Commerce First Bancorp Inc. (CMFB) filed Quarterly Report for the period ended 2009-09-30.
CommerceFirst Bancorp operates as a community bank alternative to the super-regional financial institutions that dominate its primary market area. The cornerstone of the Bank's philosophy is to provide superior individualized service to its customers. The Bank focuses on relationship banking providing each customer with a number of services familiarizing itself with and addressing itself to customer needs in a proactive personalized fashion. Commerce First Bancorp Inc. has a market cap of $10.22 million; its shares were traded at around $5.61 with and P/S ratio of 0.91.
Highlight of Business Operations:
The Company reported net income of $292.4 thousand for the nine month period ended September 30, 2009 as compared to net income of $400.6 thousand for the nine month period ended September 30, 2008. The reduced earnings in 2009 are the result of the increase in the provision for loan losses from $167.6 thousand during the first nine months of 2008 to $1.15 million for the same period in 2009. The Company is increasing its allowance for loan losses in recognition of the detrimental effect of the weakened economy on its loan customers and increases in loan volume. The level of impaired loans and the amount of loans for which specific reserves have been established have increased as compared to the nine months of 2008 resulting in the increase of provisions for loan losses during the nine months of 2009 as compared to the same period in 2008. Net interest income increased during 2009 as compared to 2008 by $968.4 thousand (23.0%). During 2008, the Company’s net interest income was negatively affected by the reduced interest rate environment initiated by the Federal Reserve Bank in late 2007. In the nine months of 2009, the average interest rate paid on interest bearing funds declined at a more rapid pace then the decline in the average interest rate earned on interest earning assets. This resulted in increases in net interest spread, net interest margin and net interest income. The increase in non-interest expenses of $194.1 thousand was somewhat offset by increases in non- interest income of $59.7 thousand. The largest non-interest expense increase was the $258.5 thousand increase in federal deposit insurance premiums.
Interest expense decreased by $271.1 thousand or 7.1% to $3.5 million for the nine months ended September 30, 2009 as compared to $3.8 million during the first nine months of 2008. This decrease was primarily attributable to the decrease in the cost of funds from 4.4% during the first nine of 2008 to 3.4% during the first nine months of 2009 as the result of declining interest rates on certificates of deposit. The decline in the cost of funds was partially offset by the increase in average interest bearing liabilities of $23.1 million during 2009 as compared to 2008.
Non-Interest Income. Non-interest income principally consists of gains from the sale of the guaranteed portion of Small Business Administration loans and from deposit account services charges. For the nine months ended September 30, 2009, gains on sales of the guaranteed portion of SBA loans were $164.4 thousand whereas gains on sales of SBA loans amounted to $222.1 thousand during the first nine months of 2008. Generally, the Bank desires to sell the guaranteed portion of most additional SBA loans resulting in a continuing stream of income that may vary significantly from quarter to quarter, depending in part upon the volume of loans actually sold. Deposit account service charges amounted to $338.6 thousand during the nine months ended September 30, 2009 as compared to $180.7 thousand for the same period in 2008 reflecting higher service charges assessed on deposit account activities. The Company increased service charge rates as well as chargeable items during 2009.
Non-Interest Expense. Non-interest expense increased by $194.1 thousand during the nine month period ended September 30, 2009 as compared to the same period in 2008, a 5.0% increase. The increase in FDIC insurance assessments of $258.5 thousand, including $86.6 thousand in special assessment paid and $43 thousand of possible special assessments accrued for the fourth quarter of 2009, was the primary cause of the increase in non-interest expense for the nine months ended September 30, 2009. The status of further special insurance premium assessments is unknown as the FDIC continues to consider strategies to increase its liquidity and capital reserves, including the potential requirement to prepay three years of premiums.
Non-Interest Income. For the three months ended September 30, 2009, gains on sales of the guaranteed portion of SBA loans were $46.9 thousand whereas gains on sales of SBA loans amounted to $92.1 thousand during the same period in 2008. Deposit account service charges amounted to $130.8 thousand during the three months ended September 30, 2009 as compared to $63.8 thousand for the same period in 2008 reflecting higher service charges assessed on deposit account activities. The Company increased service charge rates as well as chargeable items during 2009.
General. The Company’s assets at September 30, 2009 were $195.3 million, an increase of $28.7 million or 17.2%, from December 31, 2008. Gross loans totaled $179.8 million is comprised of real estate loans of $113.1 million, an increase of $26.8 million, or 17.5%, from December 31, 2008 and commercial loans of $66.7 million, an increase of $7.9 million, or 13.5% from December 31, 2008. At September 30, 2009, deposits totaled $173.7 million an increase of $28.5 million, or 19.5%, from December 31, 2008. Deposits at September 30, 2009 are comprised primarily of certificates of deposit of $135.8 million, NOW and Money Market accounts of $9.3 million, savings accounts of $7.0 million and noninterest bearing deposits of $21.6 million.
Rate This Article: |
  |