REDDING, Calif., Feb. 1 /PRNewswire-FirstCall/ -- Bank of Commerce Holdings (NASDAQ:BOCH), a $618.3 million asset financial 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 income of $6.1 million for 2007.
2007 Highlights -- Assets of $618.3 million -- Income of $6.1 million -- Record loan growth of $77.3 million -- Core deposit growth of $32.9 million -- "Bank of Commerce - Bank of Choice(TM)" reflecting a renewed commitment
to making Bank of Commerce the bank of choice(TM) for local businesses
with a fresh focus on family and personal finances -- Treasury stock repurchase program announced -- Quarterly dividends of $0.08 per share
"The strength of our core banking business continued to serve us very well through 2007. Top line revenues increased to $45.8 million in 2007 compared with $39.5 million in 2006, a 15.9% increase over the prior year. Removing a non-recurring income item of $2.3 million, top line revenues are still up 9.9% or $3.9 million over the prior year's performance. Overall, our performance remains above average and consistent with our goal of achieving upper quartile performance compared with our peers." "Our loan and deposit growth trends were solid and our team continued to earn more of our customers business. We maintained our conservative risk management practices and our strong balance sheet and capital ratios. We are not immune to the evolving slowdown in the housing sector, yet we had another solid quarter despite turbulent credit markets. During the fourth quarter we strengthened our reserves by funding $3.3 million in provisions for loan losses. Although two credits from our real estate development portfolio were placed into non-accrual status in the fourth quarter, no loan losses occurred during 2007. Looking ahead, we are taking appropriate steps to ensure we focus intently on actively managing our exposures and controlling costs." "Net income for 2007 was $6.1 million, a decrease of 7.0% or $461,000 over the prior year. Return on average assets was 1.04% and return on average equity was 13.39% in 2007 compared with 1.20% and 15.59% respectively in 2006. Diluted earnings per share for 2007 and 2006 were $0.68 and $0.74, respectively." "We continue to invest in our business for the long term and to introduce new products and services in our marketplace. You will notice the bank's colorful, contemporary redesign in everything from our fresh logo mark, branch signage and account statements to our newly re-launched website.
Our new Buenaventura office located in an upscale shopping district on the Westside of Redding opened on January 14, 2008," said Patrick J. Moty, President and CEO of the Company.
Financial Performance Diluted earnings per share was $0.68 compared to $0.74 in 2006, a decrease of 8.1%. Our balance sheet grew by 6.0% or $34.9 million over the prior year end. Loans, the single largest asset of the Company grew by $77.3 million or 18.9%, an all-time high for the Company. Deposit growth was up 7.8% or $34.2 million of which $32.9 million was centered in core checking and savings deposits.
Revenue Top line revenues increased to $45.8 million in 2007 compared to $39.5 in 2006. Removing a non-recurring income item of $2.3 million, top line revenues are still up 9.9% or $3.9 million over the prior year.
Loans Net portfolio loans increased $77.3 million or 18.9% to $486.3 million. The increase is primarily in the commercial and industrial portfolio. Our Company concentrates its lending activities primarily within Shasta, El Dorado, Placer, Sacramento, Sutter, Yuba and Tehama counties, in California, and the location of the five full service offices of the Bank. Our Company has a diversified loan portfolio and a significant portion of its customers' ability to repay the loans is dependent upon the professional services and investor commercial real estate sectors. Generally, the loans are secured by real estate or other assets and are expected to be repaid from cash flows of the borrower's business or cash flows from real estate investments.
Net Interest Income Net interest income modestly decreased by $23,000 over the prior year, a -0.10% decrease. The average balance of total earning assets increased to $552.9 million in 2007 compared to $517.5 million in 2006, a 6.8% increase. Yields on portfolio loans increased 4 basis points to 8.26% compared to 8.22% in 2006. Yields on all earning assets increased 18 basis points to 7.45% compared to 7.27% in 2006. Likewise, funding costs increased 39 basis points to 4.08% compared with 3.69% in 2006, reflective of the highly competitive market for deposit accounts.
Non Interest Income Non-interest income consists of earnings on key man life insurance, payroll and benefit processing fees, processing fees for merchants who accept credit card payments for goods and services, service charge on deposit accounts, mortgage servicing fees and other service fees. During the fourth quarter 2007, key life proceeds of $2.3 million were recognized. This revenue is exempt from federal and state income tax.
For the year ended December 31, 2007, non-interest income represented 9.9% of the Company's revenues versus 4.9% in 2006 and 7.1% in 2005. Mortgage activities continued to slow during 2007 reflective in the fee income of $50,000 compared to $71,000 in 2006, a 29.6% decrease year over year.
Non Interest Expense Non-interest expense consists of salaries and related employee benefits, occupancy and equipment expenses, data processing fees, professional fees, directors' fees and other operating expenses. The increase in salary and benefit expense for 2007 over 2006 is primarily due to a one time executive severance package, coupled with staff increases to support the new westside office. The increase in professional service fees is reflective of professional services utilized to redesign the Company logo, website and collateral pieces.
Credit Quality During the fourth quarter 2007, two credits in the real estate development portfolio were placed into non-accrual status. The gross interest income that would have been recorded during the period had the loans been current in accordance with their original terms was approximately $96,000. The Company's OREO (Other Real Estate Owned) remained at $0 during 2007, 2006 and 2005. During the fourth quarter we strengthened our reserves by funding $3.3 million in provisions for loan losses.
The Company's allowance for loan losses was 1.66% of total loans at December 31, 2007 and 1.18% at December 31, 2006. Provisions for loan losses were $3,291,250 compared to $226,000 for the year ended 2006.
Facilities During the first quarter 2008, the Company has opened a new contemporary, consumer friendly express office with extended hours located at 3455 Placer Street, Redding, California 96001. (The Westside location).
Dividends On December 19, 2007, the Company announced a $0.08 quarterly cash dividend payable to shareholders of record as of December 31, 2007 and payable on January 11, 2008.
Capital The capital ratios of 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 Global 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/ Morgan Stanley/
John Cavender Rick Hill
555 Market Street 310 Hemsted Drive, Suite 100
San Francisco, CA Redding, CA
(800) 346-5544 (800) 733-6126 Wachovia Securities/ Raymond James Financial/
Ken Myers, Rick Hansen Geoff Ball
10466 Brunswick Road 1805 Hilltop Drive, Suite 106
Grass Valley, CA Redding, CA
(888) 383-3112 (800) 926-5040 This 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.
Condensed Consolidated Balance Sheets
(Unaudited) ASSETS 2007 2006 Cash and due from banks $13,839,123 $14,661,386
Federal funds sold and securities
purchased under agreements to resell 8,395,000 24,605,000
Cash and cash equivalents 22,234,123 39,266,386
Securities available-for-sale
(including pledged collateral
of $61,329,000 at December 31, 2007
and $71,686,000 at December 31, 2006) 67,906,386 95,601,107
Securities held-to-maturity, at cost
(estimated fair value of
$10,632,208 at December 31 2007
and $10,792,938 at December 31 2006) 10,558,765 10,810,113
Loans, net of the allowance for loan
and lease losses of $8,232,970 at
December 31, 2007 and $4,904,266
at December 31, 2006 486,282,571 408,989,228
Bank premises and equipment, net 10,963,975 8,595,044
Other assets 20,381,095 20,180,149 TOTAL ASSETS $618,326,915 $583,442,027 LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand - noninterest bearing $75,717,742 $84,778,916
Demand - interest bearing 142,820,773 119,437,370
Savings accounts 41,376,296 22,748,885
Certificates of deposit 213,716,486 212,442,258
Total Deposits 473,631,297 439,407,429
198,323,303 188,620,698 Securities sold under agreements
to repurchase 15,513,211 37,116,610
Federal Home Loan Bank borrowings 60,000,000 40,000,000
Other liabilities 7,553,559 7,536,738
Junior subordinated debt payable
to unconsolidated subsidiary
grantor trust 15,465,000 15,465,000
Total liabilities 572,163,067 539,525,777 Stockholders' equity:
Preferred stock, no par value;
2,000,000 shares authorized;
no shares issued and outstanding
in 2007 and 2006 - -
Common stock, no par value;
50,000,000 shares authorized;
8,757,445 shares issued and
outstanding in 2007
and 8,847,042 shares issued
and outstanding in 2006 9,995,517 11,517,368 Retained earnings 36,604,902 33,336,032
Accumulated other comprehensive
(loss) income, net of tax (436,571) ( 937,150)
Total stockholders' equity 46,163,848 43,916,250
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $618,326,915 $583,442,027 Condensed Consolidated Statements of Income
(Unaudited) Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2005
Interest income:
Interest and fees
on loans $36,134,170 $32,394,766 $24,069,980
Interest on tax-exempt
securities 1,228,944 786,972 332,385
Interest on U.S. government
securities 3,084,672 3,421,191 2,910,695
Interest on federal funds
sold and securities
purchased under
agreement to resell 680,578 871,879 491,019
Interest on other
securities 89,686 135,651 59,909
Total interest income 41,218,050 37,610,459 27,863,988
Interest expense:
Interest on demand
deposits 2,735,170 1,504,180 938,532
Interest on savings
deposits 1,215,920 288,883 182,994
Interest on certificates
of deposit 10,570,776 8,485,799 4,331,468
Interest on securities
sold under repurchase
agreements 1,177,417 1,138,242 430,754
Interest on FHLB
borrowings 2,421,636 3,079,432 1,161,762
Interest on junior
subordinated debt payable
to unconsolidated
subsidiary grantor
trusts 1,084,990 1,078,884 580,935
Total interest expense 19,205,909 15,575,420 7,626,445
Net interest income 22,012,141 22,035,039 20,237,543
Provision for loan
and lease losses 3,291,250 225,900 447,700
Net interest income
after provision for
loan and lease losses 18,720,891 21,809,139 19,789,843
Noninterest income:
Service charges on
deposit accounts 277,769 345,737 393,661
Payroll and benefit
processing fees 382,738 385,867 356,957
Earnings on cash
surrender value -Bank
owned life insurance 2,731,251 328,743 209,322
Net (loss) gain on
sale of securities
available-for-sale 45,670 (170,524) (1,537)
Net gain on sale of loans 0 89,851 145,594
Merchant credit card
service income, net 388,438 380,066 345,721
Mortgage brokerage
fee income 49,995 71,350 249,049
Other income 658,893 497,141 424,973
Total noninterest income 4,534,754 1,928,231 2,123,740 Noninterest expense:
Salaries and related
benefits 8,665,679 8,020,136 6,883,754
Occupancy and equipment
expense 2,372,617 1,845,664 1,572,458
FDIC insurance premium 51,077 47,670 48,659
Data processing fees 395,558 216,313 303,316
Professional service fees 1,027,671 683,602 648,871
Payroll processing fees 107,856 103,518 110,376
Deferred compensation
expense 411,191 368,809 321,321
Stationery and supplies 256,799 230,843 241,144
Postage 137,740 112,740 104,439
Directors' expenses 311,777 243,428 219,687
Other expenses 2,005,729 1,460,008 1,294,684
Total noninterest
expense 15,743,694 13,332,731 11,748,709 Income before provision
for income taxes 9,011,951 10,404,639 10,164,874
Provision for income taxes 1,405,053 3,836,930 3,886,504
Net Income $6,106,898 $6,567,709 $6,278,370
Basic earnings per share $0.69 $0.75 $0.73
Weighted average shares
- basic 8,857,627 8,759,568 8,600,270
Diluted earnings per share $0.68 $0.74 $0.71
Weighted average shares
- diluted 8,937,736 8,931,584 8,844,626 Quarterly Financial Condition Data
(Unaudited)
For the Quarter Ended
Dec. Sept. June March Dec. Sept. June
31, 30, 30, 31, 31, 30, 30,
2007 2007 2007 2007 2006 2006 2006
Cash and due
from banks $13,839 $12,366 $18,206 $12,597 $14,661 $17,535 $12,668 Federal
funds
sold and
securities
purchased
under
agreements
to resell 8,395 7,980 14,115 21,195 24,605 28,010 14,155
Total Cash &
Equivalents 22,234 20,346 32,321 33,792 39,266 45,545 26,823
Securities
available-
for-sale 67,906 93,423 94,029 92,769 95,601 97,614 97,366
Securities
held to
maturity,
at cost 10,559 10,592 10,637 10,673 10,810 10,841 11,141
Loans, net
of allowance
for loan
losses 486,283 461,171 437,821 411,357 408,990 403,657 401,185
Bank premises
and
equipment,
net 10,964 10,464 10,329 9,992 8,595 7,350 6,690
Other
assets 20,381 19,979 20,440 19,513 20,180 20,211 20,942
TOTAL
ASSETS $618,327 $615,975 $605,577 $578,096 $583,442 $585,218 $564,147
Liabilities:
Demand -
noninterest
bearing $75,718 $70,809 $69,842 $ 70,035 $84,779 81,125 74,505
Demand -
interest
bearing 142,821 136,219 114,530 112,550 119,437 111,439 101,492
Savings 41,376 44,406 45,082 41,537 22,749 22,610 23,111 Certificates
of deposit 213,716 220,803 211,794 211,422 212,442 214,019 189,577
Total
deposits 473,631 472,237 441,248 435,544 439,407 429,193 388,685 Securities
sold under
agreements to
repurchase 15,513 26,755 46,655 35,053 37,117 35,260 32,507
Federal Home
Loan Bank
borrowings 60,000 50,000 50,000 40,000 40,000 55,000 80,000
Other
liabilities 7,554 6,734 7,114 6,646 7,537 6,352 6,536
Junior
subordinated
debt payable
to subsidiary
grantor
trust 15,465 15,465 15,465 15,465 15,465 15,465 15,465
Total
liabil-
ities 572,163 571,191 560,482 532,708 539,526 541,270 523,193
Stockholders'
equity:
Common stock 9,996 10,252 11,966 11,940 11,517 12,416 11,442
Retained
earnings 36,605 35,617 34,997 34,110 33,336 32,526 31,479
Accumulated
other
comprehensive
income (loss),
net (437) (1,085) (1,868) (662) (937) (994) (1,967)
Total
stockholders'
equity 46,164 44,784 45,095 45,388 43,916 43,948 40,954
TOTAL
LIABILITIES
AND
STOCKHOLDERS'
EQUITY $618,327 $615,975 $605,577 $578,096 $583,442 $585,218 $564,147 Interest
Income:
Net interest
income 5,585 5,641 5,461 $5,327 $5,418 $5,530 $5,674
Provision
for loan
losses 3,170 115 0 6 0 72 143
Net interest
income after
provision
for loan
losses 2,415 5,526 5,461 5,321 5,418 5,458 5,531
Noninterest
Income:
Service
charges 63 70 76 69 91 81 86
Merchant
credit
card service
income, net 91 109 89 92 100 89 93
Net gain (loss)
on sale of
securities
available
-for-sale 0 0 0 46 0 (171) 0
Mortgage
brokerage fee
income (6) 21 29 6 (13) 32 35
Other income 2,745 326 424 285 363 397 298
Total
non-
interest
income 2,893 526 618 498 541 428 512
Noninterest
Expense:
Salaries and
related
benefits 2,208 2,402 1,959 2,097 2,150 1,996 1,996
Net
Occupancy
and equipment
expense 737 635 543 458 496 467 448
Professional
service fees 365 216 252 195 181 149 150
Other
expenses 1,218 775 947 738 659 687 716
Total
non-
interest
expense 4,528 4,028 3,701 3,488 3,486 3,299 3,310 Income before
income taxes 780 2,024 2,378 2,331 2,473 2,587 2,733
Provision
for income
taxes (910) 693 778 844 858 915 1,044
Net
Income $1,690 $1,331 $1,600 $1,487 $1,615 $1,672 $1,689 Average Balances, Interest Income/Expense and Yields/Rates Paid
(Unaudited, Dollars in thousands) Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Interest Earning
Assets
Portfolio loans $437,217 $36,134 8.26% $394,152 $32,394 8.22%
Tax-exempt
securities 30,727 1,229 4.00% 21,112 787 3.73%
US government
securities 26,782 1,112 4.15% 39,576 1,593 4.03%
Mortgage backed
securities 43,122 1,973 4.58% 42,476 1,828 4.30%
Federal funds
sold 13,099 681 5.20% 17,124 872 5.09%
Other securities 2,000 90 4.50% 3,075 136 4.42%
Average Earning
Assets $552,947 $41,219 7.45% $517,515 $37,610 7.27%
Cash & due
from banks 14,273 14,113
Bank premises
and fixed assets 10,155 6,878
Other assets 17,986 11,022
Average Total
Assets $595,361 $549,528
Interest Bearing
Liabilities
Interest bearing
demand $121,281 $2,735 2.26% $108,066 $1,504 1.39%
Savings deposits 39,565 1,216 3.07% 24,633 289 1.17%
Certificates
of deposit 215,511 10,571 4.91% 190,568 8,486 4.45%
Repurchase
Agreements 32,237 1,177 3.65% 29,708 1,138 3.83%
Other borrowings 62,095 3,507 5.65% 69,014 4,158 6.02%
Average Interest
Liabilities $470,689 $19,206 4.08% $421,989 15,575 3.69%
Noninterest
bearing Demand 72,545 79,245
Other liabilities 6,502 6,154
Stockholders'
equity 45,625 42,140
Average
Liabilities and
Stockholders'
equity $595,361 $549,528 Net Interest
Income and Net
Interest Margin $22,013 3.98% $22,035 4.26% Average Yield/
Balance Interest Rate
Interest Earning Assets
Portfolio loans $337,284 $24,070 7.14 %
Tax-exempt securities 9,966 332 3.33 %
US government securities 35,779 1,272 3.56 %
Mortgage backed securities 41,181 1,639 3.98 %
Federal funds sold 15,225 491 3.22 %
Other securities 1,384 60 4.34 %
Average Earning Assets $440,819 $27,864 6.32 %
Cash & due from banks 15,208
Bank premises and fixed assets 5,563
Other assets 7,172
Average Total Assets $468,762
Interest Bearing Liabilities
Interest bearing demand $112,236 $939 0.84 %
Savings deposits 26,542 183 0.69 %
Certificates of deposit 149,204 4,331 2.90 %
Repurchase Agreements 17,892 63 0.36 %
Other borrowings 34,042 2,110 6.20 %
Average Interest Liabilities $339,916 7,626 2.24 %
Noninterest bearing Demand 80,219
Other liabilities 4,417
Stockholders' equity 44,210
Average Liabilities and
Stockholders' equity $468,762 Net Interest Income and Net
Interest Margin $20,238 4.59 %
Interest income on loans includes fee income of approximately $241,000, $429,000 and $556,000 for the years ended December 31, 2007, 2006, and 2005 respectively. The Company's average total assets increased to $590.0 million in 2007 from $549.5 million in 2006 and $468.8 million in 2005, representing a 6.1% increase in 2007 over 2006 and a 17.2% increase in 2006 over 2005. DATASOURCE: Bank of Commerce Holdings CONTACT: Patrick J. Moty, President & CEO, +1-530-722-3950, or Linda J.
Miles, CFO, +1-530-722-3955, both of Bank of Commerce Holdings Web site: http://reddingbankofcommerce.com/
|