California Bank of Commerce Turns a Profit in 2010

San Francisco Bay Area-based California Bank of Commerce, a bank which targets closely held businesses, today reported net income of $3.4 million for the full year-ended December 31, 2010, including a tax loss carry forward of $3.0 million, compared to a start-up related Loss of ($1.5 million) for the full year-ended December 31, 2009.

The bank had total assets at year-end 2010 were $240 million, up $46 million or 24% from year-end 2009. Total Deposits were $184 million at year-end 2010, up $31 million or 20% over year-end 2009. Total Loans were $176 million at year-end 2010, up $32 million or 22% over year-end 2009.

CBoC’s perating income (pre-tax income excluding provision for loan losses and stock option expense) was $2.57 million for the full year 2010 compared to $0.45 million for the full year 2009. The Bank has now accomplished six consecutive quarters of operating profits. Cumulative operating profits, from the Bank’s opening to December 31, 2010, are now positive. “The five-fold increase in Operating Profits we achieved for the full year, in comparison with the year previous, is evidence of the Bank’s positive momentum,” said John E. Rossell, President and CEO.

Total equity at December 31, 2010 was $27 million, up $3.7 million in comparison with December 31, 2009. The Bank’s Capital ratios continue to exceed the regulatory definition of well capitalized. “The Bank’s capital base is vital to its safety and soundness. It provides the platform upon which we will continue to grow,” said Rossell.

Full Year 2010 versus Full Year 2009

  • Total Loans of $176 million, up 22%
  • Total Deposits of $184 million, up 20%
  • Total Assets of $240 million, up 24%
  • Net Interest Income of $7.6 million, up 42%
  • Tangible Book Value per common share of $8.36, up $1.32

In comparison with industry composites, the Bank finished the year with a strong reserve for loan losses, low loan delinquency ratios and low quotients of non-performing loans and loan charge-offs.

On an operating basis, the fourth quarter of 2010 was essentially flat in comparison with the third quarter of 2010, with the exception of Total Loans, which were up $10 million or 6%. The Bank trimmed underutilized deposits, reducing Total Deposits by about 2%. The Net Interest Margin was 3.56% in the Fourth Quarter 2010 compared to 3.54% during the Third Quarter of 2010. Net Interest Income declined by about 5% in the Fourth Quarter, to $1.949 million from $2.062 million, after the Bank rebalanced its investment portfolio in favor of shorter durations and in anticipation of rising intermediate term interest rates.

In January, founding director Mr. Stuart Kahn resigned from the Board of Directors to attend to personal matters.

“Our bank is now three and half years old. Even in the midst of disruption in the financial markets our single biggest obstacle has been the narrow margins imposed on the banking system by the Federal Reserve. We dealt with that obstacle by growing the earning assets of the Bank, to a point now beginning to approach a quarter billion dollars. We could do this because we have skilled officers and high quality clients. With each new dollar of growth going forward, we now have the opportunity to push profits to the bottom line. Despite the loss of our good director, Mr. Kahn, we are well positioned indeed to take advantage of a recovering economy and a return to more moderate rates of interest,” said Rossell.


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