Attached files
| file | filename |
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| 8-K - FORM 8-K - Bank of Commerce Holdings | boch20180418_8k.htm |
Exhibit 99.1
For Immediate Release:
Bank of Commerce Holdings Announces Results for the First Quarter of 2018
SACRAMENTO, California, April 20, 2018 / GLOBE NEWSWIRE—Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.2 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, 2018. Net income for the quarter ended March 31, 2018 was $3.2 million or $0.20 per share – diluted, compared with net income of $2.3 million or $0.17 per share – diluted for the same period of 2017.
Financial highlights for the first quarter of 2018 compared to the same quarter a year ago:
|
● |
Net income of $3.2 million or $0.20 per share – diluted for the three months ended March 31, 2018 was an increase of $989 thousand (44%) from $2.3 million or $0.17 per share – diluted earned during the same period in the prior year. The increase in earnings per share compared to the same quarter a year ago was 18% and reflects the impact of 2,738,096 shares of common stock sold in the second quarter of 2017. |
|
● |
Net interest income increased $1.6 million (17%) to $11.3 million for the three months ended March 31, 2018 compared to $9.7 million for the same period in the prior year. |
|
● |
Return on average assets improved to 1.05% for the three months ended March 31, 2018 compared to 0.80% for the same period in the prior year. |
|
● |
Return on average equity improved to 10.34% for the three months ended March 31, 2018 compared to 9.63% for the same period in the prior year. |
|
● |
Average loans for the three months ended March 31, 2018 totaled $883.9 million, an increase of $77.1 million (10%) compared to average loans for the same period in the prior year. |
|
● |
Average earning assets totaled $1.2 billion for the three months ended March 31, 2018, an increase of $106.8 million (10%) compared to average earning assets for the same period in the prior year. |
|
● |
Average deposits for the three months ended March 31, 2018 totaled $1.1 billion, an increase of $58.3 million (6%) compared to average deposits for the same period in the prior year. |
|
● |
The Company’s efficiency ratio was 65.17% for the three months ended March 31, 2018 compared to 71.31% for the same period in the prior year. |
|
● |
Nonperforming assets at March 31, 2018 totaled $4.3 million or 0.34% of total assets, a decrease of $6.5 million (60%) compared to March 31, 2017. |
|
● |
Book value per common share was $7.83 at March 31, 2018 compared to $7.14 at March 31, 2017. |
|
● |
Tangible book value per common share was $7.71 at March 31, 2018 compared to $6.97 at March 31, 2017. |
Financial highlights for the first quarter of 2018 compared to the prior quarter:
|
● |
A comparison of current quarter and prior quarter net earnings information is not particularly meaningful and is not provided because the prior period included the impact of the Tax Cuts and Jobs Act of 2017 which reduced net income in that period to $7 thousand. |
|
● |
Net interest income increased $476 thousand (18% annualized) to $11.3 million for the first quarter of 2018 compared to $10.9 million for the prior quarter. |
|
● |
Average loans for the three months ended March 31, 2018 totaled $883.9 million, an increase of $44.9 million (22% annualized) compared to average loans for the prior quarter. |
|
● |
Average earning assets for the three months ended March 31, 2018 totaled $1.2 billion, an increase of $3.8 million (1% annualized) compared to average earning assets for the prior quarter. |
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● |
Average deposits for the three months ended March 31, 2018 totaled $1.1 billion, a decrease of $12.6 million (5% annualized) compared to average deposits for the prior quarter. |
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● |
The Company’s efficiency ratio was 65.17% for the first quarter of 2018 compared to 64.94% during the prior quarter. |
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● |
Nonperforming assets at March 31, 2018 totaled $4.3 million or 0.34% of total assets, a decrease of $1.6 million since December 31, 2017. |
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● |
Book value per common share was $7.83 at March 31, 2018 compared to $7.82 at December 31, 2017. |
|
● |
Tangible book value per common share was $7.71 at March 31, 2018 compared to $7.70 at December 31, 2017. |
Randall S. Eslick, President and CEO commented: “I am very proud of our talented and dedicated employees. Their commitment to the company has generated noticeably improved financial results for the first quarter as we continue to execute on our vision. Net income totaled $3.2 million ($0.20 per share), ROAA was 1.05%, ROAE was 10.34% and loans increased $20.6 million (9.5% annualized). This is a great start to the year.”
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:
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● |
Competitive pressure in the banking industry and changes in the regulatory environment |
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● |
Changes in the interest rate environment and volatility of rate sensitive assets and liabilities |
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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 |
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Credit quality deterioration which could cause an increase in the provision for loan and lease losses |
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Asset/Liability matching risks and liquidity risks |
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● |
Changes in the securities markets |
For additional information concerning risks and uncertainties related to the Company and its operations, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 under the heading “Risk Factors” and to subsequent reports on Form 10-Q and current reports on Form 8-K. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation and specifically disclaims any obligation to revise or publicly release the results of any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date the statements were made.
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TABLE 1 |
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|
SELECTED FINANCIAL INFORMATION - UNAUDITED |
||||||||||||
|
(amounts in thousands except per share data) |
|
For The Three Months Ended |
||||||||||||
|
Net income, average assets and |
March 31, |
December 31, |
||||||||||
|
average shareholders' equity |
2018 |
2017 |
2017 |
|||||||||
|
Net income |
$ | 3,241 | $ | 2,252 | $ | 7 | ||||||
|
Average total assets |
$ | 1,248,563 | $ | 1,148,305 | $ | 1,251,960 | ||||||
|
Average total earning assets |
$ | 1,181,857 | $ | 1,075,039 | $ | 1,178,037 | ||||||
|
Average shareholders' equity |
$ | 127,069 | $ | 94,820 | $ | 128,862 | ||||||
|
Selected performance ratios |
||||||||||||
|
Return on average assets |
1.05 |
% |
0.80 |
% |
0.00 |
% |
||||||
|
Return on average equity |
10.34 |
% |
9.63 |
% |
0.02 |
% |
||||||
|
Efficiency ratio |
65.17 |
% |
71.31 |
% |
64.94 |
% |
||||||
|
Share and per share amounts |
||||||||||||
|
Weighted average shares - basic (1) |
16,225 | 13,416 | 16,195 | |||||||||
|
Weighted average shares - diluted |
16,310 | 13,521 | 16,306 | |||||||||
|
Earnings per share - basic |
$ | 0.20 | $ | 0.17 | $ | — | ||||||
|
Earnings per share - diluted |
$ | 0.20 | $ | 0.17 | $ | — | ||||||
|
At March 31, |
At December 31, |
|||||||||||
|
Share and per share amounts |
2018 |
2017 |
2017 |
|||||||||
|
Common shares outstanding (2) |
16,315 | 13,517 | 16,272 | |||||||||
|
Book value per common share |
$ | 7.83 | $ | 7.14 | $ | 7.82 | ||||||
|
Tangible book value per common share (3) |
$ | 7.71 | $ | 6.97 | $ | 7.70 | ||||||
|
Capital ratios (4) |
||||||||||||
|
Bank of Commerce Holdings |
||||||||||||
|
Common equity tier 1 capital ratio |
12.35 |
% |
9.71 |
% |
12.26 |
% |
||||||
|
Tier 1 capital ratio |
13.31 |
% |
10.72 |
% |
13.23 |
% |
||||||
|
Total capital ratio |
15.52 |
% |
13.00 |
% |
15.44 |
% |
||||||
|
Tier 1 leverage ratio |
11.11 |
% |
9.09 |
% |
10.86 |
% |
||||||
|
Tangible common equity ratio (5) |
10.11 |
% |
8.27 |
% |
9.88 |
% |
||||||
|
Redding Bank of Commerce |
||||||||||||
|
Common equity tier 1 capital ratio |
12.62 |
% |
12.59 |
% |
12.58 |
% |
||||||
|
Tier 1 capital ratio |
12.62 |
% |
12.59 |
% |
12.58 |
% |
||||||
|
Total capital ratio |
13.87 |
% |
13.84 |
% |
13.81 |
% |
||||||
|
Tier 1 leverage ratio |
10.51 |
% |
10.67 |
% |
10.33 |
% |
||||||
|
(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. |
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|
(2) Includes unvested restricted shares issued in accordance with the Company's equity incentive plan. |
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|
(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. Capital ratios for the Company include the benefit of $26.8 million net proceeds from the sale of 2,738,096 shares of common stock in the second quarter of 2017. | ||||||||||||
|
(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, 2018, the Company had total consolidated assets of $1.2 billion, gross loans of $900.4 million, allowance for loan and lease losses (“ALLL”) of $12.3 million, total deposits of $1.0 billion, and shareholders’ equity of $127.7 million.
|
TABLE 2 |
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|
LOAN BALANCES BY TYPE - UNAUDITED |
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|
(amounts in thousands) |
|
At March 31, |
At December 31, |
|||||||||||||||||||||||||||||||
|
% of |
% of |
Change |
% of |
|||||||||||||||||||||||||||||
|
2018 |
Total |
2017 |
Total |
Amount |
% |
2017 |
Total |
|||||||||||||||||||||||||
|
Commercial |
$ | 137,870 | 15 |
% |
$ | 138,674 | 18 |
% |
$ | (804 | ) | (1 | )% | $ | 142,405 | 16 |
% |
|||||||||||||||
|
Real estate - construction and land development |
14,723 | 2 | 25,241 | 3 | (10,518 | ) | (42 | )% | 15,902 | 2 | ||||||||||||||||||||||
|
Real estate - commercial non-owner occupied |
405,192 | 46 | 311,203 | 38 | 93,989 | 30 |
% |
377,668 | 43 | |||||||||||||||||||||||
|
Real estate - commercial owner occupied |
193,286 | 22 | 186,713 | 24 | 6,573 | 4 |
% |
192,023 | 22 | |||||||||||||||||||||||
|
Real estate - residential - ITIN |
40,425 | 4 | 44,211 | 5 | (3,786 | ) | (9 | )% | 41,188 | 5 | ||||||||||||||||||||||
|
Real estate - residential - 1-4 family mortgage |
30,247 | 3 | 19,710 | 2 | 10,537 | 53 |
% |
30,377 | 3 | |||||||||||||||||||||||
|
Real estate - residential - equity lines |
30,520 | 3 | 33,019 | 4 | (2,499 | ) | (8 | )% | 30,347 | 3 | ||||||||||||||||||||||
|
Consumer and other |
48,157 | 5 | 51,423 | 6 | (3,266 | ) | (6 | )% | 49,925 | 6 | ||||||||||||||||||||||
|
Gross loans |
900,420 | 100 |
% |
810,194 | 100 |
% |
90,226 | 11 |
% |
879,835 | 100 |
% |
||||||||||||||||||||
|
Deferred fees and costs |
1,713 | 1,446 | 267 | 1,710 | ||||||||||||||||||||||||||||
|
Loans, net of deferred fees and costs |
902,133 | 811,640 | 90,493 | 881,545 | ||||||||||||||||||||||||||||
|
Allowance for loan and lease losses |
(12,295 | ) | (11,641 | ) | (654 | ) | (11,925 | ) | ||||||||||||||||||||||||
|
Net loans |
$ | 889,838 | $ | 799,999 | $ | 89,839 | $ | 869,620 | ||||||||||||||||||||||||
|
Average yield on loans during the quarter |
4.92 | % | 4.72 | % | 0.20 | 4.77 | % | |||||||||||||||||||||||||
The Company recorded gross loan balances of $900.4 million at March 31, 2018, compared with $810.2 million and $879.8 million at March 31, 2017 and December 31, 2017, respectively, an increase of $90.2 million and $20.6 million, respectively. The increase in gross loans compared to the same period a year ago and the prior period was driven by organic loan originations by our SBA division and by our expanded Sacramento commercial banking group.
Average loan balances were $883.9 million for the quarter ended March 31, 2018, compared with $806.8 million for the quarter ended March 31, 2017 and $839.0 million for the quarter ended December 31, 2017, an increase of $77.1 million or 10% and an increase of $44.9 million or 22% annualized, respectively.
The average yield on loans during the quarter was 4.92% compared to 4.72% and 4.77% for the quarters ended March 31, 2017 and December 31, 2017, respectively. The current quarter income on loans of $10.7 million included $229 thousand from prepayment penalties and interest income from nonaccrual loans that were sold or repaid during the quarter which enhanced the average yield by ten basis points.
|
TABLE 3 |
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|
CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED |
||||||||||||||||||||||||
|
(amounts in thousands) |
|
At March 31, |
At December 31, |
|||||||||||||||||||||||||||||||
|
% of |
% of |
Change |
% of |
|||||||||||||||||||||||||||||
|
2018 |
Total |
2017 |
Total |
Amount |
% |
2017 |
Total |
|||||||||||||||||||||||||
|
Cash and due from banks |
$ | 16,247 | 6 |
% |
$ | 18,315 | 7 |
% |
$ | (2,068 | ) | (11 | )% | $ | 17,979 | 5 |
% |
|||||||||||||||
|
Interest-bearing deposits in other banks |
17,376 | 6 | 42,744 | 16 | (25,368 | ) | (59 | )% | 48,991 | 15 | ||||||||||||||||||||||
|
Total cash and cash equivalents |
33,623 | 12 | 61,059 | 23 | (27,436 | ) | (45 | )% | 66,970 | 20 | ||||||||||||||||||||||
|
Investment securities: |
||||||||||||||||||||||||||||||||
|
U.S. government and agencies |
41,179 | 14 | 12,496 | 5 | 28,683 | 230 |
% |
40,369 | 12 | |||||||||||||||||||||||
|
Obligations of state and political subdivisions |
59,408 | 21 | 55,663 | 20 | 3,745 | 7 |
% |
78,844 | 24 | |||||||||||||||||||||||
|
Residential mortgage backed securities and collateralized mortgage obligations |
125,567 | 43 | 82,392 | 30 | 43,175 | 52 |
% |
114,592 | 34 | |||||||||||||||||||||||
|
Corporate securities |
3,958 | 1 | 10,448 | 4 | (6,490 | ) | (62 | )% | 4,992 | 1 | ||||||||||||||||||||||
|
Commercial mortgage backed securities |
25,520 | 9 | 16,522 | 6 | 8,998 | 54 |
% |
26,641 | 8 | |||||||||||||||||||||||
|
Other asset backed securities |
285 | — | 4,013 | 1 | (3,728 | ) | (93 | )% | 2,516 | 1 | ||||||||||||||||||||||
|
Total investment securities - AFS |
255,917 | 88 | 181,534 | 66 | 74,383 | 41 |
% |
267,954 | 80 | |||||||||||||||||||||||
|
Obligations of state and political subdivisions - HTM |
— | — | 31,257 | 11 | (31,257 | ) | (100 | )% | — | — | ||||||||||||||||||||||
|
Total investment securities - AFS and HTM |
255,917 | 88 | 212,791 | 77 | 43,126 | 20 |
% |
267,954 | 80 | |||||||||||||||||||||||
|
Total cash, cash equivalents and investment securities |
$ | 289,540 | 100 |
% |
$ | 273,850 | 100 |
% |
$ | 15,690 | 6 |
% |
$ | 334,924 | 100 |
% |
||||||||||||||||
|
Average yield on interest-bearing due from banks and investment securities during the quarter - (nominal) |
2.45 | % | 2.17 | % | 0.28 | 2.30 | % | |||||||||||||||||||||||||
As of March 31, 2018, we maintained noninterest-bearing cash positions of $16.2 million and interest-bearing deposits of $17.4 million at the Federal Reserve Bank and correspondent banks. The reduction in cash and cash equivalents from December 31, 2017 to March 31, 2018 reflects the seasonal decline in deposits which, in 2018, has been greater than it was in the prior two years.
Investment securities totaled $255.9 million at March 31, 2018, compared with $212.8 million and $268.0 million at March 31, 2017 and December 31, 2017, respectively. Our investment securities portfolio provides us with a secondary source of liquidity to fund higher yielding asset opportunities, such as loan originations. During the first quarter of 2018, we purchased 12 securities with a par value of $19.6 million and weighted average yield of 3.11% and sold 29 securities with a par value of $18.7 million and weighted average yield of 2.27%. The sales activity on available-for-sale securities resulted in $36 thousand in net realized gains. During the same period, we received $7.9 million in proceeds from principal payments, calls and maturities within the investment securities portfolio.
Average securities balances and weighted average tax equivalent yields for the quarters ended March 31, 2018 and 2017 were $265.1 million and 2.75% compared to $211.1 million and 3.06%, respectively. The current quarter tax equivalent yields were reduced by 17 basis points as a result of the Tax Cuts and Jobs Act of 2017 which reduced the federal corporate tax rate from a graduated rate of 35% to a flat rate of 21%.
At March 31, 2018, our net unrealized losses on available-for-sale investment securities were $3.9 million compared with net unrealized losses of $891 thousand and $452 thousand at March 31, 2017 and December 31, 2017, respectively. The changes in the net unrealized loss on the investment securities portfolio are due to changes in market interest rates and the reclassification of all HTM securities to AFS during the fourth quarter of 2017.
| TABLE 4 |
|
DEPOSITS BY TYPE - UNAUDITED |
|
(amounts in thousands) |
|
At March 31, |
At December 31, |
|||||||||||||||||||||||||||||||
|
% of |
% of |
Change |
% of |
|||||||||||||||||||||||||||||
|
2018 |
Total |
2017 |
Total |
Amount |
% |
2017 |
Total |
|||||||||||||||||||||||||
|
Demand - noninterest-bearing |
$ | 301,981 | 29 |
% |
$ | 270,412 | 27 |
% |
$ | 31,569 | 12 |
% |
$ | 305,650 | 28 |
% |
||||||||||||||||
|
Demand - interest-bearing |
462,551 | 44 | 407,784 | 41 | 54,767 | 13 |
% |
496,990 | 45 | |||||||||||||||||||||||
|
Total demand |
764,532 | 73 | 678,196 | 68 | 86,336 | 13 |
% |
802,640 | 73 | |||||||||||||||||||||||
|
Savings |
107,986 | 10 | 112,738 | 11 | (4,752 | ) | (4 |
)% |
110,837 | 10 | ||||||||||||||||||||||
|
Total non-maturing deposits |
872,518 | 83 | 790,934 | 79 | 81,584 | 10 |
% |
913,477 | 83 | |||||||||||||||||||||||
|
Certificates of deposit |
176,233 | 17 | 213,556 | 21 | (37,323 | ) | (17 |
)% |
189,255 | 17 | ||||||||||||||||||||||
|
Total deposits |
$ | 1,048,751 | 100 |
% |
$ | 1,004,490 | 100 |
% |
$ | 44,261 | 4 |
% |
$ | 1,102,732 | 100 |
% |
||||||||||||||||
|
Average rate on interest-bearing deposits during the quarter |
0.41 | % | 0.39 | % | 0.02 | 0.42 | % | |||||||||||||||||||||||||
|
Average rate on all deposits during the quarter |
0.29 | % | 0.29 | % | - | 0.30 | % | |||||||||||||||||||||||||
Total deposits at March 31, 2018, increased $44.3 million or 4% to $1.0 billion compared to March 31, 2017, and decreased $54.0 million or 20% annualized compared to December 31, 2017. Total non-maturing deposits increased $81.6 million or 10% compared to the same date a year ago and decreased $41.0 million or 18% annualized compared to December 31, 2017. Certificates of deposit decreased $37.3 million or 17% compared to the same date a year ago and decreased $13.0 million or 28% annualized compared to December 31, 2017.
In late December 2017, deposit balances increased more significantly than at prior year-ends and then were withdrawn in early 2018. Average balances more clearly illustrate deposit balance trends. Average non-maturity deposits totaled $888.6 million in the first quarter of 2018 compared to $888.1 million in the prior quarter. Average certificates of deposit totaled $181.9 million in the first quarter of 2018 compared to $194.9 million in the prior quarter.
|
TABLE 5 |
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|
WHOLESALE AND BROKERED DEPOSITS - UNAUDITED |
||||||||
|
(amounts in thousands) |
|
At March 31, |
At December 31, |
|||||||||||
|
2018 |
2017 |
2017 |
||||||||||
|
CDARS / ICS reciprocal brokered deposits |
$ | 56,732 | $ | 55,565 | $ | 66,279 | ||||||
|
Online listing service wholesale time deposits |
29,159 | 47,429 | 36,060 | |||||||||
|
Total wholesale and brokered deposits |
$ | 85,891 | $ | 102,994 | $ | 102,339 | ||||||
In accordance with regulatory Call Report instructions, the Bank will file (or has filed) quarterly Call Reports which list brokered deposits of $56.7 million, $55.6 million and $66.3 million at March 31, 2018, March 31, 2017 and December 31, 2017, respectively.
INCOME STATEMENT OVERVIEW
| TABLE 6 |
|
SUMMARY INCOME STATEMENT - UNAUDITED |
|
(amounts in thousands, except per share data) |
|
For The Three Months Ended |
|
March 31, |
Change |
December 31, |
Change |
|||||||||||||||||||||||||
|
2018 |
2017 |
Amount |
% |
2017 |
Amount |
% |
||||||||||||||||||||||
|
Interest income |
$ | 12,530 | $ | 10,817 | $ | 1,713 | 16 |
% |
$ | 12,047 | $ | 483 | 4 |
% |
||||||||||||||
|
Interest expense |
1,185 | 1,083 | 102 | 9 |
% |
1,178 | 7 | 1 |
% |
|||||||||||||||||||
|
Net interest income |
11,345 | 9,734 | 1,611 | 17 |
% |
10,869 | 476 | 4 |
% |
|||||||||||||||||||
|
Provision for loan and lease losses |
— | 200 | (200 | ) | (100 |
)% |
450 | (450 | ) | (100 |
)% |
|||||||||||||||||
|
Noninterest income |
982 | 1,471 | (489 | ) | (33 |
)% |
1,282 | (300 | ) | (23 |
)% |
|||||||||||||||||
|
Noninterest expense |
8,033 | 7,990 | 43 | 1 |
% |
7,891 | 142 | 2 |
% |
|||||||||||||||||||
|
Income before provision for income taxes |
4,294 | 3,015 | 1,279 | 42 |
% |
3,810 | 484 | 13 |
% |
|||||||||||||||||||
|
Provision for income taxes: |
||||||||||||||||||||||||||||
|
Net deferred tax asset write-down |
— | — | — | — |
% |
2,490 | (2,490 | ) | (100 |
)% |
||||||||||||||||||
|
Provision for income taxes from operations |
1,053 | 763 | 290 | 38 |
% |
1,313 | (260 | ) | (20 |
)% |
||||||||||||||||||
|
Total provision for income taxes |
1,053 | 763 | 290 | 38 |
% |
3,803 | (2,750 | ) | (72 |
)% |
||||||||||||||||||
|
Net income |
$ | 3,241 | $ | 2,252 | $ | 989 | 44 |
% |
$ | 7 | $ | 3,234 | 100 |
% |
||||||||||||||
|
Basic earnings per share |
$ | 0.20 | $ | 0.17 | $ | 0.03 | 18 |
% |
$ | — | $ | 0.20 | 100 |
% |
||||||||||||||
|
Average basic shares |
16,225 | 13,416 | 2,809 | 21 |
% |
16,195 | 30 | — |
% |
|||||||||||||||||||
|
Diluted earnings per share |
$ | 0.20 | $ | 0.17 | $ | 0.03 | 18 |
% |
$ | — | $ | 0.20 | 100 |
% |
||||||||||||||
|
Average diluted shares |
16,310 | 13,521 | 2,789 | 21 |
% |
16,306 | 4 | — |
% |
|||||||||||||||||||
|
Dividends declared per common share |
$ | 0.03 | $ | 0.03 | $ | — | — |
% |
$ | 0.03 | $ | — | — |
% |
||||||||||||||
First Quarter of 2018 Compared With First Quarter of 2017
Net income for the first quarter of 2018 increased $989 thousand compared to the first quarter of 2017. In the current quarter, net interest income was $1.6 million higher and provision for loan and lease losses was $200 thousand lower. These positive changes were offset by noninterest income that was $489 thousand lower, noninterest expense that was $43 thousand higher and a provision for income tax that was $290 thousand higher.
Net Interest Income
Net interest income increased $1.6 million compared to the same period a year ago.
Interest income for the three months ended March 31, 2018 increased $1.7 million or 16% to $12.5 million. Interest and fees on loans increased $1.3 million due to a $77.1 million increase in average loan balances and a 20 basis point increase in the average yield on the loan portfolio. Interest on securities increased $353 thousand due to a $54.0 million increase in average securities balances and a two basis point increase in the average yield on the securities portfolio. Interest on interest-bearing deposits due from banks increased $15 thousand primarily due to a 78 basis point increase in average yield resulting from increased fed funds rates.
Interest expense for the first quarter of 2018 increased $102 thousand or 9% to $1.2 million. The net increase was due to the following:
|
● |
Interest expense on interest bearing deposits increased $51 thousand. Average interest-bearing demand and savings deposit balances increased $47.1 million, while average certificate of deposit balances decreased $33.3 million. The average rate paid on interest-bearing deposits increased two basis points. |
|
● |
Interest expense on other interest bearing liabilities increased $51 thousand primarily due to increased borrowing from the Federal Home Loan Bank of San Francisco. |
Provision for loan and lease loss
As a result of continued improved asset quality and net loan loss recoveries, no provision for loan and lease losses was necessary during the current quarter compared with a provision for loan and lease losses of $200 thousand for the same quarter a year ago.
Noninterest Income
Noninterest income for the three months ended March 31, 2018 decreased $489 thousand compared to the first quarter for 2017. During the first quarter of 2017 we recognized income from life insurance death benefit proceeds of $502 thousand.
Noninterest Expense
Noninterest expense for the three months ended March 31, 2018 increased only $43 thousand compared to the same period a year previous.
The Company’s efficiency ratio was 65.17% for the first quarter of 2018 compared to 71.31% during the same period in 2017.
Income Tax Provision
For the three months ended March 31, 2018, our income tax provision of $1.1 million on pre-tax income of $4.3 million was an effective tax rate of 24.5%. The current quarter effective tax rate reflects the benefits of the Tax Cuts and Jobs Act of 2017 which reduced the federal corporate tax rate from a graduated rate of 35% to a flat rate of 21%. The tax provision for the first quarter of the prior year was $763 thousand on pre-tax income of $3.0 million for an effective tax rate of 25.31%. Life insurance death benefits of $502 thousand recorded during the first quarter of 2017 are not subject to income tax, and if excluded from pretax income, the effective tax rate would have been 30.36%.
First Quarter of 2018 Compared With Fourth Quarter of 2017
Net income for the first quarter of 2018 increased $3.2 million compared to the fourth quarter of 2017. In the current quarter, net interest income was $476 thousand higher, the provision for loan and lease losses was $450 thousand lower and the provision for income taxes was $2.8 million lower. These positive changes were offset by noninterest income that was $300 thousand lower and noninterest expenses that were $142 thousand higher.
Net Interest Income
Net interest income increased $476 thousand over the prior quarter.
Interest income for the three months ended March 31, 2018 increased $483 thousand or 4% to $12.5 million. Interest and fees on loans increased $646 thousand due to a $44.9 million increase in average loan balances and a 15 basis point increase in the average yield on the loan portfolio. Interest on investment securities decreased $68 thousand due to a $6.9 million decrease in average securities balances partially offset by a two basis point increase in average yield. Interest on interest-bearing deposits due from banks decreased $95 thousand due to a $34.1 million decrease in average balances.
Interest expense for the three months ended March 31, 2018 increased $7 thousand or 1% to $1.2 million. Interest expense on deposits declined $42 thousand as average interest-bearing demand and savings deposits increased $10.0 million, average certificates of deposit declined $13.0 million and the average rate paid on these deposits declined one basis point. This was offset by new borrowings from the Federal Home loan Bank of San Francisco which averaged $12.4 million and carried interest expense of $47 thousand. Variances in interest expense on other term debt were immaterial.
Provision for loan and lease loss
As a result of continued improved asset quality and net loan loss recoveries, no provision for loan and lease losses was necessary during the current quarter compared with a provision for loan and lease losses of $450 thousand for the prior quarter.
Noninterest Income
Noninterest income for the three months ended March 31, 2018 decreased $300 thousand. During the current quarter gains on sale of OREO were $16 thousand compared to gains on sale of OREO of $346 thousand in the prior quarter.
Noninterest Expense
Noninterest expense for the three months ended March 31, 2018 increased $142 thousand compared to the fourth quarter of 2017. The increase was primarily related to employee compensation.
The Company’s efficiency ratio was 65.17% for the first quarter of 2018 compared to 64.94% during the prior quarter.
Income Tax Provision
For the three months ended March 31, 2018, our income tax provision of $1.1 million on pre-tax income of $4.3 million was an effective tax rate of 24.5%. This compares with a provision for income taxes of $3.8 million on pretax income of $3.8 million (99.8% effective tax rate) for the prior quarter. The income tax provision in the prior quarter included a $2.5 million write-down of our net deferred tax assets and if excluded from the calculation, the effective tax rate would have been 34.5%
Earnings Per Share
Diluted earnings per share were $0.20 for the three months ended March 31, 2018. This compared with diluted earnings per share of $0.17 for the same period a year ago and diluted earnings per share of $0.00 for the prior period. Net income and weighted average shares used to calculate earnings per share – diluted are summarized in table 6 presented earlier in this press release.
The following table presents the average cost of interest-bearing deposits, all deposits and all interest-bearing liabilities for the periods indicated.
|
TABLE 7 |
|||||||||||||||||||||||||||||||
|
AVERAGE COST OF FUNDS |
|
For The Three Months Ended |
||||||||||||||||||||||||||||||||
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||||||||||||||||||||||
|
2018 |
2017 |
2017 |
2017 |
2017 |
2016 |
2016 |
2016 |
|||||||||||||||||||||||||
|
Interest-bearing deposits |
0.41 |
% |
0.42 |
% |
0.43 |
% |
0.42 |
% |
0.39 |
% |
0.40 |
% |
0.39 |
% |
0.39 |
% |
||||||||||||||||
|
Interest-bearing deposits and noninterest-bearing demand |
0.29 |
% |
0.30 |
% |
0.31 |
% |
0.31 |
% |
0.29 |
% |
0.29 |
% |
0.29 |
% |
0.30 |
% |
||||||||||||||||
|
All interest-bearing liabilities |
0.60 |
% |
0.59 |
% |
0.60 |
% |
0.60 |
% |
0.56 |
% |
0.57 |
% |
0.56 |
% |
0.56 |
% |
||||||||||||||||
|
All interest-bearing liabilities and noninterest-bearing demand |
0.43 |
% |
0.42 |
% |
0.43 |
% |
0.44 |
% |
0.42 |
% |
0.42 |
% |
0.42 |
% |
0.44 |
% |
||||||||||||||||
|
TABLE 8a |
|||||||||||||||||||||||||||
|
NET INTEREST MARGIN - UNAUDITED |
|||||||||||||||||||||||||||
|
(amounts in thousands) |
|
For The Three Months Ended |
||||||||||||||||||||||||||||||||||||
|
March 31, 2018 |
March 31, 2017 |
December 31, 2017 |
||||||||||||||||||||||||||||||||||
|
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) |
$ | 883,876 | $ | 10,729 | 4.92 |
% |
$ | 806,793 | $ | 9,384 | 4.72 |
% |
$ | 839,004 | $ | 10,083 | 4.77 |
% |
||||||||||||||||||
|
Taxable securities |
205,302 | 1,209 | 2.39 |
% |
137,582 | 789 | 2.33 |
% |
199,849 | 1,211 | 2.40 |
% |
||||||||||||||||||||||||
|
Tax-exempt securities |
59,789 | 463 | 3.14 |
% |
73,524 | 530 | 2.92 |
% |
72,152 | 529 | 2.91 |
% |
||||||||||||||||||||||||
|
Interest-bearing deposits in other banks |
32,890 | 129 | 1.59 |
% |
57,140 | 114 | 0.81 |
% |
67,032 | 224 | 1.33 |
% |
||||||||||||||||||||||||
|
Average interest-earning assets |
1,181,857 | 12,530 | 4.30 |
% |
1,075,039 | 10,817 | 4.08 |
% |
1,178,037 | 12,047 | 4.06 |
% |
||||||||||||||||||||||||
|
Cash and due from banks |
17,666 | 16,873 | 19,783 | |||||||||||||||||||||||||||||||||
|
Premises and equipment, net |
14,557 | 16,165 | 14,948 | |||||||||||||||||||||||||||||||||
|
Other assets |
34,483 | 40,228 | 39,192 | |||||||||||||||||||||||||||||||||
|
Average total assets |
$ | 1,248,563 | $ | 1,148,305 | $ | 1,251,960 | ||||||||||||||||||||||||||||||
|
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
|
Interest-bearing demand |
$ | 470,440 | 221 | 0.19 |
% |
$ | 420,416 | 148 | 0.14 |
% |
$ | 459,451 | 216 | 0.19 |
% |
|||||||||||||||||||||
|
Savings deposits |
110,725 | 59 | 0.22 |
% |
113,647 | 47 | 0.17 |
% |
111,725 | 54 | 0.19 |
% |
||||||||||||||||||||||||
|
Certificates of deposit |
181,901 | 495 | 1.10 |
% |
215,202 | 529 | 1.00 |
% |
194,886 | 547 | 1.11 |
% |
||||||||||||||||||||||||
|
Federal Home Loan Bank of San Francisco borrowings |
12,444 | 47 | 1.53 |
% |
— | — | — |
% |
— | — | — |
% |
||||||||||||||||||||||||
|
Other borrowings net of unamortized debt issuance costs |
16,528 | 281 | 6.90 |
% |
18,598 | 293 | 6.39 |
% |
17,211 | 285 | 6.57 |
% |
||||||||||||||||||||||||
|
Junior subordinated debentures |
10,310 | 82 | 3.23 |
% |
10,310 | 66 | 2.60 |
% |
10,310 | 76 | 2.92 |
% |
||||||||||||||||||||||||
|
Average interest-bearing liabilities |
802,348 | 1,185 | 0.60 |
% |
778,173 | 1,083 | 0.56 |
% |
793,583 | 1,178 | 0.59 |
% |
||||||||||||||||||||||||
|
Noninterest-bearing demand |
307,397 | 262,881 | 316,961 | |||||||||||||||||||||||||||||||||
|
Other liabilities |
11,749 | 12,431 | 12,554 | |||||||||||||||||||||||||||||||||
|
Shareholders’ equity |
127,069 | 94,820 | 128,862 | |||||||||||||||||||||||||||||||||
|
Average liabilities and |
$ | 1,248,563 | $ | 1,148,305 | $ | 1,251,960 | ||||||||||||||||||||||||||||||
|
Net interest income and net interest margin(4) |
$ | 11,345 | 3.89 |
% |
$ | 9,734 | 3.67 |
% |
$ | 10,869 | 3.66 |
% |
||||||||||||||||||||||||
|
Tax equivalent net interest margin (3) |
3.94 |
% |
3.78 |
% |
3.75 |
% |
||||||||||||||||||||||||||||||
|
(1) Interest income on loans is net of deferred fees and costs of approximately $137 thousand, $197 thousand, and $123 thousand for the three months ended March 31, 2018, and 2017 and December 31, 2017, respectively. |
|||||||||||||||||||||||||||
|
(2) Net loans includes average nonaccrual loans of $4.8 million, $10.9 million and $6.5 million for the three months ended March 31, 2018 and 2017 and December 31, 2017, respectively. |
|||||||||||||||||||||||||||
|
(3) Tax-exempt income has been adjusted to tax equivalent basis at a 21% for 2018 and at a 34% tax rate for 2017. The amount of such adjustments was an addition to recorded income of approximately $123 thousand, $273 thousand and $273 thousand for the three months ended March 31, 2018 and 2017 and December 31, 2017, respectively. |
|||||||||||||||||||||||||||
|
(4) Net interest margin is 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, |
||||||||||||||||
|
2018 |
2017 |
2017 |
2017 |
2017 |
||||||||||||||||
|
Beginning balance ALLL |
$ | 11,925 | $ | 11,692 | $ | 11,688 | $ | 11,641 | $ | 11,544 | ||||||||||
|
Provision for loan and lease losses |
— | 450 | — | 300 | 200 | |||||||||||||||
|
Loans charged-off |
(390 | ) | (451 | ) | (245 | ) | (359 | ) | (447 | ) | ||||||||||
|
Loan loss recoveries |
760 | 234 | 249 | 106 | 344 | |||||||||||||||
|
Ending balance ALLL |
$ | 12,295 | $ | 11,925 | $ | 11,692 | $ | 11,688 | $ | 11,641 | ||||||||||
|
At March 31, |
At December 31, |
At September 30, |
At June 30, |
At March 31, |
||||||||||||||||
|
2018 |
2017 |
2017 |
2017 |
2017 |
||||||||||||||||
|
Nonaccrual loans: |
||||||||||||||||||||
|
Commercial |
$ | 1,109 | $ | 1,603 | $ | 2,309 | $ | 2,410 | $ | 2,534 | ||||||||||
|
Real estate - commercial non-owner occupied |
— | — | — | 1,196 | 1,196 | |||||||||||||||
|
Real estate - commercial owner occupied |
— | 600 | 617 | 639 | 654 | |||||||||||||||
|
Real estate - residential - ITIN |
2,839 | 2,909 | 3,201 | 3,346 | 3,331 | |||||||||||||||
|
Real estate - residential - 1-4 family mortgage |
188 | 606 | 626 | 653 | 1,337 | |||||||||||||||
|
Real estate - residential - equity lines |
45 | 45 | 815 | 872 | 906 | |||||||||||||||
|
Consumer and other |
35 | 36 | 37 | 38 | 39 | |||||||||||||||
|
Total nonaccrual loans |
4,216 | 5,799 | 7,605 | 9,154 | 9,997 | |||||||||||||||
|
Accruing troubled debt restructured loans: |
||||||||||||||||||||
|
Commercial |
1,516 | 1,551 | 671 | 703 | 741 | |||||||||||||||
|
Real estate - commercial non-owner occupied |
800 | 803 | 805 | 806 | 808 | |||||||||||||||
|
Real estate - residential - ITIN |
4,554 | 4,614 | 4,655 | 4,712 | 4,761 | |||||||||||||||
|
Real estate - residential - equity lines |
376 | 380 | 441 | 445 | 450 | |||||||||||||||
|
Total accruing troubled debt restructured loans |
7,246 | 7,348 | 6,572 | 6,666 | 6,760 | |||||||||||||||
|
All other accruing impaired loans |
— | — | — | — | — | |||||||||||||||
|
Total impaired loans |
$ | 11,462 | $ | 13,147 | $ | 14,177 | $ | 15,820 | $ | 16,757 | ||||||||||
|
Gross loans outstanding at period end |
$ | 900,420 | $ | 879,835 | $ | 824,874 | $ | 815,388 | $ | 810,194 | ||||||||||
|
Impaired loans to gross loans |
1.27 |
% |
1.49 |
% |
1.72 |
% |
1.94 |
% |
2.07 |
% |
||||||||||
|
Nonaccrual loans to gross loans |
0.47 |
% |
0.66 |
% |
0.92 |
% |
1.12 |
% |
1.23 |
% |
||||||||||
| Allowance for loan and lease losses as a percent of: | ||||||||||||||||||||
|
Gross loans |
1.37 |
% |
1.36 |
% |
1.42 |
% |
1.43 |
% |
1.44 |
% |
||||||||||
|
Nonaccrual loans |
291.63 |
% |
205.64 |
% |
153.74 |
% |
127.68 |
% |
116.44 |
% |
||||||||||
|
Impaired loans |
107.27 |
% |
90.71 |
% |
82.47 |
% |
73.88 |
% |
69.47 |
% |
||||||||||
We continue to monitor credit quality and adjust the ALLL to ensure that the ALLL is maintained at a level that is adequate to cover estimated credit losses in the loan and lease portfolio. As a result of continued improved asset quality and net loan loss recoveries, no provision for loan and lease losses was necessary during the current quarter. This compared with a provision of $200 thousand for the three months ended March 31, 2017 and a $450 thousand provision for loan and lease losses during the three months ended December 31, 2017. Our ALLL as a percentage of gross loans was 1.37% as of March 31, 2018 compared to 1.44% as of March 31, 2017 and 1.36% as of December 31, 2017. 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, 2018. There is, however, no assurance that future loan and lease losses will not exceed the levels provided for in the ALLL and could possibly result in future charges to the provision for loan and lease losses.
At March 31, 2018, the recorded investment in loans classified as impaired totaled $11.5 million, with a corresponding specific reserve of $1.1 million compared to impaired loans of $16.8 million with a corresponding specific reserve of $1.3 million at March 31, 2017 and impaired loans of $13.1 million, with a corresponding specific reserve of $1.2 million at December 31, 2017. The decrease in loans classified as impaired and nonaccrual loans compared to the prior quarter is primarily due to one commercial loan relationship and one commercial real estate loan that were paid off during the quarter. The decrease in the specific reserve on impaired loans compared to the prior quarter was primarily due to one commercial loan.
|
TABLE 10 |
||||||||||||||||||||
|
TROUBLED DEBT RESTRUCTURINGS - UNAUDITED |
||||||||||||||||||||
|
(amounts in thousands) |
|
At March 31, |
At December 31, |
At September 30, |
At June 30, |
At March 31, |
||||||||||||||||
|
2018 |
2017 |
2017 |
2017 |
2017 |
||||||||||||||||
|
Nonaccrual |
$ | 3,237 | $ | 3,581 | $ | 4,403 | $ | 4,630 | $ | 4,570 | ||||||||||
|
Accruing |
7,246 | 7,348 | 6,572 | 6,666 | 6,760 | |||||||||||||||
|
Total troubled debt restructurings |
$ | 10,483 | $ | 10,929 | $ | 10,975 | $ | 11,296 | $ | 11,330 | ||||||||||
|
Troubled debt restructurings as a percentage of total gross loans |
1.16 |
% |
1.24 |
% |
1.33 |
% |
1.39 |
% |
1.40 |
% |
||||||||||
There were no new troubled debt restructurings during the three months ended March 31, 2018. As of March 31, 2018, we had 113 restructured loans that qualified as troubled debt restructurings, of which 108 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, |
||||||||||||||||
|
2018 |
2017 |
2017 |
2017 |
2017 |
||||||||||||||||
|
Total nonaccrual loans |
$ | 4,216 | $ | 5,799 | $ | 7,605 | $ | 9,154 | $ | 9,997 | ||||||||||
|
90 days past due and still accruing |
— | — | — | — | — | |||||||||||||||
|
Total nonperforming loans |
4,216 | 5,799 | 7,605 | 9,154 | 9,997 | |||||||||||||||
|
Other real estate owned |
60 | 35 | 699 | 1,517 | 814 | |||||||||||||||
|
Total nonperforming assets |
$ | 4,276 | $ | 5,834 | $ | 8,304 | $ | 10,671 | $ | 10,811 | ||||||||||
|
Nonperforming loans to gross loans |
0.47 |
% |
0.66 |
% |
0.92 |
% |
1.12 |
% |
1.23 |
% |
||||||||||
|
Nonperforming assets to total assets |
0.34 |
% |
0.46 |
% |
0.67 |
% |
0.88 |
% |
0.95 |
% |
||||||||||
The March 31, 2018 OREO balance consists of three 1-4 family residential real estate property in the amount of $60 thousand. The increase in the OREO balance compared to the prior quarter is due to the transfer of three 1-4 family residential properties to OREO totaling $60 thousand offset by the disposition of one 1-4 family residential property for $35 thousand. Net gains on sale of OREO in the current quarter were $16 thousand compared to net losses of $71 thousand and net gains of $346 thousand in the same quarter a year ago and in the prior quarter, respectively.
|
TABLE 12 |
|||||||||||||||
|
UNAUDITED CONSOLIDATED |
|||||||||||||||
|
BALANCE SHEET |
|||||||||||||||
|
(amounts in thousands, except per share data) |
|
At March 31, |
At March 31, |
Change |
At December 31, |
|||||||||||||||||
|
2018 |
2017 |
$ |
% |
2017 |
||||||||||||||||
|
Assets: |
||||||||||||||||||||
|
Cash and due from banks |
$ | 16,247 | $ | 18,315 | $ | (2,068 | ) | (11 |
)% |
$ | 17,979 | |||||||||
|
Interest-bearing deposits in other banks |
17,376 | 42,744 | (25,368 | ) | (59 |
)% |
48,991 | |||||||||||||
|
Total cash and cash equivalents |
33,623 | 61,059 | (27,436 | ) | (45 |
)% |
66,970 | |||||||||||||
|
Securities available-for-sale, at fair value |
255,917 | 181,534 | 74,383 | 41 |
% |
267,954 | ||||||||||||||
|
Securities held-to-maturity, at amortized cost |
— | 31,257 | (31,257 | ) | (100 |
)% |
— | |||||||||||||
|
Loans, net of deferred fees and costs |
902,133 | 811,640 | 90,493 | 11 |
% |
881,545 | ||||||||||||||
|
Allowance for loan and lease losses |
(12,295 | ) | (11,641 | ) | (654 | ) | 6 |
% |
(11,925 | ) | ||||||||||
|
Net loans |
889,838 | 799,999 | 89,839 | 11 |
% |
869,620 | ||||||||||||||
|
Premises and equipment, net |
14,214 | 15,903 | (1,689 | ) | (11 |
)% |
14,748 | |||||||||||||
|
Other real estate owned |
60 | 814 | (754 | ) | (93 |
)% |
35 | |||||||||||||
|
Life insurance |
22,027 | 21,494 | 533 | 2 |
% |
21,898 | ||||||||||||||
|
Deferred tax asset, net |
7,523 | 9,363 | (1,840 | ) | (20 |
)% |
6,505 | |||||||||||||
|
Goodwill and core deposit intangible, net |
1,975 | 2,196 | (221 | ) | (10 |
)% |
2,030 | |||||||||||||
|
Other assets |
20,398 | 19,132 | 1,266 | 7 |
% |
19,661 | ||||||||||||||
|
Total assets |
$ | 1,245,575 | $ | 1,142,751 | $ | 102,824 | 9 |
% |
$ | 1,269,421 | ||||||||||
|
Liabilities and shareholders' equity: |
||||||||||||||||||||
|
Demand - noninterest-bearing |
$ | 301,981 | $ | 270,412 | $ | 31,569 | 12 |
% |
$ | 305,650 | ||||||||||
|
Demand - interest-bearing |
462,551 | 407,784 | 54,767 | 13 |
% |
496,990 | ||||||||||||||
|
Savings |
107,986 | 112,738 | (4,752 | ) | (4 |
)% |
110,837 | |||||||||||||
|
Certificates of deposit |
176,233 | 213,556 | (37,323 | ) | (17 |
)% |
189,255 | |||||||||||||
|
Total deposits |
1,048,751 | 1,004,490 | 44,261 | 4 |
% |
1,102,732 | ||||||||||||||
|
Term debt: |
||||||||||||||||||||
|
Federal Home Loan Bank of San Francisco borrowings |
30,000 | — | 30,000 | 100 |
% |
— | ||||||||||||||
|
Other borrowings |
16,196 | 18,667 | (2,471 | ) | (13 |
)% |
17,096 | |||||||||||||
|
Unamortized debt issuance costs |
(127 | ) | (173 | ) | 46 | (27 |
)% |
(138 | ) | |||||||||||
|
Net term debt |
46,069 | 18,494 | 27,575 | 149 |
% |
16,958 | ||||||||||||||
|
Junior subordinated debentures |
10,310 | 10,310 | — | — |
% |
10,310 | ||||||||||||||
|
Other liabilities |
12,723 | 12,994 | (271 | ) | (2 |
)% |
12,157 | |||||||||||||
|
Total liabilities |
1,117,853 | 1,046,288 | 71,565 | 7 |
% |
1,142,157 | ||||||||||||||
|
Shareholders' equity: |
||||||||||||||||||||
|
Common stock |
51,959 | 24,800 | 27,159 | 110 |
% |
51,830 | ||||||||||||||
|
Retained earnings |
78,507 | 72,066 | 6,441 | 9 |
% |
75,700 | ||||||||||||||
|
Accumulated other comprehensive loss, net of tax |
(2,744 | ) | (403 | ) | (2,341 | ) | 581 |
% |
(266 | ) | ||||||||||
|
Total shareholders' equity |
127,722 | 96,463 | 31,259 | 32 |
% |
127,264 | ||||||||||||||
|
Total liabilities and shareholders' equity |
$ | 1,245,575 | $ | 1,142,751 | $ | 102,824 | 9 |
% |
$ | 1,269,421 | ||||||||||
|
Total interest-earning assets |
$ | 1,179,321 | $ | 1,068,066 | $ | 111,255 | 10 |
% |
$ | 1,198,942 | ||||||||||
|
Shares outstanding |
16,315 | 13,517 | 2,798 | 21 |
% |
16,272 | ||||||||||||||
|
Book value per share |
$ | 7.83 | $ | 7.14 | $ | 0.69 | 10 |
% |
$ | 7.82 | ||||||||||
|
Tangible book value per share (1) |
$ | 7.71 | $ | 6.97 | $ | 0.74 | 11 |
% |
$ | 7.70 | ||||||||||
|
(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, |
||||||||||||||||||
|
2018 |
2017 |
$ |
% |
2017 |
||||||||||||||||
|
Interest income: |
||||||||||||||||||||
|
Interest and fees on loans |
$ | 10,729 | $ | 9,384 | $ | 1,345 | 14 |
% |
$ | 10,083 | ||||||||||
|
Interest on taxable securities |
1,209 | 789 | 420 | 53 |
% |
1,211 | ||||||||||||||
|
Interest on tax-exempt securities |
463 | 530 | (67 | ) | (13 |
)% |
529 | |||||||||||||
|
Interest on interest-bearing deposits in other banks |
129 | 114 | 15 | 13 |
% |
224 | ||||||||||||||
|
Total interest income |
12,530 | 10,817 | 1,713 | 16 |
% |
12,047 | ||||||||||||||
|
Interest expense: |
||||||||||||||||||||
|
Interest on demand deposits |
221 | 148 | 73 | 49 |
% |
216 | ||||||||||||||
|
Interest on savings deposits |
59 | 47 | 12 | 26 |
% |
54 | ||||||||||||||
|
Interest on certificates of deposit |
495 | 529 | (34 | ) | (6 |
)% |
547 | |||||||||||||
|
Interest on Federal Home Loan Bank of San Francisco borrowings |
47 | — | 47 | 100 |
% |
— | ||||||||||||||
|
Interest on other borrowings |
281 | 293 | (12 | ) | (4 |
)% |
285 | |||||||||||||
|
Interest on junior subordinated debentures |
82 | 66 | 16 | 24 |
% |
76 | ||||||||||||||
|
Total interest expense |
1,185 | 1,083 | 102 | 9 |
% |
1,178 | ||||||||||||||
|
Net interest income |
11,345 | 9,734 | 1,611 | 17 |
% |
10,869 | ||||||||||||||
|
Provision for loan and lease losses |
— | 200 | (200 | ) | (100 |
)% |
450 | |||||||||||||
|
Net interest income after provision for loan and lease losses |
11,345 | 9,534 | 1,811 | 19 |
% |
10,419 | ||||||||||||||
|
Noninterest income: |
||||||||||||||||||||
|
Service charges on deposit accounts |
176 | 127 | 49 | 39 |
% |
141 | ||||||||||||||
|
ATM and point of sale fees |
266 | 266 | — | — |
% |
266 | ||||||||||||||
|
Fees on payroll and benefit processing |
169 | 191 | (22 | ) | (12 |
)% |
173 | |||||||||||||
|
Life insurance |
129 | 646 | (517 | ) | (80 |
)% |
135 | |||||||||||||
|
Gain (loss) on investment securities, net |
36 | 66 | (30 | ) | (45 |
)% |
(2 | ) | ||||||||||||
|
Federal Home Loan Bank of San Francisco dividends |
80 | 103 | (23 | ) | (22 |
)% |
81 | |||||||||||||
|
Gain (loss) on sale of OREO |
16 | (71 | ) | 87 | (123 |
)% |
346 | |||||||||||||
|
Insured cash sweep fees |
— | 32 | (32 | ) | (100 |
)% |
5 | |||||||||||||
|
Other income |
110 | 111 | (1 | ) | (1 |
)% |
137 | |||||||||||||
|
Total noninterest income |
982 | 1,471 | (489 | ) | (33 |
)% |
1,282 | |||||||||||||
|
TABLE 13 - CONTINUED |
||||||||||||||||
|
UNAUDITED |
||||||||||||||||
|
INCOME STATEMENT |
||||||||||||||||
|
(amounts in thousands, except per share data) |
|
For The Three Months Ended |
||||||||||||||||||||
|
March 31, |
Change |
December 31, |
||||||||||||||||||
|
2018 |
2017 |
$ |
% |
2017 |
||||||||||||||||
|
Noninterest expense: |
||||||||||||||||||||
|
Salaries and related benefits |
4,855 | 4,858 | (3 | ) | — |
% |
4,523 | |||||||||||||
|
Premises and equipment |
1,071 | 1,048 | 23 | 2 |
% |
1,073 | ||||||||||||||
|
Federal Deposit Insurance Corporation insurance premium |
96 | 48 | 48 | 100 |
% |
88 | ||||||||||||||
|
Data processing fees |
432 | 406 | 26 | 6 |
% |
455 | ||||||||||||||
|
Professional service fees |
345 | 384 | (39 | ) | (10 |
)% |
279 | |||||||||||||
|
Telecommunications |
216 | 211 | 5 | 2 |
% |
226 | ||||||||||||||
|
Other expenses |
1,018 | 1,035 | (17 | ) | (2 |
)% |
1,247 | |||||||||||||
|
Total noninterest expense |
8,033 | 7,990 | 43 | 1 |
% |
7,891 | ||||||||||||||
|
Income before provision for income taxes |
4,294 | 3,015 | 1,279 | 42 |
% |
3,810 | ||||||||||||||
|
Provision for income taxes: |
||||||||||||||||||||
|
Net deferred tax asset write-down |
— | — | — | — |
% |
2,490 | ||||||||||||||
|
Provision for income taxes from operations |
1,053 | 763 | 290 | 38 |
% |
1,313 | ||||||||||||||
|
Total provision for income taxes |
1,053 | 763 | 290 | 38 |
% |
3,803 | ||||||||||||||
|
Net income |
$ | 3,241 | $ | 2,252 | $ | 989 | 44 |
% |
$ | 7 | ||||||||||
|
Basic earnings per share |
$ | 0.20 | $ | 0.17 | $ | 0.03 | 18 |
% |
$ | — | ||||||||||
|
Average basic shares |
16,225 | 13,416 | 2,809 | 21 |
% |
16,195 | ||||||||||||||
|
Diluted earnings per share |
$ | 0.20 | $ | 0.17 | $ | 0.03 | 18 |
% |
$ | — | ||||||||||
|
Average diluted shares |
16,310 | 13,521 | 2,789 | 21 |
% |
16,306 | ||||||||||||||
|
TABLE 14 |
|||||||||||||||
|
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, |
||||||||||||||||
|
2018 |
2017 |
2017 |
2016 |
2015 |
||||||||||||||||
|
Earning assets: |
||||||||||||||||||||
|
Loans |
$ | 883,876 | $ | 806,793 | $ | 818,119 | $ | 752,938 | $ | 699,227 | ||||||||||
|
Taxable securities |
205,302 | 137,582 | 165,333 | 120,884 | 120,897 | |||||||||||||||
|
Tax exempt securities |
59,789 | 73,524 | 74,231 | 75,303 | 77,089 | |||||||||||||||
|
Interest-bearing deposits in other banks |
32,890 | 57,140 | 66,872 | 58,668 | 30,323 | |||||||||||||||
|
Total earning assets |
1,181,857 | 1,075,039 | 1,124,555 | 1,007,793 | 927,536 | |||||||||||||||
|
Cash and due from banks |
17,666 | 16,873 | 18,301 | 15,831 | 11,220 | |||||||||||||||
|
Premises and equipment, net |
14,557 | 16,165 | 15,567 | 15,078 | 11,552 | |||||||||||||||
|
Other assets |
34,483 | 40,228 | 39,828 | 41,048 | 42,423 | |||||||||||||||
|
Total assets |
$ | 1,248,563 | $ | 1,148,305 | $ | 1,198,251 | $ | 1,079,750 | $ | 992,731 | ||||||||||
|
Liabilities and shareholders' equity: |
||||||||||||||||||||
|
Demand - noninterest-bearing |
$ | 307,397 | $ | 262,881 | $ | 289,735 | $ | 226,368 | $ | 156,578 | ||||||||||
|
Demand - interest-bearing |
470,440 | 420,416 | 434,705 | 374,170 | 283,105 | |||||||||||||||
|
Savings |
110,725 | 113,647 | 111,376 | 104,771 | 92,659 | |||||||||||||||
|
Certificates of deposit |
181,901 | 215,202 | 205,648 | 221,074 | 238,626 | |||||||||||||||
|
Total deposits |
1,070,463 | 1,012,146 | 1,041,464 | 926,383 | 770,968 | |||||||||||||||
|
Federal Home Loan Bank of San Francisco borrowings |
12,444 | — | — | — | — | |||||||||||||||
|
Other borrowings net of unamortized debt issuance costs |
16,528 | 18,598 | 18,283 | 37,286 | 88,874 | |||||||||||||||
|
Junior subordinated debentures |
10,310 | 10,310 | 10,310 | 10,310 | 10,310 | |||||||||||||||
|
Other liabilities |
11,749 | 12,431 | 12,293 | 13,217 | 16,588 | |||||||||||||||
|
Total liabilities |
1,121,494 | 1,053,485 | 1,082,350 | 987,196 | 886,740 | |||||||||||||||
|
Shareholders' equity |
127,069 | 94,820 | 115,901 | 92,554 | 105,991 | |||||||||||||||
|
Liabilities & shareholders' equity |
$ | 1,248,563 | $ | 1,148,305 | $ | 1,198,251 | $ | 1,079,750 | $ | 992,731 | ||||||||||
|
TABLE 15 |
|||||||||||||||
|
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, |
||||||||||||||||
|
2018 |
2017 |
2017 |
2017 |
2017 |
||||||||||||||||
|
Earning assets: |
||||||||||||||||||||
|
Loans |
$ | 883,876 | $ | 839,004 | $ | 805,144 | $ | 821,321 | $ | 806,793 | ||||||||||
|
Taxable securities |
205,302 | 199,849 | 179,362 | 143,705 | 137,582 | |||||||||||||||
|
Tax exempt securities |
59,789 | 72,152 | 77,303 | 73,927 | 73,524 | |||||||||||||||
|
Interest-bearing deposits in other banks |
32,890 | 67,032 | 84,323 | 58,691 | 57,140 | |||||||||||||||
|
Total earning assets |
1,181,857 | 1,178,037 | 1,146,132 | 1,097,644 | 1,075,039 | |||||||||||||||
|
Cash and due from banks |
17,666 | 19,783 | 19,143 | 17,364 | 16,873 | |||||||||||||||
|
Premises and equipment, net |
14,557 | 14,948 | 15,362 | 15,809 | 16,165 | |||||||||||||||
|
Other assets |
34,483 | 39,192 | 40,263 | 39,630 | 40,228 | |||||||||||||||
|
Total assets |
$ | 1,248,563 | $ | 1,251,960 | $ | 1,220,900 | $ | 1,170,447 | $ | 1,148,305 | ||||||||||
|
Liabilities and shareholders' equity: |
||||||||||||||||||||
|
Demand - noninterest-bearing |
$ | 307,397 | $ | 316,961 | $ | 303,314 | $ | 275,039 | $ | 262,881 | ||||||||||
|
Demand - interest-bearing |
470,440 | 459,451 | 436,614 | 421,888 | 420,416 | |||||||||||||||
|
Savings |
110,725 | 111,725 | 110,305 | 109,857 | 113,647 | |||||||||||||||
|
Certificates of deposit |
181,901 | 194,886 | 204,044 | 208,703 | 215,202 | |||||||||||||||
|
Total deposits |
1,070,463 | 1,083,023 | 1,054,277 | 1,015,487 | 1,012,146 | |||||||||||||||
|
Federal Home Loan Bank of San Francisco borrowings |
12,444 | — | — | — | — | |||||||||||||||
|
Other borrowings net of unamortized debt issuance costs |
16,528 | 17,211 | 17,804 | 19,539 | 18,598 | |||||||||||||||
|
Junior subordinated debentures |
10,310 | 10,310 | 10,310 | 10,310 | 10,310 | |||||||||||||||
|
Other liabilities |
11,749 | 12,554 | 11,935 | 12,256 | 12,431 | |||||||||||||||
|
Total liabilities |
1,121,494 | 1,123,098 | 1,094,326 | 1,057,592 | 1,053,485 | |||||||||||||||
|
Shareholders' equity |
127,069 | 128,862 | 126,574 | 112,855 | 94,820 | |||||||||||||||
|
Liabilities & shareholders' equity |
$ | 1,248,563 | $ | 1,251,960 | $ | 1,220,900 | $ | 1,170,447 | $ | 1,148,305 | ||||||||||
About Bank of Commerce Holdings
Bank of Commerce Holdings is a bank holding company headquartered in Sacramento, California and is the parent company for Redding Bank of Commerce which operates under two separate names (Redding Bank of Commerce and Sacramento Bank of Commerce, a division of Redding Bank of Commerce). The Bank is an FDIC-insured California banking corporation providing community banking and financial services through nine offices located in northern California. The Bank was incorporated as a California banking corporation on November 25, 1981 and opened for business on October 22, 1982. The Company’s common stock is listed on the NASDAQ Global Market and trades under the symbol “BOCH”.
Contact Information:
Randall S. Eslick, President and Chief Executive Officer
Telephone Direct (916) 677-5800
James A. Sundquist, Executive Vice President and Chief Financial Officer
Telephone Direct (916) 677-5825
Samuel D. Jimenez, Executive Vice President and Chief Operating Officer
Telephone Direct (530) 722-3952
Andrea Schneck, Vice President and Senior Administrative Officer
Telephone Direct (530) 722-3959
18