REDDING, Calif., April 30 /PRNewswire-FirstCall/ -- Patrick J. Moty, President & CEO of Bank of Commerce Holdings (NASDAQ:BOCH), a $651 million financial services holding company, and parent company of Redding Bank of Commerce(TM), Roseville Bank of Commerce(TM), Sutter Bank of Commerce(TM) and Bank of Commerce Mortgage(TM) today announced first quarter 2008 operating results. Bank of Commerce Holdings' net income was $1,229,000 for the first quarter 2008 compared with $1,487,000 for the first quarter of 2007 down $258,000 or 17%.
Diluted earnings per common share was $0.14 for the first quarter 2008 compared to $0.17 for the first quarter of 2007. Return on average assets and return on average common equity were 0.79% and 10.54%, respectively, compared with 1.05% and 13.37%, respectively, for the first quarter 2007. The Company's results for the first quarter of 2008 declined due to compression in the margin and higher provisioning for loan losses.
"During the first quarter 2008, as part of management's ongoing credit practices, a thorough review of the loan portfolio, with special emphasis on construction and development projects was completed. The recent slowdown in residential development and construction markets has led to an increase in nonperforming loans which has made it prudent to strengthen our reserve position at this time. Management has taken prudent steps to ensure the proper funding of loan reserves," said Patrick J. Moty, President and CEO of the Company. "Credit quality, expense control and the bottom line remain top focus." Total revenues increased to $10.5 million compared to $10.3 million during the same period in 2007, an increase of 2.2%. Noninterest income growth of 13.5% was driven by an increase in FHLB dividends and Goldman Sachs fee income. Sales of available-for-sale investments provided a gain of $242,000 for the period, partially offset by a loss of $225,000 to unwind a SWAP transaction.
Total noninterest expense in the first quarter of 2008 was $3.6 million compared to $3.5 million, relatively flat for the period.
On March 20, 2008, the Company announced a $0.08 quarterly cash dividend payable to shareholders of record as of March 31, 2008 and paid on April 11, 2008.
The Company's allowance for loan losses was 1.14% of total loans at March 31, 2008 and 1.18% at March 31, 2007. Provisions for loan losses for the quarter ended March 2008 were $600,000 compared to $6,000 for the same period in 2007. Management has taken aggressive action by placing two real estate development related loans into nonaccrual status, even though loan payments are current. In addition, an impairment review of one Sacramento development loan has resulted in a $2.9 million write-down. Reserves were previously allocated in anticipation of this impairment review. Non-performing loans and leases were 3.12% of total loans as of March 31, 2008 compared to 2.55% at December 31, 2007 and 0% one year ago. Interest reversed from income during the period due to nonaccrual loans was $84,525.
The Company's OREO remained at $0 through the first quarter of 2008 and 2007.
Average loans for the first quarter 2008 were $96.3 million higher than the first quarter of 2007, a 23.6% increase. Average deposits and borrowings were $54.7 million higher for the first quarter 2008 compared with the first quarter of 2007, a 10.5% increase. Net interest income was $5.4 million during the first quarter 2008 compared with $5.3 million during the first quarter 2007, up $93,000 or 1.7%. Net interest margin declined by 31 basis points to 3.70% from 4.01% a year ago.
At March 31, 2008, Bank of Commerce Holdings' total assets were $651.2 million, an increase of 12.6% or $73.1 million from March 31, 2007.
Provision for income taxes for the first quarter of 2008 resulted in an effective tax rate of 32.5% compared with an effective tax rate of 36.2% in the first quarter of 2007.
The reduction in the effective tax rate from the same quarter of the prior year reflects increased investments in tax-exempt municipal securities, bank- owned life insurance and investments in California Affordable Housing projects which afford federal and state tax credits.
The capital ratios of Redding Bank of Commerce continue to be above the well-capitalized guidelines established by bank regulatory agencies.
Bank of Commerce Holdings, with administrative offices in Redding, California is a financial service holding company that owns Redding Bank of Commerce(TM), Roseville Bank of Commerce(TM), Sutter Bank of Commerce(TM) and Bank of Commerce Mortgage(TM). The Company is a federally insured California banking corporation and opened on October 22, 1982.
BOCH is a NASDAQ National Market listed stock. Please contact your local investment advisor for purchases and sales. Investment firms making a market in BOCH stock are: Howe Barnes Hoefer & Arnett Investment Inc. /
John T. Cavender
555 Market Street
San Francisco, CA (800) 346-5544 Raymond James Financial/ Geoff Ball
1805 Hilltop Drive, Suite 106
Redding, CA (800) 926-5040 Morgan Stanley/Rick Hill
310 Hemsted Drive, Suite 100
Redding, CA (800) 733-6126 Wachovia Securities/ Ken Myers, Rick Hansen
10466 Brunswick Road
Grass Valley, CA (888) 383-3112 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 the Company's 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. * The health of the economy declines nationally or regionally which could
reduce the demand for loans or reduce the value of real estate
collateral securing most of the Company's loans. * Credit quality deteriorates which could cause an increase in the
provision for loan losses. * Losses in the Company's merchant credit card processing business. * 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 year ended December 31, 2007 and under the heading: "Risk factors that may affect results" and 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, which speak only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited) Dollars in thousands
ASSETS March 31, 2008 Dec. 31, 2007 March 31, 2007 Cash and due from banks $12,737 $ 13,839 $12,597
Federal funds sold and
securities purchased under
agreements to resell 25,995 8,395 21,195
Cash and cash equivalents 38,732 22,234 33,792 Securities available-for-sale
(including pledged collateral of
$57,274 at March 31, 2008,
$61,329 at December 31, 2007
and $68,261 at March 31, 2007) 62,090 67,906 93,769
Securities held-to-maturity, at
cost (estimated fair value of
$10,646 at March 31, 2008,
$10,632 at December 31, 2007
and $10,693 at March 31, 2007) 10,421 10,559 10,673
Loans, net of the allowance for
loan losses of $5,815 at
March 31, 2008, $8,233 at
December 31, 2007 and
$4,933 at March 31, 2007 506,374 486,283 411,357
Bank premises and equipment,
net 11,370 10,964 9,992
Other assets 22,248 20,381 18,513 TOTAL ASSETS $651,235 $618,327 $578,096 LIABILITIES AND STOCKHOLDERS' EQUITY Demand - noninterest bearing $71,722 $75,718 $70,035
Demand - interest bearing 140,624 142,821 112,550
Savings accounts 42,946 41,376 41,537
Certificates of deposit 229,006 213,716 211,422
Total deposits 484,298 473,631 435,544 Securities sold under agreements
to repurchase 12,455 15,513 35,053
Federal Home Loan Bank
borrowings 85,000 60,000 40,000
Other liabilities 7,633 7,554 6,646
Junior subordinated debt payable
to unconsolidated
subsidiary grantor trust 15,465 15,465 15,465
Total Liabilities 604,851 572,163 532,708
Commitments and contingencies
Stockholders' Equity:
Preferred stock, no par value,
2,000,000 authorized no shares
issued and outstanding in
2008 and 2007 - - -
Common stock, no par value,
50,000,000 shares authorized;
8,707,745 shares issued and
outstanding at March 31, 2008,
8,757,445 at December 31, 2007
and 8,907,680 at March 31, 2007 9,550 9,996 11,940
Retained earnings 37,135 36,605 34,110
Accumulated other comprehensive
(loss), net of tax (301) (437) (662)
Total stockholders' equity 46,384 46,164 45,388
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $651,235 $618,327 $578,096 BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
Three months ended March 31, 2008 and 2007
Dollars in thousands, except for per share data
Three Months Ended
March 31, March 31,
2008 2007
Interest income:
Interest and fees on loans $9,131 $8,464
Interest on tax-exempt securities 274 278
Interest on U.S. government securities 481 832
Interest on federal funds sold and securities
purchased under agreements to resell 58 200
Interest on other securities 22 36
Total interest income 9,966 9,810
Interest expense:
Interest on demand deposits 750 557
Interest on savings deposits 290 171
Interest on certificates of deposit 2,376 2,605
Securities sold under repurchase agreements 84 342
Interest on FHLB and other borrowings 731 539
Interest on junior subordinated debt payable to
unconsolidated subsidiary grantor trust 315 269
Total interest expense 4,546 4,483
Net interest income 5,420 5,327
Provision for loan and lease losses 600 6
Net interest income after provision for loan
and lease losses 4,820 5,321
Noninterest income:
Service charges on deposit accounts 62 69
Payroll and benefit processing fees 129 108
Earnings on cash surrender value - Bank owned life
insurance 83 95
Net gain (loss) on sale of securities
available-for-sale 242 46
Net (loss) on derivative (225) 0
Merchant credit card service income, net 83 92
Mortgage brokerage fee income 10 6
Other income 181 82
Total noninterest income 565 498
Noninterest expense:
Salaries and related benefits 1,949 2,097
Occupancy and equipment expense 644 458
FDIC insurance premium 58 13
Data processing fees 78 55
Professional service fees 118 195
Payroll processing fees 33 31
Deferred compensation expense 111 97
Stationery and supplies 62 61
Postage 34 33
Directors' expense 48 45
Other expenses 430 403
Total noninterest expense 3,565 3,488
Income before provision for income taxes 1,820 2,331
Provision for income taxes 591 844
Net income $1,229 $1,487
Basic earnings per share $0.14 $0.17
Weighted average shares - basic 8,719 8,864
Diluted earnings per share $0.14 $0.17
Weighted average shares - diluted 8,748 8,976
Cash dividends per share $0.08 $0.08 Average Balances, Interest Income/Expense and Yields/Rates Paid
(Unaudited, Dollars in thousands) Three Months Ended Three Months Ended
March 31, 2008 March 31, 2007
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
Earning Assets
Portfolio Loans $504,091 $9,131 7.25% $407,758 $8,464 8.30%
Tax-exempt
Securities 27,901 274 3.93% 29,712 278 3.74%
US Government
Securities 15,272 142 3.72% 33,722 356 4.22%
Mortgage backed
Securities 29,055 339 4.67% 41,919 476 4.54%
Federal Funds Sold 8,014 58 2.89% 15,540 200 5.15%
Other Securities 2,000 22 4.40% 2,302 36 6.26%
Average Earning
Assets $586,333 $9,966 6.80% $530,953 $9,810 7.39%
Cash & Due From
Banks $12,708 $12,939
Bank Premises 11,303 9,288
Allowance for Loan
Losses (8,441) (4,892)
Other Assets 20,116 17,226
Average Total
Assets $622,019 $565,514
Interest Bearing
Liabilities
Demand Interest
Bearing $141,709 $750 2.12% $112,910 $557 1.97%
Savings Deposits 41,195 290 2.82% 28,864 171 2.37%
Certificates of
Deposit 216,051 2,376 4.40% 214,094 2,605 4.87%
Repurchase
Agreements 13,052 84 2.57% 34,860 342 3.92%
FHLB Borrowings 80,569 731 3.63% 40,000 539 5.39%
Trust Preferred
Borrowings 15,000 315 8.40% 15,000 269 7.17%
507,576 $4,546 3.58% 445,728 $4,483 4.02%
Noninterest
bearing demand 66,825 73,977
Other Liabilities 995 1,333
Stockholders'
Equity 46,623 44,476
Average Liabilities
and Stockholders'
Equity $622,019 $565,514
Net Interest
Income and Net
Interest Margin $5,420 3.70% $5,327 4.01% Net interest income was $5.4 million for the first three-months of 2008 compared with $5.3 million for the same period in 2007, a 1.7% increase. The increase in net interest income is primarily attributed to the increase in earning assets during the period. Average earning assets for the first three- months of 2008 were $586.3 million compared with $530.9 million for the same period in 2007, an increase of $55.4 million or 10.4%. The single largest component of increased earning assets was in the loan portfolio. Average loans increased $96.3 million or 23.6% over the same three-month period in 2007. Coupled with the asset growth, yields on earning assets decreased to 6.80% compared with 7.39% over the same three-month period in 2007, a loss of 59 basis points.
Average interest bearing liabilities also increased by $61.9 million or 13.9% for the first three-months of 2008 to $507.6 million in 2008 compared with $445.7 million for the same period in 2007. The cost of interest bearing liabilities or funding decreased to 3.58% in 2008 compared to 4.02% in 2007, a decrease in interest expense of $62,000 or 1.4%. The increase in interest expense is primarily due to increased volume in core deposit relationships.
As a result of these changes, the interest spread (the difference between the yield on earning assets and the cost of interest bearing liabilities) decreased 31 basis points to 3.70% for the three-months ended March 31, 2008 compared with 4.01% for the same three-month period in the prior year.
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Quarterly Financial Condition Data
(Unaudited)
For the Quarter Ended March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2007 2007 2007 2007 2006
Cash and due
from banks $12,737 $13,839 $12,366 $18,206 $12,597 $14,661
Federal funds
sold and securities
purchased
under agreements
to resell 25,995 8,395 7,980 14,115 21,195 24,605
Total Cash &
Equivalents 38,732 22,234 20,346 32,321 33,792 39,266
Securities
available-for-
sale 62,090 67,906 93,423 94,029 93,769 95,601
Securities held
to maturity, at
cost 10,421 10,559 10,592 10,637 10,673 10,810
Loans, net of
allowance for
loan losses 506,374 486,283 461,171 437,821 411,357 408,990
Bank premises and
equipment, net 11,370 10,964 10,464 10,329 9,992 8,595
Other assets 22,248 20,381 19,979 20,440 18,513 20,180
TOTAL ASSETS $651,235 $618,327 $615,975 $605,577 $578,096 $583,442 Liabilities:
Demand -
noninterest
bearing $71,722 $75,718 $70,809 $69,842 $70,035 $84,779
Demand -
interest
bearing 140,624 142,821 136,219 114,530 112,550 119,437
Savings 42,946 41,376 44,406 45,082 41,537 22,749
Certificates of
deposit 229,006 213,716 220,803 211,794 211,422 212,442
Total deposits 484,298 473,631 472,237 441,248 435,544 439,407 Securities sold
under agreements
to repurchase 12,455 15,513 26,755 46,655 35,053 37,117
Federal Home Loan
Bank borrowings 85,000 60,000 50,000 50,000 40,000 40,000
Other liabilities 7,633 7,554 6,734 7,114 6,646 7,537
Junior subordinated
debt payable to
subsidiary grantor
trust 15,465 15,465 15,465 15,465 15,465 15,465
Total
liabilities 604,851 572,163 571,191 560,482 532,708 539,526
Stockholders'
equity:
Common stock 9,550 9,996 10,252 11,966 11,940 11,517
Retained earnings 37,135 36,605 35,617 34,997 34,110 33,336
Accumulated other
comprehensive
(loss), net (301) (437) (1,085) (1,868) (662) (937)
Total stockholders'
equity 46,384 46,164 44,784 45,095 45,388 43,916
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY $651,235 $618,327 $615,975 $605,577 $578,096 $583,442 Interest Income:
Net interest
income 5,420 5,585 5,641 5,461 $5,327 $5,418
Provision for
loan losses 600 3,170 115 0 6 0
Net interest
income after
provision for
loan losses 4,820 2,415 5,526 5,461 5,321 5,418
Noninterest Income:
Service charges 62 63 70 76 69 91
Merchant credit
card service
income, net 83 91 109 89 92 100
Net gain on
sale of
securities
available-
for-sale 242 0 0 0 46 0
Net (loss) on sale
of derivatives (225) 0 0 0 0 0
Mortgage brokerage
fee income 10 (6) 21 29 6 (13)
Other income 393 2,745 326 424 285 363
Total
noninterest
income 565 2,893 526 618 498 541
Noninterest Expense:
Salaries and
related benefits 1,949 2,208 2,402 1,959 2,097 2,150
Net Occupancy
and equipment
expense 644 737 635 543 458 496
Professional
service fees 118 365 216 252 195 181
Other expenses 854 1,218 775 947 738 659
Total
noninterest
expense 3,565 4,528 4,028 3,701 3,488 3,486 Income before
income taxes 1,820 780 2,024 2,378 2,331 2,473
Provision for
income taxes 591 (910) 693 778 844 858
Net Income $1,229 $1,690 $1,331 $1 600 $1,487 $1,615
DATASOURCE: Bank of Commerce Holdings CONTACT: Patrick J. Moty, President & CEO, +1-530-722-3953, or Linda J.
Miles, Chief Financial Officer, +1-530-722-3955, both of Bank of Commerce Holdings Web site: http://reddingbankofcommerce.com/
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