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
months and year ended December 31, 2020.
For the fourth quarter of 2020, the Company
reported net income of $3.7 million, or $0.16 per fully diluted
share. This compares to net income of $5.1 million, or $0.21 per
fully diluted share, in the third quarter of 2020, and net income
of $440 thousand, or $0.02 per fully diluted share, in the fourth
quarter of 2019. The decrease in net income for the three months
ended December 31, 2020, as compared to the three months ended
September 30, 2020, is attributable to a decrease in interest
income as a result of a decrease in the balance of our loan
portfolio due to the forgiveness of PPP loans and paydowns on lines
of credit, and an adjustment to the accretion of PPP income that
resulted in a deferral of fee income to the first quarter of 2021.
In addition, total noninterest income decreased primarily as a
result of a decrease in gain on sale of SBA loans as compared to
the prior quarter. The increase in net income, as compared to the
three months ended December 31, 2019, is primarily
attributable to a decrease in interest expense of $2.4 million from
the same quarter of the prior year, and no provision for loan and
lease losses for the three months ended December 31, 2020,
compared to a $3.8 million provision taken for the three months
ended December 31, 2019. In addition, noninterest income
increased 33.5%, while noninterest expense decreased 8.9% in the
fourth quarter of 2020 when compared to the same quarter prior year
as the result of modifications to our loan and deposit fee
structure and the implementation of cost savings initiatives during
the year.
Brad R. Dinsmore, President & CEO of Pacific
Mercantile Bancorp, said, “Our strong fourth quarter operating
results reflect the continuation of improved financial performance
resulting from our efforts to lower our cost of deposits, reduce
our cost structure, and improve our ability to attract new
operating companies to the Bank. Over the second half
of 2020, we added five proven Southern California commercial
lenders, which increased our relationship management team by
approximately one-third, and provided us with a greater ability to
target new clients in areas where we historically haven’t had a
significant presence, such as the Los Angeles market. While overall
commercial loan demand remains relatively weak due to the ongoing
pandemic, we are already seeing good results from our expanded
commercial banking team with loan production, loan funding, and
deposit inflows from new clients increasing significantly in the
fourth quarter.
“We continue to closely monitor the performance
of our borrowers as the pandemic continues. The early assessments
we made regarding the degree of impact that clients would
experience from the pandemic have proven to be accurate and the
level of allowance we built has been appropriate. As a result of
the prolonged impact of the pandemic, we recognized three larger
commercial loans as impaired that had previously been graded as
classified loans, and are now included in our nonperforming loans.
While the impaired status change for these loans resulted in an
increase in nonperforming loans, the reserves we built continue to
be sufficient and we did not require any provision for this
quarter. Aside from these three loans, the general migration trends
in the portfolio were positive during the fourth quarter as most of
our clients have been able to adapt well to the current
environment.
“Despite the challenges presented by the
pandemic, we had a very productive year in executing on our
strategies to improve the performance of the Company.
We eliminated $3 million in annual expenses, shifted more of our
personnel towards business development roles, expanded and upgraded
our commercial banking team while still keeping operating expenses
below the prior year level, and increased our ability to generate
non-interest income. In addition to executing on these initiatives,
our team was able to assist our clients in the PPP and had top
decile performance in PPP origination relative to our
size. With our larger commercial banking team, we have
improved our ability to grow our balance sheet with high quality
loans and low-cost deposits, which we expect will drive increased
operating leverage and higher earnings as economic conditions
improve,” 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 tables for the three months and year
ended December 31, 2020, as compared to the three months ended
September 30, 2020 and the three months and year ended
December 31, 2019.
| |
Three Months Ended |
| |
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
| |
(Dollars in thousands) |
|
Total interest income |
$ |
14,234 |
|
|
$ |
16,016 |
|
|
$ |
15,580 |
|
|
$ |
14,769 |
|
|
$ |
16,277 |
|
| Total interest expense |
1,297 |
|
|
1,762 |
|
|
2,262 |
|
|
3,296 |
|
|
3,734 |
|
| Net interest income |
12,937 |
|
|
14,254 |
|
|
13,318 |
|
|
11,473 |
|
|
12,543 |
|
| Provision for loan and lease
losses |
— |
|
|
— |
|
|
2,850 |
|
|
6,200 |
|
|
3,750 |
|
| Total noninterest income |
1,827 |
|
|
2,245 |
|
|
1,171 |
|
|
1,095 |
|
|
1,369 |
|
| Total noninterest expense |
8,920 |
|
|
9,275 |
|
|
8,934 |
|
|
9,720 |
|
|
9,790 |
|
| Income tax provision
(benefit) |
2,140 |
|
|
2,138 |
|
|
800 |
|
|
(991 |
) |
|
(68 |
) |
| Net income (loss) |
$ |
3,704 |
|
|
$ |
5,086 |
|
|
$ |
1,905 |
|
|
$ |
(2,361 |
) |
|
$ |
440 |
|
| |
Year Ended December 31, |
|
| |
2020 |
|
2019 |
|
| |
|
|
| |
(Dollars in thousands) |
|
|
Total interest income |
$ |
60,598 |
|
|
$ |
65,677 |
|
|
| Total interest expense |
8,616 |
|
|
16,121 |
|
|
| Net interest income |
51,982 |
|
|
49,556 |
|
|
| Provision for loan and lease
losses |
9,050 |
|
|
9,150 |
|
|
| Total noninterest income |
6,337 |
|
|
5,588 |
|
|
| Total noninterest expense |
36,846 |
|
|
38,179 |
|
|
| Income tax provision |
4,088 |
|
|
2,135 |
|
|
| Net income |
$ |
8,335 |
|
|
$ |
5,680 |
|
|
Net Interest Income
Q4 2020 vs Q3 2020. Net
interest income decreased $1.3 million, or 9.2%, for the three
months ended December 31, 2020 as compared to the three months
ended September 30, 2020 primarily as a result of:
- A decrease in
interest income of $1.8 million, or 11.1%, primarily attributable
to the decrease in the balance of the loan portfolio and an
adjustment to the accretion of PPP fee income that resulted in a
deferral of income to the next quarter, decreasing the fee income
for the three months ended December 31, 2020 as compared to
the three months ended September 30, 2020; partially offset
by
- A decrease in
interest expense of $465 thousand, or 26.4%, primarily attributable
to our ongoing focus on reducing costs of deposits by monitoring
and lowering interest rates in response to the current interest
rate environment and actively managing our deposit portfolio away
from higher costing money market deposits and certificates of
deposit and into noninterest bearing deposits.Our net interest
margin decreased to 3.31% for the three months ended
December 31, 2020 as compared to 3.34% for the three months
ended September 30, 2020, primarily as a result of the
decrease in the balance of our loan portfolio due to the
forgiveness of PPP loans and paydowns on lines of credit, and an
adjustment to the accretion of PPP income that decreased fee income
for the quarter. These factors were partially offset by a favorable
change in our mix of deposits from higher costing money market and
certificates of deposit to lower costing noninterest bearing
deposits.
Q4 2020 vs Q4 2019. Net
interest income increased $394 thousand, or 3.1%, for the three
months ended December 31, 2020 as compared to the three months
ended December 31, 2019 primarily as a result of:
- A decrease in
interest expense of $2.4 million, or 65.3%, primarily attributable
to our focus on reducing costs of deposits by monitoring and
lowering interest rates in response to the current interest rate
environment and actively managing our deposit portfolio away from
higher costing money market deposits and certificates of deposit
and into noninterest bearing deposits; partially offset by
- A decrease in interest income of
$2.0 million, or 12.6%, primarily attributable to a decrease in
interest earned on loans and short-term investments as a result of
lower average yields in the declining interest rate environment
during the three months ended December 31, 2020 as compared to
the three months ended December 31, 2019, partially offset by
increased income from our participation in PPP.
YTD 2020 vs YTD 2019. Net
interest income increased $2.4 million, or 4.9%, for the year ended
December 31, 2020 as compared to the year ended
December 31, 2019, primarily as a result of:
- A decrease in
interest expense of $7.5 million, or 46.6%, primarily attributable
to our focus on reducing costs of deposits by monitoring and
lowering interest rates in response to the current interest rate
environment and actively managing our deposit portfolio away from
higher costing money market deposits and certificates of deposit
and into noninterest bearing deposits; partially offset by
- A decrease in interest income of
$5.1 million, or 7.7%, primarily attributable to a decrease in
interest earned on short-term investments as a result of lower
average yields in the declining interest rate environment during
the year ended December 31, 2020, partially offset by
increased income from our participation in PPP.
Provision for Loan and Lease
Losses
Q4 2020 vs Q3 2020. We recorded
no provision for loan and lease losses during the three months
ended December 31, 2020 and September 30, 2020 as the
level of allowance built earlier in the year in anticipation of
credits impacted by COVID-19 eventually migrating to nonperforming
status continued to be sufficient to reflect the actual migration
trends experienced in the portfolio. During the three months ended
December 31, 2020, we had net charge-offs of $33 thousand
compared to net charge-offs of $681 thousand for the three months
ended September 30, 2020.
Q4 2020 vs Q4 2019. We recorded
no provision for loan and lease losses during the three months
ended December 31, 2020 as the level of allowance built
earlier in the year in anticipation of credits impacted by COVID-19
eventually migrating to nonperforming status continued to be
sufficient to reflect the actual migration trends experienced in
the portfolio. We recorded a $3.8 million provision for loan and
lease losses during the three months ended December 31, 2019
as a result of net charge-offs primarily related to one commercial
loan relationship and an increase in classified and nonperforming
loans during the quarter.
YTD 2020 vs YTD 2019. We
recorded a $9.1 million provision for loan and lease losses during
the year ended December 31, 2020 as a result of net
charge-offs of $5.2 million, an increase in classified and
nonperforming loans, and qualitative factor increases related to
COVID-19. We recorded a $9.2 million provision for loan and lease
losses during the year ended December 31, 2019 as a result of
net charge-offs of $9.0 million, an increase in classified and
nonperforming loans, and growth in our loan portfolio during the
year.
Noninterest
Income
Q4 2020 vs Q3 2020. Noninterest
income decreased by $418 thousand, or 18.6%, for the three months
ended December 31, 2020 as compared to the three months ended
September 30, 2020, primarily resulting from swap fee income
of $246 thousand in the third quarter that did not occur in the
fourth quarter, and gain on sale of $535 thousand for the three
months ended September 30, 2020 compared to $183 thousand for
the three months ended December 31, 2020; partially offset by
an increase in deposit related fees, credit card fees and loan
service fees of $208 thousand, or 23.3% .
Q4 2020 vs Q4 2019. Noninterest
income increased by $458 thousand, or 33.5%, for the three months
ended December 31, 2020 as compared to the three months ended
December 31, 2019, primarily as a result of an increase in
deposit related fees, credit card fees and loan service fees.
YTD 2020 vs YTD 2019.
Noninterest income increased $749 thousand, or 13.4%, for the year
ended December 31, 2020 as compared to the year ended
December 31, 2019, primarily as a result of:
- An increase of
$1.4 million in deposit related fees, credit card fees and loan
service fees during the year ended December 31, 2020 as
compared to the year ended December 31, 2019; partially offset
by
- Gain on sale of SBA loans of $1.0
million during the year ended December 31, 2019 as compared to
gain on sale of $718 thousand during the year ended
December 31, 2020.
Noninterest
Expense
Q4 2020 vs Q3 2020. Noninterest
expense decreased $355 thousand, or 3.8%, for the three months
ended December 31, 2020 as compared to the three months ended
September 30, 2020, primarily as a result of:
- A decrease of
$181 thousand in FDIC insurance expense as the result of a
decreased assessment rate based on a decrease in average asset
size, and
- A decrease of
$210 thousand in salaries and employee benefits primarily related
to a decrease in the bonus accrual during the three months ended
December 31, 2020, and
- A decrease of
$59 thousand in equipment and depreciation related to hardware and
software purchases in the prior quarter resulting from the efforts
to deploy work-from-home capabilities for more of our employees;
partially offset by
- An increase of
$93 thousand in other noninterest expense primarily related to
business development and other operating expenses.
Q4 2020 vs Q4 2019. Noninterest
expense decreased $870 thousand, or 8.9%, for the three months
ended December 31, 2020 as compared to the three months ended
December 31, 2019, as cost savings initiatives were
implemented during the year with the following results:
- A decrease of
$820 thousand in salaries and employee benefits primarily related
to the staffing changes made at the bank during the second quarter
of 2020; and
- A decrease of
$179 thousand in our professional fees primarily related to higher
legal and consulting fees during the fourth quarter of 2019
compared to the same quarter of 2020 resulting from the cost
reduction initiatives executed during the first quarter of 2020;
partially offset by
- An increase of
$91 thousand in FDIC expenses based on an increased average asset
size that resulted from our participation in PPP versus receiving a
rebate from the FDIC during the fourth quarter of 2019; and
- An increase of
$20 thousand in equipment and depreciation related to hardware and
software purchases resulting from the efforts to deploy
work-from-home capabilities for more of our employees.
YTD 2020 vs YTD 2019.
Noninterest expense decreased $1.3 million, or 3.5%, for the year
ended December 31, 2020 as compared to the year ended
December 31, 2019, as $3.0 million in run rate cost savings
initiatives were implemented during the year with the following
results:
- A decrease of
$1.0 million in our professional fees primarily related to higher
legal and consulting fees during 2019; and
- A decrease of
$982 thousand in salaries and employee benefits primarily related
to the staffing changes made at the bank during the second quarter
of 2020; partially offset by
- An increase of
$527 thousand in FDIC expenses based on an increased average asset
size that resulted from our participation in PPP versus receiving a
rebate from the FDIC during the prior year; and
- An increase of
$140 thousand in equipment and depreciation related to hardware and
software purchases resulting from the efforts to deploy
work-from-home capabilities for more of our employees.
Income tax provision
For the three months and year ended
December 31, 2020, we had an income tax expense of $2.1
million and $4.1 million, respectively. The income tax expense
during the three months and year ended December 31, 2020 is a
result of our operating income and an adjustment to our deferred
tax asset during the fourth quarter to true up stock based
compensation. 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 December 31,
2020.
For the three months and year ended
December 31, 2019, we had an income tax benefit of $68
thousand as a result of an adjustment to true up stock based
compensation, and income tax expense of $2.1 million as a result of
our operating income, respectively. 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 December 31,
2019.
Balance Sheet Information
Loans
As indicated in the table below, at
December 31, 2020, gross loans totaled approximately $1.22
billion, which represented a decrease of $55.1 million, or 4.3%,
compared to gross loans outstanding at September 30, 2020. The
following table sets forth the composition, by loan category, of
our loan portfolio at December 31, 2020, September 30,
2020, and December 31, 2019.
| |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
| |
Amount |
|
Percent ofTotal Loans |
|
Amount |
|
Percent ofTotal Loans |
|
Amount |
|
Percent
ofTotal Loans |
| |
(Dollars in thousands) |
|
Commercial loans |
$ |
567,155 |
|
|
46.4 |
% |
|
$ |
614,737 |
|
|
48.1 |
% |
|
$ |
409,420 |
|
|
36.2 |
% |
| Commercial real estate loans -
owner occupied |
197,336 |
|
|
16.1 |
% |
|
195,586 |
|
|
15.3 |
% |
|
219,483 |
|
|
19.5 |
% |
| Commercial real estate loans -
all other |
194,893 |
|
|
15.9 |
% |
|
199,911 |
|
|
15.6 |
% |
|
208,283 |
|
|
18.5 |
% |
| Residential mortgage loans -
multi-family |
159,182 |
|
|
13.0 |
% |
|
161,947 |
|
|
12.7 |
% |
|
176,523 |
|
|
15.7 |
% |
| Residential mortgage loans -
single family |
12,766 |
|
|
1.0 |
% |
|
13,764 |
|
|
1.1 |
% |
|
18,782 |
|
|
1.7 |
% |
| Construction and land
development loans |
11,766 |
|
|
1.0 |
% |
|
9,300 |
|
|
0.7 |
% |
|
2,981 |
|
|
0.3 |
% |
| Consumer loans |
80,759 |
|
|
6.6 |
% |
|
83,736 |
|
|
6.5 |
% |
|
90,867 |
|
|
8.1 |
% |
| Gross loans |
$ |
1,223,857 |
|
|
100.0 |
% |
|
$ |
1,278,981 |
|
|
100.0 |
% |
|
$ |
1,126,339 |
|
|
100.0 |
% |
The decrease of $55.1 million in gross loans
during the fourth quarter of 2020 was primarily a result of
forgiveness of PPP loans by the SBA, and loan payoffs and paydowns
on lines of credit. Excluding the PPP, we funded total new organic
loans of $44.4 million and purchased $20.4 million of commercial
and commercial real estate loans, offset by loan payoffs of $67.8
million and charge offs of $915 thousand. The charge off is
primarily one commercial loan relationship that had been previously
identified as classified, for which we have recovered $819 thousand
due to our collection efforts. During the three months ended
December 31, 2020, $51.3 million of PPP loans were forgiven by
the SBA.
During the fourth quarter of 2020, we secured
new client relationships with commercial loan commitments of $53.1
million, of which $23.0 million were funded at December 31,
2020. Our total commercial loan commitments decreased to $893.8
million at December 31, 2020 from $933.4 million at
September 30, 2020, and the utilization rate of commercial
loan commitments decreased to 63.5% at December 31, 2020 from
66.1% at September 30, 2020. Excluding PPP loans, total
commitments increased to $664.0 million at December 31, 2020
from $652.5 million at September 30, 2020, and the utilization
rate of commercial loan commitments decreased to 50.8% from 51.5%
at September 30, 2020.
Deposits
| |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
| |
|
| Type of
Deposit |
(Dollars in thousands) |
|
Noninterest-bearing checking accounts |
$ |
647,115 |
|
|
$ |
661,462 |
|
|
$ |
397,000 |
|
|
Interest-bearing checking accounts |
129,834 |
|
|
139,425 |
|
|
108,941 |
|
|
Money market and savings deposits |
392,690 |
|
|
378,940 |
|
|
416,751 |
|
|
Certificates of deposit |
213,708 |
|
|
227,723 |
|
|
276,878 |
|
|
Totals |
$ |
1,383,347 |
|
|
$ |
1,407,550 |
|
|
$ |
1,199,570 |
|
The decrease in total deposits of $24.2 million,
or 1.7%, during the three months ended December 31, 2020 from
September 30, 2020 is attributable to a decrease in
noninterest-bearing and interest-bearing checking accounts and
certificates of deposit. Noninterest-bearing checking accounts
decreased by $14.3 million, or 2.2%, interest-bearing checking
accounts decreased by $9.6 million, or 6.9%, and certificates of
deposit decreased by $14.0 million, or 6.2%, partially offset by an
increase to money market and savings accounts of $13.8 million, or
3.6%. Lower priced core deposits increased to 84.6% of total
deposits, while higher priced certificates of deposits decreased to
15.4% of total deposits at December 31, 2020, as compared to
83.8% and 16.2%, respectively at September 30, 2020.
Asset Quality
Nonperforming Assets
| |
2020 |
|
2019 |
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
| |
|
| |
(Dollars in thousands) |
|
Total nonperforming loans |
$ |
39,916 |
|
|
$ |
16,780 |
|
|
$ |
24,681 |
|
|
$ |
20,021 |
|
|
$ |
15,682 |
|
| Other nonperforming
assets |
231 |
|
|
150 |
|
|
663 |
|
|
392 |
|
|
164 |
|
| Total nonperforming
assets |
$ |
40,147 |
|
|
$ |
16,930 |
|
|
$ |
25,344 |
|
|
$ |
20,413 |
|
|
$ |
15,846 |
|
| 30-89 day past due loans |
$ |
8,992 |
|
|
$ |
25,616 |
|
|
$ |
7,175 |
|
|
$ |
22,437 |
|
|
$ |
2,779 |
|
| 90-day past due loans |
$ |
11,507 |
|
|
$ |
9,893 |
|
|
$ |
12,412 |
|
|
$ |
3,765 |
|
|
$ |
533 |
|
| Total classified assets |
$ |
90,502 |
|
|
$ |
84,616 |
|
|
$ |
83,104 |
|
|
$ |
44,825 |
|
|
$ |
37,192 |
|
| Allowance for loan and lease
losses |
$ |
17,452 |
|
|
$ |
17,485 |
|
|
$ |
18,166 |
|
|
$ |
17,520 |
|
|
$ |
13,611 |
|
| Allowance for loan and lease
losses /gross loans |
1.43 |
% |
|
1.37 |
% |
|
1.33 |
% |
|
1.53 |
% |
|
1.21 |
% |
| Allowance for loan and lease
losses /total assets |
1.10 |
% |
|
1.08 |
% |
|
1.08 |
% |
|
1.09 |
% |
|
0.96 |
% |
| Ratio of allowance for loan
and lease losses to nonperforming loans |
43.72 |
% |
|
104.20 |
% |
|
73.60 |
% |
|
87.51 |
% |
|
86.79 |
% |
| Ratio of nonperforming assets
to total assets |
2.53 |
% |
|
1.04 |
% |
|
1.50 |
% |
|
1.28 |
% |
|
1.12 |
% |
| Net quarterly charge-offs to
gross loans (annualized) |
0.01 |
% |
|
0.21 |
% |
|
0.65 |
% |
|
0.81 |
% |
|
0.78 |
% |
December 31, 2020 vs September 30,
2020. Nonperforming assets at December 31, 2020
increased by $23.2 million from September 30, 2020 primarily
as a result of an increase in nonperforming loans. The increase in
our nonperforming loans during the three months ended
December 31, 2020 resulted from the addition of $25.9 million
of commercial and consumer loans, partially offset by principal
payments of $1.7 million and charge-offs of $915 thousand. As a
result of the prolonged impact of the pandemic, we recognized three
larger commercial loans as impaired that had previously been graded
as classified loans, which represents the majority of the increase
in our nonperforming loans. As a result of this increase in
nonperforming loans, the ratio of nonperforming assets to total
assets increased from 1.04% at September 30, 2020 to 2.53% at
December 31, 2020, and the ratio of allowance for loan and
lease losses to nonperforming loans decreased to 43.7% at
December 31, 2020, from 104.2% at September 30, 2020. Our
past due loans do not include loans that have had their payments
deferred as a result of assistance being provided under the CARES
Act to our borrowers impacted by COVID-19. As of December 31,
2020, we had 16 loans with an outstanding balance of $20.4 million
that were under a payment deferral, which is a decrease from 24
loans with an outstanding balance of $31.9 million that were under
a payment deferral as of September 30, 2020.
Our classified assets increased by $5.9 million
from $84.6 million at September 30, 2020 to $90.5 million at
December 31, 2020. The increase this quarter is primarily
related to additions of $15.7 million during the three months ended
December 31, 2020, partially offset by principal payments of
$2.4 million, charge-offs of $915 thousand, and upgraded notes of
$6.4 million during the same period. The additions to classified
loans during the three months ended December 31, 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.
December 31, 2020 vs December 31,
2019. Nonperforming assets at December 31, 2020
increased by $24.3 million from December 31, 2019 primarily as
a result of an increase in nonperforming loans to $39.9 million in
the current year from $15.7 million the prior year. As a result of
this increase to nonperforming loans, the ratio of nonperforming
assets to total assets increased from 1.12% at December 31,
2019 to 2.53% at December 31, 2020.
Our classified assets increased by $53.3 million
to $90.5 million at December 31, 2020 from $37.2 million at
December 31, 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 of the prior year.
Allowance for loan and lease
losses
| |
2020 |
|
2019 |
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
| |
|
| |
(Dollars in thousands) |
|
Balance at beginning of quarter |
$ |
17,485 |
|
|
$ |
18,166 |
|
|
$ |
17,520 |
|
|
$ |
13,611 |
|
|
$ |
12,086 |
|
|
Charge offs |
(915 |
) |
|
(840 |
) |
|
(2,249 |
) |
|
(2,314 |
) |
|
(2,608 |
) |
|
Recoveries |
882 |
|
|
159 |
|
|
45 |
|
|
23 |
|
|
383 |
|
|
Provision |
— |
|
|
— |
|
|
2,850 |
|
|
6,200 |
|
|
3,750 |
|
| Balance at end of quarter |
$ |
17,452 |
|
|
$ |
17,485 |
|
|
$ |
18,166 |
|
|
$ |
17,520 |
|
|
$ |
13,611 |
|
At December 31, 2020, the allowance for
loan and lease losses (“ALLL”) totaled $17.5 million, which was
approximately $33 thousand less than at September 30, 2020 and
$3.8 million more than at December 31, 2019. The ALLL activity
during the three months ended December 31, 2020 included net
charge-offs of $33 thousand. There was no provision for loan and
lease losses during the three months ended December 31, 2020,
as reserves allocated to the general loan pool in earlier quarters
were shifted to specific reserves related to three loans that were
recognized as impaired and moved to nonperforming status during the
quarter that had previously graded as classified, and the resulting
ALLL was determined to be sufficient. The ratio of the
ALLL-to-total loans outstanding as of December 31, 2020 was
1.43%, or 1.76% if the outstanding balance of PPP loans are
excluded from total loans (as PPP loans are fully guaranteed and do
not carry any allowance), as compared to 1.37% and 1.75%,
respectively, as of September 30, 2020, and 1.21% as of
December 31, 2019. The ratio of the ALLL-to-total loans
outstanding increased from the prior year primarily due to the
origination of $281.0 million in PPP loans that are 100% guaranteed
by the SBA, which had the effect of reducing this ratio by 33 basis
points and 38 basis points, respectively, for the three months
ended December 31, 2020 and September 30, 2020.
Capital Resources
At December 31, 2020, the Bank had total
regulatory capital of $183.2 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 15.9% 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 December 31, 2020,
as compared to the regulatory requirements that must be met for a
banking institution to be rated as a well-capitalized
institution.
| |
ActualAt December 31, 2020 |
|
Federal RegulatoryRequirement to
beRated Well-Capitalized |
| |
Amount |
|
Ratio |
|
Amount |
|
Ratio |
| |
|
| |
(Dollars in thousands) |
| |
|
|
|
|
|
|
|
|
Total Capital to Risk Weighted Assets |
$ |
183,151 |
|
|
15.9 |
% |
|
$ |
115,403 |
|
|
At least 10.0 |
| |
|
|
|
|
|
|
|
| Common Equity Tier 1 Capital
to Risk Weighted Assets |
$ |
168,684 |
|
|
14.6 |
% |
|
$ |
75,012 |
|
|
At least 6.5 |
| |
|
|
|
|
|
|
|
| Tier 1 Capital to Risk
Weighted Assets |
$ |
168,684 |
|
|
14.6 |
% |
|
$ |
92,322 |
|
|
At least 8.0 |
| |
|
|
|
|
|
|
|
| Tier 1 Capital to Average
Assets |
$ |
168,684 |
|
|
10.7 |
% |
|
$ |
79,341 |
|
|
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, and
our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2020, June 30, 2020, and September 30, 2020, each of which is on
file with the Securities and Exchange Commission (the “SEC”).
Additional information will be set forth in our Annual Report on
Form 10-K for the year ended December 31, 2020, which we
expect to file with the SEC during the first quarter of 2021, 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 |
|
Twelve Months Ended |
| |
December31, 2020 |
|
September30, 2020 |
|
December31, 2019 |
|
Dec '20 vsSept '20% Change |
|
Dec '20 vsDec '19% Change |
|
December31, 2020 |
|
December31, 2019 |
|
% Change |
|
Total interest income |
$ |
14,234 |
|
|
|
$ |
16,016 |
|
|
|
$ |
16,277 |
|
|
|
(11.1 |
) |
% |
|
(12.6 |
) |
% |
|
$ |
60,598 |
|
|
|
$ |
65,677 |
|
|
|
(7.7 |
) |
% |
| Total interest expense |
1,297 |
|
|
|
1,762 |
|
|
|
3,734 |
|
|
|
(26.4 |
) |
% |
|
(65.3 |
) |
% |
|
8,616 |
|
|
|
16,121 |
|
|
|
(46.6 |
) |
% |
|
Net interest income |
12,937 |
|
|
|
14,254 |
|
|
|
12,543 |
|
|
|
(9.2 |
) |
% |
|
3.1 |
|
% |
|
51,982 |
|
|
|
49,556 |
|
|
|
4.9 |
|
% |
| Provision for loan and lease
losses |
— |
|
|
|
— |
|
|
|
3,750 |
|
|
|
— |
|
% |
|
(100.0 |
) |
% |
|
9,050 |
|
|
|
9,150 |
|
|
|
(1.1 |
) |
% |
|
Net interest income after provision for loan and lease losses |
12,937 |
|
|
|
14,254 |
|
|
|
8,793 |
|
|
|
(9.2 |
) |
% |
|
47.1 |
|
% |
|
42,932 |
|
|
|
40,406 |
|
|
|
6.3 |
|
% |
| Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service fees on deposits and other banking services |
1,099 |
|
|
|
891 |
|
|
|
479 |
|
|
|
23.3 |
|
% |
|
129.4 |
|
% |
|
3,137 |
|
|
|
1,782 |
|
|
|
76.0 |
|
% |
|
Net gain on sale of small business administration loans |
183 |
|
|
|
535 |
|
|
|
163 |
|
|
|
— |
|
% |
|
12.3 |
|
% |
|
718 |
|
|
|
1,029 |
|
|
|
(30.2 |
) |
% |
|
Net loss on sale of other assets |
(30 |
) |
|
|
(70 |
) |
|
|
— |
|
|
|
(57.1 |
) |
% |
|
100.0 |
|
% |
|
(147 |
) |
|
|
(42 |
) |
|
|
250.0 |
|
% |
|
Other noninterest income |
575 |
|
|
|
889 |
|
|
|
727 |
|
|
|
(35.3 |
) |
% |
|
(20.9 |
) |
% |
|
2,629 |
|
|
|
2,819 |
|
|
|
(6.7 |
) |
% |
| Total noninterest income |
1,827 |
|
|
|
2,245 |
|
|
|
1,369 |
|
|
|
(18.6 |
) |
% |
|
33.5 |
|
% |
|
6,337 |
|
|
|
5,588 |
|
|
|
13.4 |
|
% |
| Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
5,344 |
|
|
|
5,554 |
|
|
|
6,164 |
|
|
|
(3.8 |
) |
% |
|
(13.3 |
) |
% |
|
22,429 |
|
|
|
23,411 |
|
|
|
(4.2 |
) |
% |
|
Occupancy and equipment |
1,171 |
|
|
|
1,232 |
|
|
|
1,123 |
|
|
|
(5.0 |
) |
% |
|
4.3 |
|
% |
|
4,701 |
|
|
|
4,437 |
|
|
|
5.9 |
|
% |
|
Professional fees |
699 |
|
|
|
695 |
|
|
|
878 |
|
|
|
0.6 |
|
% |
|
(20.4 |
) |
% |
|
2,956 |
|
|
|
3,982 |
|
|
|
(25.8 |
) |
% |
|
OREO expenses, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
% |
|
— |
|
% |
|
— |
|
|
|
69 |
|
|
|
(100.0 |
) |
% |
|
FDIC expense |
185 |
|
|
|
366 |
|
|
|
94 |
|
|
|
(49.5 |
) |
% |
|
96.8 |
|
% |
|
954 |
|
|
|
427 |
|
|
|
123.4 |
|
% |
|
Other noninterest expense |
1,521 |
|
|
|
1,428 |
|
|
|
1,531 |
|
|
|
6.5 |
|
% |
|
(0.7 |
) |
% |
|
5,806 |
|
|
|
5,853 |
|
|
|
(0.8 |
) |
% |
| Total noninterest expense |
8,920 |
|
|
|
9,275 |
|
|
|
9,790 |
|
|
|
(3.8 |
) |
% |
|
(8.9 |
) |
% |
|
36,846 |
|
|
|
38,179 |
|
|
|
(3.5 |
) |
% |
|
Income before income taxes |
5,844 |
|
|
|
7,224 |
|
|
|
372 |
|
|
|
(19.1 |
) |
% |
|
1,471.0 |
|
% |
|
12,423 |
|
|
|
7,815 |
|
|
|
59.0 |
|
% |
| Income tax expense |
2,140 |
|
|
|
2,138 |
|
|
|
(68 |
) |
|
|
0.1 |
|
% |
|
(3,247.1 |
) |
% |
|
4,088 |
|
|
|
2,135 |
|
|
|
91.5 |
|
% |
|
Net income from continuing operations |
3,704 |
|
|
|
5,086 |
|
|
|
440 |
|
|
|
(27.2 |
) |
% |
|
741.8 |
|
% |
|
8,335 |
|
|
|
5,680 |
|
|
|
46.7 |
|
% |
| Net income |
$ |
3,704 |
|
|
|
$ |
5,086 |
|
|
|
$ |
440 |
|
|
|
(27.2 |
) |
% |
|
741.8 |
|
% |
|
$ |
8,335 |
|
|
|
$ |
5,680 |
|
|
|
46.7 |
|
% |
|
Net income allocable to common shareholders |
$ |
3,704 |
|
|
|
$ |
5,086 |
|
|
|
$ |
440 |
|
|
|
(27.2 |
) |
% |
|
741.8 |
|
% |
|
$ |
8,335 |
|
|
|
$ |
5,680 |
|
|
|
46.7 |
|
% |
| Basic income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders |
$ |
0.16 |
|
|
|
$ |
0.21 |
|
|
|
$ |
0.02 |
|
|
|
(23.8 |
) |
% |
|
700.0 |
|
% |
|
$ |
0.35 |
|
|
|
$ |
0.24 |
|
|
|
45.8 |
|
% |
| Diluted income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders |
$ |
0.16 |
|
|
|
$ |
0.21 |
|
|
|
$ |
0.02 |
|
|
|
(23.8 |
) |
% |
|
700.0 |
|
% |
|
$ |
0.35 |
|
|
|
$ |
0.24 |
|
|
|
45.8 |
|
% |
| Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
23,535 |
|
|
|
23,516 |
|
|
|
23,549 |
|
|
|
0.1 |
|
% |
|
(0.1 |
) |
% |
|
23,507 |
|
|
|
22,811 |
|
|
|
3.1 |
|
% |
|
Diluted |
23,728 |
|
|
|
23,720 |
|
|
|
23,714 |
|
|
|
— |
|
% |
|
0.1 |
|
% |
|
23,716 |
|
|
|
23,632 |
|
|
|
0.4 |
|
% |
| Ratios from continuing
operations(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
0.93 |
|
% |
|
1.16 |
|
% |
|
0.12 |
|
% |
|
|
|
|
|
0.51 |
|
% |
|
0.40 |
|
% |
|
|
|
Return on average equity |
9.34 |
|
% |
|
13.24 |
|
% |
|
1.16 |
|
% |
|
|
|
|
|
5.45 |
|
% |
|
3.87 |
|
% |
|
|
|
Efficiency ratio |
60.42 |
|
% |
|
56.22 |
|
% |
|
70.37 |
|
% |
|
|
|
|
|
63.18 |
|
% |
|
69.24 |
|
% |
|
|
____________________ (1) Ratios for the three
months ended December 31, 2020, September 30, 2020 and
December 31, 2019 have been annualized.
CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION(Dollars in thousands, except share and
book value data) (Unaudited)
|
ASSETS |
December 31, 2020 |
|
December 31, 2019 |
|
Increase/(Decrease) |
|
Cash and due from banks |
$ |
12,024 |
|
|
$ |
17,409 |
|
|
(30.9 |
) |
% |
| Interest bearing deposits with
financial institutions(1) |
274,245 |
|
|
202,729 |
|
|
35.3 |
|
% |
| Interest bearing time
deposits |
1,597 |
|
|
2,420 |
|
|
(34.0 |
) |
% |
| Investment securities
(including stock) |
50,093 |
|
|
36,254 |
|
|
38.2 |
|
% |
| Loans (net of allowances of
$17,452 and $13,611, respectively) |
1,209,587 |
|
|
1,117,511 |
|
|
8.2 |
|
% |
| Net deferred tax assets |
8,502 |
|
|
8,434 |
|
|
0.8 |
|
% |
| Intangible assets |
389 |
|
|
266 |
|
|
46.2 |
|
% |
| Other assets |
31,153 |
|
|
31,131 |
|
|
0.1 |
|
% |
|
Total assets |
$ |
1,587,590 |
|
|
$ |
1,416,154 |
|
|
12.1 |
|
% |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
| Noninterest bearing
deposits |
$ |
647,115 |
|
|
$ |
397,000 |
|
|
63.0 |
|
% |
| Interest bearing deposits |
|
|
|
|
|
|
Interest checking |
129,834 |
|
|
108,941 |
|
|
19.2 |
|
% |
|
Savings/money market |
392,690 |
|
|
416,751 |
|
|
(5.8 |
) |
% |
|
Certificates of deposit |
213,708 |
|
|
276,878 |
|
|
(22.8 |
) |
% |
|
Total interest bearing deposits |
736,232 |
|
|
802,570 |
|
|
(8.3 |
) |
% |
|
Total deposits |
1,383,347 |
|
|
1,199,570 |
|
|
15.3 |
|
% |
| Other borrowings |
10,000 |
|
|
30,000 |
|
|
(66.7 |
) |
% |
| Other liabilities |
17,967 |
|
|
20,009 |
|
|
(10.2 |
) |
% |
| Junior subordinated
debentures |
17,527 |
|
|
17,527 |
|
|
— |
|
% |
|
Total liabilities |
1,428,841 |
|
|
1,267,106 |
|
|
12.8 |
|
% |
| Shareholders’ equity |
158,749 |
|
|
149,048 |
|
|
6.5 |
|
% |
|
Total Liabilities and Shareholders’ Equity |
$ |
1,587,590 |
|
|
$ |
1,416,154 |
|
|
12.1 |
|
% |
| Book value per share |
$ |
6.71 |
|
|
$ |
6.32 |
|
|
6.2 |
|
% |
| Shares outstanding,
common |
23,658,415 |
|
|
23,573,529 |
|
|
0.4 |
|
% |
____________________ (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 |
| |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
| |
AverageBalance |
|
InterestEarned/Paid |
|
AverageYield/Rate |
|
AverageBalance |
|
InterestEarned/Paid |
|
AverageYield/Rate |
|
AverageBalance |
|
InterestEarned/Paid |
|
AverageYield/Rate |
| Interest earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments(1) |
|
252,931 |
|
|
$ |
65 |
|
|
0.10 |
% |
|
$ |
349,716 |
|
|
$ |
94 |
|
|
0.11 |
% |
|
$ |
198,349 |
|
|
$ |
825 |
|
|
1.65 |
% |
|
Securities available for sale and stock(2) |
|
40,162 |
|
|
247 |
|
|
2.45 |
% |
|
|
34,852 |
|
|
222 |
|
|
2.53 |
% |
|
|
35,733 |
|
|
|
257 |
|
|
2.85 |
% |
|
Loans(3) |
|
1,260,393 |
|
|
13,922 |
|
|
4.39 |
% |
|
|
1,312,502 |
|
|
15,700 |
|
|
4.76 |
% |
|
|
1,158,852 |
|
|
|
15,196 |
|
|
5.20 |
% |
|
Total interest-earning assets |
|
1,553,486 |
|
|
14,234 |
|
|
3.65 |
% |
|
|
1,697,070 |
|
|
16,016 |
|
|
3.75 |
% |
|
|
1,392,934 |
|
|
|
16,278 |
|
|
4.64 |
% |
|
Noninterest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
16,521 |
|
|
|
|
|
|
|
19,058 |
|
|
|
|
|
|
|
16,667 |
|
|
|
|
|
|
All other assets |
|
22,451 |
|
|
|
|
|
|
|
23,443 |
|
|
|
|
|
|
|
25,586 |
|
|
|
|
|
| Total assets |
$ |
1,592,458 |
|
|
|
|
|
$ |
1,739,571 |
|
|
|
|
|
$ |
1,435,187 |
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
137,162 |
|
|
31 |
|
|
0.09 |
% |
|
$ |
110,934 |
|
|
28 |
|
|
0.10 |
% |
|
$ |
121,012 |
|
|
|
141 |
|
|
0.46 |
% |
|
Money market and savings accounts |
|
380,681 |
|
|
218 |
|
|
0.23 |
% |
|
|
417,123 |
|
|
357 |
|
|
0.34 |
% |
|
|
404,608 |
|
|
|
1,511 |
|
|
1.48 |
% |
|
Certificates of deposit |
|
220,007 |
|
|
837 |
|
|
1.51 |
% |
|
|
239,219 |
|
|
1,131 |
|
|
1.88 |
% |
|
|
269,722 |
|
|
|
1,626 |
|
|
2.39 |
% |
|
Other borrowings |
|
23,056 |
|
|
86 |
|
|
1.48 |
% |
|
|
73,419 |
|
|
115 |
|
|
0.62 |
% |
|
|
48,261 |
|
|
|
249 |
|
|
2.05 |
% |
|
Junior subordinated debentures |
|
17,527 |
|
|
125 |
|
|
2.84 |
% |
|
|
17,527 |
|
|
131 |
|
|
2.97 |
% |
|
|
17,527 |
|
|
|
208 |
|
|
4.71 |
% |
|
Total interest bearing liabilities |
|
778,433 |
|
|
1,297 |
|
|
0.66 |
% |
|
|
858,222 |
|
|
1,762 |
|
|
0.82 |
% |
|
|
861,130 |
|
|
|
3,735 |
|
|
1.72 |
% |
| Noninterest bearing
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand deposits |
|
637,940 |
|
|
|
|
|
|
|
709,391 |
|
|
|
|
|
|
|
404,411 |
|
|
|
|
|
| Accrued expenses and other
liabilities |
|
18,299 |
|
|
|
|
|
|
|
19,123 |
|
|
|
|
|
|
|
19,606 |
|
|
|
|
|
| Shareholders' equity |
|
157,786 |
|
|
|
|
|
|
|
152,835 |
|
|
|
|
|
|
|
150,040 |
|
|
|
|
|
| Total liabilities and
shareholders' equity |
$ |
1,592,458 |
|
|
|
|
|
$ |
1,739,571 |
|
|
|
|
|
$ |
1,435,187 |
|
|
|
|
| Net interest income |
|
|
$ |
12,937 |
|
|
|
|
|
|
$ |
14,254 |
|
|
|
|
|
|
$ |
12,543 |
|
|
| Net interest
income/spread |
|
|
|
|
2.99 |
% |
|
|
|
|
|
2.93 |
% |
|
|
|
|
|
2.92 |
% |
| Net interest margin |
|
|
|
|
3.31 |
% |
|
|
|
|
|
3.34 |
% |
|
|
|
|
|
3.57 |
% |
____________________ (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)
| |
Year Ended |
| |
December 31, 2020 |
|
December 31, 2019 |
| |
AverageBalance |
|
InterestEarned/Paid |
|
AverageYield/Rate |
|
AverageBalance |
|
InterestEarned/Paid |
|
AverageYield/Rate |
| Interest earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments(1) |
$ |
286,400 |
|
|
$ |
959 |
|
|
0.33 |
% |
|
$ |
239,268 |
|
|
$ |
5,264 |
|
|
2.20 |
% |
|
Securities available for sale and stock(2) |
36,470 |
|
|
939 |
|
|
2.57 |
% |
|
36,716 |
|
|
1,065 |
|
|
2.90 |
% |
|
Loans(3) |
1,255,461 |
|
|
58,700 |
|
|
4.68 |
% |
|
1,100,082 |
|
|
59,348 |
|
|
5.39 |
% |
|
Total interest-earning assets |
1,578,331 |
|
|
60,598 |
|
|
3.84 |
% |
|
1,376,066 |
|
|
65,677 |
|
|
4.77 |
% |
| Noninterest-earning
assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
17,247 |
|
|
|
|
|
|
15,975 |
|
|
|
|
|
|
All other assets |
24,762 |
|
|
|
|
|
|
26,528 |
|
|
|
|
|
| Total assets |
1,620,340 |
|
|
|
|
|
|
1,418,569 |
|
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
113,711 |
|
|
$ |
172 |
|
|
0.15 |
% |
|
$ |
109,234 |
|
|
$ |
645 |
|
|
0.59 |
% |
|
Money market and savings accounts |
416,953 |
|
|
2,439 |
|
|
0.58 |
% |
|
438,814 |
|
|
7,635 |
|
|
1.74 |
% |
|
Certificates of deposit |
248,801 |
|
|
4,918 |
|
|
1.98 |
% |
|
265,859 |
|
|
6,002 |
|
|
2.26 |
% |
|
Other borrowings |
62,948 |
|
|
464 |
|
|
0.74 |
% |
|
39,315 |
|
|
947 |
|
|
2.41 |
% |
|
Junior subordinated debentures |
17,527 |
|
|
623 |
|
|
3.55 |
% |
|
17,527 |
|
|
892 |
|
|
5.09 |
% |
|
Total interest bearing liabilities |
859,940 |
|
|
8,616 |
|
|
1.00 |
% |
|
870,749 |
|
|
16,121 |
|
|
1.85 |
% |
| Noninterest bearing
liabilities |
|
|
|
|
|
|
|
|
|
|
|
| Demand deposits |
588,557 |
|
|
|
|
|
|
382,198 |
|
|
|
|
|
| Accrued expenses and other
liabilities |
18,944 |
|
|
|
|
|
|
19,032 |
|
|
|
|
|
| Shareholders' equity |
152,899 |
|
|
|
|
|
|
146,590 |
|
|
|
|
|
| Total liabilities and
shareholders' equity |
1,620,340 |
|
|
|
|
|
|
1,418,569 |
|
|
|
|
|
| Net interest income |
|
|
$ |
51,982 |
|
|
|
|
|
|
$ |
49,556 |
|
|
|
| Net interest
income/spread |
|
|
|
|
2.84 |
% |
|
|
|
|
|
2.92 |
% |
| Net interest margin |
|
|
|
|
3.29 |
% |
|
|
|
|
|
3.60 |
% |
____________________ (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
contact |
| Curt Christianssen, Chief
Financial Officer, 714-438-2500 |
Pacific Mercantile Bancorp (NASDAQ:PMBC)
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