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Bank of Commerce Holdings Announces Results for the Second Quarter of 2018

/EIN News/ -- SACRAMENTO, Calif., July 20, 2018 (GLOBE NEWSWIRE) -- Bank of Commerce Holdings (NASDAQ:BOCH) (the “Company”), a $1.3 billion asset bank holding company and parent company of Redding Bank of Commerce (the “Bank”), today announced financial results for the quarter and the six months ended June 30, 2018. Net income for the quarter ended June 30, 2018 was $3.6 million or $0.22 per share – diluted, compared with net income of $2.2 million or $0.15 per share – diluted for the same period of 2017. Net income for the six months ended June 30, 2018 was $6.9 million or $0.42 per share – diluted, compared with net income of $4.5 million or $0.31 per share – diluted for the same period of 2017.

Financial highlights for the second quarter of 2018:

  • Net income of $3.6 million was an increase of $1.4 million (64%) from $2.2 million earned during the same period in the prior year. Earnings of $0.22 per share – diluted was an increase of $0.07 (47%) from $0.15 per share – diluted earned during the same period in the prior year and reflects the impact of 2,738,096 shares of common stock sold and issued in the second quarter of 2017.
  • Net interest income increased $1.4 million (14%) to $11.6 million compared to $10.2 million for the same period in the prior year.
  • Return on average assets improved to 1.14% compared to 0.76% for the same period in the prior year.
  • Return on average equity improved to 11.32% compared to 7.85% for the same period in the prior year.
  • Average loans totaled $922.7 million, an increase of $101.4 million (12%) compared to average loans for the same period in the prior year.
  • Average earning assets totaled $1.2 billion, an increase of $110.6 million (10%) compared the same period in the prior year.
  • Average deposits totaled $1.1 billion, an increase of $39.3 million (4%) compared the same period in the prior year.
    o    Average non-maturing deposits totaled $884.0 million, an increase of $77.2 million (10%) compared to the same period in the prior year.
    o    Average certificates of deposit totaled $170.8 million, a decrease of $37.9 million (18%) compared to the same period in the prior year.
  • The Company’s efficiency ratio was 61.16% compared to 69.17% for the same period in the prior year.
  • Nonperforming assets at June 30, 2018 totaled $4.4 million or 0.34% of total assets, a decrease of $6.3 million (59%) compared to June 30, 2017.
  • Book value per common share was $7.97 at June 30, 2018 compared to $7.75 at June 30, 2017.
  • Tangible book value per common share was $7.85 at June 30, 2018 compared to $7.61 at June 30, 2017.

Financial highlights for the six months ended June 30, 2018:

  • Net income of $6.9 million was an increase of $2.4 million (54%) from $4.5 million earned during the same period in the prior year. Earnings of $0.42 per share – diluted was an increase of $0.11 (35%) from $0.31 per share – diluted earned during the same period in the prior year and reflects the impact of 2,738,096 shares of common stock sold and issued in the second quarter of 2017.
  • Net interest income increased $3.0 million (15%) to $22.9 million compared to $19.9 million for the same period in the prior year.
  • Return on average assets improved to 1.10% compared to 0.78% for the same period in the prior year.
  • Return on average equity improved to 10.84% compared to 8.66% for the same period in the prior year.
  • Average loans totaled $903.4 million, an increase of $89.3 million (11%) compared to average loans for the same period in the prior year.
  • Average earning assets totaled $1.2 billion, an increase of $108.8 million (10%) compared to average earning assets for the same period in the prior year.
  • Average deposits totaled $1.1 billion, an increase of $48.8 million (5%) compared to average deposits for the same period in the prior year.
    o    Average non-maturing deposits totaled $886.2 million, an increase of $68.3 million (11%) compared to average non-maturing deposits for the same period in the prior year.
    o    Average certificates of deposit totaled $176.3 million, a decrease of $35.6 million (17%) compared to average certificates of deposit for the same period in the prior year.
  • The Company’s efficiency ratio was 63.15% compared to 70.24% during the same period in the prior year.
  • Nonperforming assets at June 30, 2018 totaled $4.4 million or 0.34% of total assets, a decrease of $1.5 million (51% annualized) since December 31, 2017.
  • Book value per common share was $7.97 at June 30, 2018 compared to $7.82 at December 31, 2017.
  • Tangible book value per common share was $7.85 at June 30, 2018 compared to $7.70 at December 31, 2017.

Randall S. Eslick, President and CEO commented: “I am pleased to report another quarter of improved earnings. The diligence and hard work of our dedicated employees resulted in net income for the second quarter of $3.6 million ($0.22 per share) which was a ROAA of 1.14% and a ROAE of 11.32%. These earnings supported our decision to increase our quarterly cash dividend per share from $0.03 to $0.04.”

Forward-Looking Statements

This quarterly press release includes forward-looking information, which is subject to the “safe harbor” created by the Securities Act of 1933 and Securities Act of 1934. These forward-looking statements (which involve our plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors:

  • Competitive pressure in the banking industry and changes in the regulatory environment
  • Changes in the interest rate environment and volatility of rate sensitive assets and liabilities
  • A decline in the health of the economy nationally or regionally which could reduce the demand for loans or reduce the value of real estate collateral securing most of our loans
  • Credit quality deterioration which could cause an increase in the provision for loan and lease losses
  • Asset/Liability matching risks and liquidity risks
  • Changes in the securities markets

For additional information concerning risks and uncertainties related to the Company and its operations, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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.

                                       
TABLE 1  
SELECTED FINANCIAL INFORMATION - UNAUDITED  
(amounts in thousands except per share data)  
    For The Three Months Ended   For The Six Months Ended  
Net income, average assets and   June 30,     March 31,   June 30,  
average shareholders' equity   2018     2017     2018   2018   2017  
Net income   $ 3,618     $ 2,209     $ 3,241     $ 6,859   $ 4,461  
Average total assets   $ 1,276,697     $ 1,170,447     $ 1,248,563     $ 1,262,710   $ 1,159,438  
Average total earning assets   $ 1,208,281     $ 1,097,644     $ 1,181,857     $ 1,195,154   $ 1,086,404  
Average shareholders' equity   $ 128,181     $ 112,855     $ 127,069     $ 127,628   $ 103,888  
                                       
Selected performance ratios                                      
Return on average assets     1.14 %     0.76 %     1.05 %     1.10 %   0.78 %
Return on average equity     11.32 %     7.85 %     10.34 %     10.84 %   8.66 %
Efficiency ratio     61.16 %     69.17 %     65.17 %     63.15 %   70.24 %
                                       
Share and per share amounts                                      
Weighted average shares - basic (1)     16,245       15,014       16,225       16,237     14,220  
Weighted average shares - diluted     16,325       15,113       16,310       16,319     14,321  
Earnings per share - basic   $ 0.22     $ 0.15     $ 0.20     $ 0.42   $ 0.31  
Earnings per share - diluted   $ 0.22     $ 0.15     $ 0.20     $ 0.42   $ 0.31  
                                       
    At June 30,     At March 31,      
Share and per share amounts   2018     2017     2018          
Common shares outstanding (2)     16,318       16,260       16,315                
Book value per common share   $ 7.97     $ 7.75     $ 7.83                
Tangible book value per common share (3)   $ 7.85     $ 7.61     $ 7.71                
                                       
Capital ratios (4)                                    
Bank of Commerce Holdings                                    
Common equity tier 1 capital ratio     12.15 %     12.55 %     12.35 %              
Tier 1 capital ratio     13.07 %     13.56 %     13.31 %              
Total capital ratio     15.20 %     15.83 %     15.52 %              
Tier 1 leverage ratio     11.11 %     11.38 %     11.11 %              
Tangible common equity ratio (5)     10.02 %     10.23 %     10.11 %              
                                       
Redding Bank of Commerce                                      
Common equity tier 1 capital ratio     12.51 %     12.66 %     12.62 %              
Tier 1 capital ratio     12.51 %     12.66 %     12.62 %              
Total capital ratio     13.72 %     13.91 %     13.87 %              
Tier 1 leverage ratio     10.60 %     10.64 %     10.51 %              
                                       
(1) Excludes unvested restricted shares issued in accordance with the Company's equity incentive plan, as they are non participative in dividends or voting rights.
(2) Includes unvested restricted shares issued in accordance with the Company's equity incentive plan.
(3) Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.
(4) The Company and the Bank continue to meet all capital adequacy requirements to which they are subject. 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 June 30, 2018, the Company had total consolidated assets of $1.3 billion, gross loans of $936.8 million, allowance for loan and lease losses (“ALLL”) of $12.4 million, total deposits of $1.1 billion, and shareholders’ equity of $130.1 million.

                                               
TABLE 2
LOAN BALANCES BY TYPE - UNAUDITED
(amounts in thousands)
  At June 30,             At March 31,
      % of       % of   Change       % of
  2018     Total   2017     Total   Amount   %   2018     Total
Commercial $ 139,670     15 %   $ 145,335     18 %   $ (5,665 )   (4) %   $ 137,870     15 %
Real estate - construction and land development   21,292     2       22,275     3       (983 )   (4) %     14,723     2  
Real estate - commercial non-owner occupied   427,088     46       310,995     38       116,093     37 %     405,192     46  
Real estate - commercial owner occupied   199,412     21       191,737     24       7,675     4 %     193,286     22  
Real estate - residential - ITIN   39,424     4       43,229     5       (3,805 )   (9) %     40,425     4  
Real estate - residential - 1-4 family mortgage   33,391     4       18,904     2       14,487     77 %     30,247     3  
Real estate - residential - equity lines   28,879     3       32,133     4       (3,254 )   (10) %     30,520     3  
Consumer and other   47,660     5       50,780     6       (3,120 )   (6) %     48,157     5  
Gross loans   936,816     100 %     815,388     100 %     121,428     15 %     900,420     100 %
Deferred fees and costs   1,763             1,541             222             1,713        
Loans, net of deferred fees and costs   938,579             816,929             121,650             902,133        
Allowance for loan and lease losses   (12,388 )           (11,688 )           (700 )           (12,295 )      
Net loans $ 926,191           $ 805,241           $ 120,950           $ 889,838        
                                               
Average yield on loans during the quarter   4.85 %           4.77 %           0.08             4.92 %      
                                                       

The Company recorded gross loan balances of $936.8 million at June 30, 2018, compared with $815.4 million and $900.4 million at June 30, 2017 and March 31, 2018, respectively, an increase of $121.4 million and $36.4 million, respectively. The increase in gross loans compared to the same period a year ago and the prior period was organic and did not rely on loan pool purchases.

Average loan balances were $922.7 million for the quarter ended June 30, 2018, compared with $821.3 million for the quarter ended June 30, 2017 and $883.9 million for the quarter ended March 31, 2018, an increase of $101.4 million or 12% and an increase of $38.8 million or 18% annualized, respectively.

The average yield on loans during the current quarter was 4.85% compared to 4.77% and 4.92% for the quarters ended June 30, 2017 and March 31, 2018, respectively. The previous 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 on a non-recurring basis by ten basis points.

                                                 
TABLE 3
CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED
(amounts in thousands)
    At June 30,               At March 31,
        % of       % of   Change       % of
    2018     Total   2017     Total   Amount   %   2018     Total
                                                 
Cash and due from banks   $ 23,996     9 %   $ 23,420     7 %   $ 576     2 %   $ 16,247     6 %
Interest-bearing deposits in other banks     15,690     5       73,434     22       (57,744 )   (79) %     17,376     6  
Total cash and cash equivalents     39,686     14       96,854     29       (57,168 )   (59) %     33,623     12  
                                                 
Investment securities:                                                
U.S. government and agencies     38,994     14       24,231     7       14,763     61 %     41,179     14  
Obligations of state and political subdivisions     58,479     20       58,400     17       79     %     59,408     21  
Residential mortgage backed securities and collateralized mortgage obligations     121,218     42       91,375     28       29,843     33 %     125,567     43  
Corporate securities     3,987     1       8,312     2       (4,325 )   (52) %     3,958     1  
Commercial mortgage backed securities     24,742     9       23,421     7       1,321     6 %     25,520     9  
Other asset backed securities     219           3,870     1       (3,651 )   (94) %     285      
Total investment securities - AFS     247,639     86       209,609     62       38,030     18 %     255,917     88  
                                                 
Obligations of state and political subdivisions - HTM               31,329     9       (31,329 )   (100) %          
Total investment securities - AFS and HTM     247,639     86       240,938     71       6,701     3 %     255,917     88  
Total cash, cash equivalents and investment securities   $ 287,325     100 %   $ 337,792     100 %   $ (50,467 )   (15) %   $ 289,540     100 %
Average yield on interest-bearing due from banks and investment securities during the quarter - (nominal)     2.56 %           2.27 %           0.29             2.45 %      
                                                         

As of June 30, 2018, we maintained noninterest-bearing cash positions of $24.0 million and interest-bearing deposits of $15.7 million at the Federal Reserve Bank and correspondent banks. The reduction in cash and cash equivalents compared to a year previous reflects the seasonal decline in deposits which, in 2018, has been greater than it was in the prior two years.

Investment securities totaled $247.6 million at June 30, 2018, compared with $240.9 million and $255.9 million at June 30, 2017 and March 31, 2018, 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 second quarter of 2018, we purchased one security with a par value of $1.2 million and weighted average yield of 3.0% and sold two securities with a par value of $1.1 million and weighted average yield of 3.04%. The sales activity on available-for-sale securities resulted in $4 thousand in net realized gains. During the same period, we received $6.8 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 June 30, 2018 and 2017 were $256.6 million and 2.82% compared to $217.6 million and 3.10%, respectively. The current quarter tax equivalent yields were reduced by 16 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 June 30, 2018, our net unrealized losses on available-for-sale investment securities were $4.9 million compared with net unrealized gains of $682 thousand and net unrealized losses of $3.9 million at June 30, 2017 and March 31, 2018, 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 June 30,               At March 31,
      % of       % of     Change       % of
  2018   Total   2017   Total   Amount   %   2018   Total
Demand - noninterest-bearing $ 316,347   30 %   $ 303,560   29 %   $ 12,787     4 %   $ 301,981   29 %
Demand - interest-bearing   465,087   44       426,798   41       38,289     9 %     462,551   44  
Total demand   781,434   74       730,358   70       51,076     7 %     764,532   73  
                                               
Savings   106,170   10       109,472   10       (3,302 )   (3) %     107,986   10  
Total non-maturing deposits   887,604   84       839,830   80       47,774     6 %     872,518   83  
                                               
Certificates of deposit   166,925   16       206,395   20       (39,470 )   (19) %     176,233   17  
Total deposits $ 1,054,529   100 %   $ 1,046,225   100 %   $ 8,304     1 %   $ 1,048,751   100 %
                                               

Total deposits at June 30, 2018, increased $8.3 million or 1% to $1.1 billion compared to June 30, 2017, and increased $5.8 million or 2% annualized compared to March 31, 2018. Total non-maturing deposits increased $47.8 million or 6% compared to the same date a year ago and increased $15.1 million or 7% annualized compared to March 31, 2018. Certificates of deposit decreased $39.5 million or 19% compared to the same date a year ago and decreased $9.3 million or 21% annualized compared to March 31, 2018.

                 
TABLE 5
WHOLESALE AND RECIPROCAL DEPOSITS - UNAUDITED
(amounts in thousands)
  At June 30,   At March 31,
  2018   2017   2018
CDARS / ICS reciprocal deposits $ 60,538   $ 56,803   $ 56,732
Online listing service wholesale time deposits   25,491     42,709     29,159
Total wholesale and reciprocal deposits $ 86,029   $ 99,512   $ 85,891
                 

For calendar quarters prior to June 30, 2018, CDARS/ ICS reciprocal deposits were considered to be brokered deposits by regulatory authorities and were reported as such on quarterly Call Reports. With passage of The Economic Growth, Regulatory Relief and Consumer Protection Act in May 2018, this is no longer so.

AVERAGE COST OF FUNDS

The following table presents the average cost of interest-bearing deposits, all deposits and all interest-bearing liabilities for the periods indicated.

                                                               
TABLE 6
AVERAGE COST OF FUNDS - UNAUDITED
  For The Three Months Ended
  June 30,   March 31,   December 31,   September 30,   June 30,   March 31,   December 31,   September 30,
  2018   2018   2017   2017   2017   2017   2016   2016
Interest-bearing deposits   0.41 %     0.41 %     0.42 %     0.43 %     0.42 %     0.39 %     0.40 %     0.39 %
Interest-bearing deposits and noninterest-bearing demand   0.29 %     0.29 %     0.30 %     0.31 %     0.31 %     0.29 %     0.29 %     0.29 %
All interest-bearing liabilities   0.68 %     0.60 %     0.59 %     0.60 %     0.60 %     0.56 %     0.57 %     0.56 %
All interest-bearing liabilities and noninterest-bearing demand   0.50 %     0.43 %     0.42 %     0.43 %     0.44 %     0.42 %     0.42 %     0.42 %
                                                               



INCOME STATEMENT OVERVIEW

                                         
TABLE 7
SUMMARY INCOME STATEMENT - UNAUDITED
(amounts in thousands, except per share data)
  For The Three Months Ended                    
  June 30,   Change   March 31,   Change
  2018   2017   Amount   %   2018   Amount   %
Interest income $ 12,990   $ 11,320   $ 1,670     15 %   $ 12,530   $ 460     4 %
Interest expense   1,410     1,145     265     23 %     1,185     225     19 %
Net interest income   11,580     10,175     1,405     14 %     11,345     235     2 %
Provision for loan and lease losses       300     (300 )   (100) %             %
Noninterest income   962     995     (33 )   (3) %     982     (20 )   (2) %
Noninterest expense   7,671     7,726     (55 )   (1) %     8,033     (362 )   (5) %
Income before provision for income taxes   4,871     3,144     1,727     55 %     4,294     577     13 %
Provision for income taxes   1,253     935     318     34 %     1,053     200     19 %
Net income $ 3,618   $ 2,209   $ 1,409     64 %   $ 3,241   $ 377     12 %
                                         
Basic earnings per share $ 0.22   $ 0.15   $ 0.07     47 %   $ 0.20   $ 0.02     10 %
Average basic shares   16,245     15,014     1,231     8 %     16,225     20     %
Diluted earnings per share $ 0.22   $ 0.15   $ 0.07     47 %   $ 0.20   $ 0.02     10 %
Average diluted shares   16,325     15,113     1,212     8 %     16,310     15     %
Dividends declared per common share $ 0.04   $ 0.03   $ 0.01     33 %   $ 0.03   $ 0.01     33 %
                                             

Second Quarter of 2018 Compared With Second Quarter of 2017

Net income for the second quarter of 2018 increased $1.4 million compared to the second quarter of 2017. In the current quarter, net interest income was $1.4 million higher, provision for loan and lease losses was $300 thousand lower and noninterest expense was $55 thousand lower. These positive changes were offset by noninterest income that was $33 thousand lower, and a provision for income taxes that was $318 thousand higher.

Net Interest Income

Net interest income increased $1.4 million compared to the same period a year ago.

Interest income for the three months ended June 30, 2018 increased $1.7 million or 15% to $13.0 million:

  • Interest and fees on loans increased $1.4 million due to a $101.4 million increase in average loan balances and an eight basis point increase in the average yield on the loan portfolio.

  • Interest on securities increased $285 thousand due to a $38.9 million increase in average securities balances and a five basis point increase in the average yield on the securities portfolio.

  • Interest on interest-bearing deposits due from banks decreased $21 thousand primarily due to a $29.7 million decrease in average interest-bearing deposit balances, partially offset by an 80 basis point increase in average yield resulting from increased fed funds rates.

Interest expense for the second quarter of 2018 increased $265 thousand or 23% to $1.4 million:

  • Interest expense on interest bearing deposits decreased $9 thousand. Average interest-bearing demand and savings deposit balances increased $43.0 million, while average certificate of deposit balances decreased $37.9 million. The average rate paid on interest-bearing deposits decreased one basis point.

  • Interest expense on other interest bearing liabilities increased $274 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 $300 thousand for the same quarter a year ago.

Noninterest Income

Noninterest income for the three months ended June 30, 2018 decreased $33 thousand compared to the second quarter for 2017, a variance not concentrated in any one item.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2018 decreased $55 thousand compared to the same period a year previous. The net decrease was due to the following:

  • $145 thousand in decreased professional fees.
  • $137 thousand decrease related to software development project costs that were written off in the same period a year previous.
  • $87 thousand decrease in telecommunications and occupancy costs.
  • $366 thousand increase in salaries and related benefit costs that increased primarily as a result of additional employees hired in our Sacramento market.

The Company’s efficiency ratio was 61.16% for the second quarter of 2018 compared to 69.17% during the same period in 2017.

Income Tax Provision

For the three months ended June 30, 2018, our income tax provision of $1.3 million on pre-tax income of $4.9 million was an effective tax rate of 25.7%. 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%. This compares with a provision for income taxes for the second quarter of the prior year of $935 thousand on pre-tax income of $3.1 million (29.7% effective tax rate).

Second Quarter of 2018 Compared With First Quarter of 2018

Net income for the second quarter of 2018 increased $377 thousand compared to the first quarter of 2018. In the current quarter, net interest income was $235 thousand higher and noninterest expense was $362 thousand lower. These positive changes were offset by noninterest income that was $20 thousand lower and a provision for income taxes that was $200 thousand higher.

Net Interest Income

Net interest income increased $235 thousand over the prior quarter.

Interest income for the three months ended June 30, 2018 increased $460 thousand or 4% to $13.0 million.

  • Interest and fees on loans increased $435 thousand due to a $38.8 million increase in average loan balances and a seven basis point decrease in the average yield on the loan portfolio.
  • Interest on investment securities increased $19 thousand due to an eight basis point increase in average yield partially offset by an $8.5 million decrease in average securities balances.
  • Interest on interest-bearing deposits due from banks increased $6 thousand due to a 27 basis point increase average yields partially offset by a $3.8 million decrease in average balances.

Interest expense for the three months ended June 30, 2018 increased $225 thousand or 19% to $1.4 million.

  • Interest expense on deposits declined $8 thousand as average interest-bearing demand and savings deposits decreased $6.4 million, average certificates of deposit declined $11.1 million and the average rate paid on these deposits was unchanged.
  • Interest expense on borrowings from the Federal Home loan Bank of San Francisco increased $220 thousand. Federal Home loan Bank of San Francisco borrowings averaged $55.3 million compared to an average balance of $12.4 million for the prior quarter.
  • Interest expense on other term debt increased $13 thousand.

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 or previous quarter.

Noninterest Income

Noninterest income for the three months ended June 30, 2018 decreased $20 thousand, a variance not concentrated in any one item.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2018 decreased $362 thousand compared to the first quarter of 2018. The decrease was primarily related to employee compensation.

The Company’s efficiency ratio was 61.16% for the second quarter of 2018 compared to 65.17% during the prior quarter.

Income Tax Provision

For the three months ended June 30, 2018, our income tax provision of $1.3 million on pre-tax income of $4.9 million with an effective tax rate of 25.72%. This compares with a provision for income taxes for the prior quarter of $1.1 million on pretax income of $4.3 million (24.5% effective tax rate).

Earnings Per Share

Diluted earnings per share were $0.22 for the three months ended June 30, 2018 compared with diluted earnings per share of $0.15 for the same period a year ago and diluted earnings per share of $0.20 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.

                                                       
TABLE 8a
NET INTEREST MARGIN - UNAUDITED
(amounts in thousands)
    For The Three Months Ended
    June 30, 2018   June 30, 2017   March 31, 2018
    Average         Yield /   Average         Yield /   Average         Yield /
(Amounts in thousands)   Balance   Interest(1)   Rate (5)   Balance   Interest(1)   Rate (5)   Balance   Interest(1)   Rate (5)
Interest-earning assets:                                                      
Net loans (2)   $ 922,687   $ 11,164   4.85 %   $ 821,321   $ 9,758   4.77 %   $ 883,876   $ 10,729   4.92 %
Taxable securities     206,247     1,278   2.49 %     143,705     872   2.43 %     205,302     1,209   2.39 %
Tax-exempt securities     50,306     413   3.29 %     73,927     534   2.90 %     59,789     463   3.14 %
Interest-bearing deposits in other banks     29,041     135   1.86 %     58,691     156   1.07 %     32,890     129   1.59 %
Average interest- earning assets     1,208,281     12,990   4.31 %     1,097,644     11,320   4.14 %     1,181,857     12,530   4.30 %
Cash and due from banks     19,880                 17,364                 17,666            
Premises and equipment, net     14,167                 15,809                 14,557            
Other assets     34,369                 39,630                 34,483            
Average total assets   $ 1,276,697               $ 1,170,447               $ 1,248,563            
                                                       
Interest-bearing liabilities:                                                      
Interest-bearing demand   $ 467,651     215   0.18 %   $ 421,888     184   0.17 %   $ 470,440     221   0.19 %
Savings deposits     107,108     64   0.24 %     109,857     47   0.17 %     110,725     59   0.22 %
Certificates of deposit     170,824     488   1.15 %     208,703     545   1.05 %     181,901     495   1.10 %
Federal Home Loan Bank of San Francisco borrowings     55,275     267   1.94 %     1,209     3   1.00 %     12,444     47   1.53 %
Other borrowings net of unamortized debt issuance costs     15,614     279   7.17 %     18,330     295   6.46 %     16,528     281   6.90 %
Junior subordinated
debentures
    10,310     97   3.77 %     10,310     71   2.76 %     10,310     82   3.23 %
Average interest-bearing liabilities     826,782     1,410   0.68 %     770,297     1,145   0.60 %     802,348     1,185   0.60 %
Noninterest-bearing demand     309,199                 275,039                 307,397            
Other liabilities     12,535                 12,256                 11,749            
Shareholders’ equity     128,181                 112,855                 127,069            
Average liabilities and shareholders’ equity   $ 1,276,697               $ 1,170,447               $ 1,248,563            
Net interest income and net interest margin (4)         $ 11,580   3.84 %         $ 10,175   3.72 %         $ 11,345   3.89 %
Tax equivalent net interest margin (3)               3.88 %               3.82 %               3.94 %
                                                       
(1) Interest income on loans is net of deferred fees and costs of approximately $145 thousand, $131 thousand, and $137 thousand for the three months ended June 30, 2018, and 2017 and March 31, 2018, respectively.
(2) Net loans includes average nonaccrual loans of $4.2 million, $9.8 million and $4.8 million for the three months ended June 30, 2018 and 2017 and March 31, 2018, 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 $110 thousand, $275 thousand and $123 thousand for the three months ended June 30, 2018 and 2017 and March 31, 2018, 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 8b  
NET INTEREST MARGIN - UNAUDITED  
(amounts in thousands)  
    For The Six Months Ended  
    June 30, 2018   June 30, 2017  
    Average         Yield /   Average         Yield /  
(Amounts in thousands)   Balance   Interest(1)   Rate (5)   Balance   Interest(1)   Rate (5)  
Interest-earning assets:                                      
Net loans (2)   $ 903,389   $ 21,893   4.89 %   $ 814,098   $ 19,142   4.74 %  
Taxable securities     205,777     2,487   2.44 %     140,660     1,661   2.38 %  
Tax-exempt securities     55,021     876   3.21 %     73,726     1,064   2.91 %  
Interest-bearing deposits in other banks     30,967     264   1.72 %     57,920     270   0.94 %  
Average interest-earning assets     1,195,154     25,520   4.31 %     1,086,404     22,137   4.11 %  
Cash and due from banks     18,767                 17,120              
Premises and equipment, net     14,361                 15,986              
Other assets     34,428                 39,928              
Average total assets   $ 1,262,710               $ 1,159,438              
                                       
Interest-bearing liabilities:                                      
Interest-bearing demand   $ 469,038     436   0.19 %   $ 421,156     332   0.16 %  
Savings deposits     108,907     123   0.23 %     111,742     94   0.17 %  
Certificates of deposit     176,332     983   1.12 %     211,934     1,074   1.02 %  
Federal Home Loan Bank of San Francisco borrowings     33,978     314   1.86 %     608     3   1.00 %  
Other borrowings net of unamortized debt issuance costs     16,069     560   7.03 %     18,463     588   6.42 %  
Junior subordinated debentures     10,310     179   3.50 %     10,310     137   2.68 %  
Average interest-bearing liabilities     814,634     2,595   0.64 %     774,213     2,228   0.58 %  
Noninterest-bearing demand     308,304                 268,994              
Other liabilities     12,144                 12,343              
Shareholders’ equity     127,628                 103,888              
Average liabilities and shareholders’ equity   $ 1,262,710               $ 1,159,438              
Net interest income and net interest margin (4)         $ 22,925   3.87 %         $ 19,909   3.70 %  
Tax equivalent net interest margin (3)               3.91 %               3.80 %  
                                       
(1) Interest income on loans is net of deferred fees and costs of approximately $282 thousand and $328 thousand for the six months ended June 30, 2018 and 2017, respectively.
(2) Net loans includes average nonaccrual loans of $4.5 million and $10.3 million for the six months ended June 30, 2018 and 2017, respectively.
(3) Tax-exempt income has been adjusted to tax equivalent basis at a 21% tax rate for 2018 and at a 34% tax rate for 2017. The amount of such adjustments was an addition to recorded income of approximately $233 thousand and $548 thousand for the six months ended June 30, 2018 and 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
  June 30,   March 31,   December 31,   September 30,   June 30,
  2018   2018   2017   2017   2017
Beginning balance ALLL $ 12,295     $ 11,925     $ 11,692     $ 11,688     $ 11,641  
Provision for loan and lease losses               450             300  
Loans charged-off   (382)       (390)       (451)       (245)       (359)  
Loan loss recoveries   475       760       234       249       106  
Ending balance ALLL $ 12,388     $ 12,295     $ 11,925     $ 11,692     $ 11,688  
                                       
  At June 30,   At March 31,   At December 31,   At September 30,   At June 30,
  2018   2018   2017   2017   2017
Nonaccrual loans:                                      
Commercial $ 1,358     $ 1,109     $ 1,603     $ 2,309     $ 2,410  
Real estate - commercial non-owner occupied                           1,196  
Real estate - commercial owner occupied               600       617       639  
Real estate - residential - ITIN   2,613       2,839       2,909       3,201       3,346  
Real estate - residential - 1-4 family mortgage   184       188       606       626       653  
Real estate - residential - equity lines   44       45       45       815       872  
Consumer and other   33       35       36       37       38  
Total nonaccrual loans   4,232       4,216       5,799       7,605       9,154  
Accruing troubled debt restructured loans:                                      
Commercial   1,420       1,516       1,551       671       703  
Real estate - commercial non-owner occupied   799       800       803       805       806  
Real estate - residential - ITIN   4,592       4,554       4,614       4,655       4,712  
Real estate - residential - equity lines   372       376       380       441       445  
Total accruing troubled debt restructured loans   7,183       7,246       7,348       6,572       6,666  
                                       
All other accruing impaired loans                            
                                       
Total impaired loans $ 11,415     $ 11,462     $ 13,147     $ 14,177     $ 15,820  
                                       
Gross loans outstanding at period end $ 936,816     $ 900,420     $ 879,835     $ 824,874     $ 815,388  
                                       
Impaired loans to gross loans   1.22 %     1.27 %     1.49 %     1.72 %     1.94 %
Nonaccrual loans to gross loans   0.45 %     0.47 %     0.66 %     0.92 %     1.12 %
                                       
Allowance for loan and lease losses as a percent of:                          
Gross loans   1.32 %     1.37 %     1.36 %     1.42 %     1.43 %
Nonaccrual loans   292.72 %     291.63 %     205.64 %     153.74 %     127.68 %
Impaired loans   108.52 %     107.27 %     90.71 %     82.47 %     73.88 %
                                       

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 or prior quarter. This compared with a provision of $300 thousand for the three months ended June 30, 2017. Our ALLL as a percentage of gross loans was 1.32% as of June 30, 2018 compared to 1.43% as of June 30, 2017 and 1.37% as of March 31, 2018. Based on the Bank’s ALLL methodology, which uses criteria such as risk factors and historical loss rates, and given the ongoing improvements in asset quality, management believes the Company’s ALLL is adequate at June 30, 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 June 30, 2018, the recorded investment in loans classified as impaired totaled $11.4 million, with a corresponding specific reserve of $1.2 million compared to impaired loans of $15.8 million with a corresponding specific reserve of $1.1 million at June 30, 2017 and impaired loans of $11.5 million, with a corresponding specific reserve of $1.1 million at March 31, 2018.

                                         
TABLE 10
TROUBLED DEBT RESTRUCTURINGS - UNAUDITED
(amounts in thousands)
    At June 30,   At March 31,   At December 31,   At September 30,   At June 30,
    2018   2018   2017   2017   2017
Nonaccrual   $ 3,218     $ 3,237     $ 3,581     $ 4,403     $ 4,630  
Accruing     7,183       7,246       7,348       6,572       6,666  
Total troubled debt restructurings   $ 10,401     $ 10,483     $ 10,929     $ 10,975     $ 11,296  
                                         
Troubled debt restructurings as a percentage of total gross loans     1.11 %     1.16 %     1.24 %     1.33 %     1.39 %
                                         

There were no new troubled debt restructurings during the three months ended June 30, 2018. As of June 30, 2018, we had 110 restructured loans that qualified as troubled debt restructurings, of which all were performing according to their restructured terms.

                                         
TABLE 11
NONPERFORMING ASSETS - UNAUDITED
(amounts in thousands)
    At June 30,   At March 31,   At December 31,   At September 30,   At June 30,
    2018   2018   2017   2017   2017
Total nonaccrual loans   $  4,232      $  4,216      $  5,799      $  7,605      $  9,154   
90 days past due and still accruing      —        —        —        —        —  
Total nonperforming loans      4,232         4,216         5,799         7,605         9,154   
                                         
Other real estate owned ("OREO")      140         60         35         699         1,517   
Total nonperforming assets   $  4,372      $  4,276      $  5,834      $  8,304      $  10,671   
                                         
Nonperforming loans to gross loans     0.45 %     0.47 %     0.66 %     0.92 %     1.12 %
Nonperforming assets to total assets     0.34 %     0.34 %     0.46 %     0.67 %     0.88 %
                                         

The June 30, 2018 OREO balance consists of five 1-4 family residential real estate properties in the amount of $140 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 $79 thousand. There were no OREO dispositions in the current quarter compared to sales resulting in net gains of $12 thousand and net gains of $16 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 June 30,   At June 30,   Change   At March 31,
    2018     2017     $   %   2018  
Assets:                              
Cash and due from banks   $ 23,996     $ 23,420     $ 576     2 %   $ 16,247  
Interest-bearing deposits in other banks     15,690       73,434       (57,744 )   (79) %     17,376  
Total cash and cash equivalents     39,686       96,854       (57,168 )   (59) %     33,623  
                               
Securities available-for-sale, at fair value     247,639       209,609       38,030     18 %     255,917  
Securities held-to-maturity, at amortized cost           31,329       (31,329 )   (100) %      
Loans, net of deferred fees and costs     938,579       816,929       121,650     15 %     902,133  
Allowance for loan and lease losses     (12,388 )     (11,688 )     (700 )   6 %     (12,295)  
Net loans     926,191       805,241       120,950     15 %     889,838  
                               
Premises and equipment, net     13,908       15,417       (1,509 )   (10) %     14,214  
Other real estate owned     140       1,517       (1,377 )   (91) %     60  
Life insurance     22,155       21,629       526     2 %     22,027  
Deferred tax asset, net     7,815       8,723       (908 )   (10) %     7,523  
Goodwill and core deposit intangible, net     1,920       2,141       (221 )   (10) %     1,975  
Other assets     22,050       19,634       2,416     12 %     20,398  
Total assets   $ 1,281,504     $ 1,212,094     $ 69,410     6 %   $ 1,245,575  
                               
Liabilities and shareholders' equity:                              
Demand - noninterest-bearing   $ 316,347     $ 303,560     $ 12,787     4 %   $ 301,981  
Demand - interest-bearing     465,087       426,798       38,289     9 %     462,551  
Savings     106,170       109,472       (3,302 )   (3) %     107,986  
Certificates of deposit     166,925       206,395       (39,470 )   (19 %     176,233  
Total deposits     1,054,529       1,046,225       8,304     1 %     1,048,751  
                               
Term debt:                              
Federal Home Loan Bank of San Francisco borrowings     60,000             60,000     100 %     30,000  
Other borrowings     15,296       18,300       (3,004 )   (16) %     16,196  
Unamortized debt issuance costs     (115 )     (161 )     46     (29 %     (127 )
Net term debt     75,181       18,139       57,042     314 %     46,069  
                               
Junior subordinated debentures     10,310       10,310           %     10,310  
Other liabilities     11,406       11,468       (62 )   (1) %     12,723  
Total liabilities     1,151,426       1,086,142       65,284     6 %     1,117,853  
                               
Shareholders' equity:                              
Common stock     52,043       51,651       392     1 %     51,959  
Retained earnings     81,475       73,789       7,686     10 %     78,507  
Accumulated other comprehensive (loss) income, net of tax     (3,440 )     512       (3,952 )   (772) %     (2,744 )
Total shareholders' equity     130,078       125,952       4,126     3 %     127,722  
                               
Total liabilities and shareholders' equity   $ 1,281,504     $ 1,212,094     $ 69,410     6 %   $ 1,245,575  
                               
Total interest-earning assets   $ 1,206,791     $ 1,130,619     $ 76,172     7 %   $ 1,179,321  
Shares outstanding     16,318       16,260       58     %     16,315  
Book value per share   $ 7.97     $ 7.75     $ 0.22     3 %   $ 7.83  
Tangible book value per share (1)   $ 7.85     $ 7.61     $ 0.24     3 %   $ 7.71  
                               
(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   For The Six Months Ended
    June 30,   Change   March 31,   June 30,
    2018   2017   $   %   2018   2018   2017  
Interest income:                                          
Interest and fees on loans   $ 11,164   $ 9,758   $ 1,406     14 %   $ 10,729   $ 21,893   $ 19,142  
Interest on taxable securities     1,278     872     406     47 %     1,209     2,487     1,661  
Interest on tax-exempt securities     413     534     (121 )   (23) %     463     876     1,064  
Interest on interest-bearing deposits in other banks     135     156     (21 )   (13) %     129     264     270  
Total interest income     12,990     11,320     1,670     15 %     12,530     25,520     22,137  
Interest expense:                                          
Interest on demand deposits     215     184     31     17 %     221     436     332  
Interest on savings deposits     64     47     17     36 %     59     123     94  
Interest on certificates of deposit     488     545     (57 )   (10) %     495     983     1,074  
Interest on Federal Home Loan Bank of
San Francisco borrowings
    267     3     264     8,800 %     47     314     3  
Interest on other borrowings     279     295     (16 )   (5) %     281     560     588  
Interest on junior subordinated debentures     97     71     26     37 %     82     179     137  
Total interest expense     1,410     1,145     265     23 %     1,185     2,595     2,228  
Net interest income     11,580     10,175     1,405     14 %     11,345     22,925     19,909  
Provision for loan and lease losses         300     (300 )   (100) %             500  
Net interest income after provision
for loan and lease losses
    11,580     9,875     1,705     17 %     11,345     22,925     19,409  
Noninterest income:                                          
Service charges on deposit accounts     175     142     33     23 %     176     351     269  
ATM and point of sale fees     300     288     12     4 %     266     566     554  
Fees on payroll and benefit processing     146     147     (1 )   (1) %     169     315     338  
Life insurance     127     135     (8 )   (6) %     129     256     781  
Gain (loss) on investment securities, net     4     35     (31 )   (89) %     36     40     101  
Federal Home Loan Bank of
San Francisco dividends
    95     54     41     76 %     80     175     157  
Gain (loss) on sale of OREO         12     (12 )   (100) %     16     16     (59 )
Insured cash sweep fees         73     (73 )   (100) %             105  
Other income     115     109     6     6 %     110     225     220  
Total noninterest income     962     995     (33 )   (3) %     982     1,944     2,466  
                                               


                                           
TABLE 13 - CONTINUED
UNAUDITED
INCOME STATEMENT
(amounts in thousands, except per share data)
    For The Three Months Ended   For The Six Months Ended
    June 30,   Change   March 31,   June 30,
    2018   2017   $   %   2018   2018   2017
Noninterest expense:                                          
Salaries and related benefits     4,513     4,147     366     9 %     4,855     9,368     9,005
Premises and equipment     1,016     1,054     (38 )   (4) %     1,071     2,087     2,102
Federal Deposit Insurance Corporation insurance premium     93     104     (11 )   (11) %     96     189     152
Data processing fees     471     451     20     4 %     432     903     857
Professional service fees     314     459     (145 )   (32) %     345     659     843
Telecommunications     178     223     (45 )   (20) %     216     394     434
Other expenses     1,086     1,288     (202 )   (16) %     1,018     2,104     2,323
Total noninterest expense     7,671     7,726     (55 )   (1) %     8,033     15,704     15,716
Income before provision for income taxes     4,871     3,144     1,727     55 %     4,294     9,165     6,159
Provision for income taxes     1,253     935     318     34 %     1,053     2,306     1,698
Net income   $ 3,618   $ 2,209   $ 1,409     64 %   $ 3,241   $ 6,859   $ 4,461
                                           
Basic earnings per share   $ 0.22   $ 0.15   $ 0.07     47 %   $ 0.20   $ 0.42   $ 0.31
Average basic shares     16,245     15,014     1,231     8 %     16,225     16,237     14,220
Diluted earnings per share   $ 0.22   $ 0.15   $ 0.07     47 %   $ 0.20   $ 0.42   $ 0.31
Average diluted shares     16,325     15,113     1,212     8 %     16,310     16,319     14,321
                                             



                               
TABLE 14
UNAUDITED CONDENSED CONSOLIDATED
YEAR TO DATE AVERAGE BALANCE SHEETS
(amounts in thousands)
  For the Six Months Ended   For the Twelve Months Ended
    June 30,   June 30,   December 31,   December 31,   December 31,
    2018   2017   2017   2016   2015
Earning assets:                            
Loans   $  903,389    $  814,098    $  818,119    $  752,938    $  699,227 
Taxable securities      205,777       140,660       165,333       120,884       120,897 
Tax exempt securities      55,021       73,726       74,231       75,303       77,089 
Interest-bearing deposits in other banks      30,967       57,920       66,872       58,668       30,323 
Total earning assets      1,195,154       1,086,404       1,124,555       1,007,793       927,536 
                               
Cash and due from banks      18,767       17,120       18,301       15,831       11,220 
Premises and equipment, net      14,361       15,986       15,567       15,078       11,552 
Other assets      34,428       39,928       39,828       41,048       42,423 
Total assets   $  1,262,710    $  1,159,438    $  1,198,251    $  1,079,750    $  992,731 
                               
Liabilities and shareholders' equity:                              
Demand - noninterest-bearing   $  308,304    $  268,994    $  289,735    $  226,368    $  156,578 
Demand - interest-bearing      469,038       421,156       434,705       374,170       283,105 
Savings      108,907       111,742       111,376       104,771       92,659 
Certificates of deposit      176,332       211,934       205,648       221,074       238,626 
Total deposits      1,062,581       1,013,826       1,041,464       926,383       770,968 
                               
Federal Home Loan Bank of San Francisco borrowings      33,978       608       302       17,856       87,548 
Other borrowings net of unamortized debt issuance costs      16,069       18,463       17,981       19,430       1,326 
Junior subordinated debentures      10,310       10,310       10,310       10,310       10,310 
Other liabilities      12,144       12,343       12,293       13,217       16,588 
Total liabilities      1,135,082       1,055,550       1,082,350       987,196       886,740 
                               
Shareholders' equity      127,628       103,888       115,901       92,554       105,991 
Liabilities & shareholders' equity   $  1,262,710    $  1,159,438    $  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
    June 30,   March 31,   December 31,   September 30,   June 30,
    2018   2018   2017   2017   2017
Earning assets:                              
Loans   $  922,687    $  883,876    $  839,004    $  805,144    $  821,321 
Taxable securities      206,247       205,302       199,849       179,362       143,705 
Tax exempt securities      50,306       59,789       72,152       77,303       73,927 
Interest-bearing deposits in other banks      29,041       32,890       67,032       84,323       58,691 
Total earning assets      1,208,281       1,181,857       1,178,037       1,146,132       1,097,644 
                               
Cash and due from banks      19,880       17,666       19,783       19,143       17,364 
Premises and equipment, net      14,167       14,557       14,948       15,362       15,809 
Other assets      34,369       34,483       39,192       40,263       39,630 
Total assets   $  1,276,697    $  1,248,563    $  1,251,960    $  1,220,900    $  1,170,447 
                               
Liabilities and shareholders' equity:                              
Demand - noninterest-bearing   $  309,199    $  307,397    $  316,961    $  303,314    $  275,039 
Demand - interest-bearing      467,651       470,440       459,451       436,614       421,888 
Savings      107,108       110,725       111,725       110,305       109,857 
Certificates of deposit      170,824       181,901       194,886       204,044       208,703 
Total deposits      1,054,782       1,070,463       1,083,023       1,054,277       1,015,487 
                               
Federal Home Loan Bank of San Francisco borrowings      55,275       12,444       —      —      1,209 
Other borrowings net of unamortized debt issuance costs      15,614       16,528       17,211       17,804       18,330 
Junior subordinated debentures      10,310       10,310       10,310       10,310       10,310 
Other liabilities      12,535       11,749       12,554       11,935       12,256 
Total liabilities      1,148,516       1,121,494       1,123,098       1,094,326       1,057,592 
                               
Shareholders' equity      128,181       127,069       128,862       126,574       112,855 
Liabilities & shareholders' equity   $  1,276,697    $  1,248,563    $  1,251,960    $  1,220,900    $  1,170,447 
                               

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

 

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