Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT ON FORM 8-K - Bank of Commerce Holdings | d405289d8k.htm |
| EX-99.2 - PRESS RELEASE - Bank of Commerce Holdings | d405289dex992.htm |
| EX-10.29 - STOCK PURCHASE AGREEMENT - Bank of Commerce Holdings | d405289dex1029.htm |
| EX-10.30 - PROMISSORY NOTE - Bank of Commerce Holdings | d405289dex1030.htm |
Exhibit 99.1 Unaudited Pro Forma Condensed Combined Financial Information
The following Unaudited Pro Forma Condensed Consolidated Financial Statements of Bank of Commerce Holdings and its consolidated subsidiaries are included herein:
| • | Unaudited Pro Forma Condensed Balance Sheet as of June 30, 2012 |
| • | Unaudited Pro Forma Condensed Statement of Operations for six months ended June 30, 2012 |
| • | Unaudited Pro Forma Condensed Statement of Operations for the year ended December 31, 2011 |
| • | Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements |
The Unaudited Pro Forma Condensed Consolidated Financial Statements and related Notes presented reflect the deconsolidation of Bank of Commerce Mortgage (BOCM) as a result of the sale of its entire controlling equity interest (51%) in BOCM. As a result of the sale, BOCM was deconsolidated from Bank of Commerce Holdings consolidated financial statements as of July 1, 2012.
The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared by applying pro forma adjustments to the Unaudited Condensed Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the period ended June 30, 2012. The Unaudited Pro Forma Condensed Consolidated Balance Sheet, reflect the deconsolidation of BOCM assuming the sale occurred as of June 30, 2012. The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2012 reflect the deconsolidation BOCM assuming the sale occurred as of the beginning of the year 2012 and the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011, reflect the deconsolidation of BOCM assuming the sale occurred as of the beginning of the year 2011. The pro forma adjustments, as described in the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements, are based on currently available information. While such adjustments are subject to change, management believes such adjustments are reasonable and directly attributable to the deconsolidation of BOCM.
The Unaudited Pro Forma Condensed Consolidated Financial Statements are presented for informational purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the sale occurred on, or as of, the dates indicated, nor are they necessarily indicative of future operation results or financial position.
Bank of Commerce Holdings & Subsidiaries
Condensed Consolidated Balance Sheet (Unaudited)
| June 30, 2012 | ||||||||||||||||
| (Dollars in thousands) | As Reported (a) |
Less Deconsolidation of BOCM (b) |
Pro Forma Adjustments (c) |
Pro Forma | ||||||||||||
| ASSETS |
||||||||||||||||
| Cash and due from banks |
$ | 41,221 | $ | (1,186 | ) | $ | 321 | $ | 40,356 | |||||||
| Interest bearing due from banks |
24,035 | — | — | 24,035 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total cash and cash equivalents |
65,256 | (1,186 | ) | 321 | 64,391 | |||||||||||
| Securities available-for-sale, at fair value |
201,348 | — | — | 201,348 | ||||||||||||
| Portfolio loans |
596,105 | — | — | 596,105 | ||||||||||||
| Allowance for loan and lease losses |
(12,497 | ) | — | — | (12,497 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loans |
583,608 | — | — | 583,608 | ||||||||||||
| Mortgage loans held-for-sale, at fair value |
23,238 | — | — | 23,238 | ||||||||||||
| Mortgage loans held-for-sale, at lower of cost or market |
39,306 | (24,658 | ) | — | 14,648 | |||||||||||
| Bank premises and equipment, net |
10,328 | (619 | ) | — | 9,709 | |||||||||||
| Goodwill and other intangible assets, net |
3,808 | (3,695 | ) | — | 113 | |||||||||||
| Other real estate owned |
2,647 | — | — | 2,647 | ||||||||||||
| Other assets |
33,006 | (2,058 | ) | 4,179 | 35,127 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL ASSETS |
$ | 962,545 | $ | (32,216 | ) | $ | 4,500 | $ | 934,829 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||||||
| Demand – noninterest bearing |
$ | 117,649 | $ | 737 | $ | — | $ | 118,386 | ||||||||
| Demand – interest bearing |
207,307 | — | — | 207,307 | ||||||||||||
| Savings accounts |
89,405 | — | — | 89,405 | ||||||||||||
| Certificates of deposit |
268,102 | — | — | 268,102 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total deposits |
682,463 | — | — | 683,200 | ||||||||||||
| Securities sold under agreements to repurchase |
14,378 | — | — | 14,378 | ||||||||||||
| Federal Home Loan Bank borrowings |
100,000 | — | — | 100,000 | ||||||||||||
| Mortgage warehouse lines of credit |
22,110 | (22,110 | ) | — | — | |||||||||||
| Junior subordinated debentures |
15,465 | — | — | 15,465 | ||||||||||||
| Other liabilities |
14,538 | (2,159 | ) | (200 | ) | 12,179 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Liabilities |
848,954 | (23,532 | ) | (200 | ) | 825,222 | ||||||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 11) |
||||||||||||||||
| Stockholders’ Equity: |
||||||||||||||||
| Preferred stock, no par value, 2,000,000 shares authorized: Series B (liquidation preference $1,000 per share) issued and outstanding: 20,000 in 2012 and 2011 |
19,931 | — | — | 19,931 | ||||||||||||
| Common stock , no par value, 50,000,000 shares authorized; 16,991,495 shares issued; 16,265,125 outstanding on June 30, 2012 and 16,991,495 outstanding on December 31, 2011 |
40,168 | (1 | ) | — | 40,167 | |||||||||||
| Retained earnings |
48,566 | (8,683 | ) | 8,176 | 48,059 | |||||||||||
| Accumulated other comprehensive income, net of tax |
1,450 | — | — | 1,450 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Equity – Bank of Commerce Holdings |
110,115 | (8,684 | ) | 8,176 | 109,607 | |||||||||||
| Noncontrolling interest in subsidiary |
3,476 | — | (3,476 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Stockholders’ Equity |
113,591 | (8,684 | ) | 4,700 | 109,607 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 962,545 | $ | (32,216 | ) | $ | 4,500 | $ | 934,829 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
Bank of Commerce Holdings & Subsidiaries
Condensed Consolidated Statement of Operations (Unaudited)
| For the six months ended June 30, 2012 |
||||||||||||||||
| (Amounts in thousands) | As Reported (a) |
Less: Deconsolidation of BOCM (d) |
Pro Forma Adjustments (e) |
Pro Forma |
||||||||||||
| Interest income: |
||||||||||||||||
| Interest and fees on loans |
$ | 17,644 | $ | (984 | ) | $ | — | $ | 16,660 | |||||||
| Interest on tax-exempt securities |
1,165 | — | — | 1,165 | ||||||||||||
| Interest on U.S. government securities |
799 | — | — | 799 | ||||||||||||
| Interest on other securities |
1,526 | — | — | 1,526 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest income |
21,134 | (984 | ) | 20,150 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Interest expense: |
||||||||||||||||
| Interest on demand deposits |
310 | — | — | 310 | ||||||||||||
| Interest on savings deposits |
221 | — | — | 221 | ||||||||||||
| Interest on certificates of deposit |
2,070 | — | — | 2,070 | ||||||||||||
| Interest on securities sold under repurchase agreements |
13 | — | — | 13 | ||||||||||||
| Interest on Federal Home Loan Bank borrowings |
103 | — | — | 103 | ||||||||||||
| Interest on other borrowings |
1,241 | (1,047 | ) | — | 194 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest expense |
3,958 | (1,047 | ) | — | 2,911 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income |
17,176 | 63 | — | 17,239 | ||||||||||||
| Provision for loan losses |
2,950 | — | — | 2,950 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income after provision for loan and lease losses |
14,226 | 63 | — | 14,289 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest income: |
||||||||||||||||
| Service charges on deposit accounts |
97 | — | — | 97 | ||||||||||||
| Payroll and benefit processing fees |
273 | — | — | 273 | ||||||||||||
| Earnings on cash surrender value – Bank owned life insurance |
227 | — | — | 227 | ||||||||||||
| Gain on investment securities, net |
1,187 | — | — | 1,187 | ||||||||||||
| Merchant credit card service income, net |
73 | — | — | 73 | ||||||||||||
| Mortgage banking revenue, net |
11,076 | (11,076 | ) | — | — | |||||||||||
| Other income |
271 | 333 | 131 | 735 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total noninterest income |
13,204 | (10,743 | ) | 131 | 2,592 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest expense: |
||||||||||||||||
| Salaries and related benefits |
12,460 | (6,807 | ) | — | 5,653 | |||||||||||
| Occupancy and equipment expense |
1,687 | (672 | ) | — | 1,015 | |||||||||||
| Write down of other real estate owned |
425 | — | — | 425 | ||||||||||||
| Federal Deposit Insurance Corporation insurance premium |
410 | — | — | 410 | ||||||||||||
| Data processing fees |
185 | — | — | 185 | ||||||||||||
| Professional service fees |
1,302 | (695 | ) | — | 607 | |||||||||||
| Deferred compensation expense |
290 | — | — | 290 | ||||||||||||
| Other expenses |
3,781 | (1,225 | ) | — | 2,556 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total noninterest expense |
20,540 | (9,399 | ) | — | 11,141 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before provision for income taxes |
6,890 | (1,281 | ) | 131 | 5,740 | |||||||||||
| Provision for income taxes |
2,230 | (570 | ) | 42 | 1,702 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income |
$ | 4,660 | $ | (711 | ) | $ | 89 | $ | 4,038 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less: Net income (loss) attributable to noncontrolling interest |
348 | (348 | ) | — | — | |||||||||||
| Net income attributable to Bank of Commerce Holdings |
$ | 4,312 | $ | (363 | ) | $ | 89 | $ | 4,038 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less: Preferred dividend and accretion on preferred stock |
434 | — | — | 434 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income available to common shareholders |
$ | 3,878 | $ | (363 | ) | $ | 89 | $ | 3,604 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic earnings per share |
$ | 0.23 | $ | (0.02 | ) | $ | 0.01 | $ | 0.22 | |||||||
| Weighted average shares – basic |
16,553 | 16,553 | 16,553 | 16,553 | ||||||||||||
| Diluted earnings per share |
$ | 0.23 | $ | (0.02 | ) | $ | 0.01 | $ | 0.22 | |||||||
| Weighted Average shares – diluted |
16,553 | 16,553 | 16,553 | 16,553 | ||||||||||||
Bank of Commerce Holdings & Subsidiaries
Condensed Consolidated Statement of Operations (Unaudited)
| For the year ended December 31, 2011 |
||||||||||||||||
| (Amounts in thousands) | As Reported (a) |
Less: Deconsolidation of BOCM (f) |
Pro Forma Adjustments (g) |
Pro Forma |
||||||||||||
| Interest income: |
||||||||||||||||
| Interest and fees on loans |
$ | 36,138 | $ | (1,054 | ) | $ | — | $ | 35,084 | |||||||
| Interest on tax-exempt securities |
2,014 | — | — | 2,014 | ||||||||||||
| Interest on U.S. government securities |
2,123 | — | — | 2,123 | ||||||||||||
| Interest on other securities |
2,410 | — | — | 2,410 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest income |
42,685 | (1,054 | ) | — | 41,631 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Interest expense: |
||||||||||||||||
| Interest on demand deposits |
787 | — | — | 787 | ||||||||||||
| Interest on savings deposits |
792 | — | — | 792 | ||||||||||||
| Interest on certificates of deposit |
4,912 | — | — | 4,912 | ||||||||||||
| Interest on securities sold under repurchase agreements |
43 | — | — | 43 | ||||||||||||
| Interest on Federal Home Loan Bank borrowings |
579 | — | — | 579 | ||||||||||||
| Interest on other borrowings |
1,485 | (1,122 | ) | — | 363 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest expense |
8,598 | (1,122 | ) | — | 7,476 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income |
34,087 | 68 | — | 34,155 | ||||||||||||
| Provision for loan losses |
8,991 | — | — | 8,991 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income after provision for loan and lease losses |
25,096 | 68 | — | 25,164 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest income: |
||||||||||||||||
| Service charges on deposit accounts |
192 | — | — | 192 | ||||||||||||
| Payroll and benefit processing fees |
458 | — | — | 458 | ||||||||||||
| Earnings on cash surrender value – Bank owned life insurance |
465 | — | — | 465 | ||||||||||||
| Gain on investment securities, net |
1,550 | — | — | 1,550 | ||||||||||||
| Merchant credit card service income, net |
376 | — | — | 376 | ||||||||||||
| Mortgage banking revenue, net |
14,255 | (14,255 | ) | — | — | |||||||||||
| Other income |
474 | 376 | 261 | 1,111 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total noninterest income |
17,770 | (13,879 | ) | 261 | 4,152 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Noninterest expense: |
||||||||||||||||
| Salaries and related benefits |
18,789 | (8,831 | ) | — | 9,958 | |||||||||||
| Occupancy and equipment expense |
2,971 | (962 | ) | — | 2,009 | |||||||||||
| Write down of other real estate owned |
557 | — | — | 557 | ||||||||||||
| Federal Deposit Insurance Corporation insurance premium |
1,319 | — | — | 1,319 | ||||||||||||
| Data processing fees |
389 | — | — | 389 | ||||||||||||
| Professional service fees |
2,268 | (1,251 | ) | — | 1,017 | |||||||||||
| Deferred compensation expense |
533 | — | — | 533 | ||||||||||||
| Other expenses |
5,400 | (1,113 | ) | — | 4,287 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total noninterest expense |
32,226 | (12,157 | ) | — | 20,069 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before provision for income taxes |
10,640 | (1,654 | ) | 261 | 9,247 | |||||||||||
| Provision for income taxes |
2,836 | (533 | ) | 84 | 2,387 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income |
$ | 7,804 | $ | (1,121 | ) | $ | 177 | $ | 6,860 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less: Net income (loss) attributable to noncontrolling interest |
549 | (549 | ) | — | — | |||||||||||
| Net income attributable to Bank of Commerce Holdings |
$ | 7,255 | $ | (572 | ) | $ | 177 | $ | 6,860 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less: Preferred dividend and accretion on preferred stock |
943 | — | — | 943 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income available to common shareholders |
$ | 6,312 | $ | (572 | ) | $ | 177 | $ | 5,917 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic earnings per share |
$ | 0.37 | $ | (0.03 | ) | $ | 0.01 | $ | 0.35 | |||||||
| Weighted average shares – basic |
16,991 | 16,991 | 16,991 | 16,991 | ||||||||||||
| Diluted earnings per share |
$ | 0.37 | $ | (0.03 | ) | $ | 0.01 | $ | 0.35 | |||||||
| Weighted Average shares – diluted |
16,991 | 16,991 | 16,991 | 16,991 | ||||||||||||
Bank of Commerce Holdings & Subsidiaries
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
| (a) | Amounts represent historical financial information from our Quarterly Report on Form 10-Q for the period ended June 30, 2012 |
| (b) | Reflects the deconsolidation of the previously consolidated assets and liabilities of BOCM to unconsolidated, net of intercompany transactions. |
| (c) | We have made adjustments to the Unaudited Pro Forma Condensed Balance Sheet as of June 30, 2012 to reflect the deconsolidation of BOCM as if the sale occurred on June 30, 2012. The pro forma adjustments per the sale are as follows: |
| (Dollars in thousands) | ||||||
| Description |
Balance Sheet Location | Amount | ||||
| Cash received |
Cash and due from banks | $ | 321 | |||
| Fair Value note receivable |
Other assets | $ | 3,940 | |||
| Deferred tax asset |
Other assets | $ | 239 | |||
| Termination of earn out payable to Holdings |
Other liabilities | $ | 200 | |||
| Deconsolidation of mortgage subsidiary controlling and noncontrolling interests |
Retained earnings | $ | (8,683 | ) | ||
| Loss on sale of mortgage subsidiary, net of tax |
Retained earnings | $ | 507 | |||
| (d) | Represents the deconsolidation of income and expense items, net of intercompany transactions, relating to BOCM as if the transaction occurred on January 1, 2012. |
| (e) | Represents a full six months accretion of the discounted note receivable resulting from the sale of the mortgage subsidiary. |
| (f) | Represents the deconsolidation of income and expense items, net of intercompany transactions, relating to BOCM as if the transaction occurred on January 1, 2011. |
| (g) | Represents a full twelve months accretion of the discounted note receivable resulting from the sale of the mortgage subsidiary. |