California Bank of Commerce Reports Second Quarter 2016 Earnings

LAFAYETTE, Calif.--()--California Bank of Commerce (OTCQX: CABC) a San Francisco Bay Area business bank, today reported unaudited financial results for the second quarter of 2016 with net income of $1.1 million, increasing 34% over second quarter 2015. Total assets were $725 million on June 30, 2016 compared to $637 million on March 31, 2016 and $473 million on June 30, 2015.

“Our strong second quarter performance is a testament to our ability to integrate a merger and expand into new markets, while accelerating production velocity. The business community continues to embrace our brand of commercial banking in the Bay Area,” said Terry A. Peterson, President and CEO of California Bank of Commerce.

The comparability of financial information for the second quarter 2016 and year-to-date to similar periods in 2015 is affected by the Bank’s acquisition of Pan Pacific Bank with total assets of $131 million, which closed on December 31, 2015. Additionally, one-time merger related expenses year-to-date 2016, totaled $535,000 as the Bank continues its integration process with Pan Pacific - targeted for completion by the end of the third quarter 2016.

In the second quarter, the Bank completed a private placement of $4 million Tier I common equity and $5 million of Tier II equity in the form of subordinated debt in conjunction with redeeming $11 million of preferred stock held by the United States Department of Treasury (“SBLF”).

Highlights

2Q 2016 vs. 1Q 2016

  • Total deposits of $614 million at the end of the second quarter 2016 increased by $87 million or 17% compared to the first quarter of 2016. Non-interest bearing deposits of $229 million at the end of the second quarter 2016 increased $33 million, also 17% compared to the first quarter of 2016.
  • Total loans net of deferred costs and fees were $580 million at the end of the second quarter 2016, an increase of $48 million or 9% over first quarter 2016.
  • Net income of $1.1 million for the second quarter 2016 increased $126 thousand or 13% compared to the first quarter 2016.
  • Basic earnings per share were $0.173 for the second quarter compared to $0.158 in the first quarter.
  • Tangible book value per common share increased to $11.20 as of June 30, 2016.

2Q 2016 vs. 2Q 2015:

  • Total deposits of $614 million at June 30, 2016 were up $232 million or 61% over the same 2015 quarter end, while non-interest bearing deposits were up by $74 million or 42% to $229 million.
  • Loans, net of deferred costs and fees, were $580 million on June 30, 2016, increasing $200 million or 53%.
  • Net income was $1.1 million for the second quarter 2016, increasing 34%. Net income was $2.0 million for the first six months of 2016, increasing 36% or $532 thousand.
  • Credit quality remains strong, with non-performing assets to total assets decreasing to 0.30% at June 30, 2016 compared to 0.70% on the same date a year ago. The allowance for loan losses (“ALLL”) was $6.6 million at the end of the second quarter 2016, increasing $955 thousand from a year ago. ALLL was 1.14% on June 30, 2016, down from 1.50% a year ago. The ALLL ratio was affected by the merger accounting adjustments related to the Pan Pacific Bank merger as of December 31, 2015.

“We are pleased to report our second quarter results, and the successful execution of our business plans. The business community appreciates our expansion into the Fremont, San Jose and Oakland markets. We are also pleased with our year to date operating results,” said Stephen A. Cortese, Chairman of the Board for California Bank of Commerce.

About California Bank of Commerce

California Bank of Commerce offers a broad range of commercial banking services to closely held businesses and professionals located throughout the San Francisco Bay Area. The stock trades on the OTCQX marketplace under the symbol CABC. For more information on California Bank of Commerce, call us at (925) 283-2265, or visit us at www.californiabankofcommerce.com.

 
CALIFORNIA BANK OF COMMERCE
UNAUDITED SUMMARY FINANCIAL STATEMENTS
         
INCOME STATEMENT
($ Thousands)
 
Three Months Ended Year Over Year Change
30-Jun-16 31-Mar-16 30-Jun-15   $   %
Interest income $ 7,106 $ 6,820 $ 4,486 $ 2,620 58 %
Interest expense   (511 )   (422 )   (333 )   (178 ) 53 %
Net interest income before provision 6,595 6,398 4,153 2,442 59 %
Provision to the Loan Loss Reserve   (419 )   (115 )   (94 )   (325 ) NA
Net interest income after provision $ 6,176 $ 6,283 $ 4,059 $ 2,117 52 %
 
Non-interest income 708 607 556 152 27 %
Non-interest expense   (5,172 )   (5,386 )   (3,340 )   (1,832 ) 55 %
Income before tax provision 1,712 1,504 1,275 437 34 %
Provision for income taxes   (643 )   (561 )   (479 )   (164 ) 34 %
Net income $ 1,069   $ 943   $ 796   $ 273   34 %
 
Preferred Dividends   85     67     27     58   215 %
Income to Common Shareholders $ 984   $ 876   $ 769   $ 215   28 %
 
Basic Earnings per Common share $ 0.173 $ 0.158 $ 0.176 $ (0.003 ) -1 %
 
Weighted average shares outstanding 5,686,101 5,542,507 4,377,738
 
Return on Average Assets 0.64 % 0.59 % 0.70 %
Return on Average Tangible Common Equity 6.77 % 6.28 % 6.45 %
 
Non Interest Expense to Average Total Assets 3.10 % 3.79 % 2.93 %
Efficiency Ratio 70.8 % 76.9 % 70.9 %
 
CALIFORNIA BANK OF COMMERCE
UNAUDITED SUMMARY FINANCIAL STATEMENTS
       
INCOME STATEMENT
($ Thousands)
 
Six Months Ended Year Over Year Change
30-Jun-16 30-Jun-15   $   %
Interest income $ 13,926 $ 8,787 $ 5,139 58 %
Interest expense   (933 )   (656 )   (277 ) 42 %
Net interest income before provision 12,993 8,131 4,862 60 %
Provision to the Loan Loss Reserve   (534 )   (98 )   (436 ) 444 %
Net interest income after provision $ 12,459 $ 8,033 $ 4,426 55 %
 
Non-interest income 1,315 1,053 262 25 %
Non-interest expense   (10,558 )   (6,653 )   (3,905 ) 59 %
Income before tax provision 3,216 2,433 783 32 %
Provision for income taxes   (1,204 )   (953 )   (251 ) 26 %
Net income $ 2,012   $ 1,480   $ 532   36 %
 
Preferred Dividends   152     54     98   181 %
Income to Common Shareholders $ 1,860   $ 1,426   $ 435   30 %
 
Basic Earnings per Common share $ 0.331 $ 0.327 $ 0.004 1 %
 
Weighted average shares outstanding 5,614,304 4,354,441
 
Return on Average Assets 0.62 % 0.66 %
Return on Avg. Tangible Common Equity 6.53 % 6.10 %
 
Non Interest Expense to Avg. Total Assets 3.23 % 2.98 %
Efficiency Ratio 73.8 % 72.4 %
 
CALIFORNIA BANK OF COMMERCE
UNAUDITED SUMMARY FINANCIAL STATEMENTS
         
BALANCE SHEET
($ Thousands)
 
Year Over Year Change
Assets 30-Jun-16 31-Mar-16 30-Jun-15   $   %
Total Cash and Investments $ 113,029 $ 73,211 $ 78,788 $ 34,241 43 %
Loans, net of deferred costs/fees 579,749 531,579 379,460 200,289 53 %
Loan Loss Reserve (6,635 ) (6,200 ) (5,680 ) (955 ) 17 %
Other   38,805     38,345     20,053     18,752   94 %
Total Assets $ 724,948   $ 636,935   $ 472,621   $ 252,327   53 %
 
Liabilities & Shareholders' Equity
Non-interest Bearing Deposits $ 228,927 $ 195,709 $ 155,233 $ 73,694 47 %
Interest Bearing Deposits   384,759     331,045     226,090     158,669   70 %
Total Deposits $ 613,686 $ 526,754 $ 381,323 $ 232,363 61 %
Total Borrowings and Other Liabilities   38,171     31,136     30,818     7,353   24 %
Total Liabilities $ 651,857 $ 557,890 $ 412,141 $ 239,716 58 %
 
Shareholder's Equity $ 73,091   $ 79,045   $ 60,480   $ 12,611   21 %
Total Liabilities & Shareholders' Equity $ 724,948   $ 636,935   $ 472,621   $ 252,327   53 %
 
Common Shares Outstanding 5,839,134 5,542,837 4,377,738 1,461,396 33 %
Book Value per Common Share $ 12.52 $ 12.29 $ 11.31 $ 1.20 11 %
 
 

Average Balances - Period

2Q 2016 1Q 2016 2Q 2015
Total Assets $ 669,828 $ 639,882 $ 457,792
Total Loans $ 545,388 $ 519,143 $ 352,143
Total Investments $ 17,734 $ 24,996 $ 36,732
Total Earning Assets $ 616,777 $ 585,100 $ 430,416
Total Non-Interest Bearing Deposits $ 204,902 $ 208,324 $ 149,788
Total Deposits $ 559,817 $ 528,232 $ 366,949
Total Borrowings $ 33,231 $ 29,000 $ 29,000
Tangible Common Equity $ 63,312 $ 60,289 $ 49,472
 
 

Average Yields and Cost

2Q 2016 1Q 2016 2Q 2015
Net Interest Margin 4.29 % 4.38 % 3.87 %
Yield on Earning Assets 4.62 % 4.68 % 4.18 %
Cost of Interest Bearing Liabilities 0.53 % 0.50 % 0.54 %
 

End of Period

30-Jun-16 31-Mar-16 30-Jun-15
Loan Loss Reserve to Total Loans 1.14 % 1.17 % 1.50 %
 
NPAs (including accruing TDRs) to Total Assets 0.30 % 0.35 % 0.70 %
Accruing TDRs to Total Assets 0.15 % 0.17 % 0.30 %

Contacts

California Bank of Commerce
Terry A. Peterson, 510-457-3615
President and CEO
tpeterson@bankcbc.com
Mark DeVincenzi, 510-457-3770
EVP Shareholder Relations and CMO
mdevincenzi@bankcbc.com

Contacts

California Bank of Commerce
Terry A. Peterson, 510-457-3615
President and CEO
tpeterson@bankcbc.com
Mark DeVincenzi, 510-457-3770
EVP Shareholder Relations and CMO
mdevincenzi@bankcbc.com