- Earnings for the third quarter equaled $1,286,000, or $0.14 per diluted share, representing a return on average assets (ROAA) of 0.97% and a return on average equity (ROAE) of 9.13%.
- Year-to-date core earnings (net of tax-effected, merger-related expenses) equaled $2,797,000, or $0.36 per diluted share, representing an ROAA of 0.84% and an ROAE of 7.74%.
- The net interest margin for the current quarter was 4.69% compared to 4.43% in the same quarter last year and 4.22% in the second quarter of 2016.
- The quarterly efficiency ratio was 64.9% compared to 74.7% in the same quarter last year and 68.6% in the second quarter of 2016 (adjusted for merger-related expenses).
- Total noninterest bearing demand deposits grew 10.3%, or $18.4 million, to $196.0 million from $177.6 million at the end of the prior quarter.
Chief Executive Officer Frank J. Mercardante said, "We are pleased with the progress we have made in realizing the synergies from the two acquisitions we have closed in the past sixteen months. Core earnings, deposits and loans have all continued to grow both organically and through acquisitions. Our staff remains focused on our key growth and earnings objectives. They have done an excellent job helping us to put another record quarter behind us and we continue to be excited about our future prospects."INCOME STATEMENT Net interest income for the third quarter rose 66.5% to $5.9 million compared to $3.6 million in the third quarter of 2015 and $4.5 million in the second quarter of 2016. Average interest earning assets increased in the 2016 quarter to $503.8 million with a yield of 5.00% compared with average interest earning assets of $320.0 million in the same period in 2015 with a yield of 4.66%. Average interest earning assets in the second quarter of 2016 totaled $422.3 million with a yield of 4.48%. The net interest margin for the third quarter of 2016 was 4.69% compared to 4.43% in the third quarter of 2015 and 4.22% in the prior quarter. Non-interest income increased 52.1% in the third quarter of 2016 to $996,000, from $655,000 in the third quarter of 2015. The current quarter non-interest income increased by 14.4% compared to $871,000 in the second quarter of 2016. During the current quarter the largest increase in non-interest income was in SBA loan sales and servicing income, other non-interest income and deposit service charges and fees. For the nine months ended September 30, 2016 non-interest income increased by 70.5% to $2.3 million from $1.4 million in the same period ended 2015. The largest increases were in SBA loan sales and servicing income, other non-interest income and deposit service charges and fees.
Non-interest expenses exclusive of merger-related expenses increased in the third quarter by 42.7% to $4.5 million from $3.2 million in the third quarter of 2015, with increases in salaries and benefits, occupancy expenses, legal and consulting and technology-related expenses representing the largest components of the increase.For the nine months ended September 30, 2016 non-interest expenses exclusive of merger-related expenses increased by 47.7% to $11.4 million from $7.7 million in the same period ended 2015. The largest increases were in salaries and benefits, information technology and occupancy expenses. The efficiency ratio, which measures total revenue to total operating expense, improved to 64.9% in the third quarter from 74.7% in the same period in 2015 using core earnings as defined above. Year to date, the efficiency ratio improved to 72.2% from 87.6% for the first nine months of 2015 based on core earnings. BALANCE SHEET Assets increased 58.0% to $552.1 million at September 30, 2016 compared to $349.5 million a year earlier. Total loans increased 54.7% to $430.9 million compared to $278.5 million a year ago. New loan originations in the third quarter, and year-to-date, equaled $33.4 million and $95.4 million, respectively. Total deposits increased to $478.7 million, or by 73.0%, from a year earlier and by 6.8% from the prior quarter-end. Total noninterest bearing demand deposits grew 96.8% to $196.1 million from $99.6 million a year ago and by 10.4%, or $18.4 million, at the June 30, 2016 quarter-end. CREDIT QUALITY Excluding $194.9 million in loans acquired from Vibra Bank and ProAmérica Bank that are covered under purchase accounting rules which are carried at a discount of 1.30% as of September 30, 2016, the allowance for loan and lease losses (ALLL) to total loans held for investment equaled 1.42% of loans outstanding. Total loans held for sale equaled $11.1 million at the end of the third quarter, including $1.1 million in mortgage loans which were held at a discount of 2.00% to the face value of the note. Provisions to the ALLL resumed in the third quarter to reflect the growth in the portfolio. REGULATORY CAPITAL Shareholders' equity increased by 48.8% to $56.9 million as of September 30, 2016 compared to $38.3 million a year ago, primarily as a result of the ProAmérica Bank acquisition. Both the Company and Bank remained "Well-Capitalized" by regulatory definition, with capital ratios, as of September 30, 2016, as follows:
|Tier 1 Leverage Ratio:||4.00%||8.71%||9.71%|
|Common Equity Tier 1 Capital Ratio:||4.50%||10.03%||11.17%|
|Tier 1 Capital Ratio:||6.00%||10.03%||11.17%|
|Total Capital Ratio:||8.00%||10.81%||11.96%|
|Pacific Commerce Bancorp Consolidated Selected Financial Data - Unaudited (Amounts are in thousands, except for book value per share and shares outstanding data)|
|September 30,||September 30,||June 30,|
|Cash and due from banks||$||25,803||$||23,704||8.9||%||$||38,898|
|Federal funds sold||61,305||21,784||181.4||%||34,440|
|Mortgage Warehouse Loans Held for Sale||1,092||2,007||-45.6||%||13,373|
|Other Loans Held for Sale||10,021||9,439||6.2||%||9,734|
|Loans, net of unearned income||430,947||278,525||54.7||%||433,546|
|Less: Allowance for loan losses||(3,493||)||(3,013||)||15.9||%||(3,182||)|
|Liabilities and Shareholders' Equity|
|Accrued interest and other liabilities||2,576||1,580||63.0||%||1,336|
|Other Comprehensive Income||1||6||-83.3||%||2|
|Total Shareholders' Equity||56,940||38,258||48.8||%||55,552|
|Total Liabilities & Shareholders' Equity||$||552,149||$||349,546||58.0||%||$||554,154|
|Book value per share at end of period||$||6.39||$||5.85||9.3||%||$||6.24|
|Tangible Book Value per share at end of period||$||5.21||$||5.28||-1.5||%||$||5.04|
|Pacific Commerce Bancorp Consolidated Selected Financial Data - Unaudited (Amounts are in thousands, except for earnings per share and shares outstanding data)|
|For the Nine Months Ended September 30,||For the Three Months Ended September 30,|
|2016||2015||% change||2016||2015||% change|
|Total interest income||$||15,386||$||9,581||60.6||%||$||6,328||$||3,758||68.4||%|
|Total interest expense||968||518||86.9||%||384||187||105.3||%|
|Net interest income||14,418||9,063||59.1||%||5,944||3,571||66.5||%|
|Provision for loan losses||250||(500||)||150.0||%||250||0||100.0||%|
|Total non-interest income||2,304||1,351||70.5||%||996||655||52.1||%|
|Non-Interest Expense (Non-merger-Related)||11,442||7,748||47.7||%||4,505||3,157||42.7||%|
|Income Before Merger-Related Expenses and Income Taxes||5,030||3,166||58.9||%||2,185||1,069||104.4||%|
|Non-Recurring Merger-Related Expenses||1,073||1,485||-27.7||%||0||341||-100.0||%|
|Income tax expense||1,792||817||119.3||%||899||382||135.3||%|
|Basic earnings per share||$||0.24||$||0.13||$||0.14||$||0.05|
|Diluted earnings per share||$||0.23||$||0.12||$||0.14||$||0.05|
|Core earnings per average share, net of tax||$||0.36||$||0.30||$||0.14||$||0.08|
|Average shares outstanding||7,700,058||5,797,586||8,911,682||6,538,755|