Pacific City Financial Corporation (the “Company”) (OTC Pink: PFCF), the holding company of Pacific City Bank, today reported net income of $4.3 million, or $0.32 per diluted common share, compared with $3.5 million, or $0.27 per diluted common share, in the previous quarter and $2.9 million, or $0.24 per diluted common share, in the year-ago quarter. For the 2016 year, net income was $14.0 million, or $1.11 per diluted common share, compared with $12.2 million, or $1.02 per diluted common share, in 2015.
2016 Fourth Quarter Highlights
- The Company announced 10% of stock dividend
- Net income totaled $4.3 million or $0.32 per diluted common share
- Loan origination in 2016 was $588.2 million compared with $470.0 million in 2015
- Total assets increased $184.1 million, or 17.7%, to $1.2 billion at 2016 yearend compared with $1.0 billion at 2015 yearend
- Total loans, including loans held-for-sale and net of unearned fee/cost, increased $187.0 million, or 22.1%, to $1,033.3 million at 2016 yearend compared with $846.3 million at 2015 yearend
- Total deposits increased $152.4 million, or 16.2%, to $1,091.8 million at 2016 yearend compared with $939.4 million at 2015 yearend
“We are pleased to announce another solid quarter with strong net income and loan growth. In connection to our strong financial performance we announced our third 10% stock dividend in December in as many years in addition to continually declaring cash dividends as part of our ongoing effort to benefit our shareholders,” said Haeyoung Cho, President and CEO. “Our net income in the fourth quarter of 2016 increased significantly to $4.3 million compared with $3.5 million the previous quarter and $2.9 million in the year-ago quarter. Our loan portfolio increased $21.7 million, or 2.1%, to $1,033 million at December 31, 2016 compared with $1,012 million at September 30, 2016, and increased $187 million, or 22.1%, compared with $846 million at December 31, 2015.”
RESULTS OF OPERATIONS
Net Income
Net income in the fourth quarter of 2016 increased $832,000, or 23.9%, to $4.3 million compared with $3.5 million in the previous quarter and increased $1.4 million, or 48.5%, compared with $2.9 million in the year-ago quarter. Diluted earnings per share were $0.32 in the fourth quarter of 2016 compared with $0.27 in the previous quarter and $0.24 in the year-ago quarter. Net income for 2016 year increased $1.8 million, or 14.9%, to $14.0 million compared with $12.2 million in the previous year.
Net Interest Income and Net Interest Margin
Net interest income before provision for loan losses in the fourth quarter of 2016 increased $1.2 million, or 10.4%, to $12.6 million compared with $11.4 million in the previous quarter and increased $2.7 million, or 27.6%, compared with $9.9 million in the year-ago quarter. The increase was primarily due to an increase in loan portfolio balance. Net interest income before provision for loan losses for 2016 year increased $8.5 million, or 23.1%, to $45.6 million compared with $37.0 million in the previous year primarily due to an increase in loan portfolio balance.
Interest income on loans increased $1.1 million, or 9.0%, to $13.8 million in the fourth quarter of 2016 compared with $12.7 million in the previous quarter and increased $3.0 million, or 27.3%, compared with $10.8 million in the year-ago quarter. The average total loan balance, including loan held for sale, was $1,040.8 million in the fourth quarter of 2016 compared with $978.5 million in the previous quarter, and $825.9 million in the year-ago quarter. Interest income on loans in 2016 increased $8.9 million, or 21.6%, to $50.1 million compared with $41.2 million in the previous year. Average gross loan balance was $961.5 million in 2016 compared with $800.2 million in the previous year.
The loan yield increased 12 basis points to 5.27% in the fourth quarter of 2016 compared with 5.15% in the previous quarter, and increased 7 basis points compared with 5.20% in the year-ago quarter. Loan yields for 2016 increased 7 basis points to 5.21% compared with 5.14% in 2015. The increase compared with the previous year was primarily due to the “asset sensitive” balance sheet where the variable interest rate loans repriced to a higher rates as a result of the 0.25% increase in Wall Street Journal Prime rate in December 2015 and December 2016.
Below is a table of fixed and variable interest rate loans accompanied with weighted average contractual rates:
December 31, 2016 | September 30, 2016 | December 31, 2015 | ||||||||||
WAVG | WAVG | WAVG | ||||||||||
% to Gross | Contractual | % to Gross | Contractual | % to Gross | Contractual | |||||||
Loans * | Rate | Loans * | Rate | Loans * | Rate | |||||||
Fixed rate loans | 30.9% | 5.10% | 31.3% | 5.10% | 37.8% | 5.10% | ||||||
Variable rate loans | 69.1% | 4.68% | 68.7% | 4.44% | 62.2% | 4.53% | ||||||
* Including LHFS |
The interest income on investment securities increased $62,000, or 16.6%, to $428,000 compared with $367,000 in the previous quarter, but decreased $47,000, or 9.9%, compared with $475,000 in the year-ago quarter. The fluctuation compared with the previous quarter and the year-ago quarter was primarily due to the fluctuations in investment portfolio balance. The average balance of investment securities was $95.7 million in the fourth quarter of 2016 compared with $88.0 million in the previous quarter, and $98.3 million in the year-ago quarter. Interest income on investment securities in 2016 increased $321,000, or 22.6%, to $1.7 million compared with $1.4 million in the previous year due to an increase of $15.4 million in average balance.
Total interest expense in the fourth quarter of 2016 increased $206,000, or 11.4%, to $2.0 million compared with $1.8 million in the previous quarter and increased $392,000, or 24.2%, compared with $1.6 million in the year-ago quarter. The increase was primarily due to an increase in average balance of interest bearing deposits. The average balance of interest bearing deposits was $798.4 million in the fourth quarter of 2016 compared with $745.6 million in the previous quarter, and $689.6 million in the year-ago quarter. The cost of interest-bearing deposits was 1.00% in the fourth quarter of 2016 compared with 0.96% in the previous quarter, and 0.93% in the year-ago quarter. Total interest expenses in 2016 increased $783,000, or 12.6%, to $7.0 million compared with $6.2 million in 2015 primarily due to an increase of $72.9 million in average balance of interest bearing deposits.
The cost of total deposits including non-interest bearing deposits was 0.74% in the fourth quarter of 2016 compared with 0.70% in the previous quarter, and 0.68% in the year-ago quarter.
Net interest margin was 4.16% in the fourth quarter of 2016 compared with 4.05% in the previous quarter, and 3.82% in the year-ago quarter. The increase in net interest margin in the 2016 fourth quarter compared with the previous quarter and the year-ago quarter was primarily due to an increase in yield on interest earning assets. Yield on interest earning assets increased 14 basis points to 4.84% from 4.70% in the previous quarter and increased 39 basis points from 4.45% in the year-ago quarter. Net interest margin increased 29 basis points to 4.14% in 2016 compared with 3.85% in 2015.
Loan Loss Provision
The provision for loan losses in the fourth quarter of 2016 decreased $181,000 to $621,000 compared with $802,000 in the previous quarter, and increased $189,000 compared with $432,000 in the year-ago quarter primarily due to an increase in the loan portfolio balance and an increase in the loss look back period in calculating the loan loss reserve balance. The allowance for loan losses to gross loan ratio was 1.10% at December 31, 2016 compared with 1.11% at September 30, 2016 and 1.11% at December 31, 2015. In 2016, the Company recorded $2.3 million in provision for loan losses compared with $412,000 in 2015.
During the fourth quarter of 2016, the Company recognized a net charge-off of $293,000 compared with a net recovery of $3,000 in the previous quarter, and a net charge-off of $285,000 in the year-ago quarter. In 2016, the Company recognized a net charge-off of $309,000 compared with $499,000 in 2015.
Non-interest Income
Non-interest income in the fourth quarter of 2016 decreased $373,000, or 9.3%, to $3.6 million compared with $4.0 million in the previous quarter, but increased $508,000, or 16.2%, compared with $3.1 million in the year-ago quarter. The decrease compared to the previous quarter was primarily due to a decrease of $300,000 in gain on sale of SBA and residential home mortgage loans to $2.5 million compared with $2.8 million, and the increase compared to the year-ago quarter was due to an increase of $500,000 in gain on sale of SBA and mortgage loans compared with the year-ago quarter. Non-interest income in 2016 increased $840,000, or 6.6%, to $13.6 million compared with $12.8 million in 2015 primarily due to an increase of $648,000 in gain on sale of SBA and mortgage loans and an increase of $210,000 in loan servicing income.
The Bank originated $28.3 million in SBA loans and sold $38.9 million in the fourth quarter of 2016 compared with $39.0 million in origination and $34.5 million sold during the previous quarter, and $41.9 million in origination and sold $33.7 million during the year-ago quarter. The Bank originated $18.4 million in residential mortgage loans and sold $4.4 million in the fourth quarter of 2016 compared with $29.5 million in origination and sold $21.9 million in the previous quarter and $18.5 million in origination and sold $1.8 million in the year-ago quarter.
Non-interest Expenses
Non-interest expenses in the fourth quarter of 2016 decreased $461,000, or 5.4%, to $8.1 million compared with $8.5 million in the previous quarter, but increased $525,000, or 7.0%, compared with $7.5 million in the year-ago quarter. The decrease compared with the previous quarter was primarily due to a decrease of $442,000 in salary and benefits expenses related to the reversal of some bonus accrual. The increase compared with the year-ago quarter was primarily due to an increase of $580,000 in salary and employee benefits expenses resulting from an increase in headcount in conjunction with asset growth and an increase of $185,000 in occupancies and fixed assets expenses, partially offset by a decrease of $169,000 in legal and professional expenses.
Non-interest expenses for 2016 increased $4.2 million, or 14.8%, to $32.5 million compared with $28.3 million in 2015 primarily due to an increase of $3.1 million in employee salaries and benefits, an increase of $717,000 in occupancies and fixed assets, and an increase of $175,000 in marketing expenses. The increases in non-interest expenses were attributable to the opening of a new full-service branch in Fort Lee, New Jersey in August 2015, opening of two new full-service branches in Los Angeles, California in August 2016, and relocation of headquarter office to a larger space in December 2015 to accommodate growth in the number of employees.
The Company’s efficiency ratio was 49.75% in the fourth quarter of 2016 compared with 55.37% in the previous quarter, and 58.08% in the year-ago quarter. The Company’s efficiency ratio for 2016 was 54.92% compared with 56.84% in 2015.
Income Tax Provision
The Company’s effective income tax rate was 42.75% in the fourth quarter of 2016 compared with 42.70% in the previous quarter and 42.09% in the year-ago quarter. The Company’s effective income tax rate in 2016 was 42.62% compared with 42.21% in 2015.
BALANCE SHEET SUMMARY
Total Assets
Total assets at December 31, 2016 increased $49.4 million, or 4.2%, to $1,226.6 million compared with $1,177.2 million at September 30, 2016, and increased $184.1 million, or 17.7%, compared with $1,042.5 million at December 31, 2015.
Loans
Total loans receivable including loan held-for-sale, net of deferred costs and fees, increased $21.7 million, or 2.1%, to $1,033.3 million at December 31, 2016 compared with $1,011.5 million at September 30, 2016, and increased $187.0 million, or 22.1%, compared with $846.3 million at December 31, 2015.
During the fourth quarter of 2016, the Company originated $118.7 million in loans, sold $38.9 million in SBA and $4.4 million in residential mortgage loans, recognized $52.3 million in loan principal paydown/payoff, and charged-off $386,000. During the fourth quarter of 2015, loan origination was $144.8 million, sale of SBA loans were $33.7 million, sale of mortgage loans were $1.8 million, principal paydown/payoff were $73.6 million, and principal charge-off was $380,000.
In 2016, the Company originated $588.2 million in loans, sold $119.3 million in SBA and $45.3 million in residential mortgage loans, and recognized $234.3 million of pay-down/pay-off. In 2015, loan origination was $470.0 million, sale of SBA loans were $104.8 million, sale of mortgage loans were $51.7 million, principal paydown/payoff were $209.5 million, and principal charge-off was $1.3 million.
The following table illustrates details of gross loan balance by type:
Loan type (dollars in thousands) | |||||||||||||
Dec. 31, | Sept. 30, | Percentage | Dec. 31, | Percentage | |||||||||
2016 | 2016 | Change | 2015 | Change | |||||||||
Real estate loans | $ | 612,301 | $ | 592,233 | 3.4% | $ | 487,545 | 25.6% | |||||
Residential mortgage loans | 140,688 | 126,637 | 11.1% | 129,508 | 8.6% | ||||||||
SBA loans | 130,577 | 130,049 | 0.4% | 112,397 | 16.2% | ||||||||
Commercial industrial loans | 113,642 | 105,615 | 7.6% | 85,692 | 32.6% | ||||||||
Consumer loans | 33,722 | 32,630 | 3.3% | 29,134 | 15.7% | ||||||||
Deferred loan fees/costs | 181 | 303 | -40.3% | 93 | 94.6% | ||||||||
Gross loans receivables | 1,031,111 | 987,467 | 4.4% | 844,369 | 22.1% | ||||||||
Loans held for sale | 2,150 | 24,074 | -91.1% | 1,941 | 10.8% | ||||||||
Total loans | $ | 1,033,261 | $ | 1,011,541 | 2.1% | $ | 846,310 | 22.1% |
Investment Securities
Total investment securities at December 31, 2016 increased $12.5 million, or 14.2%, to $100.4 million compared with $88.0 million at September 30, 2016, and decreased $1.8 million, or 1.7%, compared with $102.2 million at December 31, 2015. The increase in investment securities portfolio compared with the previous quarter was primarily due to the purchase of $18.8 million in investment securities, partially offset by $4.5 million in principal pay-downs, $190,000 in net premium amortization, and $1.7 million decline in fair market value.
Deposits
Total deposit balance increased $46.8 million, or 4.5%, to $1,091.8 million at December 31, 2016 compared with $1,045.0 million at September 30, 2016, and increased $152.4 million, or 16.2%, compared with $939.4 million at December 31, 2015. The demand deposit to total deposit ratio was 25.1% at December 31, 2016 compared with 26.5% at September 30, 2016, and 28.5% at December 31, 2015.
The table below consists of deposit mix by period:
Deposit mix (Dollars in thousands) | |||||||||||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||
Amount | Percentage | Amount | Percentage | Amount | Percentage | ||||||||||
Demand deposits | $ | 274,003 | 25.1% | $ | 276,523 | 26.5% | $ | 267,934 | 28.5% | ||||||
Now accounts | 7,837 | 0.7% | 7,306 | 0.7% | 7,945 | 0.8% | |||||||||
Money market accounts | 303,233 | 27.8% | 264,557 | 25.3% | 223,471 | 23.8% | |||||||||
Savings | 8,858 | 0.8% | 9,750 | 0.9% | 8,263 | 0.9% | |||||||||
Time deposits under $250K | 252,491 | 23.1% | 246,849 | 23.6% | 232,034 | 24.7% | |||||||||
Time deposits of $250K and over | 127,624 | 11.7% | 119,602 | 11.4% | 108,791 | 11.6% | |||||||||
State & Broker CDs | 117,766 | 10.8% | 120,416 | 11.5% | 91,001 | 9.7% | |||||||||
Total deposits | $ | 1,091,812 | 100.0% | $ | 1,045,003 | 100.0% | $ | 939,439 | 100.0% |
Stockholders’ Equity
On August 5, 2016, the Company raised $15.3 million in new capital through a private placement by issuing Company’s common stocks. The proceed is being used for general corporate purposes and supporting the asset growth of Pacific City Bank.
On December 13, 2016, the Company announced 10% stock dividend on the Company’s common stocks. The stock dividend is payable on January 17, 2017 to common shareholder of record on December 30, 2016. In accordance with Accounting Research Bulletins 43 (ARB 43), this stock dividend is considered as a small stock dividend and $12.6 million in retained earnings was transferred to common stock, which did not have any effect on the total stockholders’ equity balance.
The Stockholders’ equity increased $3.2 million, or 2.6%, to $127.0 million at December 31, 2016 compared with $123.8 million at September 30, 2016, and increased $29.0 million, or 29.5%, compared with $98.0 million at December 31, 2015.
CREDIT QUALITY
Non-performing Assets
Non-performing loans (“NPL”) balance at December 31, 2016 decreased $266,000 to $1.8 million compared with $2.1 million at September 30, 2016, and decreased $524,000 compared with $2.4 million at December 31, 2015. Non-performing loans to gross loans ratios were 0.18% at December 31, 2016 compared with 0.21% at September 30, 2016 and 0.28% at December 31, 2015.
The OREO balance of $506,000 at December 31, 2016 did not change from September 30, 2016, and there were no OREO balance at December 31, 2015.
The following tables summarize composition of non-performing loans and non-performing assets:
Non-performing loans composition (Dollars in thousands) | |||||||||||||
Dec. 31, | Sept. 30, | Percentage | Dec. 31, | Percentage | |||||||||
2016 | 2016 | Change | 2015 | Change | |||||||||
Real estate loans | $ | 57 | $ | 63 | -9.5% | $ | 79 | -27.8% | |||||
Commercial and industrial loans | 284 | 530 | -46.4% | 706 | -59.8% | ||||||||
SBA loans | 1,468 | 1,486 | -1.2% | 1,552 | -5.4% | ||||||||
Consumer loans & others | 39 | 35 | 11.4% | 35 | 11.4% | ||||||||
$ | 1,848 | $ | 2,114 | -12.6% | $ | 2,372 | -22.1% |
Non-performing assets (Dollars in thousands) | ||||||||||||||||
Dec. 31, | Sept. 30, | % | Dec. 31, | % | ||||||||||||
2016 | 2016 | Change | 2015 | Change | ||||||||||||
Non-performing loans (NPL) | $ | 1,848 | $ | 2,114 | -12.6% | $ | 2,372 | -22.1% | ||||||||
Non-performing TDR (included in NPL) | $ | 663 | $ | 1,176 | -43.6% | $ | 1,562 | -57.6% | ||||||||
Gross loans including deferred loan fees/cost | $ | 1,031,112 | $ | 987,467 | 4.4% | $ | 844,369 | 22.1% | ||||||||
NPL/Gross loans | 0.18 | % | 0.21 | % | 0.28 | % | ||||||||||
OREO | $ | 506 | $ | 506 | 0.0% | $ | - | N/A | ||||||||
Performing TDR | $ | 2,196 | $ | 2,244 | -2.1% | $ | 2,524 | -13.0% | ||||||||
NPA (NPL+OREO) | $ | 2,353 | $ | 2,619 | -10.2% | $ | 2,372 | -0.8% | ||||||||
Total assets | $ | 1,226,642 | $ | 1,177,214 | 4.2% | $ | 1,042,517 | 17.7% | ||||||||
NPA (NPL+OREO)/Gross loans | 0.23 | % | 0.27 | % | 0.28 | % | ||||||||||
NPA (NPL+OREO)/Total assets | 0.19 | % | 0.22 | % | 0.23 | % |
Classified Assets
Classified loans at December 31, 2016 increased $1.7 million to $9.1 million compared with $7.4 million at September 30, 2016 and increased $2.5 million compared with $6.5 million at December 31, 2015. Classified assets to total assets ratio was 0.78% at December 31, 2016 compared with 0.67% at September 30, 2016 and 0.63% at December 31, 2015.
The following tables provide certain detail on classified loans and classified assets.
Classified loans (Dollars in thousands) | |||||||||||||
Dec. 31 | Sept. 30, | Percentage | Dec. 31, | Percentage | |||||||||
2016 | 2016 | Change | 2015 | Change | |||||||||
Substandard (Classified) | $ | 9,065 | $ | 7,403 | 22.5% | $ | 6,537 | 38.7% | |||||
Special mention | 5,842 | 6,659 | -12.3% | 6,158 | -5.1% | ||||||||
Total criticized | 14,907 | 14,062 | 6.0% | 12,695 | 17.4% | ||||||||
Watch | 8,692 | 8,746 | -0.6% | 17,493 | -50.3% | ||||||||
Total problem loans | $ | 23,599 | $ | 22,808 | 3.5% | $ | 30,188 | -21.8% |
Classified assets (Dollars in thousands) | ||||||||||||||||
Dec. 31, | Sept. 30, | % | Dec. 31, | % | ||||||||||||
2016 | 2016 | Change | 2015 | Change | ||||||||||||
Classified assets | $ | 9,571 | $ | 7,909 | 21.0% | $ | 6,537 | 46.4% | ||||||||
Classified loans/Gross loans | 0.88 | % | 0.75 | % | 0.77 | % | ||||||||||
Tier 1 + ALLL | $ | 136,954 | $ | 133,638 | 2.5% | $ | 107,340 | 27.6% | ||||||||
Classified assets/Tier 1 + ALLL | 6.99 | % | 5.92 | % | 6.09 | % | ||||||||||
Classified assets/Total assets | 0.78 | % | 0.67 | % | 0.63 | % |
Capital
The following table illustrates Pacific City Bank capital ratios:
Capital Ratios | ||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | ||||
Tier 1 Leverage Capital Ratio (Bank) | 10.38% | 10.58% | 9.25% | |||
Common Equity Tier 1 Capital Ratio (Bank) | 12.35% | 12.29% | 12.07% | |||
Tier 1 Risk-Based Capital Ratio (Bank) | 12.35% | 12.29% | 12.07% | |||
Total Risk-Based Capital Ratio (Bank) | 13.48% | 13.42% | 13.25% |
About Pacific City Financial Corporation
Headquartered in Los Angeles, California, Pacific City Financial Corporation is the parent company of Pacific City Bank, a full-service commercial bank with twelve branch offices and eight loan production offices in Lynwood and Bellevue, Washington; Denver, Colorado; Chicago, Illinois; Annandale, Virginia; Atlanta, Georgia; Orange County, California; and Bayside, New York. Pacific City Bank specializes in commercial banking for small to medium-size businesses by providing commercial real estate loans, small business loans and lines of credit, trade finance loans, auto loans, residential mortgage loans, and SBA loans. Pacific City Bank serves a diverse customer base through its branches in the Greater Los Angeles Area and Fort Lee, New Jersey and its Loan Production Offices in seven States.
Safe Harbor Statement
This press release may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.”
Pacific City Financial Corporation | ||||||||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||||||
(Dollars In thousands) | ||||||||||||||||
December 31, | September 30, | % | December 31, | % | ||||||||||||
2016 | 2016 | change | 2015 | change | ||||||||||||
Assets | ||||||||||||||||
Cash and due from banks | $ | 18,488 | $ | 18,680 | -1.0% | $ | 13,511 | 36.8% | ||||||||
Interest-bearing deposits in financial institutions | 51,463 | 36,417 | 41.3% | 63,439 | -18.9% | |||||||||||
Total cash and cash equivalents | 69,951 | 55,097 | 27.0% | 76,950 | -9.1% | |||||||||||
Investment securities, available-for-sale | 82,838 | 72,481 | 14.3% | 84,847 | -2.4% | |||||||||||
Investment securities, held-to-maturity | 17,584 | 15,486 | 13.5% | 17,337 | 1.4% | |||||||||||
Total investment securities | 100,422 | 87,967 | 14.2% | 102,184 | -1.7% | |||||||||||
Loans held for sale | 2,150 | 24,074 | -91.1% | 1,941 | 10.8% | |||||||||||
Loans receivable, net of deferred loan costs (fees) | 1,031,112 | 987,467 | 4.4% | 844,369 | 22.1% | |||||||||||
Less: allowance for loan losses | (11,320 | ) | (10,991 | ) | 3.0% | (9,345 | ) | 21.1% | ||||||||
Net loans receivables | 1,019,792 | 976,476 | 4.4% | 835,024 | 22.1% | |||||||||||
Premises and equipment, net | 4,563 | 4,392 | 3.9% | 3,613 | 26.3% | |||||||||||
Other real estate owned, net | 506 | 506 | 0.0% | - | NA | |||||||||||
Federal Home Loan Bank and other bank stock | 5,686 | 5,686 | 0.0% | 4,922 | 15.5% | |||||||||||
Deferred tax assets, net | 5,254 | 6,527 | -19.5% | 5,195 | 1.1% | |||||||||||
Servicing assets | 8,302 | 7,988 | 3.9% | 7,405 | 12.1% | |||||||||||
Accrued interest receivables | 3,150 | 2,706 | 16.4% | 2,590 | 21.6% | |||||||||||
Others | 6,867 | 5,795 | 18.5% | 2,693 | 155.0% | |||||||||||
Total assets | $ | 1,226,643 | $ | 1,177,214 | 4.2% | $ | 1,042,517 | 17.7% | ||||||||
Liabilities | ||||||||||||||||
Deposits | ||||||||||||||||
Noninterest-bearing demand | $ | 274,003 | $ | 276,523 | -0.9% | $ | 267,934 | 2.3% | ||||||||
Savings, NOW, and money market accounts | 319,929 | 281,614 | 13.6% | 239,679 | 33.5% | |||||||||||
Time deposits under $250,000 | 291,557 | 288,565 | 1.0% | 256,235 | 13.8% | |||||||||||
Time deposits of $250,000 and over | 206,323 | 198,302 | 4.0% | 175,591 | 17.5% | |||||||||||
Total deposits | 1,091,812 | 1,045,004 | 4.5% | 939,439 | 16.2% | |||||||||||
Accrued interest payable | 1,559 | 1,102 | 41.5% | 1,417 | 10.0% | |||||||||||
Other liabilities | 6,265 | 7,332 | -14.6% | 3,621 | 73.0% | |||||||||||
Total liabilities | $ | 1,099,636 | $ | 1,053,438 | 4.4% | $ | 944,477 | 16.4% | ||||||||
Capital | ||||||||||||||||
Common stock | 125,093 | 121,001 | 3.4% | 96,074 | 30.2% | |||||||||||
Additional paid in capital | 2,444 | 2,320 | 5.3% | 2,362 | 3.5% | |||||||||||
Retained earnings | - | - | NA | - | NA | |||||||||||
Other comprehensive income (loss) | (530 | ) | 455 | -216.5% | (396 | ) | 33.8% | |||||||||
Total capital | 127,007 | 123,776 | 2.6% | 98,040 | 29.5% | |||||||||||
Total liabilities & capital | $ | 1,226,643 | $ | 1,177,214 | 4.2% | $ | 1,042,517 | 17.7% |
Pacific City Financial Corporation | |||||||||||||
Consolidated Income Statements (Unaudited) | |||||||||||||
(Dollars in thousands, except share and per share data) | |||||||||||||
Three Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | Percentage | Dec. 31, | Percentage | |||||||||
2016 | 2016 | Change | 2015 | Change | |||||||||
Interest income | |||||||||||||
Interest and fees on loans | $ | 13,793 | $ | 12,655 | 9.0% | $ | 10,831 | 27.3% | |||||
Interest on investments | 428 | 367 | 16.6% | 475 | -9.9% | ||||||||
Interest on others | 368 | 172 | 114.0% | 168 | 119.0% | ||||||||
Total interest income | 14,589 | 13,194 | 10.6% | 11,474 | 27.1% | ||||||||
Interest expense | |||||||||||||
Interest on deposits | 2,010 | 1,804 | 11.4% | 1,618 | 24.2% | ||||||||
Total interest expenses | 2,010 | 1,804 | 11.4% | 1,618 | 24.2% | ||||||||
Net interest income | 12,579 | 11,390 | 10.4% | 9,856 | 27.6% | ||||||||
Provision for loan losses (PLL) | 621 | 802 | -22.6% | 432 | 43.8% | ||||||||
Net interest income after PLL | 11,958 | 10,588 | 12.9% | 9,424 | 26.9% | ||||||||
Non-interest income | |||||||||||||
Gain on sale of SBA loans | 2,427 | 2,392 | 1.5% | 2,018 | 20.3% | ||||||||
Gain on sale of residential mortgage loans | 52 | 390 | -86.7% | 12 | 333.3% | ||||||||
Service charges on deposits | 369 | 367 | 0.5% | 345 | 7.0% | ||||||||
Loan servicing fees | 505 | 567 | -10.9% | 408 | 23.8% | ||||||||
Other | 292 | 302 | -3.3% | 354 | -17.5% | ||||||||
Total non-interest income | 3,645 | 4,018 | -9.3% | 3,137 | 16.2% | ||||||||
Non-interest expense | |||||||||||||
Employee salaries & benefits | 4,901 | 5,342 | -8.3% | 4,321 | 13.4% | ||||||||
Occupancies and fixed assets | 1,150 | 1,079 | 6.6% | 964 | 19.3% | ||||||||
Legal & professional | 651 | 594 | 9.6% | 820 | -20.6% | ||||||||
FDIC assessment | 50 | 138 | -63.8% | 134 | -62.7% | ||||||||
Marketing expenses | 269 | 349 | -22.9% | 316 | -14.9% | ||||||||
Data and item processing expenses | 241 | 237 | 1.7% | 220 | 9.5% | ||||||||
Loan related expenses | 70 | 148 | -52.7% | 117 | -40.2% | ||||||||
Others | 739 | 645 | 14.6% | 654 | 13.0% | ||||||||
Total non-interest expenses | 8,071 | 8,532 | -5.4% | 7,546 | 7.0% | ||||||||
Net income before taxes | 7,532 | 6,074 | 24.0% | 5,015 | 50.2% | ||||||||
Income tax provision | 3,220 | 2,594 | 24.1% | 2,111 | 52.5% | ||||||||
Net income | $ | 4,312 | $ | 3,480 | 23.9% | $ | 2,904 | 48.5% | |||||
Earnings per common shares | |||||||||||||
Basic | $ | 0.32 | $ | 0.27 | $ | 0.24 | |||||||
Diluted | $ | 0.32 | $ | 0.27 | $ | 0.24 | |||||||
Average shares outstanding | |||||||||||||
Basic | 13,386,503 | 12,889,986 | 11,858,522 | ||||||||||
Diluted | 13,461,260 | 12,955,295 | 11,950,804 |
Pacific City Financial Corporation | |||||||||||
Consolidated Income Statements (Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
Twelve Months Ended | |||||||||||
Amount | Percentage | ||||||||||
December 31, 2016 | December 31, 2015 | Change | Change | ||||||||
Interest income | |||||||||||
Interest and fees on loans | $ | 50,058 | $ | 41,162 | 8,896 | 21.6% | |||||
Interest on investments | 1,741 | 1,420 | 321 | 22.6% | |||||||
Interest on others | 796 | 689 | 107 | 15.5% | |||||||
Total interest income | 52,595 | 43,271 | 9,324 | 21.5% | |||||||
Interest expenses | |||||||||||
Interest on deposits | 7,009 | 6,231 | 778 | 12.5% | |||||||
Interest on borrowings | 5 | - | 5 | NA | |||||||
Total interest expenses | 7,014 | 6,231 | 783 | 12.6% | |||||||
Net interest income | 45,581 | 37,040 | 8,541 | 23.1% | |||||||
Provision for loan losses (PLL) | 2,283 | 412 | 1,871 | 454.1% | |||||||
Net interest income after PLL | 43,298 | 36,628 | 6,670 | 18.2% | |||||||
Non-interest income | |||||||||||
Gain on sale of SBA loans | 8,079 | 7,288 | 791 | 10.9% | |||||||
Gain on sale of HM loans | 833 | 976 | (143 | ) | -14.7% | ||||||
Service charges on deposits | 1,457 | 1,454 | 3 | 0.2% | |||||||
Loans servicing fees | 2,159 | 1,949 | 210 | 10.8% | |||||||
Other | 1,091 | 1,112 | (21 | ) | -1.9% | ||||||
Total non-interest income | 13,619 | 12,779 | 840 | 6.6% | |||||||
Non-interest expenses | |||||||||||
Employee salaries & benefits | 19,944 | 16,888 | 3,056 | 18.1% | |||||||
Occupancies and fixed assets | 4,337 | 3,620 | 717 | 19.8% | |||||||
Legal & professional | 2,706 | 2,624 | 82 | 3.1% | |||||||
FDIC assessment | 460 | 501 | (41 | ) | -8.2% | ||||||
Marketing expenses | 1,246 | 1,071 | 175 | 16.3% | |||||||
Data and item processing expenses | 943 | 872 | 71 | 8.1% | |||||||
Loan related expenses | 344 | 517 | (173 | ) | -33.5% | ||||||
Others | 2,534 | 2,227 | 307 | 13.8% | |||||||
Total non-interest expenses | 32,514 | 28,320 | 4,194 | 14.8% | |||||||
Net income before tax | 24,403 | 21,087 | 3,316 | 15.7% | |||||||
Income tax provision | 10,401 | 8,901 | 1,500 | 16.9% | |||||||
Net income after tax | $ | 14,002 | $ | 12,186 | 1,816 | 14.9% | |||||
Earnings per common shares | |||||||||||
Basic | $ | 1.12 | $ | 1.03 | |||||||
Diluted | $ | 1.11 | $ | 1.02 | |||||||
Average shares outstanding | |||||||||||
Basic | 12,532,807 | 11,840,528 | |||||||||
Diluted | 12,607,990 | 11,929,503 |
Pacific City Financial Corporation | |||||||||||||||||||||||||||
Average Balance, Average Yield, and Average Rate | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||||
Interest | Average | Interest | Average | Interest | Average | ||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||
Gross loans, net of deferred loan fees | $ | 1,040,783 | $ | 13,793 | 5.27% | $ | 978,519 | $ | 12,655 | 5.15% | $ | 825,871 | $ | 10,831 | 5.20% | ||||||||||||
US government agencies | 20,298 | 112 | 2.21% | 18,336 | 96 | 2.09% | 21,350 | 115 | 2.16% | ||||||||||||||||||
Mortgage backed securities | 46,629 | 187 | 1.60% | 43,793 | 164 | 1.50% | 47,334 | 239 | 2.02% | ||||||||||||||||||
Collateralized mortgage obligation | 20,775 | 89 | 1.71% | 18,417 | 72 | 1.56% | 22,358 | 87 | 1.55% | ||||||||||||||||||
Muni bonds | 8,037 | 41 | 2.06% | 7,425 | 35 | 1.89% | 7,256 | 34 | 1.89% | ||||||||||||||||||
Interest bearing deposit & others | 35,561 | 49 | 0.55% | 40,254 | 50 | 0.50% | 88,299 | 62 | 0.28% | ||||||||||||||||||
Total interest-earning assets | $ | 1,172,083 | $ | 14,270 | 4.84% | $ | 1,106,744 | $ | 13,072 | 4.70% | $ | 1,012,469 | $ | 11,369 | 4.45% | ||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 16,479 | $ | 16,708 | $ | 14,755 | |||||||||||||||||||||
Allowances for loan losses | (11,212 | ) | (10,449 | ) | (9,233 | ) | |||||||||||||||||||||
Other assets | 33,864 | 33,497 | 25,049 | ||||||||||||||||||||||||
$ | 39,131 | $ | 39,756 | $ | 30,571 | ||||||||||||||||||||||
Total assets | $ | 1,211,214 | $ | 1,146,500 | $ | 1,043,040 | |||||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||
Money market & NOW accounts | $ | 296,593 | $ | 712 | 0.95% | $ | 252,014 | $ | 572 | 0.90% | $ | 233,850 | $ | 504 | 0.86% | ||||||||||||
Savings | 8,880 | 6 | 0.27% | 10,209 | 7 | 0.27% | 7,675 | 6 | 0.31% | ||||||||||||||||||
Time deposits | 492,909 | 1,292 | 1.04% | 483,334 | 1,225 | 1.01% | 448,029 | 1,108 | 0.98% | ||||||||||||||||||
Total interest-bearing deposits | $ | 798,382 | $ | 2,010 | 1.00% | $ | 745,557 | $ | 1,804 | 0.96% | $ | 689,554 | $ | 1,618 | 0.93% | ||||||||||||
Borrowings: | |||||||||||||||||||||||||||
Other borrowings | - | - | NA | - | - | NA | - | - | NA | ||||||||||||||||||
$ | - | $ | - | NA | $ | - | $ | - | NA | $ | - | $ | - | NA | |||||||||||||
Total interest-bearing liabilities | $ | 798,382 | $ | 2,010 | 1.00% | $ | 745,557 | $ | 1,804 | 0.96% | $ | 689,554 | 1,618 | 0.93% | |||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||
Demand deposits | $ | 278,001 | $ | 273,723 | $ | 250,761 | |||||||||||||||||||||
Other liabilities | 8,646 | 9,496 | 5,308 | ||||||||||||||||||||||||
$ | 286,647 | $ | 283,219 | $ | 256,069 | ||||||||||||||||||||||
Total liabilities | $ | 1,085,029 | $ | 1,028,776 | $ | 945,623 | |||||||||||||||||||||
Stockholders' equity | $ | 126,185 | $ | 117,724 | $ | 97,417 | |||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,211,214 | $ | 1,146,500 | $ | 1,043,040 | |||||||||||||||||||||
Net interest income | $ | 12,260 | $ | 11,268 | $ | 9,751 | |||||||||||||||||||||
Cost of funds | 0.74% | 0.70% | 0.68% | ||||||||||||||||||||||||
Net interest spread | 3.84% | 3.74% | 3.52% | ||||||||||||||||||||||||
Net interest margin | 4.16% | 4.05% | 3.82% |
Pacific City Financial Corporation | ||||||||||||||||||
Average Balance, Average Yield, and Average Rate | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Twelve Month Ended | ||||||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||
Average | Income/ | Yield | Average | Income/ | Yield | |||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
Assets | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Gross loans, net of deferred loan fees | $ | 961,482 | $ | 50,058 | 5.21% | $ | 800,151 | $ | 41,162 | 5.14% | ||||||||
US government agencies | 20,928 | 460 | 2.20% | 12,919 | 238 | 1.84% | ||||||||||||
Mortgage backed securities | 45,822 | 797 | 1.74% | 40,644 | 775 | 1.91% | ||||||||||||
Collateralized mortgage obligation | 21,032 | 338 | 1.61% | 21,895 | 328 | 1.50% | ||||||||||||
Muni bonds | 7,613 | 147 | 1.94% | 4,502 | 78 | 1.74% | ||||||||||||
Interest bearing deposit & others | 28,413 | 145 | 0.51% | 67,543 | 176 | 0.26% | ||||||||||||
Total interest earning assets | $ | 1,085,290 | $ | 51,944 | 4.79% | $ | 947,653 | $ | 42,758 | 4.51% | ||||||||
Noninterest-earning assets: | ||||||||||||||||||
Cash and cash equivalents | $ | 15,848 | $ | 14,470 | ||||||||||||||
Allowances for loan losses | (10,170 | ) | (9,444 | ) | ||||||||||||||
Other assets | 31,443 | 24,588 | ||||||||||||||||
Total noninterest-earning assets | $ | 37,121 | $ | 29,614 | ||||||||||||||
Total assets | $ | 1,122,410 | $ | 977,267 | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Money market & NOW accounts | $ | 250,736 | $ | 2,264 | 0.90% | $ | 208,981 | $ | 1,782 | 0.85% | ||||||||
Savings | 9,500 | 26 | 0.27% | 7,017 | 21 | 0.30% | ||||||||||||
Time deposits | 468,953 | 4,719 | 1.01% | 440,300 | 4,428 | 1.01% | ||||||||||||
Total interest-bearing deposits | $ | 729,189 | $ | 7,009 | 0.96% | $ | 656,298 | $ | 6,231 | 0.95% | ||||||||
Borrowings: | ||||||||||||||||||
Other borrowings | 1,194 | 5 | 0.42% | 53 | 0 | 0.16% | ||||||||||||
Total borrowings: | $ | 1,194 | $ | 5 | 0.42% | $ | 53 | $ | 0 | 0.16% | ||||||||
Total interest-bearing liabilities | $ | 730,383 | $ | 7,014 | 0.96% | $ | 656,351 | $ | 6,231 | 0.95% | ||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||
Demand deposits | $ | 271,630 | $ | 223,170 | ||||||||||||||
Other liabilities | $ | 8,090 | 4,748 | |||||||||||||||
Total noninterest-bearing liabilities | $ | 279,720 | $ | 227,918 | ||||||||||||||
Total liabilities | $ | 1,010,103 | $ | 884,269 | ||||||||||||||
Stockholders' equity | $ | 112,307 | $ | 92,998 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 1,122,410 | $ | 977,267 | ||||||||||||||
Net interest income | $ | 44,931 | $ | 36,528 | ||||||||||||||
Cost of deposits | 0.70% | 0.71% | ||||||||||||||||
Net interest spread | 3.83% | 3.56% | ||||||||||||||||
Net interest margin | 4.14% | 3.85% |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170127005719/en/