Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.764
billion asset bank holding company and parent company of Merchants
Bank of Commerce (the “Bank”), today announced financial results
for the quarter and year ended December 31, 2020. Net income for
the quarter ended December 31, 2020 was $5.1 million or $0.30 per
share – diluted, compared with net income of $4.4 million or $0.24
per share – diluted for the same period of 2019. Net income for the
year ended December 31, 2020 was $14.2 million or $0.83 per share –
diluted, compared with net income of $15.0 million or $0.83 per
share – diluted for the same period of 2019.
Significant Items for the fourth quarter of
2020:
- COVID-19 loan deferrals outstanding
declined to $9.5 million at December 31, 2020 as borrowers resumed
making payments compared to deferral balances of $38.6 million and
$123.3 million at September 30, 2020 and June 30, 2020,
respectively.
- 119 PPP loans totaling $32.7 million
(20%) have been forgiven by the SBA or repaid by the borrower,
resulting in $664 thousand of accelerated fee income.
- COVID-19 credit concerns have
moderated and no provision for loan and lease losses was required
during the fourth quarter.
Randall S. Eslick, President and CEO commented: “Looking back on
2020, I could not be more proud of the accomplishments of our
dedicated employees. Despite the rollercoaster that was 2020,
the year was unexpectedly positive for our company. We
supported our employees, customers and communities through the
pandemic; we saw substantial growth in loans and deposits; and we
ended the year delivering solid returns to our investors. Our
company is well positioned for future success.”
Financial highlights for the year ended December 31,
2020:
- Net income of $14.2 million was a
decrease of $797 thousand (5%) from $15.0 million earned during the
prior year. Earnings of $0.83 per share – diluted was unchanged
compared to the prior year and reflects the impact of the
following:
- 1.5 million shares of common stock
repurchased between October of 2019 and April of 2020.
- $5.3 million provision for loan and
lease losses for the current year.
- $1.1 million in non-recurring costs
during the first quarter of 2020 associated with the termination of
a technology management services contract and a severance
agreement; both previously announced.
- $2.7 million in non-recurring costs
recorded during the year ended December 31, 2019 associated with
our January 31, 2019 acquisition of Merchants National Bank of
Sacramento and the name change of our subsidiary bank.
- Net interest income increased $1.9
million (4%) to $55.5 million compared to $53.5 million in the
prior year.
- Net interest margin declined to
3.60% compared to 3.94% in the prior year.
- Return on average assets decreased
to 0.86% compared to 1.03% in the prior year.
- Return on average equity decreased
to 8.27% compared to 9.09% in the prior year.
- Average loans totaled $1.149
billion, an increase of $129 million (13%) compared to average
loans in the prior year.
- Average earning assets totaled
$1.539 billion, an increase of $178 million (13%) compared to
average earning assets in the prior year.
- Average deposits totaled $1.423
billion, an increase of $179 million (14%) compared to average
deposits in the prior year.
- Average non-maturing deposits
totaled $1.281 billion, an increase of $197 million (18%) compared
to the prior year.
- Average certificates of deposit
totaled $142.1 million, a decrease of $18.5 million (12%) compared
to the prior year.
- The Company’s efficiency ratio was
58.8% compared to 64.5% in the prior year.
- The Company’s efficiency ratio of
58.8% for 2020 includes $1.1 million of non-recurring costs. The
efficiency ratio excluding these costs was 56.9%.
- The Company’s efficiency ratio of
64.5% for 2019 includes $2.7 million of non-recurring costs
associated with our acquisition of Merchants and name change of our
subsidiary bank. The efficiency ratio excluding these non-recurring
costs is 59.9%.
- Nonperforming assets at December 31,
2020 totaled $7.0 million or 0.40% of total assets, an increase of
$1.4 million (24%) since December 31, 2019. The increase in
nonperforming assets results primarily from two commercial loans
totaling $1.4 million and a $640 thousand commercial real estate
loan, all of which are well secured, that were placed on nonaccrual
status during the year ending December 31, 2020.
- Book value per common share was
$10.58 at December 31, 2020 compared to $9.62 at December 31,
2019.
- Tangible book value per common share
was $9.64 at December 31, 2020 compared to $8.71 at December 31,
2019.
Financial highlights for the fourth quarter of
2020:
- Net income of $5.1 million was an
increase of $703 thousand (16%) from $4.4 million earned during the
same period in the prior year. Earnings of $0.30 per share –
diluted was an increase of $0.06 (25%) per share from $0.24 per
share – diluted earned during the same period in the prior year and
reflects the impact of the following:
- 1.5 million shares of common stock
repurchased between October of 2019 and April of 2020.
- Net interest income increased $1.3
million (9%) to $14.6 million compared to $13.3 million for the
same period in the prior year.
- Net interest margin declined to
3.46% compared to 3.80% for the same period in the prior year.
- Return on average assets decreased
to 1.14% compared to 1.16% for the same period in the prior
year.
- Return on average equity increased
to 11.56% compared to 10.06% for the same period in the prior
year.
- Average loans totaled $1.173
billion, an increase of $141 million (14%) compared to average
loans for the same period in the prior year.
- Average earning assets totaled
$1.675 billion, an increase of $284 million (20%) compared to the
same period in the prior year.
- Average deposits totaled $1.555
billion, an increase of $273 million (21%) compared to the same
period in the prior year.
- Average non-maturing deposits
totaled $1.417 billion, an increase of $288 million (26%) compared
to the same period in the prior year.
- Average certificates of deposit
totaled $138.4 million, a decrease of $14.8 million (10%) compared
to the same period in the prior year.
- The Company’s efficiency ratio was
54.8% compared to 58.7% for the same period in the prior year.
- Nonperforming assets at December 31,
2020 totaled $7.0 million or 0.40% of total assets, a decrease of
$1.1 million (53% annualized) since September 30, 2020. The
decrease in nonperforming assets was due to a $1.1 million
commercial real estate loan that was placed on nonaccrual status in
the second quarter of 2020 and paid off during the fourth quarter
of 2020.
- Book value per common share was
$10.58 at December 31, 2020 compared to $10.32 at September 30,
2020.
- Tangible book value per common share
was $9.64 at December 31, 2020 compared to $9.38 at September 30,
2020.
Impact of COVID-19:
- At December 31, 2020, we have 487
loans totaling $130.8 million in the Small Business
Administration’s Paycheck Protection Program (“PPP”) compared to
606 loans totaling $163.5 million at September 30, 2020.
Substantially all of the loans were made to existing customers and
were funded under the two-year PPP loan program.
- We have experienced significant increases in deposit balances
during 2020. All PPP loan funds were deposited into customer
accounts at our bank and customer behavior has emphasized savings
during the economic slow down.
- Organic loan growth continues to be slow as we maintain credit
underwriting discipline in the current economic environment.
- For the six-month period, from April
through September, SBA made principal and interest payments on all
our SBA 7(a) loans. In October, borrowers resumed responsibility
for making their payments.
- After considering qualitative and quantitative factors,
management determined that the Company’s goodwill was not impaired
at December 31, 2020.
- At December 31, 2020, our workforce totaled 212 employees of
which 107 are working remotely.
- All of our branch offices remain open, although they are
operating under a reduced schedule. Our pandemic response team is
continuing to modify and enhance our workforce and customer
protection as additional information or requirements are
promulgated by the CDC and the state of California.
Forward-Looking Statements
Bank of Commerce Holdings wishes to take advantage of the Safe
Harbor provisions included in the Private Securities Litigation
Reform Act of 1995. This news release includes statements by the
Company, which describe management’s expectations and developments,
which may not be based on historical facts and are “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended and Section 21B of the Securities Act of 1934,
as amended. Future events are difficult to predict, and the
expectations described above are necessarily subject to risk and
uncertainty that may cause actual results to differ materially and
adversely. In addition to discussions about risks and uncertainties
set forth from time to time in the Company's public filings,
factors that may cause actual results to differ materially from
those contemplated by such forward looking statements include,
among others, the following possibilities: (1) local, national and
international economic conditions are less favorable than expected
or have a more direct and pronounced effect on the Company than
expected and adversely affect the Company's ability to continue its
internal growth at historical rates and maintain the quality of its
earning assets; (2) changes in interest rates reduce interest
margins more than expected and negatively affect funding sources;
(3) projected business increases following strategic expansion or
opening or acquiring new banks and/or branches are lower than
expected; (4) our concentration in lending tied to real estate
exposes us to the adverse effects of material increases in interest
rates, declines in the general economy, tightening credit markets
or declines in real estate values; (5) competitive pressure among
financial institutions increases significantly; (6) legislation or
regulatory requirements or changes adversely affect the businesses
in which the Company is engaged; and (7) technological changes
could expose us to new risks.
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TABLE 1 |
|
SELECTED FINANCIAL INFORMATION - UNAUDITED |
|
(dollars in thousands except per share data) |
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For The Three Months Ended |
|
For The Twelve Months Ended |
|
Net income, average
assets and |
|
December 31, |
|
|
September 30, |
|
December 31, |
|
average shareholders' equity |
|
2020 |
|
|
2019 |
|
|
2020 |
|
2020 |
|
|
2019 |
|
Net income |
|
$ |
5,072 |
|
|
$ |
4,369 |
|
|
$ |
4,329 |
|
|
$ |
14,164 |
|
|
$ |
14,961 |
|
Average total assets |
|
$ |
1,774,937 |
|
|
$ |
1,492,643 |
|
|
$ |
1,704,116 |
|
|
$ |
1,640,519 |
|
|
$ |
1,458,112 |
|
Average total earning
assets |
|
$ |
1,674,544 |
|
|
$ |
1,390,446 |
|
|
$ |
1,601,436 |
|
|
$ |
1,538,605 |
|
|
$ |
1,360,325 |
|
Average shareholders'
equity |
|
$ |
174,520 |
|
|
$ |
172,385 |
|
|
$ |
171,433 |
|
|
$ |
171,287 |
|
|
$ |
164,642 |
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Selected performance ratios |
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Return on average assets |
|
|
1.14 |
% |
|
|
1.16 |
% |
|
|
1.01 |
% |
|
|
0.86 |
% |
|
|
1.03 |
% |
Return on average equity |
|
|
11.56 |
% |
|
|
10.06 |
% |
|
|
10.05 |
% |
|
|
8.27 |
% |
|
|
9.09 |
% |
Efficiency ratio |
|
|
54.8 |
% |
|
|
58.7 |
% |
|
|
54.8 |
% |
|
|
58.8 |
% |
|
|
64.5 |
% |
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Share and per share amounts |
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Weighted average shares - basic (1) |
|
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16,663 |
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|
18,068 |
|
|
|
16,660 |
|
|
|
16,918 |
|
|
|
17,956 |
|
Weighted average shares -
diluted (1) |
|
|
16,731 |
|
|
|
18,150 |
|
|
|
16,696 |
|
|
|
16,963 |
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|
|
18,024 |
|
Earnings per share -
basic |
|
$ |
0.30 |
|
|
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.84 |
|
|
$ |
0.83 |
|
Earnings per share -
diluted |
|
$ |
0.30 |
|
|
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.83 |
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$ |
0.83 |
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At December 31, |
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At September 30, |
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Share and per share amounts |
|
2020 |
|
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2019 |
|
|
2020 |
|
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|
Common shares outstanding (2) |
|
|
16,801 |
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|
18,137 |
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|
16,792 |
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Book value per common share
(2) |
|
$ |
10.58 |
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|
$ |
9.62 |
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$ |
10.32 |
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Tangible book value per common
share (2)(3) |
|
$ |
9.64 |
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$ |
8.71 |
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$ |
9.38 |
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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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13.12 |
% |
|
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13.19 |
% |
|
|
12.61 |
% |
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Tier 1 capital ratio |
|
|
13.97 |
% |
|
|
14.04 |
% |
|
|
13.44 |
% |
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Total capital ratio |
|
|
16.06 |
% |
|
|
15.97 |
% |
|
|
15.53 |
% |
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Tier 1 leverage ratio |
|
|
9.46 |
% |
|
|
11.30 |
% |
|
|
9.60 |
% |
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|
Tangible common equity ratio
(5) |
|
|
9.27 |
% |
|
|
10.80 |
% |
|
|
9.13 |
% |
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Merchants Bank of
Commerce |
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|
Common equity tier 1 capital
ratio |
|
|
14.58 |
% |
|
|
14.39 |
% |
|
|
14.01 |
% |
|
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|
Tier 1 capital ratio |
|
|
14.58 |
% |
|
|
14.39 |
% |
|
|
14.01 |
% |
|
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|
Total capital ratio |
|
|
15.83 |
% |
|
|
15.48 |
% |
|
|
15.26 |
% |
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|
Tier 1 leverage ratio |
|
|
9.86 |
% |
|
|
11.58 |
% |
|
|
9.99 |
% |
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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) Book value
per share is computed by dividing total shareholders’ equity by
shares outstanding. 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, 2020, the Company had total consolidated
assets of $1.764 billion, gross loans of $1.140 billion, allowance
for loan and lease losses (“ALLL”) of $17 million, total deposits
of $1.543 billion, and shareholders’ equity of $178 million.
TABLE 2 |
LOAN BALANCES BY TYPE - UNAUDITED |
(dollars in thousands) |
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At December 31, |
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At September 30, |
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% of |
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% of |
|
Change |
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|
% of |
|
2020 |
|
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Total |
|
2019 |
|
|
Total |
|
Amount |
|
% |
|
2020 |
|
|
Total |
Commercial |
$ |
115,559 |
|
|
10 |
% |
|
$ |
141,197 |
|
|
14 |
% |
|
$ |
(25,638 |
) |
|
(18 |
) |
% |
|
$ |
121,025 |
|
|
10 |
% |
Paycheck protection
program |
|
130,814 |
|
|
11 |
|
|
|
— |
|
|
— |
|
|
|
130,814 |
|
|
100 |
|
% |
|
|
163,493 |
|
|
14 |
|
Real estate - construction and
land development |
|
44,549 |
|
|
4 |
|
|
|
26,830 |
|
|
3 |
|
|
|
17,719 |
|
|
66 |
|
% |
|
|
40,289 |
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|
3 |
|
Real estate - commercial
non-owner occupied |
|
512,832 |
|
|
45 |
|
|
|
493,920 |
|
|
48 |
|
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|
18,912 |
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4 |
|
% |
|
|
538,079 |
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|
45 |
|
Real estate - commercial owner
occupied |
|
210,155 |
|
|
18 |
|
|
|
218,833 |
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|
21 |
|
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|
(8,678 |
) |
|
(4 |
) |
% |
|
|
210,455 |
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|
17 |
|
Real estate - residential -
ITIN |
|
29,035 |
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|
3 |
|
|
|
33,039 |
|
|
3 |
|
|
|
(4,004 |
) |
|
(12 |
) |
% |
|
|
30,071 |
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|
2 |
|
Real estate - residential -
1-4 family mortgage |
|
55,925 |
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|
5 |
|
|
|
63,661 |
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|
6 |
|
|
|
(7,736 |
) |
|
(12 |
) |
% |
|
|
57,867 |
|
|
5 |
|
Real estate - residential -
equity lines |
|
18,894 |
|
|
2 |
|
|
|
22,099 |
|
|
2 |
|
|
|
(3,205 |
) |
|
(15 |
) |
% |
|
|
20,296 |
|
|
2 |
|
Consumer and other |
|
21,969 |
|
|
2 |
|
|
|
33,324 |
|
|
3 |
|
|
|
(11,355 |
) |
|
(34 |
) |
% |
|
|
24,490 |
|
|
2 |
|
Gross loans |
|
1,139,732 |
|
|
100 |
% |
|
|
1,032,903 |
|
|
100 |
% |
|
|
106,829 |
|
|
10 |
|
% |
|
|
1,206,065 |
|
|
100 |
% |
Deferred (fees) and costs |
|
229 |
|
|
|
|
|
|
2,162 |
|
|
|
|
|
|
(1,933 |
) |
|
|
|
|
|
(1,037 |
) |
|
|
|
Loans, net of deferred fees and costs |
|
1,139,961 |
|
|
|
|
|
|
1,035,065 |
|
|
|
|
|
|
104,896 |
|
|
|
|
|
|
1,205,028 |
|
|
|
|
Allowance for loan and lease
losses |
|
(16,910 |
) |
|
|
|
|
|
(12,231 |
) |
|
|
|
|
|
(4,679 |
) |
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|
|
(16,873 |
) |
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|
Net loans |
$ |
1,123,051 |
|
|
|
|
|
$ |
1,022,834 |
|
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|
|
|
$ |
100,217 |
|
|
|
|
|
$ |
1,188,155 |
|
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Average loans during the
quarter |
$ |
1,172,705 |
|
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|
|
$ |
1,031,702 |
|
|
|
|
|
$ |
141,003 |
|
|
14 |
|
% |
|
$ |
1,209,277 |
|
|
|
|
Average loans during the
quarter (excluding PPP) |
$ |
1,024,324 |
|
|
|
|
|
$ |
— |
|
|
|
|
|
$ |
1,024,324 |
|
|
100 |
|
% |
|
$ |
1,046,187 |
|
|
|
|
Average yield on loans during
the quarter |
|
4.59 |
|
% |
|
|
|
|
4.86 |
|
% |
|
|
|
|
(0.27 |
) |
|
(6 |
) |
% |
|
|
4.42 |
|
% |
|
|
Average yield on loans during
the quarter (excluding PPP) |
|
4.67 |
|
% |
|
|
|
|
4.86 |
|
% |
|
|
|
|
(0.19 |
) |
|
(4 |
) |
% |
|
|
4.75 |
|
% |
|
|
Average yield on loans year to
date |
|
4.57 |
|
% |
|
|
|
|
4.95 |
|
% |
|
|
|
|
(0.38 |
) |
|
(8 |
) |
% |
|
|
4.56 |
|
% |
|
|
Average yield on loans year to
date (excluding PPP) |
|
4.75 |
|
% |
|
|
|
|
4.95 |
|
% |
|
|
|
|
(0.20 |
) |
|
(4 |
) |
% |
|
|
4.77 |
|
% |
|
|
The Company recorded gross loan balances of $1.140 billion at
December 31, 2020, compared with $1.033 billion and $1.206 billion
at December 31, 2019 and September 30, 2020, respectively, an
increase of $107 million and a decrease of $66 million,
respectively.
The average yield on loans during the quarter was 4.59% compared
to 4.86% and 4.42% for the quarters ended December 31, 2019 and
September 30, 2020, respectively. Yields were impacted by PPP
loans, which averaged $148.4 million and yielded 4.07% during the
current quarter and $163.1 million and yielded 2.31% during the
prior quarter.
Gross loan balances in the table above include a net fair value
discount for loans acquired from Merchants of $920 thousand, $1.7
million and $1.1 million at December 31, 2020, December 31, 2019
and September 30, 2020, respectively. We recorded $141 thousand,
$188 thousand and $233 thousand in accretion of the discount for
these loans during the quarters ended December 31, 2020, December
31, 2019 and September 30, 2020, respectively.
We have 487 PPP loans totaling $130.8 million at December 31,
2020. During the fourth quarter of 2020, 119 PPP loans totaling
$32.7 million were repaid. Loan fee income net of loan origination
costs is earned over the 24-month life of the loans as a part of
the loan yield. When a PPP loan is repaid prior to maturity, all
unamortized fees and costs associated with the loan are accelerated
into income. During the current quarter, we recognized $664
thousand in accelerated fee income. At December 31, 2020, net fees
totaling $2.2 million remain to be earned in future quarters. The
following tables provide additional information on the PPP loans by
industry and by loan balance at December 31, 2020.
|
|
|
|
|
|
TABLE 3 |
PPP LOANS BY INDUSTRY - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
At December 31, 2020 |
|
|
Number |
|
Balance |
Construction |
|
75 |
|
$ |
55,644 |
Healthcare and Social
Assistance |
|
81 |
|
|
15,520 |
Professional, Scientific and
Tech Services |
|
58 |
|
|
7,708 |
Accommodation and Food
Services |
|
47 |
|
|
8,800 |
Admin, Support, Waste
Management and Remediation Services |
|
15 |
|
|
4,988 |
Primary Metal
Manufacturing |
|
14 |
|
|
5,037 |
Retail Trade |
|
49 |
|
|
6,710 |
Other |
|
148 |
|
|
26,407 |
Total |
|
487 |
|
$ |
130,814 |
TABLE 4 |
PPP LOANS BY LOAN SIZE - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
At December 31, 2020 |
|
Balance |
|
Number |
|
Average Loan Size |
$50,000 or less |
$ |
4,220 |
|
181 |
|
$ |
23 |
$50,001 to $150,000 |
|
11,884 |
|
143 |
|
|
83 |
$150,001 to $350,000 |
|
19,150 |
|
85 |
|
|
225 |
$350,001 to $1,999,999 |
|
52,004 |
|
66 |
|
|
788 |
$2,000,000 or greater |
|
43,556 |
|
12 |
|
|
3,630 |
Total |
$ |
130,814 |
|
487 |
|
$ |
269 |
During the third quarter of 2020, the SBA began accepting
applications for PPP loan forgiveness. The bank has 60 days to
review and approve an application before submitting it to SBA, and
the SBA then has 90 days to process it for forgiveness. The
following table presents the status of our loans in the forgiveness
process.
TABLE 5 |
PPP LOANS FORGIVENESS APPLICATION STATUS -
UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020 |
|
At September 30, 2020 |
|
Balance |
|
Number |
|
Average Loan Size |
|
Balance |
|
Number |
|
Average Loan Size |
Borrower has not started
application |
$ |
33,459 |
|
185 |
|
$ |
181 |
|
$ |
78,930 |
|
390 |
|
$ |
202 |
Borrower is working on
application |
|
31,277 |
|
136 |
|
|
230 |
|
|
38,624 |
|
123 |
|
|
314 |
Borrower has completed
application and the bank is reviewing it |
|
43,872 |
|
105 |
|
|
418 |
|
|
32,400 |
|
73 |
|
|
444 |
Bank has approved application
and submitted it to the SBA |
|
22,087 |
|
44 |
|
|
502 |
|
|
13,539 |
|
20 |
|
|
677 |
Remaining balance for loans
partially repaid |
|
119 |
|
17 |
|
|
7 |
|
|
— |
|
— |
|
|
— |
PPP loans not fully repaid |
|
130,814 |
|
487 |
|
|
269 |
|
|
163,493 |
|
606 |
|
|
270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments (1) |
|
32,679 |
|
119 |
|
|
275 |
|
|
— |
|
— |
|
|
— |
Total PPP loans originated by
bank |
$ |
163,493 |
|
606 |
|
$ |
270 |
|
$ |
163,493 |
|
606 |
|
$ |
270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes 119
loans fully repaid by SBA or the borrower and $3.2 million of
partial repayment for 17 borrowers who participated in the SBA
Economic Injury Disaster Loan ("EIDL") program. |
TABLE 6 |
CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES -
UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
|
|
|
|
|
|
At September 30, |
|
|
|
|
% of |
|
|
|
% of |
|
Change |
|
|
|
% of |
|
|
2020 |
|
Total |
|
2019 |
|
Total |
|
Amount |
|
% |
|
2020 |
|
Total |
Cash and due from banks |
|
$ |
19,875 |
|
4 |
% |
|
$ |
21,338 |
|
6 |
% |
|
$ |
(1,463 |
) |
|
(7 |
) |
% |
|
$ |
22,884 |
|
5 |
% |
Interest-bearing deposits in
other banks |
|
|
87,111 |
|
16 |
|
|
|
59,266 |
|
16 |
|
|
|
27,845 |
|
|
47 |
|
% |
|
|
104,999 |
|
23 |
|
Total cash and cash equivalents |
|
|
106,986 |
|
20 |
|
|
|
80,604 |
|
22 |
|
|
|
26,382 |
|
|
33 |
|
% |
|
|
127,883 |
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government and
agencies |
|
|
32,994 |
|
6 |
|
|
|
38,733 |
|
11 |
|
|
|
(5,739 |
) |
|
(15 |
) |
% |
|
|
31,811 |
|
7 |
|
Obligations of state and
political subdivisions |
|
|
108,366 |
|
20 |
|
|
|
42,098 |
|
11 |
|
|
|
66,268 |
|
|
157 |
|
% |
|
|
91,863 |
|
20 |
|
Residential mortgage backed
securities and collateralized mortgage obligations |
|
|
240,478 |
|
42 |
|
|
|
180,835 |
|
49 |
|
|
|
59,643 |
|
|
33 |
|
% |
|
|
165,693 |
|
35 |
|
Corporate securities |
|
|
— |
|
— |
|
|
|
2,966 |
|
1 |
|
|
|
(2,966 |
) |
|
(100 |
) |
% |
|
|
— |
|
— |
|
Commercial mortgage backed
securities |
|
|
28,074 |
|
5 |
|
|
|
19,307 |
|
5 |
|
|
|
8,767 |
|
|
45 |
|
% |
|
|
19,576 |
|
4 |
|
Other asset backed
securities |
|
|
36,968 |
|
7 |
|
|
|
3,011 |
|
1 |
|
|
|
33,957 |
|
|
1,128 |
|
% |
|
|
28,089 |
|
6 |
|
Total investment securities - AFS |
|
|
446,880 |
|
80 |
|
|
|
286,950 |
|
78 |
|
|
|
159,930 |
|
|
56 |
|
% |
|
|
337,032 |
|
72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash, cash equivalents
and investment securities |
|
$ |
553,866 |
|
100 |
% |
|
$ |
367,554 |
|
100 |
% |
|
$ |
186,312 |
|
|
51 |
|
% |
|
$ |
464,915 |
|
100 |
% |
Average yield on
interest-bearing due from banks during the quarter |
|
|
0.12 |
% |
|
|
|
|
1.66 |
% |
|
|
|
|
(1.54 |
) |
|
|
|
|
|
0.12 |
% |
|
|
Average yield on investment
securities during the quarter - nominal |
|
|
2.06 |
% |
|
|
|
|
2.61 |
% |
|
|
|
|
(0.55 |
) |
|
|
|
|
|
2.33 |
% |
|
|
Average yield on investment
securities during the quarter - tax equivalent |
|
|
2.19 |
% |
|
|
|
|
2.71 |
% |
|
|
|
|
(0.52 |
) |
|
|
|
|
|
2.50 |
% |
|
|
As of December 31, 2020, we maintained noninterest-bearing cash
positions of $19.9 million and interest-bearing deposits of $87.1
million at the Federal Reserve Bank and correspondent banks.
Management has been challenged to invest the rapidly increasing
liquidity generated by growth in deposits and loan repayments.
During the fourth quarter of 2020, we continued the deployment of
excess cash into our investment portfolio.
Investment securities totaled $446.9 million at December 31,
2020, compared with $287.0 million and $337.0 million at December
31, 2019 and September 30, 2020, respectively. Our investment
portfolio has shortened in duration considerably over the past
year, which is now allowing us to add longer-term securities with a
better yield without extending the duration of the total portfolio
beyond our risk appetite. During the fourth quarter of 2020, we
purchased securities with a par value of $133.3 million and
weighted average yield of 1.49% (1.52% tax equivalent). Investment
purchases were comprised primarily of longer duration municipal
bonds and lower coupon, moderate-term mortgage backed securities.
No securities were sold during the fourth quarter.
Average securities balances for the quarters ended December 31,
2020, December 31, 2019 and September 30, 2020 were $377.4 million,
$277.6 million and $296.8 million, respectively. Weighted average
yields on securities balances for those same periods were 2.06%,
2.61% and 2.33%, respectively.
At December 31, 2020, our net unrealized gains on
available-for-sale investment securities were $10.6 million
compared with net unrealized gains of $3.7 million and $10.4
million at December 31, 2019 and September 30, 2020, respectively.
The changes in net unrealized gains were due to changes in market
interest rates.
TABLE 7 |
DEPOSITS BY TYPE - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
|
|
|
|
|
|
At September 30, |
|
|
|
% of |
|
|
|
% of |
|
|
Change |
|
|
|
% of |
|
2020 |
|
Total |
|
2019 |
|
Total |
|
Amount |
|
% |
|
2020 |
|
Total |
Demand - noninterest-bearing |
$ |
541,033 |
|
35 |
% |
|
$ |
432,680 |
|
34 |
% |
|
$ |
108,353 |
|
|
25 |
|
% |
|
$ |
542,060 |
|
36 |
% |
Demand - interest-bearing |
|
290,251 |
|
19 |
|
|
|
239,258 |
|
19 |
|
|
|
50,993 |
|
|
21 |
|
% |
|
|
280,370 |
|
18 |
|
Money market |
|
425,121 |
|
28 |
|
|
|
307,559 |
|
24 |
|
|
|
117,562 |
|
|
38 |
|
% |
|
|
403,785 |
|
27 |
|
Total demand |
|
1,256,405 |
|
82 |
|
|
|
979,497 |
|
77 |
|
|
|
276,908 |
|
|
28 |
|
% |
|
|
1,226,215 |
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
150,695 |
|
10 |
|
|
|
135,888 |
|
11 |
|
|
|
14,807 |
|
|
11 |
|
% |
|
|
151,016 |
|
10 |
|
Total non-maturing
deposits |
|
1,407,100 |
|
92 |
|
|
|
1,115,385 |
|
88 |
|
|
|
291,715 |
|
|
26 |
|
% |
|
|
1,377,231 |
|
91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit |
|
135,679 |
|
8 |
|
|
|
151,786 |
|
12 |
|
|
|
(16,107 |
) |
|
(11 |
) |
% |
|
|
140,900 |
|
9 |
|
Total deposits |
$ |
1,542,779 |
|
100 |
% |
|
$ |
1,267,171 |
|
100 |
% |
|
$ |
275,608 |
|
|
22 |
|
% |
|
$ |
1,518,131 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits at December 31, 2020, increased $276 million or
22% to $1.543 billion compared to December 31, 2019 and increased
$24.6 million or 6% annualized compared to September 30, 2020.
Total non-maturing deposits increased $291.7 million or 26%
compared to the same date a year ago and increased $29.9 million or
9% annualized compared to September 30, 2020. The increase in
non-maturing deposits compared to the same period one year ago was
due to PPP loan program disbursements and changes in customer
behavior, which is placing greater emphasis on savings.
Certificates of deposit decreased $16.1 million or 11% compared to
the same date a year ago and decreased $5.2 million or 15%
annualized compared to September 30, 2020. These decreases reflect
our decision to reduce reliance on public deposits and depositor
reaction to the low interest rate environment.
The following table presents the average cost of
interest-bearing deposits, all deposits and all interest-bearing
liabilities for the periods indicated.
TABLE 8 |
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, |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
Interest-bearing deposits |
|
0.29 |
% |
|
|
0.36 |
% |
|
|
0.43 |
% |
|
|
0.53 |
% |
|
|
0.56 |
% |
|
|
0.56 |
% |
|
|
0.54 |
% |
|
|
0.49 |
% |
Interest-bearing deposits and
noninterest-bearing demand |
|
0.19 |
% |
|
|
0.23 |
% |
|
|
0.28 |
% |
|
|
0.35 |
% |
|
|
0.38 |
% |
|
|
0.38 |
% |
|
|
0.37 |
% |
|
|
0.34 |
% |
All interest-bearing
liabilities |
|
0.37 |
% |
|
|
0.44 |
% |
|
|
0.52 |
% |
|
|
0.65 |
% |
|
|
0.68 |
% |
|
|
0.68 |
% |
|
|
0.74 |
% |
|
|
0.67 |
% |
All interest-bearing
liabilities and noninterest-bearing demand |
|
0.24 |
% |
|
|
0.29 |
% |
|
|
0.34 |
% |
|
|
0.43 |
% |
|
|
0.46 |
% |
|
|
0.46 |
% |
|
|
0.52 |
% |
|
|
0.46 |
% |
Equity
As detailed in Table 1, capital ratios remain appropriate for
the Company’s risk profile.
In late 2019, we announced a program to repurchase 1.0 million
common shares which was later increased to 1.5 million common
shares. Between October of 2019 and April of 2020, all 1.5 million
shares were repurchased at a total cost of $13.6 million including
commissions, or an average of $9.11 per share.
During the fourth quarter of 2020, we announced a new share
repurchase program to repurchase up to 1.0 million shares of common
stock over a period ending December 31, 2021. As of December 31,
2020, no shares have been repurchased.
INCOME STATEMENT OVERVIEW
TABLE 9 |
SUMMARY INCOME STATEMENT - UNAUDITED |
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
December 31, |
|
Change |
|
September 30, |
|
Change |
|
2020 |
|
2019 |
|
Amount |
|
% |
|
2020 |
|
Amount |
|
% |
Interest income |
$ |
15,519 |
|
$ |
14,808 |
|
$ |
711 |
|
|
5 |
|
% |
|
$ |
15,218 |
|
$ |
301 |
|
|
2 |
|
% |
Interest expense |
|
963 |
|
|
1,494 |
|
|
(531 |
) |
|
(36 |
) |
% |
|
|
1,088 |
|
|
(125 |
) |
|
(11 |
) |
% |
Net interest income |
|
14,556 |
|
|
13,314 |
|
|
1,242 |
|
|
9 |
|
% |
|
|
14,130 |
|
|
426 |
|
|
3 |
|
% |
Provision for loan and
lease losses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
% |
|
|
1,100 |
|
|
(1,100 |
) |
|
(100 |
) |
% |
Noninterest income |
|
1,016 |
|
|
1,021 |
|
|
(5 |
) |
|
0 |
|
% |
|
|
1,189 |
|
|
(173 |
) |
|
(15 |
) |
% |
Noninterest expense |
|
8,534 |
|
|
8,421 |
|
|
113 |
|
|
1 |
|
% |
|
|
8,390 |
|
|
144 |
|
|
2 |
|
% |
Income before
provision for income taxes |
|
7,038 |
|
|
5,914 |
|
|
1,124 |
|
|
19 |
|
% |
|
|
5,829 |
|
|
1,209 |
|
|
21 |
|
% |
Provision for income taxes |
|
1,966 |
|
|
1,545 |
|
|
421 |
|
|
27 |
|
% |
|
|
1,500 |
|
|
466 |
|
|
31 |
|
% |
Net
income |
$ |
5,072 |
|
$ |
4,369 |
|
$ |
703 |
|
|
16 |
|
% |
|
$ |
4,329 |
|
$ |
743 |
|
|
17 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic |
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.06 |
|
|
25 |
|
% |
|
$ |
0.26 |
|
$ |
0.04 |
|
|
15 |
|
% |
Weighted average shares -
basic |
|
16,663 |
|
|
18,068 |
|
|
(1,405 |
) |
|
(8 |
) |
% |
|
|
16,660 |
|
|
3 |
|
|
— |
|
% |
Earnings per share -
diluted |
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.06 |
|
|
25 |
|
% |
|
$ |
0.26 |
|
$ |
0.04 |
|
|
15 |
|
% |
Weighted average shares -
diluted |
|
16,731 |
|
|
18,150 |
|
|
(1,419 |
) |
|
(8 |
) |
% |
|
|
16,696 |
|
|
35 |
|
|
— |
|
% |
Dividends declared
per common share |
$ |
0.06 |
|
$ |
0.05 |
|
$ |
0.01 |
|
|
20 |
|
% |
|
$ |
0.05 |
|
$ |
0.01 |
|
|
20 |
|
% |
Fourth Quarter of 2020 Compared With The Fourth Quarter
of 2019
Net income for the fourth quarter of 2020 increased $703
thousand compared to the fourth quarter of 2019. In the current
quarter, net interest income was $1.2 million higher. This positive
change was partially offset by noninterest income that was $5
thousand lower, noninterest expense that was $113 thousand higher
and a provision for income taxes that was $421 thousand higher.
Net Interest Income
Net interest income increased $1.2 million compared to the same
period a year ago.
Interest income for the fourth quarter of 2020 increased $711
thousand or 5% to $15.5 million.
- During the fourth quarter of 2020,
we recognized $664 thousand in accelerated fee income on PPP loans
forgiven or repaid during the quarter. These accelerated loan fees
increased the average yield on loans for the fourth quarter of 2020
by 23 basis points.
- PPP loans had an average balance of
$148.4 million and yield of 4.07% (2.29% excluding accelerated fee
income).
- Excluding PPP loans, interest and
fees on loans decreased $629 thousand due to a $7.4 million
decrease in average loan balances and a 19 basis point decrease in
average yield.
- Interest on investment securities
increased $126 thousand due to a $99.8 million increase in average
securities balances partially offset by a 55 basis point decrease
in average yield.
- Interest on interest-bearing
deposits due from banks decreased $304 thousand due to a 155 basis
point decrease in average yield that was partially offset by a
$43.3 million increase in average interest-bearing deposit
balances. During 2020, in response to the economic effects of the
COVID-19 pandemic, the Federal Reserve cut interest rates by 150 to
175 basis points.
Interest expense for the fourth quarter of 2020 decreased $531
thousand or 36% to $963 thousand.
- Interest expense on interest-bearing
deposits decreased $477 thousand. Average interest-bearing demand
and savings deposit balances increased $163.9 million, while
average certificate of deposit balances decreased $14.8 million.
The average rate paid on interest-bearing deposits decreased 27
basis points.
- Average FHLB borrowings were $7.1
million in the current quarter. The borrowings bear no interest
under a program offered by the FHLB during the second quarter of
2020 in response to COVID-19 liquidity concerns. There were no
borrowings during the same period a year ago.
- Interest expense on other term debt
decreased $4 thousand. The average debt balance was essentially
unchanged, while the average rate paid decreased 18 basis
points.
- Interest expense on junior
subordinated debentures decreased $50 thousand. The average debt
balance was unchanged, while the average rate paid decreased 192
basis points.
Provision for Loan and Lease Losses
Most asset quality concerns from earlier in 2020 have moderated.
Net loan recoveries were $36 thousand for the current quarter
compared to net loan charge-offs of $54 thousand during the same
period a year ago. Most COVID-19 loan payment deferrals have ended
with no negative impact on delinquencies. Classified assets
actually decreased during the current quarter due to a repayment of
$7.2 million from one commercial real estate borrower. As a result,
no provision for loan and lease losses was necessary during the
current quarter. There was no provision for loan and lease losses
in the fourth quarter of 2019. A more in depth discussion of our
provision is provided following Table 11.
Noninterest Income
Noninterest income for the three months ended December 31, 2020
decreased $5 thousand compared to the same period a year
previous.
Noninterest Expense
Noninterest expense for the three months ended December 31, 2020
increased $113 thousand compared to the same period a year
previous. Increases in noninterest expense included the following
items:
- $360 thousand increase in salaries
and related benefits.
- During the current quarter, we
recognized increased incentive accruals and we hired three
relationship managers to open a loan production office in Santa
Rosa.
- $105 thousand increase in FDIC
insurance premiums.
- During 2019, we benefited from a
Small Bank Assessment Credit from the FDIC.
These increases were partially offset by $231 thousand savings
in network infrastructure costs and a broad array of pandemic
induced savings in areas such as travel, conferences and business
development.
The Company’s efficiency ratio was 54.8% for the fourth quarter
of 2020. The ratio during the same period in 2019 was 58.7%.
Income Tax Provision
For the three months ended December 31, 2020, our income tax
provision of $2.0 million on pre-tax income of $7.0 million was an
effective tax rate of 27.9%. The tax provision for the fourth
quarter of the prior year was $1.5 million on pre-tax income of
$5.9 million for an effective rate of 26.1%.
- The tax provision of
$2.0 million included $132 thousand applicable to earlier quarters,
as deductible operating losses and tax credits from our low-income
housing partnerships were lower than we anticipated. The effective
tax rate excluding this $132 thousand was 26.1%.
Fourth Quarter of 2020 Compared With The Third Quarter
of 2020
Net income for the fourth quarter of 2020 increased $743
thousand compared to the third quarter of 2020. In the current
quarter, net interest income was $426 thousand higher and the
provision for loan and lease losses was $1.1 million lower. These
positive changes were partially offset by noninterest income that
was $173 thousand lower, noninterest expense that was $144 thousand
higher and a provision for income taxes that was $466 thousand
higher.
Net Interest Income
Net interest income increased $426 thousand over the prior
quarter.
Interest income for the three months ended December 31, 2020
increased $301 thousand or 2% to $15.5 million.
- During the fourth quarter of 2020,
we recognized $664 thousand in accelerated fee income on PPP loans
forgiven or repaid during the quarter. These accelerated loan fees
increased the average yield on loans for the fourth quarter of 2020
by 23 basis points.
- PPP loans had an average balance of
$148.4 million and yield of 4.07% (2.29% excluding accelerated fee
income).
- Excluding PPP loans, interest and
fees on loans decreased $485 thousand due to a $21.9 million
decrease in average loan balances and an 8 basis point decrease in
average yield.
- Interest on investment securities
increased $210 thousand due to an $80.6 million increase in average
security balances partially offset by a 28 basis point decrease in
average yield.
- Interest on interest-bearing
deposits due from banks increased $7 thousand due to a $29.0
million increase in average balances partially offset by a 1 basis
point decrease in average yield.
Interest expense for the three months ended December 31, 2020
decreased $125 thousand or 11% to $963 thousand.
- Interest expense on interest-bearing
deposits decreased $117 thousand. Average interest-bearing demand
and savings deposit balances increased $50.6 million, while average
certificates of deposit decreased $1.4 million. The average rate
paid on interest-bearing deposits decreased 7 basis points.
- Average FHLB borrowings were $7.1
million in the current quarter compared to $10.0 million in the
prior quarter. The borrowings bear no interest under a program
offered by the FHLB during the second quarter of 2020 in response
to COVID-19 liquidity concerns.
- Interest expense on other term debt
decreased $5 thousand. The average debt balance was essentially
unchanged, while the average rate paid decreased 21 basis
points.
- Interest expense on junior
subordinated debentures decreased $3 thousand. The average debt
balance was unchanged, while average rate paid decreased 12 basis
points.
Provision for Loan and Lease Losses
Most asset quality concerns from earlier in 2020 have moderated.
Net loan recoveries were $36 thousand in the current quarter
compared to net loan charge-offs of $316 thousand in the prior
quarter. Most COVID-19 loan deferrals ended with no negative impact
on delinquencies. Classified assets actually decreased during the
current quarter due to a repayment of $7.2 million on two loans
from one commercial real estate borrower. Nonaccrual loans
decreased by $1.1 million during the current quarter when compared
to the previous quarter due to the repayment of a $1.1 million
commercial real estate loan. As a result, management determined
that no provision for loan and lease losses was necessary during
the current quarter compared with a provision for loan and lease
losses of $1.1 million in the prior quarter. A more in depth
discussion of our provision is provided following Table 11.
Noninterest Income
Noninterest income for the three months ended December 31, 2020
decreased $173 thousand compared to the prior quarter. The prior
quarter included a $258 thousand gain on sale of investment
securities that did not recur in the current quarter.
Noninterest Expense
Noninterest expense for the three months ended December 31, 2020
increased $144 thousand compared to the prior quarter. The increase
was primarily due to an increase in accrual for incentives that was
partially offset by a broad array of pandemic induced savings in
areas such as travel, sponsorships, conferences and business
development.
The Company’s efficiency ratio was 54.8% for both the fourth
quarter of 2020 and the prior quarter.
Income Tax Provision
For the three months ended December 31, 2020, our income tax
provision of $2.0 million on pre-tax income of $7.0 million was an
effective tax rate of 27.9%. The income tax provision for the prior
quarter of $1.5 million on pre-tax income of $5.8 million was an
effective tax rate of 25.7%.
- The tax provision of
$2.0 million included $132 thousand applicable to earlier quarters,
as deductible operating losses and tax credits from our low-income
housing partnerships were lower than we anticipated. The effective
tax rate excluding this $132 thousand was 26.1%.
Earnings Per Share
Diluted earnings per share were $0.30 for the three months ended
December 31, 2020 compared with diluted earnings per share of $0.24
for the same period a year ago and diluted earnings per share of
$0.26 for the prior period. Net income and weighted average shares
used to calculate earnings per share – diluted are summarized in
Table 9 presented earlier in this press release.
TABLE 10a |
NET INTEREST MARGIN - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
September 30, 2020 |
|
|
Average |
|
|
|
|
Yield / |
|
Average |
|
|
|
|
Yield / |
|
Average |
|
|
|
|
Yield / |
|
|
Balance |
|
Interest(1) |
|
Rate (6) |
|
Balance |
|
Interest(1) |
|
Rate (6) |
|
Balance |
|
Interest(1) |
|
Rate (6) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans net of PPP (2) |
|
$ |
1,024,324 |
|
$ |
12,014 |
|
4.67 |
% |
|
$ |
1,031,702 |
|
$ |
12,643 |
|
4.86 |
% |
|
$ |
1,046,187 |
|
$ |
12,499 |
|
4.75 |
% |
PPP loans (3) |
|
|
148,381 |
|
|
1,518 |
|
4.07 |
% |
|
|
— |
|
|
— |
|
— |
% |
|
|
163,090 |
|
|
949 |
|
2.31 |
% |
Taxable securities |
|
|
304,242 |
|
|
1,484 |
|
1.94 |
% |
|
|
245,487 |
|
|
1,567 |
|
2.53 |
% |
|
|
228,045 |
|
|
1,284 |
|
2.24 |
% |
Tax-exempt securities (4) |
|
|
73,207 |
|
|
467 |
|
2.54 |
% |
|
|
32,158 |
|
|
258 |
|
3.18 |
% |
|
|
68,766 |
|
|
457 |
|
2.64 |
% |
Interest-bearing deposits in other banks |
|
|
124,390 |
|
|
36 |
|
0.12 |
% |
|
|
81,099 |
|
|
340 |
|
1.66 |
% |
|
|
95,348 |
|
|
29 |
|
0.12 |
% |
Average interest-earning
assets |
|
|
1,674,544 |
|
|
15,519 |
|
3.69 |
% |
|
|
1,390,446 |
|
|
14,808 |
|
4.23 |
% |
|
|
1,601,436 |
|
|
15,218 |
|
3.78 |
% |
Cash and due from banks |
|
|
22,413 |
|
|
|
|
|
|
|
|
24,083 |
|
|
|
|
|
|
|
|
23,381 |
|
|
|
|
|
|
Premises and equipment, net |
|
|
15,162 |
|
|
|
|
|
|
|
|
16,049 |
|
|
|
|
|
|
|
|
15,365 |
|
|
|
|
|
|
Goodwill |
|
|
11,671 |
|
|
|
|
|
|
|
|
11,671 |
|
|
|
|
|
|
|
|
11,671 |
|
|
|
|
|
|
Other intangible assets, net |
|
|
4,126 |
|
|
|
|
|
|
|
|
4,890 |
|
|
|
|
|
|
|
|
4,318 |
|
|
|
|
|
|
Other assets |
|
|
20,128 |
|
|
|
|
|
|
|
|
17,121 |
|
|
|
|
|
|
|
|
21,408 |
|
|
|
|
|
|
Average total assets |
|
$ |
1,748,044 |
|
|
|
|
|
|
|
$ |
1,464,260 |
|
|
|
|
|
|
|
$ |
1,677,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
283,213 |
|
|
57 |
|
0.08 |
% |
|
$ |
244,276 |
|
|
108 |
|
0.18 |
% |
|
$ |
279,744 |
|
|
71 |
|
0.10 |
% |
Money market |
|
|
430,014 |
|
|
237 |
|
0.22 |
% |
|
|
318,127 |
|
|
479 |
|
0.60 |
% |
|
|
387,995 |
|
|
289 |
|
0.30 |
% |
Savings |
|
|
151,223 |
|
|
53 |
|
0.14 |
% |
|
|
138,155 |
|
|
128 |
|
0.37 |
% |
|
|
146,074 |
|
|
74 |
|
0.20 |
% |
Certificates of deposit |
|
|
138,380 |
|
|
390 |
|
1.12 |
% |
|
|
153,223 |
|
|
499 |
|
1.29 |
% |
|
|
139,757 |
|
|
420 |
|
1.20 |
% |
Federal Home Loan Bank of San Francisco borrowings |
|
|
7,120 |
|
|
— |
|
— |
% |
|
|
— |
|
|
— |
|
— |
% |
|
|
10,000 |
|
|
— |
|
— |
% |
Other borrowings net of unamortized debt issuance costs |
|
|
9,999 |
|
|
179 |
|
7.12 |
% |
|
|
9,952 |
|
|
183 |
|
7.30 |
% |
|
|
9,988 |
|
|
184 |
|
7.33 |
% |
Junior subordinated debentures |
|
|
10,310 |
|
|
47 |
|
1.81 |
% |
|
|
10,310 |
|
|
97 |
|
3.73 |
% |
|
|
10,310 |
|
|
50 |
|
1.93 |
% |
Average interest-bearing
liabilities |
|
|
1,030,259 |
|
|
963 |
|
0.37 |
% |
|
|
874,043 |
|
|
1,494 |
|
0.68 |
% |
|
|
983,868 |
|
|
1,088 |
|
0.44 |
% |
Noninterest-bearing demand |
|
|
552,601 |
|
|
|
|
|
|
|
|
428,420 |
|
|
|
|
|
|
|
|
531,459 |
|
|
|
|
|
|
Other liabilities |
|
|
17,557 |
|
|
|
|
|
|
|
|
17,795 |
|
|
|
|
|
|
|
|
17,356 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
174,520 |
|
|
|
|
|
|
|
|
172,385 |
|
|
|
|
|
|
|
|
171,433 |
|
|
|
|
|
|
Average liabilities
and shareholders’ equity |
|
$ |
1,774,937 |
|
|
|
|
|
|
|
$ |
1,492,643 |
|
|
|
|
|
|
|
$ |
1,704,116 |
|
|
|
|
|
|
Net interest income
and net interest margin (5) |
|
|
|
|
$ |
14,556 |
|
3.46 |
% |
|
|
|
|
$ |
13,314 |
|
3.80 |
% |
|
|
|
|
$ |
14,130 |
|
3.51 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Interest
income on loans includes deferred fees and costs of approximately
$85 thousand, $224 thousand, and $240 thousand for the three months
ended December 31, 2020 and 2019 and September 30, 2020,
respectively. Interest income on PPP loans includes $1.1 million
and $538 thousand of fee income for the three months ended December
31, 2020 and September 30, 2020, respectively. |
(2) Loans net of
PPP includes average nonaccrual loans of $7.2 million, $11.4
million and $6.6 million for the three months ended December 31,
2020 and 2019 and September 30, 2020, respectively. |
(3) PPP loans
represents average gross loans and excludes deferred fees and
costs. |
(4) Interest
income and yields on tax-exempt securities are not presented on a
taxable equivalent basis. |
(5) Net interest
margin is net interest income expressed as a percentage of average
interest-earning assets. Net interest income for the three months
ended December 31, 2020 and 2019 and September 30, 2020 included
$141 thousand, $188 thousand and $233 thousand in accretion of the
discount on the loans acquired from Merchants Holding Company,
which improved the net interest margin by five, seven and seven
basis points, respectively. Net interest income for the three
months ended December 31, 2020 included $1.5 million in interest
and fee income from PPP loans with an average balance of $148.4
million for the quarter, which increased the net interest margin by
six basis points. |
(6) 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 10b |
NET INTEREST MARGIN - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Twelve Months Ended |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
Average |
|
|
|
|
Yield / |
|
Average |
|
|
|
|
Yield / |
|
|
Balance |
|
Interest(1) |
|
Rate (6) |
|
Balance |
|
Interest(1) |
|
Rate (6) |
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans net of PPP (2) |
|
$ |
1,038,069 |
|
$ |
49,262 |
|
4.75 |
% |
|
$ |
1,020,801 |
|
$ |
50,534 |
|
4.95 |
% |
PPP loans (3) |
|
|
111,306 |
|
|
3,280 |
|
2.95 |
% |
|
|
— |
|
|
— |
|
— |
% |
Taxable securities |
|
|
245,336 |
|
|
5,679 |
|
2.31 |
% |
|
|
246,723 |
|
|
6,673 |
|
2.70 |
% |
Tax-exempt securities (4) |
|
|
58,912 |
|
|
1,618 |
|
2.75 |
% |
|
|
38,706 |
|
|
1,244 |
|
3.21 |
% |
Interest-bearing deposits in other banks |
|
|
84,982 |
|
|
240 |
|
0.28 |
% |
|
|
54,095 |
|
|
1,112 |
|
2.06 |
% |
Average interest-earning
assets |
|
|
1,538,605 |
|
|
60,079 |
|
3.90 |
% |
|
|
1,360,325 |
|
|
59,563 |
|
4.38 |
% |
Cash and due from banks |
|
|
22,339 |
|
|
|
|
|
|
|
|
22,806 |
|
|
|
|
|
|
Premises and equipment, net |
|
|
15,426 |
|
|
|
|
|
|
|
|
15,598 |
|
|
|
|
|
|
Goodwill |
|
|
11,671 |
|
|
|
|
|
|
|
|
10,758 |
|
|
|
|
|
|
Other intangible assets, net |
|
|
4,412 |
|
|
|
|
|
|
|
|
4,807 |
|
|
|
|
|
|
Other assets |
|
|
20,966 |
|
|
|
|
|
|
|
|
14,982 |
|
|
|
|
|
|
Average total assets |
|
$ |
1,613,419 |
|
|
|
|
|
|
|
$ |
1,429,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
264,652 |
|
|
313 |
|
0.12 |
% |
|
$ |
242,516 |
|
|
480 |
|
0.20 |
% |
Money market |
|
|
372,939 |
|
|
1,246 |
|
0.33 |
% |
|
|
304,340 |
|
|
1,599 |
|
0.53 |
% |
Savings |
|
|
142,857 |
|
|
340 |
|
0.24 |
% |
|
|
136,733 |
|
|
493 |
|
0.36 |
% |
Certificates of deposit |
|
|
142,067 |
|
|
1,741 |
|
1.23 |
% |
|
|
160,550 |
|
|
1,977 |
|
1.23 |
% |
Federal Home Loan Bank of San Francisco borrowings |
|
|
8,347 |
|
|
5 |
|
0.06 |
% |
|
|
9,644 |
|
|
247 |
|
2.56 |
% |
Other borrowings net of unamortized debt issuance costs |
|
|
9,981 |
|
|
731 |
|
7.32 |
% |
|
|
10,895 |
|
|
806 |
|
7.40 |
% |
Junior subordinated debentures |
|
|
10,310 |
|
|
248 |
|
2.41 |
% |
|
|
10,310 |
|
|
426 |
|
4.13 |
% |
Average interest-bearing
liabilities |
|
|
951,153 |
|
|
4,624 |
|
0.49 |
% |
|
|
874,988 |
|
|
6,028 |
|
0.69 |
% |
Noninterest-bearing demand |
|
|
500,862 |
|
|
|
|
|
|
|
|
400,588 |
|
|
|
|
|
|
Other liabilities |
|
|
17,217 |
|
|
|
|
|
|
|
|
17,894 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
171,287 |
|
|
|
|
|
|
|
|
164,642 |
|
|
|
|
|
|
Average liabilities and
shareholders’ equity |
|
$ |
1,640,519 |
|
|
|
|
|
|
|
$ |
1,458,112 |
|
|
|
|
|
|
Net interest income and net
interest margin (5) |
|
|
|
|
$ |
55,455 |
|
3.60 |
% |
|
|
|
|
$ |
53,535 |
|
3.94 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Interest
income on loans includes deferred fees and costs of approximately
$720 thousand and $657 thousand for the years ended December 31,
2020 and 2019, respectively. Interest income on PPP loans includes
$2.2 million of fee income for the year ended December 31,
2020. |
(2) Loans net of
PPP includes average nonaccrual loans of $6.2 million and $11.7
million for the years ended December 31, 2020 and 2019,
respectively. |
(3) PPP loans
represents average gross loans and excludes deferred fees and
costs. |
(4) Interest
income and yields on tax-exempt securities are not presented on a
taxable equivalent basis. |
(5) Net interest
margin is net interest income expressed as a percentage of average
interest-earning assets. Net interest income for the years ended
December 31, 2020 and 2019 included $753 thousand and $620
thousand, respectively, in accretion of the discount on the loans
acquired from Merchants Holding Company, which improved the net
interest margin by six basis points. Net interest income for the
year ended December 31, 2020 included $3.3 million in interest and
fee income from PPP loans with an average balance of $111.3 million
for the year ended December 31, 2020, which decreased the net
interest margin by five basis points. |
(6) 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 11 |
|
ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL FORWARD AND
IMPAIRED LOAN TOTALS - UNAUDITED |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
ALLL beginning balance |
$ |
16,873 |
|
|
|
$ |
16,089 |
|
|
|
$ |
15,067 |
|
|
|
$ |
12,231 |
|
|
|
$ |
12,285 |
|
|
Provision for loan and lease
losses |
|
— |
|
|
|
|
1,100 |
|
|
|
|
1,300 |
|
|
|
|
2,850 |
|
|
|
|
— |
|
|
Loans charged-off |
|
(86 |
) |
|
|
|
(502 |
) |
|
|
|
(356 |
) |
|
|
|
(169 |
) |
|
|
|
(174 |
) |
|
Loan loss recoveries |
|
123 |
|
|
|
|
186 |
|
|
|
|
78 |
|
|
|
|
155 |
|
|
|
|
120 |
|
|
ALLL ending balance |
$ |
16,910 |
|
|
|
$ |
16,873 |
|
|
|
$ |
16,089 |
|
|
|
$ |
15,067 |
|
|
|
$ |
12,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
1,535 |
|
|
|
$ |
1,549 |
|
|
|
$ |
7 |
|
|
|
$ |
39 |
|
|
|
$ |
61 |
|
|
Real estate - commercial non-owner occupied |
|
— |
|
|
|
|
1,062 |
|
|
|
|
1,062 |
|
|
|
|
— |
|
|
|
|
— |
|
|
Real estate - commercial owner occupied |
|
3,734 |
|
|
|
|
3,750 |
|
|
|
|
3,647 |
|
|
|
|
3,103 |
|
|
|
|
3,103 |
|
|
Real estate - residential - ITIN |
|
1,585 |
|
|
|
|
1,574 |
|
|
|
|
1,738 |
|
|
|
|
1,878 |
|
|
|
|
2,221 |
|
|
Real estate - residential - 1-4 family mortgage |
|
141 |
|
|
|
|
145 |
|
|
|
|
180 |
|
|
|
|
184 |
|
|
|
|
191 |
|
|
Consumer and other |
|
18 |
|
|
|
|
18 |
|
|
|
|
37 |
|
|
|
|
39 |
|
|
|
|
40 |
|
|
Total nonaccrual loans |
|
7,013 |
|
|
|
|
8,098 |
|
|
|
|
6,671 |
|
|
|
|
5,243 |
|
|
|
|
5,616 |
|
|
Accruing troubled debt
restructured loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
498 |
|
|
|
|
531 |
|
|
|
|
592 |
|
|
|
|
592 |
|
|
|
|
595 |
|
|
Real estate - residential - ITIN |
|
3,466 |
|
|
|
|
3,597 |
|
|
|
|
3,642 |
|
|
|
|
3,891 |
|
|
|
|
3,957 |
|
|
Real estate - residential - equity lines |
|
126 |
|
|
|
|
131 |
|
|
|
|
221 |
|
|
|
|
226 |
|
|
|
|
231 |
|
|
Total accruing troubled debt
restructured loans |
|
4,090 |
|
|
|
|
4,259 |
|
|
|
|
4,455 |
|
|
|
|
4,709 |
|
|
|
|
4,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other accruing impaired
loans |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impaired loans |
$ |
11,103 |
|
|
|
$ |
12,357 |
|
|
|
$ |
11,126 |
|
|
|
$ |
9,952 |
|
|
|
$ |
10,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans outstanding at
period end |
$ |
1,139,732 |
|
|
|
$ |
1,206,065 |
|
|
|
$ |
1,206,340 |
|
|
|
$ |
1,052,245 |
|
|
|
$ |
1,032,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans to gross loans |
|
0.97 |
|
% |
|
|
1.02 |
|
% |
|
|
0.92 |
|
% |
|
|
0.95 |
|
% |
|
|
1.01 |
|
% |
Nonaccrual loans to gross
loans |
|
0.62 |
|
% |
|
|
0.67 |
|
% |
|
|
0.55 |
|
% |
|
|
0.50 |
|
% |
|
|
0.54 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
and lease losses as a percent of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans |
|
1.48 |
|
% |
|
|
1.40 |
|
% |
|
|
1.33 |
|
% |
|
|
1.43 |
|
% |
|
|
1.18 |
|
% |
Nonaccrual loans |
|
241.12 |
|
% |
|
|
208.36 |
|
% |
|
|
241.18 |
|
% |
|
|
287.37 |
|
% |
|
|
217.79 |
|
% |
Impaired loans |
|
152.30 |
|
% |
|
|
136.55 |
|
% |
|
|
144.61 |
|
% |
|
|
151.40 |
|
% |
|
|
117.62 |
|
% |
TABLE 12 |
|
ALLOWANCE, RESERVE AND DISCOUNT - UNAUDITED |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
ALLL |
$ |
16,910 |
|
|
$ |
16,873 |
|
|
$ |
16,089 |
|
|
$ |
15,067 |
|
|
$ |
12,231 |
|
Reserve for unfunded
commitments |
|
800 |
|
|
|
800 |
|
|
|
800 |
|
|
|
695 |
|
|
|
695 |
|
Discount on acquired loans
(1) |
|
919 |
|
|
|
1,060 |
|
|
|
1,293 |
|
|
|
1,509 |
|
|
|
1,672 |
|
Total allowance, reserve and discount |
$ |
18,629 |
|
|
$ |
18,733 |
|
|
$ |
18,182 |
|
|
$ |
17,271 |
|
|
$ |
14,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans |
$ |
1,139,732 |
|
|
$ |
1,206,065 |
|
|
$ |
1,206,340 |
|
|
$ |
1,052,245 |
|
|
$ |
1,032,903 |
|
PPP loans (2) |
|
130,814 |
|
|
|
163,493 |
|
|
|
162,189 |
|
|
|
— |
|
|
|
— |
|
Total gross loans net of PPP loans |
$ |
1,008,918 |
|
|
$ |
1,042,572 |
|
|
$ |
1,044,151 |
|
|
$ |
1,052,245 |
|
|
$ |
1,032,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance, reserve and
discount as a percentage of total gross loans net of PPP loans
(2) |
|
1.85 |
% |
|
|
1.80 |
% |
|
|
1.74 |
% |
|
|
1.64 |
% |
|
|
1.41 |
% |
(1) Discount on
acquired loans includes fair value discount for loans acquired from
Merchants in January of 2019. |
(2) PPP loans are
fully guaranteed by SBA and no allowance, reserve or discount is
provided for them. |
Provision for Loan and Lease Losses
We monitor credit quality and the general economic environment
to ensure that the ALLL is maintained at a level that is adequate
to cover estimated credit losses in the loan and lease portfolio.
Our review of ALLL adequacy utilizes both quantitative and
qualitative factors. The quantitative analysis relies on historical
loss rates which, unfortunately, may not be indicative of potential
losses related to a pandemic such as we are currently experiencing
with COVID-19. In response to quantitative data deficiencies, we
have placed greater reliance on qualitative factors
(Q-Factors).
During the current quarter, most of our COVID-19 loan deferrals
have resumed payments: nonaccrual loans decreased due to the
repayment of a $1.1 million commercial real estate loan and
classified assets decreased due to repayment of $7.2 million from
one commercial real estate borrower. As a result of improvement in
our asset quality metrics, management determined that no provision
for loan and lease losses was necessary during the current quarter.
We recorded $1.1 million in provision for loan and lease losses in
the prior quarter and there was no provision for loan and lease
loss during the same quarter a year ago. Our ALLL as a percentage
of gross loans was 1.48% as of December 31, 2020 compared to 1.18%
as of December 31, 2019 and 1.40% as of September 30, 2020.
Excluding SBA guaranteed PPP loans our ALLL as a percentage of
gross loans was 1.68% as of December 31, 2020 compared to 1.62% as
of September 30, 2020.
Our ALLL methodology, adjusted for the revised Q-Factors in
prior quarters and the improvements in loan quality metrics
discussed above necessitated an ALLL of $16.9 million at December
31, 2020, an increase of 38% compared to our ALLL of $12.2 million
at December 31, 2019. Management believes the Company’s ALLL is
adequate at December 31, 2020. 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, 2020, the recorded investment in loans
classified as impaired totaled $11.1 million, with a corresponding
specific reserve of $192 thousand compared to impaired loans of
$10.4 million with a corresponding specific reserve of $324
thousand at December 31, 2019 and impaired loans of $12.4 million,
with a corresponding specific reserve of $204 thousand at September
30, 2020. The decrease in impaired loans during the current quarter
was due to the repayment of a nonaccrual commercial real estate
loan totaling $1.1 million during the fourth quarter of 2020.
TABLE 13 |
TROUBLED DEBT RESTRUCTURINGS - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
Nonaccrual |
|
$ |
2,007 |
|
|
$ |
2,063 |
|
|
$ |
2,194 |
|
|
$ |
1,611 |
|
|
$ |
1,680 |
|
Accruing |
|
|
4,090 |
|
|
|
4,259 |
|
|
|
4,455 |
|
|
|
4,709 |
|
|
|
4,783 |
|
Total troubled debt
restructurings |
|
$ |
6,097 |
|
|
$ |
6,322 |
|
|
$ |
6,649 |
|
|
$ |
6,320 |
|
|
$ |
6,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt restructurings
as a percentage of total gross loans |
|
|
0.53 |
% |
|
|
0.52 |
% |
|
|
0.55 |
% |
|
|
0.60 |
% |
|
|
0.63 |
% |
There were no new troubled debt restructurings during the
current quarter. As of December 31, 2020, we had 91 loans that were
classified as troubled debt restructurings, of which 89 were
performing according to their restructured terms.
Troubled Debt Restructuring Guidance
Financial institution regulators and the CARES Act have changed
the treatment of short-term loan modifications for borrowers
impacted by COVID-19. The change provides that modifications made
in response to COVID-19, to borrowers under certain circumstances,
should not be considered a troubled debt restructuring.
We have responded to the needs of our borrowers in accordance
with the CARES Act and regulatory guidance to grant short-term
COVID-19 related loan modifications. These modified loans are not
troubled debt restructurings and are not considered to be past due
or non-performing. We have granted deferrals ranging from one to
six months determined on a case-by-case basis considering the
nature of the business and the impact of COVID-19. For some
borrowers that where initially granted a deferral of less than six
months, we have granted an additional deferral period on a
case-by-case basis.
Since March of 2020, we have granted 278 payment deferrals
totaling $127.3 million. As of December 31, 2020 previously
deferred loans totaling $115.6 million have resumed making payments
or have paid off. Three loans that were previously deferred
totaling $2.1 million were past due at December 31, 2020 and have
been moved to nonaccrual status. Two of those loans totaling $1.4
million were made to one commercial borrower and are guaranteed
under the California Capital Access Program for Small Business. The
third loan for $640 thousand is a commercial real estate loan that
was changed to a troubled debt restructured loan in the second
quarter of 2020.
We maintain close contact with our borrowers to update our
understanding of the impact of the pandemic on them, their
businesses and the underlying collateral for our loans. For
borrowers who continue to have been granted a loan payment
deferral, we have evaluated their credit quality position and the
potential for loss of principal.
The following tables present approved loan deferrals that are in
effect at December 31, 2020. For the loans with payment deferrals
at December 31, 2020, one borrower none of these loans received a
PPP loan through our U.S. Small Business Administration (“SBA”)
department.
TABLE 14a |
COVID-19 LOAN DEFERRALS - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
Payments Scheduled to Resume In The Three Months
Ended |
|
|
March 31, 2021 |
|
|
# |
|
Amount |
Length of 1st deferral
granted: |
|
|
|
|
|
3 months |
|
4 |
|
$ |
1,304 |
6 months |
|
3 |
|
|
484 |
Length of 2nd deferral
granted: |
|
|
|
|
|
2 months |
|
2 |
|
|
714 |
3 months |
|
2 |
|
|
3,053 |
Loans serviced by others
(1) |
|
71 |
|
|
3,959 |
Total |
|
82 |
|
$ |
9,514 |
(1) Loans serviced
by others are small residential mortgages and consumer home
improvement loans which are deferred on a short-term basis up to a
maximum of six months. These loans are geographically disbursed
throughout the United States and serviced by a third party. |
TABLE 14b |
COVID-19 LOAN DEFERRALS BY INDUSTRY -
UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
Payments Scheduled to Resume In The Three Months
Ended |
|
|
March 31, 2021 |
Industry: |
|
# |
|
Amount |
Health care and social assistance |
|
1 |
|
$ |
12 |
Other services |
|
1 |
|
|
2,032 |
Restaurants, bars and caterers |
|
2 |
|
|
1,695 |
Other industries |
|
7 |
|
|
1,816 |
Loans serviced by others
(1) |
|
71 |
|
|
3,959 |
Total |
|
82 |
|
$ |
9,514 |
(1) Loans serviced
by others are small residential mortgages and consumer home
improvement loans which are deferred on a short-term basis up to a
maximum of six months. These loans are geographically disbursed
throughout the United States and serviced by a third party. |
|
The following table presents nonperforming assets at the dates
indicated.
TABLE 15 |
NONPERFORMING ASSETS - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
At December 31, |
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
Total nonaccrual loans |
|
$ |
7,013 |
|
|
$ |
8,098 |
|
|
$ |
6,671 |
|
|
$ |
5,243 |
|
|
$ |
5,616 |
|
90 days past due and still
accruing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Total nonperforming loans |
|
|
7,013 |
|
|
|
8,098 |
|
|
|
6,671 |
|
|
|
5,245 |
|
|
|
5,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned
("OREO") |
|
|
8 |
|
|
|
8 |
|
|
|
8 |
|
|
|
8 |
|
|
|
35 |
|
Total nonperforming
assets |
|
$ |
7,021 |
|
|
$ |
8,106 |
|
|
$ |
6,679 |
|
|
$ |
5,253 |
|
|
$ |
5,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to gross
loans |
|
|
0.62 |
% |
|
|
0.67 |
% |
|
|
0.55 |
% |
|
|
0.50 |
% |
|
|
0.54 |
% |
Nonperforming assets to total
assets |
|
|
0.40 |
% |
|
|
0.47 |
% |
|
|
0.39 |
% |
|
|
0.36 |
% |
|
|
0.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes when loans are projected to
reprice by year and rate index as of December 31, 2020.
TABLE 16 |
LOANS BY RATE INDEX AND PROJECTED REPRICING PERIOD -
UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years 6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Through |
|
Beyond |
|
|
|
Rate Index: |
|
Year 1 |
|
Year 2 |
|
Year 3 |
|
Year 4 |
|
Year 5 |
|
Year 10 |
|
Year 10 |
|
Total |
Fixed |
|
$ |
87,179 |
|
$ |
140,831 |
|
$ |
58,748 |
|
$ |
29,769 |
|
$ |
28,706 |
|
$ |
164,817 |
|
$ |
21,693 |
|
$ |
531,743 |
Variable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prime |
|
|
77,139 |
|
|
6,390 |
|
|
3,408 |
|
|
6,882 |
|
|
9,595 |
|
|
1,232 |
|
|
— |
|
|
104,646 |
5 Year Treasury |
|
|
51,142 |
|
|
65,555 |
|
|
58,578 |
|
|
75,057 |
|
|
109,165 |
|
|
54,938 |
|
|
— |
|
|
414,435 |
7 Year Treasury |
|
|
3,242 |
|
|
4,866 |
|
|
479 |
|
|
5,601 |
|
|
13,839 |
|
|
— |
|
|
— |
|
|
28,027 |
1 Year LIBOR |
|
|
22,509 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
22,509 |
Other Indexes |
|
|
5,166 |
|
|
277 |
|
|
1,775 |
|
|
5,566 |
|
|
7,000 |
|
|
10,632 |
|
|
1,172 |
|
|
31,588 |
Total variable |
|
|
159,198 |
|
|
77,088 |
|
|
64,240 |
|
|
93,106 |
|
|
139,599 |
|
|
66,802 |
|
|
1,172 |
|
|
601,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
|
1,047 |
|
|
1,030 |
|
|
987 |
|
|
694 |
|
|
496 |
|
|
2,018 |
|
|
741 |
|
|
7,013 |
Total |
|
$ |
247,424 |
|
$ |
218,949 |
|
$ |
123,975 |
|
$ |
123,569 |
|
$ |
168,801 |
|
$ |
233,637 |
|
$ |
23,606 |
|
$ |
1,139,961 |
For variable rate loans, the following table summarizes those
that are at or above their floor rate, and those that do not
possess a contractual floor rate.
TABLE 17 |
LOAN FLOORS - UNAUDITED |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020 |
|
|
Loans At |
|
Loans Above |
|
|
|
|
|
Floor Rate |
|
Floor Rate |
|
Total |
Variable rate loans
with floors: |
|
|
|
|
|
|
|
|
|
Prime |
|
$ |
54,833 |
|
$ |
5,914 |
|
$ |
60,747 |
5 year Treasury |
|
|
342,105 |
|
|
46,964 |
|
|
389,069 |
7 Year Treasury |
|
|
28,027 |
|
|
— |
|
|
28,027 |
1 Year LIBOR |
|
|
— |
|
|
717 |
|
|
717 |
Other Indexes |
|
|
18,290 |
|
|
833 |
|
|
19,123 |
|
|
$ |
443,255 |
|
$ |
54,428 |
|
|
497,683 |
|
|
|
|
|
|
|
|
|
|
Variable rate loans
without floors: |
|
|
|
|
|
|
|
|
|
Prime |
|
|
|
|
|
|
|
|
43,899 |
5 year Treasury |
|
|
|
|
|
|
|
|
25,366 |
1 Year LIBOR |
|
|
|
|
|
|
|
|
21,792 |
Other Indexes |
|
|
|
|
|
|
|
|
12,465 |
|
|
|
|
|
|
|
|
|
103,522 |
|
|
|
|
|
|
|
|
|
|
Total accruing
variable rate loans |
|
|
|
|
|
|
|
$ |
601,205 |
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
|
|
|
|
|
|
|
7,013 |
Total variable rate
loans |
|
|
|
|
|
|
|
$ |
608,218 |
TABLE 18 |
UNAUDITED |
CONSOLIDATED BALANCE SHEET |
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, |
|
Change |
|
At September 30, |
|
|
2020 |
|
|
2019 |
|
|
$ |
|
% |
|
2020 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
19,875 |
|
|
$ |
21,338 |
|
|
$ |
(1,463 |
) |
|
(7 |
) |
% |
|
$ |
22,884 |
|
Interest-bearing deposits in other banks |
|
|
87,111 |
|
|
|
59,266 |
|
|
|
27,845 |
|
|
47 |
|
% |
|
|
104,999 |
|
Total cash and cash equivalents |
|
|
106,986 |
|
|
|
80,604 |
|
|
|
26,382 |
|
|
33 |
|
% |
|
|
127,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
|
446,880 |
|
|
|
286,950 |
|
|
|
159,930 |
|
|
56 |
|
% |
|
|
337,032 |
|
Loans, net of deferred fees and costs |
|
|
1,139,961 |
|
|
|
1,035,065 |
|
|
|
104,896 |
|
|
10 |
|
% |
|
|
1,205,028 |
|
Allowance for loan and lease losses |
|
|
(16,910 |
) |
|
|
(12,231 |
) |
|
|
(4,679 |
) |
|
(38 |
) |
% |
|
|
(16,873 |
) |
Net loans |
|
|
1,123,051 |
|
|
|
1,022,834 |
|
|
|
100,217 |
|
|
10 |
|
% |
|
|
1,188,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment, net |
|
|
14,999 |
|
|
|
15,906 |
|
|
|
(907 |
) |
|
(6 |
) |
% |
|
|
15,210 |
|
Other real estate owned |
|
|
8 |
|
|
|
35 |
|
|
|
(27 |
) |
|
(77 |
) |
% |
|
|
8 |
|
Life insurance |
|
|
24,206 |
|
|
|
23,701 |
|
|
|
505 |
|
|
2 |
|
% |
|
|
24,086 |
|
Deferred tax asset, net |
|
|
3,954 |
|
|
|
4,553 |
|
|
|
(599 |
) |
|
(13 |
) |
% |
|
|
2,571 |
|
Goodwill |
|
|
11,671 |
|
|
|
11,671 |
|
|
|
— |
|
|
— |
|
% |
|
|
11,671 |
|
Other intangible assets, net |
|
|
4,044 |
|
|
|
4,809 |
|
|
|
(765 |
) |
|
(16 |
) |
% |
|
|
4,235 |
|
Other assets |
|
|
28,155 |
|
|
|
28,553 |
|
|
|
(398 |
) |
|
(1 |
) |
% |
|
|
29,037 |
|
Total assets |
|
$ |
1,763,954 |
|
|
$ |
1,479,616 |
|
|
$ |
284,338 |
|
|
19 |
|
% |
|
$ |
1,739,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand - noninterest-bearing |
|
$ |
541,033 |
|
|
$ |
432,680 |
|
|
$ |
108,353 |
|
|
25 |
|
% |
|
$ |
542,060 |
|
Demand - interest-bearing |
|
|
290,251 |
|
|
|
239,258 |
|
|
|
50,993 |
|
|
21 |
|
% |
|
|
280,370 |
|
Money market |
|
|
425,121 |
|
|
|
307,559 |
|
|
|
117,562 |
|
|
38 |
|
% |
|
|
403,785 |
|
Savings |
|
|
150,695 |
|
|
|
135,888 |
|
|
|
14,807 |
|
|
11 |
|
% |
|
|
151,016 |
|
Certificates of deposit |
|
|
135,679 |
|
|
|
151,786 |
|
|
|
(16,107 |
) |
|
(11 |
) |
% |
|
|
140,900 |
|
Total deposits |
|
|
1,542,779 |
|
|
|
1,267,171 |
|
|
|
275,608 |
|
|
22 |
|
% |
|
|
1,518,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank of San Francisco borrowings |
|
|
5,000 |
|
|
|
— |
|
|
|
5,000 |
|
|
100 |
|
% |
|
|
10,000 |
|
Other borrowings |
|
|
10,000 |
|
|
|
10,000 |
|
|
|
— |
|
|
— |
|
% |
|
|
10,000 |
|
Unamortized debt issuance costs |
|
|
— |
|
|
|
(43 |
) |
|
|
43 |
|
|
100 |
|
% |
|
|
(7 |
) |
Net term debt |
|
|
15,000 |
|
|
|
9,957 |
|
|
|
5,043 |
|
|
51 |
|
% |
|
|
19,993 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior subordinated debentures |
|
|
10,310 |
|
|
|
10,310 |
|
|
|
— |
|
|
— |
|
% |
|
|
10,310 |
|
Other liabilities |
|
|
18,163 |
|
|
|
17,700 |
|
|
|
463 |
|
|
3 |
|
% |
|
|
18,104 |
|
Total liabilities |
|
|
1,586,252 |
|
|
|
1,305,138 |
|
|
|
281,114 |
|
|
22 |
|
% |
|
|
1,566,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
58,988 |
|
|
|
71,311 |
|
|
|
(12,323 |
) |
|
(17 |
) |
% |
|
|
58,872 |
|
Retained earnings |
|
|
111,226 |
|
|
|
100,566 |
|
|
|
10,660 |
|
|
11 |
|
% |
|
|
107,154 |
|
Accumulated other comprehensive income, net of tax |
|
|
7,488 |
|
|
|
2,601 |
|
|
|
4,887 |
|
|
188 |
|
% |
|
|
7,324 |
|
Total shareholders' equity |
|
|
177,702 |
|
|
|
174,478 |
|
|
|
3,224 |
|
|
2 |
|
% |
|
|
173,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
1,763,954 |
|
|
$ |
1,479,616 |
|
|
$ |
284,338 |
|
|
19 |
|
% |
|
$ |
1,739,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
$ |
1,663,321 |
|
|
$ |
1,377,588 |
|
|
$ |
285,733 |
|
|
21 |
|
% |
|
$ |
1,636,661 |
|
Shares outstanding |
|
|
16,801 |
|
|
|
18,137 |
|
|
|
(1,336 |
) |
|
(7 |
) |
% |
|
|
16,792 |
|
Book value per share (1) |
|
$ |
10.58 |
|
|
$ |
9.62 |
|
|
$ |
0.96 |
|
|
10 |
|
% |
|
$ |
10.32 |
|
Tangible book value per share
(1) |
|
$ |
9.64 |
|
|
$ |
8.71 |
|
|
$ |
0.93 |
|
|
11 |
|
% |
|
$ |
9.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Book value
per share is computed by dividing total shareholders’ equity by
shares outstanding. 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 19 |
UNAUDITED |
INCOME STATEMENT |
(dollars in thousands, except per share data) |
|
|
For The Three Months Ended |
|
For The Twelve Months Ended |
|
|
December 31, |
|
Change |
|
September 30, |
|
December 31, |
|
|
2020 |
|
2019 |
|
$ |
|
% |
|
2020 |
|
2020 |
|
|
2019 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
13,532 |
|
$ |
12,643 |
|
$ |
889 |
|
|
7 |
|
% |
|
$ |
13,448 |
|
$ |
52,542 |
|
|
$ |
50,534 |
Interest on taxable securities |
|
|
1,484 |
|
|
1,567 |
|
|
(83 |
) |
|
(5 |
) |
% |
|
|
1,284 |
|
|
5,679 |
|
|
|
6,673 |
Interest on tax-exempt securities |
|
|
467 |
|
|
258 |
|
|
209 |
|
|
81 |
|
% |
|
|
457 |
|
|
1,618 |
|
|
|
1,244 |
Interest on interest-bearing deposits in other banks |
|
|
36 |
|
|
340 |
|
|
(304 |
) |
|
(89 |
) |
% |
|
|
29 |
|
|
240 |
|
|
|
1,112 |
Total interest income |
|
|
15,519 |
|
|
14,808 |
|
|
711 |
|
|
5 |
|
% |
|
|
15,218 |
|
|
60,079 |
|
|
|
59,563 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on demand deposits |
|
|
57 |
|
|
108 |
|
|
(51 |
) |
|
(47 |
) |
% |
|
|
71 |
|
|
313 |
|
|
|
480 |
Interest on money market |
|
|
237 |
|
|
479 |
|
|
(242 |
) |
|
(51 |
) |
% |
|
|
289 |
|
|
1,246 |
|
|
|
1,599 |
Interest on savings |
|
|
53 |
|
|
128 |
|
|
(75 |
) |
|
(59 |
) |
% |
|
|
74 |
|
|
340 |
|
|
|
493 |
Interest on certificates of deposit |
|
|
390 |
|
|
499 |
|
|
(109 |
) |
|
(22 |
) |
% |
|
|
420 |
|
|
1,741 |
|
|
|
1,977 |
Interest on Federal Home Loan Bank of San Francisco borrowings |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
% |
|
|
— |
|
|
5 |
|
|
|
247 |
Interest on other borrowings |
|
|
179 |
|
|
183 |
|
|
(4 |
) |
|
(2 |
) |
% |
|
|
184 |
|
|
731 |
|
|
|
806 |
Interest on junior subordinated debentures |
|
|
47 |
|
|
97 |
|
|
(50 |
) |
|
(52 |
) |
% |
|
|
50 |
|
|
248 |
|
|
|
426 |
Total interest expense |
|
|
963 |
|
|
1,494 |
|
|
(531 |
) |
|
(36 |
) |
% |
|
|
1,088 |
|
|
4,624 |
|
|
|
6,028 |
Net interest income |
|
|
14,556 |
|
|
13,314 |
|
|
1,242 |
|
|
9 |
|
% |
|
|
14,130 |
|
|
55,455 |
|
|
|
53,535 |
Provision for loan and lease
losses |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
% |
|
|
1,100 |
|
|
5,250 |
|
|
|
— |
Net interest income after provision for loan and lease
losses |
|
|
14,556 |
|
|
13,314 |
|
|
1,242 |
|
|
9 |
|
% |
|
|
13,030 |
|
|
50,205 |
|
|
|
53,535 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
173 |
|
|
198 |
|
|
(25 |
) |
|
(13 |
) |
% |
|
|
142 |
|
|
636 |
|
|
|
730 |
ATM and point of sale fees |
|
|
306 |
|
|
282 |
|
|
24 |
|
|
9 |
|
% |
|
|
297 |
|
|
1,134 |
|
|
|
1,158 |
Payroll and benefit processing fees |
|
|
182 |
|
|
183 |
|
|
(1 |
) |
|
(1 |
) |
% |
|
|
152 |
|
|
647 |
|
|
|
669 |
Life insurance |
|
|
125 |
|
|
126 |
|
|
(1 |
) |
|
(1 |
) |
% |
|
|
125 |
|
|
521 |
|
|
|
536 |
Gain on investment securities, net |
|
|
— |
|
|
49 |
|
|
(49 |
) |
|
(100 |
) |
% |
|
|
258 |
|
|
482 |
|
|
|
186 |
Federal Home Loan Bank of San Francisco dividends |
|
|
94 |
|
|
131 |
|
|
(37 |
) |
|
(28 |
) |
% |
|
|
109 |
|
|
369 |
|
|
|
507 |
(Loss) gain on sale of OREO |
|
|
— |
|
|
21 |
|
|
(21 |
) |
|
(100 |
) |
% |
|
|
— |
|
|
(23 |
) |
|
|
62 |
Other income |
|
|
136 |
|
|
31 |
|
|
105 |
|
|
339 |
|
% |
|
|
106 |
|
|
286 |
|
|
|
336 |
Total noninterest income |
|
|
1,016 |
|
|
1,021 |
|
|
(5 |
) |
|
— |
|
% |
|
|
1,189 |
|
|
4,052 |
|
|
|
4,184 |
TABLE 19 - CONTINUED |
UNAUDITED |
INCOME STATEMENT |
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
For The Twelve Months Ended |
|
|
December 31, |
|
Change |
|
September 30, |
|
December 31, |
|
|
2020 |
|
2019 |
|
$ |
|
% |
|
2020 |
|
2020 |
|
2019 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related benefits |
|
|
5,284 |
|
|
4,924 |
|
|
360 |
|
|
7 |
|
% |
|
|
5,126 |
|
|
21,262 |
|
|
20,804 |
Premises and equipment |
|
|
966 |
|
|
916 |
|
|
50 |
|
|
5 |
|
% |
|
|
951 |
|
|
3,597 |
|
|
3,752 |
Federal Deposit Insurance Corporation insurance premium |
|
|
105 |
|
|
— |
|
|
105 |
|
|
— |
|
% |
|
|
101 |
|
|
332 |
|
|
91 |
Data processing |
|
|
584 |
|
|
739 |
|
|
(155 |
) |
|
(21 |
) |
% |
|
|
581 |
|
|
2,281 |
|
|
2,535 |
Professional services |
|
|
292 |
|
|
309 |
|
|
(17 |
) |
|
(6 |
) |
% |
|
|
342 |
|
|
1,437 |
|
|
1,539 |
Telecommunications |
|
|
174 |
|
|
190 |
|
|
(16 |
) |
|
(8 |
) |
% |
|
|
157 |
|
|
658 |
|
|
737 |
Acquisition and merger |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
% |
|
|
— |
|
|
— |
|
|
2,193 |
Other expenses |
|
|
1,129 |
|
|
1,343 |
|
|
(214 |
) |
|
(16 |
) |
% |
|
|
1,132 |
|
|
5,410 |
|
|
5,604 |
Total noninterest expense |
|
|
8,534 |
|
|
8,421 |
|
|
113 |
|
|
1 |
|
% |
|
|
8,390 |
|
|
34,977 |
|
|
37,255 |
Income before provision for
income taxes |
|
|
7,038 |
|
|
5,914 |
|
|
1,124 |
|
|
19 |
|
% |
|
|
5,829 |
|
|
19,280 |
|
|
20,464 |
Provision for income taxes |
|
|
1,966 |
|
|
1,545 |
|
|
421 |
|
|
27 |
|
% |
|
|
1,500 |
|
|
5,116 |
|
|
5,503 |
Net income |
|
$ |
5,072 |
|
$ |
4,369 |
|
$ |
703 |
|
|
16 |
|
% |
|
$ |
4,329 |
|
$ |
14,164 |
|
$ |
14,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic |
|
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.06 |
|
|
25 |
|
% |
|
$ |
0.26 |
|
$ |
0.84 |
|
$ |
0.83 |
Weighted average shares -
basic |
|
|
16,663 |
|
|
18,068 |
|
|
(1,405 |
) |
|
(8 |
) |
% |
|
|
16,660 |
|
|
16,918 |
|
|
17,956 |
Earnings per share -
diluted |
|
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.06 |
|
|
25 |
|
% |
|
$ |
0.26 |
|
$ |
0.83 |
|
$ |
0.83 |
Weighted average shares -
diluted |
|
|
16,731 |
|
|
18,150 |
|
|
(1,419 |
) |
|
(8 |
) |
% |
|
|
16,696 |
|
|
16,963 |
|
|
18,024 |
TABLE 20 |
UNAUDITED CONDENSED CONSOLIDATED |
QUARTERLY AVERAGE BALANCE SHEETS |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
1,172,705 |
|
$ |
1,209,277 |
|
$ |
1,180,915 |
|
$ |
1,033,689 |
|
$ |
1,031,702 |
Taxable securities |
|
|
304,242 |
|
|
228,045 |
|
|
211,195 |
|
|
237,405 |
|
|
245,487 |
Tax-exempt securities |
|
|
73,207 |
|
|
68,766 |
|
|
58,540 |
|
|
34,869 |
|
|
32,158 |
Interest-bearing deposits in other banks |
|
|
124,390 |
|
|
95,348 |
|
|
72,507 |
|
|
47,135 |
|
|
81,099 |
Total earning assets |
|
|
1,674,544 |
|
|
1,601,436 |
|
|
1,523,157 |
|
|
1,353,098 |
|
|
1,390,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
22,413 |
|
|
23,381 |
|
|
21,564 |
|
|
21,987 |
|
|
24,083 |
Premises and equipment,
net |
|
|
15,162 |
|
|
15,365 |
|
|
15,428 |
|
|
15,753 |
|
|
16,049 |
Other real estate owned |
|
|
8 |
|
|
8 |
|
|
8 |
|
|
33 |
|
|
54 |
Life insurance |
|
|
24,147 |
|
|
24,028 |
|
|
23,899 |
|
|
23,762 |
|
|
23,638 |
Deferred tax asset, net |
|
|
2,738 |
|
|
2,501 |
|
|
3,016 |
|
|
4,259 |
|
|
4,691 |
Goodwill |
|
|
11,671 |
|
|
11,671 |
|
|
11,671 |
|
|
11,671 |
|
|
11,671 |
Other intangible assets,
net |
|
|
4,126 |
|
|
4,318 |
|
|
4,508 |
|
|
4,701 |
|
|
4,890 |
Other assets |
|
|
20,128 |
|
|
21,408 |
|
|
23,576 |
|
|
18,755 |
|
|
17,121 |
Total assets |
|
$ |
1,774,937 |
|
$ |
1,704,116 |
|
$ |
1,626,827 |
|
$ |
1,454,019 |
|
$ |
1,492,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand - noninterest-bearing |
|
$ |
552,601 |
|
$ |
531,459 |
|
$ |
497,636 |
|
$ |
420,847 |
|
$ |
428,420 |
Demand - interest-bearing |
|
|
283,213 |
|
|
279,744 |
|
|
261,907 |
|
|
233,375 |
|
|
244,276 |
Money market |
|
|
430,014 |
|
|
387,995 |
|
|
365,368 |
|
|
307,587 |
|
|
318,127 |
Savings |
|
|
151,223 |
|
|
146,074 |
|
|
138,500 |
|
|
135,504 |
|
|
138,155 |
Certificates of deposit |
|
|
138,380 |
|
|
139,757 |
|
|
142,955 |
|
|
147,241 |
|
|
153,223 |
Total deposits |
|
|
1,555,431 |
|
|
1,485,029 |
|
|
1,406,366 |
|
|
1,244,554 |
|
|
1,282,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank of San Francisco borrowings |
|
|
7,120 |
|
|
10,000 |
|
|
16,044 |
|
|
220 |
|
|
— |
Other borrowings net of unamortized debt issuance costs |
|
|
9,999 |
|
|
9,988 |
|
|
9,976 |
|
|
9,963 |
|
|
9,952 |
Junior subordinated debentures |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
Other liabilities |
|
|
17,557 |
|
|
17,356 |
|
|
17,095 |
|
|
16,852 |
|
|
17,795 |
Total liabilities |
|
|
1,600,417 |
|
|
1,532,683 |
|
|
1,459,791 |
|
|
1,281,899 |
|
|
1,320,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
174,520 |
|
|
171,433 |
|
|
167,036 |
|
|
172,120 |
|
|
172,385 |
Liabilities &
shareholders' equity |
|
$ |
1,774,937 |
|
$ |
1,704,116 |
|
$ |
1,626,827 |
|
$ |
1,454,019 |
|
$ |
1,492,643 |
TABLE 21 |
UNAUDITED CONDENSED CONSOLIDATED |
ANNUAL AVERAGE BALANCE SHEETS |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
2018 |
|
2017 |
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
1,149,375 |
|
$ |
1,020,801 |
|
$ |
915,360 |
|
$ |
818,119 |
Taxable securities |
|
|
245,336 |
|
|
246,723 |
|
|
207,407 |
|
|
165,333 |
Tax-exempt securities |
|
|
58,912 |
|
|
38,706 |
|
|
50,330 |
|
|
74,231 |
Interest-bearing deposits in other banks |
|
|
84,982 |
|
|
54,095 |
|
|
47,038 |
|
|
66,872 |
Total earning assets |
|
|
1,538,605 |
|
|
1,360,325 |
|
|
1,220,135 |
|
|
1,124,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
22,339 |
|
|
22,806 |
|
|
20,468 |
|
|
18,301 |
Premises and equipment,
net |
|
|
15,426 |
|
|
15,598 |
|
|
13,952 |
|
|
15,567 |
Other real estate owned |
|
|
14 |
|
|
35 |
|
|
93 |
|
|
664 |
Life insurance |
|
|
23,960 |
|
|
23,371 |
|
|
22,148 |
|
|
21,905 |
Deferred tax asset, net |
|
|
3,126 |
|
|
5,430 |
|
|
7,567 |
|
|
8,919 |
Goodwill |
|
|
11,671 |
|
|
10,758 |
|
|
665 |
|
|
665 |
Other intangible assets,
net |
|
|
4,412 |
|
|
4,807 |
|
|
1,252 |
|
|
1,471 |
Other assets |
|
|
20,966 |
|
|
14,982 |
|
|
2,561 |
|
|
6,204 |
Total assets |
|
$ |
1,640,519 |
|
$ |
1,458,112 |
|
$ |
1,288,841 |
|
$ |
1,198,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand - noninterest-bearing |
|
$ |
500,862 |
|
$ |
400,588 |
|
$ |
332,197 |
|
$ |
289,735 |
Demand - interest-bearing |
|
|
264,652 |
|
|
242,516 |
|
|
238,328 |
|
|
209,792 |
Money market |
|
|
372,939 |
|
|
304,340 |
|
|
250,685 |
|
|
224,913 |
Savings |
|
|
142,857 |
|
|
136,733 |
|
|
109,025 |
|
|
111,376 |
Certificates of deposit |
|
|
142,067 |
|
|
160,550 |
|
|
168,183 |
|
|
205,648 |
Total deposits |
|
|
1,423,377 |
|
|
1,244,727 |
|
|
1,098,418 |
|
|
1,041,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank of San Francisco borrowings |
|
|
8,347 |
|
|
9,644 |
|
|
22,466 |
|
|
302 |
Other borrowings net of unamortized debt issuance costs |
|
|
9,981 |
|
|
10,895 |
|
|
15,143 |
|
|
17,981 |
Junior subordinated debentures |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
|
|
10,310 |
Other liabilities |
|
|
17,217 |
|
|
17,894 |
|
|
12,286 |
|
|
12,293 |
Total liabilities |
|
|
1,469,232 |
|
|
1,293,470 |
|
|
1,158,623 |
|
|
1,082,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
171,287 |
|
|
164,642 |
|
|
130,218 |
|
|
115,901 |
Liabilities &
shareholders' equity |
|
$ |
1,640,519 |
|
$ |
1,458,112 |
|
$ |
1,288,841 |
|
$ |
1,198,251 |
About Bank of Commerce Holdings
Bank of Commerce Holdings is a bank holding company
headquartered in Sacramento, California and is the parent company
for Merchants Bank of Commerce. The Bank is an FDIC-insured
California banking corporation providing community banking and
financial services in northern California along the Interstate 5
corridor from Sacramento to Yreka and in the North Bay wine region.
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 Officer
Telephone Direct (916) 677-5800
James A. Sundquist, Executive Vice President and Chief Financial
Officer Telephone Direct (916) 677-5825
Andrea M. Newburn, Vice President and Senior Administrative
Officer / Corporate Secretary Telephone Direct (530)
722-3959
Bank of Commerce (NASDAQ:BOCH)
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From Aug 2024 to Sep 2024
Bank of Commerce (NASDAQ:BOCH)
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From Sep 2023 to Sep 2024