CCB Bankshares, Inc. Reports 31% Growth in Net Income for First Quarter 2016

SOUTH HILL, Va., April 27, 2016 /PRNewswire/ -- CCB Bankshares, Inc. (OTCQB: CZYB) today announced its unaudited results of operations for the first quarter of 2016.

Earnings

CCB Bankshares, Inc. is pleased to report net earnings of $269,576 to common shareholders after preferred stock dividends of $9,000 for the first quarter of 2016.  Earnings per share on a basic and dilutive basis were $0.18 and return on average assets was 0.59%.  For the first quarter of 2015, the Bank reported net income of $205,758 after preferred stock dividends of $10,000 or $0.14 per share on a basic and diluted basis.  This represents a 31.0% increase or $64 thousand year-over year.   

Regarding performance for the first quarter, James R. Black, President and CEO, said, "We had a solid start to the year. First quarter net income was up 31% and the loan pipeline is healthy. We had a successful subordinated debt offering during the quarter and are making further progress on expanding our market presence in northern North Carolina. We expect continued growth for the remainder of the year and are focused on improving our overall efficiency."

Net interest income, which includes the effect of $29 thousand in interest expense paid on subordinated debt issued by the company in February 2016, increased by $207,748 or 14.4% from the first quarter of 2015.  The net interest margin for the first quarter of 2016 was 3.87% compared to 3.67% for the same period of 2015.  The yield on earning assets was 4.40% for the first quarter of 2016, compared to 4.39% for the first quarter of 2015.  The cost of funds for the first quarter of 2016 was 0.76%, an 18 basis point reduction from the first quarter of 2015.  This is attributed to repricing the certificate of deposit portfolio lower as well as diversification of funding through judicious use of market-priced deposits.  The weighted cost of funds for the first quarter of 2016 was 0.54%, compared to 0.78% for the first quarter of 2015, augmented by a 9.0% increase in demand deposits.          

Noninterest income totaled $198,165 for the first quarter of 2016, a decrease of $2,848 or 1.4% from the first quarter of 2015, at $201,013.  Service charge income at March 31, 2016 was $47 thousand compared to $54 thousand at March 31, 2015.  Higher balances maintained in accounts as a result of relationship pricing as well as continued regulatory pressures on imposition of service charges contributed to the decrease year-over-year. First quarter fee income for placement of mortgages in the secondary market was $12,723, compared to $11,939 for the first quarter of 2015.  The mortgage pipeline is steady and the Company's flexibility allows it to retain a select group of loans for its own portfolio, which may result in lower fee income in the short run but higher interest income in the long run.  Noninterest expense for the first quarter of 2016 was $1,449,209, an increase of $111,417 or 8.3% from the first quarter of 2015.  Several broad expense categories have increased year-over-year, including salary expense, which is 9.9% higher as a result of the opening of the Louisburg, NC branch in the fourth quarter of 2015 and the addition of several business development officers and support staff in North Carolina.  Data processing expenses decreased by 15.8% year over year due to even closer management of core functions and products.  There were no valuation write downs to other real estate owned during the first quarter of 2016 or 2015, and no provision expense was required.  As the levels of other real estate owned decrease, so too do the accompanying legal and collection fees and the expenses to carry the properties.  The efficiency ratio for the first quarter of 2016 was 78.4% compared to 80.8% one year ago. 

Growth

At March 31, 2016, total assets were $186.3 million, up $13.7 million, or 7.9% from March 31, 2015.  Gross loans at March 31, 2016 were $154.6 million, an increase of $21.2 million or 15.9% from March 31, 2015.  Net loans at March 31, 2016 were $152.6 million, compared to $149.1 million at December 31, 2015, an increase of $3.5 million despite a combination of unexpected and anticipated annual line payoffs.  Loan demand throughout the markets has shown modest improvement.  The Company remains committed to profitable growth without compromise of asset quality, liquidity, or interest rate risk.   Deposits totaled $156.9 million, an increase of $9.6 million or 6.5% over March 31, 2015 and $3.4 million or 2.2% over December 31, 2015.  Over the same comparable period, noninterest bearing demand deposits increased $8.2 million or 30.0%, interest-bearing checking and savings deposits increased $17.2 million or 43.2%, and time deposits decreased 5.0%.       

Asset Quality

No provision expense was taken for the first quarter of 2016 or 2015.  At March 31, 2016, net recoveries totaled $97.2 thousand compared to $4 thousand at March 31, 2015.  The allowance for loan losses represented 1.29% of loans as of March 31, 2016, compared to 1.26% on December 31, 2015 and 1.46% as of March 31, 2015. Nonperforming loans, which exclude performing troubled debt restructurings, equaled $431,885 or 0.28% at March 31, 2016 compared to $403,463 or 0.30% at March 31, 2015.  There are no loans which are delinquent over 90 days and still accruing interest at March 31, 2016.   As always, appropriate risk management through maintenance of high asset quality standards and an adequate reserve for loan losses continue to be priorities for the Company.   

Other real estate owned totaled $154 thousand at March 31, 2016 and December 31, 2015, compared to $718 thousand at March 31, 2015.  Total nonperforming assets at March 31, 2016 were $649 thousand or 0.35% of total assets, compared to $733 thousand or 0.40% of total assets at December 31, 2015, and $1.1million or 0.65% of total assets at March 31, 2015.  Total classified assets continue to decrease, with a total of $2.9 million at March 31, 2016, compared to $4.6 million at March 31, 2015.     

Capital

The Company is under $1 billion in assets; therefore, capital ratios of the Bank are presented.  As of March 31, 2016, total risk-based capital was 14.4% compared to 18.3% one year ago, and significantly higher than the 10.0% minimum regulatory requirement for well capitalized institutions. Tier 1 leverage was 10.6% at March 31, 2016, compared to 12.6% at March 31, 2015.  In June 2015 the Bank redeemed $3 million of preferred stock held in connection with the Treasury's SBLF program which accounts for the change in capital ratios.  The common equity tier 1 capital ratio of 13.2% at March 31, 2016 compares favorably to the required regulatory minimum of 4.5%.  During the first quarter of 2016, the Company repaid the remaining $1 million of SBLF preferred stock with a $3.5 million subordinated debt offering.  The remaining $2.5 million resides at the holding company. 

CCB Bankshares, Inc. is a Virginia state chartered bank holding company headquartered in South Hill, Virginia and parent company to Citizens Community Bank.  It operates six branches, three in south central Virginia and three in northern North Carolina, as well as a loan production office in North Raleigh, North Carolina. For more information and additional financial data, please visit www.ccbsite.com. 

This press release contains "forward-looking statements" that concern future events which are subject to risks and uncertainties.  Any such statements are based on certain assumptions and analyses by the Bank and other factors it believes are appropriate in the circumstances and at the time at which such statements are made.  The Bank's actual results, events and developments may differ materially from those contemplated by any forward-looking statement.  The Bank has no responsibility to update such forward-looking statements.

SOURCE CCB Bankshares, Inc.

Related Links

http://www.ccbsite.com