Fresno First Bank : Communities First Financial Corporation Reports Record Earnings For 2015

Microsoft Word - 2015 Q4 Earnings Release FOR IMMEDIATE RELEASE Contact Steve Miller - CEO or Steve Canfield - CFO 559-439-0200

COMMUNITIES FIRST FINANCIAL CORPORATION REPORTS RECORD EARNINGS FOR 2015

2015 Earnings of $2.54 million up 19.9% over prior year.

Fresno, CA - January 19, 2016 - Communities First Financial Corporation (the "Company") (OTCQX: CFST), Fresno, CA, the parent company of Fresno First Bank (the "Bank"), reported today earnings for the year ended December 31, 2015 of $2.54 million, an increase of $421 thousand or 19.9% from net income of $2.12 million in 2014. Fully diluted earnings per share for 2015 were $.93 compared to $.79 for 2014. For the fourth quarter of 2015, the Company reported net income of $543 thousand or $.20 per fully diluted share compared to 2014 fourth quarter income of $538 thousand or $.20 per fully diluted share.

Factors that contributed to the annual increase in earnings include a $1.3 million, or 12.5%, increase in gross revenue consisting of a $1.1 million increase in net interest income and a $200 thousand increase in non-interest income. The increase in interest income was primarily the result of increased loans outstanding while the increase in non-interest income was a result of a number of contributing factors including; gains from the sale of SBA loans, increased Merchant Services revenue and gains from the securities portfolio. In 2015, the Company reduced its provision for loan losses by $90 thousand while recording net recoveries on previously charged off loans. These gains were partially offset by a $610 thousand, or 8.8% increase in operating expenses.

"Our growth this past year was outstanding and profits exceeded all previous levels. In September we were honored with the Great Game of Business All-Star award in St. Louis and we topped the Fresno District SBA lending list for the third year in a row" stated Steve Miller, President and CEO of Communities First. "The team is proud of our 2015 results and we are now focused on building on this success in the coming year."

At December 31, 2015, the Company's total assets grew to $295.7 million, compared to $253.7 million at December 31, 2014 an increase of $42.0 million or 16.6%. Total deposits reached $268.1 million at year end, compared to $227.8 million at December 31, 2014, an increase of $40.2 million or $17.7%, while loans outstanding increased $26.2 million or 16.1% ending 2015 at $188.6 million compared to $162.4

million at year-end 2014. Shareholders' equity at December 31, 2015 was $27.0 million, reflecting a capital to total assets ratio of 9.1%.

Non-performing assets consisted of one non-accrual loan relationship totaling $2.36 million at December 31, 2015 compared to non-performing assets of $49 thousand at December 31, 2014. The Company had no other past due loans at year end 2015 compared to a delinquency ratio of 2.01% of total loans outstanding at December 31, 2014. The Company's reserve as a percentage of total loans outstanding was 1.89% at December 31, 2015, compared to 1.87% at December 31, 2014. Management consistently monitors the credit conditions within the portfolio and the overall market and believes the loan loss reserve is prudent and sufficient.

Communities First Financial Corporation, headquartered in Fresno, California, serves as the parent holding company for Fresno First Bank founded in December 2005. Communities' First stock is quoted on the OTCQX Marketplace under the symbol "CFST". Additional information about Communities First and Fresno First Bank is available from the Company's website at www.fresnofirstbank.com or call 559- 439-0200.

###

This earnings release may contain forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Company's ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Company's business; international developments; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events.

The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

(In thousands, except per share and ratio data)

Thre e Months Ende d Tw e lve Months Ende d

Dec 31,

2015

Dec 31,

2014

% Change Dec31,

2015

Dec 31,

2014

% Change

STATEMENT OF INCOME DATA: Interest income	$ 2,833	$ 2,622	8.0%	$ 11,041	$ 9,970	10.7%
Interest expense	112	110	1.6%	422	423	-0.1%
Net Interest Income	2,721	2,513	8.3%	10,619	9,548	11.2%
Provision for loan losses	270	380	-28.9%
Net interest income after provision	2,721	2,513	8.3%	10,349	9,168	12.9%
Non-interest income	236	238	-1.0%	1,327	1,073	23.7%
Non-Interest Expense: Salaries & employee benefits	1,185	1,097	8.0%	4,182	3,982	5.0%
Occupancy expense	137	127	8.2%	517	509	1.7%
Other operating expense	734	621	18.3%	2,762	2,304	19.9%
Non-interest expense	2,074	1,872	10.7%	7,540	6,930	8.8%
Net income before tax	884	879	0.6%	4,135	3,310	24.9%
Tax provision (benefit)	341	341	0.2%	1,596	1,192	34.0%
Net income after tax	543	538	0.8%	2,539	2,118	19.9%

EARNINGS PER SHARE:

Fully diluted $ 0.20 $ 0.20 $ 0.93 $ 0.79

SELECTED FINANCIAL RATIOS:
Return on average assets	0.72%	0.82%	0.94%	0.88%
Return on average equity	8.10%	8.95%	9.80%	9.16%
Net interest margin	3.71%	3.93%	4.04%	4.14%
Efficiency ratio	70.34%	68.01%	63.41%	64.66%

BALANCE SHEET DATA - PERIOD END BALANCES:

Total assets	$ 295,667	$ 253,669	16.6%
Total loans outstanding	188,607	162,406	16.1%
Allowance for loan losses	(3,556)	(3,043)	16.9%
Investment securities	74,458	71,204	4.6%
Cash and cash equivalents	31,905	18,325	74.1%
Non-interest bearing deposits	120,282	90,227	33.3%
Interest bearing deposits	147,808	137,616	7.4%
Total deposits	268,090	227,843	17.7%
Total equity	26,616	24,323	9.4%
Other comprehensive income (loss)	362	404	-10.4%
Shareholders equity, net	26,978	24,727	9.1%

Loans to deposits	70.35%	71.28%
Allowance for loan losses to total loans	1.89%	1.87%
Nonperforming assets to total assets	0.80%	0.02%
Net loan losses (recoveries) to average loans	(0.14%)	(0.10%)
Equity to assets	9.12%	9.75%
Common shares outstanding	2,683,417	1,967,502
Fully diluted shares end of period	2,712,493	2,736,921
CFST - Stock Price (last trade at quarter end)	$ 10.16	$ 10.75
Book Value per Share	$ 9.95	$ 9.03