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Bank of Commerce Holdings Announces Results for the First Quarter of 2019

SACRAMENTO, Calif., April 19, 2019 (GLOBE NEWSWIRE) -- Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.471 billion asset bank holding company and parent company of Redding Bank of Commerce (the “Bank”), today announced financial results for the quarter ended March 31, 2019. Net income for the quarter ended March 31, 2019 was $2.3 million or $0.13 per share – diluted, compared with net income of $3.2 million or $0.20 per share – diluted for the same period of 2018.

/EIN News/ -- The current quarter includes the results and related acquisition costs of $1.9 million associated with the January 31, 2019 acquisition of Merchants Holding Company in Sacramento (“Merchants”).

Randall S. Eslick, President and CEO commented: “All of our employees have worked diligently to ensure that the integration of Merchants Bank continues to progress very smoothly and we are excited to extend our banking services into downtown Sacramento.”

Financial highlights for the first quarter of 2019 compared to the same quarter a year ago:

  • Net income of $2.3 million was a decrease of $935 thousand (29%) from $3.2 million earned during the same period in the prior year. Earnings of $0.13 per share – diluted was a decrease of $0.07 (35%) from $0.20 per share – diluted earned during the same period in the prior year and reflects the impact of 1,834,142 shares of common stock issued during the current quarter as part of our acquisition of Merchants.
  • Acquisition costs associated with our acquisition of Merchants totaled $1.9 million.
  • Net interest income increased $1.7 million (15%) to $13.0 million compared to $11.3 million for the same period in the prior year.
  • Return on average assets decreased to 0.66% compared to 1.05% for the same period in the prior year.
  • Return on average equity decreased to 6.12% compared to 10.34% for the same period in the prior year.
  • Average loans totaled $993.3 million, an increase of $109.4 million (12%) compared to average loans for the same period in the prior year.
  • Average earning assets totaled $1.337 billion, an increase of $155 million (13%) compared to average earning assets for the same period in the prior year.
  • Average deposits totaled $1.224 billion, an increase of $153 million (14%) compared to average deposits for the same period in the prior year.
    • Average non-maturing deposits totaled $1.056 billion, an increase of $168 million (19%) compared to the same period in the prior year.
    • Average certificates of deposit totaled $167.5 million, a decrease of $14.4 million (8%) compared to same period in the prior year.
  • The Company’s efficiency ratio was 77.7% compared to 65.2% during the same period in the prior year.
  • Nonperforming assets at March 31, 2019 totaled $14.6 million or 0.99% of total assets, an increase of $10.3 million (241%) since March 31, 2018. The increase in nonperforming assets results from one $10.9 million commercial real estate loan which at March 31, 2019 had zero calculated impairment.
  • Book value per common share was $8.90 at March 31, 2019 compared to $7.83 at March 31, 2018.
  • Tangible book value per common share was $7.96 at March 31, 2019 compared to $7.71 at March 31, 2018.

Financial highlights for the first quarter of 2019 compared to the prior quarter:

  • Net income of $2.3 million ($0.13 per share –diluted) was a decrease of $2.5 million (52%) from $4.8 million ($0.30 per share – diluted) earned during the prior quarter.
  • Acquisition costs associated with our acquisition of Merchants totaled $1.9 million compared to $802 thousand for the prior quarter.
  • Net interest income increased $510 thousand (17% annualized) to $13.0 million compared to $12.5 million for the prior quarter.
  • Return on average assets decreased to 0.66% compared to 1.44% for the prior quarter.
  • Return on average equity decreased to 6.12% compared to 14.32% for the prior quarter.
  • Average loans totaled $993.3 million, an increase of $69.9 million (31% annualized) compared to average loans for the prior quarter.
  • Average earning assets totaled $1.337 billion, an increase of $77 million (25% annualized) compared the prior quarter.
  • Average deposits totaled $1.224 billion, an increase of $65.9 million (23% annualized) compared the prior quarter.
    • Average non-maturing deposits totaled $1.056 billion, an increase of $55 million (22% annualized) compared to the prior quarter.
    • Average certificates of deposit totaled $167.5 million, an increase of $10.4 million (27% annualized) compared to the prior quarter.
  • The Company’s efficiency ratio was 77.7% compared to 65.1% for the prior quarter.
  • Nonperforming assets at March 31, 2019 totaled $14.6 million or 0.99% of total assets, an increase of $10.4 million (1,009% annualized) compared to December 31, 2018. The increase in nonperforming assets results from one $10.9 million commercial real estate loan which at March 31, 2019 had zero calculated impairment.
  • Book value per common share was $8.90 at March 31, 2019 compared to $8.47 at December 31, 2018.
  • Tangible book value per common share was $7.96 at March 31, 2019 compared to $8.36 at December 31, 2018.

Forward-Looking Statements

This quarterly press release includes forward-looking information, which is subject to the “safe harbor” created by the Securities Act of 1933 and Securities Act of 1934. These forward-looking statements (which involve our plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors:

  • Competitive pressure in the banking industry and changes in the regulatory environment
  • Changes in the interest rate environment and volatility of rate sensitive assets and liabilities
  • A decline in the health of the economy nationally or regionally which could reduce the demand for loans or reduce the value of real estate collateral securing most of our loans
  • Credit quality deterioration which could cause an increase in the provision for loan and lease losses
  • Asset/Liability matching risks and liquidity risks
  • Changes in the securities markets

For additional information concerning risks and uncertainties related to the Company and its operations, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 under the heading “Risk Factors” and to subsequent reports on Form 10-Q and current reports on Form 8-K. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation and specifically disclaims any obligation to revise or publicly release the results of any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date the statements were made.

 
TABLE 1
SELECTED FINANCIAL INFORMATION - UNAUDITED
(amounts in thousands except per share data)
                         
    For The Three Months Ended
Net income, average assets and   March 31,     December 31,
average shareholders' equity   2019   2018   2018
Net income   $ 2,306     $ 3,241     $ 4,839  
Average total assets   $ 1,425,860     $ 1,248,563     $ 1,328,817  
Average total earning assets   $ 1,337,006     $ 1,181,882     $ 1,259,709  
Average shareholders' equity   $ 152,705     $ 127,069     $ 134,033  
                         
Selected performance ratios                        
Return on average assets     0.66 %     1.05 %     1.44 %
Return on average equity     6.12 %     10.34 %     14.32 %
Efficiency ratio     77.7 %     65.2 %     65.1 %
                         
Share and per share amounts                        
Weighted average shares - basic (1)     17,489       16,225       16,265  
Weighted average shares - diluted (1)     17,552       16,310       16,345  
Earnings per share - basic   $ 0.13     $ 0.20     $ 0.30  
Earnings per share - diluted   $ 0.13     $ 0.20     $ 0.30  
                         
    At March 31,     At December 31,
Share and per share amounts   2019   2018   2018
Common shares outstanding (2)     18,213       16,315       16,334  
Book value per common share (2)   $ 8.90     $ 7.83     $ 8.47  
Tangible book value per common share (2)(3)   $ 7.96     $ 7.71     $ 8.36  
                         
Capital ratios (4)                      
Bank of Commerce Holdings                      
Common equity tier 1 capital ratio     12.40 %     12.35 %     12.79 %
Tier 1 capital ratio     13.25 %     13.31 %     13.71 %
Total capital ratio     15.19 %     15.52 %     15.82 %
Tier 1 leverage ratio     11.05 %     11.09 %     11.21 %
Tangible common equity ratio (5)     9.97 %     10.11 %     10.46 %
                         
Redding Bank of Commerce                        
Common equity tier 1 capital ratio     13.98 %     12.62 %     13.23 %
Tier 1 capital ratio     13.98 %     12.62 %     13.23 %
Total capital ratio     15.08 %     13.87 %     14.42 %
Tier 1 leverage ratio     11.66 %     10.51 %     10.81 %
                         
(1) Excludes unvested restricted shares issued in accordance with the Company's equity incentive plan, as they are non participative in dividends or voting rights.
(2) Includes unvested restricted shares issued in accordance with the Company's equity incentive plan.
(3) Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.
(4) The Company and the Bank continue to meet all capital adequacy requirements to which they are subject.
(5) Management believes the tangible common equity ratio is a useful measure of capital adequacy because it provides a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability of the Company to absorb potential losses. The tangible common equity ratio is calculated as total shareholders' equity less goodwill and core deposit intangible, net divided by total assets less goodwill and core deposit intangible, net.
 

BALANCE SHEET OVERVIEW

As of March 31, 2019, the Company had total consolidated assets of $1.471 billion, gross loans of $1.035 billion, allowance for loan and lease losses (“ALLL”) of $12.2 million, total deposits of $1.248 billion, and shareholders’ equity of $162.1 million.

                                               
TABLE 2
LOAN BALANCES BY TYPE - UNAUDITED
(amounts in thousands)
                                               
    At March 31,             At December 31,
        % of       % of   Change       % of
    2019   Total   2018   Total   Amount   %   2018   Total
Commercial   $ 149,575     14 %   $ 137,870     15 %   $ 11,705     8 %   $ 135,543     14 %
Real estate - construction and land development     30,335     3       14,723     2       15,612     106 %     22,563     2  
Real estate - commercial non-owner occupied     477,798     47       405,192     46       72,606     18 %     433,708     46  
Real estate - commercial owner occupied     200,349     19       193,286     22       7,063     4 %     204,622     22  
Real estate - residential - ITIN     36,145     3       40,425     4       (4,280 )   (11 )%     37,446     4  
Real estate - residential - 1-4 family mortgage     68,092     7       30,247     3       37,845     125 %     34,366     4  
Real estate - residential - equity lines     26,162     3       30,520     3       (4,358 )   (14 )%     26,958     3  
Consumer and other     46,150     4       48,157     5       (2,007 )   (4 )%     51,045     5  
Gross loans     1,034,606     100 %     900,420     100 %     134,186     15 %     946,251     100 %
Deferred fees and costs     1,992             1,713             279           1,927        
Loans, net of deferred fees and costs     1,036,598             902,133             134,465           948,178        
Allowance for loan and lease losses     (12,242 )           (12,295 )           53           (12,292 )      
Net loans   $ 1,024,356           $ 889,838           $ 134,518         $ 935,886        
                                               
Average yield on loans during the quarter     4.91 %           4.92 %           (0.01 )         4.94 %      
Average yield on loans during the year     4.91 %           4.92 %           (0.01 )         4.91 %      
                                                       

The Company recorded gross loan balances of $1.035 billion at March 31, 2019, compared with $900.4 million and $946.3 million at March 31, 2018 and December 31, 2018, respectively, an increase of $134.2 million and $88.4 million, respectively. During the first quarter of 2019, Merchants Holding Company acquisition provided an additional $85.3 million of loans. At March 31, 2019, gross loans from the acquisition totaled $84.1 million as follows:

  • Commercial $6.0 million
  • Real estate - construction and land development $2.4 million
  • Real estate - commercial non-owner occupied $39.5 million
  • Real estate - residential – 1-4 family mortgage $36.0 million
  • Consumer and other $0.2 million

Average loan balances were $993.3 million for the quarter ended March 31, 2019, compared with $883.9 million for the quarter ended March 31, 2018 and $923.4 million for the quarter ended December 31, 2018 an increase of $109.4 million or 12% and an increase of $69.9 million or 31% annualized.

The average yield on loans during the quarter was 4.91% compared to 4.92% and 4.94% for the quarters ended March 31, 2018 and December 31, 2018, respectively. During the quarter, a $10.9 million commercial real estate loan was placed on nonaccrual status. The uncollected interest on the loan was reversed which reduced our average yield on loans by 5 basis points.

                                               
TABLE 3
CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED
(amounts in thousands)
                                               
    At March 31,             At December 31,
        % of       % of   Change       % of
    2019   Total   2018   Total   Amount   %   2018   Total
Cash and due from banks   $ 32,104     9 %   $ 16,247     6 %   $ 15,857     98 %   $ 23,692     8 %
Interest-bearing deposits in other banks     30,425     9       17,376     6       13,049     75 %     23,673     8  
Total cash and cash equivalents     62,529     18       33,623     12       28,906     86 %     47,365     16  
                                               
Investment securities:                                              
U.S. government and agencies     46,451     13       41,179     14       5,272     13 %     40,087     13  
Obligations of state and political subdivisions     48,935     14       59,408     21       (10,473 )   (18 )%     50,530     17  
Residential mortgage backed securities and collateralized mortgage obligations     171,814     47       125,567     43       46,247     37 %     138,503     45  
Corporate securities     2,958     1       3,958     1       (1,000 )   (25 )%     2,922     1  
Commercial mortgage backed securities     23,864     7       25,520     9       (1,656 )   (6 )%     24,762     8  
Other asset backed securities     95           285     0       (190 )   (67 )%     124      
Total investment securities - AFS     294,117     82       255,917     88       38,200     15 %     256,928     84  
                                               
Total cash, cash equivalents and investment securities   $ 356,646     100 %   $ 289,540     100 %   $ 67,106     23 %   $ 304,293     100 %
Average yield on interest-bearing due from banks and investment securities during the quarter - nominal     2.83 %           2.45 %           0.38           2.66 %      
Average yield on interest-bearing due from banks and investment securities during the quarter - tax equivalent     2.95 %           2.62 %           0.33           2.77 %      
                                                       

As of March 31, 2019, we maintained noninterest-bearing cash positions of $32.1 million and interest-bearing deposits of $30.4 million at the Federal Reserve Bank and correspondent banks.

Investment securities totaled $294.1 million at March 31, 2019, compared with $255.9 million and $256.9 million at March 31, 2018 and December 31, 2018, respectively. During the first quarter of 2019, the Merchants acquisition included securities with a par value of $107.4 million. Management elected to sell securities with a par value of $67.8 million which resulted in $92 thousand in net realized gains.

Average securities balances and weighted average tax equivalent yields for the quarters ended March 31, 2019 and 2018 were $303.5 million and 3.01% compared to $265.1 million and 2.75%, respectively.

At March 31, 2019, our net unrealized losses on available-for-sale investment securities were $701 thousand compared with net unrealized losses of $3.9 million and $4.3 million at March 31, 2018 and December 31, 2018, respectively. The changes in net unrealized losses on the investment securities portfolio are due to changes in market interest rates.

                                                     
TABLE 4
DEPOSITS BY TYPE - UNAUDITED
(amounts in thousands)
                                                     
    At March 31,             At December 31,
        % of       % of     Change       % of
    2019   Total   2018   Total   Amount   %   2018   Total
Demand - noninterest-bearing   $ 385,696     31 %   $ 301,981     29 %   $ 83,715     28 %   $ 347,199     31 %
Demand - interest-bearing     241,292     19       229,681     22       11,611     5 %     252,202     22  
Money market accounts     311,853     25       232,870     22       78,983     34 %     265,093     23  
Total demand     938,841     75       764,532     73       174,309     23 %     864,494     76  
                                                     
Savings     139,237     11       107,986     10       31,251     29 %     114,840     10  
Total non-maturing deposits     1,078,078     67       872,518     83       205,560     24 %     979,334     86  
                                                     
Certificates of deposit     170,216     14       176,233     17       (6,017 )   (3 )%     152,382     14  
Total deposits   $ 1,248,294     100 %   $ 1,048,751     100 %   $ 199,543     19 %   $ 1,131,716     100 %
                                                     

Total deposits at March 31, 2019, increased $200 million or 19% to $1.248 billion compared to March 31, 2018 and increased $117 million or 42% annualized compared to December 31, 2018. Total non-maturing deposits increased $206 million or 24% compared to the same date a year ago and increased $99 million or 41% annualized compared to December 31, 2018. Certificates of deposit decreased $6 million or 3% compared to the same date a year ago and increased $18 million or 47% annualized compared to December 31, 2018.

During the first quarter of 2019, Merchants Holding Company acquisition provided an additional $190.2 million of deposits, which are essentially unchanged at March 31, 2019. As illustrated in the following table, legacy deposits have experienced their seasonal decline, while wholesale time deposits have matured and were not renewed.

                               
TABLE 4a
YEAR TO DATE CHANGES IN DEPOSITS
(amounts in thousands)
    Legacy Deposits   Acquired Merchants
Deposits
  Change In   Deposits
    At December 31,   At March 31,   Legacy Deposits   At March 31,
    2018   2019   Deposits   2019
Demand - noninterest-bearing   $ 347,199     $ 49,892     $ (11,395 )   $ 385,696  
Demand - interest-bearing     252,202       28,344       (39,254 )     241,292  
Money market accounts     265,093       46,321       439       311,853  
Total demand     864,494       124,557       (50,210 )     938,841  
                               
Savings     114,840       28,386       (3,989 )     139,237  
Total non-maturing deposits     979,334       152,943       (54,199 )     1,078,078  
                               
Certificates of deposit     152,382       36,863       (19,029 )     170,216  
Total deposits   $ 1,131,716     $ 189,806     $ (73,228 )   $ 1,248,294  


TABLE 5
WHOLESALE AND RECIPROCAL DEPOSITS - UNAUDITED
(amounts in thousands)
                         
    At March 31,   At December 31,
    2019   2018   2018
CDARS / ICS reciprocal deposits   $ 65,192     $ 56,732     $ 83,666  
Online listing service wholesale time deposits     1,683       29,159       22,015  
Total wholesale and reciprocal deposits   $ 66,875     $ 85,891     $ 105,681  
                         

For calendar quarters prior to April 1, 2018, CDARS/ ICS reciprocal deposits were considered to be brokered deposits by regulatory authorities and were reported as such on quarterly Call Reports. With passage of The Economic Growth, Regulatory Relief and Consumer Protection Act in May 2018, this is no longer so.

AVERAGE COST OF FUNDS

The following table presents the average cost of interest-bearing deposits, all deposits and all interest-bearing liabilities for the periods indicated.

                                                                 
TABLE 6
AVERAGE COST OF FUNDS - UNAUDITED
For The Three Months Ended
                                                                 
    March 31,   December 31,   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,
    2019   2018   2018   2018   2018   2017   2017   2017
Interest-bearing deposits     0.49 %     0.45 %     0.42 %     0.41 %     0.41 %     0.42 %     0.43 %     0.42 %
Interest-bearing deposits and noninterest-bearing demand     0.34 %     0.31 %     0.29 %     0.29 %     0.29 %     0.30 %     0.31 %     0.31 %
All interest-bearing liabilities     0.67 %     0.61 %     0.64 %     0.68 %     0.60 %     0.59 %     0.60 %     0.60 %
All interest-bearing liabilities and noninterest-bearing demand     0.46 %     0.42 %     0.45 %     0.50 %     0.43 %     0.42 %     0.43 %     0.44 %
                                                                 

INCOME STATEMENT OVERVIEW

                                           
TABLE 7
SUMMARY INCOME STATEMENT - UNAUDITED
(amounts in thousands, except per share data)
                                           
For The Three Months Ended
    March 31,   Change   December 31,   Change
    2019   2018   Amount   %   2018
  Amount   %
Interest income   $ 14,427     $ 12,530     $ 1,897     15 %   $ 13,750     $ 677     5 %
Interest expense     1,423       1,185       238     20 %     1,256       167     13 %
Net interest income     13,004       11,345       1,659     15 %     12,494       510     4 %
Provision for loan and lease losses                     %               %
Noninterest income     1,057       982       75     8 %     1,132       (75 )   (7 )%
Noninterest expense     10,923       8,033       2,890     36 %     8,868       2,055     23 %
Income before provision for income taxes     3,138       4,294       (1,156 )   (27 )%     4,758       (1,620 )   (34 )%
Provision for income taxes:                                          
Reversal of uncertain tax position                     %     (988 )     988     100 %
Benefit from cost segregation study and tangible property review                     %     (484 )     484     100 %
Provision for income taxes from operations     832       1,053       (221 )   (21 )%     1,391       (559 )   (40 )%
Total provision for income taxes     832       1,053       (221 )   (21 )%     (81 )     913     (1,127 )%
Net income   $ 2,306     $ 3,241     $ (935 )   (29 )%   $ 4,839     $ (2,533 )   (52 )%
                                           
Basic earnings per share   $ 0.13     $ 0.20     $ (0.07 )   (35 )%   $ 0.30     $ (0.17 )   (57 )%
Average basic shares     17,489       16,225       1,264     8 %     16,265       1,224     8 %
Diluted earnings per share   $ 0.13     $ 0.20     $ (0.07 )   (35 )%   $ 0.30     $ (0.17 )   (57 )%
Average diluted shares     17,552       16,310       1,242     8 %     16,345       1,207     7 %
Dividends declared per common share   $ 0.04     $ 0.03     $ 0.01     33 %   $ 0.04     $     %
                                                     

First Quarter of 2019 Compared With First Quarter of 2018

Net income for the first quarter of 2019 decreased $935 thousand compared to the first quarter of 2018. In the current quarter, net interest income was $1.7 million higher, noninterest income was $75 thousand higher and the provision for income taxes was $221 thousand lower. These positive changes were offset by noninterest expenses that were $2.9 million higher.

Net Interest Income

Net interest income increased $1.7 million compared to the same period a year ago.

Interest income for the first quarter of 2019 increased $1.9 million or 15% to $14.4 million:

  • Interest and fees on loans increased $1.3 million due to a $109.4 million increase in average loan balances partially offset by a one basis point decrease in the average yield on the loan portfolio.
  • Interest on securities increased $479 thousand due to a $38.4 million increase in average securities balances and a 32 basis point increase in average yield on the securities portfolio.
  • Interest on interest-bearing deposits due from banks increased $116 thousand due to a $7.3 million increase in average interest-bearing deposit balances, and an 88 basis point increase in average yield.

Interest expense for the first quarter of 2019 increased $238 thousand or 20% to $1.4 million:

  • Interest expense on interest bearing deposits increased $241 thousand. Average interest-bearing demand and savings deposit balances increased $86.7 million, while average certificate of deposit balances decreased $14.4 million. The average rate paid on interest-bearing deposits increased eight basis points.
  • Interest expense on borrowings from the Federal Home Loan Bank of San Francisco increased $8 thousand. Average Federal Home Loan Bank of San Francisco borrowings outstanding in the current quarter were $8.8 million compared to $12.4 million in the same quarter a year ago.
  • Interest expense on other term debt and junior subordinated debentures decreased $11 thousand.

Provision for loan and lease losses

As illustrated in Table 9, the nonaccrual status of a $10.9 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, no calculated impairment reserve on this loan is indicated and no provision for loan and lease losses was necessary for the quarter.

Noninterest Income

Noninterest income for the three months ended March 31, 2019 increased $75 thousand compared to the first quarter for 2018. Gains on sale of investment securities increased $56 thousand and dividends on Federal Home Loan Bank of San Francisco stock increased $41 thousand.

Noninterest Expense

Noninterest expense for the three months ended March 31, 2019 increased $2.9 million compared to the same period a year previous which included:

  • $1.9 million in acquisition costs
  • $0.6 million increase in operating expenses from the Merchants acquisition

The Company’s efficiency ratio was 77.7% for the first quarter of 2019 (64.0% exclusive of acquisition costs). The ratio during the same period in 2018 was 65.2%.

Income Tax Provision

For the three months ended March 31, 2019, our income tax provision of $832 thousand on pre-tax income of $3.1 million was an effective tax rate of 26.5%. The tax provision for the first quarter of the prior year was $1.1 million on pre-tax income of $4.3 million for an effective tax rate of 24.5%. The current quarter includes $135 thousand, of acquisition costs which are not tax deductible.

First Quarter of 2019 Compared With Fourth Quarter of 2018

Net income for the first quarter of 2019 decreased $2.5 million compared to the fourth quarter of 2018. In the current quarter, net interest income was $510 thousand higher. This positive change was offset by noninterest income that was $75 thousand lower, noninterest expense that was $2.1 million higher and provision for income taxes that was $913 thousand higher.

Net Interest Income

Net interest income increased $510 thousand over the prior quarter.

Interest income for the three months ended March 31, 2019 increased $677 thousand or 5% to $14.4 million.

  • Interest and fees on loans increased $537 thousand due to a $69.9 million increase in average loan balances partially offset by a three basis point decrease in the average yield on the loan portfolio.
  • Interest on investment securities increased $329 thousand due to a $42.5 million increase in average securities balances and a 10 basis point increase in average yield on the investment portfolio.
  • Interest on interest-bearing deposits due from banks decreased $189 thousand due to a $35.1 million decrease in average balances partially offset by an 18 basis point increase in average yield.

Interest expense for the three months ended March 31, 2019 increased $167 thousand or 13% to $1.4 million.

  • Interest expense on deposits increased $114 thousand as average interest-bearing demand and savings deposits increased $34.5 million, average certificates of deposit increased $10.4 million and the average rate paid on these deposits increased by eight basis points.
  • Interest expense on borrowings from the Federal Home Loan Bank of San Francisco increased $55 thousand. Average Federal Home Loan Bank of San Francisco borrowings outstanding in the current quarter were $8.8 million, there were no borrowings in the prior quarter
  • Interest expense on other term debt and junior subordinated debentures decreased $2 thousand.

Provision for loan and lease losses

As illustrated in Table 9, the nonaccrual status of a $10.9 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, no calculated impairment reserve on this loan is indicated and no provision for loan and lease losses was necessary for the quarter.

Noninterest Income

Noninterest income for the three months ended March 31, 2019 decreased $75 thousand, the decrease was due to a $96 thousand special dividend on Federal Home Loan Bank of San Francisco stock in the prior quarter that did not recur and a decrease in gains on sale of OREO properties of $41 thousand. These decreases were partially offset by an increase in the gain on sale of investment securities of $89 thousand.

Noninterest Expense

Noninterest expense for the three months ended March 31, 2019 increased $2.1 million. The increase was due to:

  • $1.1 million increase in acquisition costs
  • $0.6 million increase in operating expenses from the Merchants acquisition

The Company’s efficiency ratio was 77.7% for the first quarter of 2019 (64% exclusive of acquisition costs). The ratio during the prior quarter was 65.1%.

Income Tax Provision

For the three months ended March 31, 2019, our income tax provision of $832 thousand on pre-tax income of $3.1 million was an effective tax rate of 26.5%. The negative tax provision for the prior quarter of $81 thousand on pre-tax income of $4.8 million included:

  • $(988) thousand benefit due to the reversal of our uncertain tax position.
  • $(484) thousand benefit as a result to our cost segregation study and tangible property review.
  • $1.4 million tax provision on pre-tax net operating income of $4.8 million (29.2%).

The current and prior quarter include $135 thousand and $765 thousand, respectively, of acquisition costs which are not tax deductible.

Earnings Per Share

Diluted earnings per share were $0.13 for the three months ended March 31, 2019 compared with diluted earnings per share of $0.20 for the same period a year ago and diluted earnings per share of $0.30 for the prior period. Net income and weighted average shares used to calculate earnings per share – diluted are summarized in table 7 presented earlier in this press release.

                                                                   
TABLE 8a
NET INTEREST MARGIN - UNAUDITED
(amounts in thousands)
                                                                   
    For The Three Months Ended
    March 31, 2019   March 31, 2018   December 31, 2018
    Average           Yield /   Average           Yield /   Average           Yield /
(Amounts in thousands)   Balance   Interest(1)   Rate (5)   Balance   Interest(1)   Rate (5)   Balance   Interest(1)   Rate (5)
Interest-earning assets:                                                                  
Net loans (2)   $ 993,261     $ 12,031     4.91 %   $ 883,876     $ 10,729     4.92 %   $ 923,409     $ 11,494     4.94 %
Taxable securities     253,068       1,764     2.83 %     205,302       1,209     2.39 %     218,137       1,469     2.67 %
Tax-exempt securities     50,454       387     3.11 %     59,789       463     3.14 %     42,868       353     3.27 %
Interest-bearing deposits in other banks     40,223       245     2.47 %     32,915       129     1.59 %     75,295       434     2.29 %
Average interest-earning assets     1,337,006       14,427     4.38 %     1,181,882       12,530     4.30 %     1,259,709       13,750     4.33 %
Cash and due from banks     21,392                     17,641                     22,447                
Premises and equipment, net     14,581                     14,557                     13,331                
Goodwill and core deposit intangible, net     11,872                     1,998                     1,842                
Other assets     41,009                     32,485                     31,488                
Average total assets   $ 1,425,860                   $ 1,248,563                   $ 1,328,817                
                                                                   
Interest-bearing liabilities:                                                                  
Interest-bearing demand   $ 243,376       126     0.21 %   $ 234,269       89     0.15 %   $ 257,227       141     0.22 %
Money market accounts     293,396       289     0.40 %     236,171       132     0.23 %     265,190       207     0.31 %
Savings deposits     131,081       111     0.34 %     110,725       59     0.22 %     110,934       92     0.33 %
Certificates of deposit     167,463       490     1.19 %     181,901       495     1.10 %     157,035       462     1.17 %
Federal Home Loan Bank of San Francisco borrowings     8,778       55     2.54 %     12,444       47     1.53 %               %
Other borrowings net of unamortized debt issuance costs     12,889       239     7.52 %     16,528       281     6.90 %     13,785       252     7.25 %
Junior subordinated debentures     10,310       113     4.44 %     10,310       82     3.23 %     10,310       102     3.93 %
Average interest-bearing liabilities     867,293       1,423     0.67 %     802,348       1,185     0.60 %     814,481       1,256     0.61 %
Noninterest-bearing demand     388,410                     307,397                     367,457                
Other liabilities     17,452                     11,749                     12,846                
Shareholders’ equity     152,705                     127,069                     134,033                
Average liabilities and shareholders’ equity   $ 1,425,860                   $ 1,248,563                   $ 1,328,817                
Net interest income and net interest margin (4)           $ 13,004     3.94 %           $ 11,345     3.89 %           $ 12,494     3.93 %
Tax equivalent net interest margin (3)                   3.98 %                   3.94 %                   3.96 %
                                                                   
(1) Interest income on loans includes deferred fees and costs of approximately $181 thousand, $137 thousand, and $109 thousand for the three months ended
March 31, 2019, and 2018 and December 31, 2018, respectively.
(2) Net loans includes average nonaccrual loans of $8.5 million, $4.8 million and $4.1 million for the three months ended March 31, 2019 and 2018 and
December 31, 2018, respectively.
(3) Tax-exempt income has been adjusted to tax equivalent basis at a 21% for 2019 and 2018. The amount of such adjustments was an addition to recorded income of approximately $103 thousand, $123 thousand and $94 thousand for the three months ended March 31, 2019 and 2018 and December 31, 2018, respectively.
(4) Net interest margin is annualized net interest income expressed as a percentage of average interest-earning assets.
(5) Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result.


TABLE 9
ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED
(amounts in thousands)
                               
    For The Three Months Ended
    March 31,   December 31,   September 30,   June 30,   March 31,
    2019   2018   2018   2018   2018
Beginning balance ALLL   $ 12,292     $ 12,392     $ 12,388     $ 12,295     $ 11,925  
Provision for loan and lease losses                              
Loans charged-off     (348 )     (279 )     (198 )     (382 )     (390 )
Loan loss recoveries     298       179       202       475       760  
Ending balance ALLL   $ 12,242     $ 12,292     $ 12,392     $ 12,388     $ 12,295  
                               
    At March 31,   At December 31,   At September 30,   At June 30,   At March 31,
    2019   2018   2018   2018   2018
Nonaccrual loans:                              
Commercial   $ 1,018     $ 959     $ 899     $ 1,358     $ 1,109  
Real estate - construction and land development                              
Real estate - commercial non-owner occupied     10,878                          
Real estate - commercial owner occupied           548                    
Real estate - residential - ITIN     2,392       2,388       2,571       2,613       2,839  
Real estate - residential - 1-4 family mortgage     182       185       179       184       188  
Real estate - residential - equity lines     42       43       44       44       45  
Consumer and other     23       23       24       33       35  
Total nonaccrual loans     14,535       4,146       3,717       4,232       4,216  
Accruing troubled debt restructured loans:                              
Commercial     1,187       1,224       1,291       1,420       1,516  
Real estate - commercial non-owner occupied     793       795       797       799       800  
Real estate - residential - ITIN     4,342       4,484       4,535       4,592       4,554  
Real estate - residential - equity lines     358       363       367       372       376  
Total accruing troubled debt restructured loans     6,680       6,866       6,990       7,183       7,246  
                               
All other accruing impaired loans                              
                               
Total impaired loans   $ 21,215     $ 11,012     $ 10,707     $ 11,415     $ 11,462  
                               
Gross loans outstanding at period end   $ 1,034,606     $ 946,251     $ 927,480     $ 936,816     $ 900,420  
                               
Impaired loans to gross loans     2.05 %     1.16 %     1.15 %     1.22 %     1.27 %
Nonaccrual loans to gross loans     1.40 %     0.44 %     0.40 %     0.45 %     0.47 %
                               
Allowance for loan and lease losses as a percent of:                  
Gross loans     1.18 %     1.30 %     1.34 %     1.32 %     1.37 %
Nonaccrual loans     84.22 %     296.48 %     333.39 %     292.72 %     291.63 %
Impaired loans     57.70 %     111.62 %     115.74 %     108.52 %     107.27 %
                                         

We continue to monitor credit quality and adjust the ALLL to ensure that the ALLL is maintained at a level that is adequate to cover estimated credit losses in the loan and lease portfolio. As illustrated in Table 9, the nonaccrual status of a $10.9 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, no calculated impairment reserve on this loan is indicated and no provision for loan and lease losses was necessary for the quarter. There was no provision for loan and lease loss during the prior quarter or during the same quarter a year ago. The loans acquired from Merchants were recorded at fair value which included a discount for credit risk which is not a part of the ALLL. As a result, our ALLL as a percentage of gross loans was declined to 1.18% as of March 31, 2019 compared to 1.37% as of March 31, 2018 and 1.30% as of December 31, 2018. Based on the Bank’s ALLL methodology, which uses criteria such as risk factors and historical loss rates, and given the ongoing improvements in asset quality, management believes the Company’s ALLL is adequate at March 31, 2019. There is, however, no assurance that future loan and lease losses will not exceed the levels provided for in the ALLL and could possibly result in future charges to the provision for loan and lease losses.

At March 31, 2019, the recorded investment in loans classified as impaired totaled $21.2 million, with a corresponding specific reserve of $1.4 million compared to impaired loans of $11.5 million with a corresponding specific reserve of $1.1 million at March 31, 2018 and impaired loans of $11.0 million, with a corresponding specific reserve of $1.2 million at December 31, 2018. The increase in loans classified as impaired results from one $10.9 million commercial real estate loan which at March 31, 2019 had zero calculated impairment.

                                         
TABLE 10
TROUBLED DEBT RESTRUCTURINGS - UNAUDITED
(amounts in thousands)
                                         
    At March 31,   At December 31,   At September 30,   At June 30,   At March 31,
    2019   2018   2018   2018   2018
Nonaccrual   $ 2,725     $ 2,693     $ 2,720     $ 3,218     $ 3,237  
Accruing     6,680       6,866       6,990       7,183       7,246  
Total troubled debt restructurings   $ 9,405     $ 9,559     $ 9,710     $ 10,401     $ 10,483  
                                         
Troubled debt restructurings as a percentage of total gross loans     0.91 %     1.01 %     1.05 %     1.11 %     1.16 %
                                         

There were no new troubled debt restructurings during the three months ended March 31, 2019. As of March 31, 2019, we had 105 restructured loans that qualified as troubled debt restructurings, of which 104 were performing according to their restructured terms.

                                         
TABLE 11
NONPERFORMING ASSETS - UNAUDITED
(amounts in thousands)
                                         
    At March 31,   At December 31,   At September 30,   At June 30,   At March 31,
    2019   2018   2018   2018   2018
Total nonaccrual loans   $  14,535      $  4,146      $  3,717      $  4,232      $  4,216   
90 days past due and still accruing      —        —        —        —        —  
Total nonperforming loans      14,535         4,146         3,717         4,232         4,216   
                                         
Other real estate owned ("OREO")      34         31         136         140         60   
Total nonperforming assets   $  14,569      $  4,177      $  3,853      $  4,372      $  4,276   
                                         
Nonperforming loans to gross loans     1.40 %     0.44 %     0.40 %     0.45 %     0.47 %
Nonperforming assets to total assets     0.99 %     0.32 %     0.29 %     0.34 %     0.34 %


TABLE 12
UNAUDITED CONSOLIDATED
BALANCE SHEET
(amounts in thousands, except per share data)
                             
    At March 31,   Change   At December 31,
    2019   2018   $   %   2018
Assets:                            
Cash and due from banks   $ 32,104     $ 16,247     $ 15,857     98 %   $ 23,692  
Interest-bearing deposits in other banks     30,425       17,376       13,049     75 %     23,673  
Total cash and cash equivalents     62,529       33,623       28,906     86 %     47,365  
                             
Securities available-for-sale, at fair value     294,117       255,917       38,200     15 %     256,928  
Loans, net of deferred fees and costs     1,036,598       902,133       134,465     15 %     948,178  
Allowance for loan and lease losses     (12,242 )     (12,295 )     53     %     (12,292 )
Net loans     1,024,356       889,838       134,518     15 %     935,886  
                             
Premises and equipment, net     15,391       14,214       1,177     8 %     13,119  
Other real estate owned     34       60       (26 )   (43 )%     31  
Life insurance     23,294       22,027       1,267     6 %     22,410  
Deferred tax asset, net     6,072       7,523       (1,451 )   (19 )%     7,039  
Goodwill and core deposit intangible, net     17,094       1,975       15,119     766 %     1,841  
Other assets     28,604       20,398       8,206     40 %     22,485  
Total assets   $ 1,471,491     $ 1,245,575     $ 225,916     18 %   $ 1,307,104  
                             
Liabilities and shareholders' equity:                            
Demand - noninterest-bearing   $ 385,696     $ 301,981     $ 83,715     28 %   $ 347,199  
Demand - interest-bearing     241,292       229,681       11,611     5 %     252,202  
Money market     311,853       232,870       78,983     34 %     265,093  
Savings     139,237       107,986       31,251     29 %     114,840  
Certificates of deposit     170,216       176,233       (6,017 )   (3 )%     152,382  
Total deposits     1,248,294       1,048,751       199,543     19 %     1,131,716  
                             
Term debt:                            
Federal Home Loan Bank of San Francisco borrowings     20,000       30,000       (10,000 )   (33 )%      
Other borrowings     12,596       16,196       (3,600 )   (22 )%     13,496  
Unamortized debt issuance costs     (79 )     (127 )     48     (38 )%     (91 )
Net term debt     32,517       46,069       (13,552 )   (29 )%     13,405  
                             
Junior subordinated debentures     10,310       10,310           %     10,310  
Other liabilities     18,272       12,723       5,549     44 %     13,352  
Total liabilities     1,309,393       1,117,853       191,540     17 %     1,168,783  
                             
Shareholders' equity:                            
Common stock     71,966       51,959       20,007     39 %     52,284  
Retained earnings     90,626       78,507       12,119     15 %     89,045  
Accumulated other comprehensive loss, net of tax     (494 )     (2,744 )     2,250     (82 )%     (3,008 )
Total shareholders' equity     162,098       127,722       34,376     27 %     138,321  
                             
Total liabilities and shareholders' equity   $ 1,471,491     $ 1,245,575     $ 225,916     18 %   $ 1,307,104  
                             
Total interest-earning assets   $ 1,361,841     $ 1,179,321     $ 182,520     15 %   $ 1,233,049  
Shares outstanding     18,213       16,315       1,898     12 %     16,334  
Book value per share   $ 8.90     $ 7.83     $ 1.07     14 %   $ 8.47  
Tangible book value per share (1)   $ 7.96     $ 7.71     $ 0.25     3 %   $ 8.36  
                             
(1) Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.


TABLE 13
UNAUDITED
INCOME STATEMENT
(amounts in thousands, except per share data)
 
    For The Three Months Ended
    March 31,   Change   December 31,
    2019   2018   $   %   2018
Interest income:                                  
Interest and fees on loans   $ 12,031     $ 10,729     $ 1,302     12 %   $ 11,494  
Interest on taxable securities     1,764       1,209       555     46 %     1,469  
Interest on tax-exempt securities     387       463       (76 )   (16 )%     353  
Interest on interest-bearing deposits in other banks     245       129       116     90 %     434  
Total interest income     14,427       12,530       1,897     15 %     13,750  
Interest expense:                                  
Interest on demand deposits     126       89       37     42 %     141  
Interest on money market accounts     289       132       157     119 %     207  
Interest on savings deposits     111       59       52     88 %     92  
Interest on certificates of deposit     490       495       (5 )   (1 )%     462  
Interest on Federal Home Loan Bank of San Francisco borrowings     55       47       8     17 %      
Interest on other borrowings     239       281       (42 )   (15 )%     252  
Interest on junior subordinated debentures     113       82       31     38 %     102  
Total interest expense     1,423       1,185       238     20 %     1,256  
Net interest income     13,004       11,345       1,659     15 %     12,494  
Provision for loan and lease losses                     %      
Net interest income after provision for loan and lease losses     13,004       11,345       1,659     15 %     12,494  
Noninterest income:                                  
Service charges on deposit accounts     168       176       (8 )   (5 )%     161  
ATM and point of sale fees     265       266       (1 )   %     283  
Fees on payroll and benefit processing     171       169       2     1 %     178  
Life insurance     129       129           %     128  
Gain on investment securities, net     92       36       56     156 %     3  
Federal Home Loan Bank of San Francisco dividends     121       80       41     51 %     201  
Gain on sale of OREO     23       16       7     44 %     64  
Other income     88       110       (22 )   (20 )%     114  
Total noninterest income     1,057       982       75     8 %     1,132  


TABLE 13 - CONTINUED
UNAUDITED
INCOME STATEMENT
(amounts in thousands, except per share data)
                                 
    For The Three Months Ended
    March 31,   Change   December 31,
    2019   2018   $   %   2018
Noninterest expense:                                
Salaries and related benefits     5,729       4,855       874     18 %     4,812  
Premises and equipment     992       1,071       (79 )   (7 )%     943  
Federal Deposit Insurance Corporation insurance premium     100       96       4     4 %     93  
Data processing fees     559       432       127     29 %     512  
Professional service fees     303       345       (42 )   (12 )%     436  
Telecommunications     173       216       (43 )   (20 )%     145  
Acquisition     1,930             1,930     100 %     802  
Other expenses     1,137       1,018       119     12 %     1,125  
Total noninterest expense     10,923       8,033       2,890     36 %     8,868  
Income before provision for income taxes     3,138       4,294       (1,156 )   (27 )%     4,758  
Provision for income taxes:                                
Reversal of uncertain tax position                     %     (988 )
Benefit from cost segregation study and tangible property review                     %     (484 )
Provision for income taxes from operations     832       1,053       (221 )   (21 )%     1,391  
Total provision for income taxes     832       1,053       (221 )   (21 )%     (81 )
Net income   $ 2,306     $ 3,241     $ (935 )   (29 )%   $ 4,839  
                                 
Basic earnings per share   $ 0.13     $ 0.20     $ (0.07 )   (35 )%   $ 0.30  
Average basic shares     17,489       16,225       1,264     8 %     16,265  
Diluted earnings per share   $ 0.13     $ 0.20     $ (0.07 )   (35 )%   $ 0.30  
Average diluted shares     17,552       16,310       1,242     8 %     16,345  


TABLE 14
UNAUDITED CONDENSED CONSOLIDATED
QUARTERLY AVERAGE BALANCE SHEETS
(amounts in thousands)
                                         
    For The Three Months Ended
    March 31,   December 31,   September 30,   June 30,   March 31,
    2019   2018   2018   2018   2018
Earning assets:                                        
Loans   $ 993,261     $ 923,409     $ 930,863     $ 922,687     $ 883,876  
Taxable securities     253,068       218,137       199,883       206,247       205,302  
Tax exempt securities     50,454       42,868       48,561       50,306       59,789  
Interest-bearing deposits in other banks     40,223       75,295       50,397       29,041       32,915  
Total earning assets     1,337,006       1,259,709       1,229,704       1,208,281       1,181,882  
                                         
Cash and due from banks     21,392       22,447       21,834       19,880       17,641  
Premises and equipment, net     14,581       13,331       13,768       14,167       14,557  
Goodwill and core deposit intangible, net     11,872       1,842       1,888       1,943       1,998  
Other assets     41,009       31,488       33,084       32,426       32,485  
Total assets   $ 1,425,860     $ 1,328,817     $ 1,300,278     $ 1,276,697     $ 1,248,563  
                                         
Liabilities and shareholders' equity:                                        
Demand - noninterest-bearing   $ 388,410     $ 367,457     $ 343,948     $ 309,199     $ 307,397  
Demand - interest-bearing     243,376       257,227       235,664       225,927       234,269  
Money market accounts     293,396       265,190       259,242       241,724       236,171  
Savings     131,081       110,934       107,349       107,108       110,725  
Certificates of deposit     167,463       157,035       163,302       170,824       181,901  
Total deposits     1,223,726       1,157,843       1,109,505       1,054,782       1,070,463  
                                         
Federal Home Loan Bank of San Francisco borrowings     8,778             22,283       55,275       12,444  
Other borrowings net of unamortized debt issuance costs     12,889       13,785       14,681       15,614       16,528  
Junior subordinated debentures     10,310       10,310       10,310       10,310       10,310  
Other liabilities     17,452       12,846       12,000       12,535       11,749  
Total liabilities     1,273,155       1,194,784       1,168,779       1,148,516       1,121,494  
                                         
Shareholders' equity     152,705       134,033       131,499       128,181       127,069  
Liabilities & shareholders' equity   $ 1,425,860     $ 1,328,817     $ 1,300,278     $ 1,276,697     $ 1,248,563  


TABLE 15
UNAUDITED CONDENSED CONSOLIDATED
YEAR TO DATE AVERAGE BALANCE SHEETS
(amounts in thousands)
                                         
    For the Three Months Ended   For the Twelve Months Ended
    March 31,   March 31,   December 31,   December 31,   December 31,
    2019   2018   2018   2017   2016
Earning assets:                                    
Loans   $ 993,261     $ 883,876     $ 915,360     $ 818,119     $ 752,938  
Taxable securities     253,068       205,302       207,407       165,333       120,884  
Tax exempt securities     50,454       59,789       50,330       74,231       75,303  
Interest-bearing deposits in other banks     40,223       32,915       47,038       66,872       58,668  
Total earning assets     1,337,006       1,181,882       1,220,135       1,124,555       1,007,793  
                                         
Cash and due from banks     21,392       17,641       20,468       18,301       15,831  
Premises and equipment, net     14,581       14,557       13,952       15,567       15,078  
Goodwill and core deposit intangible, net     11,872       1,998       1,917       2,136       1,888  
Other assets     41,009       32,485       32,369       37,692       39,160  
Total assets   $ 1,425,860     $ 1,248,563     $ 1,288,841     $ 1,198,251     $ 1,079,750  
                                         
Liabilities and shareholders' equity:                                        
Demand - noninterest-bearing   $ 388,410     $ 307,397     $ 332,197     $ 289,735     $ 226,368  
Demand - interest-bearing     243,376       234,269       238,328       209,792       172,011  
Money market accounts     293,396       236,171       250,685       224,913       202,159  
Savings     131,081       110,725       109,025       111,376       104,771  
Certificates of deposit     167,463       181,901       168,183       205,648       221,074  
Total deposits     1,223,726       1,070,463       1,098,418       1,041,464       926,383  
                                         
Federal Home Loan Bank of San Francisco borrowings     8,778       12,444       22,466       302       17,856  
Other borrowings net of unamortized debt issuance costs     12,889       16,528       15,143       17,981       19,430  
Junior subordinated debentures     10,310       10,310       10,310       10,310       10,310  
Other liabilities     17,452       11,749       12,286       12,293       13,217  
Total liabilities     1,273,155       1,121,494       1,158,623       1,082,350       987,196  
                                         
Shareholders' equity     152,705       127,069       130,218       115,901       92,554  
Liabilities & shareholders' equity   $ 1,425,860     $ 1,248,563     $ 1,288,841     $ 1,198,251     $ 1,079,750  
                                         

About Bank of Commerce Holdings

Bank of Commerce Holdings is a bank holding company headquartered in Sacramento, California and is the parent company for Redding Bank of Commerce which operates under three separate names (Redding Bank of Commerce; Sacramento Bank of Commerce, a division of Redding Bank of Commerce; and The Merchants Bank of Sacramento, a division of Redding Bank of Commerce). As previously announced, the Bank will change its name for all operations to Merchants Bank of Commerce effective May 20, 2019. The Bank is an FDIC-insured California banking corporation providing community banking and financial services through twelve locations in northern California. The Bank was incorporated as a California banking corporation on November 25, 1981 and opened for business on October 22, 1982. The Company’s common stock is listed on the NASDAQ Global Market and trades under the symbol “BOCH”.

Contact Information:

Randall S. Eslick, President and Chief Executive Officer
Telephone Direct (916) 677-5800

James A. Sundquist, Executive Vice President and Chief Financial Officer
Telephone Direct (916) 677-5825

Samuel D. Jimenez, Executive Vice President and Chief Operating Officer
Telephone Direct (530) 722-3952

Andrea M. Newburn, Vice President and Senior Administrative Officer / Corporate Secretary
Telephone Direct (530) 722-3959

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