Pacific Commerce Bancorp Reports First Quarter Results

LOS ANGELES--()--Pacific Commerce Bancorp (PCBC) (the “Company”), parent company of Pacific Commerce Bank (the “Bank”), today reported results for the first quarter of 2017.

Highlights

  • Earnings for the first quarter equaled $1,398,000, or $0.15 per diluted share.
  • The return on average assets (ROAA) and return on average equity (ROAE) for the quarter were 1.08% and 9.50% respectively.
  • The efficiency ratio for the quarter equaled 62.07%.
  • Total non-maturing deposits represented 79% of total deposits, and total non-interest bearing deposits represented 48% of total deposits at March 31, 2017.

The Company earned $1,398,000, or $0.15 per diluted share in the first quarter of 2017, compared to $556,000, or $0.08 per diluted share, in the first quarter of 2016. Earnings for the first quarter of 2016 were impacted by nonrecurring, tax affected merger related charges of $79,000, or $0.01 per diluted share, in connection with the 2016 ProAmérica Bank acquisition. The Company earned $1,526,000 or $0.17 per diluted share in the fourth quarter of 2016.

INCOME STATEMENT

Net interest income totaled $5,653,000 in the first quarter of 2017, compared to $3,699,000 in the first quarter of 2016 and $5,836,000 in the most recent linked quarter. Net interest income was positively impacted by purchase accounting accretion in each of the periods totaling $137,000 in the first quarter of 2017, $114,000 in the first quarter of 2016 and $187,000 in the fourth quarter of 2016.

The net interest margin, exclusive of the impact of purchase accounting accretion equaled 4.50%, in the first quarter of 2017 compared to 4.28% in the first quarter of 2016 and 4.33% in the fourth quarter of 2016.

The yield on average interest bearing assets, exclusive of the impact of purchase accounting accretion equaled 4.78%, in the first quarter of 2017 compared to 4.58% in the first quarter of 2016 and 4.62% in the fourth quarter of 2016. The cost of interest bearing deposits for the current quarter, exclusive of purchase accounting accretion, equaled 48 basis points, compared with 44 basis points in the first quarter of 2016 and 50 basis points in the fourth quarter of 2016. The purchase accounting accretion benefit for the current quarter equaled 6 basis points, compared to 1 basis point in the first quarter of 2016 and 6 basis points in the fourth quarter of 2016.

The Company had $6 million in borrowings during the first quarter of 2017 at an average cost of 5.68%. This compares to borrowings of $4 million in the first quarter of 2016 at an average cost of 5.52% in and $6 million in the fourth quarter of 2016 at an average cost of 5.56%.

Non-interest income in the first quarter of 2017 equaled $687,000, compared with $684,000 in the first quarter of 2016 and $784,000 in the most recent linked quarter. Exclusive of merger related charges, non-interest expenses totaled $3,957,000 in the first quarter of 2017, compared to $3,234,000 in the first quarter of 2016 and $4,100,000 in the fourth quarter of 2016. The efficiency ratio for the current period was 62.07%, compared to 73.79% and 61.94% in the first and fourth quarter of 2016, respectively, exclusive of merger related charges.

The ROAA for the first quarter of 2017 was 1.08%, compared with 0.63% and 1.11% in the first and fourth quarter of 2016, respectively. The ROAE for the first quarter of 2017 equaled 9.50%, compared with 5.62% and 10.47% in the first and fourth quarters of 2016, respectively.

CREDIT QUALITY

Credit quality remained unchanged in the most recent quarter and the current reserve for future losses was deemed adequate. Excluding $170.9 million in loans carried under purchase accounting rules which are held at a discount of 1.30% as of March 31, 2017, the allowance for loan and lease losses to total loans held for investment equaled 1.34% of loans outstanding. Total loans held for sale equaled $11.6 million at the end of the first quarter.

BALANCE SHEET

Total average assets and average interest-earning assets were $524.5 million and $497.0 million respectively at March 31, 2017. This compares with $354.8 million and $337.6 million respectively, at March 31, 2016, and $548.0 million and $519.7 million, respectively at December 31, 2016.

Average interest bearing liabilities as of March 31, 2017 totaled $252.6 million, compared with $188.4 million at March 31, 2016 and $280.5 million at December 31, 2016. Total non-maturity deposits increased to $367.6 million as of March 31, 2017, compared to $221.5 million at March 31, 2016 and $348.8 million at December 31, 2016. Total deposits increased to $467.6 million as of March 31, 2017, compared to $286.3 million at March 31, 2016 and $458.1 million at December 31, 2016.

REGULATORY CAPITAL

Shareholders’ equity at the Company as of March 31, 2017 equaled $60.3 million, compared to $39.9 million at March 31, 2016 and $58.6 million at December 31, 2016. Both the Company and Bank remained “Well-Capitalized” by regulatory definition at December 31, 2016 with capital ratios as follows:

     

Minimum

           

Required

Company

Bank

Tier 1 Leverage Ratio: 4.00 % 9.63 % 10.62 %
Common Equity Tier 1 Capital Ratio: 4.50 % 11.06 % 12.19 %
Tier 1 Capital Ratio: 6.00 % 11.06 % 12.19 %
Total Capital Ratio: 8.00 % 11.85 % 12.98 %
 

About Pacific Commerce Bancorp

Pacific Commerce Bancorp is the parent company for Pacific Commerce Bank. Pacific Commerce Bank operates six full-service branches in Los Angeles and San Diego Counties, including its wholly owned Division, ProAmérica Bank in Downtown Los Angeles. The Bank provides a complete array of deposit, treasury, cash management and loan banking solutions to small businesses, professionals and high net worth individuals from Los Angeles to the Mexico border. As a Preferred SBA Lender the Bank provides a full complement of lending solutions to small businesses throughout Southern California. Pacific Commerce Bancorp’s common stock is publicly traded on the Over the Counter Market under the ticker symbol “PCBC.” For more information please visit our website at www.pacificcommercebank.com.

Forward Looking Information

The financial information in this press release is based on unaudited financial results. Certain statements in this press release are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements are subject to risks and uncertainties and therefore the Company's actual results may differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that the Company is subject to include, but are not limited to, risks related to the local and national economy, including fluctuations in interest rates and costs and changes in economic policy; the ability of the Company to perform in accordance with its plans; competition; regulatory matters; demand for loan products; deposit flows; its ability to develop and implement new technologies; and other factors. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

 
Pacific Commerce Bancorp
Consolidated Selected Financial Data – Unaudited
(Amounts are in thousands, except for book value per share and shares outstanding data)
 
BALANCE SHEET
      March 31,       March 31,             December 31,
2017 2016 % Change 2016

Assets

Cash and due from banks $ 25,235 $ 29,829 -15.4 % $ 25,664
Interest Bearing Deposits with Other Banks 60,848 5,584 989.7 % 64,380
Federal Funds Sold 2,740 3,000 -8.7 % 3,000
Investment securities 22 209 -89.5 % 74
Mortgage Warehouse Loans Held for Sale - 3,205 -100.0 % 1,696
Other Loans Held for Sale 11,587 9,399 23.3 % 9,596
Loans, net of unearned income 413,154 295,042 40.0 % 412,102
Less: Allowance for loan losses   (3,455 )         (3,156 )       9.5 %         (3,436 )
Net Loans 421,286 304,490 38.4 % 419,958

Other assets

  25,429           16,357         55.5 %         26,484  
Total Assets $ 535,560         $ 359,469         49.0 %       $ 539,560  
 
Liabilities and Shareholders' Equity
Demand deposits $ 223,657 $ 131,230 70.4 % $ 204,984
Non-maturity interest bearing deposits 143,935 90,234 59.5 % 143,815
Time Deposits   99,988           64,832         54.2 %         109,302  
Total Deposits 467,580 286,296 63.3 % 458,101
Borrowings 5,952 31,934 -81.4 % 20,906
Accrued interest and other liabilities   1,742           1,306         33.4 %         1,925  
Total Liabilities 475,274 319,536 48.7 % 480,932
 
Shareholders' Equity
Common stock 57,244 41,422 38.2 % 56,984
Retained Earnings (Deficit) 3,042 (1,492 ) 303.9 % 1,644
Other Comprehensive Income   -           3         -100.0 %         -  
Total Shareholders' Equity   60,286           39,933         51.0 %         58,628  
Total Liabilities & Shareholders' Equity $ 535,560         $ 359,469         49.0 %       $ 539,560  
 
Book value per share at end of period $ 6.75 $ 6.08 10.9 % $ 6.58
Tangible Book Value per share at end of period $ 5.64 $ 5.53 2.0 % $ 5.46
Ending Shares outstanding 8,935,689 6,563,795 36.1 % 8,912,269
 
 
Pacific Commerce Bancorp
Consolidated Selected Financial Data – Unaudited
(Amounts are in thousands, except for book value per share and shares outstanding data)
 
STATEMENT OF INCOME
      For the Three Months Ended March 31,      
2017       2016       % change

$ change

 
Total interest income $ 5,995 $ 3,955 51.6 % $ 2,040
Total interest expense   342         256       33.6 %         86  
Net interest income 5,653 3,699 52.8 % 1,954
Provision for loan losses 0 0 N/A 0
Total non-interest income 687 684 0.4 % 3

Non-Interest Expense (Non-merger Related)

 

  3,957         3,234       22.4 %         723  

Core earnings before Merger Related Expenses and Income Taxes

2,383 1,149 107.4 % 1,234
Non-Recurring

Merger Related Expenses

0 133 -100.0 % (133 )
Income tax expense   985         460       114.1 %         525  
Net Income $ 1,398       $ 556       151.4 %       $ 842  
 
 
Basic earnings per share $ 0.16 $ 0.08
Diluted earnings per share $ 0.15 $ 0.08

Diluted core earnings per average share

$ 0.15 $ 0.10
Average shares outstanding 8,929,964 6,557,723
Diluted average shares outstanding 9,193,679 6,682,305
 

Contacts

Pacific Commerce Bancorp
Long T. Huynh, 213-617-0082
Chief Financial Officer

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