California Bank of Commerce Reports Record Third Quarter Results

Double Digit Growth For Earnings And Earnings Per Share

LAFAYETTE, Calif.--()--California Bank of Commerce (OTCQX: CABC), a San Francisco Bay Area business bank, today reported unaudited financial results for the third quarter of 2016 with net income of $1,394,000, increasing 30% over the second quarter 2016 and 52% over same period one year ago. Total assets were $769 million on September 30, 2016, compared to $725 million on June 30, 2016, and $520 million on September 30, 2015.

The comparability of financial information for the third 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 totaled $782,000 year-to-date, and $281,000 for the third quarter of 2016 as the Bank completed the integration process with Pan Pacific Bank in September.

“The business community in the San Francisco Bay Area continues to embrace the Bank as demonstrated by our continued growth, and this is simply a testament to the experience and quality of our bankers, “ said Terry A. Peterson, President and CEO of California Bank of Commerce. “Our commercial banking offices in Oakland, Fremont, San Jose and Lafayette continue to outperform our expectations,” he stated.

Highlights

Third Quarter 2016 vs. Second Quarter 2016

Net income of $1,394,000 for the third quarter of 2016 increased by $325,000 or 30% compared to the second quarter 2016 and basic earnings per common share were $0.239 for the third quarter 2016 compared to $0.173 in the second quarter 2016.

Total deposits of $657 million as of September 30, 2016, increased by $43 million or 7.0% compared to the second quarter of 2016, while non-interest bearing deposits increased by $41 million or 18%, to $270 million over the same period.

Total loans, net of deferred costs were $608 million at the end of the third quarter 2016 an increase of $29 million or 5.0% over the second quarter of 2016.

Tangible book value per common share increased to $11.45 as of September 30, 2016, compared to $11.20 as of June 30, 2016.

Third Quarter 2016 vs. Third Quarter 2015

Net income was $1,394,000 for the third quarter of 2016 an increase of 57% compared to $887,000 for the third quarter of 2015. Year-to-date net income was $3,407,000 for the first nine months of 2016 an increase of 42% or $1,012,000 over the same period of 2015.

Total deposits of $657 million at September 30, 2016, were up by $230 million or 54% over the same 2015 quarter end, while non-interest bearing deposits were up by $85 million or 46% to $270 million.

Loans, net of deferred costs, were $608 million on September 30, 2016, increasing $215 million or 55% from September 30, 2015.

Credit Quality

Credit quality remains strong, with non-performing assets to total assets improving to 0.24% at September 30, 2016 compared to 0.59% on the same date in 2015. The loan loss reserve was $7,100,000 at the end of the third quarter 2016 increasing by $465,000 for the quarter and $1,400,000 over the prior year quarter at September 30, 2015. The ratio of the reserve to total loans was 1.17% on September 30, 2016, down from 1.45% at September 30, 2015, as a result of merger accounting adjustments related to the Pan Pacific Bank merger, which was effected on December 31, 2015.

“We are very pleased with the execution of our business plans for 2016. The successful merger with Pan Pacific Bank is complete and we look forward to accelerating our progress for the balance of 2016 and into 2017,” said Stephen A. Cortese, Chairman of the Board for California Bank of Commerce.

Please see our detailed Third Quarter 2016 Unaudited Summary Financial Statements for more information.

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 (510) 457-3751, 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-Sep-16 30-Jun-16 30-Sep-15 $ %
Interest income $ 7,539 $ 7,106 $ 4,830 $ 2,709 56 %
Interest expense   (565 )   (511 )   (355 )   (210 ) 59 %
Net interest income before provision 6,974 6,595 4,475 2,499 56 %
Provision to the Loan Loss Reserve   (457 )   (419 )   (13 )   (444 ) NA
Net interest income after provision $ 6,517 $ 6,176 $ 4,462 $ 2,055 46 %
 
Non-interest income 768 708 615 153 25 %
Non-interest expense   (5,008 )   (5,172 )   (3,747 )   (1,261 ) 34 %
Income before tax provision 2,277 1,712 1,330 947 71 %
Provision for income taxes   (883 )   (643 )   (415 )   (468 ) 113 %
Net income $ 1,394   $ 1,069   $ 915   $ 479   52 %
 
Preferred Dividends   -     85     28     (28 ) -100 %
Income to Common Shareholders $ 1,394   $ 984   $ 887   $ 507   57 %
 
Basic Earnings per Common share $ 0.239 $ 0.173 $ 0.202 $ 0.037 18 %
 
Weighted average shares outstanding 5,843,904 5,686,101 4,386,347
 
Return on Average Assets 0.76 % 0.64 % 0.74 %
Return on Average Tangible Common Equity 8.30 % 6.78 % 7.19 %
 
Non Interest Expense to Average Total Assets 2.72 % 3.10 % 3.03 %
Efficiency Ratio 64.7 % 70.8 % 73.6 %
 
                 
CALIFORNIA BANK OF COMMERCE
UNAUDITED SUMMARY FINANCIAL STATEMENTS
 

INCOME STATEMENT

($ Thousands)
 

Nine Months Ended

Year Over Year Change
30-Sep-16 30-Sep-15 $ %
Interest income $ 21,465 $ 13,617 $ 7,848 58 %
Interest expense   (1,498 )   (1,011 )   (487 ) 48 %
Net interest income before provision 19,967 12,606 7,361 58 %
Provision to the Loan Loss Reserve   (991 )   (112 )   (879 ) 785 %
Net interest income after provision $ 18,976 $ 12,494 $ 6,482 52 %
 
Non-interest income 2,084 1,669 415 25 %
Non-interest expense   (15,566 )   (10,400 )   (5,166 ) 50 %
Income before tax provision 5,494 3,763 1,731 46 %
Provision for income taxes   (2,087 )   (1,368 )   (719 ) 53 %
Net income $ 3,407   $ 2,395   $ 1,012   42 %
 
Preferred Dividends   152     82     70   85 %
Income to Common Shareholders $ 3,255   $ 2,313   $ 942   41 %
 
Basic Earnings per Common share $ 0.572 $ 0.530 $ 0.042 8 %
 
Weighted average shares outstanding 5,691,396 4,365,193
 
Return on Average Assets 0.67 % 0.69 %
Return on Avg. Tangible Common Equity 7.16 % 6.48 %
 
Non Interest Expense to Avg. Total Assets 3.05 % 3.00 %
Efficiency Ratio 70.6 % 72.9 %
 
 
CALIFORNIA BANK OF COMMERCE
UNAUDITED SUMMARY FINANCIAL STATEMENTS
                     
BALANCE SHEET
($ Thousands)
 
Year Over Year Change
Assets 30-Sep-16 30-Jun-16 30-Sep-15 $ %
Total Cash and Investments $ 128,589 $ 113,029 $ 110,701 $ 17,888 16 %
Loans, net of deferred costs/fees 608,459 579,749 393,809 214,650 55 %
Loan Loss Reserve (7,100 ) (6,635 ) (5,700 ) (1,400 ) 25 %
Other   38,781     38,805     21,198     17,583   83 %
Total Assets $ 768,729   $ 724,948   $ 520,008   $ 248,721   48 %
 
Liabilities & Shareholders' Equity
Non-interest Bearing Deposits $ 270,230 $ 228,927 $ 185,275 $ 84,955 46 %
Interest Bearing Deposits   386,355     384,759     241,446     144,909   60 %
Total Deposits $ 656,585 $ 613,686 $ 426,721 $ 229,864 54 %
Total Borrowings and Other Liabilities   37,278     38,171     31,609     5,669   18 %
Total Liabilities $ 693,863 $ 651,857 $ 458,330 $ 235,533 51 %
 
Shareholder's Equity $ 74,866   $ 73,091   $ 61,678   $ 13,188   21 %
Total Liabilities & Shareholders' Equity $ 768,729   $ 724,948   $ 520,008   $ 248,721   48 %
 
Common Shares Outstanding 5,871,752 5,839,134 4,398,907 1,472,845 33 %
Tangible Book Value per Common Share $ 11.45 $ 11.20 $ 11.53 $ (0.08 ) -1 %
 

Average Balances - Period

3Q 2016 2Q 2016 3Q 2015
Total Assets $ 729,804 $ 669,828 $ 491,226
Total Loans $ 584,264 $ 545,388 $ 376,924
Total Investments $ 16,911 $ 17,734 $ 30,731
Total Earning Assets $ 673,173 $ 616,777 $ 458,954
Total Non-Interest Bearing Deposits $ 244,336 $ 204,902 $ 166,189
Total Deposits $ 618,544 $ 559,817 $ 398,908
Total Borrowings $ 33,921 $ 33,231 $ 29,000
Tangible Common Equity $ 66,657 $ 63,232 $ 50,470
 
 

Average Yields and Cost

3Q 2016 2Q 2016 3Q 2015
Net Interest Margin 4.12 % 4.29 % 3.87 %
Yield on Earning Assets 4.45 % 4.62 % 4.18 %
Cost of Interest Bearing Liabilities 0.55 % 0.53 % 0.54 %
 

End of Period

30-Sep-16 30-Jun-16 30-Sep-15
Loan Loss Reserve to Total Loans 1.17 % 1.14 % 1.45 %
 
NPAs (including accruing TDRs) to Total Assets 0.24 % 0.30 % 0.59 %
Accruing TDRs to Total Assets 0.14 % 0.15 % 0.35 %

Contacts

California Bank of Commerce
Terry A. Peterson, 510-457-3751
President and CEO
tpeterson@bankcbc.com
Randy Greenfield, 510-457-3769
EVP and Chief Financial Officer
rgreenfield@bankcbc.com

Contacts

California Bank of Commerce
Terry A. Peterson, 510-457-3751
President and CEO
tpeterson@bankcbc.com
Randy Greenfield, 510-457-3769
EVP and Chief Financial Officer
rgreenfield@bankcbc.com