LOS ANGELES--(BUSINESS WIRE)--Pacific Commerce Bank (OTCQB: PFCI) today reported financial results for the fourth quarter and the twelve months ended December 31, 2014 that reflected annual net income after tax of $1.7 million and growth in total assets of $44.6 million, or 26% for the year. On October 30, 2014, Pacific Commerce Bank announced it had entered into a definitive agreement to merge with Vibra Bank, a transaction that is expected to close early in the second quarter of 2015. The Federal Reserve Bank of San Francisco has approved the merger, which remains subject to approval of the California Department of Business Oversight and both banks’ shareholders.
Furthermore, the Bank previously announced it had repurchased its TARP preferred shares from three private investors at a discount that added $1.1 million to the Bank’s common equity in the fourth quarter of 2014.
For the full year ended December 31, 2014, net income was $1,744,000 or $0.39 per share, which compares to net income of $4,925,000 or $1.10 per share in 2013. 2013 results included the recovery of the Bank’s $4.3 million deferred tax asset valuation allowance. In 2014, net interest income increased $1.4 million, or 22.5% due to the significant increase in loans outstanding, combined with a lower cost of funds for the year. Non-interest income, adjusted for non-recurring items in 2013 related to securities and OREO sales, increased 14.8%, or $102,000 in 2014 due primarily to increased SBA 7(a) loan production and the subsequent sale of the guaranteed portions of certain of those loans. Non-interest expense, net of merger-related and stock option expenses increased $364,000 or 5.5% on a year-over-year basis, due to increased staffing in revenue producing areas of loan production and business development, along with increased costs in risk management and compliance.
Income from operations before tax for the year-ended December 31, 2014 was $1,457,000 after adjusting for $263,000 in merger-related expenses incurred in 2014. This compares to income from operations before tax of $324,000 in 2013.
Total assets increased 26% to $217.8 million, an increase of $44.6 million over 2013 levels. Loans outstanding grew 34% or $49.5 million to $195.7 million in 2014. Total deposits increased 14% or $20.0 million to $165.5 million, with improved core deposit levels contributing to a reduction of the Bank’s overall cost of funds to 0.26% from 0.33% in 2013. Net interest margin remained stable at 4.01% in 2014 versus 4.03% in 2013.
President and Chief Executive Officer Scott R. Andrews commented, “2014 was an outstanding year for Pacific Commerce Bank in a number of key areas. Solid balance sheet growth led to the significant increase in operating income for the year, which, combined with a reversal of $1.5 million in loan loss provision due to significantly improved asset quality levels, led to the excellent net income performance of the Bank.”
Andrews further commented, “The strong financial performance and strong capital position of Pacific Commerce Bank enabled the Bank to repurchase its TARP preferred shares, leading to a significant increase in shareholder value as a result. The signing of the definitive agreement to merge with Vibra Bank was the culmination of two and a half years of hard work by the entire PCB team, which produced the turnaround that led to the Vibra Bank merger becoming a reality.”
Chairman Thomas Iino commented, “2014 was a significant year in the evolution of the Bank. Under the leadership of Scott Andrews and our dedicated team we are now positioned to take the institution to the next level. The transaction with Vibra Bank is the first step to our growth strategy to provide an attractive return on capital to our collective shareholders.”
Pacific Commerce Bank remains well capitalized after the TARP repurchase, and upon completion of the Vibra Bank merger, the Bank is poised for future growth opportunities.
The Bank’s regulatory capital ratios as of December 31, 2014 are as follows:
Tier 1 Leverage Ratio: 10.87%
Tier 1 Risk-Based Capital Ratio:
11.52%
Total Risk-Based Capital Ratio: 12.78%
Selected financial highlights as of December 31, 2014:
- Total assets were $217.8 million compared to $173.2 million a year ago, an increase of 25.8%
- Total loans were $195.7 million compared to $146.2 million a year ago, a 33.9% increase
- Total deposits were $165.5 million compared to $145.5 million a year ago, a 13.8% increase
- There is one non-accrual loan in the amount of $219,000 compared to $264,000 a year ago
- Allowance for Loan Losses to Total Loans was 1.73% versus 3.42% a year ago as a result of a $1.5 million loan loss provision reversal
- Net charge-offs totaled $128,000 for a charge-off ratio of 0.07%
- Net interest margin for the year was 4.01% compared to 4.03% for 2013
- Net interest income increased $1.4 million, or 22.5% versus 2013
- Non-interest income increased $102,000 or 14.8% net of non-recurring items
- Non-interest expenses, net of merger related and stock option expenses were up $364,000 or 5.5% higher year-over-year
- YTD average cost of funds was 0.26% versus 0.33% for 2013
- New loan originations totaled $87 million for the year compared to $77 million in 2013
- Two OREO properties were sold at gains during the year, with no remaining properties owned at year-end
About Pacific Commerce Bank
Established in 2002, Pacific Commerce Bank is a business-oriented community bank with offices in downtown Los Angeles, West Los Angeles and San Diego. Founded by local business owners and professionals, the Bank is focused on meeting the diverse financial needs of its clients, and offers a full range of loan, deposit and treasury management products and is an SBA Preferred Lender. For more information about the Bank, 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 bank’s actual results may differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that the bank 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 bank 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 bank cautions readers not to place undue reliance on any forward-looking statements. The bank 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.
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Pacific Commerce Bank |
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Selected Financial Data – Unaudited (‘000) |
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| BALANCE SHEET | 12/31/2014 | 12/31/2013 | ||||||||||
| Total Assets | $ | 217,780 | $ | 173,154 | ||||||||
| Total Investments | $ | 597 | $ | 1,219 | ||||||||
| Gross Loans | $ | 195,727 | $ | 146,303 | ||||||||
| Allowance for Loan Losses | ($3,379 | ) | ($5,006 | ) | ||||||||
| Other Real Estate Owned | $ | 0 | $ | 244 | ||||||||
| Total Deposits | $ | 165,527 | $ | 145,516 | ||||||||
| Total Borrowings | $ | 26,000 | $ | 0 | ||||||||
| Total Stockholders' Equity | $ | 25,140 | $ | 26,204 | ||||||||
| Net Charge-offs / (Recoveries) | $ | 128 | ($303 | ) | ||||||||
| Total Non-Accrual Loans | $ | 219 | $ | 264 | ||||||||
| ALLL / Total Loans | 1.73 | % | 3.42 | % | ||||||||
| ALLL / Non-Accrual Loans | 1541 | % | 1894 | % | ||||||||
| For the Three Months | ||||||||||||
| Ended December 31, | ||||||||||||
| STATEMENT OF OPERATIONS | 2014 | 2013 | ||||||||||
| Total Interest Income | $ | 2,225 | $ | 1,655 | ||||||||
| Total Interest Expense | 122 | 107 | ||||||||||
| Net Interest Income | 2,103 | 1,548 | ||||||||||
| Non-Interest Income | 114 | 288 | ||||||||||
| Non-Interest Expense | 1,682 | 1,756 | ||||||||||
| Income from Operations | 535 | 80 | ||||||||||
| Non-Recurring OREO Income | 0 | 487 | ||||||||||
| Non-Recurring OREO Expense | 0 | 443 | ||||||||||
| Merger-Related Expense | 158 | 0 | ||||||||||
| Stock Option Expense | 71 | 0 | ||||||||||
| Income Before Loan Loss Provision and Income Taxes | 306 | 124 | ||||||||||
| Provision for Loan Losses | 0 | 0 | ||||||||||
| Income Tax Expense | 167 | 390 | ||||||||||
| Net Income | $ | 139 | ($266 | ) | ||||||||
| EPS | $ | 0.03 | ($0.06 | ) | ||||||||
| For the Twelve Months | ||||||||||||
| Ended December 31, | ||||||||||||
| STATEMENT OF OPERATIONS | 2014 | 2013 | ||||||||||
| Total Interest Income | $ | 8,051 | $ | 6,664 | ||||||||
| Total Interest Expense | 448 | 456 | ||||||||||
| Net Interest Income | 7,603 | 6,208 | ||||||||||
| Non-Interest Income | 793 | 691 | ||||||||||
| Non-Interest Expense | 6,939 | 6,575 | ||||||||||
| Income from Operations | 1,457 | 324 | ||||||||||
| Non-Recurring OREO and Securities Income | 93 | 1,150 | ||||||||||
| Non-Recurring OREO Expense | 0 | 443 | ||||||||||
| Merger-Related Expense | 263 | 0 | ||||||||||
| Stock Option Expense | 313 | 0 | ||||||||||
| Income Before Loan Loss Provision and Income Taxes | 974 | 1,031 | ||||||||||
| Provision for Loan Losses | (1,500 | ) | 0 | |||||||||
| Income Tax Expense | 730 | (3,895 | ) | |||||||||
| Net Income | $ | 1,744 | $ | 4,926 | ||||||||
| EPS | $ | 0.39 | $ | 1.10 | ||||||||