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California BanCorp Reports Record Annual Earnings of $8.7 Million with Total Assets over $1 Billion at Year-End 2018

Oakland, Calif., January 30, 2019 – California BanCorp (the “Company”) (OTCQX-CALB), the parent company of California Bank of Commerce (the “Bank”), today announced record earnings and strong asset growth year-over-year for 2018. Net income increased 55% to $8.7 million, or $1.22 per share in 2018 from $5.6 million, or $0.89 per share in 2017.

Excluding non-recurring expenses in both 2018 and 2017, net income for the year ended December 31, 2018 was $9.6 million, or $1.36 per share, compared to $7.6 million, or $1.20 per share in 2017. Net income in 2017 was negatively impacted by a tax adjustment of $1.7 million, or $0.27 per share, resulting from the write-off of a portion of the deferred tax asset due to the change in corporate tax rates when the 2017 Tax Cuts and Jobs Act was signed into law in December 2017.

Net income in 2018 was primarily the result of strong growth in average earning assets of $116 million, or 15% to $876 million in 2018 compared to 2017. Average total loans increased by $64 million, or 9% to $756 million in 2018 compared to 2017, with 52% or $33 million of the increase in commercial and industrial loans.

At December 31, 2018, total loans were $847 million, a $114 million, or 16% increase over total loans at December 31, 2017, with $62 million of the increase occurring during the fourth quarter of 2018, primarily in late December 2018.

Total assets reached a record $1.0 billion as of December 31, 2018, up 16% or $139 million compared to a year ago. This growth was propelled by strong commercial deposit generation as shown by a $38 million, or 12%, increase in non-interest bearing deposits and an additional $76 million, or 17% increase, in interest-bearing deposits. “Achieving $1 billion in total assets is a directional milestone for our team and demonstrates the Bank’s impact on the San Francisco Bay Area business community,” stated Steve Shelton, President and Chief Executive Officer.

Also during 2018, the Company completed a successful private placement of common stock for a net increase in equity of $23.6 million. These funds allowed the Company to pay-off its outstanding senior debt and support organic growth targets over the next several years.

 

Financial Highlights

December 31, 2018 compared to December 31, 2017

  • Total assets increased by $139 million, or 16% to $1.0 billion.
  • Total loans increased by $114 million, or 16% to $847 million.
  • Total deposits increased by $114 million, or 15% to $874 million.
  • Total core deposits increased by $131 million, or 20% to $780 million.
  • Total equity increased by $36 million, or 43% to $121 million.

 

Income Statement

Three months ended December 31, 2018 compared to December 31, 2017

  • Fourth quarter net income of $2.1 million.
  • Net interest income increased by $1.3 million, or 16% to $9.6 million.
  • Non-interest income increased by $96 thousand, or 13% to $862 thousand.
  • Return on average tangible common equity was 7.43% in the 2018 period.
  • Return on average assets was 0.85% in the 2018 period.

 

Income Statement

Twelve months ended December 31, 2018 compared to December 31, 2017

  • Net income increased by $3.1 million, or 55% to $8.7 million.
  • Net interest income increased by $4.3 million, or 14% to $35.8 million.
  • Non-interest income increased by $625 thousand, or 20% to $3.7 million.
  • Return on average tangible common equity increased to 9.4% from 7.4%.
  • Return on average assets increased to 0.94% from 0.69%.
  • Core earnings increased by $4.0 million or 71% to $9.6 million.
  • Core return on average tangible common equity increased to 10.4% from 7.4%.
  • Core return on average total assets increased to 1.04% from 0.69%.

 

Balance Sheet

Total loans increased by $114 million or 16% from $733 million at December 31, 2017, to $847 million at December 31, 2018. The largest categories of growth within the loan portfolio were in relationship-based commercial real estate loans at $106 million and commercial & industrial loans at $12 million.

As a result of a strong cash position and with higher market interest rates during the latter part of 2018, the Bank increased its investment portfolio by $30 million to $43 million at December 31, 2018 compared to $13 million at the end of 2017.

Total deposits increased by $114 million, or 15% to $874 million at December 31, 2018, from $760 million at December 31, 2017, with growth primarily concentrated in core commercial deposits, which increased by $131 million, or 20% to $780 million. Non-interest bearing deposits remained strong at 40.3% of total deposits at December 31, 2018, compared to 41.4% at December 31, 2017. Strong organic core deposit growth during 2018 provided the funding to return approximately $45 million in higher cost deposits during the second half of the year.

 

Shareholder’s Equity

Total shareholder’s equity increased by $36.3 million, or 43% from $84.7 million at December 31, 2017, to $121.1 million at December 31, 2018. The $36.3 million increase includes earnings during the twelve month period totaling $8.7 million, proceeds from the exercise of stock options totaling $3.1 million and $23.6 million in net proceeds from the Company’s successful private placement of common stock during the third quarter of 2018. Tangible book value per common share increased by 18% between the periods, from $12.01 at December 31, 2017, to $14.20 at December 31, 2018.

 

Net Interest Income and Net Interest Margin – three months ended December 31, 2018 and December 31, 2017

Net interest income was $9.6 million for the three months ended December 31, 2018, an increase of $1.3 million or 16% from $8.3 million for the same period in 2017. The increase in net interest income includes an increase of $1.8 million in interest income; the largest component of which was an increase in interest and fees on loans of $1.3 million. This increase in interest and fees on loans was primarily attributable to an increase in the average balance of loans outstanding of $70 million and the change in the Prime interest rate between the periods, with the yield on loans increasing by 20 basis points from 4.91% during the 2017 quarter to 5.12% during the current quarter.

The Bank additionally added to its investment securities portfolio during the 2018 quarter with a $39 million average increase to $53 million, compared to $13 million average balance during the fourth quarter of 2017. Interest earnings in investment securities during the 2018 quarter were $410 thousand compared to $66 thousand during the 2017 quarter and the average yield increased by 1.13% to 3.08% in the 2018 period from 1.95% in the 2017 quarter.

With the substantial increase in loan and investment earning assets during the fourth quarter of 2018, average cash and cash equivalent balances declined by $16 million compared to the 2017 quarter, although, as a result of the increase in market interest rates between the periods, interest income increased by $160 thousand to $503 thousand with a yield increase of 0.94% to 2.25% in the 2018 quarter compared to 1.31% in the 2017 quarter.

With the reduced level of lower yielding cash balances during the fourth quarter of 2018, in addition to the increased balances of both loans and investments, the yield on total interest-earning assets increased by 31 basis points to 4.73% in the 2018 quarter, compared to 4.42% during the same period in 2017.

Both non-interest-bearing and interest-bearing deposits grew at a strong rate between the periods, with average non-interest-bearing deposits up by $39 million, or 12% to $358 million and average interest-bearing deposits up by $33 million, or 7% to $496 million during the fourth quarter of 2018, compared to the same 2017 period. The increase in the average balance of interest-bearing deposits, as well as higher interest rates between the periods led to an increase in interest paid on total deposits of $615 thousand to $1.4 million during the fourth quarter of 2018 and an increase in the average rate paid on total deposits of 25 basis points to 0.65% in the fourth quarter of 2018 compared to 0.40% in the 2017 quarter.

As a result of the additional capital funding acquired during the third quarter of 2018, the Company paid-off $11.5 million of senior debt during the period, reducing funds to $5.0 million during the fourth quarter of 2018 compared to $16 million during the 2017 quarter. While the average balance declined, the average rate paid on these borrowed funds rose to 6.17% during the fourth quarter of 2018, up by 1.00% from 5.2% paid during the 2017 period, as the borrowing mix between the periods changed. At December 31, 2018, the Company’s total borrowings were $5.0 million in subordinated debt.

With higher rates and strong average earning asset growth during the fourth quarter of 2018, when compared to 2017, the net interest margin increased by 14 basis points to 4.09% during the 2018 period compared to 3.95% in the 2017 quarter.

 

Net Interest Income and Net Interest Margin – twelve months ended December 31, 2018 and December 31, 2017

Net interest income for the twelve months ended December 31, 2018, was $35.8 million, an increase of $4.3 million, or 14.0% from the $31.5 million for the same period in 2017. During the twelve month period the Bank benefited from a significant increase in average total deposit balances of $110 million or 16% to $815 million, which was deployed primarily into a $64 million increase in average total loans, a $43 million increase in average interest-earning cash and cash equivalent balances and a $9 million increase in average investment securities.

While average total interest-earning assets increased by $116 million, or 15% to $876 million during the 2018 period, the average yield increased by only 11 basis points to 4.67%, primarily as a result of the strong increase in the average balance of lower-yielding cash and cash equivalent balances of $43 million. The average yield on total average loans including fees for 2018 was 5.09%, up by 20 basis points compared to the 4.88% yield during 2017.

Of the $110 million increase in average total deposit balances between the years ended December 31, 2018 and December 31, 2017, $51 million were non-interest-bearing deposits while $59 million were interest-bearing. The overall cost of average total deposit balances was up by 20 basis points to 0.55% during 2018 compared to 0.35% during 2017. Average borrowed funds declined by $12.1 million from $24.1 million in 2017 to $12.1 million during 2018, while their cost increased by 2.37% to 5.35% in 2018 compared to 2.98% in 2017.

As a result of the increase in higher cost interest-bearing balances on the funding side and the impact of the higher volume but lower return cash and cash equivalent balances to interest-earning assets, the net interest margin declined by 6 basis points to 4.09% during 2018, compared to 4.15% in 2017.

 

Non-Interest Income and Expense – three months ended December 31, 2018 and December 31, 2017

During the three months ended December 31, 2018, non-interest income totaled $862 thousand, an increase of $95 thousand, or 12% from the three month period ended December 31, 2017. The increase was primarily the result of higher commercial deposit account analysis fees, in addition to gains on loan and investment securities sales during the 2018 period, compared to 2017.

During the three months ended December 31, 2018, total non-interest expenses increased by $1.2 million, or 21% to $7.1 million compared to the same 2017 quarter. Of the increase, $551 thousand was in net salaries and benefits expenses, the result of hiring key lending and operational staff positions to support the Company’s continued growth. Occupancy and FF&E expense increased by $106 thousand or 16% to $773 thousand in the 2018 quarter as the Bank expanded into its new Walnut Creek, California location in the second half of 2017 and also expanded its Oakland, California space early in 2018. Other non-interest expenses increased by $584 thousand, or 35% to $2.3 million during the 2018 fourth quarter, primarily as a result of increased professional fees incurred during the period. Of the other fourth quarter non-interest expenses, $348 thousand were non-recurring and related to a strategic initiative.

 

Non-Interest Income and Expense – twelve months ended December 31, 2018 and December 31, 2017

During the twelve months ended December 31, 2018, non-interest income totaled $3.7 million, a $625 thousand, or 20% increase over the same period in 2017. This increase for the 2018 period was primarily the result of higher commercial deposit account analysis fees, gains on the sale of SBA loans and investment securities, and other loan fee income.

During the twelve months ended December 31, 2018, non-interest expenses increased by $5.4 million or 26% to $26.4 million compared to the same period in 2017. Of this increase, $3.2 million was in net salaries and benefits expenses, the result of hiring key executive, lending and operational staff positions to support the Company’s continued growth, a non-recurring expense for the CEO transition, and a decrease in deferred loan origination costs compared to the twelve-month period in 2017. Occupancy and FF&E expense increased by $460 thousand or 19% to $2.9 million in the 2018 period as the Bank expanded into its new Walnut Creek, California location in the second half of 2017 and also expanded its Oakland, California space early in 2018. Other non-interest expenses increased by $1.7 million, or 28% to $7.9 million during 2018 period, primarily as a result of increased operating expenses of $641 thousand at the Bank holding company (the holding company was formed at June 30, 2017), in addition to higher professional fees. Other non-interest expenses incurred during 2018 included non-recurring costs of $942 thousand related to various strategic initiatives.

 

Credit Quality

Credit quality remains strong, with non-performing assets (“NPAs”) to total assets at 0.54% at December 31, 2018, compared to 0.25% at December 31, 2017, with non-performing loans at $5.4 million and $2.2 million, respectively, on those dates.

The loan loss reserve was $10.8 million, or 1.28% of total loans at December 31, 2018, compared to $9.3 million, or 1.27% at December 31, 2017.

 

Closing Remarks

“We are pleased to have achieved record growth in 2018 supported by the additional capital raised mid-year 2018,” stated Chairman Stephen Cortese. “We continue to execute our strategy of quality organic growth and investment in commercial business bankers and infrastructure to create extraordinary value for our shareholders in the years ahead.”

Please see our detailed Fourth Quarter 2018 Unaudited Summary Financial Statements or visit our Investor Relations website for more information.

 

About California BanCorp

California BanCorp, the parent company for California Bank of Commerce, offers a broad range of commercial banking services to closely held businesses and professionals located throughout the San Francisco Bay Area. The stock trades on the OTCQX marketplace under the symbol CALB (formerly CABC). For more information on California BanCorp, call us at (510) 457-3751, or visit us at www.californiabankofcommerce.com.

California BanCorp
Steven E. Shelton, (510) 457-3751
President and Chief Executive Officer
seshelton@bankcbc.com

Randall D. Greenfield, (510) 457-3769
Senior EVP and Chief Financial Officer
rgreenfield@bankcbc.com

 

Source: California BanCorp

 

 

 

California BanCorp Financial Data as of December 31, 2018 (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ Thousands)

 

For the three months ended

 

Change %

 

Year ended

 

Change %

 

 

Income Statement

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

QoQ

 

YoY

 

12/31/2018

 

12/31/2017

 

YTDoYTD

 

 

Interest and fees on loans

 

$

  10,120

 

 

$

  9,839

 

 

$

  8,857

 

 

3

%

 

14

%

 

$

  38,443

 

 

$

  33,771

 

 

     14

%

 

 

Other interest income

 

 

  913

 

 

 

  756

 

 

 

  409

 

 

21

%

 

123

%

 

 

  2,496

 

 

 

  922

 

 

171

%

 

 

Total interest income

 

 

  11,033

 

 

 

  10,595

 

 

 

  9,266

 

 

4

%

 

19

%

 

 

  40,939

 

 

 

  34,693

 

 

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

  1,396

 

 

 

  1,205

 

 

 

  782

 

 

16

%

 

79

%

 

 

  4,461

 

 

 

  2,442

 

 

83

%

 

 

Interest on borrowings and subordinated debentures

 

 

  78

 

 

 

  151

 

 

 

  208

 

 

(48

%)

 

(63

%)

 

 

  645

 

 

 

  717

 

 

(10

%)

 

 

Total interest expense

 

 

  1,474

 

 

 

  1,356

 

 

 

  990

 

 

9

%

 

49

%

 

 

  5,106

 

 

 

  3,159

 

 

62

%

 

 

Net interest income

 

 

  9,559

 

 

 

  9,239

 

 

 

  8,276

 

 

3

%

 

16

%

 

 

  35,833

 

 

 

  31,534

 

 

14

%

 

 

Provision for loan loss

 

 

  591

 

 

 

  394

 

 

 

  284

 

 

50

%

 

108

%

 

 

  1,436

 

 

 

  2,394

 

 

(40

%)

 

 

Net interest income after provision

 

 

  8,968

 

 

 

  8,845

 

 

 

  7,992

 

 

1

%

 

12

%

 

 

  34,397

 

 

 

  29,140

 

 

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and other account fees

 

 

  292

 

 

 

  350

 

 

 

  244

 

 

(17

%)

 

20

%

 

 

  1,059

 

 

 

  900

 

 

18

%

 

 

Loan related fees

 

 

  291

 

 

 

  404

 

 

 

  303

 

 

(28

%)

 

(4

%)

 

 

  1,441

 

 

 

  1,277

 

 

13

%

 

 

Net gains on securities sales

 

 

  97

 

 

 

  –

 

 

 

  –

 

 

0

%

 

0

%

 

 

  97

 

 

 

  –

 

 

0

%

 

 

Net gains on loan sales

 

 

  135

 

 

 

  –

 

 

 

  58

 

 

0

%

 

133

%

 

 

  418

 

 

 

  258

 

 

62

%

 

 

Other

 

 

  47

 

 

 

  173

 

 

 

  161

 

 

(73

%)

 

(71

%)

 

 

  701

 

 

 

  656

 

 

7

%

 

 

Total non-interest income

 

 

  862

 

 

 

  927

 

 

 

  766

 

 

(7

%)

 

13

%

 

 

  3,716

 

 

 

  3,091

 

 

20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

  4,052

 

 

 

  3,692

 

 

 

  3,500

 

 

10

%

 

16

%

 

 

  15,573

 

 

 

  12,342

 

 

26

%

 

 

Occupancy and equipment expenses

 

 

  773

 

 

 

  736

 

 

 

  666

 

 

5

%

 

16

%

 

 

  2,918

 

 

 

  2,458

 

 

19

%

 

 

Data processing, internet and software

 

 

  424

 

 

 

  373

 

 

 

  334

 

 

14

%

 

27

%

 

 

  1,539

 

 

 

  1,457

 

 

6

%

 

 

Professional and legal

 

 

  437

 

 

 

  340

 

 

 

  138

 

 

29

%

 

217

%

 

 

  1,123

 

 

 

  718

 

 

56

%

 

 

M&A and strategic initiatives

 

 

  –

 

 

 

  –

 

 

 

  –

 

 

0

%

 

0

%

 

 

  514

 

 

 

  –

 

 

0

%

 

 

Other operating expenses

 

 

  1,405

 

 

 

  1,080

 

 

 

  1,210

 

 

30

%

 

16

%

 

 

  4,704

 

 

 

  3,970

 

 

18

%

 

 

Total operating expenses

 

 

  7,091

 

 

 

  6,221

 

 

 

  5,848

 

 

14

%

 

21

%

 

 

  26,371

 

 

 

  20,945

 

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before taxes

 

 

  2,739

 

 

 

  3,551

 

 

 

  2,910

 

 

(23

%)

 

(6

%)

 

 

  11,742

 

 

 

  11,286

 

 

4

%

 

 

Income taxes

 

 

  632

 

 

 

  1,037

 

 

 

  2,905

 

 

(39

%)

 

(78

%)

 

 

  3,029

 

 

 

  5,659

 

 

(46

%)

 

 

Net income

 

$

   2,107

 

 

$

   2,514

 

 

$

   5

 

 

(16

%)

 

N/A 

 

 

$

   8,713

 

 

$

   5,627

 

 

55

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

   0.26

 

 

$

   0.34

 

 

$

   0.00

 

 

(23

%)

 

N/A 

 

 

$

   1.22

 

 

$

   0.89

 

 

37

%

 

 

Diluted earnings per share

 

$

   0.26

 

 

$

   0.34

 

 

$

   0.00

 

 

(22

%)

 

N/A 

 

 

$

   1.19

 

 

$

   0.85

 

 

41

%

 

 

Average shares outstanding

 

 

  7,990,089

 

 

 

  7,361,383

 

 

 

  6,412,054

 

 

 

 

 

 

 

  7,120,986

 

 

 

  6,298,971

 

 

 

 

 

Average diluted shares

 

 

  8,103,041

 

 

 

  7,502,759

 

 

 

  6,723,598

 

 

 

 

 

 

 

  7,317,611

 

 

 

  6,642,508

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CORE EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months Ended

 

Change %

 

Year ended

 

Change %

 

 

Nonrecurring expense

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

QoQ

 

YoY

 

12/31/2018

 

12/31/2017

 

YTDoYTD

 

 

Strategic initiatives and CEO transition

 

$

  348

 

 

$

  80

 

 

$

  –

 

 

 

 

 

 

$

  1,328

 

 

$

  270

 

 

 

 

 

Total Nonrecurring expense

 

 

  348

 

 

 

  80

 

 

 

  –

 

 

 

 

 

 

 

  1,328

 

 

 

  270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

  103

 

 

 

  24

 

 

 

  –

 

 

 

 

 

 

 

  392

 

 

 

  80

 

 

 

 

 

2017 Tax Cuts and Jobs Acts

 

 

  –

 

 

 

  –

 

 

 

  (1,748

)

 

 

 

 

 

 

  –

 

 

 

  (1,748

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonrecurring expense (net of tax)

 

 

  245

 

 

 

  56

 

 

 

  1,748

 

 

 

 

 

 

 

  936

 

 

 

  1,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Net income

 

$

   2,352

 

 

$

   2,570

 

 

$

   1,753

 

 

(8

%)

 

34

%

 

$

   9,649

 

 

$

   7,565

 

 

28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic core earnings per share

 

 

  0.29

 

 

 

  0.35

 

 

 

  0.27

 

 

(16

%)

 

8

%

 

 

  1.36

 

 

 

  1.20

 

 

13

%

 

 

Diluted core earnings per share

 

 

  0.29

 

 

 

  0.34

 

 

 

  0.26

 

 

(15

%)

 

11

%

 

 

  1.32

 

 

 

  1.14

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core return on average assets

 

 

0.95

%

 

 

1.06

%

 

 

0.78

%

 

 

 

 

 

 

1.04

%

 

 

0.93

%

 

 

 

 

Core return on average tangible common equity

 

 

8.30

%

 

 

10.43

%

 

 

8.86

%

 

 

 

 

 

 

10.38

%

 

 

9.99

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months Ended

 

Change $

 

Change %

 

 

 

 

Average Balance Sheet Items

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

QoQ

 

YoY

 

QoQ

 

YoY

 

 

 

 

Total Assets

 

 

  982,992

 

 

 

  962,254

 

 

 

  888,403

 

 

  20,738

 

 

  94,589

 

 

 

2

%

 

 

11

%

 

 

 

 

Total Loans

 

 

  784,765

 

 

 

  758,399

 

 

 

  714,695

 

 

  26,366

 

 

  70,070

 

 

 

3

%

 

 

10

%

 

 

 

 

Investments

 

 

  52,836

 

 

 

  15,417

 

 

 

  13,377

 

 

  37,419

 

 

  39,459

 

 

 

243

%

 

 

295

%

 

 

 

 

Earning Assets

 

 

  926,331

 

 

 

  906,259

 

 

 

  832,326

 

 

  20,072

 

 

  94,005

 

 

 

2

%

 

 

11

%

 

 

 

 

Non-Interest Bearing Deposits

 

 

  358,016

 

 

 

  349,449

 

 

 

  318,955

 

 

  8,567

 

 

  39,061

 

 

 

2

%

 

 

12

%

 

 

 

 

Core Deposits

 

 

  760,220

 

 

 

  739,629

 

 

 

  672,317

 

 

  20,591

 

 

  87,903

 

 

 

3

%

 

 

13

%

 

 

 

 

Total Deposits

 

 

  854,165

 

 

 

  843,147

 

 

 

  781,715

 

 

  11,018

 

 

  72,450

 

 

 

1

%

 

 

9

%

 

 

 

 

Borrowings

 

 

  5,000

 

 

 

  10,954

 

 

 

  16,009

 

 

  (5,954

)

 

  (11,009

)

 

 

-54

%

 

 

-69

%

 

 

 

 

Tangible Common Equity

 

 

  112,450

 

 

 

  97,779

 

 

 

  78,527

 

 

  14,671

 

 

  33,923

 

 

 

15

%

 

 

43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended

 

Change

 

 

 

 

 

 

 

 

 

 

Average Balance Sheet Items

 

12/31/2018

 

12/31/2017

 

$

 

%

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

  929,028

 

 

 

  814,533

 

 

 

  114,495

 

 

14

%

 

 

 

 

 

 

 

 

 

 

Total Loans

 

 

  755,659

 

 

 

  691,520

 

 

 

  64,139

 

 

9

%

 

 

 

 

 

 

 

 

 

 

Investments

 

 

  23,378

 

 

 

  14,333

 

 

 

  9,045

 

 

63

%

 

 

 

 

 

 

 

 

 

 

Earning Assets

 

 

  876,288

 

 

 

  760,142

 

 

 

  116,146

 

 

15

%

 

 

 

 

 

 

 

 

 

 

Non-Interest Bearing Deposits

 

 

  333,075

 

 

 

  282,385

 

 

 

  50,690

 

 

18

%

 

 

 

 

 

 

 

 

 

 

Core Deposits

 

 

  711,928

 

 

 

  601,062

 

 

 

  110,866

 

 

18

%

 

 

 

 

 

 

 

 

 

 

Total Deposits

 

 

  814,930

 

 

 

  704,990

 

 

 

  109,940

 

 

16

%

 

 

 

 

 

 

 

 

 

 

Borrowings

 

 

  12,051

 

 

 

  24,134

 

 

 

  (12,083

)

 

(50

%)

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity

 

 

  92,963

 

 

 

  75,743

 

 

 

  17,220

 

 

23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At the periods ended

 

Change $

 

Change %

 

 

 

 

Balance Sheet

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

QoQ

 

YoY

 

QoQ

 

YoY

 

 

 

 

Cash and equivalents

 

 

  78,705

 

 

 

  92,224

 

 

 

  85,953

 

 

  (13,519

)

 

  (7,248

)

 

 

(15

%)

 

 

(8

%)

 

 

 

 

Investment securities

 

 

  43,415

 

 

 

  42,532

 

 

 

  13,002

 

 

  883

 

 

  30,413

 

 

 

2

%

 

 

234

%

 

 

 

 

Other investments

 

 

  3,536

 

 

 

  3,536

 

 

 

  3,199

 

 

  –

 

 

  337

 

 

 

0

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

  341,184

 

 

 

  329,539

 

 

 

  328,685

 

 

  11,645

 

 

  12,499

 

 

 

4

%

 

 

4

%

 

 

 

 

CRE loans

 

 

  451,851

 

 

 

  399,096

 

 

 

  345,810

 

 

  52,755

 

 

  106,041

 

 

 

13

%

 

 

31

%

 

 

 

 

Construction and land loans

 

 

  37,344

 

 

 

  40,207

 

 

 

  41,265

 

 

  (2,863

)

 

  (3,921

)

 

 

(7

%)

 

 

(10

%)

 

 

 

 

Other loans

 

 

  16,552

 

 

 

  16,270

 

 

 

  17,005

 

 

  282

 

 

  (453

)

 

 

2

%

 

 

(3

%)

 

 

 

 

Loans

 

 

  846,931

 

 

 

  785,112

 

 

 

  732,765

 

 

  61,819

 

 

  114,166

 

 

 

8

%

 

 

16

%

 

 

 

 

Allowance for loan losses

 

 

  10,800

 

 

 

  10,200

 

 

 

  9,300

 

 

  600

 

 

  1,500

 

 

 

6

%

 

 

16

%

 

 

 

 

Net loans

 

 

  836,131

 

 

 

  774,912

 

 

 

  723,465

 

 

  61,219

 

 

  112,666

 

 

 

8

%

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

 

  2,076

 

 

 

  2,253

 

 

 

  2,886

 

 

  (177

)

 

  (810

)

 

 

(8

%)

 

 

(28

%)

 

 

 

 

Bank owned life insurance

 

 

  17,806

 

 

 

  16,756

 

 

 

  16,433

 

 

  1,050

 

 

  1,373

 

 

 

6

%

 

 

8

%

 

 

 

 

Deferred income taxes, net

 

 

  5,803

 

 

 

  5,205

 

 

 

  4,437

 

 

  598

 

 

  1,366

 

 

 

11

%

 

 

31

%

 

 

 

 

Core Deposit Intangible

 

 

  286

 

 

 

  405

 

 

 

  447

 

 

  (119

)

 

  (161

)

 

 

(29

%)

 

 

(36

%)

 

 

 

 

Goodwill

 

 

  7,350

 

 

 

  7,350

 

 

 

  7,350

 

 

  –

 

 

  –

 

 

 

0

%

 

 

0

%

 

 

 

 

Other assets and interest receivable

 

 

  10,564

 

 

 

  9,435

 

 

 

  9,298

 

 

  1,129

 

 

  1,266

 

 

 

12

%

 

 

14

%

 

 

 

 

Total assets

 

 

  1,005,672

 

 

 

  954,608

 

 

 

  866,470

 

 

  51,064

 

 

  139,202

 

 

 

5

%

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

  352,402

 

 

 

  340,941

 

 

 

  314,516

 

 

  11,461

 

 

  37,886

 

 

 

3

%

 

 

12

%

 

 

 

 

Interest bearing demand deposits

 

 

  32,650

 

 

 

  24,054

 

 

 

  23,903

 

 

  8,596

 

 

  8,747

 

 

 

36

%

 

 

37

%

 

 

 

 

Money market & savings deposits

 

 

  392,290

 

 

 

  367,539

 

 

 

  325,601

 

 

  24,751

 

 

  66,689

 

 

 

7

%

 

 

20

%

 

 

 

 

Time deposits

 

 

  96,912

 

 

 

  93,855

 

 

 

  96,353

 

 

  3,057

 

 

  559

 

 

 

3

%

 

 

1

%

 

 

 

 

Total deposits

 

 

  874,254

 

 

 

  826,389

 

 

 

  760,373

 

 

  47,865

 

 

  113,881

 

 

 

6

%

 

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

 

  –

 

 

 

  –

 

 

 

  11,000

 

 

  –

 

 

  (11,000

)

 

N/A 

 

 

(100

%)

 

 

 

 

Subordinated debentures, net

 

 

  4,960

 

 

 

  4,956

 

 

 

  4,943

 

 

  4

 

 

  17

 

 

 

0

%

 

 

0

%

 

 

 

 

Other liabilities

 

 

  5,379

 

 

 

  5,036

 

 

 

  5,411

 

 

  343

 

 

  (32

)

 

 

7

%

 

 

(1

%)

 

 

 

 

Total liabilities

 

 

  884,593

 

 

 

  836,381

 

 

 

  781,727

 

 

  48,212

 

 

  102,866

 

 

 

6

%

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

  104,563

 

 

 

  104,062

 

 

 

  76,938

 

 

  501

 

 

  27,625

 

 

 

0

%

 

 

36

%

 

 

 

 

Retained earnings

 

 

  16,515

 

 

 

  14,407

 

 

 

  7,802

 

 

  2,108

 

 

  8,713

 

 

 

15

%

 

 

112

%

 

 

 

 

Other comprehensive income

 

 

  1

 

 

 

  (242

)

 

 

  3

 

 

  243

 

 

  (2

)

 

 

(100

%)

 

 

– 

 

 

 

 

 

Total shareholder’s equity

 

 

  121,079

 

 

 

  118,227

 

 

 

  84,743

 

 

  2,852

 

 

  36,336

 

 

 

2

%

 

 

43

%

 

 

 

 

Total liabilities and equity

 

 

  1,005,672

 

 

 

  954,608

 

 

 

  866,470

 

 

  51,064

 

 

  139,202

 

 

 

5

%

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per common share

 

 

  14.20

 

 

 

  13.87

 

 

 

  12.01

 

 

 

 

 

 

 

2

%

 

 

18

%

 

 

 

 

Total shares outstanding

 

 

  7,993,908

 

 

 

  7,974,856

 

 

 

  6,416,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core relationship deposits

 

 

  779,783

 

 

 

  734,837

 

 

 

  649,148

 

 

  44,946

 

 

  130,635

 

 

 

6

%

 

 

20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the twelve months ended

 

 

 

 

 

 

 

 

Performance Ratios

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

12/31/2018

 

12/31/2017

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.85

%

 

 

1.04

%

 

 

0.00

%

 

0.94

%

 

0.69

%

 

 

 

 

 

 

 

 

Return on average tangible common equity

 

 

7.43

%

 

 

10.20

%

 

 

0.03

%

 

9.37

%

 

7.43

%

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

68.05

%

 

 

61.19

%

 

 

64.68

%

 

66.68

%

 

60.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

4.09

%

 

 

4.05

%

 

 

3.95

%

 

4.09

%

 

4.15

%

 

 

 

 

 

 

 

 

Average investment yield

 

 

3.08

%

 

 

2.41

%

 

 

1.95

%

 

2.72

%

 

1.92

%

 

 

 

 

 

 

 

 

Average loan yield

 

 

5.12

%

 

 

5.15

%

 

 

4.91

%

 

5.09

%

 

4.88

%

 

 

 

 

 

 

 

 

Average total deposit rate

 

 

0.65

%

 

 

0.57

%

 

 

0.40

%

 

0.55

%

 

0.35

%

 

 

 

 

 

 

 

 

Average borrowing rate

 

 

6.17

%

 

 

5.13

%

 

 

5.17

%

 

5.35

%

 

2.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total loans to total deposits

 

 

91.9

%

 

 

89.9

%

 

 

91.4

%

 

92.7

%

 

98.1

%

 

 

 

 

 

 

 

 

Average C&I loans to total loans

 

 

40.9

%

 

 

42.6

%

 

 

43.5

%

 

43.0

%

 

41.9

%

 

 

 

 

 

 

 

 

Average non-interest bearing deposits to total deposits

 

41.9

%

 

 

41.4

%

 

 

40.8

%

 

40.9

%

 

40.1

%

 

 

 

 

 

 

 

 

Average core deposits to total deposits

 

 

89.0

%

 

 

87.7

%

 

 

86.0

%

 

87.4

%

 

85.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At the periods ended

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios – Bank

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

11.31

%

 

 

11.26

%

 

 

9.92

%

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio

 

 

10.94

%

 

 

11.61

%

 

 

10.09

%

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 risk-based capital ratio

 

 

10.94

%

 

 

11.61

%

 

 

10.09

%

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

 

12.52

%

 

 

13.27

%

 

 

11.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At the periods ended

 

 

 

 

 

 

 

 

 

 

 

 

Non-Performing Assets

 

12/31/2018

 

9/30/2018

 

12/31/2017

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accrual Loans

 

$

  4,463

 

 

$

  1,754

 

 

$

  484

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructured Loans

 

 

  930

 

 

 

  969

 

 

 

  1,713

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing loans (NPL)

 

 

  5,393

 

 

 

  2,723

 

 

 

  2,197

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Real Estate Owned

 

 

  –

 

 

 

  –

 

 

 

  –

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing assets (NPA)

 

$

  5,393

 

 

$

  2,723

 

 

$

  2,197

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Net (Charge-offs)/Recoveries

 

$

  9

 

 

$

  6

 

 

$

  16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NPAs / Assets %

 

 

0.54

%

 

 

0.29

%

 

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

 

NPAs / Loans and OREO %

 

 

0.64

%

 

 

0.35

%

 

 

0.30

%

 

 

 

 

 

 

 

 

 

 

 

 

Loan Loss Reserves / Loans (%)

 

 

1.28

%

 

 

1.30

%

 

 

1.27

%

 

 

 

 

 

 

 

 

 

 

 

 

Loan Loss Reserves / NPLs (%)

 

 

200

%

 

 

375

%

 

 

423

%