- GAAP net income for three months ended December 31, 2015 totaled $630,632 compared to $139,000 in the 2014 fourth quarter.
- Net income adjusted for one-time merger related expenses in the fourth quarter of 2015 were $706,000, compared to adjusted net income of $297,000 for the 2014 fourth quarter.
- GAAP annualized return on average assets was 0.72%.
- GAAP annualized return on average shareholder equity was 6.44%.
- The net interest margin for the quarter was 4.18% for Q4-2015 compared to 4.13% for Q4-2014.
- Nonperforming assets remain minimal.
- GAAP net income for the full year ended December 31, 2015 totaled $1,495,000 compared to $1,714,000 for the year ended December 31, 2014.
- Net income, adjusted for one-time merger related expenses and credit provision reversals, totaled $2,275,000 for 2015, compared to 2014 net income of $728,000, adjusted for one-time merger related expenses and credit provision reversals in that year.
- GAAP return on average assets was 0.48%.
- GAAP return on average shareholder equity was 4.23%.
- The full year net interest margin was 4.39% compared to 4.01% in 2014.
- Total assets reached a record $353.4 million, total loans $306.9 million and total deposits $283.5 million.
The Bank completed its first acquisition in April 2015 with the close of the previously announced Chula Vista based Vibra Bank transaction. In December 2015, the Company announced that it had entered into a definitive agreement to acquire Los Angeles based ProAmerica Bank, which, subject to regulatory and shareholder approvals is expected to close in the second quarter of 2016.Mercardante continued, "The successful acquisition of Vibra Bank increased our total assets by 60% and our total capital by 45%. Upon the successful close of the ProAmerica transaction, our total assets are expected to increase again by more than 50%, putting us well over $500 million in total assets. In addition, we opened our fifth banking office in Pasadena this month, expanding our Los Angeles market coverage even further. With the recent formation of our holding company, PCBC, we have greater flexibility and capacity in future activities and capital raising efforts". In December 2015 the Company closed on a $4 million privately placed capital loan. For the fourth quarter of 2015, the Company earned $631,000 or $0.09 per diluted share after one-time merger related charges of $83,000, compared to $139,000, or $0.03 per diluted share in the fourth quarter of 2014, after one-time merger related charges of $158,000. For the twelve months ended December 31, 2015, the company earned $1,495,000, or $0.24 per diluted share after one-time merger related charges of $1,568,000 and a one-time credit provision reversal of $500,000. Without these one-time charges, core earnings were $2,275,000, or $0.36 per diluted share. This compares with earnings of $1,744,000, or $0.39 per diluted share after one-time merger related charges of $263,000 and a one-time loan loss provision reversal of $1.5 million for the full year of 2014. Excluding the merger-related expenses and credit provision reversals in 2014 the net, core earnings were $728,000, or $0.16 per diluted share.
INCOME STATEMENTNet interest income increased in the fourth quarter by 63% to $3.4 million from $2.1 million in Q4-2014. The net interest margin improved during the quarter by four basis points to 4.17% from 4.13% in Q4-2014. For the full year, net interest income increased by 64% to $12.5 million from $7.6 million for all of 2014. The net interest margin for 2015 increased to 4.39% from 4.01% in 2014 year earlier. Non-interest income increased by 768% to $990,000 from $114,000 in the fourth quarter, with the largest increases coming from gain on sale of SBA loans, service charges and fees and other non-interest income. For the full year, non-interest income increased by 164% to $2.3 million from $ 0.9 million in 2014, with the largest increases coming from gain on sale of SBA loans, service charges and fees and other non-interest income. Non-interest expenses increased by 67% to $12.6 million for all of 2015 compared to $7.5 million in the prior year. Net of merger related expenses, non-interest expenses increased by $3.7 million to $11.0 million from $7.3 million a year earlier with increases in salaries and benefits, occupancy expenses, legal, consulting, data processing, and network expenses representing the largest components of the increase. BALANCE SHEET Total assets at yearend 2015 increased by 62% to 353.4 million from $217.8 million at December 31, 2014. The strong growth reflects the consolidation of Vibra Bank in the second quarter of 2015 along with solid organic growth generated by the Company's legacy branches. Total loans increased 57% to 306.7 million from $195.7 million a year earlier as a result of strong demand throughout the year. Total deposits were also up significantly by $118.5 million from $165.5 million to $283.5 million in the prior year. Core deposits, which include all deposits demand, savings, money market and retail time deposits increased $113.6 million, or 89% to $240.9 from $127.4 in the prior year.
CREDIT QUALITYThe Bank had one nonaccrual loan with a balance of $2 thousand as of December 31, 2015. Overall credit quality remained strong during the quarter, resulting in the determination by management that no provision for the allowance for loan and lease loss was required. The allowance for loan and lease losses to total loans, excluding loans acquired in the Vibra Bank merger and loans held for sale was 1.51%, versus 1.77% a year ago. In addition, loans acquired in the Vibra Bank merger totaling $85.8 million at the end of the quarter are carried at a discount of $0.7 million as required by GAAP and loans held for sale totaling $9.3 million are held at a discount of 2.00% to the face value of the note. REGULATORY CAPITAL The Company and Bank remained "Well-Capitalized" by regulatory definition with capital ratios, as of December 31, 2015, as follows:
|Tier 1 Leverage Ratio:||10.12%||11.10%|
|Common Equity Tier 1 Capital Ratio:||11.57%||12.70%|
|Tier 1 Capital Ratio:||11.57%||12.70%|
|Total Capital Ratio:||12.62%||13.74%|
|Pacific Commerce Bancorp|
|Consolidated Selected Financial Data - Unaudited|
|(Amounts are in thousands, except for book value per share and shares outstanding data)|
|BALANCE SHEET||12/31/2015||12/31/2014||% Change|
|Cash and due from banks||$5,530||$2,041||170.9%|
|Federal funds sold||9,592||10,395||-7.7%|
|Loans held for sale||17,677||4,403||301.5%|
|Loans, net of unearned income||289,019||191,323||51.1%|
|Less: Allowance for loan losses||(3,066)||(3,379)||-9.3%|
|Accrued interest and other liabilities||1,310||1,113||17.7%|
|Other comprehensive income||4||14||-71.4%|
|Total Shareholders' Equity||39,118||25,140||55.6%|
|Total Liabilities & Shareholders' Equity||$353,393||$217,780||118.7%|
|Book value per share at end of period||$5.98||$5.64||6.1%|
|Pacific Commerce Bancorp|
|Consolidated Selected Financial Data - Unaudited|
|(Amounts are in thousands, except for earnings per share data)|
|For the Twelve Months Ended December 31,||For the Three Months Ended December 31,|
|STATEMENT OF OPERATIONS||2015||2014||% Change||2015||2014||% Change|
|Total interest income||$13,205||$8,051||64%||$3,624||$2,225||63%|
|Total interest expense||721||448||61%||203||122||66%|
|Net interest income||12,484||7,603||64%||3,421||2,103||63%|
|Provision for loan losses||(500)||(1,500)||-67%||0||0||0%|
|Non-interest expense (non-merger related)||10,958||7,252||51%||3,210||1,753||83%|
|Income before merger related expenses and income taxes||4,367||2,737||-60%||1,201||464||159%|
|Non-recurring merger related expenses||1,568||263||496%||83||158||-47%|
|Income tax expenses||1,304||730||79%||487||167||192%|
|Basic earnings per share||$0.25||$0.39||-36%||$0.10||$0.03||221%|
|Diluted earnings per share||$0.24||$0.39||-40%||$0.09||$0.03||216%|
|Average shares outstanding||5,985,648||4,461,255||6,543,701||4,461,255|