Attached files
| file | filename |
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| 8-K - FORM 8-K - Bank of Commerce Holdings | f58050e8vk.htm |
Exhibit 99.1
For immediate release:
Bank of Commerce Holdings™ Reports Full Year Net Income of $6.2 million or $0.35 diluted earnings
per common share
REDDING, California, January 28, 2011/ PR Newswire— Patrick J. Moty, President & CEO of Bank
of Commerce Holdings (NASDAQ:BOCH), a $939 million financial services holding company, and parent
company of Redding Bank of Commerce™, Roseville Bank of Commerce™, and Bank of Commerce Mortgage™
today announced 4th quarter and full year 2010 operating results.
“We are very pleased with our Company’s financial results in another difficult year for the banking
industry. Despite the challenges, we have never been more optimistic about the long-term future of
our Company. We have the underlying financial strength and profitability to meet our customer’s
needs as the economy stabilizes and begins expanding again. We look forward to 2011 with renewed
enthusiasm” said Patrick J. Moty, President and CEO.
“In 2010 we increased our net interest margin, maintained solid profitability with a 3.6% increase
in net income and continued to assertively attend to the credit issues in our markets. Being
profitable provides our shareholders with a strong Company, with expanding opportunities to provide
financial services to businesses, professionals, families and individuals in multiple markets.”
2010 Full Year Highlights:
| • | Net income of $6.2 million up 3.6% over the prior year | ||
| • | Total revenues of $62.2 million | ||
| • | Pre-tax pre-provision profits of $22.2 million1 | ||
| • | Diluted earnings per common share of $0.35, reduced by $0.06 per share for CPP preferred dividends and accretion | ||
| • | Average portfolio loans of $640.2 million, up 8.6% from prior year | ||
| • | Allowance for loan and lease losses 2.14% of total portfolio loans | ||
| • | Non-performing assets represent 2.43% of total assets | ||
| • | Average checking and savings deposits (core) of $311.1 million, up 12.1% from prior year | ||
| • | Net interest margin of 4.06% compared to 3.94% at 12-31-2009 | ||
| • | Return on average assets of 0.69% and return on average equity of 6.50% | ||
| • | Cash dividends paid to common shareholders in 2010 totaled $2.6 million |
| 1 | Pre-tax pre-provision profit is net income before provision for loan and lease losses and provision for income taxes. Management believes that this measurement is a useful financial measure because it enables investors and others to determine the Company’s ability to generate capital to cover credit losses. |
Fourth Quarter 2010 Highlights:
| • | Net income of $1.6 million | ||
| • | Total revenues of $17.6 million | ||
| • | Diluted earnings per common share of $0.08, reduced by $0.01 per share for CPP preferred stock dividends | ||
| • | Pre-tax pre-provision profits of $6.9 million | ||
| • | Reduction in non-performing assets of $4.4 million, or non-performing assets of 2.43% of total assets compared to 3.03% of total assets in prior quarter |
Selected Financial Information
| Quarter Ended | Year Ended | |||||||||||
| December 31, 2010 | September 30, 2010 | December 31, 2010 | ||||||||||
Earnings |
||||||||||||
Diluted earnings per share |
$ | 0.08 | $ | 0.08 | $ | 0.35 | ||||||
Net Income (Dollars in thousands) |
$ | 1,622 | $ | 1,559 | $ | 6,220 | ||||||
Return on Average Assets |
0.70 | % | 0.70 | % | 0.69 | % | ||||||
Return on Average Equity |
6.22 | % | 6.61 | % | 6.50 | % | ||||||
Asset Quality |
||||||||||||
Allowance as a % of total
portfolio loans |
2.14 | % | 2.53 | % | 2.14 | % | ||||||
Nonperforming loans as a % of
total assets |
2.43 | % | 3.03 | % | 2.43 | % | ||||||
Net charge-offs as a % of
average total loans |
1.77 | % | 0.67 | % | 1.75 | % | ||||||
Other (Dollars in thousands) |
||||||||||||
Total revenues |
$ | 17,646 | $ | 16,667 | $ | 62,209 | ||||||
Average portfolio loans |
$ | 632,804 | $ | 625,396 | $ | 640,213 | ||||||
Average core deposits2 |
$ | 305,571 | $ | 300,008 | $ | 311,134 | ||||||
Net Interest margin |
4.04 | % | 4.14 | % | 4.06 | % | ||||||
Financial Performance
While our current economic environment remains challenging, our Company provided solid value to our
shareholders in 2010. During the first quarter 2010 the Company successfully completed a capital
raise, increasing our equity by approximately $33.1 million after deducting expenses related to the
raise. Our Company earned $6.2 million or $0.35 per diluted share. We declared common stock cash
dividends totaling $0.18 per share in 2010, representing a yield of 2.77%.
As of December 31, 2010, the Company had total consolidated assets of $939.1 million, total gross
portfolio loans of $600.7 million, and allowance for loan and leases of $12.8 million or 2.14% of
total portfolio loans, deposits outstanding of $648.7 million and shareholders equity of $103.7
million.
Net Interest Income
Net interest income was $33.0 million compared with $29.0 million a year ago. A combination of
reduced funding costs and an increase in the volume of earning assets significantly improved the
Company’s net interest margin. The increased volume of earning assets contributed an additional
$5.0 million in interest income. The Company benefited from the continued decline in interest
expense relating to retail and wholesale funding. As a result of the decline in interest rates, the
Company realized a decrease in interest expense of $1.0 million. The net effect of volume increases
and reduced expenses added $4.0 million to the margin increasing the net interest margin
to 4.06% compared to 3.94% a year ago.
| 2 | Core deposits are the total of checking and savings accounts |
2
Noninterest income
Noninterest income for the year ended December 31, 2010 was $19.8 million or 96.9% greater than the
same period a year ago. Noninterest income includes the following items:
| Years Ended December 31, | ||||||||||||
| (Dollars in thousands) | 2010 | 2009 | 2008 | |||||||||
Noninterest income: |
||||||||||||
Service charges on deposit accounts |
$ | 260 | $ | 390 | $ | 311 | ||||||
Payroll and benefit processing fees |
448 | 452 | 453 | |||||||||
Earnings on cash surrender value- Bank owned life insurance |
439 | 418 | 340 | |||||||||
Net gain on sale of securities available-for-sale |
1,981 | 2,438 | 628 | |||||||||
Net loss on sale of derivative swap transaction |
— | — | (225 | ) | ||||||||
Net gain on transfer of financial assets |
— | 341 | — | |||||||||
Gain on settlement of put reserve |
1,750 | — | — | |||||||||
Mortgage brokerage fee income |
14,214 | 5,327 | 21 | |||||||||
Other income |
726 | 697 | 1,095 | |||||||||
Total Noninterest income |
$ | 19,818 | $ | 10,063 | $ | 2,623 | ||||||
The significant increase is primarily derived from increased mortgage origination volume,
gains from the settlement of the put reserve, and a consolidation of twelve months of mortgage
brokerage fee income compared to seven months for the year ended December 31, 2009.
Mortgage brokerage fee income is primarily derived from origination fees on residential mortgage
loans and from the sale of mortgage loans to financial institutions. Loan origination fees and
sales fees earned on brokered loans are recorded as income when the loans are sold. Mortgage
brokerage fee income increased substantially as a result of increased origination volume, due to
the current historically low interest rate environment.
During 2010, the Company received a written release to the put reserve provided on the ITIN loan
pool purchase. The “put reserve” was part of the April 17, 2009 loan “swap” transaction in which
the Company purchased a pool of Individual Tax Identification Number (“ITIN”) residential mortgages
in exchange for a combination of certain nonperforming loans and cash. The put reserve or credit
enhancement originally totaled $3.5 million; the Company had the right but not the obligation to
“put back” the outstanding principal balance of any ITIN loan that became sixty days or more
delinquent over a period not to exceed three years from the transaction date.
Prior to the release, the put reserve carried a balance of $2.1 million; approximately $398,627 of
the reserve was paid to the private equity firm as consideration. As a result, the Company recorded
a $1.7 million gain on settlement.
Our investment strategy requires that we periodically reposition our investment portfolio within
certain parameters to minimize risks to comprehensive income, and to mitigate interest rate risk.
The Company continued to reposition the portfolio during the current period. As a result, the
Company realized less gain on sales of securities compared to the prior year. Accordingly, net
gains on available for sale securities decreased by $457,000 compared to the prior year end.
3
Noninterest expense
Noninterest expense for the year ended December 31, 2010 was $30.3 million or 47.0% greater than
the same period a year ago. Noninterest expense includes the following items:
| Years ended December 31, | ||||||||||||
| (Dollars in thousands) | 2010 | 2009 | 2008 | |||||||||
Salaries & related benefits |
$ | 15,903 | $ | 10,882 | $ | 7,751 | ||||||
Occupancy & equipment expense |
3,660 | 3,405 | 2,501 | |||||||||
Write down of other real estate owned |
1,571 | 164 | 735 | |||||||||
FDIC insurance premium |
1,016 | 1,274 | 383 | |||||||||
Data processing fees |
270 | 282 | 276 | |||||||||
Professional service fees |
1,726 | 820 | 667 | |||||||||
Deferred compensation expense |
493 | 478 | 461 | |||||||||
Stationery & supplies |
258 | 185 | 262 | |||||||||
Postage |
198 | 147 | 134 | |||||||||
Directors’ expenses |
266 | 299 | 294 | |||||||||
Other expenses |
4,967 | 2,688 | 1,832 | |||||||||
Total Noninterest expense |
$ | 30,328 | $ | 20,624 | $ | 15,296 | ||||||
The $9.7 million increase in noninterest expense is primarily due to increased salaries and
related benefits pertaining to the Mortgage Services subsidiary. The Mortgage Services subsidiary
transitioned existing independent contractors to FTE’s, resulting in an increase in salaries and
related benefits. Furthermore, due to continued growth in Mortgage Services operations, there was
additional staff added to payroll. The increase in salaries and related benefits is primarily due
to the timing of the purchase of an equity interest in our Mortgage Services subsidiary. The
Company consolidated an additional $4.6 million in related salaries and benefits of the Mortgage
Services for the year ended December 31, 2010 compared to a consolidation of only seven months of
expense for the year ended December 31, 2009.
During 2010, the Company determined that a valuation adjustment to the carrying value of the
Company’s other real estate owned was necessary. The values were adjusted downward, reflecting the
continued deterioration in local real estate market conditions. As a result, the Company recognized
a $1.6 million impairment charge to earnings.
Other expenses increased by approximately $2.1 million during 2010. The increase is primarily due
to increased credit administration expenses including appraisal expenses associated with the
Company’s real estate loan portfolio and overall increased activities associated with the Mortgage
Services general operations.
For the year ended December 31, 2010, professional fess increased approximately $1.0 million.
During the reporting period, the Company increased the solicitation of outside professionals to
conduct credit quality reviews pertaining to the Company’s loan portfolio. In addition, during the
reporting period, the Company increased the engagements of legal counsel. The increase in these
services coincides with the continued monitoring of the Company’s nonperforming loans.
Income Taxes
Our provision for income taxes includes both federal and state income taxes and reflects the
application of federal and state statutory rates to our income before taxes. Our Company’s
effective tax rate at December 31, 2010 was 32.79%, compared to 30.02% at December 31, 2009. The
difference between statutory tax rates and our effective tax rate is the benefit derived from
investing in tax-exempt securities and preferential state tax treatment for qualified enterprise
zone loans.
4
Loans
Average portfolio loans were $640.2 million at December 31, 2010 compared with $589.3 million at
December 31, 2009. The increase is directly related to the increased loan originations coupled with
the purchase of one Home Equity pool of loans with an outstanding balance of $17.8 million at
year-end 2010.
Deposits
Average checking and savings accounts (core deposits) increased 12.1% percent to $311.1 million
from $277.6 million a year ago. During the year approximately $28.0 million in brokered time
deposits were repaid.
Capital
As of December 31, 2010, the Bank is categorized as “well capitalized” under the current regulatory
framework.
| December 31, 2010 | ||||||||||||||||
| Actual | Well Capitalized | Minimum Capital | ||||||||||||||
| Capital | Ratio | Requirement | Requirement | |||||||||||||
The Company |
||||||||||||||||
Leverage |
$ | 115,541,020 | 12.48 | % | n/a | 4.0 | % | |||||||||
Tier 1 Risk-Based |
115,541,020 | 13.58 | % | n/a | 4.0 | % | ||||||||||
Total Risk-Based |
126,211,864 | 14.83 | % | n/a | 8.0 | % | ||||||||||
Redding Bank of Commerce |
||||||||||||||||
Leverage |
$ | 106,747,245 | 11.60 | % | 5.0 | % | 4.0 | % | ||||||||
Tier 1 Risk-Based |
106,747,245 | 13.17 | % | 6.0 | % | 4.0 | % | |||||||||
Total Risk-Based |
116,918,219 | 14.42 | % | 10.00 | % | 8.0 | % | |||||||||
Credit Quality
Fourth quarter credit results were in line with management expectations, while losses were elevated
during the quarter as expected, management actions were designed to position the Company to take
advantage of a more favorable economic outlook in 2011. While we continue to advance loans to
credit-worthy borrowers, segments of the Company’s loan portfolio remained strained. The Commercial
and Industrial portfolio experienced deterioration in 2010 while our real estate development
properties and construction related lending are showing some signs of stabilization. Nevertheless,
our loan portfolio remains susceptible to additional weakening in commercial real estate values and
ongoing deterioration in the general economy.
Credit Losses
Net charge-offs were $11.2 million for the year ending December 31, 2010, or 1.75% of average loans
compared with net charge-offs of $6.7 million of 1.14% of average loans at December 31, 2009. The
most significant increase in charge-offs were in the Commercial & Industrial and Commercial Real
Estate portfolios.
Allowance for Loan and Lease Losses
The allowance for loan and lease losses totaled $12.8 million at December 31, 2010 compared to
$11.2 million at December 31, 2009. The allowance represents management’s estimate of inherent
losses in the loan portfolio at December 31, 2010. The allowance coverage to total loans was 2.14%
at December 31, 2010 compared to 1.86% at December 31, 2009.
| (Dollars in thousand) | ||||||||||||
| Twelve Months Ended | December 31, 2010 | September 30, 2010 | December 31, 2009 | |||||||||
Beginning balance |
$ | 11,207 | $ | 11,207 | $ | 8,467 | ||||||
Provision for loan loss charged to expense |
12,850 | 8,300 | 9,475 | |||||||||
Loans charged off |
(12,089 | ) | (4,765 | ) | (6,909 | ) | ||||||
Loan loss recoveries |
873 | 710 | 174 | |||||||||
Ending balance |
$ | 12,841 | $ | 15,452 | $ | 11,207 | ||||||
Gross portfolio loans outstanding at period end |
$ | 600,707 | $ | 611,027 | $ | 600,002 | ||||||
Ratio of allowance for loan losses to total loans |
2.14 | % | 2.53 | % | 1.86 | % | ||||||
5
Nonperforming Assets
Total nonperforming assets were $22.8 million at December 31, 2010 compared to $15.6 million at
December 31, 2009, representing 2.43% of total assets and include $20.5 million of non-accrual
loans and $2.3 million of other real estate owned.
| (Dollars in thousands) | ||||||||||||
| Nonperforming assets | December 31, 2010 | September 30, 2010 | December 31, 2009 | |||||||||
Commercial & Industrial |
$ | 2,302 | $ | 4,952 | $ | 237 | ||||||
Secured by 1-4 family, closed end 1st lien |
1,166 | 1,204 | 623 | |||||||||
Secured by 1-4 family — Revolving |
97 | 194 | 199 | |||||||||
Secured by Commercial Real Estate |
7,066 | 9,617 | 5,759 | |||||||||
Secured by RE — 1-4 Construction |
342 | 261 | 849 | |||||||||
Secured by RE — ITIN Loan Pool |
9,538 | 6,751 | — | |||||||||
Secured by Home Equity Loan Pool |
— | 42 | — | |||||||||
Secured by RE — Other Construction |
— | 2,251 | — | |||||||||
Nonaccrual Loan Portfolio |
$ | 20,511 | $ | 25,272 | $ | 7,667 | ||||||
90 days past due and still accruing |
— | — | 5,052 | |||||||||
Other real estate owned |
2,288 | 2,020 | 2,880 | |||||||||
Total nonperforming assets |
$ | 22,799 | $ | 27,292 | $ | 15,599 | ||||||
Allowance for loan losses to non accrual loans |
62.61 | % | 61.14 | % | 146.17 | % | ||||||
Nonaccrual loans to total loans |
3.41 | % | 4.14 | % | 1.28 | % | ||||||
|
The Company periodically restructures loans and grants concessions to borrowers due to
economic or legal reasons relating to the borrower’s financial condition that it would not
otherwise consider. Loans restructured under these situations are classified as troubled debt
restructurings. As of December 31, 2010, the Company has 93 restructured loans that qualified as
troubled debt restructurings, of which 50 were performing according to their restructured loans and
are considered performing loans.
| ||||||||||||
| Troubled debt restructurings | December 31, 2010 | September 30, 2010 | December 31, 2009 | |||||||||
| (Dollars in thousands) | ||||||||||||
Nonaccrual |
$ | 11,977 | $ | 12,587 | $ | 4,937 | ||||||
Accruing |
12,668 | 12,162 | 5,730 | |||||||||
Total troubled debt restructurings |
$ | 24,645 | $ | 24,749 | $ | 10,667 | ||||||
Bank of Commerce Mortgage ™
Our Company is especially pleased with the results attributable to our mortgage banking subsidiary,
Bank of Commerce Mortgage™ for 2010. We believe that our Company has played a significant part in
making credit available to help the economic recovery in our markets. The outstanding balance of
this portfolio at December 31, 2010 was $43.0 million.
| • | Total Home Mortgage applications processed during 2010 of $1.4 billion | ||
| • | Home Mortgage originations (purchases) funded during 2010 of $315.6 million | ||
| • | Home Mortgage refinances funded during 2010 of $462.3 million | ||
| • | Home Mortgage pipeline of $96.7 million at December 31, 2010 |
6
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 the Company’s 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. | |
| • | The health of the economy declines nationally or regionally which could reduce the demand for loans or reduce the value of real estate collateral securing most of the Company’s loans. | |
| • | Credit quality deteriorates which could cause an increase in the provision for loan losses. | |
| • | Losses in the Company’s merchant credit card processing business. | |
| • | 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 year ended December 31,
2009 and under the heading:
“Risk factors that may affect results” and 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,
which speak only as of the date hereof. The Company undertakes no obligation to revise or publicly
release the results of any revision to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of unanticipated events.
7
BANK OF COMMERCE HOLDINGS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2010 and 2009 (Dollars in thousands)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2010 and 2009 (Dollars in thousands)
| 2010 | 2009 | |||||||
| (Unaudited) | ||||||||
ASSETS |
||||||||
Cash and due from banks |
$ | 23,786 | $ | 36,902 | ||||
Interest bearing due from banks |
39,470 | 31,338 | ||||||
Cash and cash equivalents |
63,256 | 68,240 | ||||||
Securities available-for-sale (including pledged collateral of $32,564,562 at December 31, 2010 and $55,672,267 at December 31, 2009) |
189,235 | 80,062 | ||||||
Mortgage loans held for sale |
42,995 | 27,288 | ||||||
Loans, net of the allowance for loan and lease losses of $12,841,186 at December 31, 2010 and $11,207,213 at December 31, 2009 |
587,865 | 590,023 | ||||||
Bank premises and equipment, net |
9,697 | 9,980 | ||||||
Goodwill |
3,695 | 3,727 | ||||||
Other real estate owned |
2,288 | 2,880 | ||||||
Other assets |
40,102 | 31,206 | ||||||
TOTAL ASSETS |
$ | 939,133 | $ | 813,406 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Deposits: |
||||||||
Demand — noninterest bearing |
$ | 91,025 | $ | 69,448 | ||||
Demand — interest bearing |
162,258 | 163,813 | ||||||
Savings accounts |
83,652 | 65,414 | ||||||
Certificates of deposit |
311,767 | 341,789 | ||||||
Total Deposits |
648,702 | 640,464 | ||||||
Securities sold under agreements to repurchase |
13,547 | 9,621 | ||||||
Federal Home Loan Bank borrowings |
141,000 | 70,000 | ||||||
Other liabilities |
16,692 | 9,050 | ||||||
Junior subordinated debt payable to unconsolidated subsidiary grantor trust |
15,465 | 15,465 | ||||||
Total liabilities |
835,406 | 744,600 | ||||||
Shareholders’ equity: |
||||||||
Preferred stock (liquidation preference of $1,000 per share; issued 2008); 2,000,000 shares authorized; 17,000 shares issued and outstanding in 2010 and 2009 |
16,731 | 16,641 | ||||||
Common stock, no par value; 50,000,000 shares authorized; 16,991,495 shares issued and outstanding in 2010 and 8,711,495 outstanding in 2009 |
42,755 | 9,730 | ||||||
Common stock warrant |
449 | 449 | ||||||
Retained earnings |
41,722 | 39,004 | ||||||
Accumulated other comprehensive income (loss), net of tax |
(509 | ) | 657 | |||||
Total Equity — Bank of Commerce Holdings |
101,148 | 66,481 | ||||||
Non controlling interest in subsidiary |
2,579 | 2,325 | ||||||
Total shareholders’ equity |
103,727 | 68,806 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 939,133 | $ | 813,406 | ||||
8
BANK OF COMMERCE HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
| 2010 | 2009 | 2008 | ||||||||||
| (Dollars in thousands) | (Unaudited) | |||||||||||
Interest income: |
||||||||||||
Interest and fees on loans |
$ | 37,000 | $ | 35,860 | $ | 33,582 | ||||||
Interest on tax-exempt securities |
1,692 | 1,164 | 1,197 | |||||||||
Interest on U.S. government securities |
2,083 | 3,450 | 2,469 | |||||||||
Interest on federal funds sold and securities purchased under agreement to resell |
2 | 32 | 303 | |||||||||
Interest on other securities |
1,614 | 823 | 138 | |||||||||
Total interest income |
42,391 | 41,329 | 37,689 | |||||||||
Interest expense: |
||||||||||||
Interest on demand deposits |
968 | 1,015 | 2,173 | |||||||||
Interest on savings deposits |
921 | 963 | 1,576 | |||||||||
Interest on certificates of deposit |
6,151 | 7,628 | 8,552 | |||||||||
Interest on securities sold under repurchase agreements |
52 | 50 | 173 | |||||||||
Interest on FHLB borrowings |
626 | 1,833 | 2,812 | |||||||||
Interest on junior subordinated debt payable to unconsolidated subsidiary grantor trusts |
680 | 846 | 1,056 | |||||||||
Total interest expense |
9,398 | 12,335 | 16,342 | |||||||||
Net interest income |
32,993 | 28,994 | 21,347 | |||||||||
Provision for loan and lease losses |
12,850 | 9,475 | 6,520 | |||||||||
Net interest income after provision for loan and lease losses |
20,143 | 19,519 | 14,827 | |||||||||
Noninterest income: |
||||||||||||
Service charges on deposit accounts |
260 | 390 | 311 | |||||||||
Payroll and benefit processing fees |
448 | 452 | 453 | |||||||||
Earnings on cash surrender value - Bank owned life insurance |
438 | 418 | 340 | |||||||||
Net gain on sale of securities available-for-sale |
1,981 | 2,438 | 628 | |||||||||
Net loss on sale of derivative swap transaction |
— | — | (226 | ) | ||||||||
Net gain transfer of financial assets |
— | 341 | — | |||||||||
Gain on settlement of put reserve |
1,750 | — | — | |||||||||
Mortgage brokerage fee income |
14,214 | 5,327 | 21 | |||||||||
Other income |
727 | 697 | 1,096 | |||||||||
Total noninterest income |
19,818 | 10,063 | 2,623 | |||||||||
Noninterest expense: |
||||||||||||
Salaries and related benefits |
15,903 | 10,882 | 7,751 | |||||||||
Occupancy and equipment expense |
3,660 | 3,405 | 2,501 | |||||||||
Write down of other real estate owned |
1,571 | 164 | 735 | |||||||||
FDIC insurance premium |
1,016 | 1,274 | 383 | |||||||||
Data processing fees |
270 | 282 | 276 | |||||||||
Professional service fees |
1,726 | 820 | 667 | |||||||||
Deferred compensation expense |
493 | 478 | 461 | |||||||||
Stationery and supplies |
258 | 185 | 262 | |||||||||
Postage |
198 | 147 | 134 | |||||||||
Directors’ expenses |
266 | 299 | 294 | |||||||||
Other expenses |
4,967 | 2,688 | 1,832 | |||||||||
Total noninterest expense |
30,328 | 20,624 | 15,296 | |||||||||
Income before provision (benefit) for income taxes |
9,633 | 8,958 | 2,154 | |||||||||
Provision (benefit) for income taxes |
3,159 | 2,690 | (40 | ) | ||||||||
Net income |
6,474 | 6,268 | 2,194 | |||||||||
Less: Net income attributable to non-controlling interest |
254 | 263 | — | |||||||||
Net income attributable to Bank of Commerce Holdings |
$ | 6,220 | $ | 6,005 | $ | 2,194 | ||||||
Less: preferred dividend and accretion on preferred stock |
940 | 942 | — | |||||||||
Income available to common shareholders |
5,280 | 5,063 | 2,194 | |||||||||
Basic earnings per share |
$ | 0.35 | $ | 0.58 | $ | 0.25 | ||||||
Weighted
average shares — basic |
14,951 | 8,711 | 8,713 | |||||||||
Diluted earnings per share |
$ | 0.35 | $ | 0.58 | $ | 0.25 | ||||||
Weighted average shares — diluted |
14,951 | 8,711 | 8,725 | |||||||||
Cash dividends declared |
$ | 0.18 | $ | 0.24 | $ | 0.29 | ||||||
9
Average Balances, Interest Income/Expense and Yields/Rates Paid
Years Ended December 31,
Years Ended December 31,
| 2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
| Average | Average | Average | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | |||||||||||||||||||||||||||
Interest Earning Assets |
||||||||||||||||||||||||||||||||||||
Portfolio loans |
$ | 640,213 | 3 | $ | 37,000 | 5.78 | % | $ | 589,336 | $ | 35,860 | 6.08 | % | $ | 518,759 | $ | 33,582 | 6.47 | % | |||||||||||||||||
Tax-exempt securities |
42,172 | 1,692 | 4.01 | % | 28,384 | 1,164 | 4.10 | % | 24,399 | 1,197 | 4.91 | % | ||||||||||||||||||||||||
US government securities |
27,423 | 617 | 2.25 | % | 8,606 | 343 | 3.99 | % | 13,637 | 553 | 4.06 | % | ||||||||||||||||||||||||
Mortgage backed securities |
48,972 | 1,466 | 2.99 | % | 53,722 | 3,107 | 5.78 | % | 37,328 | 1,916 | 5.13 | % | ||||||||||||||||||||||||
Federal funds sold |
995 | 2 | 0.20 | % | 13,438 | 32 | 0.24 | % | 17,987 | 303 | 1.68 | % | ||||||||||||||||||||||||
Other securities |
52,322 | 1,614 | 3.08 | % | 41,305 | 823 | 1.99 | % | 2,918 | 139 | 4.76 | % | ||||||||||||||||||||||||
Average Earning Assets |
$ | 812,097 | $ | 42,391 | 5.22 | % | $ | 735,241 | $ | 41,329 | 5.62 | % | $ | 615,028 | $ | 37,690 | 6.13 | % | ||||||||||||||||||
Cash & due from banks |
28,748 | 26,841 | 16,298 | |||||||||||||||||||||||||||||||||
Bank Premises |
9,814 | 10,322 | 11,097 | |||||||||||||||||||||||||||||||||
Other assets |
55,440 | 40,639 | 19,866 | |||||||||||||||||||||||||||||||||
Average Total Assets |
$ | 906,099 | $ | 804,211 | $ | 662,289 | ||||||||||||||||||||||||||||||
Interest Bearing Liabilities |
||||||||||||||||||||||||||||||||||||
Interest bearing demand |
$ | 141,983 | $ | 968 | 0.68 | % | $ | 145,542 | $ | 1,015 | 0.70 | % | $ | 138,743 | $ | 2,173 | 1.57 | % | ||||||||||||||||||
Savings deposits |
76,718 | 921 | 1.20 | % | 62,846 | 963 | 1.53 | % | 56,914 | 1,576 | 2.77 | % | ||||||||||||||||||||||||
Certificates of deposit |
321,051 | 6,151 | 1.92 | % | 317,417 | 7,628 | 2.40 | % | 234,493 | 8,552 | 3.65 | % | ||||||||||||||||||||||||
Repurchase Agreements |
12,274 | 52 | 0.42 | % | 11,006 | 51 | 0.46 | % | 13,043 | 173 | 1.33 | % | ||||||||||||||||||||||||
Other borrowings |
134,255 | 1,306 | 0.97 | % | 122,057 | 2,678 | 2.19 | % | 98,518 | 3,868 | 3.93 | % | ||||||||||||||||||||||||
Average Interest Liabilities |
$ | 686,281 | $ | 9,398 | 1.37 | % | $ | 658,868 | 12,335 | 1.87 | % | $ | 541,711 | $ | 16,342 | 3.02 | % | |||||||||||||||||||
Noninterest bearing Demand |
92,433 | 69,250 | 70,933 | |||||||||||||||||||||||||||||||||
Other liabilities |
31,748 | 9,467 | 5,660 | |||||||||||||||||||||||||||||||||
Shareholders’ equity |
95,637 | 66,626 | 43,985 | |||||||||||||||||||||||||||||||||
Average Liabilities and Shareholders’ equity |
$ | 906,099 | $ | 804,211 | $ | 662,289 | ||||||||||||||||||||||||||||||
Net Interest Income and Net Interest Margin |
$ | 32,993 | 4.06 | % | $ | 28,994 | 3.94 | % | $ | 21,348 | 3.47 | % | ||||||||||||||||||||||||
| 3 | Average nonaccrual loans and average loans held for sale of $20.5 and $30.6 million are included, respectively |
10
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Quarterly Financial Condition Data (unaudited)
Quarterly Financial Condition Data (unaudited)
| Dec. 31, | Sep. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
| (Dollars in thousands, except for per share data) | 2010 | 2010 | 2010 | 2010 | 2009 | |||||||||||||||
Interest income: |
||||||||||||||||||||
Interest and fees on loans |
$ | 9,233 | $ | 9,414 | $ | 9,302 | $ | 9,051 | $ | 9,184 | ||||||||||
Interest on tax-exempt securities |
524 | 465 | 381 | 322 | 311 | |||||||||||||||
Interest on U.S. government securities |
505 | 633 | 507 | 439 | 676 | |||||||||||||||
Interest on federal funds sold and securities repurchased
under agreements to resell |
— | 1 | — | 1 | 1 | |||||||||||||||
Interest on other securities |
529 | 471 | 343 | 270 | 266 | |||||||||||||||
Total interest income |
10,791 | 10,984 | 10,533 | 10,083 | 10,438 | |||||||||||||||
Interest expense: |
||||||||||||||||||||
Interest on demand deposits |
261 | 251 | 226 | 230 | 229 | |||||||||||||||
Interest on savings deposits |
244 | 237 | 221 | 219 | 221 | |||||||||||||||
Interest on certificates of deposit |
1,383 | 1,453 | 1,554 | 1,761 | 1,906 | |||||||||||||||
Securities sold under repurchase agreements |
12 | 13 | 15 | 12 | 13 | |||||||||||||||
Interest on FHLB and other borrowings |
181 | 186 | 138 | 136 | 172 | |||||||||||||||
Interest on junior subordinated debt |
47 | 204 | 207 | 208 | 208 | |||||||||||||||
Total interest expense |
2,128 | 2,344 | 2,361 | 2,566 | 2,749 | |||||||||||||||
Net interest income |
8,663 | 8,640 | 8,172 | 7,517 | 7,689 | |||||||||||||||
Provision for loan and lease losses |
4,550 | 4,450 | 1,600 | 2,250 | 3,150 | |||||||||||||||
Net interest income after provision for loan and lease losses |
4,113 | 4,190 | 6,572 | 5,267 | 4,539 | |||||||||||||||
Noninterest income: |
||||||||||||||||||||
Service charges on deposit accounts |
53 | 63 | 62 | 82 | 94 | |||||||||||||||
Payroll and benefit processing fees |
113 | 107 | 100 | 128 | 105 | |||||||||||||||
Earnings on cash surrender value — bank owned life insurance |
111 | 112 | 107 | 108 | 107 | |||||||||||||||
Net gain on sale of securities available-for-sale |
738 | 179 | 133 | 931 | 454 | |||||||||||||||
Net gain on transfer of financial assets |
— | — | — | — | 1 | |||||||||||||||
Gain on settlement of put reserve |
— | 1,750 | 64 | 54 | 68 | |||||||||||||||
Mortgage brokerage fee income |
5,629 | 3,293 | 2,753 | 2,539 | 2,112 | |||||||||||||||
Other income |
211 | 179 | 118 | 100 | 119 | |||||||||||||||
Total noninterest income |
6,855 | 5,683 | 3,337 | 3,942 | 3,060 | |||||||||||||||
Noninterest expense: |
||||||||||||||||||||
Salaries and related benefits |
4,665 | 4,162 | 3,365 | 3,711 | 3,209 | |||||||||||||||
Occupancy and equipment expense |
855 | 952 | 924 | 929 | 1,178 | |||||||||||||||
Write down of other real estate owned |
196 | 129 | 1,064 | 181 | 161 | |||||||||||||||
FDIC insurance premium |
261 | 250 | 254 | 251 | 279 | |||||||||||||||
Data processing fees |
65 | 52 | 64 | 89 | 51 | |||||||||||||||
Professional service fees |
740 | 216 | 543 | 400 | 146 | |||||||||||||||
Deferred compensation expense |
127 | 126 | 122 | 118 | 118 | |||||||||||||||
Stationery and supplies |
47 | 35 | 96 | 80 | 44 | |||||||||||||||
Postage |
53 | 58 | 45 | 42 | 36 | |||||||||||||||
Directors’ expense |
58 | 56 | 68 | 84 | 67 | |||||||||||||||
Other expenses |
1,270 | 1,257 | 965 | 1,300 | 828 | |||||||||||||||
Total noninterest expense |
8,337 | 7,293 | 7,510 | 7,185 | 6,117 | |||||||||||||||
Income before provision for income taxes |
2,631 | 2,580 | 2,399 | 2,024 | 1,482 | |||||||||||||||
Provision for income taxes |
749 | 916 | 750 | 744 | 43 | |||||||||||||||
Net Income |
1,882 | 1,664 | 1,649 | 1,280 | 1,439 | |||||||||||||||
Less: Net income (loss) attributable to non-
controlling interest |
260 | 105 | 144 | (255 | ) | 33 | ||||||||||||||
Net income attributable to Bank of Commerce
Holdings |
$ | 1,622 | $ | 1,559 | $ | 1,505 | $ | 1,535 | $ | 1,406 | ||||||||||
Less: Preferred dividend and accretion on preferred stock |
$ | 235 | $ | 235 | $ | 236 | $ | 235 | $ | 235 | ||||||||||
Income available to common stockholders |
$ | 1,387 | $ | 1,324 | $ | 1,269 | $ | 1,300 | $ | 1,171 | ||||||||||
Basic earnings per share |
$ | 0.08 | $ | 0.08 | $ | 0.08 | $ | 0.15 | $ | 0.13 | ||||||||||
Weighted average shares — basic |
16,991 | 16,991 | 16,837 | 8,871 | 8,711 | |||||||||||||||
Diluted earnings per share |
$ | 0.08 | $ | 0.08 | $ | 0.08 | $ | 0.15 | $ | 0.13 | ||||||||||
Weighted average shares — diluted |
16,991 | 16,991 | 16,837 | 8,871 | 8,711 | |||||||||||||||
Cash dividends per share |
$ | 0.03 | $ | 0.03 | $ | 0.06 | $ | 0.06 | $ | 0.06 | ||||||||||
11
About Bank of Commerce Holdings
Bank of Commerce Holdings, with administrative offices in Redding, California is a financial
service holding company that owns Redding Bank of Commerce™, Roseville Bank of Commerce™, and Bank
of Commerce Mortgage™. The bank is a federally insured California banking corporation and opened
on October 22, 1982. BOCH is a NASDAQ Global Market listed stock. Please contact your local
investment advisor for purchases and sales. Investment firms making a market in BOCH stock are:
Howe Barnes Hoefer & Arnett Investment Inc. /
John T. Cavender
555 Market Street
San Francisco, CA (800) 346-5544
John T. Cavender
555 Market Street
San Francisco, CA (800) 346-5544
Hill, Thompson, Magid & Co. Inc / R.J. Dragani
15 Exchange Place, Suite 800
Jersey City, New Jersey 07030 (201) 369-2908
15 Exchange Place, Suite 800
Jersey City, New Jersey 07030 (201) 369-2908
Keefe, Bruyette & Woods, Inc. /
Dave Bonaccorso
101 California Street, 37th Floor
San Francisco, CA 94105 (415) 591-5063
Dave Bonaccorso
101 California Street, 37th Floor
San Francisco, CA 94105 (415) 591-5063
Sandler & O’Neil /Bryan Sullivan
919 Third Avenue, 6th Floor
New York, NY 10022 (888) 383-3112
919 Third Avenue, 6th Floor
New York, NY 10022 (888) 383-3112
McAdams Wright Ragen, Inc. /Joey Warmenhoven
1121 SW Fifth Avenue
Suite 1400
Portland, Oregon 97204 (866) 662-0351
1121 SW Fifth Avenue
Suite 1400
Portland, Oregon 97204 (866) 662-0351
Contact Information:
Patrick J. Moty, President & CEO
|
Telephone Direct (530) 722-3953 | |
Linda J. Miles, EVP & Chief Operating Officer
|
Telephone Direct (530) 722-3955 | |
Samuel D. Jimenez, Senior Vice President and CFO
|
Telephone Direct (530) 722-3952 |
12