CU Bancorp, the parent company of wholly owned California United Bank, today reported financial results for the first quarter of 2015.
“Net charge-offs in 2014 were 2 basis points of average loans and the Company experienced a net recovery in 2013”
The comparability of financial information for the first quarter of 2015 to the first and fourth quarters of 2014 is affected by the Company’s acquisition of 1st Enterprise Bank (“1st Enterprise”), which was accomplished by a merger of California United Bank with 1st Enterprise (“the merger”), effective November 30, 2014. Operating results for the first quarter of 2015 include three months of combined operations, compared to one month of combined operations in the fourth quarter of 2014.
First Quarter 2015 Highlights
– Net organic loan growth of $67 million in the first quarter.
– Core net income available to common shareholders increased to $4.2 million, up $1.5 million or 56% from the prior quarter.
– Diluted core earnings per share of $0.25, up 25% from previous quarter.
– Net interest income increased to $20.6 million, up $4.9 million or 31% from the prior quarter.
– Net interest margin increased to 3.95% from 3.78% in the prior quarter.
– Core efficiency ratio improved to 62% from 66% in the prior quarter.
– Return on average tangible common equity of 8.23%.
– Tangible book value per share increased $0.28 to $11.65 per share.
– Total assets increased to $2.4 billion, up $142 million or 6% from the prior quarter.
– Total loans increased to $1.7 billion, up $41 million or 2.5% from the prior quarter.
– Total deposits increased to $2.1 billion, up $136 million or 7% from the prior quarter.
– Non-interest bearing demand deposits were 53% of total deposits.
– Continued status as well-capitalized, the highest regulatory category.
First Quarter Year-Over-Year Pro Forma Comparison
The first quarter of 2015 represents the Company’s first complete quarter of combined operations following the acquisition of 1st Enterprise. As such, the Company believes comparisons to the results of legacy CUB’s first quarter of 2014 or the results of the fourth quarter of 2014, which only represented one month of combined operations after the merger, do not provide the most appropriate benchmarks for assessing its performance in the first quarter of 2015. The Company believes it is more relevant to compare its results in the first quarter of 2015 to the pro forma combined results for CU Bancorp and 1st Enterprise in the first quarter of 2014, the last quarter of operations for both entities that was unaffected by merger-related charges. First quarter 2014 pro forma numbers are used for illustrative purposes only.
As the table below shows, excluding merger-related charges and the provision for loan losses, CUB’s net income before the provision for income taxes in the first quarter of 2015 increased 30%, total assets increased 12%, total loans increased 14% and total deposits increased 12% over the pro forma combined results of CU Bancorp and 1st Enterprise in the first quarter of 2014.
