Pacific Commerce Bank Reports Strong First Quarter Results

LOS ANGELES--()--Pacific Commerce Bank (OTCQB:PFCI) today reported that net income for the first quarter, ended March 31, 2015, totaled $534,000, or $0.12 per diluted share, after nonrecurring merger related expenses of $187,000 and a reversal of the provision for loan losses of $500,000 due to continued improvement in asset quality of the Bank. This compares to net income of $891,000, or $0.20 per diluted share, for the quarter ended March 31, 2014, after a reversal of the provision for loan losses of $1.5 million. Total assets increased 18%, to $220.3 million, from $187.1 million a year earlier. Total loans and total deposits each increased 22%, to $193.4 million and $177.8 million, respectively, from the prior year.

The Bank previously reported that it has completed its merger with Vibra Bank on April 7, 2015 creating a combined institution of approximately $350 million in total assets and estimated combined total capital of approximately $37.4 million, subject to ASC 805 Business Combinations adjustments.

Former CEO of Vibra Bank, Frank J. Mercardante, who became CEO of the combined bank upon the close of the merger, said, “The Bank is off to a great start in the new year. In addition to improved core earnings, the Bank experienced solid growth in both loans and deposits. Asset quality, which was already strong continued to improve.” Mercardante continued, “We are excited about the opportunities that lie ahead as we complete the integration of the two banks creating a community bank platform that stretches from Downtown Los Angeles to the Mexican border.”

Chairman Thomas Iino commented, “We are enthusiastic about our future prospects as a larger, more geographically diverse, community-focused bank. We became the beneficiaries of many talented and experienced bankers in the Vibra Bank merger which will help us in our growth strategies in the future.”

Selected financial highlights as of March 31, 2015:

  • Net interest income for the period was up 25%, to $2.1 million, from $1.6 million for the same period in 2014, primarily due to increase in loans of $35 million, or 22.1% in 2015.
  • Net interest margin in Q1 2015 increased to 4.05%, from 3.98% in the same period 2014, due to increased loan volume.
  • Average cost of funds in Q1 2015 was 0.27% versus 0.28% for Q1 2014.
  • Non-interest income increased 46%, to $210,000 from $144,000, due to higher gain on sale of SBA loans in Q1 2015.
  • Non-interest expenses, excluding merger related expenses, declined 2.4%.
  • Total assets were $220.3 million, compared to $187.1 million a year ago, an increase of 17.8%.
  • Allowance for Loan Losses to Total Loans was 1.51%, versus 2.23% a year ago, a result of a $500,000 loan loss provision reversal in Q1 2015 and $35 million in loan balance growth year-over-year.
  • Net recovery, from previously charged-off loans, was $35,000 for Q1 2015 versus $31,000 for the like quarter in 2014.
  • The Bank remained “Well-Capitalized” by regulatory definition with capital ratios, as of March 31, 2015, as follows:
          Tier 1 Leverage Ratio:   11.15%
Common Equity Tier 1 Capital Ratio: 12.28%
Tier 1 Capital Ratio: 12.28%
Total Capital Ratio: 13.53%

About Pacific Commerce Bank

Pacific Commerce Bank is a business-oriented, community bank established in 2002 by local business owners to meet the growing needs of the local community it serves. Today, the Bank is a Preferred SBA Lender with offices in downtown Los Angeles, West Los Angeles, San Diego and Chula Vista. The Bank provides a wide variety of deposit and loan services to meet client needs. Deposit offerings include, among others, state-of-the-art online banking and remote deposit capture. The Bank’s lending is focused on loans to small businesses and professionals, commercial real estate, and high net-worth individuals. For more information about the Bank, please visit our website at

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 (‘000)




Total Assets $220,337 $187,093
Total Investments $517 $1,159
Gross Loans $193,437 $158,535
Allowance for Loan Losses ($2,914) ($3,537)
Total Deposits $177,782 $145,361
Total Borrowings $16,000 $13,500
Total Stockholders' Equity $25,756 $27,115
Net (Recoveries)/ Charge-offs ($35) ($31)
Total Non-Accrual Loans $133 $477
ALLL / Total Loans 1.51% 2.23%
ALLL / Non-Accrual Loans 2191% 742%

For the Three Months
Ended March 31,



Total Interest Income $ 2,194 $ 1,753
Total Interest Expense 127 104
Net Interest Income 2,067 1,649
Provision for Loan Losses (500) (1,500)
Non-Interest Income 210 144
Non-Interest Expense (Non-merger Related) 1,772 1,815
Income Before Merger Related Expenses and Income Taxes 1,005 1,478
Non-Recurring Merger Related Expenses 187 -
Income Tax Expense 284 587
Net Income $ 534 $ 891
EPS $0.12 $0.20


Pacific Commerce Bank
Richard Koh, Chief Financial Officer


Pacific Commerce Bank
Richard Koh, Chief Financial Officer