Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.471
billion asset bank holding company and parent company of Redding
Bank of Commerce (the “Bank”), today announced financial results
for the quarter ended March 31, 2019. Net income for the quarter
ended March 31, 2019 was $2.3 million or $0.13 per share – diluted,
compared with net income of $3.2 million or $0.20 per share –
diluted for the same period of 2018.
The current quarter includes the results and related acquisition
costs of $1.9 million associated with the January 31, 2019
acquisition of Merchants Holding Company in Sacramento
(“Merchants”).
Randall S. Eslick, President and CEO commented: “All of our
employees have worked diligently to ensure that the integration of
Merchants Bank continues to progress very smoothly and we are
excited to extend our banking services into downtown
Sacramento.”
Financial highlights for the first quarter of 2019
compared to the same quarter a year ago:
- Net income of $2.3 million was a decrease of $935 thousand
(29%) from $3.2 million earned during the same period in the prior
year. Earnings of $0.13 per share – diluted was a decrease of $0.07
(35%) from $0.20 per share – diluted earned during the same period
in the prior year and reflects the impact of 1,834,142 shares of
common stock issued during the current quarter as part of our
acquisition of Merchants.
- Acquisition costs associated with our acquisition of Merchants
totaled $1.9 million.
- Net interest income increased $1.7 million (15%) to $13.0
million compared to $11.3 million for the same period in the prior
year.
- Return on average assets decreased to 0.66% compared to 1.05%
for the same period in the prior year.
- Return on average equity decreased to 6.12% compared to 10.34%
for the same period in the prior year.
- Average loans totaled $993.3 million, an increase of $109.4
million (12%) compared to average loans for the same period in the
prior year.
- Average earning assets totaled $1.337 billion, an increase of
$155 million (13%) compared to average earning assets for the same
period in the prior year.
- Average deposits totaled $1.224 billion, an increase of $153
million (14%) compared to average deposits for the same period in
the prior year.
- Average non-maturing deposits totaled $1.056 billion, an
increase of $168 million (19%) compared to the same period in the
prior year.
- Average certificates of deposit totaled $167.5 million, a
decrease of $14.4 million (8%) compared to same period in the prior
year.
- The Company’s efficiency ratio was 77.7% compared to 65.2%
during the same period in the prior year.
- Nonperforming assets at March 31, 2019 totaled $14.6 million or
0.99% of total assets, an increase of $10.3 million (241%) since
March 31, 2018. The increase in nonperforming assets results from
one $10.9 million commercial real estate loan which at March 31,
2019 had zero calculated impairment.
- Book value per common share was $8.90 at March 31, 2019
compared to $7.83 at March 31, 2018.
- Tangible book value per common share was $7.96 at March 31,
2019 compared to $7.71 at March 31, 2018.
Financial highlights for the first quarter of 2019
compared to the prior quarter:
- Net income of $2.3 million ($0.13 per share –diluted) was a
decrease of $2.5 million (52%) from $4.8 million ($0.30 per share –
diluted) earned during the prior quarter.
- Acquisition costs associated with our acquisition of Merchants
totaled $1.9 million compared to $802 thousand for the prior
quarter.
- Net interest income increased $510 thousand (17% annualized) to
$13.0 million compared to $12.5 million for the prior quarter.
- Return on average assets decreased to 0.66% compared to 1.44%
for the prior quarter.
- Return on average equity decreased to 6.12% compared to 14.32%
for the prior quarter.
- Average loans totaled $993.3 million, an increase of $69.9
million (31% annualized) compared to average loans for the prior
quarter.
- Average earning assets totaled $1.337 billion, an increase of
$77 million (25% annualized) compared the prior quarter.
- Average deposits totaled $1.224 billion, an increase of $65.9
million (23% annualized) compared the prior quarter.
- Average non-maturing deposits totaled $1.056 billion, an
increase of $55 million (22% annualized) compared to the prior
quarter.
- Average certificates of deposit totaled $167.5 million, an
increase of $10.4 million (27% annualized) compared to the prior
quarter.
- The Company’s efficiency ratio was 77.7% compared to 65.1% for
the prior quarter.
- Nonperforming assets at March 31, 2019 totaled $14.6 million or
0.99% of total assets, an increase of $10.4 million (1,009%
annualized) compared to December 31, 2018. The increase in
nonperforming assets results from one $10.9 million commercial real
estate loan which at March 31, 2019 had zero calculated
impairment.
- Book value per common share was $8.90 at March 31, 2019
compared to $8.47 at December 31, 2018.
- Tangible book value per common share was $7.96 at March 31,
2019 compared to $8.36 at December 31, 2018.
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, 2018 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.
|
TABLE 1 |
SELECTED FINANCIAL INFORMATION -
UNAUDITED |
(amounts in thousands except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
Net income,
average assets and |
|
March 31, |
|
|
December 31, |
average shareholders' equity |
|
2019 |
|
2018 |
|
2018 |
Net income |
|
$ |
2,306 |
|
|
$ |
3,241 |
|
|
$ |
4,839 |
|
Average total
assets |
|
$ |
1,425,860 |
|
|
$ |
1,248,563 |
|
|
$ |
1,328,817 |
|
Average total earning
assets |
|
$ |
1,337,006 |
|
|
$ |
1,181,882 |
|
|
$ |
1,259,709 |
|
Average shareholders'
equity |
|
$ |
152,705 |
|
|
$ |
127,069 |
|
|
$ |
134,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected performance ratios |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets |
|
|
0.66 |
% |
|
|
1.05 |
% |
|
|
1.44 |
% |
Return on average
equity |
|
|
6.12 |
% |
|
|
10.34 |
% |
|
|
14.32 |
% |
Efficiency ratio |
|
|
77.7 |
% |
|
|
65.2 |
% |
|
|
65.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and per share amounts |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
- basic (1) |
|
|
17,489 |
|
|
|
16,225 |
|
|
|
16,265 |
|
Weighted average shares
- diluted (1) |
|
|
17,552 |
|
|
|
16,310 |
|
|
|
16,345 |
|
Earnings per share -
basic |
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
0.30 |
|
Earnings per share -
diluted |
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
|
At December 31, |
Share and per share amounts |
|
2019 |
|
2018 |
|
2018 |
Common shares
outstanding (2) |
|
|
18,213 |
|
|
|
16,315 |
|
|
|
16,334 |
|
Book value per common
share (2) |
|
$ |
8.90 |
|
|
$ |
7.83 |
|
|
$ |
8.47 |
|
Tangible book value per
common share (2)(3) |
|
$ |
7.96 |
|
|
$ |
7.71 |
|
|
$ |
8.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratios (4) |
|
|
|
|
|
|
|
|
|
|
|
Bank of Commerce
Holdings |
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital ratio |
|
|
12.40 |
% |
|
|
12.35 |
% |
|
|
12.79 |
% |
Tier 1 capital
ratio |
|
|
13.25 |
% |
|
|
13.31 |
% |
|
|
13.71 |
% |
Total capital
ratio |
|
|
15.19 |
% |
|
|
15.52 |
% |
|
|
15.82 |
% |
Tier 1 leverage
ratio |
|
|
11.05 |
% |
|
|
11.09 |
% |
|
|
11.21 |
% |
Tangible common equity
ratio (5) |
|
|
9.97 |
% |
|
|
10.11 |
% |
|
|
10.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Redding Bank of
Commerce |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital ratio |
|
|
13.98 |
% |
|
|
12.62 |
% |
|
|
13.23 |
% |
Tier 1 capital
ratio |
|
|
13.98 |
% |
|
|
12.62 |
% |
|
|
13.23 |
% |
Total capital
ratio |
|
|
15.08 |
% |
|
|
13.87 |
% |
|
|
14.42 |
% |
Tier 1 leverage
ratio |
|
|
11.66 |
% |
|
|
10.51 |
% |
|
|
10.81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31, 2019, the Company had total consolidated assets
of $1.471 billion, gross loans of $1.035 billion, allowance for
loan and lease losses (“ALLL”) of $12.2 million, total deposits of
$1.248 billion, and shareholders’ equity of $162.1 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 2 |
LOAN BALANCES BY TYPE -
UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
|
|
|
|
|
At December 31, |
|
|
|
|
% of |
|
|
|
% of |
|
Change |
|
|
|
% of |
|
|
2019 |
|
Total |
|
2018 |
|
Total |
|
Amount |
|
% |
|
2018 |
|
Total |
Commercial |
|
$ |
149,575 |
|
|
14 |
% |
|
$ |
137,870 |
|
|
15 |
% |
|
$ |
11,705 |
|
|
8 |
% |
|
$ |
135,543 |
|
|
14 |
% |
Real estate -
construction and land development |
|
|
30,335 |
|
|
3 |
|
|
|
14,723 |
|
|
2 |
|
|
|
15,612 |
|
|
106 |
% |
|
|
22,563 |
|
|
2 |
|
Real estate -
commercial non-owner occupied |
|
|
477,798 |
|
|
47 |
|
|
|
405,192 |
|
|
46 |
|
|
|
72,606 |
|
|
18 |
% |
|
|
433,708 |
|
|
46 |
|
Real estate -
commercial owner occupied |
|
|
200,349 |
|
|
19 |
|
|
|
193,286 |
|
|
22 |
|
|
|
7,063 |
|
|
4 |
% |
|
|
204,622 |
|
|
22 |
|
Real estate -
residential - ITIN |
|
|
36,145 |
|
|
3 |
|
|
|
40,425 |
|
|
4 |
|
|
|
(4,280 |
) |
|
(11 |
)% |
|
|
37,446 |
|
|
4 |
|
Real estate -
residential - 1-4 family mortgage |
|
|
68,092 |
|
|
7 |
|
|
|
30,247 |
|
|
3 |
|
|
|
37,845 |
|
|
125 |
% |
|
|
34,366 |
|
|
4 |
|
Real estate -
residential - equity lines |
|
|
26,162 |
|
|
3 |
|
|
|
30,520 |
|
|
3 |
|
|
|
(4,358 |
) |
|
(14 |
)% |
|
|
26,958 |
|
|
3 |
|
Consumer and other |
|
|
46,150 |
|
|
4 |
|
|
|
48,157 |
|
|
5 |
|
|
|
(2,007 |
) |
|
(4 |
)% |
|
|
51,045 |
|
|
5 |
|
Gross
loans |
|
|
1,034,606 |
|
|
100 |
% |
|
|
900,420 |
|
|
100 |
% |
|
|
134,186 |
|
|
15 |
% |
|
|
946,251 |
|
|
100 |
% |
Deferred fees and
costs |
|
|
1,992 |
|
|
|
|
|
|
1,713 |
|
|
|
|
|
|
279 |
|
|
|
|
|
1,927 |
|
|
|
|
Loans,
net of deferred fees and costs |
|
|
1,036,598 |
|
|
|
|
|
|
902,133 |
|
|
|
|
|
|
134,465 |
|
|
|
|
|
948,178 |
|
|
|
|
Allowance for loan and
lease losses |
|
|
(12,242 |
) |
|
|
|
|
|
(12,295 |
) |
|
|
|
|
|
53 |
|
|
|
|
|
(12,292 |
) |
|
|
|
Net
loans |
|
$ |
1,024,356 |
|
|
|
|
|
$ |
889,838 |
|
|
|
|
|
$ |
134,518 |
|
|
|
|
$ |
935,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average yield on loans
during the quarter |
|
|
4.91 |
% |
|
|
|
|
|
4.92 |
% |
|
|
|
|
|
(0.01 |
) |
|
|
|
|
4.94 |
% |
|
|
|
Average yield on loans
during the year |
|
|
4.91 |
% |
|
|
|
|
|
4.92 |
% |
|
|
|
|
|
(0.01 |
) |
|
|
|
|
4.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company recorded gross loan balances of $1.035 billion at
March 31, 2019, compared with $900.4 million and $946.3 million at
March 31, 2018 and December 31, 2018, respectively, an increase of
$134.2 million and $88.4 million, respectively. During the first
quarter of 2019, Merchants Holding Company acquisition provided an
additional $85.3 million of loans. At March 31, 2019, gross loans
from the acquisition totaled $84.1 million as follows:
- Commercial $6.0 million
- Real estate - construction and land development $2.4
million
- Real estate - commercial non-owner occupied $39.5 million
- Real estate - residential – 1-4 family mortgage $36.0
million
- Consumer and other $0.2 million
Average loan balances were $993.3 million for the quarter ended
March 31, 2019, compared with $883.9 million for the quarter ended
March 31, 2018 and $923.4 million for the quarter ended December
31, 2018 an increase of $109.4 million or 12% and an increase of
$69.9 million or 31% annualized.
The average yield on loans during the quarter was 4.91% compared
to 4.92% and 4.94% for the quarters ended March 31, 2018 and
December 31, 2018, respectively. During the quarter, a $10.9
million commercial real estate loan was placed on nonaccrual
status. The uncollected interest on the loan was reversed which
reduced our average yield on loans by 5 basis points.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 3 |
CASH, CASH EQUIVALENTS, AND INVESTMENT
SECURITIES - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
|
|
|
|
|
At December 31, |
|
|
|
|
% of |
|
|
|
% of |
|
Change |
|
|
|
% of |
|
|
2019 |
|
Total |
|
2018 |
|
Total |
|
Amount |
|
% |
|
2018 |
|
Total |
Cash and due from
banks |
|
$ |
32,104 |
|
|
9 |
% |
|
$ |
16,247 |
|
|
6 |
% |
|
$ |
15,857 |
|
|
98 |
% |
|
$ |
23,692 |
|
|
8 |
% |
Interest-bearing
deposits in other banks |
|
|
30,425 |
|
|
9 |
|
|
|
17,376 |
|
|
6 |
|
|
|
13,049 |
|
|
75 |
% |
|
|
23,673 |
|
|
8 |
|
Total
cash and cash equivalents |
|
|
62,529 |
|
|
18 |
|
|
|
33,623 |
|
|
12 |
|
|
|
28,906 |
|
|
86 |
% |
|
|
47,365 |
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government and
agencies |
|
|
46,451 |
|
|
13 |
|
|
|
41,179 |
|
|
14 |
|
|
|
5,272 |
|
|
13 |
% |
|
|
40,087 |
|
|
13 |
|
Obligations of state
and political subdivisions |
|
|
48,935 |
|
|
14 |
|
|
|
59,408 |
|
|
21 |
|
|
|
(10,473 |
) |
|
(18 |
)% |
|
|
50,530 |
|
|
17 |
|
Residential mortgage
backed securities and collateralized mortgage obligations |
|
|
171,814 |
|
|
47 |
|
|
|
125,567 |
|
|
43 |
|
|
|
46,247 |
|
|
37 |
% |
|
|
138,503 |
|
|
45 |
|
Corporate
securities |
|
|
2,958 |
|
|
1 |
|
|
|
3,958 |
|
|
1 |
|
|
|
(1,000 |
) |
|
(25 |
)% |
|
|
2,922 |
|
|
1 |
|
Commercial mortgage
backed securities |
|
|
23,864 |
|
|
7 |
|
|
|
25,520 |
|
|
9 |
|
|
|
(1,656 |
) |
|
(6 |
)% |
|
|
24,762 |
|
|
8 |
|
Other asset backed
securities |
|
|
95 |
|
|
— |
|
|
|
285 |
|
|
0 |
|
|
|
(190 |
) |
|
(67 |
)% |
|
|
124 |
|
|
— |
|
Total
investment securities - AFS |
|
|
294,117 |
|
|
82 |
|
|
|
255,917 |
|
|
88 |
|
|
|
38,200 |
|
|
15 |
% |
|
|
256,928 |
|
|
84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash, cash
equivalents and investment securities |
|
$ |
356,646 |
|
|
100 |
% |
|
$ |
289,540 |
|
|
100 |
% |
|
$ |
67,106 |
|
|
23 |
% |
|
$ |
304,293 |
|
|
100 |
% |
Average yield on
interest-bearing due from banks and investment securities during
the quarter - nominal |
|
|
2.83 |
% |
|
|
|
|
|
2.45 |
% |
|
|
|
|
|
0.38 |
|
|
|
|
|
2.66 |
% |
|
|
|
Average yield on
interest-bearing due from banks and investment securities during
the quarter - tax equivalent |
|
|
2.95 |
% |
|
|
|
|
|
2.62 |
% |
|
|
|
|
|
0.33 |
|
|
|
|
|
2.77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2019, we maintained noninterest-bearing cash
positions of $32.1 million and interest-bearing deposits of $30.4
million at the Federal Reserve Bank and correspondent banks.
Investment securities totaled $294.1 million at March 31, 2019,
compared with $255.9 million and $256.9 million at March 31, 2018
and December 31, 2018, respectively. During the first quarter of
2019, the Merchants acquisition included securities with a par
value of $107.4 million. Management elected to sell securities with
a par value of $67.8 million which resulted in $92 thousand in net
realized gains.
Average securities balances and weighted average tax equivalent
yields for the quarters ended March 31, 2019 and 2018 were $303.5
million and 3.01% compared to $265.1 million and 2.75%,
respectively.
At March 31, 2019, our net unrealized losses on
available-for-sale investment securities were $701 thousand
compared with net unrealized losses of $3.9 million and $4.3
million at March 31, 2018 and December 31, 2018, respectively. The
changes in net unrealized losses on the investment securities
portfolio are due to changes in market interest rates.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 4 |
DEPOSITS BY TYPE - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
|
|
|
|
|
At December 31, |
|
|
|
|
% of |
|
|
|
% of |
|
|
Change |
|
|
|
% of |
|
|
2019 |
|
Total |
|
2018 |
|
Total |
|
Amount |
|
% |
|
2018 |
|
Total |
Demand -
noninterest-bearing |
|
$ |
385,696 |
|
|
31 |
% |
|
$ |
301,981 |
|
|
29 |
% |
|
$ |
83,715 |
|
|
28 |
% |
|
$ |
347,199 |
|
|
31 |
% |
Demand -
interest-bearing |
|
|
241,292 |
|
|
19 |
|
|
|
229,681 |
|
|
22 |
|
|
|
11,611 |
|
|
5 |
% |
|
|
252,202 |
|
|
22 |
|
Money market
accounts |
|
|
311,853 |
|
|
25 |
|
|
|
232,870 |
|
|
22 |
|
|
|
78,983 |
|
|
34 |
% |
|
|
265,093 |
|
|
23 |
|
Total demand |
|
|
938,841 |
|
|
75 |
|
|
|
764,532 |
|
|
73 |
|
|
|
174,309 |
|
|
23 |
% |
|
|
864,494 |
|
|
76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
|
139,237 |
|
|
11 |
|
|
|
107,986 |
|
|
10 |
|
|
|
31,251 |
|
|
29 |
% |
|
|
114,840 |
|
|
10 |
|
Total non-maturing
deposits |
|
|
1,078,078 |
|
|
67 |
|
|
|
872,518 |
|
|
83 |
|
|
|
205,560 |
|
|
24 |
% |
|
|
979,334 |
|
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit |
|
|
170,216 |
|
|
14 |
|
|
|
176,233 |
|
|
17 |
|
|
|
(6,017 |
) |
|
(3 |
)% |
|
|
152,382 |
|
|
14 |
|
Total deposits |
|
$ |
1,248,294 |
|
|
100 |
% |
|
$ |
1,048,751 |
|
|
100 |
% |
|
$ |
199,543 |
|
|
19 |
% |
|
$ |
1,131,716 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits at March 31, 2019, increased $200 million or 19%
to $1.248 billion compared to March 31, 2018 and increased $117
million or 42% annualized compared to December 31, 2018. Total
non-maturing deposits increased $206 million or 24% compared to the
same date a year ago and increased $99 million or 41% annualized
compared to December 31, 2018. Certificates of deposit decreased $6
million or 3% compared to the same date a year ago and increased
$18 million or 47% annualized compared to December 31, 2018.
During the first quarter of 2019, Merchants Holding Company
acquisition provided an additional $190.2 million of deposits,
which are essentially unchanged at March 31, 2019. As illustrated
in the following table, legacy deposits have experienced their
seasonal decline, while wholesale time deposits have matured and
were not renewed.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 4a |
YEAR TO DATE CHANGES IN DEPOSITS |
(amounts in thousands) |
|
|
Legacy Deposits |
|
Acquired MerchantsDeposits |
|
Change In |
|
Deposits |
|
|
At December 31, |
|
At March 31, |
|
Legacy Deposits |
|
At March 31, |
|
|
2018 |
|
2019 |
|
Deposits |
|
2019 |
Demand -
noninterest-bearing |
|
$ |
347,199 |
|
|
$ |
49,892 |
|
|
$ |
(11,395 |
) |
|
$ |
385,696 |
|
Demand -
interest-bearing |
|
|
252,202 |
|
|
|
28,344 |
|
|
|
(39,254 |
) |
|
|
241,292 |
|
Money market
accounts |
|
|
265,093 |
|
|
|
46,321 |
|
|
|
439 |
|
|
|
311,853 |
|
Total demand |
|
|
864,494 |
|
|
|
124,557 |
|
|
|
(50,210 |
) |
|
|
938,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
|
114,840 |
|
|
|
28,386 |
|
|
|
(3,989 |
) |
|
|
139,237 |
|
Total non-maturing
deposits |
|
|
979,334 |
|
|
|
152,943 |
|
|
|
(54,199 |
) |
|
|
1,078,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit |
|
|
152,382 |
|
|
|
36,863 |
|
|
|
(19,029 |
) |
|
|
170,216 |
|
Total deposits |
|
$ |
1,131,716 |
|
|
$ |
189,806 |
|
|
$ |
(73,228 |
) |
|
$ |
1,248,294 |
|
TABLE 5 |
WHOLESALE AND RECIPROCAL DEPOSITS -
UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
At December 31, |
|
|
2019 |
|
2018 |
|
2018 |
CDARS / ICS reciprocal
deposits |
|
$ |
65,192 |
|
|
$ |
56,732 |
|
|
$ |
83,666 |
|
Online listing service
wholesale time deposits |
|
|
1,683 |
|
|
|
29,159 |
|
|
|
22,015 |
|
Total wholesale and
reciprocal deposits |
|
$ |
66,875 |
|
|
$ |
85,891 |
|
|
$ |
105,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calendar quarters prior to April 1, 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, this is no longer so.
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
2017 |
Interest-bearing
deposits |
|
|
0.49 |
% |
|
|
0.45 |
% |
|
|
0.42 |
% |
|
|
0.41 |
% |
|
|
0.41 |
% |
|
|
0.42 |
% |
|
|
0.43 |
% |
|
|
0.42 |
% |
Interest-bearing
deposits and noninterest-bearing demand |
|
|
0.34 |
% |
|
|
0.31 |
% |
|
|
0.29 |
% |
|
|
0.29 |
% |
|
|
0.29 |
% |
|
|
0.30 |
% |
|
|
0.31 |
% |
|
|
0.31 |
% |
All interest-bearing
liabilities |
|
|
0.67 |
% |
|
|
0.61 |
% |
|
|
0.64 |
% |
|
|
0.68 |
% |
|
|
0.60 |
% |
|
|
0.59 |
% |
|
|
0.60 |
% |
|
|
0.60 |
% |
All interest-bearing
liabilities and noninterest-bearing demand |
|
|
0.46 |
% |
|
|
0.42 |
% |
|
|
0.45 |
% |
|
|
0.50 |
% |
|
|
0.43 |
% |
|
|
0.42 |
% |
|
|
0.43 |
% |
|
|
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT
OVERVIEW
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 7 |
SUMMARY INCOME STATEMENT -
UNAUDITED |
(amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
March 31, |
|
Change |
|
December 31, |
|
Change |
|
|
2019 |
|
2018 |
|
Amount |
|
% |
|
2018 |
|
Amount |
|
% |
Interest income |
|
$ |
14,427 |
|
|
$ |
12,530 |
|
|
$ |
1,897 |
|
|
15 |
% |
|
$ |
13,750 |
|
|
$ |
677 |
|
|
5 |
% |
Interest expense |
|
|
1,423 |
|
|
|
1,185 |
|
|
|
238 |
|
|
20 |
% |
|
|
1,256 |
|
|
|
167 |
|
|
13 |
% |
Net interest
income |
|
|
13,004 |
|
|
|
11,345 |
|
|
|
1,659 |
|
|
15 |
% |
|
|
12,494 |
|
|
|
510 |
|
|
4 |
% |
Provision for loan and
lease losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
|
— |
% |
Noninterest income |
|
|
1,057 |
|
|
|
982 |
|
|
|
75 |
|
|
8 |
% |
|
|
1,132 |
|
|
|
(75 |
) |
|
(7 |
)% |
Noninterest
expense |
|
|
10,923 |
|
|
|
8,033 |
|
|
|
2,890 |
|
|
36 |
% |
|
|
8,868 |
|
|
|
2,055 |
|
|
23 |
% |
Income before provision
for income taxes |
|
|
3,138 |
|
|
|
4,294 |
|
|
|
(1,156 |
) |
|
(27 |
)% |
|
|
4,758 |
|
|
|
(1,620 |
) |
|
(34 |
)% |
Provision for income
taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal
of uncertain tax position |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
(988 |
) |
|
|
988 |
|
|
100 |
% |
Benefit
from cost segregation study and tangible property review |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
(484 |
) |
|
|
484 |
|
|
100 |
% |
Provision
for income taxes from operations |
|
|
832 |
|
|
|
1,053 |
|
|
|
(221 |
) |
|
(21 |
)% |
|
|
1,391 |
|
|
|
(559 |
) |
|
(40 |
)% |
Total provision for
income taxes |
|
|
832 |
|
|
|
1,053 |
|
|
|
(221 |
) |
|
(21 |
)% |
|
|
(81 |
) |
|
|
913 |
|
|
(1,127 |
)% |
Net
income |
|
$ |
2,306 |
|
|
$ |
3,241 |
|
|
$ |
(935 |
) |
|
(29 |
)% |
|
$ |
4,839 |
|
|
$ |
(2,533 |
) |
|
(52 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
(0.07 |
) |
|
(35 |
)% |
|
$ |
0.30 |
|
|
$ |
(0.17 |
) |
|
(57 |
)% |
Average basic
shares |
|
|
17,489 |
|
|
|
16,225 |
|
|
|
1,264 |
|
|
8 |
% |
|
|
16,265 |
|
|
|
1,224 |
|
|
8 |
% |
Diluted earnings per
share |
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
(0.07 |
) |
|
(35 |
)% |
|
$ |
0.30 |
|
|
$ |
(0.17 |
) |
|
(57 |
)% |
Average diluted
shares |
|
|
17,552 |
|
|
|
16,310 |
|
|
|
1,242 |
|
|
8 |
% |
|
|
16,345 |
|
|
|
1,207 |
|
|
7 |
% |
Dividends declared per
common share |
|
$ |
0.04 |
|
|
$ |
0.03 |
|
|
$ |
0.01 |
|
|
33 |
% |
|
$ |
0.04 |
|
|
$ |
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter of 2019 Compared With First
Quarter of 2018
Net income for the first quarter of 2019 decreased $935 thousand
compared to the first quarter of 2018. In the current quarter, net
interest income was $1.7 million higher, noninterest income was $75
thousand higher and the provision for income taxes was $221
thousand lower. These positive changes were offset by noninterest
expenses that were $2.9 million higher.
Net Interest Income
Net interest income increased $1.7 million compared to the same
period a year ago.
Interest income for the first quarter of 2019 increased $1.9
million or 15% to $14.4 million:
- Interest and fees on loans increased $1.3 million due to a
$109.4 million increase in average loan balances partially offset
by a one basis point decrease in the average yield on the loan
portfolio.
- Interest on securities increased $479 thousand due to a $38.4
million increase in average securities balances and a 32 basis
point increase in average yield on the securities portfolio.
- Interest on interest-bearing deposits due from banks increased
$116 thousand due to a $7.3 million increase in average
interest-bearing deposit balances, and an 88 basis point increase
in average yield.
Interest expense for the first quarter of 2019 increased $238
thousand or 20% to $1.4 million:
- Interest expense on interest bearing deposits increased $241
thousand. Average interest-bearing demand and savings deposit
balances increased $86.7 million, while average certificate of
deposit balances decreased $14.4 million. The average rate paid on
interest-bearing deposits increased eight basis points.
- Interest expense on borrowings from the Federal Home Loan Bank
of San Francisco increased $8 thousand. Average Federal Home Loan
Bank of San Francisco borrowings outstanding in the current quarter
were $8.8 million compared to $12.4 million in the same quarter a
year ago.
- Interest expense on other term debt and junior subordinated
debentures decreased $11 thousand.
Provision for loan and lease losses
As illustrated in Table 9, the nonaccrual status of a $10.9
million commercial real estate loan has resulted in a deterioration
in our asset quality metrics. However, no calculated impairment
reserve on this loan is indicated and no provision for loan and
lease losses was necessary for the quarter.
Noninterest Income
Noninterest income for the three months ended March 31, 2019
increased $75 thousand compared to the first quarter for 2018.
Gains on sale of investment securities increased $56 thousand and
dividends on Federal Home Loan Bank of San Francisco stock
increased $41 thousand.
Noninterest Expense
Noninterest expense for the three months ended March 31, 2019
increased $2.9 million compared to the same period a year previous
which included:
- $1.9 million in acquisition costs
- $0.6 million increase in operating expenses from the Merchants
acquisition
The Company’s efficiency ratio was 77.7% for the first quarter
of 2019 (64.0% exclusive of acquisition costs). The ratio during
the same period in 2018 was 65.2%.
Income Tax Provision
For the three months ended March 31, 2019, our income tax
provision of $832 thousand on pre-tax income of $3.1 million was an
effective tax rate of 26.5%. The tax provision for the first
quarter of the prior year was $1.1 million on pre-tax income of
$4.3 million for an effective tax rate of 24.5%. The current
quarter includes $135 thousand, of acquisition costs which are not
tax deductible.
First Quarter of 2019 Compared With Fourth
Quarter of 2018
Net income for the first quarter of 2019 decreased $2.5 million
compared to the fourth quarter of 2018. In the current quarter, net
interest income was $510 thousand higher. This positive change was
offset by noninterest income that was $75 thousand lower,
noninterest expense that was $2.1 million higher and provision for
income taxes that was $913 thousand higher.
Net Interest Income
Net interest income increased $510 thousand over the prior
quarter.
Interest income for the three months ended March 31, 2019
increased $677 thousand or 5% to $14.4 million.
- Interest and fees on loans increased $537 thousand due to a
$69.9 million increase in average loan balances partially offset by
a three basis point decrease in the average yield on the loan
portfolio.
- Interest on investment securities increased $329 thousand due
to a $42.5 million increase in average securities balances and a 10
basis point increase in average yield on the investment
portfolio.
- Interest on interest-bearing deposits due from banks decreased
$189 thousand due to a $35.1 million decrease in average balances
partially offset by an 18 basis point increase in average
yield.
Interest expense for the three months ended March 31, 2019
increased $167 thousand or 13% to $1.4 million.
- Interest expense on deposits increased $114 thousand as average
interest-bearing demand and savings deposits increased $34.5
million, average certificates of deposit increased $10.4 million
and the average rate paid on these deposits increased by eight
basis points.
- Interest expense on borrowings from the Federal Home Loan Bank
of San Francisco increased $55 thousand. Average Federal Home Loan
Bank of San Francisco borrowings outstanding in the current quarter
were $8.8 million, there were no borrowings in the prior
quarter
- Interest expense on other term debt and junior subordinated
debentures decreased $2 thousand.
Provision for loan and lease losses
As illustrated in Table 9, the nonaccrual status of a $10.9
million commercial real estate loan has resulted in a deterioration
in our asset quality metrics. However, no calculated impairment
reserve on this loan is indicated and no provision for loan and
lease losses was necessary for the quarter.
Noninterest Income
Noninterest income for the three months ended March 31, 2019
decreased $75 thousand, the decrease was due to a $96 thousand
special dividend on Federal Home Loan Bank of San Francisco stock
in the prior quarter that did not recur and a decrease in gains on
sale of OREO properties of $41 thousand. These decreases were
partially offset by an increase in the gain on sale of investment
securities of $89 thousand.
Noninterest Expense
Noninterest expense for the three months ended March 31, 2019
increased $2.1 million. The increase was due to:
- $1.1 million increase in acquisition costs
- $0.6 million increase in operating expenses from the Merchants
acquisition
The Company’s efficiency ratio was 77.7% for the first quarter
of 2019 (64% exclusive of acquisition costs). The ratio during the
prior quarter was 65.1%.
Income Tax Provision
For the three months ended March 31, 2019, our income tax
provision of $832 thousand on pre-tax income of $3.1 million was an
effective tax rate of 26.5%. The negative tax provision for the
prior quarter 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 and prior quarter include $135 thousand and $765
thousand, respectively, of acquisition costs which are not tax
deductible.
Earnings Per Share
Diluted earnings per share were $0.13 for the three months ended
March 31, 2019 compared with diluted earnings per share of $0.20
for the same period a year ago and diluted earnings per share of
$0.30 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 |
|
|
March 31, 2019 |
|
March 31, 2018 |
|
December 31, 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) |
|
$ |
993,261 |
|
|
$ |
12,031 |
|
|
4.91 |
% |
|
$ |
883,876 |
|
|
$ |
10,729 |
|
|
4.92 |
% |
|
$ |
923,409 |
|
|
$ |
11,494 |
|
|
4.94 |
% |
Taxable
securities |
|
|
253,068 |
|
|
|
1,764 |
|
|
2.83 |
% |
|
|
205,302 |
|
|
|
1,209 |
|
|
2.39 |
% |
|
|
218,137 |
|
|
|
1,469 |
|
|
2.67 |
% |
Tax-exempt securities |
|
|
50,454 |
|
|
|
387 |
|
|
3.11 |
% |
|
|
59,789 |
|
|
|
463 |
|
|
3.14 |
% |
|
|
42,868 |
|
|
|
353 |
|
|
3.27 |
% |
Interest-bearing deposits in other banks |
|
|
40,223 |
|
|
|
245 |
|
|
2.47 |
% |
|
|
32,915 |
|
|
|
129 |
|
|
1.59 |
% |
|
|
75,295 |
|
|
|
434 |
|
|
2.29 |
% |
Average
interest-earning assets |
|
|
1,337,006 |
|
|
|
14,427 |
|
|
4.38 |
% |
|
|
1,181,882 |
|
|
|
12,530 |
|
|
4.30 |
% |
|
|
1,259,709 |
|
|
|
13,750 |
|
|
4.33 |
% |
Cash and
due from banks |
|
|
21,392 |
|
|
|
|
|
|
|
|
|
|
17,641 |
|
|
|
|
|
|
|
|
|
|
22,447 |
|
|
|
|
|
|
|
|
Premises
and equipment, net |
|
|
14,581 |
|
|
|
|
|
|
|
|
|
|
14,557 |
|
|
|
|
|
|
|
|
|
|
13,331 |
|
|
|
|
|
|
|
|
Goodwill
and core deposit intangible, net |
|
|
11,872 |
|
|
|
|
|
|
|
|
|
|
1,998 |
|
|
|
|
|
|
|
|
|
|
1,842 |
|
|
|
|
|
|
|
|
Other
assets |
|
|
41,009 |
|
|
|
|
|
|
|
|
|
|
32,485 |
|
|
|
|
|
|
|
|
|
|
31,488 |
|
|
|
|
|
|
|
|
Average total
assets |
|
$ |
1,425,860 |
|
|
|
|
|
|
|
|
|
$ |
1,248,563 |
|
|
|
|
|
|
|
|
|
$ |
1,328,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
243,376 |
|
|
|
126 |
|
|
0.21 |
% |
|
$ |
234,269 |
|
|
|
89 |
|
|
0.15 |
% |
|
$ |
257,227 |
|
|
|
141 |
|
|
0.22 |
% |
Money
market accounts |
|
|
293,396 |
|
|
|
289 |
|
|
0.40 |
% |
|
|
236,171 |
|
|
|
132 |
|
|
0.23 |
% |
|
|
265,190 |
|
|
|
207 |
|
|
0.31 |
% |
Savings
deposits |
|
|
131,081 |
|
|
|
111 |
|
|
0.34 |
% |
|
|
110,725 |
|
|
|
59 |
|
|
0.22 |
% |
|
|
110,934 |
|
|
|
92 |
|
|
0.33 |
% |
Certificates of deposit |
|
|
167,463 |
|
|
|
490 |
|
|
1.19 |
% |
|
|
181,901 |
|
|
|
495 |
|
|
1.10 |
% |
|
|
157,035 |
|
|
|
462 |
|
|
1.17 |
% |
Federal
Home Loan Bank of San Francisco borrowings |
|
|
8,778 |
|
|
|
55 |
|
|
2.54 |
% |
|
|
12,444 |
|
|
|
47 |
|
|
1.53 |
% |
|
|
— |
|
|
|
— |
|
|
— |
% |
Other
borrowings net of unamortized debt issuance costs |
|
|
12,889 |
|
|
|
239 |
|
|
7.52 |
% |
|
|
16,528 |
|
|
|
281 |
|
|
6.90 |
% |
|
|
13,785 |
|
|
|
252 |
|
|
7.25 |
% |
Junior
subordinated debentures |
|
|
10,310 |
|
|
|
113 |
|
|
4.44 |
% |
|
|
10,310 |
|
|
|
82 |
|
|
3.23 |
% |
|
|
10,310 |
|
|
|
102 |
|
|
3.93 |
% |
Average
interest-bearing liabilities |
|
|
867,293 |
|
|
|
1,423 |
|
|
0.67 |
% |
|
|
802,348 |
|
|
|
1,185 |
|
|
0.60 |
% |
|
|
814,481 |
|
|
|
1,256 |
|
|
0.61 |
% |
Noninterest-bearing demand |
|
|
388,410 |
|
|
|
|
|
|
|
|
|
|
307,397 |
|
|
|
|
|
|
|
|
|
|
367,457 |
|
|
|
|
|
|
|
|
Other
liabilities |
|
|
17,452 |
|
|
|
|
|
|
|
|
|
|
11,749 |
|
|
|
|
|
|
|
|
|
|
12,846 |
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
152,705 |
|
|
|
|
|
|
|
|
|
|
127,069 |
|
|
|
|
|
|
|
|
|
|
134,033 |
|
|
|
|
|
|
|
|
Average liabilities and
shareholders’ equity |
|
$ |
1,425,860 |
|
|
|
|
|
|
|
|
|
$ |
1,248,563 |
|
|
|
|
|
|
|
|
|
$ |
1,328,817 |
|
|
|
|
|
|
|
|
Net interest income and
net interest margin (4) |
|
|
|
|
|
$ |
13,004 |
|
|
3.94 |
% |
|
|
|
|
|
$ |
11,345 |
|
|
3.89 |
% |
|
|
|
|
|
$ |
12,494 |
|
|
3.93 |
% |
Tax equivalent net
interest margin (3) |
|
|
|
|
|
|
|
|
|
3.98 |
% |
|
|
|
|
|
|
|
|
|
3.94 |
% |
|
|
|
|
|
|
|
|
|
3.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Interest income on loans includes deferred fees and costs of
approximately $181 thousand, $137 thousand, and $109 thousand for
the three months ended March 31, 2019, and 2018 and December 31,
2018, respectively. |
(2) Net
loans includes average nonaccrual loans of $8.5 million, $4.8
million and $4.1 million for the three months ended March 31, 2019
and 2018 and December 31, 2018, respectively. |
(3)
Tax-exempt income has been adjusted to tax equivalent basis at a
21% for 2019 and 2018. The amount of such adjustments was an
addition to recorded income of approximately $103 thousand, $123
thousand and $94 thousand for the three months ended March 31, 2019
and 2018 and December 31, 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 9 |
ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL
FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Beginning balance
ALLL |
|
$ |
12,292 |
|
|
$ |
12,392 |
|
|
$ |
12,388 |
|
|
$ |
12,295 |
|
|
$ |
11,925 |
|
Provision for loan and
lease losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loans charged-off |
|
|
(348 |
) |
|
|
(279 |
) |
|
|
(198 |
) |
|
|
(382 |
) |
|
|
(390 |
) |
Loan loss
recoveries |
|
|
298 |
|
|
|
179 |
|
|
|
202 |
|
|
|
475 |
|
|
|
760 |
|
Ending balance
ALLL |
|
$ |
12,242 |
|
|
$ |
12,292 |
|
|
$ |
12,392 |
|
|
$ |
12,388 |
|
|
$ |
12,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
1,018 |
|
|
$ |
959 |
|
|
$ |
899 |
|
|
$ |
1,358 |
|
|
$ |
1,109 |
|
Real
estate - construction and land development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate - commercial non-owner occupied |
|
|
10,878 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Real
estate - commercial owner occupied |
|
|
— |
|
|
|
548 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Real
estate - residential - ITIN |
|
|
2,392 |
|
|
|
2,388 |
|
|
|
2,571 |
|
|
|
2,613 |
|
|
|
2,839 |
|
Real
estate - residential - 1-4 family mortgage |
|
|
182 |
|
|
|
185 |
|
|
|
179 |
|
|
|
184 |
|
|
|
188 |
|
Real
estate - residential - equity lines |
|
|
42 |
|
|
|
43 |
|
|
|
44 |
|
|
|
44 |
|
|
|
45 |
|
Consumer
and other |
|
|
23 |
|
|
|
23 |
|
|
|
24 |
|
|
|
33 |
|
|
|
35 |
|
Total nonaccrual
loans |
|
|
14,535 |
|
|
|
4,146 |
|
|
|
3,717 |
|
|
|
4,232 |
|
|
|
4,216 |
|
Accruing troubled debt
restructured loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
1,187 |
|
|
|
1,224 |
|
|
|
1,291 |
|
|
|
1,420 |
|
|
|
1,516 |
|
Real
estate - commercial non-owner occupied |
|
|
793 |
|
|
|
795 |
|
|
|
797 |
|
|
|
799 |
|
|
|
800 |
|
Real
estate - residential - ITIN |
|
|
4,342 |
|
|
|
4,484 |
|
|
|
4,535 |
|
|
|
4,592 |
|
|
|
4,554 |
|
Real
estate - residential - equity lines |
|
|
358 |
|
|
|
363 |
|
|
|
367 |
|
|
|
372 |
|
|
|
376 |
|
Total accruing troubled
debt restructured loans |
|
|
6,680 |
|
|
|
6,866 |
|
|
|
6,990 |
|
|
|
7,183 |
|
|
|
7,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other accruing
impaired loans |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impaired
loans |
|
$ |
21,215 |
|
|
$ |
11,012 |
|
|
$ |
10,707 |
|
|
$ |
11,415 |
|
|
$ |
11,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans outstanding
at period end |
|
$ |
1,034,606 |
|
|
$ |
946,251 |
|
|
$ |
927,480 |
|
|
$ |
936,816 |
|
|
$ |
900,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired
loans to gross loans |
|
|
2.05 |
% |
|
|
1.16 |
% |
|
|
1.15 |
% |
|
|
1.22 |
% |
|
|
1.27 |
% |
Nonaccrual loans to
gross loans |
|
|
1.40 |
% |
|
|
0.44 |
% |
|
|
0.40 |
% |
|
|
0.45 |
% |
|
|
0.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan and lease losses as a percent of: |
|
|
|
|
|
|
|
|
|
Gross
loans |
|
|
1.18 |
% |
|
|
1.30 |
% |
|
|
1.34 |
% |
|
|
1.32 |
% |
|
|
1.37 |
% |
Nonaccrual loans |
|
|
84.22 |
% |
|
|
296.48 |
% |
|
|
333.39 |
% |
|
|
292.72 |
% |
|
|
291.63 |
% |
Impaired
loans |
|
|
57.70 |
% |
|
|
111.62 |
% |
|
|
115.74 |
% |
|
|
108.52 |
% |
|
|
107.27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
illustrated in Table 9, the nonaccrual status of a $10.9 million
commercial real estate loan has resulted in a deterioration in our
asset quality metrics. However, no calculated impairment reserve on
this loan is indicated and no provision for loan and lease losses
was necessary for the quarter. There was no provision for loan and
lease loss during the prior quarter or during the same quarter a
year ago. The loans acquired from Merchants were recorded at fair
value which included a discount for credit risk which is not a part
of the ALLL. As a result, our ALLL as a percentage of gross loans
was declined to 1.18% as of March 31, 2019 compared to 1.37% as of
March 31, 2018 and 1.30% as of December 31, 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 March 31, 2019. 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 March 31, 2019, the recorded investment in loans classified
as impaired totaled $21.2 million, with a corresponding specific
reserve of $1.4 million compared to impaired loans of $11.5 million
with a corresponding specific reserve of $1.1 million at March 31,
2018 and impaired loans of $11.0 million, with a corresponding
specific reserve of $1.2 million at December 31, 2018. The increase
in loans classified as impaired results from one $10.9 million
commercial real estate loan which at March 31, 2019 had zero
calculated impairment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 10 |
TROUBLED DEBT RESTRUCTURINGS -
UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Nonaccrual |
|
$ |
2,725 |
|
|
$ |
2,693 |
|
|
$ |
2,720 |
|
|
$ |
3,218 |
|
|
$ |
3,237 |
|
Accruing |
|
|
6,680 |
|
|
|
6,866 |
|
|
|
6,990 |
|
|
|
7,183 |
|
|
|
7,246 |
|
Total troubled debt
restructurings |
|
$ |
9,405 |
|
|
$ |
9,559 |
|
|
$ |
9,710 |
|
|
$ |
10,401 |
|
|
$ |
10,483 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt
restructurings as a percentage of total gross loans |
|
|
0.91 |
% |
|
|
1.01 |
% |
|
|
1.05 |
% |
|
|
1.11 |
% |
|
|
1.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no new troubled debt restructurings during the three
months ended March 31, 2019. As of March 31, 2019, we had 105
restructured loans that qualified as troubled debt restructurings,
of which 104 were performing according to their restructured
terms.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 11 |
NONPERFORMING ASSETS - UNAUDITED |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
At December 31, |
|
At September 30, |
|
At June 30, |
|
At March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Total nonaccrual
loans |
|
$ |
14,535 |
|
|
$ |
4,146 |
|
|
$ |
3,717 |
|
|
$ |
4,232 |
|
|
$ |
4,216 |
|
90 days past due and
still accruing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total nonperforming
loans |
|
|
14,535 |
|
|
|
4,146 |
|
|
|
3,717 |
|
|
|
4,232 |
|
|
|
4,216 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned
("OREO") |
|
|
34 |
|
|
|
31 |
|
|
|
136 |
|
|
|
140 |
|
|
|
60 |
|
Total nonperforming
assets |
|
$ |
14,569 |
|
|
$ |
4,177 |
|
|
$ |
3,853 |
|
|
$ |
4,372 |
|
|
$ |
4,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to
gross loans |
|
|
1.40 |
% |
|
|
0.44 |
% |
|
|
0.40 |
% |
|
|
0.45 |
% |
|
|
0.47 |
% |
Nonperforming assets to
total assets |
|
|
0.99 |
% |
|
|
0.32 |
% |
|
|
0.29 |
% |
|
|
0.34 |
% |
|
|
0.34 |
% |
TABLE 12 |
UNAUDITED CONSOLIDATED |
BALANCE SHEET |
(amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, |
|
Change |
|
At December 31, |
|
|
2019 |
|
2018 |
|
$ |
|
% |
|
2018 |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
|
$ |
32,104 |
|
|
$ |
16,247 |
|
|
$ |
15,857 |
|
|
98 |
% |
|
$ |
23,692 |
|
Interest-bearing deposits in other banks |
|
|
30,425 |
|
|
|
17,376 |
|
|
|
13,049 |
|
|
75 |
% |
|
|
23,673 |
|
Total
cash and cash equivalents |
|
|
62,529 |
|
|
|
33,623 |
|
|
|
28,906 |
|
|
86 |
% |
|
|
47,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
|
294,117 |
|
|
|
255,917 |
|
|
|
38,200 |
|
|
15 |
% |
|
|
256,928 |
|
Loans,
net of deferred fees and costs |
|
|
1,036,598 |
|
|
|
902,133 |
|
|
|
134,465 |
|
|
15 |
% |
|
|
948,178 |
|
Allowance
for loan and lease losses |
|
|
(12,242 |
) |
|
|
(12,295 |
) |
|
|
53 |
|
|
— |
% |
|
|
(12,292 |
) |
Net
loans |
|
|
1,024,356 |
|
|
|
889,838 |
|
|
|
134,518 |
|
|
15 |
% |
|
|
935,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises
and equipment, net |
|
|
15,391 |
|
|
|
14,214 |
|
|
|
1,177 |
|
|
8 |
% |
|
|
13,119 |
|
Other
real estate owned |
|
|
34 |
|
|
|
60 |
|
|
|
(26 |
) |
|
(43 |
)% |
|
|
31 |
|
Life
insurance |
|
|
23,294 |
|
|
|
22,027 |
|
|
|
1,267 |
|
|
6 |
% |
|
|
22,410 |
|
Deferred
tax asset, net |
|
|
6,072 |
|
|
|
7,523 |
|
|
|
(1,451 |
) |
|
(19 |
)% |
|
|
7,039 |
|
Goodwill
and core deposit intangible, net |
|
|
17,094 |
|
|
|
1,975 |
|
|
|
15,119 |
|
|
766 |
% |
|
|
1,841 |
|
Other
assets |
|
|
28,604 |
|
|
|
20,398 |
|
|
|
8,206 |
|
|
40 |
% |
|
|
22,485 |
|
Total assets |
|
$ |
1,471,491 |
|
|
$ |
1,245,575 |
|
|
$ |
225,916 |
|
|
18 |
% |
|
$ |
1,307,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand -
noninterest-bearing |
|
$ |
385,696 |
|
|
$ |
301,981 |
|
|
$ |
83,715 |
|
|
28 |
% |
|
$ |
347,199 |
|
Demand -
interest-bearing |
|
|
241,292 |
|
|
|
229,681 |
|
|
|
11,611 |
|
|
5 |
% |
|
|
252,202 |
|
Money
market |
|
|
311,853 |
|
|
|
232,870 |
|
|
|
78,983 |
|
|
34 |
% |
|
|
265,093 |
|
Savings |
|
|
139,237 |
|
|
|
107,986 |
|
|
|
31,251 |
|
|
29 |
% |
|
|
114,840 |
|
Certificates of deposit |
|
|
170,216 |
|
|
|
176,233 |
|
|
|
(6,017 |
) |
|
(3 |
)% |
|
|
152,382 |
|
Total
deposits |
|
|
1,248,294 |
|
|
|
1,048,751 |
|
|
|
199,543 |
|
|
19 |
% |
|
|
1,131,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term
debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
Home Loan Bank of San Francisco borrowings |
|
|
20,000 |
|
|
|
30,000 |
|
|
|
(10,000 |
) |
|
(33 |
)% |
|
|
— |
|
Other
borrowings |
|
|
12,596 |
|
|
|
16,196 |
|
|
|
(3,600 |
) |
|
(22 |
)% |
|
|
13,496 |
|
Unamortized debt issuance costs |
|
|
(79 |
) |
|
|
(127 |
) |
|
|
48 |
|
|
(38 |
)% |
|
|
(91 |
) |
Net term
debt |
|
|
32,517 |
|
|
|
46,069 |
|
|
|
(13,552 |
) |
|
(29 |
)% |
|
|
13,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior
subordinated debentures |
|
|
10,310 |
|
|
|
10,310 |
|
|
|
— |
|
|
— |
% |
|
|
10,310 |
|
Other
liabilities |
|
|
18,272 |
|
|
|
12,723 |
|
|
|
5,549 |
|
|
44 |
% |
|
|
13,352 |
|
Total
liabilities |
|
|
1,309,393 |
|
|
|
1,117,853 |
|
|
|
191,540 |
|
|
17 |
% |
|
|
1,168,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock |
|
|
71,966 |
|
|
|
51,959 |
|
|
|
20,007 |
|
|
39 |
% |
|
|
52,284 |
|
Retained
earnings |
|
|
90,626 |
|
|
|
78,507 |
|
|
|
12,119 |
|
|
15 |
% |
|
|
89,045 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(494 |
) |
|
|
(2,744 |
) |
|
|
2,250 |
|
|
(82 |
)% |
|
|
(3,008 |
) |
Total
shareholders' equity |
|
|
162,098 |
|
|
|
127,722 |
|
|
|
34,376 |
|
|
27 |
% |
|
|
138,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
1,471,491 |
|
|
$ |
1,245,575 |
|
|
$ |
225,916 |
|
|
18 |
% |
|
$ |
1,307,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
$ |
1,361,841 |
|
|
$ |
1,179,321 |
|
|
$ |
182,520 |
|
|
15 |
% |
|
$ |
1,233,049 |
|
Shares outstanding |
|
|
18,213 |
|
|
|
16,315 |
|
|
|
1,898 |
|
|
12 |
% |
|
|
16,334 |
|
Book value per
share |
|
$ |
8.90 |
|
|
$ |
7.83 |
|
|
$ |
1.07 |
|
|
14 |
% |
|
$ |
8.47 |
|
Tangible book value per
share (1) |
|
$ |
7.96 |
|
|
$ |
7.71 |
|
|
$ |
0.25 |
|
|
3 |
% |
|
$ |
8.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
|
March 31, |
|
Change |
|
December 31, |
|
|
2019 |
|
2018 |
|
$ |
|
% |
|
2018 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans |
|
$ |
12,031 |
|
|
$ |
10,729 |
|
|
$ |
1,302 |
|
|
12 |
% |
|
$ |
11,494 |
|
Interest
on taxable securities |
|
|
1,764 |
|
|
|
1,209 |
|
|
|
555 |
|
|
46 |
% |
|
|
1,469 |
|
Interest
on tax-exempt securities |
|
|
387 |
|
|
|
463 |
|
|
|
(76 |
) |
|
(16 |
)% |
|
|
353 |
|
Interest
on interest-bearing deposits in other banks |
|
|
245 |
|
|
|
129 |
|
|
|
116 |
|
|
90 |
% |
|
|
434 |
|
Total interest
income |
|
|
14,427 |
|
|
|
12,530 |
|
|
|
1,897 |
|
|
15 |
% |
|
|
13,750 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
on demand deposits |
|
|
126 |
|
|
|
89 |
|
|
|
37 |
|
|
42 |
% |
|
|
141 |
|
Interest
on money market accounts |
|
|
289 |
|
|
|
132 |
|
|
|
157 |
|
|
119 |
% |
|
|
207 |
|
Interest
on savings deposits |
|
|
111 |
|
|
|
59 |
|
|
|
52 |
|
|
88 |
% |
|
|
92 |
|
Interest
on certificates of deposit |
|
|
490 |
|
|
|
495 |
|
|
|
(5 |
) |
|
(1 |
)% |
|
|
462 |
|
Interest
on Federal Home Loan Bank of San Francisco borrowings |
|
|
55 |
|
|
|
47 |
|
|
|
8 |
|
|
17 |
% |
|
|
— |
|
Interest
on other borrowings |
|
|
239 |
|
|
|
281 |
|
|
|
(42 |
) |
|
(15 |
)% |
|
|
252 |
|
Interest
on junior subordinated debentures |
|
|
113 |
|
|
|
82 |
|
|
|
31 |
|
|
38 |
% |
|
|
102 |
|
Total interest
expense |
|
|
1,423 |
|
|
|
1,185 |
|
|
|
238 |
|
|
20 |
% |
|
|
1,256 |
|
Net interest
income |
|
|
13,004 |
|
|
|
11,345 |
|
|
|
1,659 |
|
|
15 |
% |
|
|
12,494 |
|
Provision for loan and
lease losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
Net
interest income after provision for loan and lease losses |
|
|
13,004 |
|
|
|
11,345 |
|
|
|
1,659 |
|
|
15 |
% |
|
|
12,494 |
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
|
168 |
|
|
|
176 |
|
|
|
(8 |
) |
|
(5 |
)% |
|
|
161 |
|
ATM and
point of sale fees |
|
|
265 |
|
|
|
266 |
|
|
|
(1 |
) |
|
— |
% |
|
|
283 |
|
Fees on
payroll and benefit processing |
|
|
171 |
|
|
|
169 |
|
|
|
2 |
|
|
1 |
% |
|
|
178 |
|
Life
insurance |
|
|
129 |
|
|
|
129 |
|
|
|
— |
|
|
— |
% |
|
|
128 |
|
Gain on
investment securities, net |
|
|
92 |
|
|
|
36 |
|
|
|
56 |
|
|
156 |
% |
|
|
3 |
|
Federal
Home Loan Bank of San Francisco dividends |
|
|
121 |
|
|
|
80 |
|
|
|
41 |
|
|
51 |
% |
|
|
201 |
|
Gain on
sale of OREO |
|
|
23 |
|
|
|
16 |
|
|
|
7 |
|
|
44 |
% |
|
|
64 |
|
Other
income |
|
|
88 |
|
|
|
110 |
|
|
|
(22 |
) |
|
(20 |
)% |
|
|
114 |
|
Total noninterest
income |
|
|
1,057 |
|
|
|
982 |
|
|
|
75 |
|
|
8 |
% |
|
|
1,132 |
|
TABLE 13 - CONTINUED |
UNAUDITED |
INCOME STATEMENT |
(amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
March 31, |
|
Change |
|
December 31, |
|
|
2019 |
|
2018 |
|
$ |
|
% |
|
2018 |
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and related
benefits |
|
|
5,729 |
|
|
|
4,855 |
|
|
|
874 |
|
|
18 |
% |
|
|
4,812 |
|
Premises
and equipment |
|
|
992 |
|
|
|
1,071 |
|
|
|
(79 |
) |
|
(7 |
)% |
|
|
943 |
|
Federal
Deposit Insurance Corporation insurance premium |
|
|
100 |
|
|
|
96 |
|
|
|
4 |
|
|
4 |
% |
|
|
93 |
|
Data
processing fees |
|
|
559 |
|
|
|
432 |
|
|
|
127 |
|
|
29 |
% |
|
|
512 |
|
Professional service fees |
|
|
303 |
|
|
|
345 |
|
|
|
(42 |
) |
|
(12 |
)% |
|
|
436 |
|
Telecommunications |
|
|
173 |
|
|
|
216 |
|
|
|
(43 |
) |
|
(20 |
)% |
|
|
145 |
|
Acquisition |
|
|
1,930 |
|
|
|
— |
|
|
|
1,930 |
|
|
100 |
% |
|
|
802 |
|
Other
expenses |
|
|
1,137 |
|
|
|
1,018 |
|
|
|
119 |
|
|
12 |
% |
|
|
1,125 |
|
Total noninterest
expense |
|
|
10,923 |
|
|
|
8,033 |
|
|
|
2,890 |
|
|
36 |
% |
|
|
8,868 |
|
Income before provision
for income taxes |
|
|
3,138 |
|
|
|
4,294 |
|
|
|
(1,156 |
) |
|
(27 |
)% |
|
|
4,758 |
|
Provision for income
taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal
of uncertain tax position |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
(988 |
) |
Benefit
from cost segregation study and tangible property review |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
(484 |
) |
Provision
for income taxes from operations |
|
|
832 |
|
|
|
1,053 |
|
|
|
(221 |
) |
|
(21 |
)% |
|
|
1,391 |
|
Total provision for
income taxes |
|
|
832 |
|
|
|
1,053 |
|
|
|
(221 |
) |
|
(21 |
)% |
|
|
(81 |
) |
Net income |
|
$ |
2,306 |
|
|
$ |
3,241 |
|
|
$ |
(935 |
) |
|
(29 |
)% |
|
$ |
4,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
(0.07 |
) |
|
(35 |
)% |
|
$ |
0.30 |
|
Average basic
shares |
|
|
17,489 |
|
|
|
16,225 |
|
|
|
1,264 |
|
|
8 |
% |
|
|
16,265 |
|
Diluted earnings per
share |
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
(0.07 |
) |
|
(35 |
)% |
|
$ |
0.30 |
|
Average diluted
shares |
|
|
17,552 |
|
|
|
16,310 |
|
|
|
1,242 |
|
|
8 |
% |
|
|
16,345 |
|
TABLE 14 |
UNAUDITED CONDENSED CONSOLIDATED |
QUARTERLY AVERAGE BALANCE SHEETS |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
993,261 |
|
|
$ |
923,409 |
|
|
$ |
930,863 |
|
|
$ |
922,687 |
|
|
$ |
883,876 |
|
Taxable
securities |
|
|
253,068 |
|
|
|
218,137 |
|
|
|
199,883 |
|
|
|
206,247 |
|
|
|
205,302 |
|
Tax
exempt securities |
|
|
50,454 |
|
|
|
42,868 |
|
|
|
48,561 |
|
|
|
50,306 |
|
|
|
59,789 |
|
Interest-bearing deposits in other banks |
|
|
40,223 |
|
|
|
75,295 |
|
|
|
50,397 |
|
|
|
29,041 |
|
|
|
32,915 |
|
Total earning
assets |
|
|
1,337,006 |
|
|
|
1,259,709 |
|
|
|
1,229,704 |
|
|
|
1,208,281 |
|
|
|
1,181,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
|
|
21,392 |
|
|
|
22,447 |
|
|
|
21,834 |
|
|
|
19,880 |
|
|
|
17,641 |
|
Premises and equipment,
net |
|
|
14,581 |
|
|
|
13,331 |
|
|
|
13,768 |
|
|
|
14,167 |
|
|
|
14,557 |
|
Goodwill and core
deposit intangible, net |
|
|
11,872 |
|
|
|
1,842 |
|
|
|
1,888 |
|
|
|
1,943 |
|
|
|
1,998 |
|
Other assets |
|
|
41,009 |
|
|
|
31,488 |
|
|
|
33,084 |
|
|
|
32,426 |
|
|
|
32,485 |
|
Total assets |
|
$ |
1,425,860 |
|
|
$ |
1,328,817 |
|
|
$ |
1,300,278 |
|
|
$ |
1,276,697 |
|
|
$ |
1,248,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand -
noninterest-bearing |
|
$ |
388,410 |
|
|
$ |
367,457 |
|
|
$ |
343,948 |
|
|
$ |
309,199 |
|
|
$ |
307,397 |
|
Demand -
interest-bearing |
|
|
243,376 |
|
|
|
257,227 |
|
|
|
235,664 |
|
|
|
225,927 |
|
|
|
234,269 |
|
Money
market accounts |
|
|
293,396 |
|
|
|
265,190 |
|
|
|
259,242 |
|
|
|
241,724 |
|
|
|
236,171 |
|
Savings |
|
|
131,081 |
|
|
|
110,934 |
|
|
|
107,349 |
|
|
|
107,108 |
|
|
|
110,725 |
|
Certificates of deposit |
|
|
167,463 |
|
|
|
157,035 |
|
|
|
163,302 |
|
|
|
170,824 |
|
|
|
181,901 |
|
Total
deposits |
|
|
1,223,726 |
|
|
|
1,157,843 |
|
|
|
1,109,505 |
|
|
|
1,054,782 |
|
|
|
1,070,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
Home Loan Bank of San Francisco borrowings |
|
|
8,778 |
|
|
|
— |
|
|
|
22,283 |
|
|
|
55,275 |
|
|
|
12,444 |
|
Other
borrowings net of unamortized debt issuance costs |
|
|
12,889 |
|
|
|
13,785 |
|
|
|
14,681 |
|
|
|
15,614 |
|
|
|
16,528 |
|
Junior
subordinated debentures |
|
|
10,310 |
|
|
|
10,310 |
|
|
|
10,310 |
|
|
|
10,310 |
|
|
|
10,310 |
|
Other
liabilities |
|
|
17,452 |
|
|
|
12,846 |
|
|
|
12,000 |
|
|
|
12,535 |
|
|
|
11,749 |
|
Total liabilities |
|
|
1,273,155 |
|
|
|
1,194,784 |
|
|
|
1,168,779 |
|
|
|
1,148,516 |
|
|
|
1,121,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
152,705 |
|
|
|
134,033 |
|
|
|
131,499 |
|
|
|
128,181 |
|
|
|
127,069 |
|
Liabilities &
shareholders' equity |
|
$ |
1,425,860 |
|
|
$ |
1,328,817 |
|
|
$ |
1,300,278 |
|
|
$ |
1,276,697 |
|
|
$ |
1,248,563 |
|
TABLE 15 |
UNAUDITED CONDENSED CONSOLIDATED |
YEAR TO DATE AVERAGE BALANCE
SHEETS |
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
|
March 31, |
|
March 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2017 |
|
2016 |
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
993,261 |
|
|
$ |
883,876 |
|
|
$ |
915,360 |
|
|
$ |
818,119 |
|
|
$ |
752,938 |
|
Taxable
securities |
|
|
253,068 |
|
|
|
205,302 |
|
|
|
207,407 |
|
|
|
165,333 |
|
|
|
120,884 |
|
Tax
exempt securities |
|
|
50,454 |
|
|
|
59,789 |
|
|
|
50,330 |
|
|
|
74,231 |
|
|
|
75,303 |
|
Interest-bearing deposits in other banks |
|
|
40,223 |
|
|
|
32,915 |
|
|
|
47,038 |
|
|
|
66,872 |
|
|
|
58,668 |
|
Total earning
assets |
|
|
1,337,006 |
|
|
|
1,181,882 |
|
|
|
1,220,135 |
|
|
|
1,124,555 |
|
|
|
1,007,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
|
|
21,392 |
|
|
|
17,641 |
|
|
|
20,468 |
|
|
|
18,301 |
|
|
|
15,831 |
|
Premises and equipment,
net |
|
|
14,581 |
|
|
|
14,557 |
|
|
|
13,952 |
|
|
|
15,567 |
|
|
|
15,078 |
|
Goodwill and core
deposit intangible, net |
|
|
11,872 |
|
|
|
1,998 |
|
|
|
1,917 |
|
|
|
2,136 |
|
|
|
1,888 |
|
Other assets |
|
|
41,009 |
|
|
|
32,485 |
|
|
|
32,369 |
|
|
|
37,692 |
|
|
|
39,160 |
|
Total assets |
|
$ |
1,425,860 |
|
|
$ |
1,248,563 |
|
|
$ |
1,288,841 |
|
|
$ |
1,198,251 |
|
|
$ |
1,079,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand -
noninterest-bearing |
|
$ |
388,410 |
|
|
$ |
307,397 |
|
|
$ |
332,197 |
|
|
$ |
289,735 |
|
|
$ |
226,368 |
|
Demand -
interest-bearing |
|
|
243,376 |
|
|
|
234,269 |
|
|
|
238,328 |
|
|
|
209,792 |
|
|
|
172,011 |
|
Money
market accounts |
|
|
293,396 |
|
|
|
236,171 |
|
|
|
250,685 |
|
|
|
224,913 |
|
|
|
202,159 |
|
Savings |
|
|
131,081 |
|
|
|
110,725 |
|
|
|
109,025 |
|
|
|
111,376 |
|
|
|
104,771 |
|
Certificates of deposit |
|
|
167,463 |
|
|
|
181,901 |
|
|
|
168,183 |
|
|
|
205,648 |
|
|
|
221,074 |
|
Total
deposits |
|
|
1,223,726 |
|
|
|
1,070,463 |
|
|
|
1,098,418 |
|
|
|
1,041,464 |
|
|
|
926,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
Home Loan Bank of San Francisco borrowings |
|
|
8,778 |
|
|
|
12,444 |
|
|
|
22,466 |
|
|
|
302 |
|
|
|
17,856 |
|
Other
borrowings net of unamortized debt issuance costs |
|
|
12,889 |
|
|
|
16,528 |
|
|
|
15,143 |
|
|
|
17,981 |
|
|
|
19,430 |
|
Junior
subordinated debentures |
|
|
10,310 |
|
|
|
10,310 |
|
|
|
10,310 |
|
|
|
10,310 |
|
|
|
10,310 |
|
Other
liabilities |
|
|
17,452 |
|
|
|
11,749 |
|
|
|
12,286 |
|
|
|
12,293 |
|
|
|
13,217 |
|
Total liabilities |
|
|
1,273,155 |
|
|
|
1,121,494 |
|
|
|
1,158,623 |
|
|
|
1,082,350 |
|
|
|
987,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
152,705 |
|
|
|
127,069 |
|
|
|
130,218 |
|
|
|
115,901 |
|
|
|
92,554 |
|
Liabilities &
shareholders' equity |
|
$ |
1,425,860 |
|
|
$ |
1,248,563 |
|
|
$ |
1,288,841 |
|
|
$ |
1,198,251 |
|
|
$ |
1,079,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 three
separate names (Redding Bank of Commerce; Sacramento Bank of
Commerce, a division of Redding Bank of Commerce; and The Merchants
Bank of Sacramento, a division of Redding Bank of Commerce). As
previously announced, the Bank will change its name for all
operations to Merchants Bank of Commerce effective May 20, 2019.
The Bank is an FDIC-insured California banking corporation
providing community banking and financial services through twelve
locations 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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