ICB Financial Third Quarter 2010 Financial Performance

ONTARIO, Calif., Oct. 21 /PRNewswire-FirstCall/ -- ICB Financial (OTC Bulletin Board: ICBN)

Letter to Our Customers and Shareholders

Core operating performance remains strong, accompanied by a trend of ongoing improvement in asset quality, for ICB Financial ("ICBF") and its wholly owned subsidiary Inland Community Bank ("ICB") in the first nine months of 2010. Net income continued to trend upward with consolidated income for the nine months at $1.013 million, compared to a ($379,000) loss in 2009. Net income recorded by ICB was even higher, at $1.301 million.

While consolidated income was suppressed by impairment losses on loans held by ICBF, the Company has made notable progress in reducing non-performing assets, a process that was particularly aggressive in December 2009. ICBF is now reaping the benefits of this move and subsequent efforts to strengthen the loan portfolio are reflected in a reduction in non-performing assets of 57.3% in the first nine months compared to the same period in 2009.

Lower loan loss provisions due to decreased charge-off's and improved portfolio performance continue to be a major driver of the Company's improved profitability, with loan loss provisions dropping from $2.6 million in 2009 to $.4 million in 2010. Although significant improvements in asset quality have been achieved since 2009, we remain committed to maintaining adequate reserves and have increased the ALLL from 1.65% of total loans in 2009 to 2.49% of total loans in 2010.  

The Company's operating results are positively impacted by stable core deposit relationships. Core deposits, which represent 83% of total deposits at September 30, 2010, continue to be ICB's primary source of funds. As the environment for new deposits remains highly competitive, Management is exploring new initiatives to provide improved organic deposit growth. Total deposits at September 30, 2010 increased 1.9% over the same period in 2009 and the Company expects to take further steps that will enable continued deposit growth into the future. At the same time, our strong net interest margin has been essential in improving profitability. For the first nine months, average net interest margin was a healthy 4.39%.

While economic conditions show signs of stabilizing, the local business environment continues to show lackluster improvement, and deteriorating real estate values also impact the commercial sector. The Company thus remains prudent in maintaining a sustainable approach to growth through lending. Market conditions as well as our responsible lending policies resulted in a conservative 1% growth in total loans, which were at $211.9 million for the first nine months of 2010, compared to $210.0 million for the same period in 2009.

The Company's financial performance and liquidity position remain strong relative to peer banks. ICB already had a favorable Texas Ratio under the 38% average of State of California banks, and has reduced it even further in 2010. The Texas Ratio, a risk-factor measurement indicative of a bank's credit problems, was measured at an impressive 11.2% at September 30, 2010 for ICBF compared to 25.1% covering the same period in 2009.

The Company is committed to continuing to take effective measures that strengthen our franchise and market position. ICBF generated an annualized return on average equity of 4.36% and a return on average assets of 0.48%, a 390% and 352% improvement, respectively, compared to the first nine months of 2009.

Financial Performance highlights for ICBF for the first nine months of 2010 ended September 30, 2010 (compared to the same period in 2009) include:

• Total assets were $288.8 million compared to $272.9 million in 2009, an increase of 5.8%.
• Net income was $1,013,000 compared to a net loss of ($379,000) in 2009, up a positive $1.4 million or over 367%.
• Total loans were $211.9 million compared to $210.0 million in 2009, an increase of 1.0%.
• Total deposits were $238.9 million, up 1.9% or $4.5 million compared to 2009.
• The Efficiency ratio was 76.5%, compared to 74.0% in 2009.
• Combined Non-performing assets decreased to 1.39% of total assets compared to 3.45% in 2009.
• Combined past due loans were 0.5% of total loans compared to 5.9% in 2009, representing a 91% reduction in past due loans.
• Net earnings per common share were $0.20 compared to net loss of ($0.07) in 2009.
• Provision for loan and lease losses was $400M versus a $2,626M provision expense in 2009.
• Gross interest revenue was $10.1 million for the first nine months of 2010 compared to $10.3 million in 2009, a decrease of 2.2%.
• Important Ratios for ICB at September 30, 2010:
  • Total Risk-Based Capital – 15.0%; minimum for well capitalized under regulatory guidelines is 10.0%.
  • Tier 1 Leverage Capital – 9.6%; minimum for well capitalized under regulatory guidelines is 5.0%.
  • ALLL for ICB as a percent of loans (excludes loans held for sale) was 2.49%.
  • Net charge-offs for 2010 as a percent of 2010 average total loans were 0.19%.
  • Total OREO and Non-accrual loans (NPA's) to total risk-based capital were 7.2% for ICB.
  • Average Net Interest Margin was a healthy 4.39%.

Banking is the business of managing risks and we have been proactive and vigilant in managing our liquidity position, our interest rate risk, and our credit risk. In addition, we augmented our management staff with experienced professionals to guide us in effectively managing operational, compliance, strategic, and pricing risks. This team of professional bankers has been instrumental in enabling us to reduce expenses, maximize income, and provide substantial improvement in asset quality.

As we finish 2010 and begin our planning for next year, we are confident that the hard work that has culminated in significantly improved performance will serve as a basis for continued growth in profitability and deposits. In 2010, the Bank celebrated a noteworthy milestone: our 20th anniversary. As we go forward, we expect to reward the support of our customers and shareholders with ongoing stability and sustainable growth.

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.

ICB Financial and its wholly owned subsidiary, Inland Community Bank N.A. never asks for your account or personal information via email. When emailing us, please do not include any non-public information such as account numbers or Tax Identification Number.

SOURCE ICB Financial