Net Income up 23% over Third Quarter
2013
Total Assets exceed $500 million for the
first time
Presidio Bank (OTCBB: PDOB), a Bay Area business bank, today
reported unaudited results for the third quarter ended September
30, 2014 with net income for the quarter of $895 thousand, a 23%
increase over the $728 thousand achieved in the third quarter of
2013. Deposits and total assets also grew to record levels during
the quarter.
“We are pleased to have passed the $500 million in total assets
milestone,” said Presidio Bank President and CEO Steve Heitel. “The
Bank had solid deposit and income growth during the quarter. While
loans declined modestly due to some construction loan payoffs, we
expect resumption of loan growth in the fourth quarter, which is
traditionally our strongest.”
Financial Highlights
- Total Loans Outstanding declined by $8
million or 2% over the quarter ended June 30, 2014 but increased by
$50 million or 14% over the quarter ended September 30, 2013. A
number of construction loans paid off earlier than anticipated as a
reflection of the robust real estate market in the San Francisco
Bay Area. Prior to the modest decline this quarter, the Bank had
enjoyed six consecutive quarters of loan growth.
- Total Deposits increased by $41 million
or 10% from the quarter ended June 30, 2014 and by $77 million or
20% from the quarter ended September 30, 2013. As has happened in
the past, a number of depositors had significant inflows towards
the end of the quarter. It is likely these balances will normalize
during the fourth quarter. The trend line for Deposit Growth
remains positive.
- Net Interest Income of $4.8 million in
the third quarter was up 4% over the second quarter of 2014. This
growth was inflated somewhat by lack of Loan Loss Provision Expense
in the third quarter versus $81 thousand taken in the second
quarter. After normalizing this impact, Net Interest Income still
grew by 2.6% during the quarter and was up by 16% over the same
quarter in 2013.
- Operating Expenses increased 2% from
the second quarter primarily due to increased Compensation Expense
and the commencement of lease expense in September for the Bank’s
new San Mateo Office.
- Net Income Applicable to Common
Shareholders was $806 thousand for the quarter, an increase of 38%
over the third quarter of 2013. Net Income Applicable to Common
Shareholders was up 9% over the second quarter of 2014.
- As previously announced, the Bank
completed a capital raise during the quarter, which consisted of
$10 million of 8%, 10-year maturity, subordinated notes which it
expects will count as Tier II capital. The debt is reflected on the
September 30 balance sheet however, since it closed at the end of
September, interest expense related to this debt was nominal for
third quarter.
- Credit Quality remains strong. The Bank
has just two borrowers classified as non-performing totaling $1.4
million. This represents just 0.34% of total loans outstanding.
Loan Loss Reserves of $4.9 million cover non-performing loans 3.5
times. At September 30, 2014, the Bank had one past due loan
totaling $2.1 million. That loan subsequently paid off in early
October.
- Diluted Earnings per Common Share were
$0.18 for the quarter compared to $0.17 in the second quarter of
2014 and $0.14 in the third quarter of 2013.
- Book Value per Share increased to $9.53
per share as of September 30, 2014 from $9.31 per share at June 30,
2014 and $8.74 per share at September 30, 2013.
“I am pleased that the Bank successfully raised $10 million in
Tier II capital to help fund our next stage of growth as we
continue to expand in the San Francisco Bay Area,” said Presidio
Bank Chairman and Founder, Jim Woolwine. “As part of our growth
strategy and capital planning, our Board of Directors conducts an
ongoing review of our capital position and capital needs. As part
of that review, we will continue to assess additional capital
options, including a common equity capital raise in 2015 to enhance
our Tier 1 capital.”
3rd Quarter 2014
Financial Results
(Dollars in thousands, except per share
amounts, unaudited)
Condensed Balance Sheet
9/30/2014
6/30/2014 Change
9/30/2013 Change
12/31/2013 Change Cash and due
from banks 7,972 2,517 216.7 % 5,557 43.4 % 5,694 40.0 % Interest
bearing due from banks 84,612 56,366
50.1 % 51,284 65.0 %
49,545 70.8 % Total cash and equivalents
92,584 58,883 57.2 % 56,841 62.9 % 55,239 67.6 % Investment
securities 14,419 14,492 -0.5 % 14,218 1.4 % 14,230 1.3 % Loans,
net of fees 401,421 408,752 -1.8 % 351,470 14.2 % 373,421 7.5 %
Allowance for loan losses (4,952 ) (4,952 )
0.0 % (4,865 ) 1.8 % (4,867 )
1.7 % Net loans 396,469 403,800 -1.8 % 346,605 14.4 %
368,554 7.6 % Premises and equipment, net 1,090 1,032 5.6 % 909
20.0 % 932 17.0 % Other assets and interest receivable 5,773
5,386 7.2 % 4,949
16.6 % 4,863 18.7 % Total assets
510,335 483,593 5.5 % 423,523 20.5 % 443,818 15.0 %
Non-interest-bearing demand 167,411 132,538 26.3 % 125,452 33.4 %
132,546 26.3 % Interest bearing transaction 63,260 61,222 3.3 %
65,749 -3.8 % 71,760 -11.8 % Money market and savings accounts
166,866 169,909 -1.8 % 141,198 18.2 % 153,180 8.9 % Time deposits
52,967 45,736 15.8 %
41,108 28.8 % 39,672
33.5 % Total deposits 450,504 409,405 10.0 % 373,507 20.6 %
397,158 13.4 % Borrowings 10,048 26,147 -61.6 % - NM - NM Other
liabilities 2,913 2,095
39.0 % 2,523 15.5 % 2,376
22.6 % Total liabilities 463,465 437,647 5.9 % 376,030 23.3
% 399,534 16.0 % Preferred stock 6,860 6,844 0.2 % 11,051
-37.9 % 6,811 0.7 % Common stock 43,949 43,798 0.3 % 43,333 1.4 %
43,540 0.9 % Retained earnings (3,797 ) (4,588 ) 17.2 % (6,683 )
43.2 % (5,898 ) 35.6 % Other comprehensive income (142 )
(108 ) -31.5 % (208 )
31.7 % (169 ) 16.0 % Total shareholder’s equity
46,870 45,946 2.0 %
47,493 -1.3 % 44,284
5.8 % Total liabilities and equity 510,335 483,593 5.5 %
423,523 20.5 % 443,818 15.0 %
Book value per share
Book value per share $ 9.53 $ 9.31 $ 8.74 $ 8.99 Total shares
outstanding EOP 4,199 4,199 4,170 4,170
Capital
Ratios Tier 1 leverage ratio 9.7 % 9.6 % 11.1 % 10.0 % Tier 1
risk-based capital ratio 10.1 % 10.0 % 11.9 % 10.5 % Total
risk-based capital ratio 13.5 % 11.2 % 13.2 % 11.7 % Tangible
common risk-based ratio 8.6 % 8.5 % 9.1 % 8.8 %
Condensed Statement of Income
For the three months ended For the nine months
ended 9/30/2014
6/30/2014
Change
Fav./(Unfav.)
9/30/2013
ChangeFav./(Unfav.)
9/30/2014 9/30/2013
Change
Fav./(Unfav.)
Interest income 4,963
4,841 2.5 % 4,317 15.0 % 14,377 12,366 16.3 % Interest expense
197 195 (1.0 %)
209 5.7 % 586 607
3.4 % Net interest income 4,766 4,646 2.6 % 4,108
16.0 % 13,791 11,759 17.3 % Provision for loan loss -
81 NM -
NM 81 - NM
Net interest income after provision 4,766 4,565 4.4 % 4,108
16.0 % 13,710 11,759 16.6 % Other income 182 182 0.0 % 146
24.9 % 534 420 27.2 % Compensation and benefit expenses
2,165 2,064 (4.9 %) 1,794 (20.7 %) 6,416 5,463 (17.4 %) Occupancy
and equipment expenses 393 373 (5.4 %) 383 (2.6 %) 1,139 1,153 1.2
% Data processing 261 261 0.0 % 249 (4.9 %) 778 748 (4.0 %)
Professional and legal 88 118 25.4 % 105 15.9 % 302 449 32.7 %
Other operating expenses 498 525
5.1 % 491 (1.5 %) 1,486
1,489 0.2 % Total operating
expenses 3,405 3,341 (1.9
%) 3,021 (12.7 %) 10,121
9,301 (8.8 %) Net income before taxes
1,543 1,406 9.7 % 1,233 25.1 % 4,123 2,877 43.3 % Income taxes
648 576 (12.5 %)
506 (28.2 %) 1,706
1,180 (44.6 %) Net income 895 830 7.8 % 728 23.0 %
2,417 1,698 42.4 % Preferred dividends 89
89 0.0 % 142 37.5
% 267 427 37.5 % Net
income to common 806 741 8.8 % 585 37.7 % 2,150 1,271 69.2 %
Earnings Per Share Basic earnings per share $ 0.19 $ 0.17 $
0.14 $ 0.50 $ 0.30 Diluted earnings per share $ 0.18 $ 0.17 $ 0.14
$ 0.48 $ 0.30 Average shares outstanding 4,187 4,171 4,131 4,167
4,113 Average diluted shares 4,390 4,352 4,177 4,338 4,141
Performance Ratios Return on average assets 0.73 % 0.69 %
0.68 % 0.68 % 0.55 % Return on average common equity 8.02 % 7.64 %
6.40 % 7.37 % 4.74 % Net interest margin 3.96 % 3.95 % 3.88 % 3.97
% 3.89 % Cost of funds 0.18 % 0.18 % 0.22 % 0.19 % 0.22 %
Efficiency ratio 68.8 % 69.2 % 71.0 % 70.7 % 76.4 %
Average Balances Total assets 484,699 479,221 427,409
471,881 411,506 Earning assets 476,849 471,872 420,255 464,504
404,666 Total loans 403,372 399,895 342,378 395,218 328,304 Total
deposits 426,552 419,923 377,918 414,256 362,689 Common equity
39,892 38,931 36,295 38,991 35,814 NM = Not Meaningful
About Presidio Bank
Presidio Bank provides business banking services to small and
mid-size businesses, including professional service firms, real
estate developers and investors, and not-for-profit organizations,
and to their owners who desire personalized, responsive service
with access to local decision makers. Presidio Bank offers clients
the resources of a large bank combined with the personalized
services of a neighborhood bank. Presidio Bank is headquartered in
San Francisco, California and currently operates four banking
offices in San Francisco, Walnut Creek, San Rafael and Palo Alto.
More information is available at www.presidiobank.com. Presidio
Bank is a member of FDIC and an Equal Housing Lender.
This press release contains certain forward-looking statements
that involve risk and uncertainties. These statements are
identifiable by use of the words “believe,” “expect,” “intend,”
“anticipate,” “plan,” “estimate,” “project,” or similar
expressions. The risks and uncertainties that may affect the
operations, performance, development, growth projections and
results of Presidio Bank’s business include, but are not limited
to, the growth of the economy, interest rate movements, timely
development by Presidio Bank of technology enhancements for its
products and operating systems, the impact of competitive products,
services and pricing, client-based requirements, Congressional
legislation, changes in regulatory or generally accepted accounting
principles and similar matters. Readers are cautioned not to place
undue reliance on forward-looking statements which are subject to
influence by the named risk factors and unanticipated future
events. Actual results, accordingly, may differ materially from
management expectations.
Presidio BankSteve Heitel, 415-229-8428President & CEOorEd
Murphy, 415-229-8403EVP/CFOorAnnette Gelinas, 415-229-8415 (o) /
925-787-2956 (c)SVP/Marketing Directoragelinas@presidiobank.com