net increase of 1.94% or $88
thousand compared to the first quarter of 2006. The majority of the
increase relates to salary and benefit expenses during the first
quarter 2007, which increased by $83 thousand as compared to the
same period in 2006. At March 31, 2007, total assets were $1.12
billion, up 23.93% over March 31, 2006. Asset growth since December
31, 2006 was $38.37 million or 3.56%. Loans grew 28.82% to $1.04
billion compared to $807.24 million at March 31, 2006. Loan growth
since December 31, 2006 was $74.24 million or 7.69%. Residential
construction loan activity has accounted for the majority of this
increase. At March 31, 2007, deposits increased 28.68% to $797.83
million compared to $620.01 million at March 31, 2006 and 4.50%
since December 31, 2006. City Bank�s return on average assets for
the three months ended March 31, 2007 was 3.87% compared to 3.79%
for the same period in 2006. Return on average equity was 21.03%
for the three month period, compared to 18.16% for the same period
in 2006. The ratio of average equity to average assets (Tier 1
Capital) for the three months ended March 31, 2007 was 18.39%
compared to 20.88% for the same period in 2006. The Tier 1 Capital
Ratio decreased slightly due to the significant increase in the
Bank�s total assets for the period ended March 31, 2007.
Forward-Looking Statements The previous discussion contains a
review of City Bank�s operating results and financial condition for
the three months ended March 31, 2007 and 2006. The discussion may
contain certain forward-looking statements, which are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from those stated, including, but not limited to, the
Bank�s inability to generate increased earning assets, sustain
credit losses, maintain adequate net interest margin, control
fluctuations in operating results, maintain liquidity to fund
assets, retain key personnel, and other risks detailed from time to
time in the Bank�s filings with the Federal Deposit Insurance
Corporation, including our Annual Report on Form 10-K�for the
period ended December 31, 2006. Readers are cautioned not to place
undue reliance on these forward-looking statements. City Bank is a
state-chartered commercial bank founded in 1974 and headquartered
in Lynnwood, Washington. The bank is publicly traded (NASDAQ:CTBK)
and many of the stockholders are local individuals. Eight banking
offices serve both Snohomish and North King counties. Two mortgage
loan offices serve Snohomish, King and Pierce counties. City Bank
provides a wide range of banking services for business and
individuals, including loans for residential construction, land
development, mortgage, commercial, Small Business Administration,
consumer, and all types of deposits as well as other general
banking services. City Bank has been consistently recognized as one
of the top performing banks in Washington State as well as
nationally. � Selected Financial Highlights(unaudited) (In
thousands, except per share data) Three months ended March Income
Statement Data � 2007� � 2006� % Change� Interest income $ 28,963�
$ 21,723� 33.33% Interest expense 9,025� 5,539� 62.94% Net interest
income 19,938� 16,184� 23.20% Provision for credit losses -� -�
0.00% Net interest income after provision for credit losses 19,938�
16,184� 23.20% Other noninterest income 818� 1,001� -18.28% Other
noninterest expense 4,623� 4,535� 1.94% Income before income taxes
16,133� 12,650� 27.53% Provision for income taxes 5,757� 4,436�
29.78% Net Income $ 10,376� $ 8,214� 26.32% � � Share Data Actual
shares outstanding 15,711� 15,604� 0.69% Earnings Per Share: Basic
earnings per common share $ 0.66� $ 0.53� 25.21% Diluted earnings
per common share $ 0.65� $ 0.52� 24.49% Book value per common share
$ 12.79� $ 11.79� 8.45% Basic average shares outstanding 15,684�
15,582� 0.65% Fully diluted average shares outstanding 15,846�
15,731� 0.73% Dividends paid per share $ 0.15� $ 0.13� 12.78% �
Balance Sheet Data (at period end) Investment securities 15,384�
14,189� 8.42% Loans held for sale 2,219� 5,725� -61.24% Loans, net
of unearned income 1,039,910� 807,236� 28.82% Assets related to
discontinued operations 0� 127� -100.00% Allowance for credit
losses 10,367� 10,409� -0.40% Total assets 1,116,060� 900,558�
23.93% Total deposits 797,829� 620,010� 28.68% Liabilities related
to discontinued operations 1,254� 1,174� 6.81% Total Shareholders'
Equity 200,918� 183,996� 9.20% � Selected Ratios Return on average
shareholders' equity 21.03% 18.16% 15.81% Average shareholders'
equity to average assets 18.39% 20.88% -11.90% Return on average
total assets 3.87% 3.79% 2.03% Net interest spread 6.58% 6.76%
-2.66% Net interest margin 7.52% 7.61% -1.18% Efficiency ratio
22.27% 26.39% -15.61% � Asset Quality Ratios Allowance for credit
losses $ 10,367� $ 10,409� -0.40% Allowance to ending total loans
0.99% 1.28% -5.44% Non-performing assets Non-accrual $ 1,054� $
867� 21.57% 90 days past due and still accruing $ 1,620� $ 341�
Foreclosed real estate $ 0� $ 2,887� -100.00% Non-performing assets
to total assets 0.24% 0.45% -47.31% Net (charge-offs) recoveries $
81� ($6) -1450.00% Net loan (charge-offs) recoveries (annualized)
to average loans 0.01% 0.00% -1184.08%
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