CCB Bankshares, Inc. Announces Strong Loan Growth of 17% and Continued Core Earnings Improvement

SOUTH HILL, Va., Aug. 16, 2016 /PRNewswire/ -- CCB Bankshares, Inc. (OTCQB: CZYB) today announced its unaudited results of operations for the second quarter of 2016.

Earnings

Net income to common shareholders for the second quarter of 2016 was $100,185, compared to net income to common shareholders of $175,011 after preferred stock dividends of $9,333 for the second quarter of 2015.  On a basic and diluted basis, this was equivalent to $0.07 per share compared to $0.12 per share for the second quarter of 2015. 

President and CEO James R. Black stated, "We are pleased with the second quarter performance as we continued to expand our loan portfolio and experienced solid core earnings growth.  Bottom line net income was reduced as we absorbed a full quarter of subordinated debt interest and replenished the loan loss reserve for loan growth and a partial loan charge off from a loan made during 2006.  Overall, we are making tremendous strides in expanding our market presence, creating internal efficiencies, and generating additional business that will drive positive operating leverage and market share higher."

In comparing the second quarter of 2016 to the same quarter in 2015, net interest income increased by $163 thousand or 11.0%.   The net interest margin for the second quarter of 2016 was 3.68%, flat to the margin for the second quarter of 2015.  On a year-to-date basis, the net interest margin at June 30, 2016 was 3.78%, compared to 3.67% for the first six months of 2015.  Continued lower repricing of deposits contributed to the 8 basis point improvement year-over-year.

Noninterest income totaled $200,544 for the second quarter of 2016 compared to $194,234 for the same period in 2015, a 3.3% increase.  Service charge income was down almost 16% as the company moves toward relationship pricing and collection of NSF fees becomes more challenging.  Noninterest expense of $1,495,357 represents a 14.0% increase from $1,312,672 for the second quarter of 2015.  Noninterest expense year-to-date is at $2.9 million versus $2.7 million at June 2015. Several factors contributed to the increase, including addition to both business development and support staff, FDIC premiums on a higher deposit base, audit and compliance costs for the ever-increasing regulatory burden, and operating expenses for the Louisburg branch which opened as a branch in December 2015.  Provision expense at June 30, 2016 was $190 thousand compared to $100 thousand at June 30, 2015.  As loan growth continues, particularly in new markets, commensurate additions to the provision are just careful operating strategy. 

Net income for the first six months of 2016 available to common shareholders was $369,761 compared to $380,770 for the first six months of 2015.  While on its face this translates to a 2.9% decrease, core earnings for the first six months compares favorably.  Pre-tax core earnings (absent provision expense and gains or losses on sale of other real estate) at June 30, 2016 exceeded June 30, 2015 by 19.9%. 

Growth

At June 30, 2016, total assets were $191.5 million, up $11.3 million or 6.3% from December 31, 2015. Gross loans were $162.0 million, an increase of $11.0 million or 7.3% from December 31, 2015 and 16.8% higher than the second quarter of 2015.  Deposits totaled $162.9 million, an increase of $9.4 million or 6.1% from December 31, 2015. 

Asset Quality

At June 30, 2016 the allowance for loan losses was $2.1 million or 1.29% of loans.  Net charge-offs at June 30, 2016 were $5 thousand.  Provision expense at June 30, 2016 was $190 thousand compared to $100 thousand at June 30, 2015.  Nonperforming loans at June 30, 2016 were $643 thousand, compared to $516 thousand at December 31, 2015 and $685 thousand at June 30, 2015.

At June 30, 2016, other real estate owned totaled $154 thousand compared with $217 thousand at year end 2015 and $435 thousand at June 30, 2015.  In aggregate, nonperforming assets equaled $797 thousand or 0.4% of total assets at June 30, 2016, compared to $1.1 million or 0.7% of total assets at June 30, 2015, a reduction of $323 thousand or 28.8%.

Capital 

As of June 30, 2016, the Bank's total risk-based capital was 14.1% and its Tier 1 leverage was 10.3%, compared to 15.5% and 10.7%, respectively at June 30, 2015.  Accelerated loan growth of 17% year-over-year resulted in the decline in capital ratios.  On February 18, 2016 the Company issued $3.5 million in subordinated debt at a 7.0% rate fixed for 10 years. From the proceeds, $1.0 million was used to repay the remaining Small Business Lending Fund preferred stock and the remaining funds are being held at the holding company.   Capital ratios exceed regulatory guidelines to be well-capitalized and the Bank's capital position enables it to provide the products and services demanded by the communities it serves.   

CCB Bankshares, Inc. is a Virginia-registered holding company headquartered in South Hill, Virginia.  Its primary subsidiary Citizens Community Bank, was opened in December 1999.  The Company operates six branches, three in Virginia and three in 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.

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