Pacific Commerce Bank Reports Results for Second Quarter

LOS ANGELES--()--Pacific Commerce Bank (PFCI) today announced the results of the bank’s first full quarter of operations since the close of its merger with Vibra Bank on April 7, 2015.

The bank’s unaudited financial results for the quarter ended June 30, 2015 reflect: total assets of $348.4 million, total loans of $297.3 million, including loans held for sale totaling $13.0 million, and total deposits of $274.2 million. This compares with total assets of $207.1 million, total loans of $171.4 million, with no loans held for sale and total deposits of $143.9 million as of June 30, 2014.

For the quarter ended June 30, 2015, the bank reported a net loss of $16,000, or $0.00 per diluted share before adjusting for nonrecurring, merger related expenses recorded during the quarter. Net of $711,000 in nonrecurring, merger related expenses the bank’s core after tax earnings for the quarter was $498,000, or $0.08 per diluted share. This compares to net income of $405,000, or $0.09 per diluted share for the second quarter of 2014 with no merger related expenses and fewer shares outstanding.

Earnings for the first half of 2015 totaled $518,000, or $0.08 per diluted share after nonrecurring merger related expenses of $1,139,000, compared to $1,296,000, or $0.29 per diluted share, with no merger related expenses during the first half of 2014. Earnings for the first half of 2014 were favorably impacted by a $1,500,000 reversal in loan loss provision compared to a $500,000 reversal in the first half of 2015.

Frank J. Mercardante, Chief Executive Officer of Pacific Commerce Bank since the close of the merger stated, “Response from clients after the close of the merger has been very positive. The additional branch locations, products and services and significantly higher lending limits have enabled us to better serve existing clients and reach new ones. Our sales teams are fired up and our pipeline of new loan and deposit prospects is growing."

The bank offers state-of-the-art deposit and loan services, including treasury management, remote deposit and full 24 hour online banking services. “We completed the systems integration during the last quarter and expect to have all merger related tasks completed in the third quarter,” added Mercardante.

Selected highlights as of June 30, 2015:

  • Total assets were $348.4 million, compared to $207.1 million a year ago, an increase of 68.2% primarily as a result of the Vibra Bank acquisition.
  • As a result of purchase accounting, the Bank recorded Goodwill of $2.2 million and a Core Deposit Intangible of $1.4 million, net of CDI amortization at June 30, 2015.
  • Year-to-date net interest income was up 60%, to $5.5 million, from $3.4 million for the same period in 2014, primarily due to increase in loans of $125.8 million, or 73.4% in 2015.
  • Net interest margin in Q2 2015 increased to 4.31%, from 3.76% in the same period 2014, primarily due to increased loan volume.
  • Average cost of funds in Q2 2015 was 0.26% versus 0.25% for Q2 2014.
  • Non-interest income increased 44%, to $696,000, from $484,000 for the six-month period ended June 2015, due to higher service fee income and an increase in gains on the sale of SBA loans.
  • Non-interest expenses, excluding merger related expenses, increased 22%. The Bank recorded $711,000 in non-recurring, merger related expenses during the second quarter of 2015 and a total of $1,139,000 year-to-date.
  • Allowance for Loan Losses to Total Loans, excluding loans held for sale, was 1.04%, versus 2.12% a year ago, as a result of a $500,000 reversal in loan loss provision in Q1 2015 and $115.6 million in loan balance growth year-over-year, net of loans held for sale. In addition, loans held for sale totaling $13.0 million are held at a discount of 2.00% to the face value of the note.
  • Net recovery, from previously charged-off loans, was $73,000 for Q2 2015 versus $74,000 for the like quarter in 2014.
  • The bank remained “Well-Capitalized” by regulatory definition with capital ratios, as of June 30, 2015, as follows:

    Tier 1 Leverage Ratio: 10.01%
    Common Equity Tier 1 Capital Ratio: 11.19%
    Tier 1 Capital Ratio: 11.19%
    Total Capital Ratio: 12.21%

About Pacific Commerce Bank

Pacific Commerce Bank provides complete deposit and loan banking solutions to small businesses, professionals and high net worth individuals from Los Angeles to the Mexican border. The Bank is a Preferred SBA Lender and operates offices in Downtown Los Angeles, West Los Angeles, San Diego and Chula Vista. Pacific Commerce Bank stock is publicly traded on the Over the Counter Other Markets under the ticker symbol “PFCI”. 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 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.

 

Pacific Commerce Bank

Selected Financial Data – Unaudited

(Amounts are in thousands, except for book value per share and shares outstanding data)

           
BALANCE SHEET 6/30/2015 6/30/2014 % Change
Assets
Cash and due from banks $ 7,371 $ 3,537 108.4 %
Federal funds sold 29,548 22,190 33.2 %
Investment securities 362 1,131 -68.0 %
Loans held for sale 12,987 2,788 365.8 %
Loans, net of unearned income 284,281 168,649 68.6 %
Less: Allowance for loan losses   (2,952 )   (3,580 ) -17.5 %
Net Loans 281,329 165,069 70.4 %
Other real estate owned - 542 -100.0 %
Other assets   16,788     11,868   41.5 %
Total Assets $ 348,385   $ 207,124   68.2 %
 
Liabilities
Noninterest-bearing deposits $ 85,601 $ 34,976 144.7 %
Interest-bearing deposits   188,554     108,939   73.1 %
Total deposits 274,155 143,915 90.5 %
Borrowings 35,000 34,250 2.2 %
Accrued interest and other liabilities   1,452     1,276   13.8 %
Total Liabilities 310,607 179,441 73.1 %
 
Shareholders' Equity
Preferred stock 0 4,263 -100.0 %
Common stock 40,805 28,526 43.0 %
Retained earnings (3,035 ) (5,109 ) -40.6 %
Other comprehensive income   8     3   166.7 %
Total Shareholders' Equity   37,778     27,683   36.5 %
Total Liabilities & Shareholders' Equity $ 348,385   $ 207,124   109.6 %
 
Book value per share at end of period $ 5.80 $ 6.21
Shares outstanding 6,518,701 4,461,255
ALLL/Total Loans 1.04 % 2.12 %
 
       

(Amounts are in thousands, except for earnings per share data)

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

STATEMENT OF OPERATIONS 2015     2014    

%

Change

2015     2014    

%

Change

 
Total interest income $ 3,630 $ 1,893 92 % $ 5,824 $ 3,646 60 %
 
Total interest expense   205         108   90 %   332         212   57 %
 
Net interest income 3,425 1,785 92 % 5,492 3,434 60 %
 
Provision for loan losses - - - (500 ) (1,500 ) -67 %
Non-interest income 485 340 43 % 696 484 44 %
Non-interest expense (non-merger related)   3,064         1,960   91 %   4,596         3,775   22 %
Income before merger related expenses and income taxes 846 165 413 % 2,092 1,643 -27 %
Non-recurring merger related expenses 711 - - 1,139 - -
 
Income Tax Expense/(Benefit)   151         (240 ) -163 %   435         347   25 %
 
Net (Loss)/Income $ (16 )     $ 405   -104 % $ 518       $ 1,296   -60 %
 
Earnings per share $ (0.00 ) $ 0.09 $ 0.08 $ 0.29
 

Contacts

Pacific Commerce Bank
Richard Koh, Chief Financial Officer
213-617-0082

Contacts

Pacific Commerce Bank
Richard Koh, Chief Financial Officer
213-617-0082