Pacific City Financial Corporation Reports Record Earnings of $6.3 Million for Q1 2018

LOS ANGELES--()--Pacific City Financial Corporation (the “Company”) (OTC Pink: PFCF), the holding company of Pacific City Bank (the “Bank”), today reported net income of $6.3 million, or $0.46 per diluted common share for the first quarter of 2018, compared with $2.3 million, or $0.17 per diluted common share, in the previous quarter and $4.4 million, or $0.33 per diluted common share, in the year-ago quarter.

First Quarter 2018 Highlights

  • Net income totaled $6.3 million or $0.46 per diluted common share;
  • Total assets increased $137.0 million, or 9.5%, to $1,579.0 million at March 31, 2018 compared with $1,442.0 million at December 31, 2017;
  • Total loans, including loans held-for-sale (“LHFS”) and net of unearned fees and costs, increased $34.2 million, or 2.9%, to $1,229.5 million at March 31, 2018 compared with $1,195.3 million at December 31, 2017;
  • Total deposits increased $130.6 million, or 10.4%, to $1,381.9 million at March 31, 2018 compared with $1,251.3 million at December 31, 2017;
  • Classified loans decreased $603,000, or 12.1%, to $4.4 million at March 31, 2018 compared with $5.0 million at December 31, 2017; and
  • Net interest margin increased 6 bps to 4.33% for the first quarter of 2018 compared with 4.27% for the previous quarter and increased 18 bps compared with 4.15% for the year-ago quarter.

"We are pleased to report a strong quarter that was highlighted by the expansion in net interest margin and net interest income,” stated Henry Kim, President and CEO. “Our net interest margin increased to 4.33% in the first quarter of 2018 compared with 4.27% in the previous quarter and 4.15% in the year-ago quarter. Our net income in the first quarter of 2018 increased 168% to $6.3 million compared with $2.3 million in the previous quarter and increased 42.4% compared with $4.4 million in the year-ago quarter.”

Mr. Kim continued, “Our deposit balance increased $131 million, or 10.4%, to $1.38 billion in the first quarter of 2018 compared with $1.25 billion in the previous quarter and increased $236 million, or 20.6%, compared with $1.15 billion in the year-ago quarter. The anticipated rise in market interest rates will challenge our ability to manage cost of funds; however, our asset-sensitive balance sheet is expected to more than offset such rise in interest expenses and improve our net interest margin.”

                             
2018 First Quarter Financial Highlights
(dollars in thousands, except per share data)
 
At or for the Three Months Ended

Mar. 31,
2018

Dec. 31,
2017

%
change

Mar. 31,
2017

%
change

Net income $ 6,264 $ 2,339 167.8 % $ 4,398 42.4 %
Earnings per common share (diluted) 0.46 0.17 170.6 % 0.33 39.4 %
 
Net interest income $ 15,293 $ 14,933 2.4 % $ 12,470 22.6 %
Provision for loan loss 95 1,713 -94.5 % (198 ) -148.0 %
Non-interest income 3,362 3,362 0.0 % 3,489 -3.6 %
Non-interest expense 9,630 9,620 0.1 % 8,521 13.0 %
 
Total assets $ 1,578,970 $ 1,441,998 9.5 % $ 1,286,432 22.7 %
Net loans receivable, net of allowance and loan fee/cost 1,210,901 1,177,775 2.8 % 1,042,879 16.1 %
Total deposits 1,381,925 1,251,289 10.4 % 1,146,262 20.6 %
 
Return on average assets 1.73 % 0.65 % 1.42 %
Return on average stockholders' equity 17.50 % 6.47 % 13.77 %
Net interest margin 4.33 % 4.27 % 4.15 %
Efficiency ratio 51.62 % 52.58 % 53.39 %
Tangible common equity to tangible assets 9.32 % 9.86 % 10.21 %
Tangible common equity per common share $ 10.97 $ 10.60 $ 9.79
 
Tier 1 leverage ratio (consolidated) 10.09 % 10.01 % 10.45 %
 

RESULTS OF OPERATIONS

Net Income

Net income for the 2018 first quarter increased $3.9 million, or 167.8%, to $6.3 million compared with $2.3 million for the previous quarter and increased $1.9 million, or 42.4%, compared with $4.4 million for the year-ago quarter. Diluted earnings per share for the 2018 first quarter was $0.46 compared with $0.17 for the previous quarter and $0.33 for the year-ago quarter. The increase in net income compared with the previous quarter was primarily due to a decrease of $1.6 million in provision for loan losses, a decrease of $2.0 million in income tax provision, and an increase of $360,000 in net interest income. The increase in net income compared to the year-ago quarter was primarily due to an increase of $2.8 million in net interest income, a decrease of $572,000 in income tax provision, partially offset by an increase of $1.1 million in non-interest expense, and a decrease of $127,000 in non-interest income.

Net Interest Income and Net Interest Margin

Net interest income for the 2018 first quarter increased $360,000, or 2.4%, to $15.3 million compared with $14.9 million for the previous quarter and increased $2.8 million, or 22.6%, compared with $12.5 million for the year-ago quarter. The increase in net interest income compared with the previous quarter and the year-ago quarter was primarily due to an increase in interest-earning assets and a continuous increase in market interest rates since December 2016.

Interest income on loans for the 2018 first quarter increased $608,000, or 3.6%, to $17.4 million compared with $16.8 million for the previous quarter and increased $3.6 million, or 25.7%, compared with $13.9 million for the year-ago quarter. The increase in interest income on loans compared with the previous quarter was primarily due to increases in loan balance and loan yield. The average total loan balance, including LHFS, was $1,219.9 million in the 2018 first quarter compared with $1,186.0 million in the previous quarter and $1,055.8 million in the year-ago quarter. Loan yield was 5.80% in the 2018 first quarter, 5.63% in the previous quarter, and 5.33% in the year-ago quarter.

Below is a table showing our fixed and variable interest rate loan mix accompanied by the weighted the average contractual rates as of dates indicated:

         
March 31, 2018 December 31, 2017 March 31, 2017

% to Gross
Loans *

WAVG
Contractual
Rate

% to Gross
Loans *

WAVG
Contractual
Rate

% to Gross
Loans *

WAVG
Contractual
Rate

Fixed rate loans 26.8 % 5.07 % 26.6 % 5.09 % 29.3 % 5.11 %
Variable rate loans 73.2 % 5.62 % 73.4 % 5.38 % 70.7 % 4.92 %
 

* Includes LHFS of $6.2 million, $5.3 million, and $12.8 million at March, 31, 2018, December 31, 2017, and March 31, 2017, respectively.

 

Interest income on investment securities for the 2018 first quarter increased $76,000, or 9.8%, to $848,000 compared with $772,000 for the previous quarter and increased $340,000, or 66.9%, compared with $508,000 for the year-ago quarter. The increases compared with the previous quarter and the year-ago quarter were primarily due to an increase in the size of the investment securities portfolio and an improvement in yield resulting from additional purchases of investment securities in the current rising interest rate environment. The average balance of investment securities in the 2018 first quarter was $149.4 million, compared with $147.5 million in the previous quarter and $104.3 million in the year-ago quarter, and the yield in the 2018 first quarter was 2.27% compared with 2.09% in the previous quarter and 1.95% in the year-ago quarter.

Total interest expense for the 2018 fourth quarter increased $397,000, or 13.5%, to $3.3 million compared with $2.9 million for the previous quarter and increased $1.2 million, or 55.3%, compared with $2.1 million in the year-ago quarter. The increase was primarily due to increases in the balance of interest-bearing liabilities and cost of interest-bearing deposits that resulted from our deposit promotion during the 2018 first quarter. During the promotion, the Company raised $122.7 million of interest-bearing deposits at a weighted average rate of 2.21%. The average balance of interest-bearing liabilities was $1,000.7 million in the 2018 first quarter compared with $948.3 million in the previous quarter, and $839.4 million in the year-ago quarter. Cost of interest-bearing liabilities was 1.35% in the 2018 first quarter compared with 1.23% in the previous quarter, and 1.04% in the year-ago quarter. Cost of funds, including non-interest-bearing deposits, was 1.03% in the 2018 first quarter compared with 0.92% in the previous quarter and 0.78% in the year-ago quarter.

Net interest margin was 4.33% in the 2018 first quarter compared with 4.27% in the previous quarter, and 4.15% in the year-ago quarter.

Provision for Loan Losses

The Company recorded a provision for loan losses of $95,000 for the 2018 first quarter compared with $1.7 million for the previous quarter and a negative provision of $198,000 for the year-ago quarter. The decrease in provision for loan losses for the 2018 first quarter compared to the previous quarter was primarily due to a decrease in net charge-offs. In the 2018 first quarter, the Company recorded a net recovery of $52,000 compared with a net charge-off of $1.1 million in the previous quarter. The allowance for loan losses to gross loan ratio was 1.01% at March 31, 2018, 1.03% at December 31, 2017, and 1.07% at March 31, 2017.

Non-interest Income

Non-interest income for the 2018 first quarter was in line with the previous quarter at $3.4 million and decreased $127,000 compared with $3.5 million for the year-ago quarter. The decrease compared with the year-ago quarter was primarily due to a decrease of $265,000 in gain on sale of SBA loans, partially offset by increases of $60,000 in loan servicing fees and $85,000 in other income.

The Company funded $52.1 million in SBA loans and sold $31.0 million of the guaranteed portion of SBA loans in the 2018 first quarter compared with $43.8 million in funding and $29.2 million sold during the previous quarter, and $61.1 million in funding and $36.4 million sold during the year-ago quarter. The Company funded $25.8 million in residential mortgage loans and sold $1.2 million in the 2018 first quarter compared with $24.0 million in funding and $2.1 million sold in the previous quarter and $15.4 million in funding and $2.7 million sold in the year-ago quarter.

Non-interest Expenses

Non-interest expenses for the 2018 first quarter were in line with the previous quarter at $9.6 million and increased $1.1 million, or 13.0%, compared with $8.5 million for the year-ago quarter. The increase compared with the year-ago quarter was primarily due to increases of $725,000 in employee salaries and benefits expenses, $169,000 in legal and professional expense, and $85,000 in marketing expense, partially offset by a decrease of $70,000 in loan related expense. The increase in salary and employee benefit expenses compared with the year-ago quarter consisted of additional expenses of $324,000 for an increase in employee headcount and annual salary adjustments, $230,000 for employee bonuses and incentive compensation, and $86,000 for employee group insurance.

The Company’s efficiency ratio in the 2018 first quarter was 51.62% compared with 52.58% in the previous quarter and 53.39% in the year-ago quarter.

Income Tax Provision

The Company’s effective income tax rate was 29.86% in the 2018 first quarter compared with 66.41% in the previous quarter and 42.41% in the year-ago quarter. The effective income tax rate in the 2018 first quarter decreased compared with prior quarters primarily due to the enactment of H.R. 1, also known as the Tax Cuts and Jobs Act, on December 22, 2017. Beginning in 2018, H.R. 1 reduced the U.S. federal corporate tax rate from 35% to 21% and changed or limited certain tax deductions. As a result of the lower corporate tax rate, during the previous quarter, the Company recorded a one-time revaluation adjustment of $1.6 million to reduce its deferred tax assets, which increased income tax expense.

BALANCE SHEET SUMMARY

Total Assets

Total assets increased $137.0 million, or 9.5%, to $1,579.0 million at March 31, 2018 compared with $1,442.0 million at December 31, 2017 and increased $292.5 million, or 22.7%, compared with $1,286.4 million at March 31, 2017.

Loans

Total loans receivable, including loans held-for-sale and net of deferred costs and fees, increased $34.2 million, or 2.9%, to $1,229.5 million at March 31, 2018 compared with $1,195.3 million at December 31, 2017 and increased $162.4 million, or 15.2%, compared with $1,067.0 million at March 31, 2017.

During the 2018 first quarter, the Company funded $155.2 million in loans, sold $31.0 million of the guaranteed portion of SBA loans and $1.2 million in residential mortgage loans, recognized $88.7 million in loan principal pay-down/pay-off, and charged-off $139,000. During the previous quarter, the Company funded $154.3 million in loans, sold $29.2 million of SBA guaranteed portion of the loans and $2.1 million in residential mortgage loans, recognized $75.6 million in loan principal pay-down/pay-off, and charged-off $1.2 million.

The table below details gross loan balances by loan type as of the dates indicated:

                             
Loan type (dollars in thousands)
 

Mar. 31,
2018

Dec. 31,
2017

Percentage
Change

Mar. 31,
2017

Percentage
Change

Commercial real estate loans (1)

$ 702,626 $ 686,863 2.3 % $ 615,887 14.1 %
Residential property loans 183,945 168,091 9.4 % 142,719 28.9 %
SBA loans 163,577 160,637 1.8 % 139,236 17.5 %
Commercial and industrial loans (2) 140,072 140,208 -0.1 % 122,325 14.5 %
Consumer loans 32,704 33,869 -3.4 % 33,617 -2.7 %
Deferred loan fees/costs   348   331 5.1 %   410 -15.1 %
Gross loans receivables 1,223,272 1,189,999 2.8 % 1,054,194 16.0 %
Loans held for sale   6,182   5,297 16.7 %   12,847 -51.9 %
Total loans $ 1,229,454 $ 1,195,296 2.9 % $ 1,067,041 15.2 %
 

(1) Commercial real estate loans include commercial property loans and construction loans.

(2) Commercial and industrial loans include commercial term loans, commercial lines of credit and international loans.
 

Investment Securities

Total investment securities decreased $4.0 million, or 2.6%, to $146.8 million at March 31, 2018 compared with $150.8 million at December 31, 2017, and increased $37.4 million, or 34.2%, compared with $109.4 million at March 31, 2017. The decrease in investment securities compared with the previous quarter was primarily due to the principal pay-down of $6.4 million exceeding the purchase of $4.1 million, $1.4 million in decline of fair market value, and $206,000 in net premium amortization. The increase in investment securities compared with the year-ago quarter was primarily due to the purchase of $64.0 million, partially offset by $22.4 million in principal pay-downs or called securities, $2.3 million in decline-in fair market value, and $844,000 in net premium amortization since the 2017 first quarter-end. The purchase of $64.0 million consisted of $2.0 million of U.S. government agency securities, $30.4 million of mortgage-backed securities, and $31.6 million of collateralized mortgage obligations.

Deposits

Total deposits increased $130.6 million, or 10.4%, to $1,381.9 million at March 31, 2018 compared with $1,251.3 million at December 31, 2017, and increased $235.7 million, or 20.6%, compared with $1,146.3 million at March 31, 2017. During the 2018 first quarter, the Company launched a promotion for interest-bearing deposits and was able to raise $122.7 million in interest-bearing deposits. The demand deposit to total deposit ratio was 23.2% at March 31, 2018 compared with 25.5% at December 31, 2017, and 26.0% at March 31, 2017.

The table below details our deposit mix by period as of the dates indicated:

                             
Deposit mix (Dollars in thousands)
        March 31, 2018 December 31, 2017 March 31, 2017
Amount Percentage Amount Percentage Amount Percentage
Demand deposits $ 321,109 23.2 % $ 319,025 25.5 % $ 298,563 26.0 %
Now accounts 9,716 0.7 % 10,324 0.8 % 9,655 0.8 %
Money market accounts 272,208 19.7 % 299,390 23.9 % 313,212 27.4 %
Savings 8,181 0.6 % 8,164 0.7 % 8,382 0.7 %
Time deposits under $250K 382,826 27.8 % 295,274 23.6 % 257,660 22.5 %
Time deposits of $250K and over 235,385 17.0 % 166,612 13.3 % 132,724 11.6 %
State & Broker CDs   152,500 11.0 %   152,500 12.2 %   126,066 11.0 %
Total deposits $ 1,381,925 100.0 % $ 1,251,289 100.0 % $ 1,146,262 100.0 %
 

Borrowings

The balance of borrowings from the Federal Home Loan Bank (“FHLB”) at March 31, 2018 and at December 31, 2017 was $40.0 million and none at March 31, 2017. Borrowings from FHLB bore fixed interest rates with original maturity terms ranging from one to five years.

Shareholders’ Equity

Shareholders’ equity increased $5.0 million, or 3.6% to $147.2 million at March 31, 2018 compared with $142.2 million at December 31, 2017 and increased $15.9 million, or 12.1%, compared with $131.3 million at March 31, 2017. On January 26, 2018, the Company declared a cash dividend of $0.03 per common share, which was paid on March 15, 2018.

CREDIT QUALITY

Non-Performing Assets

Non-performing loans (“NPL”) decreased $837,000 to $2.4 million at March 31, 2018 compared with $3.2 million at December 31, 2017 and increased $697,000 compared with $1.7 million at March 31, 2017. The NPL to gross loans ratio was 0.20% at March 31, 2018, 0.27% at December 31, 2017, and 0.21% at March 31, 2017.

The Company had no other real estate owned (“OREO”) at March 31, 2018 compared with $99,000 at December 31, 2017 and $505,000 at March 31, 2017. The Company sold an OREO with a gain of $3,000 in March 2018.

Non-performing assets (“NPA”), which consist of NPL and OREO, and the NPAs to total assets ratio were $2.4 million and 0.15%, respectively, at March 31, 2018, $3.3 million and 0.23%, respectively, at December 31, 2017, and $2.2 million and 0.17%, respectively, at March 31, 2017.

The tables below summarize composition of NPLs and NPAs as of dates indicated:

                 
Non-performing loan composition (Dollars in thousands)
           

Mar. 31,
2018

Dec. 31,
2017

Percentage
Change

Mar. 31,
2017

Percentage
Change

Commercial real estate loans (1) $ 311 $ 318 -2.2 % $ 51 509.8 %
Commercial and industrial loans (2) - 14 -100.0 % 244 -100.0 %
SBA loans 1,340 2,148 -37.6 % 1,357 -1.3 %
Residential property loans 730 730 0.0 % - N/A
Consumer loans   16     24   -33.3 %   48   -66.7 %
$ 2,397   $ 3,234   -25.9 % $ 1,700   41.0 %
 

(1) Commercial real estate loans include commercial property loans and construction loans.

(2) Commercial and industrial loans include commercial term loans, commercial lines of credit and international loans.
 
                             
Non-performing assets (Dollars in thousands)
 
Mar. 31,

2018

Dec. 31,

2017

%

Change

Mar. 31,

2017

%

Change

Non-performing loans $ 2,397 $ 3,234 -25.9 % $ 1,700 41.0 %
Non-performing TDR (included in NPL) 595 1,675 -64.5 % 597 -0.3 %
Gross loans including deferred loan fees/cost 1,223,272 1,189,999 2.8 % 1,054,194 16.0 %
NPL/Gross loans 0.20 % 0.27 % 0.16 %
OREO $ - $ 99 -100.0 % $ 505 -100.0 %
Performing TDR 554 592 -6.4 % 1,790 -69.1 %
NPA (NPL+OREO) 2,397 3,333 -28.1 % 2,205 8.7 %
Total assets $ 1,578,970 $ 1,441,998 9.5 % $ 1,286,432 22.7 %
 
NPA (NPL+OREO)/Gross loans 0.20 % 0.28 % 0.21 %
NPA (NPL+OREO)/Total assets 0.15 % 0.23 % 0.17 %
 

Classified Assets

Classified loans decreased $603,000, or 12.1%, to $4.4 million at March 31, 2018 compared with $5.0 million at December 31, 2017 and decreased $4.5 million, or 50.5%, compared with $8.9 million at March 31, 2017. Classified assets, which consist of classified loans and OREO, and the classified assets to total assets ratios were $4.4 million and 0.28%, respectively, at March 31, 2018, $5.1 million and 0.35%, respectively, at December 31, 2017, and $9.4 million and 0.73%, respectively, at March 31, 2017.

The table below provides certain details on classified assets as of the dates indicated:

                             
Classified assets (Dollars in thousands)
 

Mar. 31,
2018

Dec. 31,
2017

%
Change

Mar. 31,
2017

%
Change

Classified loans $ 4,379 $ 4,982 -12.1 % $ 8,852 -50.5 %
OREO - 99 -100.0 % 505 -100.0 %
Classified assets 4,379 5,081 -13.8 % 9,357 -53.2 %
Classified loans/Gross loans 0.36 % 0.42 % 0.84 %
Tier 1 + ALLL $ 160,626 $ 154,594 3.9 % $ 142,113 13.0 %
Classified assets/Tier 1 + ALLL 2.73 % 3.29 % 6.58 %
Classified assets/Total assets 0.28 % 0.35 % 0.73 %
 

Capital Ratios

The table below illustrates capital ratios for the Company and the Bank as of dates indicated:

                 
March 31, 2018 December 31, 2017 March 31, 2017

Pacific City Financial Corporation

Tier 1 Leverage Capital Ratio 10.09 % 10.01 % 10.45 %
Common Equity Tier 1 Capital Ratio 12.32 % 12.15 % 12.56 %
Tier 1 Risk-Based Capital Ratio 12.32 % 12.15 % 12.56 %
Total Risk-Based Capital Ratio 13.36 % 13.20 % 13.66 %

Pacific City Bank

Tier 1 Leverage Capital Ratio 10.03 % 9.94 % 10.39 %
Common Equity Tier 1 Capital Ratio 12.25 % 12.06 % 12.49 %
Tier 1 Risk-Based Capital Ratio 12.25 % 12.06 % 12.49 %
Total Risk-Based Capital Ratio 13.29 % 13.12 % 13.59 %
 

About Pacific City Financial Corporation

Headquartered in Los Angeles, California, Pacific City Financial Corporation is the parent company of Pacific City Bank, a full-service commercial bank with thirteen branch offices and ten loan production offices in Lynwood and Bellevue, Washington; Denver, Colorado; Chicago, Illinois; Annandale, Virginia; Atlanta, Georgia; Orange County and Los Angeles, California; Bayside, New York; and Carrollton, Texas. Pacific City Bank specializes in commercial banking for small to medium-size businesses by providing commercial real estate loans, small business loans and lines of credit, trade finance loans, auto loans, residential mortgage loans, and SBA loans. Pacific City Bank serves a diverse customer base through its branches in the Greater Los Angeles Area, Fort Lee, New Jersey, and Bayside, New York and its Loan Production Offices in eight States.

Safe Harbor Statement

This press release may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, competition, changes in accounting principles, policies or guidelines, legislation or regulation (including the Tax Cuts & Jobs Act of 2017), and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cyber-security threats) affecting Company’s operations, pricing, products and services. Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

 
Pacific City Financial Corporation
Consolidated Balance Sheets
(Dollars In thousands)
                                   

March 31,
2018
(Unaudited)

December 31,
2017
(Audited)

%
change

March 31,
2017

%
change

Assets
Cash and due from banks $ 16,765 $ 16,662 0.6 % $ 16,085 4.2 %
Interest-bearing deposits in financial institutions   164,788     56,996   189.1 %   72,509   127.3 %
Total cash and cash equivalents   181,553     73,658   146.5 %   88,594   104.9 %
 
Investment securities, available-for-sale 125,940 129,689 -2.9 % 90,370 39.4 %
Investment securities, held-to-maturity   20,826     21,070   -1.2 %   19,023   9.5 %
Total investment securities   146,766     150,759   -2.6 %   109,393   34.2 %
 
Loans held for sale 6,182 5,297 16.7 % 12,847 -51.9 %
 
Loans receivable, net of deferred loan costs (fees) 1,223,272 1,189,999 2.8 % 1,054,194 16.0 %
Less: allowance for loan losses   (12,371 )   (12,224 ) 1.2 %   (11,315 ) 9.3 %
Net loans receivables   1,210,901     1,177,775   2.8 %   1,042,879   16.1 %
 
Premises and equipment, net 5,069 4,723 7.3 % 4,370 16.0 %
Other real estate owned, net - 99 -100.0 % 505 -100.0 %
Federal Home Loan Bank and other bank stock 6,589 6,589 0.0 % 5,686 15.9 %
Deferred tax assets, net 4,239 3,847 10.2 % 5,536 -23.4 %
Servicing assets 8,890 8,973 -0.9 % 8,637 2.9 %
Accrued interest receivables 4,303 4,251 1.2 % 3,264 31.8 %
Others   4,478     6,027   -25.7 %   4,721   -5.1 %
Total assets $ 1,578,970   $ 1,441,998   9.5 % $ 1,286,432   22.7 %
 
Liabilities
Deposits
Noninterest-bearing demand $ 321,109 $ 319,025 0.7 % $ 298,563 7.6 %
Savings, NOW, and money market accounts 290,105 317,878 -8.7 % 331,249 -12.4 %
Time deposits under $250,000 435,326 347,774 25.2 % 283,726 53.4 %
Time deposits of $250,000 and over   335,385     266,612   25.8 %   232,724   44.1 %
Total deposits   1,381,925     1,251,289   10.4 %   1,146,262   20.6 %
Borrowings 40,000 40,000 0.0 % - NA
Accrued interest payable 2,609 2,251 15.9 % 1,701 53.4 %
Other liabilities   7,203     6,274   14.8 %   7,162   0.6 %
Total liabilities $ 1,431,737   $ 1,299,814   10.1 % $ 1,155,125   23.9 %
 
Shareholders' Equity
Common stock 125,511 125,430 0.1 % 125,270 0.2 %
Additional paid in capital 3,072 2,941 4.5 % 2,502 22.8 %
Retained earnings 20,898 15,036 39.0 % 3,996 423.0 %
Other comprehensive loss   (2,248 )   (1,223 ) 83.8 %   (461 ) 387.6 %
Total shareholders' equity   147,233     142,184   3.6 %   131,307   12.1 %
 
Total liabilities & shareholders' equity $ 1,578,970   $ 1,441,998   9.5 % $ 1,286,432   22.7 %
 
 
Pacific City Financial Corporation
Consolidated Income Statements (Unaudited)
(Dollars in thousands, except share and per share data)
                             
Three Months Ended
Mar. 31,

2018

Dec. 31,

2017

Percentage

Change

Mar. 31,

2017

Percentage

Change

Interest income
Interest and fees on loans $ 17,440 $ 16,832 3.6 % $ 13,877 25.7 %
Interest on investments 848 772 9.8 % 508 66.9 %
Interest on others   340     267   27.3 %   232   46.6 %
Total interest income   18,628     17,871   4.2 %   14,617   27.4 %
 
Interest expense
Interest on deposits 3,166 2,766 14.5 % 2,147 47.5 %
Interest on borrowings   168     172   -2.3 %   -   NA
Total interest expenses   3,334     2,938   13.5 %   2,147   55.3 %
 
Net interest income 15,293 14,933 2.4 % 12,470 22.6 %
 
Provision for loan losses (PLL) 95 1,713 -94.5 % (198

)

 

-148.0 %
 
Net interest income after PLL   15,198     13,220   15.0 %   12,668   20.0 %
 
Non-interest income
Gain on sale of SBA loans 2,050 2,109 -2.8 % 2,315 -11.4 %
Gain on sale of residential mortgage loans 22 18 22.2 % 29 -24.1 %
Service charges on deposits 349 357 -2.2 % 350 -0.3 %
Loan servicing fees 626 605 3.5 % 566 10.6 %
Other   315     273   15.4 %   229   37.6 %
Total non-interest income   3,362     3,362   0.0 %   3,489   -3.6 %
 
Non-interest expense
Employee salaries & benefits 6,246 6,140 1.7 % 5,521 13.1 %
Occupancies and fixed assets 1,144 1,167 -2.0 % 1,096 4.4 %
Legal & professional 753 716 5.2 % 584 28.9 %
FDIC assessment 132 114 15.8 % 98 34.7 %
Marketing expenses 352 321 9.7 % 267 31.8 %
Data and item processing expenses 302 288 4.9 % 249 21.3 %
Loan related expenses 53 128 -58.6 % 124 -57.3 %
Net loss on sale of OREO - 11 -100.0 % 1 NA
Others   648     735   -11.8 %   581 11.5 %
Total non-interest expenses   9,630     9,620   0.1 %   8,521 13.0 %
 
Net income before taxes 8,930 6,962 28.3 % 7,636 16.9 %
 
Income tax provision   2,666     4,623     -42.3 %   3,238 -17.7 %
 
Net income $ 6,264   $ 2,339   167.8 % $ 4,398   42.4 %
 
 
Earnings per common shares
 
Basic $ 0.47 $ 0.17 $ 0.33
Diluted $ 0.46 $ 0.17 $ 0.33
 
Average shares outstanding
 
Basic 13,418,259 13,415,795 13,395,363
Diluted 13,586,759 13,569,503 13,503,502
 
 
Return on average assets 1.73

%

 

0.65

%

 

1.42

%

 

Return on average shareholders' equity 17.50

%

 

6.47

%

 

13.77

%

 

Net interest margin 4.33

%

 

4.27

%

 

4.15

%

 

Efficiency ratio 51.62

%

 

52.58

%

 

53.39

%

 

 
                                                   
Pacific City Financial Corporation
Average Balance, Average Yield, and Average Rate
(Dollars in thousands)
 
Three Months Ended

March 31, 2018

December 31, 2017 March 31, 2017

Average
Balance

Interest
Income/
Expense

Average
Yield/
Rate

Average
Balance

Interest
Income/
Expense

Average
Yield/
Rate

Average
Balance

Interest
Income/
Expense

Average
Yield/
Rate

Assets
Interest-earning assets:
Gross loans, net of deferred loan fees $ 1,219,867 $ 17,440 5.80 % $ 1,186,020 $ 16,832 5.63 % $ 1,055,843 $ 13,877 5.33 %
US government agencies 24,350 137 2.25 % 25,333 144 2.28 % 22,701 130 2.29 %
Mortgage backed securities 67,484 391 2.32 % 66,594 332 1.99 % 49,129 220 1.79 %
Collateralized mortgage obligation 50,974 280 2.20 % 47,879 251 2.10 % 23,657 110 1.86 %
Muni bonds 6,583 41 2.49 % 7,666 44 2.30 % 8,794 48 2.18 %
Interest bearing deposit & others   63,981     340   2.13 %   53,872     268   2.00 %   58,693     232 1.58 %
Total interest-earning assets $ 1,433,239   $ 18,629   5.27 % $ 1,387,364   $ 17,871   5.11 % $ 1,218,817   $ 14,617 4.86 %
Noninterest-earning assets:
Cash and cash equivalents $ 20,329 $ 17,440 $ 16,945
Allowances for loan losses (12,366 ) (11,665 ) (11,479 )
Other assets   26,746     28,836     27,455  
$ 34,709   $ 34,611   $ 32,921  
 
Total assets $ 1,467,948   $ 1,421,975   $ 1,251,738  
 
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Money market & NOW accounts $ 297,947 $ 760 1.03 % $ 314,237 $ 814 1.03 % $ 322,261 $ 776 0.98 %
Savings 8,632 6 0.28 % 8,870 6 0.27 % 8,713 6 0.28 %
Time deposits   654,124     2,400   1.49 %   585,163     1,946   1.32 %   508,411     1,365 1.09 %
Total interest-bearing deposits $ 960,703   $ 3,166   1.34 % $ 908,270   $ 2,766   1.21 % $ 839,385   $ 2,147 1.04 %
Borrowings:
Other borrowings   40,000     168   1.70 %   40,000     172   1.71 %   -     - NA
$ 40,000   $ 168   1.70 % $ 40,000   $ 172   1.71 % $ -   $ - NA
 
Total interest-bearing liabilities $ 1,000,703   $ 3,334   1.35 % $ 948,270   $ 2,938   1.23 % $ 839,385     2,147 1.04 %
Noninterest-bearing liabilities:
Demand deposits $ 313,660 $ 320,174 $ 275,151
Other liabilities   8,384     10,131     7,690  
$ 322,044   $ 330,305   $ 282,841  
 
Total liabilities $ 1,322,747   $ 1,278,575   $ 1,122,226  
 
Shareholders' equity $ 145,201   $ 143,400   $ 129,512  
 
Total liabilities and shareholders' equity $ 1,467,948   $ 1,421,975   $ 1,251,738  
 
Net interest income $ 15,295   $ 14,933   $ 12,470
 
Cost of funds 1.03 % 0.92 % 0.78 %
 
Net interest spread 3.92 % 3.88 % 3.82 %
 
Net interest margin 4.33 % 4.27 % 4.15 %
 

Contacts

Pacific City Financial Corporation
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000

Contacts

Pacific City Financial Corporation
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000