California Bank of Commerce (OTCQB:CABC) a San Francisco Bay Area business bank, reported net income of $3.4 million for the year ended December 31, 2014, or $0.92 per share, up from $2.6 million, or $0.89 per share, for the same period in 2013. Net income of $954 thousand for the fourth quarter 2014 compared to $737 thousand for the same period in 2013.
Return on average total assets was 0.85% for the full year 2014, compared to 0.72% for 2013. Net interest income grew 14% in 2014 compared to 2013. Net interest margin improved to 3.97% for year ending December 31, 2014, increasing from 3.84% for the same period a year ago. Loan quality also improved year over year with the Bank’s NPL ratio declining 18 basis points (bp) to 0.52% at December 31, 2014.
Loans grew by $56 million to $339 million for the year ending December 31, 2014. Total deposits grew by $61 million to $355 million for the year ending December 31, 2014. Non-interest bearing deposit growth accounted for 59% of total deposit growth.
“The San Francisco Bay Area business community has embraced and appreciates our deep commercial banking expertise and knowledge,” said Terry A. Peterson, President and CEO. “We responded by raising $16 million in new common equity capital in 2014. Our new capital allows us to grow with our existing and prospective business clients, invest in technology tools for our clients, and provide a larger banking platform to continue attracting the best Bay Area bankers to our team,” said Peterson.
Fourth Quarter 2014 versus Fourth Quarter 2013
- Net interest income reached a record high of $3.9 million
- Net income of $954 thousand, increased 44%
Year 2014 versus 2013
- Net interest income increased 14% to $14.9 million
- Net income rose 32% to $3.4 million
- Basic earnings per common share was $0.92
- $16 million in capital raised, issuing 1.5 million new shares
Strong growth in 2014 year over year leads to record balances
- Total loans of $339 million, up $56 million or 20% from year-end 2013
- Total deposits of $355 million, up $61 million or 21% from year-end 2013
- Total non-interest bearing deposits of $141 million, up $36 million or 34%, representing 40% of total deposits
Strong credit quality
- Total non-performing loans declined to 0.52% of assets at December 31, 2104, from 0.70% on the same date last year
- Loan loss reserve of $5.6 million increased 6% over last year
- Loan loss reserve ratio fell to 1.65% of total loans at December 31, 2104, from 1.86% a year ago as a result of improvements in credit quality
Improved book value and capital ratios
- Tangible book value per share $11.01, up $0.92 or 9% from last year
- Capital ratios improved on stronger earnings and additional equity capital
Net Income
Net income reached a record $3.4 million for the full year 2014, improving 32% over 2013.
Balance Sheet
As of December 31, 2014, total assets were up $81 million or 22% to $446 million with loans up by $56 million or 20% year over year to $339 million compared to December 31, 2013. For the year ending December 31, 2014, commercial and industrial (C&I) loans grew 25% or $35 million over the end of year 2013 continuing to represent over 50% of total loans, while commercial real estate loans grew 14% or $18 million during the same period.
Total asset growth during 2014 was funded with deposit growth which increased 21% or $61 million to $355 million in total deposits at the end of 2014 compared to $294 million at the end of 2013. Non-interest bearing deposits increased 34% and represented 40% of total deposits at December 31, 2014 compared to 36% for the same date a year ago.
Total shareholders’ equity and shares outstanding increased as a result of the additional equity capital raised at the end of the second quarter 2014. Shareholders’ equity increased 51% to $59 million at December 31, 2014 compared to the $39 million for the same date a year ago.
Credit Quality
Total non-performing loans declined to 0.52% of assets, from 0.70% last year. The reserve for loan losses increased to $5.6 million as of December 31, 2014 compared to $5.3 million at December 31, 2013. As a percent of total loans, the reserve level continues to reflect the Bank’s healthy loan portfolio and conservative posture at 1.65% of total loans at the end of the current period compared to 1.86% at December 31, 2013.
“We continue to retain and recruit the very best bankers in the Bay Area and our financial results demonstrate this success,” said Stephen A. Cortese, Chairman of the Board for California Bank of Commerce. “Our ability to quickly and efficiently access the capital markets, as demonstrated by our recent capital offering, validates investor confidence in our bank,” said Cortese.
About California Bank of Commerce
California Bank of Commerce was designed and built to provide a unique banking experience for its clients. The Bank offers a broad range of commercial banking services to closely held businesses and professionals throughout the San Francisco Bay Area. For more information on California Bank of Commerce and our unique banking experience, call us at (925) 283-2265, or visit us at www.californiabankofcommerce.com.
CALIFORNIA BANK OF COMMERCE | |||||||||||||||||||
UNAUDITED SUMMARY FINANCIAL STATEMENTS | |||||||||||||||||||
INCOME STATEMENT | |||||||||||||||||||
($ Thousands) | |||||||||||||||||||
Twelve Months Ended | Year Over Year Change | ||||||||||||||||||
31-Dec-14 | 31-Dec-13 | $ | % | ||||||||||||||||
Interest income | $ | 16,186 | $ | 14,420 | $ | 1,766 | 12 | % | |||||||||||
Interest expense | (1,287 | ) | (1,384 | ) | 97 | -7 | % | ||||||||||||
Net interest income before provision | 14,899 | 13,036 | 1,863 | 14 | % | ||||||||||||||
Provision to the Loan Loss Reserve | 71 | (264 | ) | 335 | -- | ||||||||||||||
Net interest income after provision | $ | 14,970 | $ | 12,772 | $ | 2,198 | 17 | % | |||||||||||
Non-interest income | 2,156 | 1,469 | 687 | 47 | % | ||||||||||||||
Non-interest expense | (11,801 | ) | (9,919 | ) | (1,882 | ) | 19 | % | |||||||||||
Income before tax provision | 5,325 | 4,322 | 1,003 | 23 | % | ||||||||||||||
Provision for income taxes | (1,958 | ) | (1,766 | ) | (192 | ) | 11 | % | |||||||||||
Net income | $ | 3,367 | $ | 2,556 | $ | 811 | 32 | % | |||||||||||
Preferred Dividends | 110 | 110 | - | 0 | % | ||||||||||||||
Income to Common Shareholders | $ | 3,257 | $ | 2,446 | $ | 811 | 33 | % | |||||||||||
Basic Earnings per Common share | $ | 0.915 | $ | 0.886 | $ | 0.029 | 3 | % | |||||||||||
Weighted Average Shares Outstanding | 3,558,689 | 2,760,432 | 798,257 | 29 | % | ||||||||||||||
Return on Average Assets | 0.85 | % | 0.72 | % | |||||||||||||||
Return on Average Tangible Common Equity | 8.79 | % | 9.48 | % | |||||||||||||||
Non-Interest Expense to Average Total Assets | 2.97 | % | 2.78 | % | |||||||||||||||
Efficiency Ratio | 69.2 | % | 68.4 | % | |||||||||||||||
CALIFORNIA BANK OF COMMERCE | ||||||||||||||||||||||||
UNAUDITED SUMMARY FINANCIAL STATEMENTS | ||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||
($ Thousands) | ||||||||||||||||||||||||
Three Months Ended | Year Over Year Change | |||||||||||||||||||||||
31-Dec-14 | 30-Sep-14 | 31-Dec-13 | $ | % | ||||||||||||||||||||
Interest income | $ | 4,266 | $ | 4,107 | $ | 3,908 | $ | 358 | 9 | % | ||||||||||||||
Interest expense | (354 | ) | (328 | ) | (319 | ) | (35 | ) | 11 | % | ||||||||||||||
Net interest income before provision | 3,912 | 3,779 | 3,589 | 323 | 9 | % | ||||||||||||||||||
Provision to the Loan Loss Reserve | (79 | ) | (1 | ) | 85 | (164 | ) | -- | ||||||||||||||||
Net interest income after provision | $ | 3,833 | $ | 3,778 | $ | 3,674 | $ | 159 | 4 | % | ||||||||||||||
Non-interest income | 500 | 617 | 429 | 71 | 17 | % | ||||||||||||||||||
Non-interest expense | (3,084 | ) | (3,152 | ) | (2,890 | ) | (194 | ) | 7 | % | ||||||||||||||
Income before tax provision | 1,249 | 1,243 | 1,213 | 36 | 3 | % | ||||||||||||||||||
Provision for income taxes | (295 | ) | (506 | ) | (552 | ) | 257 | -47 | % | |||||||||||||||
Net income | $ | 954 | $ | 737 | $ | 661 | $ | 293 | 44 | % | ||||||||||||||
Preferred Dividends | 28 | 28 | 28 | - | 0 | % | ||||||||||||||||||
Income to Common Shareholders | $ | 926 | $ | 709 | $ | 633 | $ | 293 | 46 | % | ||||||||||||||
Basic Earnings per Common share | $ | 0.214 | $ | 0.164 | $ | 0.229 | $ | (0.015 | ) | -7 | % | |||||||||||||
Weighted Average Shares Outstanding | 4,328,488 | 4,324,759 | 2,768,263 | |||||||||||||||||||||
Return on Average Assets | 0.84 | % | 0.72 | % | 0.70 | % | ||||||||||||||||||
Return on Average Tangible Common Equity | 8.00 | % | 6.29 | % | 9.38 | % | ||||||||||||||||||
Non-Interest Expense to Average Total Assets | 2.72 | % | 3.07 | % | 3.04 | % | ||||||||||||||||||
Efficiency Ratio | 69.9 | % | 71.7 | % | 71.9 | % | ||||||||||||||||||
CALIFORNIA BANK OF COMMERCE | |||||||||||||||||||||||||
UNAUDITED SUMMARY FINANCIAL STATEMENTS | |||||||||||||||||||||||||
BALANCE SHEET | |||||||||||||||||||||||||
($ Thousands) | |||||||||||||||||||||||||
Year Over Year Change | |||||||||||||||||||||||||
Assets | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | $ | % | ||||||||||||||||||||
Total Cash and Investments | $ | 91,125 | $ | 102,942 | $ | 72,255 | $ | 18,870 | 26 | % | |||||||||||||||
Loans, net of deferred costs/fees | 338,812 | 312,952 | 282,829 | 55,983 | 20 | % | |||||||||||||||||||
Loan Loss Reserve | (5,560 | ) | (5,450 | ) | (5,250 | ) | 310 | 6 | % | ||||||||||||||||
Other | 21,250 | 18,189 | 14,685 | 6,565 | 45 | % | |||||||||||||||||||
Total Assets | $ | 445,627 | $ | 428,633 | $ | 364,519 | $ | 81,108 | 22 | % | |||||||||||||||
Liabilities & Shareholders' Equity | |||||||||||||||||||||||||
Non-interest Bearing Deposits | $ | 140,558 | $ | 118,245 | $ | 104,642 | $ | 35,916 | 34 | % | |||||||||||||||
Interest Bearing Deposits | 214,468 | 221,716 | 189,499 | 24,969 | 13 | % | |||||||||||||||||||
Total Deposits | 355,026 | 339,961 | 294,141 | 60,885 | 21 | % | |||||||||||||||||||
Total Borrowings and Other Liabilities | 32,010 | 31,139 | 31,497 | 513 | 2 | % | |||||||||||||||||||
Total Liabilities | 387,036 | 371,100 | 325,638 | 61,398 | 19 | % | |||||||||||||||||||
Shareholder's Equity | 58,591 | 57,533 | 38,881 | 19,710 | 51 | % | |||||||||||||||||||
Total Liabilities & Shareholders' Equity | $ | 445,627 | $ | 428,633 | $ | 364,519 | $ | 81,108 | 22 | % | |||||||||||||||
Shares Outstanding | 4,328,488 | 4,328,488 | 2,768,893 | 1,559,595 | 56 | % | |||||||||||||||||||
Book Value per Common Share | $ | 11.01 | $ | 10.76 | $ | 10.09 | $ | 0.92 | 9 | % | |||||||||||||||
Annual | Annual | ||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||
Average Balances - Period | 4Q 2014 | 3Q 2014 | 4Q 2013 | 2014 | 2013 | ||||||||||||||||||||
Total Assets | $ | 449,841 | $ | 407,699 | $ | 377,405 | $ | 397,403 | $ | 356,736 | |||||||||||||||
Total Loans | $ | 315,959 | $ | 305,207 | $ | 272,267 | $ | 299,994 | $ | 257,462 | |||||||||||||||
Total Investments | $ | 35,508 | $ | 34,822 | $ | 45,479 | $ | 39,250 | $ | 44,639 | |||||||||||||||
Total Earning Assets | $ | 423,279 | $ | 385,494 | $ | 359,143 | $ | 375,490 | $ | 339,619 | |||||||||||||||
Total Non-Interest Bearing Deposits | $ | 131,419 | $ | 110,747 | $ | 110,192 | $ | 109,922 | $ | 92,815 | |||||||||||||||
Total Deposits | $ | 360,091 | $ | 319,448 | $ | 307,259 | $ | 316,401 | $ | 287,937 | |||||||||||||||
Total Borrowings | $ | 29,000 | $ | 29,000 | $ | 29,000 | $ | 29,210 | $ | 29,001 | |||||||||||||||
Tangible Common Equity | $ | 47,344 | $ | 46,466 | $ | 27,983 | $ | 38,313 | $ | 26,973 | |||||||||||||||
Annual | Annual | ||||||||||||||||||||||||
Average Yields and Cost | 4Q 2014 | 3Q 2014 | 4Q 2013 | 2014 | 2013 | ||||||||||||||||||||
Net Interest Margin | 3.67 | % | 3.89 | % | 3.97 | % | 3.97 | % | 3.84 | % | |||||||||||||||
Yield on Earning Assets | 4.00 | % | 4.23 | % | 4.32 | % | 4.31 | % | 4.25 | % | |||||||||||||||
Cost of Interest Bearing Liabilities | 0.55 | % | 0.55 | % | 0.56 | % | 0.55 | % | 0.62 | % | |||||||||||||||
End of Period | 31-Dec-14 | 30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||
Loan Loss Reserve to Total Loans | 1.65 | % | 1.75 | % | 1.86 | % | |||||||||||||||||||
NPLs (incl non performing TDRs) to Total Assets | 0.29 | % | 0.30 | % | 0.37 | % | |||||||||||||||||||
Performing TDRs to Total Assets | 0.23 | % | 0.08 | % | 0.33 | % | |||||||||||||||||||
Total NPLs | 0.52 | % | 0.38 | % | 0.70 | % | |||||||||||||||||||
Tier I Leverage Ratio | 13.00 | % | 14.11 | % | 10.36 | % |