Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.307
billion asset bank holding company and parent company of Redding
Bank of Commerce (the “Bank”), today announced financial results
for the quarter and the year ended December 31, 2018. Net income
for the quarter ended December 31, 2018 was $4.8 million or $0.30
per share – diluted, compared with net income of $7 thousand or
$0.00 per share – diluted for the same period of 2017. Net income
for the year ended December 31, 2018 was $15.7 million or $0.96 per
share – diluted, compared with net income of $7.3 million or $0.48
per share – diluted for the same period of 2017.
Selected Tax Items:Financial performance for
both 2018 and 2017 includes “selected tax items” which complicate
reporting period comparisons. The 2018 results include a $1.5
million decrease in our income tax provision composed of a $988
thousand reversal of our uncertain tax position and a $484 thousand
benefit as a result of our cost segregation study and tangible
property review. These items were previously disclosed in our form
10-Q filed November 2, 2018. The 2017 results include a $2.5
million increase in our income tax provision as a result of the Tax
Cuts and Jobs Act of 2017 disclosed in our 2017 form 10-K filed on
March 9, 2018. Management believes that our financial results are
more comparative excluding the impact of these selected tax
items.
Non-GAAP Financial MeasuresIn addition to
results presented in accordance with generally accepted accounting
principles in the United States of America (GAAP), this press
release contains certain non-GAAP financial measures. We believe
that these non-GAAP financial measures provide investors with
information useful in understanding the Company’s financial
performance; however, readers of this document are urged to review
these non-GAAP financial measures in conjunction with the GAAP
results as reported.
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SELECTED NON-GAAP FINANCIAL INFORMATION -
UNAUDITED |
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(amounts in thousands except per share
data) |
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For The Three Months Ended |
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For The Twelve Months Ended |
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Reconciliation
of Net Income (GAAP) to Net Income |
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December 31, |
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September 30, |
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December 31, |
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Excluding Selected Tax Items (non-GAAP): |
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2018 |
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|
2017 |
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2018 |
|
2018 |
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|
2017 |
|
Net income (GAAP) |
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$ |
4,839 |
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$ |
7 |
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$ |
4,032 |
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$ |
15,730 |
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$ |
7,344 |
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Selected tax
items: |
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Reversal
of uncertain tax position (GAAP) |
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(988 |
) |
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— |
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— |
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(988 |
) |
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— |
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Benefit
from cost segregation study and tangible property review
(GAAP) |
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(484 |
) |
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— |
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— |
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(484 |
) |
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— |
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Deferred
tax asset write-down (GAAP) |
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— |
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2,490 |
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— |
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— |
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2,490 |
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Total selected tax
items |
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(1,472 |
) |
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2,490 |
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— |
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(1,472 |
) |
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2,490 |
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Net income excluding
selected tax items (non-GAAP) |
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$ |
3,367 |
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$ |
2,497 |
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$ |
4,032 |
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$ |
14,258 |
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$ |
9,834 |
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Earnings per share -
diluted (GAAP) |
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$ |
0.30 |
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$ |
— |
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$ |
0.25 |
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$ |
0.96 |
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$ |
0.48 |
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Effect of selected tax
items |
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(0.09 |
) |
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0.15 |
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— |
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(0.09 |
) |
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0.16 |
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Earnings per share -
diluted excluding selected tax items (non-GAAP) |
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$ |
0.21 |
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$ |
0.15 |
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$ |
0.25 |
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$ |
0.87 |
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$ |
0.64 |
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Non-GAAP Ratios: |
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Return on average
assets excluding selected tax items |
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1.01 |
% |
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0.79 |
% |
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1.23 |
% |
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1.11 |
% |
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0.82 |
% |
Return on average
equity excluding selected tax items |
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9.97 |
% |
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7.69 |
% |
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12.16 |
% |
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10.95 |
% |
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8.48 |
% |
Effective tax rate
excluding selected tax items |
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29.2 |
% |
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34.5 |
% |
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25.8 |
% |
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26.3 |
% |
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31.1 |
% |
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GAAP Information: |
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Return on average
assets |
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1.44 |
% |
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0.00 |
% |
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1.23 |
% |
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1.22 |
% |
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0.61 |
% |
Return on average
equity |
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14.32 |
% |
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0.02 |
% |
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12.16 |
% |
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12.08 |
% |
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6.34 |
% |
Effective tax rate |
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(1.7 |
)% |
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99.8 |
% |
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25.8 |
% |
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18.7 |
% |
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48.5 |
% |
Financial highlights for the year ended December 31,
2018:
- Net income of $15.7 million was an increase of $8.4 million
(114%) from $7.3 million earned during the same period in the prior
year. Earnings of $0.96 per share – diluted was an increase of
$0.48 (100%) from $0.48 per share – diluted earned during the same
period in the prior year and reflects the impact of 2,738,096
shares of common stock sold and issued in the second quarter of
2017.
- Expenses associated with our pending acquisition of Merchants
Holding Company totaled $844 thousand.
- Net interest income increased $6.2 million (15%) to $47.5
million compared to $41.4 million for the same period in the prior
year.
- Return on average assets improved to 1.22% compared to 0.61%
for the same period in the prior year.
- Return on average equity improved to 12.08% compared to 6.34%
for the same period in the prior year.
- Average loans totaled $915.4 million, an increase of $97.2
million (12%) compared to average loans for the same period in the
prior year.
- Average earning assets totaled $1.220 billion, an increase of
$96 million (9%) compared to average earning assets for the same
period in the prior year.
- Average deposits totaled $1.098 billion, an increase of $57
million (5%) compared to average deposits for the same period in
the prior year.
- Average non-maturing deposits totaled $930.2 million, an
increase of $94.4 million (11%) compared to the same period in the
prior year.
- Average certificates of deposit totaled $168.2 million, a
decrease of $37.5 million (18%) compared to same period in the
prior year.
- The Company’s efficiency ratio was 62.5% compared to 67.0%
during the same period in the prior year.
- Nonperforming assets at December 31, 2018 totaled $4.2 million
or 0.32% of total assets, a decrease of $1.7 million (28%) since
December 31, 2017.
- Book value per common share was $8.47 at December 31, 2018
compared to $7.82 at December 31, 2017.
- Tangible book value per common share was $8.36 at December 31,
2018 compared to $7.70 at December 31, 2017.
Financial highlights for the fourth quarter of
2018:
- Net income of $4.8 million ($0.30 per share –diluted) was an
increase of $4.8 million (100%) from $7 thousand ($0.00 per share –
diluted) earned during the same period in the prior year.
- Expenses associated with our pending acquisition of Merchants
Holding Company totaled $802 thousand.
- Net interest income increased $1.6 million (15%) to $12.5
million compared to $10.9 million for the same period in the prior
year.
- Return on average assets improved to 1.44% compared to 0.00%
for the same period in the prior year.
- Return on average equity improved to 14.32% compared to 0.02%
for the same period in the prior year.
- Average loans totaled $923.4 million, an increase of $84.4
million (10%) compared to average loans for the same period in the
prior year.
- Average earning assets totaled $1.260 billion, an increase of
$82 million (7%) compared the same period in the prior year.
- Average deposits totaled $1.158 billion, an increase of $75
million (7%) compared the same period in the prior year.
- Average non-maturing deposits totaled $1.001 billion, an
increase of $113 million (13%) compared to the same period in the
prior year.
- Average certificates of deposit totaled $157.0 million, a
decrease of $37.9 million (19%) compared to the same period in the
prior year.
- The Company’s efficiency ratio was 65.1% compared to 64.9% for
the same period in the prior year.
- Nonperforming assets at December 31, 2018 totaled $4.2 million
or 0.32% of total assets, an increase of $324 thousand (33%
annualized) compared to September 30, 2018.
- Book value per common share was $8.47 at December 31, 2018
compared to $7.82 at December 31, 2017.
- Tangible book value per common share was $8.36 at December 31,
2018 compared to $7.70 at December 31, 2017.
Randall S. Eslick, President and CEO commented: “We are pleased
to report our financial results for 2018. Our dedicated and
hard-working employees performed at a high level as reflected in
our strong core deposit and loan growth and enhanced shareholder
returns. Their outstanding efforts have positioned the company well
for continued success into the future.”
Forward-Looking Statements
This quarterly press release includes forward-looking
information, which is subject to the “safe harbor” created by the
Securities Act of 1933 and Securities Act of 1934. These
forward-looking statements (which involve our plans, beliefs and
goals, refer to estimates or use similar terms) involve certain
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Such risks
and uncertainties include, but are not limited to, the following
factors:
- Competitive pressure in the banking industry and changes in the
regulatory environment
- Changes in the interest rate environment and volatility of rate
sensitive assets and liabilities
- A decline in the health of the economy nationally or regionally
which could reduce the demand for loans or reduce the value of real
estate collateral securing most of our loans
- Credit quality deterioration which could cause an increase in
the provision for loan and lease losses
- Asset/Liability matching risks and liquidity risks
- Changes in the securities markets
For additional information concerning risks and uncertainties
related to the Company and its operations, please refer to the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2017 under the heading “Risk Factors” and to
subsequent reports on Form 10-Q and current reports on Form 8-K.
Readers are cautioned not to place undue reliance on these
forward-looking statements. The Company undertakes no obligation
and specifically disclaims any obligation to revise or publicly
release the results of any revision or update to these
forward-looking statements to reflect events or circumstances that
occur after the date the statements were made.
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TABLE 1 |
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SELECTED FINANCIAL INFORMATION -
UNAUDITED |
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(amounts in thousands except per share
data) |
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For The Three Months Ended |
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For The Twelve Months Ended |
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Net income,
average assets and |
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December 31, |
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September 30, |
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December 31, |
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average shareholders' equity |
|
2018 |
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|
2017 |
|
|
2018 |
|
2018 |
|
2017 |
|
Net income |
|
$ |
4,839 |
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|
$ |
7 |
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$ |
4,032 |
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$ |
15,730 |
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$ |
7,344 |
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Average total
assets |
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$ |
1,328,817 |
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|
$ |
1,251,960 |
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$ |
1,300,278 |
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$ |
1,288,841 |
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$ |
1,198,251 |
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Average total earning
assets |
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$ |
1,259,709 |
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$ |
1,178,037 |
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$ |
1,229,704 |
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$ |
1,220,135 |
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$ |
1,124,555 |
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Average shareholders'
equity |
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$ |
134,033 |
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$ |
128,862 |
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$ |
131,499 |
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$ |
130,218 |
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$ |
115,901 |
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Selected performance ratios |
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Return on average
assets |
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|
1.44 |
% |
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|
0.00 |
% |
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|
1.23 |
% |
|
|
1.22 |
% |
|
0.61 |
% |
Return on average
equity |
|
|
14.32 |
% |
|
|
0.02 |
% |
|
|
12.16 |
% |
|
|
12.08 |
% |
|
6.34 |
% |
Efficiency ratio |
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|
65.1 |
% |
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|
64.9 |
% |
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|
58.4 |
% |
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|
62.5 |
% |
|
67.0 |
% |
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Share and per share amounts |
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Weighted average shares
- basic (1) |
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|
16,265 |
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|
16,195 |
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|
16,252 |
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|
16,248 |
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|
15,207 |
|
Weighted average shares
- diluted (2) |
|
|
16,345 |
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|
16,306 |
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|
|
16,342 |
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|
|
16,332 |
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|
15,310 |
|
Earnings per share -
basic |
|
$ |
0.30 |
|
|
$ |
— |
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|
$ |
0.25 |
|
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$ |
0.97 |
|
$ |
0.48 |
|
Earnings per share -
diluted |
|
$ |
0.30 |
|
|
$ |
— |
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|
$ |
0.25 |
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$ |
0.96 |
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$ |
0.48 |
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At December 31, |
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At September 30, |
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Share and per share amounts |
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2018 |
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2017 |
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2018 |
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Common shares
outstanding (2) |
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16,334 |
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|
16,272 |
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|
16,330 |
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Book value per common
share (2) |
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$ |
8.47 |
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$ |
7.82 |
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$ |
8.14 |
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Tangible book value per
common share (2)(3) |
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$ |
8.36 |
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$ |
7.70 |
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$ |
8.03 |
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Capital ratios (4) |
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Bank of Commerce
Holdings |
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Common equity tier 1
capital ratio |
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12.79 |
% |
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|
12.26 |
% |
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|
12.65 |
% |
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|
Tier 1 capital
ratio |
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|
13.71 |
% |
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|
13.23 |
% |
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|
13.59 |
% |
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|
Total capital
ratio |
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|
15.82 |
% |
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|
15.44 |
% |
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|
15.75 |
% |
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|
Tier 1 leverage
ratio |
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|
11.21 |
% |
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|
10.86 |
% |
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|
11.14 |
% |
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|
Tangible common equity
ratio (5) |
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|
10.46 |
% |
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|
9.88 |
% |
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|
9.98 |
% |
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Redding Bank of
Commerce |
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Common equity tier 1
capital ratio |
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|
13.23 |
% |
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|
12.58 |
% |
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|
13.14 |
% |
|
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|
Tier 1 capital
ratio |
|
|
13.23 |
% |
|
|
12.58 |
% |
|
|
13.14 |
% |
|
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|
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|
Total capital
ratio |
|
|
14.42 |
% |
|
|
13.81 |
% |
|
|
14.36 |
% |
|
|
|
|
|
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|
Tier 1 leverage
ratio |
|
|
10.82 |
% |
|
|
10.33 |
% |
|
|
10.78 |
% |
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|
(1)
Excludes unvested restricted shares issued in accordance with the
Company's equity incentive plan, as they are non participative in
dividends or voting rights. |
(2)
Includes unvested restricted shares issued in accordance with the
Company's equity incentive plan. |
(3)
Tangible book value per share is computed by dividing total
shareholders’ equity less goodwill and core deposit intangible, net
by shares outstanding. Management believes that tangible book value
per share is meaningful because it is a measure that the Company
and investors commonly use to assess capital adequacy. |
(4) The
Company and the Bank continue to meet all capital adequacy
requirements to which they are subject. |
(5)
Management believes the tangible common equity ratio is a useful
measure of capital adequacy because it provides a meaningful base
for period-to-period and company-to-company comparisons, which
management believes will assist investors in assessing the capital
of the Company and the ability of the Company to absorb potential
losses. The tangible common equity ratio is calculated as total
shareholders' equity less goodwill and core deposit intangible, net
divided by total assets less goodwill and core deposit intangible,
net. |
BALANCE SHEET OVERVIEW
As of December 31, 2018, the Company had total consolidated
assets of $1.307 billion, gross loans of $946.3 million, allowance
for loan and lease losses (“ALLL”) of $12.3 million, total deposits
of $1.132 billion, and shareholders’ equity of $138.3 million.
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TABLE 2 |
LOAN BALANCES BY TYPE -
UNAUDITED |
(amounts in thousands) |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
At December 31, |
|
|
|
|
|
|
At September 30, |
|
|
|
% of |
|
|
|
% of |
|
Change |
|
|
|
% of |
|
2018 |
|
|
Total |
|
2017 |
|
|
Total |
|
Amount |
|
% |
|
2018 |
|
|
Total |
Commercial |
$ |
135,543 |
|
|
14 |
% |
|
$ |
142,405 |
|
|
16 |
% |
|
$ |
(6,862 |
) |
|
(5 |
)% |
|
$ |
132,091 |
|
|
14 |
% |
Real estate -
construction and land development |
|
22,563 |
|
|
2 |
|
|
|
15,902 |
|
|
2 |
|
|
|
6,661 |
|
|
42 |
% |
|
|
20,496 |
|
|
2 |
|
Real estate -
commercial non-owner occupied |
|
433,708 |
|
|
46 |
|
|
|
377,668 |
|
|
43 |
|
|
|
56,040 |
|
|
15 |
% |
|
|
431,246 |
|
|
47 |
|
Real estate -
commercial owner occupied |
|
204,622 |
|
|
22 |
|
|
|
192,023 |
|
|
22 |
|
|
|
12,599 |
|
|
7 |
% |
|
|
195,608 |
|
|
21 |
|
Real estate -
residential - ITIN |
|
37,446 |
|
|
4 |
|
|
|
41,188 |
|
|
5 |
|
|
|
(3,742 |
) |
|
(9 |
)% |
|
|
38,353 |
|
|
4 |
|
Real estate -
residential - 1-4 family mortgage |
|
34,366 |
|
|
4 |
|
|
|
30,377 |
|
|
3 |
|
|
|
3,989 |
|
|
13 |
% |
|
|
33,473 |
|
|
4 |
|
Real estate -
residential - equity lines |
|
26,958 |
|
|
3 |
|
|
|
30,347 |
|
|
3 |
|
|
|
(3,389 |
) |
|
(11 |
)% |
|
|
28,713 |
|
|
3 |
|
Consumer and other |
|
51,045 |
|
|
5 |
|
|
|
49,925 |
|
|
6 |
|
|
|
1,120 |
|
|
2 |
% |
|
|
47,500 |
|
|
5 |
|
Gross
loans |
|
946,251 |
|
|
100 |
% |
|
|
879,835 |
|
|
100 |
% |
|
|
66,416 |
|
|
8 |
% |
|
|
927,480 |
|
|
100 |
% |
Deferred fees and
costs |
|
1,927 |
|
|
|
|
|
|
1,710 |
|
|
|
|
|
|
217 |
|
|
|
|
|
|
1,757 |
|
|
|
|
Loans,
net of deferred fees and costs |
|
948,178 |
|
|
|
|
|
|
881,545 |
|
|
|
|
|
|
66,633 |
|
|
|
|
|
|
929,237 |
|
|
|
|
Allowance for loan and
lease losses |
|
(12,292 |
) |
|
|
|
|
|
(11,925 |
) |
|
|
|
|
|
(367 |
) |
|
|
|
|
|
(12,392 |
) |
|
|
|
Net
loans |
$ |
935,886 |
|
|
|
|
|
$ |
869,620 |
|
|
|
|
|
$ |
66,266 |
|
|
|
|
|
$ |
916,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average yield on loans
during the quarter |
|
4.94 |
% |
|
|
|
|
|
4.77 |
% |
|
|
|
|
|
0.17 |
|
|
|
|
|
|
4.93 |
% |
|
|
|
Average yield on loans
during the year |
|
4.91 |
% |
|
|
|
|
|
4.78 |
% |
|
|
|
|
|
0.13 |
|
|
|
|
|
|
|
|
|
|
The Company recorded gross loan balances of $946.3 million at
December 31, 2018, compared with $879.8 million and $927.5 million
at December 31, 2017 and September 30, 2018, respectively, an
increase of $66.4 million and $18.8 million, respectively. Loan
production during 2018 was organic and did not rely on loan pool
purchases.
Average loan balances were $923.4 million for the quarter ended
December 31, 2018, compared with $839.0 million for the quarter
ended December 31, 2017 an increase of $84.4 million or 10%. For
the year ended December 31, 2018 average loan balances were $915.4
million compared with $818.1 million for the year ended December
31, 2017 an increase of $97.2 million or 12%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 3 |
CASH, CASH EQUIVALENTS, AND INVESTMENT
SECURITIES - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
|
|
|
|
|
|
At September 30, |
|
|
|
|
% of |
|
|
|
% of |
|
Change |
|
|
|
% of |
|
|
2018 |
|
|
Total |
|
2017 |
|
|
Total |
|
Amount |
|
% |
|
2018 |
|
|
Total |
Cash and due from
banks |
|
$ |
23,692 |
|
|
8 |
% |
|
$ |
17,979 |
|
|
5 |
% |
|
$ |
5,713 |
|
|
32 |
% |
|
$ |
21,316 |
|
|
6 |
% |
Interest-bearing
deposits in other banks |
|
|
23,673 |
|
|
8 |
|
|
|
48,991 |
|
|
15 |
|
|
|
(25,318 |
) |
|
(52 |
)% |
|
|
69,920 |
|
|
21 |
|
Total
cash and cash equivalents |
|
|
47,365 |
|
|
16 |
|
|
|
66,970 |
|
|
20 |
|
|
|
(19,605 |
) |
|
(29 |
)% |
|
|
91,236 |
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government and
agencies |
|
|
40,087 |
|
|
13 |
|
|
|
40,369 |
|
|
12 |
|
|
|
(282 |
) |
|
(1 |
)% |
|
|
35,656 |
|
|
11 |
|
Obligations of state
and political subdivisions |
|
|
50,530 |
|
|
17 |
|
|
|
78,844 |
|
|
24 |
|
|
|
(28,314 |
) |
|
(36 |
% |
|
|
51,562 |
|
|
16 |
|
Residential mortgage
backed securities and collateralized mortgage obligations |
|
|
138,503 |
|
|
45 |
|
|
|
114,592 |
|
|
34 |
|
|
|
23,911 |
|
|
21 |
% |
|
|
124,109 |
|
|
38 |
|
Corporate
securities |
|
|
2,922 |
|
|
1 |
|
|
|
4,992 |
|
|
1 |
|
|
|
(2,070 |
) |
|
(41 |
)% |
|
|
3,974 |
|
|
1 |
|
Commercial mortgage
backed securities |
|
|
24,762 |
|
|
8 |
|
|
|
26,641 |
|
|
8 |
|
|
|
(1,879 |
) |
|
(7 |
)% |
|
|
24,167 |
|
|
7 |
|
Other asset backed
securities |
|
|
124 |
|
|
— |
|
|
|
2,516 |
|
|
1 |
|
|
|
(2,392 |
) |
|
(95 |
% |
|
|
165 |
|
|
— |
|
Total
investment securities - AFS |
|
|
256,928 |
|
|
84 |
|
|
|
267,954 |
|
|
80 |
|
|
|
(11,026 |
) |
|
(4 |
)% |
|
|
239,633 |
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash, cash
equivalents and investment securities |
|
$ |
304,293 |
|
|
100 |
% |
|
$ |
334,924 |
|
|
100 |
% |
|
$ |
(30,631 |
) |
|
(9 |
)% |
|
$ |
330,869 |
|
|
100 |
% |
Average yield on
interest-bearing due from banks and investment securities during
the quarter - nominal |
|
|
2.66 |
% |
|
|
|
|
|
2.30 |
% |
|
|
|
|
|
0.36 |
|
|
|
|
|
|
2.47 |
% |
|
|
|
Average yield on
interest-bearing due from banks and investment securities during
the quarter - tax equivalent |
|
|
2.77 |
% |
|
|
|
|
|
2.62 |
% |
|
|
|
|
|
0.15 |
|
|
|
|
|
|
2.61 |
% |
|
|
|
As of December 31, 2018, we maintained noninterest-bearing cash
positions of $23.7 million and interest-bearing deposits of $23.7
million at the Federal Reserve Bank and correspondent banks.
Investment securities totaled $256.9 million at December 31,
2018, compared with $268.0 million and $239.6 million at December
31, 2017 and September 30, 2018, respectively. Our investment
securities portfolio provides us with a secondary source of
liquidity to fund higher yielding asset opportunities, such as loan
originations. During the fourth quarter of 2018, we purchased 19
securities with a par value of $26.6 million and weighted average
yield of 3.50% and sold five securities with a par value of $2.6
million and weighted average yield of 3.10%. The sales activity on
available-for-sale securities resulted in $3 thousand in net
realized gains. During the same period, we received $7.6 million in
proceeds from principal payments, calls and maturities within the
investment securities portfolio.
Average securities balances and weighted average tax equivalent
yields for the quarters ended December 31, 2018 and 2017 were
$261.0 million and 2.91% compared to $272.0 million and 2.94%,
respectively.
At December 31, 2018, our net unrealized losses on
available-for-sale investment securities were $4.3 million compared
with net unrealized losses of $452 thousand and $5.8 million at
December 31, 2017 and September 30, 2018, respectively. The changes
in net unrealized losses on the investment securities portfolio are
due to changes in market interest rates and the reclassification of
all HTM securities to AFS during the fourth quarter of 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 4 |
DEPOSITS BY TYPE - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
|
|
|
|
|
|
At September 30, |
|
|
|
% of |
|
|
|
% of |
|
|
Change |
|
|
|
% of |
|
2018 |
|
Total |
|
2017 |
|
Total |
|
Amount |
|
% |
|
2018 |
|
Total |
Demand -
noninterest-bearing |
$ |
347,199 |
|
31 |
% |
|
$ |
305,650 |
|
28 |
% |
|
$ |
41,549 |
|
|
14 |
% |
|
$ |
361,516 |
|
32 |
% |
Demand -
interest-bearing |
|
517,295 |
|
46 |
|
|
|
496,990 |
|
45 |
|
|
|
20,305 |
|
|
4 |
% |
|
|
510,553 |
|
45 |
|
Total demand |
|
864,494 |
|
77 |
|
|
|
802,640 |
|
73 |
|
|
|
61,854 |
|
|
8 |
% |
|
|
872,069 |
|
77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
114,840 |
|
10 |
|
|
|
110,837 |
|
10 |
|
|
|
4,003 |
|
|
4 |
% |
|
|
111,388 |
|
10 |
|
Total non-maturing
deposits |
|
979,334 |
|
87 |
|
|
|
913,477 |
|
83 |
|
|
|
65,857 |
|
|
7 |
% |
|
|
983,457 |
|
87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit |
|
152,382 |
|
13 |
|
|
|
189,255 |
|
17 |
|
|
|
(36,873 |
) |
|
(19 |
)% |
|
|
161,304 |
|
13 |
|
Total deposits |
$ |
1,131,716 |
|
100 |
% |
|
$ |
1,102,732 |
|
100 |
% |
|
$ |
28,984 |
|
|
3 |
% |
|
$ |
1,144,761 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits at December 31, 2018, increased $29 million or 3%
to $1.132 billion compared to December 31, 2017. Total non-maturing
deposits increased $65.9 million or 7% compared to the same date a
year ago a while certificates of deposit decreased $36.9 million or
19%.
|
|
|
|
|
|
|
|
|
TABLE 5 |
WHOLESALE AND RECIPROCAL DEPOSITS -
UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
2018 |
|
2017 |
|
2018 |
CDARS / ICS reciprocal
deposits |
$ |
83,666 |
|
$ |
66,279 |
|
$ |
78,772 |
Online listing service
wholesale time deposits |
|
22,015 |
|
|
36,060 |
|
|
24,397 |
Total wholesale and
reciprocal deposits |
$ |
105,681 |
|
$ |
102,339 |
|
$ |
103,169 |
For calendar quarters prior to June 30, 2018, CDARS/ ICS
reciprocal deposits were considered to be brokered deposits by
regulatory authorities and were reported as such on quarterly Call
Reports. With passage of The Economic Growth, Regulatory Relief and
Consumer Protection Act in May 2018, these deposits are no longer
classified as brokered.
AVERAGE COST OF FUNDS
The following table presents the average cost of
interest-bearing deposits, all deposits and all interest-bearing
liabilities for the periods indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 6 |
AVERAGE COST OF FUNDS -
UNAUDITED |
For The Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
2017 |
|
2017 |
Interest-bearing
deposits |
|
0.45 |
% |
|
|
0.42 |
% |
|
|
0.41 |
% |
|
|
0.41 |
% |
|
|
0.42 |
% |
|
|
0.43 |
% |
|
|
0.42 |
% |
|
|
0.39 |
% |
Interest-bearing
deposits andnoninterest-bearing demand |
|
0.31 |
% |
|
|
0.29 |
% |
|
|
0.29 |
% |
|
|
0.29 |
% |
|
|
0.30 |
% |
|
|
0.31 |
% |
|
|
0.31 |
% |
|
|
0.29 |
% |
All interest-bearing
liabilities |
|
0.61 |
% |
|
|
0.64 |
% |
|
|
0.68 |
% |
|
|
0.60 |
% |
|
|
0.59 |
% |
|
|
0.60 |
% |
|
|
0.60 |
% |
|
|
0.56 |
% |
All interest-bearing
liabilitiesand noninterest-bearingdemand |
|
0.42 |
% |
|
|
0.45 |
% |
|
|
0.50 |
% |
|
|
0.43 |
% |
|
|
0.42 |
% |
|
|
0.43 |
% |
|
|
0.44 |
% |
|
|
0.42 |
% |
INCOME STATEMENT OVERVIEW
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 7 |
SUMMARY INCOME STATEMENT -
UNAUDITED |
(amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
December 31, |
|
Change |
|
September 30, |
|
Change |
|
2018 |
|
|
2017 |
|
Amount |
|
% |
|
2018 |
|
Amount |
|
% |
Interest income |
$ |
13,750 |
|
|
$ |
12,047 |
|
$ |
1,703 |
|
|
14 |
% |
|
$ |
13,431 |
|
$ |
319 |
|
|
2 |
% |
Interest expense |
|
1,256 |
|
|
|
1,178 |
|
|
78 |
|
|
7 |
% |
|
|
1,304 |
|
|
(48 |
) |
|
(4 |
)% |
Net interest
income |
|
12,494 |
|
|
|
10,869 |
|
|
1,625 |
|
|
15 |
% |
|
|
12,127 |
|
|
367 |
|
|
3 |
% |
Provision for loan and
lease losses |
|
— |
|
|
|
450 |
|
|
(450 |
) |
|
100 |
% |
|
|
— |
|
|
— |
|
|
— |
% |
Noninterest income |
|
1,132 |
|
|
|
1,282 |
|
|
(150 |
) |
|
(12 |
)% |
|
|
943 |
|
|
189 |
|
|
20 |
% |
Noninterest
expense |
|
8,868 |
|
|
|
7,891 |
|
|
977 |
|
|
12 |
% |
|
|
7,634 |
|
|
1,234 |
|
|
16 |
% |
Income before provision
for income taxes |
|
4,758 |
|
|
|
3,810 |
|
|
948 |
|
|
25 |
% |
|
|
5,436 |
|
|
(678 |
) |
|
(12 |
)% |
Provision for income
taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal
of uncertain tax position |
|
(988 |
) |
|
|
— |
|
|
(988 |
) |
|
100 |
% |
|
|
— |
|
|
(988 |
) |
|
(100 |
)% |
Benefit
from cost segregation study and tangible property review |
|
(484 |
) |
|
|
— |
|
|
(484 |
) |
|
100 |
% |
|
|
— |
|
|
(484 |
) |
|
(100 |
)% |
Net
deferred tax asset write-down |
|
— |
|
|
|
2,490 |
|
|
(2,490 |
) |
|
(100 |
)% |
|
|
— |
|
|
— |
|
|
— |
% |
Provision
for income taxes from operations |
|
1,391 |
|
|
|
1,313 |
|
|
78 |
|
|
6 |
% |
|
|
1,404 |
|
|
(13 |
) |
|
(1 |
)% |
Total provision for
income taxes |
|
(81 |
) |
|
|
3,803 |
|
|
(3,884 |
) |
|
(102 |
)% |
|
|
1,404 |
|
|
(1,485 |
) |
|
(106 |
)% |
Net
income |
$ |
4,839 |
|
|
$ |
7 |
|
$ |
4,832 |
|
|
100 |
% |
|
$ |
4,032 |
|
$ |
807 |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
$ |
0.30 |
|
|
$ |
— |
|
$ |
0.30 |
|
|
100 |
% |
|
$ |
0.25 |
|
$ |
0.05 |
|
|
20 |
% |
Average basic
shares |
|
16,265 |
|
|
|
16,195 |
|
|
70 |
|
|
— |
% |
|
|
16,252 |
|
|
13 |
|
|
— |
% |
Diluted earnings per
share |
$ |
0.30 |
|
|
$ |
— |
|
$ |
0.30 |
|
|
100 |
% |
|
$ |
0.25 |
|
$ |
0.05 |
|
|
20 |
% |
Average diluted
shares |
|
16,345 |
|
|
|
16,306 |
|
|
39 |
|
|
— |
% |
|
|
16,342 |
|
|
3 |
|
|
— |
% |
Dividends declared per
common share |
$ |
0.04 |
|
|
$ |
0.03 |
|
$ |
0.01 |
|
|
33 |
% |
|
$ |
0.04 |
|
$ |
— |
|
|
— |
% |
Fourth Quarter of 2018 Compared With Fourth
Quarter of 2017
Income before provision for income taxes for the fourth quarter
of 2018 increased $948 thousand compared to the fourth quarter of
2017. In the current quarter, net interest income was $1.6 million
higher and the provision for loan and lease loss was $450 thousand
lower. These changes were offset by noninterest income that was
$150 thousand lower, and noninterest expenses that were $977
thousand higher.
Net Interest Income
Net interest income increased $1.6 million compared to the same
period a year ago.
Interest income for the fourth quarter of 2018 increased $1.7
million or 14% to $13.8 million:
- Interest and fees on loans increased $1.4 million due to an
$84.4 million increase in average loan balances and a 17 basis
point increase in the average yield on the loan portfolio.
- Interest on securities increased $82 thousand due to a 23 basis
point increase in average yield on the securities portfolio
partially offset by an $11.0 million decrease in average securities
balances.
- Interest on interest-bearing deposits due from banks increased
$210 thousand due to an $8.3 million increase in average
interest-bearing deposit balances, and a 96 basis point increase in
average yield.
Interest expense for the fourth quarter of 2018 increased $78
thousand or 7% to $1.3 million:
- Interest expense on interest bearing deposits increased $85
thousand. Average interest-bearing demand and savings deposit
balances increased $62.2 million, while average certificate of
deposit balances decreased $37.9 million. The average rate paid on
interest-bearing deposits increased three basis points.
- Interest expense on other interest bearing liabilities
decreased $7 thousand due to decreased average term debt
balances.
Provision for loan and lease loss
As a result of continued improved asset quality, no provision
for loan and lease losses was necessary during the current quarter.
A provision for loan and lease losses of $450 thousand was recorded
during the same quarter a year ago.
Noninterest Income
Noninterest income for the three months ended December 31, 2018
decreased $150 thousand compared to the fourth quarter for 2017.
The decrease was due to gains on sale of investment securities and
OREO properties in the prior year totaling $282 thousand that did
not recur in the current year. The decrease was offset by a $96
thousand special dividend on Federal Home Loan Bank of San
Francisco stock.
Noninterest Expense
Noninterest expense for the three months ended December 31, 2018
increased $977 thousand compared to the same period a year previous
primarily due to $802 thousand in acquisition costs.
The Company’s efficiency ratio of 65.1% for the fourth quarter
of 2018 was inflated by acquisition costs. The ratio during the
same period in 2017 was 64.9%.
Income Tax Provision
For the three months ended December 31, 2018, our negative
income tax provision of $81 thousand on pre-tax income of $4.8
million included:
- $(988) thousand benefit due to the reversal of our
uncertain tax position.
- $(484) thousand benefit as a result of our cost segregation
study and tangible property review.
- $1.4 million tax provision on pre-tax net operating income of
$4.8 million (29.2%).
- The current quarter includes $765 thousand of acquisition costs
which are not tax deductible.
This compares with a provision for income taxes for the fourth
quarter of the prior year of $3.8 million on pre-tax income of $3.8
million which included:
- $2.5 million write-down of our deferred tax assets resulting
from the Tax Cuts and Jobs Act enacted on December 22, 2017
- $1.3 million tax provision on pre-tax net operating income of
$3.8 million (34.5%).
Fourth Quarter of 2018 Compared With Third
Quarter of 2018
Income before provision for income taxes for the fourth quarter
of 2018 decreased $678 thousand compared to the third quarter of
2018. In the current quarter, net interest income was $367 thousand
higher and noninterest income was $189 thousand higher. These
positive changes were offset by noninterest expense that was $1.2
million higher.
Net Interest Income
Net interest income increased $367 thousand over the prior
quarter.
Interest income for the three months ended December 31, 2018
increased $319 thousand or 2% to $13.8 million.
- Interest and fees on loans decreased $74 thousand due to a $7.5
million decrease in average loan balances.
- Interest on investment securities increased $213 thousand due
to a $12.6 million increase in average securities balances and a 20
basis point increase in average yield on the investment
portfolio.
- Interest on interest-bearing deposits due from banks increased
$180 thousand due to a $24.9 million increase in average balances
and a 29 basis point increase in average yield.
Interest expense for the three months ended December 31, 2018
decreased $48 thousand or 4% to $1.3 million.
- Interest expense on deposits increased $88 thousand as average
interest-bearing demand and savings deposits increased $31.1
million, average certificates of deposit decreased $6.3 million and
the average rate paid on these deposits increased by one basis
point.
- Interest expense on borrowings from the Federal Home Loan Bank
of San Francisco decreased $121 thousand. There were no Federal
Home Loan Bank of San Francisco borrowings outstanding in the
current quarter compared to an average balance of $22.3 million for
the prior quarter.
- Interest expense on other term debt decreased $15
thousand.
Provision for loan and lease loss
As a result of continued improved asset quality, no provision
for loan and lease losses was necessary during the current or
previous quarter.
Noninterest Income
Noninterest income for the three months ended December 31, 2018
increased $189 thousand, the increase was due to an increase in
gains on sale of OREO properties $71 thousand and a $96 thousand
special dividend on Federal Home Loan Bank of San Francisco
stock.
Noninterest Expense
Noninterest expense for the three months ended December 31, 2018
increased $1.2 million. The increase was due to $802 thousand in
acquisition costs and $293 thousand of expense incurred for our
cost segregation study and tangible property review.
The Company’s efficiency ratio of 65.1% for the fourth quarter
of 2018 was inflated by acquisition costs. The ratio during the
prior quarter was 58.4%.
Income Tax Provision
For the three months ended December 31, 2018, our negative
income tax provision of $81 thousand on pre-tax income of $4.8
million included:
- $(988) thousand benefit due to the reversal of our uncertain
tax position.
- $(484) thousand benefit as a result to our cost segregation
study and tangible property review.
- $1.4 million tax provision on pre-tax net operating income of
$4.8 million (29.2%).
- The current quarter includes $765 thousand of acquisition costs
which are not tax deductible.
This compares with a provision for income taxes for the prior
quarter of $1.4 million on pre-tax income of $5.4 million
(25.8%).
Earnings Per Share
Diluted earnings per share were $0.30 for the three months ended
December 31, 2018 compared with diluted earnings per share of $0.00
for the same period a year ago and diluted earnings per share of
$0.25 for the prior period. Net income and weighted average shares
used to calculate earnings per share – diluted are summarized in
table 7 presented earlier in this press release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 8a |
NET INTEREST MARGIN - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
December 31, 2018 |
|
December 31, 2017 |
|
September 30, 2018 |
|
|
Average |
|
|
|
|
Yield / |
|
Average |
|
|
|
|
Yield / |
|
Average |
|
|
|
|
Yield / |
(Amounts
in thousands) |
|
Balance |
|
Interest(1) |
|
Rate (5) |
|
Balance |
|
Interest(1) |
|
Rate (5) |
|
Balance |
|
Interest(1) |
|
Rate (5) |
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loans
(2) |
|
$ |
923,409 |
|
$ |
11,494 |
|
4.94 |
% |
|
$ |
839,004 |
|
$ |
10,083 |
|
4.77 |
% |
|
$ |
930,863 |
|
$ |
11,568 |
|
4.93 |
% |
Taxable
securities |
|
|
218,137 |
|
|
1,469 |
|
2.67 |
% |
|
|
199,849 |
|
|
1,211 |
|
2.40 |
% |
|
|
199,883 |
|
|
1,209 |
|
2.40 |
% |
Tax-exempt securities |
|
|
42,868 |
|
|
353 |
|
3.27 |
% |
|
|
72,152 |
|
|
529 |
|
2.91 |
% |
|
|
48,561 |
|
|
400 |
|
3.27 |
% |
Interest-bearing deposits in other banks |
|
|
75,295 |
|
|
434 |
|
2.29 |
% |
|
|
67,032 |
|
|
224 |
|
1.33 |
% |
|
|
50,397 |
|
|
254 |
|
2.00 |
% |
Average interest-
earning assets |
|
|
1,259,709 |
|
|
13,750 |
|
4.33 |
% |
|
|
1,178,037 |
|
|
12,047 |
|
4.06 |
% |
|
|
1,229,704 |
|
|
13,431 |
|
4.33 |
% |
Cash and
due from banks |
|
|
22,447 |
|
|
|
|
|
|
|
|
19,783 |
|
|
|
|
|
|
|
|
21,834 |
|
|
|
|
|
|
Premises
and equipment, net |
|
|
13,331 |
|
|
|
|
|
|
|
|
14,948 |
|
|
|
|
|
|
|
|
13,768 |
|
|
|
|
|
|
Goodwill
and core deposit intangible, net |
|
|
1,842 |
|
|
|
|
|
|
|
|
2,054 |
|
|
|
|
|
|
|
|
1,888 |
|
|
|
|
|
|
Other
assets |
|
|
31,488 |
|
|
|
|
|
|
|
|
37,138 |
|
|
|
|
|
|
|
|
33,084 |
|
|
|
|
|
|
Average total
assets |
|
$ |
1,328,817 |
|
|
|
|
|
|
|
$ |
1,251,960 |
|
|
|
|
|
|
|
$ |
1,300,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
522,417 |
|
|
348 |
|
0.26 |
% |
|
$ |
459,451 |
|
|
216 |
|
0.19 |
% |
|
$ |
494,906 |
|
|
276 |
|
0.22 |
% |
Savings
deposits |
|
|
110,934 |
|
|
92 |
|
0.33 |
% |
|
|
111,725 |
|
|
54 |
|
0.19 |
% |
|
|
107,349 |
|
|
73 |
|
0.27 |
% |
Certificates of deposit |
|
|
157,035 |
|
|
462 |
|
1.17 |
% |
|
|
194,886 |
|
|
547 |
|
1.11 |
% |
|
|
163,302 |
|
|
465 |
|
1.13 |
% |
Federal
Home Loan Bank of San Francisco borrowings |
|
|
— |
|
|
— |
|
— |
% |
|
|
— |
|
|
— |
|
— |
% |
|
|
22,283 |
|
|
121 |
|
2.15 |
% |
Other
borrowings net of unamortized debt issuance costs |
|
|
13,785 |
|
|
252 |
|
7.25 |
% |
|
|
17,211 |
|
|
285 |
|
6.57 |
% |
|
|
14,681 |
|
|
265 |
|
7.16 |
% |
Junior
subordinated debentures |
|
|
10,310 |
|
|
102 |
|
3.93 |
% |
|
|
10,310 |
|
|
76 |
|
2.92 |
% |
|
|
10,310 |
|
|
104 |
|
4.00 |
% |
Average interest-
bearing liabilities |
|
|
814,481 |
|
|
1,256 |
|
0.61 |
% |
|
|
793,583 |
|
|
1,178 |
|
0.59 |
% |
|
|
812,831 |
|
|
1,304 |
|
0.64 |
% |
Noninterest-bearing demand |
|
|
367,457 |
|
|
|
|
|
|
|
|
316,961 |
|
|
|
|
|
|
|
|
343,948 |
|
|
|
|
|
|
Other
liabilities |
|
|
12,846 |
|
|
|
|
|
|
|
|
12,554 |
|
|
|
|
|
|
|
|
12,000 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
134,033 |
|
|
|
|
|
|
|
|
128,862 |
|
|
|
|
|
|
|
|
131,499 |
|
|
|
|
|
|
Average liabilities and
shareholders’ equity |
|
$ |
1,328,817 |
|
|
|
|
|
|
|
$ |
1,251,960 |
|
|
|
|
|
|
|
$ |
1,300,278 |
|
|
|
|
|
|
Net interest income and
net interest margin (4) |
|
|
|
|
$ |
12,494 |
|
3.93 |
% |
|
|
|
|
$ |
10,869 |
|
3.66 |
% |
|
|
|
|
$ |
12,127 |
|
3.91 |
% |
Tax equivalent net
interest margin (3) |
|
|
|
|
|
|
|
3.96 |
% |
|
|
|
|
|
|
|
3.75 |
% |
|
|
|
|
|
|
|
3.95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Interest income on loans includes deferred fees and costs of
approximately $109 thousand, $123 thousand, and $75 thousand for
the three months ended December 31, 2018, and 2017 and September
30, 2018, respectively. |
(2) Net
loans includes average nonaccrual loans of $4.1 million, $6.5
million and $3.8 million for the three months ended December 31,
2018 and 2017 and September 30, 2018, respectively. |
(3)
Tax-exempt income has been adjusted to tax equivalent basis at a
21% for 2018 and at a 34% tax rate for 2017. The amount of such
adjustments was an addition to recorded income of approximately $94
thousand, $273 thousand and $106 thousand for the three months
ended December 31, 2018 and 2017 and September 30, 2018,
respectively. |
(4) Net
interest margin is annualized net interest income expressed as a
percentage of average interest-earning assets. |
(5) Yields
and rates are calculated by dividing the income or expense by the
average balance of the assets or liabilities, respectively, and
annualizing the result. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 8b |
|
NET INTEREST MARGIN - UNAUDITED |
|
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Twelve Months Ended |
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
Average |
|
|
|
|
Yield / |
|
Average |
|
|
|
|
Yield / |
|
(Amounts
in thousands) |
|
Balance |
|
Interest(1) |
|
Rate (5) |
|
Balance |
|
Interest(1) |
|
Rate (5) |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loans
(2) |
|
$ |
915,360 |
|
$ |
44,955 |
|
4.91 |
% |
|
$ |
818,119 |
|
$ |
39,112 |
|
4.78 |
% |
|
Taxable
securities |
|
|
207,407 |
|
|
5,165 |
|
2.49 |
% |
|
|
165,333 |
|
|
3,921 |
|
2.37 |
% |
|
Tax-exempt securities |
|
|
50,330 |
|
|
1,629 |
|
3.24 |
% |
|
|
74,231 |
|
|
2,144 |
|
2.89 |
% |
|
Interest-bearing deposits in other banks |
|
|
47,038 |
|
|
952 |
|
2.02 |
% |
|
|
66,872 |
|
|
772 |
|
1.15 |
% |
|
Average interest-
earning assets |
|
|
1,220,135 |
|
|
52,701 |
|
4.32 |
% |
|
|
1,124,555 |
|
|
45,949 |
|
4.09 |
% |
|
Cash and
due from banks |
|
|
20,468 |
|
|
|
|
|
|
|
|
18,301 |
|
|
|
|
|
|
|
Premises
and equipment, net |
|
|
13,952 |
|
|
|
|
|
|
|
|
15,567 |
|
|
|
|
|
|
|
Goodwill
and core deposit intangible, net |
|
|
1,917 |
|
|
|
|
|
|
|
|
2,136 |
|
|
|
|
|
|
|
Other
assets |
|
|
32,369 |
|
|
|
|
|
|
|
|
37,692 |
|
|
|
|
|
|
|
Average total
assets |
|
$ |
1,288,841 |
|
|
|
|
|
|
|
$ |
1,198,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
489,013 |
|
|
1,060 |
|
0.22 |
% |
|
$ |
434,705 |
|
|
744 |
|
0.17 |
% |
|
Savings
deposits |
|
|
109,025 |
|
|
288 |
|
0.26 |
% |
|
|
111,376 |
|
|
200 |
|
0.18 |
% |
|
Certificates of deposit |
|
|
168,183 |
|
|
1,910 |
|
1.14 |
% |
|
|
205,648 |
|
|
2,188 |
|
1.06 |
% |
|
Federal
Home Loan Bank of San Francisco borrowings |
|
|
22,466 |
|
|
435 |
|
1.94 |
% |
|
|
302 |
|
|
3 |
|
0.99 |
% |
|
Other
borrowings net of unamortized debt issuance costs |
|
|
15,143 |
|
|
1,077 |
|
7.11 |
% |
|
|
17,981 |
|
|
1,165 |
|
6.48 |
% |
|
Junior
subordinated debentures |
|
|
10,310 |
|
|
385 |
|
3.73 |
% |
|
|
10,310 |
|
|
287 |
|
2.78 |
% |
|
Average interest-
bearing liabilities |
|
|
814,140 |
|
|
5,155 |
|
0.63 |
% |
|
|
780,322 |
|
|
4,587 |
|
0.59 |
% |
|
Noninterest-bearing demand |
|
|
332,197 |
|
|
|
|
|
|
|
|
289,735 |
|
|
|
|
|
|
|
Other
liabilities |
|
|
12,286 |
|
|
|
|
|
|
|
|
12,293 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
130,218 |
|
|
|
|
|
|
|
|
115,901 |
|
|
|
|
|
|
|
Average liabilities and
shareholders’ equity |
|
$ |
1,288,841 |
|
|
|
|
|
|
|
$ |
1,198,251 |
|
|
|
|
|
|
|
Net interest income and
net interest margin (4) |
|
|
|
|
$ |
47,546 |
|
3.90 |
% |
|
|
|
|
$ |
41,362 |
|
3.68 |
% |
|
Tax equivalent net
interest margin (3) |
|
|
|
|
|
|
|
3.93 |
% |
|
|
|
|
|
|
|
3.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Interest income on loans includes deferred fees and costs of
approximately $465 thousand and $546 thousand for the years
December 31, 2018 and 2017, respectively. |
(2) Net
loans includes average nonaccrual loans of $4.2 million and $8.9
million for the years December 31, 2018 and 2017,
respectively. |
(3)
Tax-exempt income has been adjusted to tax equivalent basis at a
21% tax rate for 2018 and at a 34% tax rate for 2017. The amount of
such adjustments was an addition to recorded income of
approximately $433 thousand and $1.1 million for the years December
31, 2018 and 2017, respectively. |
(4) Net
interest margin is annualized net interest income expressed as a
percentage of average interest-earning assets. |
(5) Yields
and rates are calculated by dividing the income or expense by the
average balance of the assets or liabilities, respectively, and
annualizing the result. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 9 |
|
ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL
FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED |
|
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
Beginning balance
ALLL |
$ |
12,392 |
|
|
|
$ |
12,388 |
|
|
|
$ |
12,295 |
|
|
|
$ |
11,925 |
|
|
|
$ |
11,692 |
|
|
Provision for loan and
lease losses |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
450 |
|
|
Loans charged-off |
|
(279 |
) |
|
|
|
(198 |
) |
|
|
|
(382 |
) |
|
|
|
(390 |
) |
|
|
|
(451 |
) |
|
Loan loss
recoveries |
|
179 |
|
|
|
|
202 |
|
|
|
|
475 |
|
|
|
|
760 |
|
|
|
|
234 |
|
|
Ending balance
ALLL |
$ |
12,292 |
|
|
|
$ |
12,392 |
|
|
|
$ |
12,388 |
|
|
|
$ |
12,295 |
|
|
|
$ |
11,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
959 |
|
|
|
$ |
899 |
|
|
|
$ |
1,358 |
|
|
|
$ |
1,109 |
|
|
|
$ |
1,603 |
|
|
Real
estate - commercial owner occupied |
|
548 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
600 |
|
|
Real
estate - residential - ITIN |
|
2,388 |
|
|
|
|
2,571 |
|
|
|
|
2,613 |
|
|
|
|
2,839 |
|
|
|
|
2,909 |
|
|
Real
estate - residential - 1-4 family mortgage |
|
185 |
|
|
|
|
179 |
|
|
|
|
184 |
|
|
|
|
188 |
|
|
|
|
606 |
|
|
Real
estate - residential - equity lines |
|
43 |
|
|
|
|
44 |
|
|
|
|
44 |
|
|
|
|
45 |
|
|
|
|
45 |
|
|
Consumer
and other |
|
23 |
|
|
|
|
24 |
|
|
|
|
33 |
|
|
|
|
35 |
|
|
|
|
36 |
|
|
Total nonaccrual
loans |
|
4,146 |
|
|
|
|
3,717 |
|
|
|
|
4,232 |
|
|
|
|
4,216 |
|
|
|
|
5,799 |
|
|
Accruing troubled debt
restructured loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
1,224 |
|
|
|
|
1,291 |
|
|
|
|
1,420 |
|
|
|
|
1,516 |
|
|
|
|
1,551 |
|
|
Real
estate - commercial non-owner occupied |
|
795 |
|
|
|
|
797 |
|
|
|
|
799 |
|
|
|
|
800 |
|
|
|
|
803 |
|
|
Real
estate - residential - ITIN |
|
4,484 |
|
|
|
|
4,535 |
|
|
|
|
4,592 |
|
|
|
|
4,554 |
|
|
|
|
4,614 |
|
|
Real
estate - residential - equity lines |
|
363 |
|
|
|
|
367 |
|
|
|
|
372 |
|
|
|
|
376 |
|
|
|
|
380 |
|
|
Total accruing troubled
debt restructured loans |
|
6,866 |
|
|
|
|
6,990 |
|
|
|
|
7,183 |
|
|
|
|
7,246 |
|
|
|
|
7,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other accruing
impaired loans |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impaired
loans |
$ |
11,012 |
|
|
|
$ |
10,707 |
|
|
|
$ |
11,415 |
|
|
|
$ |
11,462 |
|
|
|
$ |
13,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans outstanding
at period end |
$ |
946,251 |
|
|
|
$ |
927,480 |
|
|
|
$ |
936,816 |
|
|
|
$ |
900,420 |
|
|
|
$ |
879,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans to gross loans |
|
1.16 |
% |
|
|
|
1.15 |
% |
|
|
|
1.22 |
% |
|
|
|
1.27 |
% |
|
|
|
1.49 |
% |
|
Nonaccrual loans to
gross loans |
|
0.44 |
% |
|
|
|
0.40 |
% |
|
|
|
0.45 |
% |
|
|
|
0.47 |
% |
|
|
|
0.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan and lease losses as a percent of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
loans |
|
1.30 |
% |
|
|
|
1.34 |
% |
|
|
|
1.32 |
% |
|
|
|
1.37 |
% |
|
|
|
1.36 |
% |
|
Nonaccrual loans |
|
296.48 |
% |
|
|
|
333.39 |
% |
|
|
|
292.72 |
% |
|
|
|
291.63 |
% |
|
|
|
205.64 |
% |
|
Impaired
loans |
|
111.62 |
% |
|
|
|
115.74 |
% |
|
|
|
108.52 |
% |
|
|
|
107.27 |
% |
|
|
|
90.71 |
% |
|
We continue to monitor credit quality and adjust the ALLL to
ensure that the ALLL is maintained at a level that is adequate to
cover estimated credit losses in the loan and lease portfolio. As a
result of continued improved asset quality, no provision for loan
and lease losses was necessary during the current quarter and the
prior quarter. A provision for loan and lease losses of $450
thousand was recorded during the same quarter a year ago. Our ALLL
as a percentage of gross loans was 1.30% as of December 31, 2018
compared to 1.36% as of December 31, 2017 and 1.34% as of September
30, 2018. Based on the Bank’s ALLL methodology, which uses criteria
such as risk factors and historical loss rates, and given the
ongoing improvements in asset quality, management believes the
Company’s ALLL is adequate at December 31, 2018. There is, however,
no assurance that future loan and lease losses will not exceed the
levels provided for in the ALLL and could possibly result in future
charges to the provision for loan and lease losses.
At December 31, 2018, the recorded investment in loans
classified as impaired totaled $11.0 million, with a corresponding
specific reserve of $1.2 million compared to impaired loans of
$13.1 million with a corresponding specific reserve of $1.2 million
at December 31, 2017 and impaired loans of $10.7 million, with a
corresponding specific reserve of $1.1 million at September 30,
2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 10 |
TROUBLED DEBT RESTRUCTURINGS -
UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
Nonaccrual |
|
$ |
2,693 |
|
|
$ |
2,720 |
|
|
$ |
3,218 |
|
|
$ |
3,237 |
|
|
$ |
3,581 |
|
Accruing |
|
|
6,866 |
|
|
|
6,990 |
|
|
|
7,183 |
|
|
|
7,246 |
|
|
|
7,348 |
|
Total troubled debt
restructurings |
|
$ |
9,559 |
|
|
$ |
9,710 |
|
|
$ |
10,401 |
|
|
$ |
10,483 |
|
|
$ |
10,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt
restructurings as a percentage of total gross loans |
|
|
1.01 |
% |
|
|
1.05 |
% |
|
|
1.11 |
% |
|
|
1.16 |
% |
|
|
1.24 |
% |
There were no new troubled debt restructurings during the three
months ended December 31, 2018. As of December 31, 2018, we had 106
restructured loans that qualified as troubled debt restructurings,
of which all were performing according to their restructured
terms.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 11 |
NONPERFORMING ASSETS - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
Total nonaccrual
loans |
|
$ |
4,146 |
|
|
$ |
3,717 |
|
|
$ |
4,232 |
|
|
$ |
4,216 |
|
|
$ |
5,799 |
|
90 days past due and
still accruing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total nonperforming
loans |
|
|
4,146 |
|
|
|
3,717 |
|
|
|
4,232 |
|
|
|
4,216 |
|
|
|
5,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned
("OREO") |
|
|
31 |
|
|
|
136 |
|
|
|
140 |
|
|
|
60 |
|
|
|
35 |
|
Total nonperforming
assets |
|
$ |
4,177 |
|
|
$ |
3,853 |
|
|
$ |
4,372 |
|
|
$ |
4,276 |
|
|
$ |
5,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to
gross loans |
|
|
0.44 |
% |
|
|
0.40 |
% |
|
|
0.45 |
% |
|
|
0.47 |
% |
|
|
0.66 |
% |
Nonperforming assets to
total assets |
|
|
0.32 |
% |
|
|
0.29 |
% |
|
|
0.34 |
% |
|
|
0.34 |
% |
|
|
0.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 12 |
UNAUDITED CONSOLIDATED |
BALANCE SHEET |
(amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
Change |
|
At September 30, |
|
|
2018 |
|
|
2017 |
|
|
$ |
|
% |
|
2018 |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
due from banks |
|
$ |
23,692 |
|
|
$ |
17,979 |
|
|
$ |
5,713 |
|
|
32 |
% |
|
$ |
21,316 |
|
Interest-bearing deposits in other banks |
|
|
23,673 |
|
|
|
48,991 |
|
|
|
(25,318 |
) |
|
(52 |
)% |
|
|
69,920 |
|
Total cash and cash equivalents |
|
|
47,365 |
|
|
|
66,970 |
|
|
|
(19,605 |
) |
|
(29 |
)% |
|
|
91,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
|
256,928 |
|
|
|
267,954 |
|
|
|
(11,026 |
) |
|
(4 |
)% |
|
|
239,633 |
|
Loans,
net of deferred fees and costs |
|
|
948,178 |
|
|
|
881,545 |
|
|
|
66,633 |
|
|
8 |
% |
|
|
929,237 |
|
Allowance
for loan and lease losses |
|
|
(12,292 |
) |
|
|
(11,925 |
) |
|
|
(367 |
) |
|
3 |
% |
|
|
(12,392 |
) |
Net
loans |
|
|
935,886 |
|
|
|
869,620 |
|
|
|
66,266 |
|
|
8 |
% |
|
|
916,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises
and equipment, net |
|
|
13,119 |
|
|
|
14,748 |
|
|
|
(1,629 |
) |
|
(11 |
)% |
|
|
13,495 |
|
Other
real estate owned |
|
|
31 |
|
|
|
35 |
|
|
|
(4 |
) |
|
(11 |
)% |
|
|
136 |
|
Life
insurance |
|
|
22,410 |
|
|
|
21,898 |
|
|
|
512 |
|
|
2 |
% |
|
|
22,282 |
|
Deferred
tax asset, net |
|
|
7,039 |
|
|
|
6,505 |
|
|
|
534 |
|
|
8 |
% |
|
|
8,084 |
|
Goodwill
and core deposit intangible, net |
|
|
1,841 |
|
|
|
2,030 |
|
|
|
(189 |
) |
|
(9 |
)% |
|
|
1,864 |
|
Other
assets |
|
|
22,485 |
|
|
|
19,661 |
|
|
|
2,824 |
|
|
14 |
% |
|
|
21,894 |
|
Total assets |
|
$ |
1,307,104 |
|
|
$ |
1,269,421 |
|
|
$ |
37,683 |
|
|
3 |
% |
|
$ |
1,315,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand -
noninterest-bearing |
|
$ |
347,199 |
|
|
$ |
305,650 |
|
|
$ |
41,549 |
|
|
14 |
% |
|
$ |
361,516 |
|
Demand -
interest-bearing |
|
|
517,295 |
|
|
|
496,990 |
|
|
|
20,305 |
|
|
4 |
% |
|
|
510,553 |
|
Savings |
|
|
114,840 |
|
|
|
110,837 |
|
|
|
4,003 |
|
|
4 |
% |
|
|
111,388 |
|
Certificates of deposit |
|
|
152,382 |
|
|
|
189,255 |
|
|
|
(36,873 |
) |
|
(19 |
)% |
|
|
161,304 |
|
Total deposits |
|
|
1,131,716 |
|
|
|
1,102,732 |
|
|
|
28,984 |
|
|
3 |
% |
|
|
1,144,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term
debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
borrowings |
|
|
13,496 |
|
|
|
17,096 |
|
|
|
(3,600 |
) |
|
(21 |
)% |
|
|
14,396 |
|
Unamortized debt issuance costs |
|
|
(91 |
) |
|
|
(138 |
) |
|
|
47 |
|
|
(34 |
)% |
|
|
(103 |
) |
Net
term debt |
|
|
13,405 |
|
|
|
16,958 |
|
|
|
(3,553 |
) |
|
(21 |
)% |
|
|
14,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior
subordinated debentures |
|
|
10,310 |
|
|
|
10,310 |
|
|
|
— |
|
|
— |
% |
|
|
10,310 |
|
Other
liabilities |
|
|
13,352 |
|
|
|
12,157 |
|
|
|
1,195 |
|
|
10 |
% |
|
|
13,136 |
|
Total liabilities |
|
|
1,168,783 |
|
|
|
1,142,157 |
|
|
|
26,626 |
|
|
2 |
% |
|
|
1,182,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock |
|
|
52,284 |
|
|
|
51,830 |
|
|
|
454 |
|
|
1 |
% |
|
|
52,191 |
|
Retained
earnings |
|
|
89,045 |
|
|
|
75,700 |
|
|
|
13,345 |
|
|
18 |
% |
|
|
84,857 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(3,008 |
) |
|
|
(266 |
) |
|
|
(2,742 |
) |
|
1,031 |
% |
|
|
(4,079 |
) |
Total shareholders' equity |
|
|
138,321 |
|
|
|
127,264 |
|
|
|
11,057 |
|
|
9 |
% |
|
|
132,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
1,307,104 |
|
|
$ |
1,269,421 |
|
|
$ |
37,683 |
|
|
3 |
% |
|
$ |
1,315,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
$ |
1,233,049 |
|
|
$ |
1,198,942 |
|
|
$ |
34,107 |
|
|
3 |
% |
|
$ |
1,244,581 |
|
Shares outstanding |
|
|
16,334 |
|
|
|
16,272 |
|
|
|
62 |
|
|
— |
% |
|
|
16,330 |
|
Book value per
share |
|
$ |
8.47 |
|
|
$ |
7.82 |
|
|
$ |
0.65 |
|
|
8 |
% |
|
$ |
8.14 |
|
Tangible book value per
share (1) |
|
$ |
8.36 |
|
|
$ |
7.70 |
|
|
$ |
0.66 |
|
|
9 |
% |
|
$ |
8.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Tangible book value per share is computed by dividing total
shareholders’ equity less goodwill and core deposit intangible, net
by shares outstanding. Management believes that tangible book value
per share is meaningful because it is a measure that the Company
and investors commonly use to assess capital adequacy. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 13 |
UNAUDITED |
INCOME STATEMENT |
(amounts in thousands, except per share
data) |
|
|
|
For The Three Months Ended |
|
For The Twelve Months Ended |
|
|
December 31, |
|
Change |
|
September 30, |
|
December 31, |
|
|
2018 |
|
2017 |
|
|
$ |
|
% |
|
2018 |
|
2018 |
|
2017 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and fees on loans |
|
$ |
11,494 |
|
$ |
10,083 |
|
|
$ |
1,411 |
|
|
14 |
% |
|
$ |
11,568 |
|
|
$ |
44,955 |
|
$ |
39,112 |
Interest
on taxable securities |
|
|
1,469 |
|
|
1,211 |
|
|
|
258 |
|
|
21 |
% |
|
|
1,209 |
|
|
|
5,165 |
|
|
3,921 |
Interest
on tax-exempt securities |
|
|
353 |
|
|
529 |
|
|
|
(176 |
) |
|
(33 |
)% |
|
|
400 |
|
|
|
1,629 |
|
|
2,144 |
Interest
on interest-bearing deposits in other banks |
|
|
434 |
|
|
224 |
|
|
|
210 |
|
|
94 |
% |
|
|
254 |
|
|
|
952 |
|
|
772 |
Total interest
income |
|
|
13,750 |
|
|
12,047 |
|
|
|
1,703 |
|
|
14 |
% |
|
|
13,431 |
|
|
|
52,701 |
|
|
45,949 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
on demand deposits |
|
|
348 |
|
|
216 |
|
|
|
132 |
|
|
61 |
% |
|
|
276 |
|
|
|
1,060 |
|
|
744 |
Interest
on savings deposits |
|
|
92 |
|
|
54 |
|
|
|
38 |
|
|
70 |
% |
|
|
73 |
|
|
|
288 |
|
|
200 |
Interest
on certificates of deposit |
|
|
462 |
|
|
547 |
|
|
|
(85 |
) |
|
(16 |
)% |
|
|
465 |
|
|
|
1,910 |
|
|
2,188 |
Interest
on Federal Home Loan Bank of San Francisco borrowings |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
121 |
|
|
|
435 |
|
|
3 |
Interest
on other borrowings |
|
|
252 |
|
|
285 |
|
|
|
(33 |
) |
|
(12 |
)% |
|
|
265 |
|
|
|
1,077 |
|
|
1,165 |
Interest
on junior subordinated debentures |
|
|
102 |
|
|
76 |
|
|
|
26 |
|
|
34 |
% |
|
|
104 |
|
|
|
385 |
|
|
287 |
Total interest
expense |
|
|
1,256 |
|
|
1,178 |
|
|
|
78 |
|
|
7 |
% |
|
|
1,304 |
|
|
|
5,155 |
|
|
4,587 |
Net interest
income |
|
|
12,494 |
|
|
10,869 |
|
|
|
1,625 |
|
|
15 |
% |
|
|
12,127 |
|
|
|
47,546 |
|
|
41,362 |
Provision for loan and
lease losses |
|
|
— |
|
|
450 |
|
|
|
(450 |
) |
|
(100 |
)% |
|
|
— |
|
|
|
— |
|
|
950 |
Net
interest income after provision for loan and lease losses |
|
|
12,494 |
|
|
10,419 |
|
|
|
2,075 |
|
|
20 |
% |
|
|
12,127 |
|
|
|
47,546 |
|
|
40,412 |
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
|
161 |
|
|
141 |
|
|
|
20 |
|
|
14 |
% |
|
|
170 |
|
|
|
682 |
|
|
542 |
ATM and
point of sale fees |
|
|
283 |
|
|
266 |
|
|
|
17 |
|
|
6 |
% |
|
|
282 |
|
|
|
1,131 |
|
|
1,093 |
Fees on
payroll and benefit processing |
|
|
178 |
|
|
173 |
|
|
|
5 |
|
|
3 |
% |
|
|
159 |
|
|
|
652 |
|
|
658 |
Life
insurance |
|
|
128 |
|
|
135 |
|
|
|
(7 |
) |
|
(5 |
)% |
|
|
128 |
|
|
|
512 |
|
|
1,050 |
Gain
(loss) on investment securities, net |
|
|
3 |
|
|
(2 |
) |
|
|
5 |
|
|
250 |
% |
|
|
1 |
|
|
|
44 |
|
|
137 |
Federal
Home Loan Bank of San Francisco dividends |
|
|
201 |
|
|
81 |
|
|
|
120 |
|
|
148 |
% |
|
|
104 |
|
|
|
480 |
|
|
318 |
Gain
(loss) on sale of OREO |
|
|
64 |
|
|
346 |
|
|
|
(282 |
) |
|
(82 |
)% |
|
|
(7 |
) |
|
|
73 |
|
|
368 |
Insured
cash sweep fees |
|
|
— |
|
|
4 |
|
|
|
(4 |
) |
|
(100 |
)% |
|
|
— |
|
|
|
— |
|
|
197 |
Other
income |
|
|
114 |
|
|
138 |
|
|
|
(24 |
) |
|
(17 |
)% |
|
|
106 |
|
|
|
445 |
|
|
461 |
Total noninterest
income |
|
|
1,132 |
|
|
1,282 |
|
|
|
(150 |
) |
|
(12 |
)% |
|
|
943 |
|
|
|
4,019 |
|
|
4,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 13 - CONTINUED |
UNAUDITED |
INCOME STATEMENT |
(amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
For The Twelve Months Ended |
|
|
December 31, |
|
Change |
|
September 30, |
|
December 31, |
|
|
2018 |
|
|
2017 |
|
$ |
|
% |
|
2018 |
|
2018 |
|
|
2017 |
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and related benefits |
|
|
4,812 |
|
|
|
4,523 |
|
|
289 |
|
|
6 |
% |
|
|
4,529 |
|
|
18,709 |
|
|
|
17,819 |
Premises
and equipment |
|
|
943 |
|
|
|
1,073 |
|
|
(130 |
) |
|
(12 |
)% |
|
|
1,017 |
|
|
4,047 |
|
|
|
4,242 |
Federal
Deposit Insurance Corporation insurance premium |
|
|
93 |
|
|
|
88 |
|
|
5 |
|
|
6 |
% |
|
|
94 |
|
|
376 |
|
|
|
318 |
Data
processing fees |
|
|
512 |
|
|
|
455 |
|
|
57 |
|
|
13 |
% |
|
|
518 |
|
|
1,933 |
|
|
|
1,749 |
Professional service fees |
|
|
436 |
|
|
|
279 |
|
|
157 |
|
|
56 |
% |
|
|
336 |
|
|
1,431 |
|
|
|
1,398 |
Telecommunications |
|
|
145 |
|
|
|
226 |
|
|
(81 |
) |
|
(36 |
)% |
|
|
55 |
|
|
594 |
|
|
|
879 |
Acquisition |
|
|
802 |
|
|
|
— |
|
|
802 |
|
|
100 |
% |
|
|
42 |
|
|
844 |
|
|
|
— |
Other
expenses |
|
|
1,125 |
|
|
|
1,247 |
|
|
(122 |
) |
|
(10 |
)% |
|
|
1,043 |
|
|
4,272 |
|
|
|
4,559 |
Total noninterest
expense |
|
|
8,868 |
|
|
|
7,891 |
|
|
977 |
|
|
12 |
% |
|
|
7,634 |
|
|
32,206 |
|
|
|
30,964 |
Income before provision
for income taxes |
|
|
4,758 |
|
|
|
3,810 |
|
|
948 |
|
|
25 |
% |
|
|
5,436 |
|
|
19,359 |
|
|
|
14,272 |
Provision for income
taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal
of uncertain tax position |
|
|
(988 |
) |
|
|
— |
|
|
(988 |
) |
|
100 |
% |
|
|
— |
|
|
(988 |
) |
|
|
— |
Benefit
from cost segregation study and tangible property review |
|
|
(484 |
) |
|
|
— |
|
|
(484 |
) |
|
100 |
% |
|
|
— |
|
|
(484 |
) |
|
|
— |
Net
deferred tax asset write-down |
|
|
— |
|
|
|
2,490 |
|
|
(2,490 |
) |
|
(100 |
)% |
|
|
— |
|
|
— |
|
|
|
2,490 |
Provision
for income taxes from operations |
|
|
1,391 |
|
|
|
1,313 |
|
|
78 |
|
|
6 |
% |
|
|
1,404 |
|
|
5,101 |
|
|
|
4,438 |
Total provision for
income taxes |
|
|
(81 |
) |
|
|
3,803 |
|
|
(3,884 |
) |
|
(102 |
)% |
|
|
1,404 |
|
|
3,629 |
|
|
|
6,928 |
Net income |
|
$ |
4,839 |
|
|
$ |
7 |
|
$ |
4,832 |
|
|
100 |
% |
|
$ |
4,032 |
|
$ |
15,730 |
|
|
$ |
7,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
$ |
0.30 |
|
|
$ |
— |
|
$ |
0.30 |
|
|
100 |
% |
|
$ |
0.25 |
|
$ |
0.97 |
|
|
$ |
0.48 |
Average basic
shares |
|
|
16,265 |
|
|
|
16,195 |
|
|
70 |
|
|
— |
% |
|
|
16,252 |
|
|
16,248 |
|
|
|
15,207 |
Diluted earnings per
share |
|
$ |
0.30 |
|
|
$ |
— |
|
$ |
0.30 |
|
|
100 |
% |
|
$ |
0.25 |
|
$ |
0.96 |
|
|
$ |
0.48 |
Average diluted
shares |
|
|
16,345 |
|
|
|
16,306 |
|
|
39 |
|
|
— |
% |
|
|
16,342 |
|
|
16,332 |
|
|
|
15,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 14 |
UNAUDITED CONDENSED CONSOLIDATED |
QUARTERLY AVERAGE BALANCE SHEETS |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
923,409 |
|
$ |
930,863 |
|
$ |
922,687 |
|
$ |
883,876 |
|
$ |
839,004 |
Taxable
securities |
|
|
218,137 |
|
|
199,883 |
|
|
206,247 |
|
|
205,302 |
|
|
199,849 |
Tax
exempt securities |
|
|
42,868 |
|
|
48,561 |
|
|
50,306 |
|
|
59,789 |
|
|
72,152 |
Interest-bearing deposits in other banks |
|
|
75,295 |
|
|
50,397 |
|
|
29,041 |
|
|
32,915 |
|
|
67,032 |
Total earning
assets |
|
|
1,259,709 |
|
|
1,229,704 |
|
|
1,208,281 |
|
|
1,181,882 |
|
|
1,178,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
|
|
22,447 |
|
|
21,834 |
|
|
19,880 |
|
|
17,641 |
|
|
19,783 |
Premises and equipment,
net |
|
|
13,331 |
|
|
13,768 |
|
|
14,167 |
|
|
14,557 |
|
|
14,948 |
Goodwill and core
deposit intangible, net |
|
|
1,842 |
|
|
1,888 |
|
|
1,943 |
|
|
1,998 |
|
|
2,054 |
Other assets |
|
|
31,488 |
|
|
33,084 |
|
|
32,426 |
|
|
32,485 |
|
|
37,138 |
Total assets |
|
$ |
1,328,817 |
|
$ |
1,300,278 |
|
$ |
1,276,697 |
|
$ |
1,248,563 |
|
$ |
1,251,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand -
noninterest-bearing |
|
$ |
367,457 |
|
$ |
343,948 |
|
$ |
309,199 |
|
$ |
307,397 |
|
$ |
316,961 |
Demand -
interest-bearing |
|
|
522,417 |
|
|
494,906 |
|
|
467,651 |
|
|
470,440 |
|
|
459,451 |
Savings |
|
|
110,934 |
|
|
107,349 |
|
|
107,108 |
|
|
110,725 |
|
|
111,725 |
Certificates of deposit |
|
|
157,035 |
|
|
163,302 |
|
|
170,824 |
|
|
181,901 |
|
|
194,886 |
Total
deposits |
|
|
1,157,843 |
|
|
1,109,505 |
|
|
1,054,782 |
|
|
1,070,463 |
|
|
1,083,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
Home Loan Bank of San Francisco borrowings |
|
|
— |
|
|
22,283 |
|
|
55,275 |
|
|
12,444 |
|
|
— |
Other
borrowings net of unamortized debt issuance costs |
|
|
13,785 |
|
|
14,681 |
|
|
15,614 |
|
|
16,528 |
|
|
17,211 |
Junior
subordinated debentures |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
Other
liabilities |
|
|
12,846 |
|
|
12,000 |
|
|
12,535 |
|
|
11,749 |
|
|
12,554 |
Total liabilities |
|
|
1,194,784 |
|
|
1,168,779 |
|
|
1,148,516 |
|
|
1,121,494 |
|
|
1,123,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
134,033 |
|
|
131,499 |
|
|
128,181 |
|
|
127,069 |
|
|
128,862 |
Liabilities &
shareholders' equity |
|
$ |
1,328,817 |
|
$ |
1,300,278 |
|
$ |
1,276,697 |
|
$ |
1,248,563 |
|
$ |
1,251,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 15 |
UNAUDITED CONDENSED CONSOLIDATED |
ANNUAL AVERAGE BALANCE SHEETS |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Twelve Months Ended |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2018 |
|
2017 |
|
2016 |
|
2015 |
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
915,360 |
|
$ |
818,119 |
|
$ |
752,938 |
|
$ |
699,227 |
Taxable
securities |
|
|
207,407 |
|
|
165,333 |
|
|
120,884 |
|
|
120,897 |
Tax
exempt securities |
|
|
50,330 |
|
|
74,231 |
|
|
75,303 |
|
|
77,089 |
Interest-bearing deposits in other banks |
|
|
47,038 |
|
|
66,872 |
|
|
58,668 |
|
|
30,323 |
Total earning
assets |
|
|
1,220,135 |
|
|
1,124,555 |
|
|
1,007,793 |
|
|
927,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
|
|
20,468 |
|
|
18,301 |
|
|
15,831 |
|
|
11,220 |
Premises and equipment,
net |
|
|
13,952 |
|
|
15,567 |
|
|
15,078 |
|
|
11,552 |
Goodwill and core
deposit intangible, net |
|
|
1,917 |
|
|
2,136 |
|
|
1,888 |
|
|
— |
Other assets |
|
|
32,369 |
|
|
37,692 |
|
|
39,160 |
|
|
42,423 |
Total assets |
|
$ |
1,288,841 |
|
$ |
1,198,251 |
|
$ |
1,079,750 |
|
$ |
992,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand -
noninterest-bearing |
|
$ |
332,197 |
|
$ |
289,735 |
|
$ |
226,368 |
|
$ |
156,578 |
Demand -
interest-bearing |
|
|
489,013 |
|
|
434,705 |
|
|
374,170 |
|
|
283,105 |
Savings |
|
|
109,025 |
|
|
111,376 |
|
|
104,771 |
|
|
92,659 |
Certificates of deposit |
|
|
168,183 |
|
|
205,648 |
|
|
221,074 |
|
|
238,626 |
Total
deposits |
|
|
1,098,418 |
|
|
1,041,464 |
|
|
926,383 |
|
|
770,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
Home Loan Bank of San Francisco borrowings |
|
|
22,466 |
|
|
302 |
|
|
17,856 |
|
|
87,548 |
Other
borrowings net of unamortized debt issuance costs |
|
|
15,143 |
|
|
17,981 |
|
|
19,430 |
|
|
1,326 |
Junior
subordinated debentures |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
Other
liabilities |
|
|
12,286 |
|
|
12,293 |
|
|
13,217 |
|
|
16,588 |
Total liabilities |
|
|
1,158,623 |
|
|
1,082,350 |
|
|
987,196 |
|
|
886,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
130,218 |
|
|
115,901 |
|
|
92,554 |
|
|
105,991 |
Liabilities &
shareholders' equity |
|
$ |
1,288,841 |
|
$ |
1,198,251 |
|
$ |
1,079,750 |
|
$ |
992,731 |
About Bank of Commerce Holdings
Bank of Commerce Holdings is a bank holding company
headquartered in Sacramento, California and is the parent company
for Redding Bank of Commerce which operates under two separate
names (Redding Bank of Commerce and Sacramento Bank of Commerce, a
division of Redding Bank of Commerce). The Bank is an FDIC-insured
California banking corporation providing community banking and
financial services through nine offices located in northern
California. The Bank was incorporated as a California banking
corporation on November 25, 1981 and opened for business on October
22, 1982. The Company’s common stock is listed on the NASDAQ Global
Market and trades under the symbol “BOCH”.
Contact Information:
Randall S. Eslick, President and Chief Executive
OfficerTelephone Direct (916) 677-5800
James A. Sundquist, Executive Vice President and Chief Financial
OfficerTelephone Direct (916) 677-5825
Samuel D. Jimenez, Executive Vice President and Chief Operating
OfficerTelephone Direct (530) 722-3952
Andrea M. Newburn, Vice President and Senior Administrative
Officer / Corporate SecretaryTelephone Direct (530) 722-3959
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