ICB Financial First Half 2010 Financial Performance

ONTARIO, Calif., July 19 /PRNewswire-FirstCall/ --

ICB Financial (OTC Bulletin Board: ICBN)

Letter to Our Customers and Shareholders

Management and the Board of Directors took steps in the latter part of 2009 geared toward improving the profitability of ICB Financial ("ICBF") and its wholly owned subsidiary Inland Community Bank ("ICB").  We are pleased to report that these steps resulted in positive earnings for the first half of 2010, and we continue to see progress as we move into the second half of the year.  ICBF consolidated and ICB remained profitable for the entire first half of 2010 with a net income of $860,000 for ICB. Consolidated income for ICBF was $562,000, which reflected OREO impairment charges.

Credit costs continue to stabilize as we work to manage the remaining weaknesses in our loan portfolio that emanate from local market conditions. The main contributor to our improved operating results for the first six months of 2010 is the lower provision for loan losses in 2010 as compared to last year as a result of the substantially reduced problem assets. This is demonstrated by a reduction in non-performing assets of 51.9% from the same time period in 2009. However, even with the improvement in asset quality, we will continue to cautiously make additions to our Allowance for Loan Losses (ALLL), which was 2.09% of total loans for ICBF and 2.37% for ICB as of the end of the second quarter. We are committed to maintaining adequate reserves should the national economy present unforeseen future challenges.

In the State of California, we face one of the most difficult environments for developing new deposit customers due to intense competition for deposits and consumer concerns about moving money from one bank to another. Despite this challenge, ongoing efforts on the part of our Managers and Bankers have achieved a 3% increase in our deposits over the same period last year. In addition, more than 75% of ICB's total deposits are considered to be "core" and thus contribute to our exceptional net interest margin.

Through the remainder of 2010 we are committed to additional organic growth with new core deposit production. It is important, however, that this growth remains profitable and allows us to maintain our very sound interest margins. Our strong net interest margins have been beneficial in helping us to enhance profitability and loan loss reserves as we continually strengthen our loan portfolio.

Financial Performance highlights for ICBF for the first six months of 2010 ended June 30, 2010 include:

• Total assets were $276.8 million at June 30, 2010, compared to $274.8 million at June 30, 2009, an increase of less than 1.0%.
• Net income for the first half of 2010 was $562,000 compared to a net loss of ($282,000) for the same period in 2009.
• Total loans at June 30, 2010 were $206.8 million compared to $217.0 million at June 30, 2009, a decrease of 4.7%.
• Total deposits at June 30, 2010 were $242.7 million, up 2.9% or $6.7 million compared to June 30, 2009.
• The Efficiency ratio for the six months ended June 30, 2010 was 75.6%, a substantial improvement from 86.0% for the same period in 2009.
• Combined Non-performing assets decreased to 1.71% of total assets at June 30, 2010 compared to 3.62% at June 30, 2009.
• Combined past due loans at June 30, 2010 were 1.9% of total loans compared to 5.4% at June 30, 2009, representing a 65% reduction in past due loans.
• Net earnings per common share for the first six months of 2010 were $0.11 compared to net loss of ($0.06) for the same period in 2009.
• Provision for loan and lease losses for ICB was $200M and impairment expense for ICBF was $164M totaling $364M combined provision expense for 2010 versus $1,100M for 2009.
• Gross interest revenue of $6.618 million the first six months of 2010 compared to $6.891 million for the same period in 2009, a decrease of 4.0%.
• Important Ratios for ICB at June 30, 2010:
  • Total Risk-Based Capital –14.6%; minimum for well capitalized under regulatory guidelines is 10.0%.
  • Tier 1 Leverage Capital – 9.9%; minimum for well capitalized under regulatory guidelines is 5.0%
  • ALLL for ICB as a percent of loans (excludes loans held for sale) was 2.37%.
  • Net charge-offs for 2010 as a percent of 2010 average total loans were 0.17%.
  • Total OREO and Non-accrual loans (NPA's) to total risk-based capital at June 30, 2010 were 11.0% for ICB.
  • Average Net Interest Margin for the first six months of 2010 was a healthy 4.28%.

We continue to deepen our customer relationships and endeavor to play a vital role in the local economic recovery by entertaining loan requests from all credit-worthy customers. Our entire team is focused on providing the type of service that is essential to developing customer loyalty and ensuring long-term customer relationships in the years ahead. And while economic challenges remain, our team of experienced bankers has navigated through similar situations in the past. We have also seen early signs of economic recovery and improvements in underlying trends, which make us more optimistic that the bulk of the credit crisis is now behind us.

With our strong capital and liquidity positions, as well as our ongoing commitment to increase operating efficiencies, reduce expenses and our substantial reduction in non-performing loans, our focus is to position the Bank to sustain the positive trends of the first six months through the remainder of the year and beyond. At the same time, we remain vigilant about managing our risks.

As always, we are grateful for the continuing support of our customers and shareholders and we look forward to building our franchise for long-term growth as well as long-term shareholder value.

James S. Cooper

President and Chief Executive Officer

Forward-looking statements

Certain statements in this press release constitute forward-looking statements that are based upon current management expectations and, therefore, are subject to certain risks and uncertainties that could cause actual results, performance, or achievements to differ materially from those expressed, suggested, or implied. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."  Forward-looking statements are effective only as of the date that they are made, and ICB Financial assumes no obligation to update this information to reflect occurrences or unanticipated events or circumstances after the date of such statements.

SOURCE ICB Financial