Pacific Mercantile Bancorp (Nasdaq: PMBC), the holding company of
Pacific Mercantile Bank (the “Bank”), a wholly owned banking
subsidiary, today reported its financial results for the three and
six months ended June 30, 2020.
For the second quarter of 2020, the Company
reported net income of $1.9 million, or $0.08 per fully diluted
share. This compares to a net loss of $2.4 million, or $(0.10) per
fully diluted share, in the first quarter of 2020, and net income
of $2.7 million, or $0.12 per fully diluted share, in the second
quarter of 2019. The increase in net income, as compared to the
three months ended March 31, 2020, is primarily attributable
to a decrease in our provision for loan and lease losses to $2.9
million for the three months ended June 30, 2020 from $6.2
million for the three months ended March 31, 2020, as well as
an increase in interest income related to our origination of $280.3
million of PPP loans and decreased interest expense resulting from
the declining interest rate environment in the second quarter. The
decrease in net income, as compared to the three months ended
June 30, 2019, is primarily attributable to the provision for
loan and lease losses of $2.9 million for the three months ended
June 30, 2020, compared to no provision taken for the three
months ended June 30, 2019, as well as decreased noninterest
income in comparison to the second quarter of 2019, which included
gain on sale of SBA loans that did not occur during the same period
in 2020.
Brad R. Dinsmore, President & CEO of Pacific
Mercantile Bancorp, said, “Despite the challenges presented by the
COVID-19 pandemic, we are pleased that we have been able to
continue making progress on the long-term strategies we have
implemented to improve our operating performance. Our strong
execution on these strategies resulted in positive trends across
many of our key metrics, including an improved deposit mix, a lower
cost of deposits, lower operating expenses, and most importantly, a
higher level of profitability.
“Due to the hard work of our team, we were
highly effective in providing efficient access to funding through
the Paycheck Protection Program (PPP), as we funded over $280
million of loans for nearly 700 companies. Relative to our size, we
were able to originate more PPP loans than most other banks in the
country. Through this process, we were able to add nearly 300 new
clients that have already contributed over $40 million in demand
deposits and are now generating fee income through the utilization
of our Treasury Management products and services.
“Through our high touch, high service
relationship banking model, we have stayed in close contact with
our borrowers to understand the level of stress on their businesses
as the pandemic has ensued and ensure they have the support they
need to manage through the downturn in the economy. A loan review
conducted in June covering approximately 95% of our non-PPP
commercial and commercial real estate loans indicated that most of
our clients were experiencing stable to improving business trends
relative to a similar review conducted in March. Given the
uncertainties that still exist due to COVID-19, we continued to
build our loan reserves this quarter to 1.67% of total loans when
excluding PPP loans.
“While the impact of recent restrictions
regarding business openings put in place by the state of California
remains to be seen, we generally expect to see a continuation of
the positive operating trends that we experienced in the second
quarter and make further progress on the initiatives we have in
place to enhance the long-term value of our franchise,” said Mr.
Dinsmore.
Results of Operations
The following tables show a summary of our
operating results for the dates and periods indicated. The
discussion below highlights the key factors contributing to the
changes shown in the following table for the three and six months
ended June 30, 2020, as compared to the three months ended
March 31, 2020 and the three and six months ended
June 30, 2019.
|
Three Months Ended |
|
June 30, 2020 |
|
March 31, 2020 |
|
December 31, 2019 |
|
September 30, 2019 |
|
June 30, 2019 |
|
(Dollars in thousands) |
Total interest income |
$ |
15,580 |
|
|
$ |
14,769 |
|
|
|
$ |
16,277 |
|
|
|
$ |
16,767 |
|
|
$ |
16,466 |
|
Total interest expense |
2,262 |
|
|
3,296 |
|
|
|
3,734 |
|
|
|
4,024 |
|
|
4,247 |
|
Net interest income |
13,318 |
|
|
11,473 |
|
|
|
12,543 |
|
|
|
12,743 |
|
|
12,219 |
|
Provision for loan and lease
losses |
2,850 |
|
|
6,200 |
|
|
|
3,750 |
|
|
|
2,100 |
|
|
— |
|
Total noninterest income |
1,171 |
|
|
1,095 |
|
|
|
1,369 |
|
|
|
1,342 |
|
|
1,386 |
|
Total noninterest expense |
8,934 |
|
|
9,720 |
|
|
|
9,790 |
|
|
|
9,697 |
|
|
9,707 |
|
Income tax (benefit)
provision |
800 |
|
|
(991 |
) |
|
|
(68 |
) |
|
|
658 |
|
|
1,170 |
|
Net income (loss) |
$ |
1,905 |
|
|
$ |
(2,361 |
) |
|
|
$ |
440 |
|
|
|
$ |
1,630 |
|
|
$ |
2,728 |
|
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
(Dollars in thousands) |
Total interest income |
$ |
30,349 |
|
|
$ |
32,632 |
|
Total interest expense |
5,558 |
|
|
8,362 |
|
Net interest income |
24,791 |
|
|
24,270 |
|
Provision for loan and lease
losses |
9,050 |
|
|
3,300 |
|
Total noninterest income |
2,265 |
|
|
2,876 |
|
Total noninterest expense |
18,651 |
|
|
18,691 |
|
Income tax (benefit)
provision |
(190 |
) |
|
1,545 |
|
Net income (loss) |
$ |
(455 |
) |
|
$ |
3,610 |
|
Net Interest Income
Q2 2020 vs Q1 2020. Net
interest income increased $1.8 million, or 16.1%, for the three
months ended June 30, 2020 as compared to the three months
ended March 31, 2020 primarily as a result of:
- An increase in interest income of $811 thousand, or 5.5%,
primarily attributable to the successful execution of PPP which
began funding small business loans for our existing and new
customers during the three months ended June 30, 2020,
resulting in a higher average loan balance and increased fee income
for the quarter as compared to the three months ended
March 31, 2020; and
- A decrease in interest expense of $1.0 million, or 31.4%,
primarily attributable to our focus on reducing costs of deposits
in combination with the 150 basis point reduction in interest rates
by the Federal Reserve that was effective throughout the three
months ended June 30, 2020, compared to the three months ended
March 31, 2020 in which rates were adjusted near the end of
the period.
Our net interest margin decreased to 3.17% for
the three months ended June 30, 2020 as compared to 3.36% for
the three months ended March 31, 2020. The decrease was
primarily attributable to a declining interest rate environment, as
the rate cuts by the Federal Reserve were made at the end of the
first quarter, where the full second quarter was effected by the
rate reductions. The decrease in net interest margin was also
impacted by an unfavorable shift in the mix of earning assets for
the quarter along with an increase in the average balance of loans
placed on nonaccrual during the second quarter and the reversal of
interest income associated with placing those loans on
nonaccrual.
Q2 2020 vs Q2 2019. Net
interest income increased $1.1 million, or 9.0%, for the three
months ended June 30, 2020 as compared to the three months
ended June 30, 2019 primarily as a result of:
- A decrease in interest expense of $2.0 million, or 46.7%,
primarily attributable to our focus on reducing costs of deposits
in combination with the 225 basis point reduction in interest rates
by the Federal Reserve during the period from June 30, 2019 to
June 30, 2020. Also contributing to the decrease was a
favorable change in our mix of deposits from higher costing
deposits to noninterest bearing deposits; partially offset by
- A decrease in interest income of $886 thousand, or 5.4%,
primarily attributable to a decrease in interest earned on
short-term investments and loans as a result of a decrease in the
average yield on earning assets resulting from the low interest
rate environment during the three months ended June 30, 2020
as compared to the three months ended June 30, 2019.
YTD 2020 vs YTD 2019. Net
interest income increased $521 thousand, or 2.1%, for the six
months ended June 30, 2020 as compared to the six months ended
June 30, 2019, primarily as a result of:
- A decrease in interest expense of $2.8 million, or 33.5%,
primarily attributable to our focus on reducing costs of deposits
in combination with the 225 basis point reduction in interest rates
by the Federal Reserve during the period from June 30, 2019 to
June 30, 2020, in addition to the decreased rates of interest
paid on borrowings for the six months ended June 30, 2020 as
compared to the six months ended June 30, 2019, which was the
result of the declining interest rate environment; partially offset
by
- A decrease in interest income of $2.3 million, or 7.0%,
primarily attributable to a decrease in interest earned on loans
and short-term investments as a result of lower average yields
during the six months ended June 30, 2020 as compared to the
six months ended June 30, 2019, which was primarily the result
of the declining interest rate environment.
Provision for Loan and Lease
Losses
Q2 2020 vs Q1 2020. We recorded
a $2.9 million provision for loan and lease losses during the three
months ended June 30, 2020 as a result of net charge-offs, an
increase in classified and nonperforming loans, and qualitative
factor increases related to COVID during the second quarter. We
recorded a $6.2 million provision for loan and lease losses during
the three months ended March 31, 2020 as a result of net
charge-offs, an increase in classified and nonperforming loans, and
qualitative factor increases related to COVID during the first
quarter. During the three months ended June 30, 2020, we had
net charge-offs of $2.2 million compared to net charge-offs of $2.3
million for the three months ended March 31, 2020.
Q2 2020 vs Q2 2019. We
recorded a $2.9 million provision for loan and lease losses during
the three months ended June 30, 2020 as a result of net
charge-offs, an increase in classified and nonperforming loans, and
qualitative factor increases related to COVID during the second
quarter. We recorded no provision for loan and lease losses during
the three months ended June 30, 2019 as a result of a nominal
increase in our loan portfolio during the quarter with a favorable
change in the composition of loans.
YTD 2020 vs YTD 2019. We
recorded a $9.1 million provision for loan and lease losses during
the six months ended June 30, 2020 as a result of net
charge-offs of $4.5 million, an increase in classified and
nonperforming loans, and qualitative factor increases related to
COVID. We recorded a $3.3 million provision for loan and lease
losses during the six months ended June 30, 2019 as a result
of total net charge-offs of $5.3 million, which primarily related
to one large credit, partially offset by a decline in the level of
classified assets.
Noninterest Income
Q2 2020 vs Q1 2020. Noninterest
income increased by $76 thousand, or 6.9%, for the three months
ended June 30, 2020 as compared to the three months ended
March 31, 2020, primarily resulting from an increase in
deposit related fees, credit card fees and loan service fees.
Q2 2020 vs Q2 2019. Noninterest
income decreased by $215 thousand, or 15.5%, for the three months
ended June 30, 2020 as compared to the three months ended
June 30, 2019, primarily as a result of no gain on sale of SBA
loans in the second quarter of 2020 compared to gain on sale of
$300 thousand during the same period in 2019, and a decrease in
other noninterest income, partially offset by an increase in
deposit related fees, credit card fees and loan service fees during
the second quarter of 2020.
YTD 2020 vs YTD 2019.
Noninterest income decreased $611 thousand, or 21.2%, for the six
months ended June 30, 2020 as compared to the six months ended
June 30, 2019, primarily as a result of:
- No gain on sale of SBA loans during the six months ended
June 30, 2020 as compared to gain on sale of $600 thousand
during the same period in 2019; and
- A decrease of $313 thousand in other noninterest income as a
result of nonrecurring loan and prepayment fees during the six
months ended June 30, 2019; partially offset by
- An increase in deposit related fees, credit card fees and loan
service fees during the six months ended June 30, 2020 as
compared to the same period in 2019.
Noninterest Expense
Q2 2020 vs Q1 2020. Noninterest
expense decreased $786 thousand, or 8.1%, for the three months
ended June 30, 2020 as compared to the three months ended
March 31, 2020, as cost savings initiatives were implemented
during the quarter with the following results:
- A decrease of $607 thousand in salaries and employee benefits
primarily related to a reorganization of the bank during the second
quarter of 2020, and
- A decrease of $90 thousand in other noninterest expense
primarily related to business development and other operating
expenses; and
- A decrease of $159 thousand in our professional fees primarily
related to a decrease in consulting fees during the second quarter;
partially offset by
- An increase of $56 thousand in equipment and depreciation
related to hardware and software purchases related to the efforts
to deploy work-from-home capabilities for more of our
employees.
Q2 2020 vs Q2 2019. Noninterest
expense decreased $773 thousand, or 8.0%, for the three months
ended June 30, 2020 as compared to the three months ended
June 30, 2019, as cost savings initiatives were implemented
during the quarter with the following results:
- A decrease of $275 thousand in salaries and employee benefits
primarily related to a reorganization of the bank during the second
quarter of 2020; and
- A decrease of $488 thousand in our professional fees primarily
related to higher legal fees during the second quarter of 2019
compared to legal fees in the second quarter of 2020; and
- A decrease of $75 thousand in other noninterest expense
primarily related to business development; partially offset by
- An increase of $66 thousand in our data processing fees
primarily related to a higher credit card and deposit transaction
volume in the second quarter of 2020; and
- An increase of $30 thousand in loan related expenses.
YTD 2020 vs YTD 2019.
Noninterest expense decreased $40 thousand, or 0.2%, for the six
months ended June 30, 2020 as compared to the six months ended
June 30, 2019, primarily as a result of:
- A decrease of $423 thousand in our professional fees primarily
related to higher legal fees in 2019; and
- A decrease of $128 thousand in business development as part of
our cost savings initiative; partially offset by
- An increase of $354 thousand in salaries and employee benefits
primarily related to an increase in employee compensation expense
and hiring related fees; and
- An increase of $192 thousand in our data processing fees
primarily related to higher credit card and deposit transaction
volume.
Income tax provision
(benefit)
For the three months ended June 30, 2020,
we had an income tax expense of $800 thousand as a result of our
operating income. For the six months ended June 30, 2020, we
had an income tax benefit of $190 thousand as a result of the net
loss for the year to date. Accounting rules specify that management
must evaluate the deferred tax asset on a recurring basis to
determine whether enough positive evidence exists to determine
whether it is more-likely-than-not that the deferred tax asset will
be available to offset or reduce future taxes. The tax code allows
net operating losses incurred prior to December 31, 2017 to be
carried forward for 20 years from the date of the loss, and based
on its evaluation, management believes that the Company will be
able to realize the deferred tax asset within the period that our
net operating losses may be carried forward. Due to the hierarchy
of evidence that the accounting rules specify, management
determined that there continued to be enough positive evidence to
support no valuation allowance on our deferred tax asset at
June 30, 2020.
For the three months ended March 31, 2020,
we had an income tax benefit of $991 thousand. The income tax
benefit during the three months ended March 31, 2020 is a
result of the net loss for the first quarter.
For the three and six months ended June 30,
2019, we had an income tax expense of $1.2 million and $1.5
million, respectively. The income tax expense during the three and
six months ended June 30, 2019 is a result of our operating income.
Due to the hierarchy of evidence that the accounting rules specify,
management determined that there continued to be enough positive
evidence to support no valuation allowance on our deferred tax
asset at June 30, 2019.
Balance Sheet Information
Loans
As indicated in the table below, at
June 30, 2020, gross loans totaled approximately $1.37
billion, which represented an increase of $226.6 million, or 19.8%,
compared to gross loans outstanding at March 31, 2020. The
following table sets forth the composition, by loan category, of
our loan portfolio at June 30, 2020, March 31, 2020, and
December 31, 2019.
|
June 30, 2020 |
|
March 31, 2020 |
|
December 31, 2019 |
|
Amount |
|
Percent of Total Loans |
|
Amount |
|
Percent of Total Loans |
|
Amount |
|
Percent of Total
Loans |
|
(Dollars in thousands) |
Commercial loans |
$ |
698,280 |
|
|
51.0 |
% |
|
$ |
454,493 |
|
|
39.8 |
% |
|
$ |
409,420 |
|
|
36.2 |
% |
Commercial real estate loans -
owner occupied |
195,379 |
|
|
14.3 |
% |
|
200,917 |
|
|
17.6 |
% |
|
219,483 |
|
|
19.5 |
% |
Commercial real estate loans -
all other |
203,330 |
|
|
14.8 |
% |
|
205,116 |
|
|
17.9 |
% |
|
208,283 |
|
|
18.5 |
% |
Residential mortgage loans -
multi-family |
164,575 |
|
|
12.0 |
% |
|
172,703 |
|
|
15.1 |
% |
|
176,523 |
|
|
15.7 |
% |
Residential mortgage loans -
single family |
15,522 |
|
|
1.1 |
% |
|
16,863 |
|
|
1.5 |
% |
|
18,782 |
|
|
1.7 |
% |
Construction and land
development loans |
7,247 |
|
|
0.5 |
% |
|
5,457 |
|
|
0.5 |
% |
|
2,981 |
|
|
0.3 |
% |
Consumer loans |
85,414 |
|
|
6.3 |
% |
|
87,608 |
|
|
7.6 |
% |
|
90,867 |
|
|
8.1 |
% |
Gross loans |
$ |
1,369,747 |
|
|
100.0 |
% |
|
$ |
1,143,157 |
|
|
100.0 |
% |
|
$ |
1,126,339 |
|
|
100.0 |
% |
The increase of $226.6 million in gross loans
during the second quarter of 2020 was primarily a result of funding
$280.3 million in loans through the PPP. Excluding the PPP, we
funded total new organic loans of $9.6 million offset by loan
payoffs of $61.0 million and charge offs of $2.2 million. The
charge offs of $2.2 million included one COVID related charge off
of $1.4 million with the balance centered in three commercial loan
relationships that had been previously identified as classified,
for which we are continuing our collection efforts.
During the second quarter of 2020, we secured
new client relationships with commercial loan commitments of $295.7
million, of which $286.2 million were funded at June 30, 2020.
Our total commercial loan commitments increased to $963.5 million
at June 30, 2020 from $679.8 million at March 31, 2020 as
a result of PPP, and the utilization rate of commercial loan
commitments increased to 72.5% at June 30, 2020 from 67.0% at
March 31, 2020. Excluding PPP loans, total commitments
increased to $683.3 million at June 30, 2020 from $679.8
million at March 31, 2020, and the utilization rate of
commercial loan commitments decreased to 61.2% from 67.0% at
March 31, 2020.
Deposits
|
June 30, 2020 |
|
March 31, 2020 |
|
December 31, 2019 |
Type of
Deposit |
(Dollars in thousands) |
Noninterest-bearing checking accounts |
$ |
596,052 |
|
|
$ |
494,442 |
|
|
$ |
397,000 |
|
Interest-bearing checking accounts |
110,707 |
|
|
90,742 |
|
|
108,941 |
|
Money market and savings deposits |
472,246 |
|
|
443,043 |
|
|
416,751 |
|
Certificates of deposit |
249,521 |
|
|
268,061 |
|
|
276,878 |
|
Totals |
$ |
1,428,526 |
|
|
$ |
1,296,288 |
|
|
$ |
1,199,570 |
|
The increase in total deposits of $132.2
million, or 10.2%, during the three months ended June 30, 2020
from March 31, 2020 is primarily attributable to deposits of
PPP loan proceeds. Noninterest-bearing checking accounts increased
by $101.6 million, or 20.6%, money market and savings accounts
increased by $29.2 million, or 6.6%, and interest-bearing checking
accounts increased by $20.0 million, or 22.0%, partially offset by
a decrease of $18.5 million, or 6.9%, on certificates of deposit.
Lower priced core deposits increased to 83% of total deposits,
while higher priced certificates of deposits decreased to 17% of
total deposits at June 30, 2020, as compared to 79% and 21%,
respectively at March 31, 2020.
Asset Quality
Nonperforming Assets
|
2020 |
|
2019 |
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
(Dollars in thousands) |
Total
nonperforming loans |
$ |
24,681 |
|
|
$ |
20,021 |
|
|
$ |
15,682 |
|
|
$ |
13,209 |
|
|
$ |
1,344 |
|
Other real estate owned |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other nonperforming assets |
663 |
|
|
392 |
|
|
164 |
|
|
138 |
|
|
82 |
|
Total nonperforming assets |
$ |
25,344 |
|
|
$ |
20,413 |
|
|
$ |
15,846 |
|
|
$ |
13,347 |
|
|
$ |
1,426 |
|
30-89 day past due loans |
$ |
7,175 |
|
|
$ |
22,437 |
|
|
$ |
2,779 |
|
|
$ |
7,827 |
|
|
$ |
5,334 |
|
90-day past due loans |
$ |
12,412 |
|
|
$ |
3,765 |
|
|
$ |
533 |
|
|
$ |
86 |
|
|
$ |
— |
|
Total classified assets |
$ |
83,104 |
|
|
$ |
44,825 |
|
|
$ |
37,192 |
|
|
$ |
32,025 |
|
|
$ |
5,174 |
|
Allowance for loan and lease losses |
$ |
18,166 |
|
|
$ |
17,520 |
|
|
$ |
13,611 |
|
|
$ |
12,086 |
|
|
$ |
11,474 |
|
Allowance for loan and lease losses /gross loans |
1.33 |
% |
|
1.53 |
% |
|
1.21 |
% |
|
1.04 |
% |
|
1.06 |
% |
Allowance for loan and lease losses /total assets |
1.08 |
% |
|
1.09 |
% |
|
0.96 |
% |
|
0.84 |
% |
|
0.81 |
% |
Ratio of allowance for loan and lease losses to nonperforming
loans |
73.60 |
% |
|
87.51 |
% |
|
86.79 |
% |
|
91.50 |
% |
|
853.72 |
% |
Ratio of nonperforming assets to total assets |
1.50 |
% |
|
1.28 |
% |
|
1.12 |
% |
|
0.93 |
% |
|
0.10 |
% |
Net quarterly charge-offs (recoveries) to gross loans
(annualized) |
0.65 |
% |
|
0.81 |
% |
|
0.78 |
% |
|
0.51 |
% |
|
0.01 |
% |
June 30, 2020 vs March 31,
2020. Nonperforming assets at June 30, 2020
increased by $4.9 million from March 31, 2020 primarily as a
result of an increase in nonperforming loans. The increase in our
nonperforming loans during the three months ended June 30,
2020 resulted from the addition of $7.8 million of commercial and
consumer loans, partially offset by principal payments of $643
thousand, and charge-offs of $2.2 million. As a result of this
increase in nonperforming loans, the ratio of nonperforming assets
to total assets increased from 1.28% at March 31, 2020 to
1.50% at June 30, 2020. The ratio of allowance for loan and
lease losses to nonperforming loans decreased to 73.60% at
June 30, 2020, from 87.51% at March 31, 2020, as a result
of a greater increase to nonperforming loans than the increase to
allowance for loan and lease losses during the second quarter. Our
past due loans do not include loans that have had their payments
deferred as a result of assistance being provided to our borrowers
due to COVID-19. As of June 30, 2020 we had 76 loans with an
outstanding balance of $34.5 million that were still under a
payment deferral.
Our classified assets increased by $38.3 million
from $44.8 million at March 31, 2020 to $83.1 million at
June 30, 2020. The increase this quarter is primarily related
to additions of $43.8 million during the three months ended
June 30, 2020, partially offset by principal payments of $3.0
million, charge-offs of $2.2 million, and the transfer to other
assets of $324 thousand during the same period. The $43.8 million
of additions was primarily comprised of four commercial loans
totaling $41.0 million, of which one commercial loan was paid in
full during July. The additions to classified loans during the
three months ended June 30, 2020 represented the migration of
loans to classified rating from loans that were previously rated as
Special Mention, or “Watch” within the Pass category in the
previous quarter.
June 30, 2020 vs June 30,
2019. Nonperforming assets at June 30, 2020
increased by $23.9 million from June 30, 2019 primarily as a
result of an increase in nonperforming loans to $24.7 million in
the current quarter from $1.3 million the prior year. As a result
of this increase to nonperforming loans, the ratio of nonperforming
assets to total assets increased from 0.10% at June 30, 2019
to 1.50% at June 30, 2020.
Our classified assets increased by $77.9 million
to $83.1 million at June 30, 2020 from $5.2 million at
June 30, 2019. The additions to classified loans represented
the migration of loans to classified rating from loans that were
previously rated as Special Mention, or “Watch” within our Pass
category in the same quarter prior year.
Allowance for loan and lease
losses
|
2020 |
|
2019 |
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
(Dollars in thousands) |
Balance at
beginning of quarter |
$ |
17,520 |
|
|
$ |
13,611 |
|
|
$ |
12,086 |
|
|
$ |
11,474 |
|
|
$ |
11,514 |
|
Charge offs |
(2,249 |
) |
|
(2,314 |
) |
|
(2,608 |
) |
|
(1,551 |
) |
|
(127 |
) |
Recoveries |
45 |
|
|
23 |
|
|
383 |
|
|
63 |
|
|
87 |
|
Provision |
2,850 |
|
|
6,200 |
|
|
3,750 |
|
|
2,100 |
|
|
— |
|
Balance at end of quarter |
$ |
18,166 |
|
|
$ |
17,520 |
|
|
$ |
13,611 |
|
|
$ |
12,086 |
|
|
$ |
11,474 |
|
At June 30, 2020, the allowance for loan
and lease losses (“ALLL”) totaled $18.2 million, which was
approximately $646 thousand more than at March 31, 2020 and
$6.7 million more than at June 30, 2019. The ALLL activity
during the three months ended June 30, 2020 included net
charge-offs of $2.2 million. There was a $2.9 million provision for
loan and lease losses during the period, primarily attributable to
the net charge-offs during the quarter, an increase in classified
and nonperforming loans, and qualitative factor increases related
to COVID during the three months ended June 30, 2020. The
ratio of the ALLL-to-total loans outstanding as of June 30,
2020 was 1.33%, or 1.67% if the outstanding balance of PPP loans
are excluded from total loans (which is a non-GAAP financial
measure), as compared to 1.53% and 1.06% as of March 31, 2020
and June 30, 2019, respectively. The ratio of the
ALLL-to-total loans outstanding decreased from last quarter
primarily due to the origination of $280.3 million in PPP loans
that are 100% guaranteed by the SBA, which had the effect of
reducing this ratio by 34 basis points.
Capital Resources
At June 30, 2020, the Bank had total
regulatory capital of $173.3 million. The ratio of the Bank’s total
capital-to-risk weighted assets, which is a principal federal bank
regulatory measure of the financial strength of banking
institutions, was 14.5% which exceeds the minimum for a bank to be
classified under federal bank regulatory guidelines as a
“well-capitalized” banking institution, which is the highest of the
capital standards established by federal banking regulatory
authorities.
The following table sets forth the regulatory
capital and capital ratios of the Bank at June 30, 2020, as
compared to the regulatory requirements that must be met for a
banking institution to be rated as a well-capitalized
institution.
|
Actual At June 30, 2020 |
|
Federal Regulatory Requirement to be Rated
Well-Capitalized |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
Total Capital to Risk Weighted Assets |
$ |
173,270 |
|
|
14.5 |
% |
|
$ |
123,938 |
|
|
At least 10.0 |
Common Equity Tier 1 Capital to
Risk Weighted Assets |
$ |
158,302 |
|
|
13.3 |
% |
|
$ |
80,560 |
|
|
At least 6.5 |
Tier 1 Capital to Risk Weighted
Assets |
$ |
158,302 |
|
|
13.3 |
% |
|
$ |
99,151 |
|
|
At least 8.0 |
Tier 1 Capital to Average
Assets |
$ |
158,302 |
|
|
9.2 |
% |
|
$ |
71,566 |
|
|
At least 5.0 |
About Pacific Mercantile
Bancorp
Pacific Mercantile Bancorp (Nasdaq: PMBC) is the
parent holding company of Pacific Mercantile Bank, which opened for
business March 1, 1999. The Bank, which is an FDIC insured,
California state-chartered bank and a member of the Federal Reserve
System, provides a wide range of commercial banking services to
businesses, business professionals and individual clients. The Bank
is headquartered in Orange County and operates a total of seven
offices in Southern California, located in Orange, Los Angeles, San
Diego, and San Bernardino counties. The Bank offers tailored
flexible solutions for its clients including an array of loan and
deposit products, sophisticated cash management services, and
comprehensive online banking services accessible at
www.pmbank.com.
Forward-Looking Information
This news release contains statements regarding
our expectations, beliefs and views about our future financial
performance and our business, trends and expectations regarding the
markets in which we operate, and our future plans, including the
credit exposure of certain loan products and other components of
our business that could be impacted by the COVID-19 pandemic. Those
statements, which include the quotation from management, constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, can be identified by
the fact that they do not relate strictly to historical or current
facts. Often, they include words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “project,” or words of
similar meaning, or future or conditional verbs such as “will,”
“would,” “should,” “could,” or “may”. Forward-looking statements
are based on current information available to us and our
assumptions about future events over which we do not have control.
Moreover, our business and our markets are subject to a number of
risks and uncertainties which could cause our actual financial
performance in the future, and the future performance of our
markets (which can affect both our financial performance and the
market prices of our shares), to differ, possibly materially, from
our expectations as set forth in the forward-looking statements
contained in this news release.
In addition to the risk of incurring loan
losses, which is an inherent risk of the banking business, these
risks and uncertainties include, but are not limited to, the
following: deteriorating economic conditions and macroeconomic
factors such as unemployment rates and the volume of bankruptcies,
as well as changes in monetary, fiscal or tax policy to address the
impact of COVID-19, any of which could cause us to incur additional
loan losses and adversely affect our results of operations in the
future; the risk that the credit quality of our borrowers declines;
potential declines in the value of the collateral for secured
loans; the risk that steps we have taken to strengthen our overall
credit administration are not effective; the risk that our interest
margins and, therefore, our net interest income will be adversely
affected by changes in prevailing interest rates; the risk that we
will not succeed in further reducing our remaining nonperforming
assets, in which event we would face the prospect of further loan
charge-offs and write-downs of other real estate owned and would
continue to incur expenses associated with the management and
disposition of those assets; the risk that we will not be able to
manage our interest rate risks effectively, in which event our
operating results could be harmed; the prospect that government
regulation of banking and other financial services organizations
will increase, causing our costs of doing business to increase and
restricting our ability to take advantage of business and growth
opportunities; the risk that our efforts to develop a robust
commercial banking platform may not succeed; and the risk that we
may be unable to realize our expected level of increasing deposit
inflows. Many of the foregoing risks and uncertainties are, and
will be, exacerbated by the COVID-19 pandemic and any worsening of
the global business and economic environment as a result. Readers
of this news release are encouraged to review the additional
information regarding these and other risks and uncertainties to
which our business is subject that are contained in our Annual
Report on Form 10-K for the year ended December 31, 2019 which
is on file with the Securities and Exchange Commission (the “SEC”).
Additional information will be set forth in our Quarterly Report on
Form 10-Q for the three and six months ended June 30, 2020, which
we expect to file with the SEC during the third quarter of 2020,
and readers of this release are urged to review the additional
information that will be contained in that report.
Due to these and other risks and uncertainties
to which our business is subject, you are cautioned not to place
undue reliance on the forward-looking statements contained in this
news release, which speak only as of its date, or to make
predictions about our future financial performance based solely on
our historical financial performance. We disclaim any obligation to
update or revise any of the forward-looking statements as a result
of new information, future events or otherwise, except as may be
required by law.
CONSOLIDATED STATEMENTS OF
OPERATIONS (Dollars and numbers of shares in
thousands, except per share data)
(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
June 30,2020 |
|
March 31,2020 |
|
June 30,2019 |
|
Jun ’20 vs Mar ’20 % Change |
|
Jun ’20 vs Jun ’19 % Change |
|
June 30,2020 |
|
June 30,2019 |
|
% Change |
Total interest income |
$ |
15,580 |
|
|
$ |
14,769 |
|
|
$ |
16,466 |
|
|
5.5 |
% |
|
(5.4 |
)% |
|
$ |
30,349 |
|
|
$ |
32,632 |
|
|
(7.0 |
)% |
Total interest expense |
2,262 |
|
|
3,296 |
|
|
4,247 |
|
|
(31.4 |
)% |
|
(46.7 |
)% |
|
5,558 |
|
|
8,362 |
|
|
(33.5 |
)% |
Net interest income |
13,318 |
|
|
11,473 |
|
|
12,219 |
|
|
16.1 |
% |
|
9.0 |
% |
|
24,791 |
|
|
24,270 |
|
|
2.1 |
% |
Provision for loan and lease
losses |
2,850 |
|
|
6,200 |
|
|
— |
|
|
(54.0 |
)% |
|
100.0 |
% |
|
9,050 |
|
|
3,300 |
|
|
174.2 |
% |
Net interest income after provision for loan and lease losses |
10,468 |
|
|
5,273 |
|
|
12,219 |
|
|
98.5 |
% |
|
(14.3 |
)% |
|
15,741 |
|
|
20,970 |
|
|
(24.9 |
)% |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service fees on deposits and other banking services |
625 |
|
|
522 |
|
|
443 |
|
|
19.7 |
% |
|
41.1 |
% |
|
1,147 |
|
|
840 |
|
|
36.5 |
% |
Net gain on sale of securities available for sale |
— |
|
|
— |
|
|
— |
|
|
— |
% |
|
— |
% |
|
— |
|
|
— |
|
|
— |
% |
Net gain on sale of small business administration loans |
— |
|
|
— |
|
|
300 |
|
|
— |
% |
|
100.0 |
% |
|
— |
|
|
600 |
|
|
100.0 |
% |
Net loss on sale of other assets |
(53 |
) |
|
6 |
|
|
(11 |
) |
|
(983.3 |
)% |
|
381.8 |
% |
|
(47 |
) |
|
(36 |
) |
|
30.6 |
% |
Other noninterest income |
599 |
|
|
567 |
|
|
654 |
|
|
5.6 |
% |
|
(8.4 |
)% |
|
1,165 |
|
|
1,472 |
|
|
(20.9 |
)% |
Total noninterest income |
1,171 |
|
|
1,095 |
|
|
1,386 |
|
|
6.9 |
% |
|
(15.5 |
)% |
|
2,265 |
|
|
2,876 |
|
|
(21.2 |
)% |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
5,462 |
|
|
6,069 |
|
|
5,737 |
|
|
(10.0 |
)% |
|
(4.8 |
)% |
|
11,531 |
|
|
11,177 |
|
|
3.2 |
% |
Occupancy and equipment |
1,176 |
|
|
1,123 |
|
|
1,127 |
|
|
4.7 |
% |
|
4.3 |
% |
|
2,298 |
|
|
2,215 |
|
|
3.7 |
% |
Professional Fees |
702 |
|
|
861 |
|
|
1,190 |
|
|
(18.5 |
)% |
|
(41.0 |
)% |
|
1,563 |
|
|
1,986 |
|
|
(21.3 |
)% |
OREO expenses, net |
— |
|
|
— |
|
|
1 |
|
|
— |
% |
|
(100.0 |
)% |
|
— |
|
|
69 |
|
|
(100.0 |
)% |
FDIC Expense |
210 |
|
|
193 |
|
|
193 |
|
|
8.8 |
% |
|
8.8 |
% |
|
403 |
|
|
357 |
|
|
12.9 |
% |
Other noninterest expense |
1,384 |
|
|
1,474 |
|
|
1,459 |
|
|
(6.1 |
)% |
|
(5.1 |
)% |
|
2,856 |
|
|
2,887 |
|
|
(1.1 |
)% |
Total noninterest expense |
8,934 |
|
|
9,720 |
|
|
9,707 |
|
|
(8.1 |
)% |
|
(8.0 |
)% |
|
18,651 |
|
|
18,691 |
|
|
(0.2 |
)% |
Income before income taxes |
2,705 |
|
|
(3,352 |
) |
|
3,898 |
|
|
(180.7 |
)% |
|
(30.6 |
)% |
|
(645 |
) |
|
5,155 |
|
|
(112.5 |
)% |
Income tax expense
(benefit) |
800 |
|
|
(991 |
) |
|
1,170 |
|
|
(180.7 |
)% |
|
(31.6 |
)% |
|
(190 |
) |
|
1,545 |
|
|
(112.3 |
)% |
Net income from continuing operations |
1,905 |
|
|
(2,361 |
) |
|
2,728 |
|
|
(180.7 |
)% |
|
(30.2 |
)% |
|
(455 |
) |
|
3,610 |
|
|
(112.6 |
)% |
Net income |
$ |
1,905 |
|
|
$ |
(2,361 |
) |
|
$ |
2,728 |
|
|
(180.7 |
)% |
|
(30.2 |
)% |
|
$ |
(455 |
) |
|
$ |
3,610 |
|
|
(112.6 |
)% |
Net income allocable to common shareholders |
$ |
1,905 |
|
|
$ |
(2,361 |
) |
|
$ |
2,728 |
|
|
(180.7 |
)% |
|
(30.2 |
)% |
|
$ |
(455 |
) |
|
$ |
3,610 |
|
|
(112.6 |
)% |
Basic income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders |
$ |
0.08 |
|
|
$ |
(0.10 |
) |
|
$ |
0.12 |
|
|
(180.0 |
)% |
|
(33.3 |
)% |
|
$ |
(0.02 |
) |
|
$ |
0.15 |
|
|
(113.3 |
)% |
Diluted income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders |
$ |
0.08 |
|
|
$ |
(0.10 |
) |
|
$ |
0.12 |
|
|
(180.0 |
)% |
|
(33.3 |
)% |
|
$ |
(0.02 |
) |
|
$ |
0.15 |
|
|
(113.3 |
)% |
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
23,502 |
|
|
23,597 |
|
|
22,620 |
|
|
(0.4 |
)% |
|
3.9 |
% |
|
23,489 |
|
|
22,224 |
|
|
5.7 |
% |
Diluted |
23,713 |
|
|
23,597 |
|
|
23,616 |
|
|
0.5 |
% |
|
0.4 |
% |
|
23,489 |
|
|
23,581 |
|
|
(0.4 |
)% |
Ratios from continuing
operations(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
0.44 |
% |
|
(0.67 |
)% |
|
0.78 |
% |
|
|
|
|
|
(0.06 |
)% |
|
0.52 |
% |
|
|
Return on average equity |
5.11 |
% |
|
(6.29 |
)% |
|
7.57 |
% |
|
|
|
|
|
(0.61 |
)% |
|
5.06 |
% |
|
|
Efficiency ratio |
61.66 |
% |
|
77.34 |
% |
|
71.35 |
% |
|
|
|
|
|
68.93 |
% |
|
68.85 |
% |
|
|
____________________
(1) Ratios for the three months ended June 30,
2020, March 31, 2020 and June 30, 2019, and for the six
months ended June 30, 2020 and June 30, 2019, have been
annualized.
CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION(Dollars in thousands, except share and
book value data) (Unaudited)
ASSETS |
June 30, 2020 |
|
December 31, 2019 |
|
Increase/
(Decrease) |
|
|
Cash and due
from banks |
$ |
17,170 |
|
|
$ |
17,409 |
|
|
(1.4 |
)% |
Interest bearing deposits with financial institutions(1) |
241,859 |
|
|
202,729 |
|
|
19.3 |
% |
Interest bearing time deposits |
2,345 |
|
|
2,420 |
|
|
(3.1 |
)% |
Investment securities (including stock) |
34,123 |
|
|
36,254 |
|
|
(5.9 |
)% |
Loans (net of allowances of $18,166 and $13,611,
respectively) |
1,350,800 |
|
|
1,117,511 |
|
|
20.9 |
% |
Net deferred tax assets |
9,816 |
|
|
8,434 |
|
|
16.4 |
% |
Intangible assets |
239 |
|
|
266 |
|
|
(10.2 |
)% |
Other assets |
31,840 |
|
|
31,131 |
|
|
2.3 |
% |
Total assets |
$ |
1,688,192 |
|
|
$ |
1,416,154 |
|
|
19.2 |
% |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Noninterest bearing deposits |
$ |
596,052 |
|
|
$ |
397,000 |
|
|
50.1 |
% |
Interest bearing deposits |
|
|
|
|
|
Interest checking |
110,707 |
|
|
108,941 |
|
|
1.6 |
% |
Savings/money market |
472,246 |
|
|
416,751 |
|
|
13.3 |
% |
Certificates of deposit |
249,521 |
|
|
276,878 |
|
|
(9.9 |
)% |
Total interest bearing deposits |
832,474 |
|
|
802,570 |
|
|
3.7 |
% |
Total deposits |
1,428,526 |
|
|
1,199,570 |
|
|
19.1 |
% |
Other borrowings |
73,962 |
|
|
30,000 |
|
|
146.5 |
% |
Other liabilities |
18,420 |
|
|
20,009 |
|
|
(7.9 |
)% |
Junior subordinated debentures |
17,527 |
|
|
17,527 |
|
|
— |
% |
Total liabilities |
1,538,435 |
|
|
1,267,106 |
|
|
21.4 |
% |
Shareholders’ equity |
149,757 |
|
|
149,048 |
|
|
0.5 |
% |
Total Liabilities and Shareholders’ Equity |
$ |
1,688,192 |
|
|
$ |
1,416,154 |
|
|
19.2 |
% |
Book value per share |
$ |
6.34 |
|
|
$ |
6.32 |
|
|
0.3 |
% |
Shares outstanding, common |
23,627,040 |
|
|
23,573,529 |
|
|
0.2 |
% |
____________________
(1) Interest bearing deposits held in the Bank’s
account maintained at the Federal Reserve Bank.
CONSOLIDATED AVERAGE BALANCES AND YIELD
DATA(Dollars in thousands)
(Unaudited)
|
Three Months
Ended |
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
Average Balance |
|
Interest Earned/
Paid |
|
Average Yield/
Rate |
|
Average Balance |
|
Interest Earned/
Paid |
|
Average Yield/
Rate |
|
Average Balance |
|
Interest Earned/
Paid |
|
Average Yield/
Rate |
Interest earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments(1) |
|
322,023 |
|
|
$ |
79 |
|
|
0.10 |
% |
|
$ |
220,598 |
|
|
$ |
721 |
|
|
1.31 |
% |
|
$ |
269,980 |
|
|
$ |
1,620 |
|
|
2.41 |
% |
Securities available for sale and stock(2) |
|
35,000 |
|
|
210 |
|
|
2.41 |
% |
|
|
35,844 |
|
|
261 |
|
|
2.93 |
% |
|
|
36,880 |
|
|
|
260 |
|
|
2.83 |
% |
Loans(3) |
|
1,331,270 |
|
|
15,291 |
|
|
4.62 |
% |
|
|
1,116,999 |
|
|
13,787 |
|
|
4.96 |
% |
|
|
1,062,228 |
|
|
|
14,586 |
|
|
5.51 |
% |
Total interest-earning assets |
|
1,688,293 |
|
|
15,580 |
|
|
3.71 |
% |
|
|
1,373,441 |
|
|
14,769 |
|
|
4.32 |
% |
|
|
1,369,088 |
|
|
|
16,466 |
|
|
4.82 |
% |
Noninterest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
16,622 |
|
|
|
|
|
|
|
16,774 |
|
|
|
|
|
|
|
15,573 |
|
|
|
|
|
All other assets |
|
28,048 |
|
|
|
|
|
|
|
25,151 |
|
|
|
|
|
|
|
26,052 |
|
|
|
|
|
Total assets |
$ |
1,732,963 |
|
|
|
|
|
|
$ |
1,415,366 |
|
|
|
|
|
|
$ |
1,410,713 |
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
103,164 |
|
|
25 |
|
|
0.10 |
% |
|
$ |
103,355 |
|
|
87 |
|
|
0.34 |
% |
|
$ |
108,530 |
|
|
|
181 |
|
|
0.67 |
% |
Money market and savings accounts |
|
454,877 |
|
|
567 |
|
|
0.50 |
% |
|
|
415,533 |
|
|
1,298 |
|
|
1.26 |
% |
|
|
460,935 |
|
|
|
2,106 |
|
|
1.83 |
% |
Certificates of deposit |
|
260,354 |
|
|
1,371 |
|
|
2.12 |
% |
|
|
276,045 |
|
|
1,580 |
|
|
2.30 |
% |
|
|
261,721 |
|
|
|
1,466 |
|
|
2.25 |
% |
Other borrowings |
|
122,015 |
|
|
130 |
|
|
0.43 |
% |
|
|
33,626 |
|
|
133 |
|
|
1.59 |
% |
|
|
40,220 |
|
|
|
262 |
|
|
2.61 |
% |
Junior subordinated debentures |
|
17,527 |
|
|
169 |
|
|
3.88 |
% |
|
|
17,527 |
|
|
198 |
|
|
4.54 |
% |
|
|
17,527 |
|
|
|
232 |
|
|
5.31 |
% |
Total interest bearing liabilities |
|
957,937 |
|
|
2,262 |
|
|
0.95 |
% |
|
|
846,086 |
|
|
3,296 |
|
|
1.57 |
% |
|
|
888,933 |
|
|
|
4,247 |
|
|
1.92 |
% |
Noninterest bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
606,481 |
|
|
|
|
|
|
|
398,547 |
|
|
|
|
|
|
|
360,597 |
|
|
|
|
|
Accrued expenses and other liabilities |
|
18,649 |
|
|
|
|
|
|
|
19,704 |
|
|
|
|
|
|
|
16,544 |
|
|
|
|
|
Shareholders' equity |
|
149,896 |
|
|
|
|
|
|
|
151,029 |
|
|
|
|
|
|
|
144,639 |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
1,732,963 |
|
|
|
|
|
|
$ |
1,415,366 |
|
|
|
|
|
|
$ |
1,410,713 |
|
|
|
|
|
Net interest income |
|
|
$ |
13,318 |
|
|
|
|
|
|
$ |
11,473 |
|
|
|
|
|
|
$ |
12,219 |
|
|
Net interest income/spread |
|
|
|
|
2.76 |
% |
|
|
|
|
|
2.75 |
% |
|
|
|
|
|
2.90 |
% |
Net interest margin |
|
|
|
|
3.17 |
% |
|
|
|
|
|
3.36 |
% |
|
|
|
|
|
3.58 |
% |
|
|
(1) Short-term investments consist of federal funds
sold and interest bearing deposits that we maintain at other
financial institutions.(2) Stock consists of FHLB stock
and Federal Reserve Bank of San Francisco stock.(3)
Loans include the average balance of nonaccrual loans.
CONSOLIDATED AVERAGE BALANCES AND YIELD
DATA(Dollars in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended |
|
June 30, 2020 |
|
June 30, 2019 |
|
Average Balance |
|
Interest Earned/
Paid |
|
Average Yield/
Rate |
|
Average Balance |
|
Interest Earned/
Paid |
|
Average Yield/
Rate |
Interest earning assets |
|
|
|
|
|
|
|
|
|
|
|
Short-term investments(1) |
$ |
271,310 |
|
|
$ |
800 |
|
|
0.59 |
% |
|
$ |
247,893 |
|
|
$ |
2,975 |
|
|
2.42 |
% |
Securities available for sale and stock(2) |
35,422 |
|
|
471 |
|
|
2.67 |
% |
|
38,035 |
|
|
551 |
|
|
2.92 |
% |
Loans(3) |
1,224,134 |
|
|
29,078 |
|
|
4.78 |
% |
|
1,071,449 |
|
|
29,106 |
|
|
5.48 |
% |
Total interest-earning assets |
1,530,866 |
|
|
30,349 |
|
|
3.99 |
% |
|
1,357,377 |
|
|
32,632 |
|
|
4.85 |
% |
Noninterest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
16,698 |
|
|
|
|
|
|
15,330 |
|
|
|
|
|
All other assets |
26,601 |
|
|
|
|
|
|
27,632 |
|
|
|
|
|
Total assets |
1,574,165 |
|
|
|
|
|
|
1,400,339 |
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
103,260 |
|
|
$ |
113 |
|
|
0.22 |
% |
|
$ |
102,038 |
|
|
$ |
342 |
|
|
0.68 |
% |
Money market and savings accounts |
435,205 |
|
|
1,864 |
|
|
0.86 |
% |
|
459,463 |
|
|
4,220 |
|
|
1.85 |
% |
Certificates of deposit |
268,200 |
|
|
2,951 |
|
|
2.21 |
% |
|
266,959 |
|
|
2,815 |
|
|
2.13 |
% |
Other borrowings |
77,821 |
|
|
263 |
|
|
0.68 |
% |
|
40,110 |
|
|
520 |
|
|
2.61 |
% |
Junior subordinated debentures |
17,527 |
|
|
367 |
|
|
4.21 |
% |
|
17,527 |
|
|
465 |
|
|
5.35 |
% |
Total interest bearing liabilities |
902,013 |
|
|
5,558 |
|
|
1.24 |
% |
|
886,097 |
|
|
8,362 |
|
|
1.90 |
% |
Noninterest bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
502,514 |
|
|
|
|
|
|
350,919 |
|
|
|
|
|
Accrued expenses and other liabilities |
19,175 |
|
|
|
|
|
|
19,397 |
|
|
|
|
|
Shareholders’ equity |
150,463 |
|
|
|
|
|
|
143,926 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
1,574,165 |
|
|
|
|
|
|
1,400,339 |
|
|
|
|
|
Net interest income |
|
|
$ |
24,791 |
|
|
|
|
|
|
$ |
24,270 |
|
|
|
Net interest income/spread |
|
|
|
|
2.75 |
% |
|
|
|
|
|
2.95 |
% |
Net interest margin |
|
|
|
|
3.26 |
% |
|
|
|
|
|
3.61 |
% |
|
|
(1) Short-term investments consist of federal funds
sold and interest bearing deposits that we maintain at other
financial institutions.(2) Stock consists of FHLB stock
and Federal Reserve Bank of San Francisco stock.(3)
Loans include the average balance of nonaccrual loans.
For more information contactCurt Christianssen, Chief Financial
Officer, 714-438-2500
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