CU Bancorp reports solid 3Q earnings
CU Bancorp, the parent company of wholly owned California United Bank, today reported financial results for the third quarter of 2012.
The results for the quarter reflect two months of combined operations with Premier Commercial Bancorp and its subsidiary Premier Commercial Bank, which were merged into CU Bancorp and California United Bank, respectively, on July 31, 2012, and include two significant non-recurring items: for the third quarter of 2012, CU Bancorp reported a net loss of $932 thousand, or $0.10 per share, which compares to net income of $601 thousand, or $0.09 per fully diluted share, for the third quarter of 2011. Pre-tax earnings before merger-related expenses increased by 6.5 percent to $1.13 million compared to $1.06 million in the third quarter of 2011;
total assets were $1.27 billion at September 30, 2012, an increase of $360 million or 40 percent from June 30, 2012; total loans increased $306 million or 63 percent from June 30, 2012 which includes net organic loan growth of $51.0 million, or 10 percent from the end of the prior quarter; net interest margin increased to 3.57% compared to 3.37% for the prior quarter.
Total deposits grew $302 million or 38 percent from June 30, 2012 including net organic deposit growth of $24.2 million, or 3 percent from the end of the prior quarter. Net charge-offs declined to $44 thousand for the third quarter of 2012, compared to $563 thousand for the second quarter of 2012.
Continued status as well-capitalized, the highest regulatory category. At September 30, 2012, the ratio of total capital to risk-based assets was 12.24 percent; the ratio of Tier 1 capital to risk-based assets was 11.43 percent; and the Tier 1 leverage ratio was 10.01 percent.
We had a very eventful quarter, highlighted by the completion of our merger with Premier Commercial Bancorp, surpassing $1 billion in total assets, and preparing for our listing on the Nasdaq Capital Market, said David Rainer, President and Chief Executive Officer of CU Bancorp and California United Bank. In addition to the significant events in the quarter, we continued to effectively execute on our business development initiatives, which helped generate a $51.0 million organic increase in our total loans.
This loan growth was driven by the combination of existing borrowers expanding their lending relationships with CUB and the addition of new commercial and entrepreneurial customers who value the customized products and services that we offer and our commitment to exceptional customer service.
The Bank's net interest income was positively impacted in both the second and third quarters of 2012 by the recognition of the discount earned on early payoffs of acquired loans. The Bank recorded $214 thousand and $193 thousand in discount earned on early loan payoffs of acquired loans in the second and third quarters of 2012, respectively.
Net interest margin in the third quarter of 2012 was 3.57 percent, compared to 3.61 percent in the third quarter of 2011 and 3.37 percent in the second quarter of 2012. The increase in net interest margin from the second quarter of 2012 is primarily attributable to a higher percentage of loans in the mix of interest-earning assets. The Company's average yield on loans was 5.59 percent in the third quarter of 2012, compared to 5.56 percent in the second quarter of 2012. The increase was primarily attributable to the accretable yield recognized on PCB loans marked to fair value at the time of the merger, which positively impacts interest income.
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