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Presidio Bank Reports Results for the Second Quarter 2014

Net Income up 56% over Second Quarter 2013

Total Loans exceed $400 million for the first time

SAN FRANCISCO--(BUSINESS WIRE)--Presidio Bank (OTCBB: PDOB), a Bay Area business bank, today reported unaudited results for the second quarter ended June 30, 2014 with net income for the quarter of $830 thousand, a 56% increase over the $531 thousand achieved in the second quarter of 2013. Loans and total assets also grew to record levels during the quarter.

“The second quarter was another strong quarter for the Bank”

“The second quarter was another strong quarter for the Bank,” said Presidio Bank President and CEO Steve Heitel. “It is particularly pleasing for me to see the level of income growth despite concurrently investing in our future with expenses related to opening our new San Mateo Office.”

Financial Highlights

  • Total Loans outstanding grew by $19 million or 5% over the quarter ended March 31, 2014 and by $75 million or 23% over the quarter ended June 30, 2013.
  • Total Deposits decreased by $15 million or 4% from the quarter ended March 31, 2014 but increased by $25 million or 7% from the quarter ended June 30, 2013. As reported earlier, a number of depositors were holding higher than usual balances at end of the first quarter which normalized during the second quarter.
  • Net interest income of $4.6 million in the second quarter was up 4% over the first quarter of 2014 despite taking loan loss provision expense of $81 thousand during the second quarter (primarily related to the growth in the loan portfolio). Net interest income was up 16% over the same quarter last year.
  • Operating Expenses decreased 1% from the first quarter as a decline in seasonal employer payroll taxes and employee benefit expenses more than offset increased expenses related to the Bank’s San Mateo expansion. Operating Expenses increased 5% from the second quarter 2013.
  • Net Income applicable to common shareholders was $741 thousand for the quarter, an increase of 91% over the second quarter of 2013. Net Income applicable to common was up 23% over the first quarter of 2014.
  • Credit quality remains strong. The Bank has just two borrowers classified as non-performing totaling $1.6 million. This represents just 0.37% of total loans outstanding. Loan loss reserves of $4.9 million cover non-performing loans 3.3 times. At June 30, 2014, the Bank had no past due loans, including those classified as non-performing.
  • Diluted earnings per common share were $0.17 for the quarter compared to $0.14 in the first quarter of 2014 and $0.09 in the second quarter of 2013.
  • Book value per share increased to $9.31 per share as of June 30, 2014 from $9.15 per share at March 31, 2014 and $8.54 per share at June 30, 2013.

“While I am proud of our financial results,” said Presidio Bank Chairman and Founder, Jim Woolwine. “It is equally pleasing to me that the Bank has once again been honored as one of the top corporate philanthropists by the San Francisco Business Times, indicating the Bank is not only serving its clients well but also serving its community.”

 

2nd Quarter 2014 Financial Results

(Dollars in thousands, except per share amounts, unaudited)

                 
 

Condensed Balance Sheet

   
6/30/2014   3/31/2014   Change   6/30/2013   Change 12/31/2013   Change
 
Cash and due from banks 2,517 5,103 -50.7 % 4,091 -38.5 % 5,694 -55.8 %
Interest bearing due from banks   56,366       66,188     -14.8 %     79,991     -29.5 %   49,545     13.8 %
Total cash and equivalents 58,883 71,291 -17.4 % 84,082 -30.0 % 55,239 6.6 %
Investment securities 14,492 14,124 2.6 % 14,144 2.5 % 14,230 1.8 %
Loans, net of fees 408,752 389,749 4.9 % 333,724 22.5 % 373,421 9.5 %
Allowance for loan losses   (4,952 )     (4,871 )   1.7 %     (4,865 )   1.8 %   (4,867 )   1.7 %
Net loans 403,800 384,878 4.9 % 328,859 22.8 % 368,554 9.6 %
Premises and equipment, net 1,032 1,033 -0.1 % 984 4.9 % 932 10.7 %
Other assets and interest receivable   5,386       5,086     5.9 %     5,117     5.3 %   4,863     10.8 %
Total assets 483,593 476,412 1.5 % 433,186 11.6 % 443,818 9.0 %
 
Non-interest-bearing demand 132,538 143,202 -7.4 % 146,309 -9.4 % 132,546 0.0 %
Interest bearing transaction 61,222 62,994 -2.8 % 51,874 18.0 % 71,760 -14.7 %
Money market and savings accounts 169,909 178,869 -5.0 % 144,514 17.6 % 153,180 10.9 %
Time deposits   45,736       39,038     17.2 %     41,745     9.6 %   39,672     15.3 %
Total deposits 409,405 424,103 -3.5 % 384,442 6.5 % 397,158 3.1 %
Borrowings 26,147 5,219 401.0 % - NM - NM
Other liabilities   2,095       2,063     1.6 %     2,105     -0.5 %   2,376     -11.8 %
Total liabilities 437,647 431,385 1.5 % 386,547 13.2 % 399,534 9.5 %
 
Preferred stock 6,844 6,827 0.2 % 11,035 -38.0 % 6,811 0.5 %
Common stock 43,798 43,667 0.3 % 43,125 1.6 % 43,540 0.6 %
Retained earnings (4,588 ) (5,311 ) 13.6 % (7,252 ) 36.7 % (5,898 ) 22.2 %
Other comprehensive income   (108 )     (156 )   30.8 %     (269 )       (169 )   36.1 %
Total shareholder’s equity   45,946       45,027     2.0 %     46,639     -1.5 %   44,284     3.8 %
Total liabilities and equity 483,593 476,412 1.5 % 433,186 11.6 % 443,818 9.0 %
 
Book value per share
Book value per share $ 9.31 $ 9.15 $ 8.54 $ 8.99
Total shares outstanding EOP 4,199 4,174 4,170 4,170
 
Capital Ratios
Tier 1 leverage ratio 9.6 % 10.0 % 11.1 % 10.0 %
Tier 1 risk-based capital ratio 10.0 % 10.3 % 12.0 % 10.5 %
Total risk-based capital ratio 11.2 % 11.6 % 13.3 % 11.7 %
Tangible common risk-based ratio 8.5 % 8.7 % 9.3 % 8.8 %
 

Condensed Statement of Income

       
For the three months ended For the six months ended
6/30/2014   3/31/2014  

Change
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(Unfav.)

  6/30/2013  

Change
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(Unfav.)

6/30/2014   6/30/2013  

Change
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(Unfav.)

           
Interest income 4,841 4,572 5.9 % 4,151 16.6 % 9,414 8,049 17.0 %
Interest expense   195       193     (1.0 %)     206     5.3 %   389       398     2.3 %
Net interest income 4,646 4,379 6.1 % 3,945 17.8 % 9,025 7,651 18.0 %
Provision for loan loss   81       -     NM       -     NM     81       -     NM  
Net interest income after provision 4,565 4,379 4.2 % 3,945 15.7 % 8,944 7,651 16.9 %
 
Other income 182 170 7.1 % 145 25.5 % 352 274 28.5 %
 
Compensation and benefit expenses 2,064 2,186 5.6 % 1,796 (14.9 %) 4,251 3,669 (15.9 %)
Occupancy and equipment expenses 373 373 0.0 % 385 3.1 % 746 770 3.1 %
Data processing 261 256 (2.0 %) 256 (2.0 %) 517 499 (3.6 %)
Professional and legal 118 95 (24.2 %) 212 44.3 % 213 344 38.1 %
Other operating expenses   525       465     (12.9 %)     541     3.0 %   989       999     1.0 %
Total operating expenses   3,341       3,375     1.0 %     3,190     (4.7 %)   6,716       6,281     (6.9 %)
Net income before taxes 1,406 1,174 19.8 % 900 56.2 % 2,580 1,644 56.9 %
Income taxes  

576

      481     (19.8 %)     369     (56.1 %)   1,058       674     (57.0 %)
Net income 830 693 19.8 % 531 56.3 % 1,522 970 56.9 %
Preferred dividends   89       89     0.0 %     142     37.5 %   178       285     37.5 %
Net income to common 741 604 22.7 % 389 90.6 % 1,344 685 96.2 %
 
Earnings Per Share
Basic earnings per share $ 0.17 $ 0.14 $ 0.09 $ 0.31 $ 0.16
Diluted earnings per share $ 0.17 $ 0.14 $ 0.09 $ 0.30 $ 0.16
 
Performance Ratios
Return on average assets 0.69 % 0.62 % 0.52 % 0.66 % 0.48 %
Return on average common equity 7.64 % 6.42 % 4.36 % 7.03 % 3.88 %
Net interest margin 3.95 % 4.00 % 3.90 % 3.97 % 3.89 %
Cost of funds 0.18 % 0.19 % 0.23 % 0.19 % 0.23 %
Efficiency ratio 69.2 % 74.2 % 78.0 % 71.6 % 79.3 %
 
Average Balances
Total assets 479,221 451,259 412,909 465,317 403,423
Earning assets 471,872 444,436 406,168 458,230 396,743
Total loans 399,895 382,154 329,961 391,074 321,151
Total deposits 419,923 395,956 364,278 408,006 354,948
Common equity 38,925 38,134 35,758 38,530 35,571
 
NM = Not Meaningful

About Presidio Bank

Presidio Bank provides business banking services to small and mid-size businesses, including professional service firms, real estate developers and investors, and not-for-profit organizations, and to their owners who desire personalized, responsive service with access to local decision makers. Presidio Bank offers clients the resources of a large bank combined with the personalized services of a neighborhood bank. Presidio Bank is headquartered in San Francisco, California and operates four banking offices in San Francisco, Walnut Creek, San Rafael and Palo Alto. A new San Mateo office is scheduled to open in late 2014. More information is available at www.presidiobank.com. Presidio Bank is a member of FDIC and an Equal Housing Lender.

This press release contains certain forward-looking statements that involve risk and uncertainties. These statements are identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “plan,” “estimate,” “project,” or similar expressions. The risks and uncertainties that may affect the operations, performance, development, growth projections and results of Presidio Bank’s business include, but are not limited to, the growth of the economy, interest rate movements, timely development by Presidio Bank of technology enhancements for its products and operating systems, the impact of competitive products, services and pricing, client-based requirements, Congressional legislation, changes in regulatory or generally accepted accounting principles and similar matters. Readers are cautioned not to place undue reliance on forward-looking statements which are subject to influence by the named risk factors and unanticipated future events. Actual results, accordingly, may differ materially from management expectations.

Contacts

Presidio Bank
Steve Heitel, 415-229-8428
President & CEO
or
Ed Murphy, 415-229-8403
EVP/CFO
or
Annette Gelinas, 415-229-8415 (o)
925-787-2956 (c)
SVP/Marketing Director
agelinas@presidiobank.com