News

Apr 26, 2017

California Bank of Commerce

Reports Profits Increased 78% to $1.7 Million, or $0.285 per Share in Q1-2017

Robust Loan Growth, Strong Asset Quality and Healthy Margin Fuel Profitability

Company Release - 4/26/2017

LAFAYETTE, California -- (Globe Newswire) -- California Bank of Commerce (OTCQX: CABC), a San Francisco Bay Area business bank, today reported near record profits in the first quarter of 2017.  Earnings grew 78% to $1.7 million from $943,000 in the first quarter of 2016.  Profitability was fueled by robust loan growth, continuing strong credit quality, above average net interest margin, and improving operating efficiencies.  Return on average assets (ROAA) improved to 0.91% and return on average tangible common equity (ROTCE) was 9.66% in the first quarter of 2017.  All financial results are unaudited.

“Our first quarter profits were the second-best results achieved in our history, coming in just below record earnings of $1.8 million generated in the fourth quarter of 2016,” said Terry A. Peterson, President and CEO.  “The  San Francisco Bay Area continues to be one of the nation’s most vibrant economies.   The very experienced bankers on our Team continue to drive our exceptional growth and financial performance.”

Financial Highlights

First Quarter 2017 vs. Fourth Quarter 2016 and First Quarter of 2016

  • Net income grew 78% to $1.7 million, or $0.285 per share compared to $943,000, or $0.170 per share in the year ago quarter and decreased from the record $1.8 million, or $0.304 per share, earned in the preceding quarter. 
  • Pretax merger related costs did not impact 1Q-17 net income, but reduced 4Q-16 pre-tax income by $66,000 and 1Q-16 by $248,000.
  • ROAA improved to 0.91% and ROTCE was 9.66% in the first quarter of 2017.
  • Net interest margin was 4.26%, up 32 basis points from 3.94% in the preceding quarter and down 13 basis points from 4.39% in the year prior quarter.  “Our deposit flow is seasonal, which impacts our loan to deposit ratio and net interest margin during the first half of the year,” added Peterson.
  • The efficiency ratio, which measures operating expenses as a percent of revenue, improved significantly to 59.46% from 73.35% in the first quarter a year ago, and was marginally higher than the 58.33% generated in the preceding quarter.
  • The ratio of net operating expense to average assets improved to 2.17% from 2.84% a year ago.
  • Total assets grew 20% to $762.9 million at quarter-end compared to $636.9 million a year ago, an increase of $126 million.
  • Total loans, net of deferred costs, grew 27% to $677.2 million from to $531.6 million a year ago, an increase of $145.6 million.
  • Total deposits grew 27% to $667.3 million as of March 31, 2017, an increase of $140.6 million, compared to $526.8 million a year ago. 
  • Non-interest bearing deposits increased to $288.2 million, up 47% from a year ago, an increase of $92.4 million.
  • Tangible book value per common share increased 11% to $12.04 as of March 31, 2017, compared to $10.89 a year ago.

Peer Comparisons

“Our performance metrics continue to improve and compare favorably with the 564 banks included in the SNL Micro Cap Bank Index on almost every measurable value,” said Peterson. 

 

PERFORMANCE RATIOS:

CABC

SNL US Micro Cap Bank Index*

1Q17

4Q16

Return on average assets

0.91%

0.80%

 

Return on average equity

8.71%

8.19%

 

Net interest margin

4.26%

3.60%

 

Efficiency ratio

59.46%

69.16%

 

Net operating expense/average assets

2.17%

2.08%

 

Nonperforming loans/loans

0.31%

1.41%

 

Allowance for loan losses/loans

1.20%

1.24%

 

Allowance for loan losses/NPAs

388%

69%

 

 

 

 

 

 

 

* SNL Micro Cap U.S. Bank : Includes all publicly traded (NYSE, NYSE MKT, NASDAQ, OTC) Banks in SNL's coverage universe with less than $250M Total Common Market Capitalization as of most recent pricing data.

Credit Quality

Credit quality remains strong, with non-performing assets to total assets improving to 0.27% at March 31, 2017, compared to 0.35% at March 31, 2016. The loan loss reserve was $8.1 million at March 31, 2017, increasing by $575,000 for the quarter, and $1.9 million over the prior year quarter-end. The ratio of the reserve to total loans was 1.20% on March 31, 2017, up from 1.17% at March 31, 2016.  “We continue to build reserves to support the strong loan growth we are generating,” said Randall Greenfield, Chief Financial Officer. 

“The middle market businesses in the San Francisco Bay Area appreciate our ability to provide customized commercial lending and treasury management solutions,” said Stephen Cortese, Chairman of the Board for California Bank of Commerce.  “The investments we made in the past several years in experienced bankers and infrastructure continue to build momentum and accelerate our profitability.” 

Please see our detailed first quarter 2017 Unaudited Summary Financial Statements for more information.


About California Bank of Commerce

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 CABC. For more information on California Bank of Commerce, call us at (510) 457-3751, or visit us at www.californiabankofcommerce.com.

 

California Bank of Commerce
Terry A. Peterson, (510) 457-3751
President and CEO
tpeterson@bankcbc.com

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

Source: California Bank of Commerce

 

 



Note: Transmitted on Globe Newswire on April 26, 2017 at 6:00 a.m. PDT.

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