SOURCE: Pacific Commerce Bank

Pacific Commerce Bank Reports Second Quarter 2014 Financial Results and Continued Growth and Profitability

Draft v5, April 25, 11

Pacific Commerce Bank (OTCQB: PFCI) today reported financial results for the second quarter and the six months ended June 30, 2014 that reflected strong balance sheet growth and continued earnings growth attributed to increases in interest and non-interest income due to consistent loan growth and SBA loan sales.

 

CEO Scott R. Andrews commented, “Second quarter results reflect our focus on core earnings improvement and continued organic growth efforts.  Loan demand remains strong and the Bank has seen growth in all of its markets, in both loans outstanding and new depository relationships.”  Andrews further commented, “Pacific Commerce Bank is looking for additional Relationship Managers and SBA Business Development Officers to enhance our current staffing as we continue to seek strategic growth opportunities throughout Southern California.” 

 

“The Board of Directors of Pacific Commerce Bank continues to seek out strategic merger and acquisition partnerships, and with the strong financial performance of the Bank, I believe that a partnership with PCB would be very beneficial to all parties,” commented Chairman Thomas Iino.

 

 

FINANCIAL RESULTS

Net income for the second quarter of 2014 was $406,000 or $0.09 per share, which compares to a net income of $567,000 or $0.13 per share for the same quarter last year2013 second quarter net income reflected gains on sales of securities and OREO of approximately $396,000 and $28,000, respectively. 2014 second quarter net income included $239,000 in gain on sale of SBA 7(a) loans and no extraordinary income items.  Net interest income in the current quarter increased $209,000 or 13.5% versus a year ago.  Core operating income in second quarter of 2014 increased by $199,000 compared to the first quarter of 2014.

 

For the six months ended June 30, 2014, net income was $1,296,000 or $0.29 per share, which compares to net income of $802,000 or $0.18 per share for the same period in 2013Net interest income increased $337,000 or 11.0%, which is attributed to a $40.2 million growth in loans from the same period last year.  In addition to the growth in net interest income, the Bank recognized gains on sales of SBA loans and servicing income of $331,000 and due to the significant improvements in asset quality, took a reverse provision to the loan loss reserve totaling $1.5 million in the first half of 2014.   Asset quality has fully stabilized with only $534,000 in non-accrual loans and one OREO property as of quarter-end, resulting in a non-performing assets ratio of 0.52%.  

 

Current quarter non-interest expenses increased $144,000 versus the prior quarter and $342,000 versus the second quarter of 2013.  Increased staffing levels in revenue producing areas accounted for the bulk of the increases as additional Relationship Managers and SBA lending personnel were added during the past year. 

 

Core deposits increased $3.3 million in the second quarter and $14.1 million from the same period a year ago.  Noninterest-bearing deposits increased 19.2% year-over-year due to the on-going business development efforts of the Bank’s Relationship Managers and Treasury Management personnel, along with increased utilization of remote deposit capture and business online banking products.  Higher cost time deposits were replaced with short-term, less expensive borrowings resulting in improved net interest income levels and a lower cost of funds, now at 0.27% year-to-date versus 0.35% a year ago.

 

Pacific Commerce Bank exceeds the Regulatory criteria to be considered well capitalized and is poised for future growth opportunities.  The Bank’s regulatory capital ratios as of June 30, 2014 are as follows:

 

 

 

 

 

Well-Capitalized

 

 

 

Regulatory

 

6/30/2014

 

Minimum %

Tier 1 Leverage Ratio

12.63%

 

5.00%

Tier 1 Risk-Based Capital Ratio

14.43%

 

6.00%

Total Risk-Based Capital Ratio

15.69%

 

10.00%

 

 

Selected financial highlights as of June 30, 2014:

 

-Total assets were $207.1 million compared to $163.0 million a year ago and $173.1 million at year-end 2013

 

-Total loans were $171.4 million compared to $131.2 million a year ago and $146.3 million at year-end 2013

 

-Total deposits were $143.9 million compared to $139.8 million a year ago and $145.5 million at year-end 2013

 

-Core deposits were $94.8 million compared to $80.6 million a year ago and $92.5 million at year-end 2013

 

-Non-accrual loans were $534,000 compared to $1.2 million a year ago.

 

-Allowance for Loan Losses to Total Loans was 2.09% versus 3.65%, a year ago

 

-Year-to-date net interest margin was 3.82%, versus 4.09% compared to the same period a year ago

 

-YTD average cost of funds was 0.27% for the first half of 2014, versus 0.35% for the same period 2013

 

About Pacific Commerce Bank

Established in 2002, Pacific Commerce Bank is a business-oriented community bank with offices in downtown Los Angeles and West Los Angeles.  Founded by local business owners and professionals, the Bank is focused on meeting the diverse financial needs of its clients, and offers a full range of loan, deposit and treasury management products.  Information about the Bank can be obtained on its website:  www.pacificcommercebank.com

 

Forward Looking Information

The financial information in this press release is based on unaudited financial results. Certain statements in this press release are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements are subject to risks and uncertainties and therefore the bank's actual results may differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that the bank is subject to include, but are not limited to, risks related to the local and national economy, including fluctuations in interest rates and costs and changes in economic policy; the ability of the bank to perform in accordance with its plans; competition; regulatory matters; and other risks detailed in its filings with the State of California Department of Financial Institutions and the Federal Deposit Insurance Corporation. The bank cautions readers not to place undue reliance on any forward-looking statements. The bank does not undertake, and specifically disclaims any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

 

 

Pacific Commerce Bank

 

 

Selected Financial Data – Unaudited (‘000)

BALANCE SHEET

6/30/2014

12/31/2013

6/30/2013

Total Assets

$207,123

$173,154

$163,020

Total Investments

$1,131

$1,219

$2,443

Gross Loans

$171,437

$146,303

$131,203

Allowance for Loan Losses

($3,580)

($5,006)

($4,788)

Other Real Estate Owned

$542

$244

$2,295

Core Deposits

$94,759

$92,546

$80,626

Total Deposits

$143,915

$145,516

$139,849

Total Borrowings

$34,250

$0

$0

Total Stockholders' Equity

$27,683

$26,204

$22,017

Net (Recoveries)/ Charge-offs

($73)

($303)

($84)

Total Non-Accrual Loans

$534

$264

$1,247

ALLL / Total Loans

2.09%

3.42%

3.65%

ALLL / Non-Accrual Loans

670%

1,894%

384%

 

             

 

 

 

          For the Three Months Ended

 

STATEMENT OF OPERATIONS

6/30/14

3/31/14

        6/30/13

Total Interest Income

$1,870

$1,753

          $1,670

Total Interest Expense

          (108)

         (104)

            (117)

Net Interest Income

1,762

1,649

           1,553

Non-Interest Income

          364

          133

              208

Total Income

2,126

1,782

           1,761

Non-Interest Expense

       (1,960)

       (1,815)

         (1,618)

Income Before Extraordinary Items, Loan Loss Provision and Income Taxes

         166

          (33)

              143

Reverse Provision for Loan Losses

0

1,500

                  0

Extraordinary Items

                    0

11

              424

Income Tax (Expense)/Benefit

         240

             (587)

                  0

Net Income

        $406

      $891  

            $567  

EPS

$0.09

$0.20

           $0.13

 

 

 

    For the Six Months Ended

STATEMENT OF OPERATIONS

6/30/2014

6/30/2013

Total Interest Income

$3,623

$3,312

Total Interest Expense

         (212)

         (238)

Net Interest Income

3,411

3,074

Non-Interest Income

         497

          293

Total Income

3,908

3,367

Non-Interest Expense

      (3,775)

      (3,228)

Income Before Extraordinary Items, Loan Loss Provision, and Income Tax Expenses

          133

        139

Reverse Provision for Loan Losses

1,500

0

Extraordinary Items

11

663

Income Tax (Expense)/Benefit

        (347)

             0

Net Income

$1,296  

$802  

EPS

$0.29

$0.18

 

 

For more information, contact:

Pacific Commerce Bank

Richard Koh, Chief Financial Officer, 213-617-0082