Written by Gabriel Dillard
Local community banks across the board saw successful 2017 performance, despite some one-time charges due to the tax reform law.
United Security Bank profit up 17 percent
United Security Bancshares, parent company of Fresno’s United Security Bank, announced annual net income of $8.64 million — up 17 percent from 2016’s total.
In the fourth quarter of 2017, United Security Bank reported income of $1.63 million, up from $1.55 million in the same quarter of 2016.
In a statement, Dennis Woods, president and CEO, said the annual results are more impressive absent some one-time charges.
“We are pleased to report an accumulation of earnings, which has resulted in a successful 2017. Excluding Non-Core items such as the Fair Value Adjustment for Trust Preferred Securities (“TRUPS”), the gain on sale of Other Real Estate Owned (OREO), and a write-down of deferred tax assets (“DTA”) due to the Tax Cuts and Jobs Act of 2017, net income would be $9,954,000 for the year ended December 31, 2017, an increase of approximately 29.71% compared to net income of $7,674,000 for the same period in 2016. None of these items are part of Core Income and specifically the TRUPS Fair Value Adjustment is dependent upon market rates, which can ‘add to’ or ‘subtract from’ Core Income and mask Core Income change.”
Total assets increased $17.86 million, or 2.27 percent, for the year ended Dec. 31, 2017.
Suncrest has a record year
Visalia-based Suncrest Bank announced record net income of $4.7 million for 2017, a 170-percent increase from the year prior.
As have other corporations, Suncrest Bank took a one-time charge of $1.3 million in December as it revalued its deferred tax assets due to the drop in the federal corporate income tax from 35 percent to 21 percent as part of the Tax Cuts and Job Act.
“2017 was an outstanding year in terms of organic balance sheet growth,” said Ciaran McMullan, president and CEO of Suncrest Bank. “We finished the year with approximately $530 million in total assets, an 18.2% increase over the previous year, while total deposits increased by 20.0% and total loans by 14.9%.”
“Our pre ‘Tax Act’ net income set new records of $4.7 million for the full year and $1.4 million for the quarter, resulting in diluted earnings per share (excluding the one-time Tax Act expense) for the year of 65 cents, a year-over year increase of over 90%.”
McMullan added, “Our anticipated merger with Community Business Bank is progressing extremely well and we are excited by the opportunities that will come with a significantly expanded presence in the Greater Sacramento and Lodi markets.”
Suncrest announced the Community Business Bank merger in November. It is expected to close in the second quarter, bringing in an additional $325.5 million in assets as of September.
Excluding the Tax Act expense, for the fourth quarter, Suncrest reported record income of $1.4 million, up 3.4 percent from the prior quarter.
Total assets increased on an annual basis by $81.3 million, or 18.2 percent, to $532.8 million.
Central Valley Community Bank reports $14.02M
Central Valley Community Bancorp, parent company of Central Valley Community Bank in Fresno, reported net income of $14.02 million for 2017, down about $1 million compared to 2016.
In addition to a one-time differed tax expense of $3.54 million in the fourth quarter related to federal tax reform, the bank also closed its acquisition of Folsom Lake Bank in the quarter.
“We are pleased with the fourth quarter and full year 2017 financial metrics. The merger with Folsom Lake Bank was completed on October 1, 2017, which contributed to the Company’s historic highs in Loans, Deposits and Pre-Tax earnings. All aspects of the merger are on target and integration plans are progressing well. The systems conversion is on schedule for early February,” stated James M. Ford, president & CEO of Central Valley Community Bank and Central Valley Community Bancorp.
“Our expansion in the Greater Sacramento Region has set the stage for continued growth of the Company in 2018 and beyond. Notwithstanding the one-time Deferred Tax Asset write-down as a result of the 2017 tax law changes, the Company’s core business continues to expand, benefiting from our nearly 40-year community bank relationship model that’s consistently delivered throughout our territory,” continued Ford.
“The strategic plan for 2018 includes consolidating two existing offices into branches in the same communities of Visalia and Folsom during the second quarter, allowing the Company’s cost structure to further improve and providing opportunity to invest in technology and continued growth initiatives throughout California’s San Joaquin Valley and the Greater Sacramento Region,” concluded Ford.
The bank reported net income of $335,000 for the fourth quarter of 2017, down from $2.6 million in the same period of 2016. The decrease was due to a $2.57 million increase in the provision for income taxes, an increase in non-interest expenses and a decrease in non-interest income.
Total assets for the year increased by $218.3 million for a total of $1.66 billion.
Fresno First Bank has record-setting year
Communities First Financial Corp., parent company of Fresno First Bank, reported record profit of $3.7 million for 2017, up 20 percent compared to 2016.
For the fourth quarter of 2017, net income was $877,000, down slightly from $932,000 in the same period of 2016.
With the signing of the Tax Cuts and Jobs act of 2017, the bank made a one-time adjustment to the value of its deferred tax assets (DTAs) causing a fourth-quarter tax expense of $325,000.
“While the benefits of lower tax rates in 2018 and beyond will be substantial for our Company and for most U.S. corporations, balance sheet adjustments for DTAs are generating considerable inconsistencies in fourth quarter earnings for many companies, and we are no different,” said Steve Miller, president and CEO. “Excluding the DTA adjustment, net income increased 30% for the year, 14% from the preceding quarter and 29% for the fourth quarter compared to a year ago. Revenues were solid; deposits were up 12% for the year and 9% on a linked quarter basis, reflecting the strength of our franchise and growth in new customer relationships.”
The bank’s total assets at the end of 2017 were $407.4 million, up 8 percent from the third quarter of last year and also up 12 percent from Dec. 31, 2016.