Bank of Commerce Holdings Announces Results for the Second Quarter of 2019

Published

SACRAMENTO, Calif., July 19, 2019 (GLOBE NEWSWIRE) -- Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.442 billion asset bank holding company and parent company of Merchants Bank of Commerce (the “Bank”), today announced financial results for the quarter ended June 30, 2019. Net income for the quarter ended June 30, 2019 was $3.6 million or $0.20 per share – diluted, compared with net income of $3.6 million or $0.22 per share – diluted for the same period of 2018. Net income for the six months ended June 30, 2019 was $6.0 million or $0.33 per share – diluted, compared with net income of $6.9 million or $0.42 per share – diluted for the same period of 2018. The current year includes the benefits of our January 31, 2019 acquisition of Merchants National Bank of Sacramento (“Merchants”). In May, we successfully converted all of Merchant’s computer records onto our core system. As previously announced, the Company’s subsidiary bank, which had been operating under multiple names, simultaneously changed the name for all locations to Merchants Bank of Commerce. To date, acquisition related costs have totaled $2.3 million and costs related to the name change have totaled $464 thousand. All significant costs for these two projects have now been absorbed. Randall S. Eslick, President and CEO commented: “I am very pleased with our second quarter accomplishments which are the result of the hard work of our dedicated and talented employees. The changes made during the second quarter reflect the continued execution of our strategic plan. I am particularly excited that with the successful integration of Merchant’s data systems along with our name change, we now operate our bank under one name and one computer system. These changes will lead to greater efficiencies and reinforce a consistent message throughout our company.” Financial highlights for the second quarter of 2019: Net income of $3.6 million was an increase of $26 thousand (1%) from $3.6 million earned during the same period in the prior year. Earnings of $0.20 per share – diluted was a decrease of $0.02 (9%) from $0.22 per share – diluted earned during the same period in the prior year and reflects the impact of 1,834,142 shares of common stock issued during the first quarter of 2019 as part of our acquisition of Merchants.Acquisition costs associated with our acquisition of Merchants totaled $376 thousand. Costs related to the name change of our subsidiary bank totaled $464 thousand.Net interest income increased $1.9 million (17%) to $13.5 million compared to $11.6 million for the same period in the prior year.Return on average assets decreased to 1.01% compared to 1.14% for the same period in the prior year.Return on average equity decreased to 8.93% compared to 11.32% for the same period in the prior year.Average loans totaled $1.028 billion, an increase of $106 million (11%) compared to average loans for the same period in the prior year.Average earning assets totaled $1.353 billion, an increase of $145 million (12%) compared to average earning assets for the same period in the prior year.Average deposits totaled $1.218 billion, an increase of $163 million (15%) compared to average deposits for the same period in the prior year.-Average non-maturing deposits totaled $1.054 billion, an increase of $170 million (19%) compared to the same period in the prior year.-Average certificates of deposit totaled $164.1 million, a decrease of $6.7 million (4%) compared to same period in the prior year.The Company’s efficiency ratio was 65.9% compared to 61.2% during the same period in the prior year.-The Company’s efficiency ratio of 65.9% for the second quarter of 2019 includes $376 thousand in acquisition costs and $464 thousand in name change costs. The efficiency ratio excluding these non-recurring costs was 60.1%.Nonperforming assets at June 30, 2019 totaled $13.5 million or 0.94% of total assets, an increase of $9.1 million since June 30, 2018. The increase in nonperforming assets results from one $10.3 million commercial real estate loan.Book value per common share was $9.22 at June 30, 2019 compared to $7.97 at June 30, 2018.Tangible book value per common share was $8.29 at June 30, 2019 compared to $7.85 at June 30, 2018. Financial highlights for the six months ended June 30, 2019: Net income of $6.0 million ($0.33 per share – diluted) was a decrease of $909 thousand (13%) from $6.9 million ($0.42 per share – diluted) earned during the same period in the prior year.Acquisition costs associated with our acquisition of Merchants totaled $2.3 million. Costs related to the name change of our subsidiary bank totaled $464 thousand.Net interest income increased $3.6 million (16%) to $26.5 million compared to $22.9 million for the same period in the prior year.Return on average assets decreased to 0.83% compared to 1.10% for the same period in the prior year.Return on average equity decreased to 7.59% compared to 10.84% for the same period in the prior year.Average loans totaled $1.011 billion, an increase of $107 million (12%) compared to average loans for the same period in the prior year.Average earning assets totaled $1.345 billion, an increase of $150 million (13%) compared the same period in the prior year.Average deposits totaled $1.221 billion, an increase of $158 million (15%) compared the same period in the prior year.-Average non-maturing deposits totaled $1.055 billion, an increase of $169 million (19%) compared to the same period in the prior year.-Average certificates of deposit totaled $165.8 million, a decrease of $10.6 million (6%) compared to the same period in the prior year.The Company’s efficiency ratio was 71.7% compared to 63.1% for the same period in the prior year.-The Company’s efficiency ratio of 71.7% for the first six months of 2019 includes $2.3 million in acquisition costs and $464 thousand in name change costs. The efficiency ratio excluding these non-recurring costs was 62.0%.Nonperforming assets at June 30, 2019 totaled $13.5 million or 0.94% of total assets, an increase of $9.3 million since December 31, 2018. The increase in nonperforming assets results from one $10.3 million commercial real estate loan.Book value per common share was $9.22 at June 30, 2019 compared to $8.47 at December 31, 2018.Tangible book value per common share was $8.29 at June 30, 2019 compared to $8.36 at December 31, 2018. Forward-Looking Statements Bank of Commerce Holdings wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. This news release includes statements by the Company, which describe management’s expectations and developments, which may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21B of the Securities Act of 1934, as amended. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in the Company's public filings, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are less favorable than expected or have a more direct and pronounced effect on the Company than expected and adversely affect the Company's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new banks and/or branches are lower than expected; (4) our concentration in lending tied to real estate exposes us to the adverse effects of material increases in interest rates, declines in the general economy, tightening credit markets or declines in real estate values; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which the Company is engaged; and (7) technological changes could expose us to new risks.                                         TABLE 1 SELECTED FINANCIAL INFORMATION - UNAUDITED (amounts in thousands except per share data)                       For The Three Months Ended For The Six Months Ended Net income, average assets and June 30,   March 31, June 30,  average shareholders' equity 2019  2018  2019 2019 2018 Net income $3,644  $3,618  $2,306  $5,950 $6,859 Average total assets $1,450,725  $1,276,697  $1,425,860  $1,438,361 $1,262,710 Average total earning assets $1,353,200  $1,208,281  $1,337,006  $1,345,177 $1,195,154 Average shareholders' equity $163,598  $128,181  $152,705  $158,182 $127,628                     Selected performance ratios                   Return on average assets  1.01%  1.14%  0.66%  0.83% 1.10%Return on average equity  8.93%  11.32%  6.12%  7.59% 10.84%Efficiency ratio  65.9%  61.2%  77.7%  71.7% 63.1%                    Share and per share amounts                   Weighted average shares - basic (1)  18,134   16,245   17,489   17,816  16,237 Weighted average shares - diluted (1)  18,194   16,325   17,552   17,878  16,319 Earnings per share - basic $0.20  $0.22  $0.13  $0.33 $0.42 Earnings per share - diluted $0.20  $0.22  $0.13  $0.33 $0.42                       At June 30,   At March 31,   Share and per share amounts 2019  2018  2019     Common shares outstanding (2)  18,214   16,318   18,213        Book value per common share (2) $9.22  $7.97  $8.90        Tangible book value per common share (2)(3) $8.29  $7.85  $7.96                            Capital ratios (4)                  Bank of Commerce Holdings                  Common equity tier 1 capital ratio  12.56%  12.15%  12.40%       Tier 1 capital ratio  13.41%  13.07%  13.25%       Total capital ratio  15.35%  15.20%  15.19%       Tier 1 leverage ratio  11.08%  11.07%  11.05%       Tangible common equity ratio (5)  10.59%  10.02%  9.97%                           Merchants Bank of Commerce                   Common equity tier 1 capital ratio  14.06%  12.51%  13.98%       Tier 1 capital ratio  14.06%  12.51%  13.98%       Total capital ratio  15.16%  13.72%  15.08%       Tier 1 leverage ratio  11.61%  10.60%  11.66%                           (1) Excludes unvested restricted shares issued in accordance with the Company's equity incentive plan, as they are non participative in dividends or voting rights.(2) Includes unvested restricted shares issued in accordance with the Company's equity incentive plan.(3) Book value per share is computed by dividing total shareholders’ equity by shares outstanding. Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.(4) The Company and the Bank continue to meet all capital adequacy requirements to which they are subject.(5) Management believes the tangible common equity ratio is a useful measure of capital adequacy because it provides a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability of the Company to absorb potential losses. The tangible common equity ratio is calculated as total shareholders' equity less goodwill and core deposit intangible, net divided by total assets less goodwill and core deposit intangible, net. BALANCE SHEET OVERVIEW As of June 30, 2019, the Company had total consolidated assets of $1.442 billion, gross loans of $1.037 billion, allowance for loan and lease losses (“ALLL”) of $12 million, total deposits of $1.236 billion, and shareholders’ equity of $168 million.                                                 TABLE 2LOAN BALANCES BY TYPE - UNAUDITED(amounts in thousands)                         At June 30,       At March 31,   % of    % of  Change   % of  2019  Total 2018  Total Amount % 2019  TotalCommercial$152,303  15% $139,670  15% $12,633  9 % $149,575  14%Real estate - construction and land development 37,685  4   21,292  2   16,393  77 %  30,335  3 Real estate - commercial non-owner occupied 468,706  45   427,088  46   41,618  10 %  469,048  46 Real estate - commercial owner occupied 210,711  21   199,412  21   11,299  6 %  209,099  20 Real estate - residential - ITIN 35,162  3   39,424  4   (4,262) (11)%  36,145  3 Real estate - residential - 1-4 family mortgage 67,092  6   33,391  4   33,701  101 %  68,092  7 Real estate - residential - equity lines 23,656  2   28,879  3   (5,223) (18)%  26,162  3 Consumer and other 41,409  4   47,660  5   (6,251) (13)%  46,150  4 Gross loans 1,036,724  100%  936,816  100%  99,908  11 %  1,034,606  100%Deferred fees and costs 2,005      1,763      242      1,992    Loans, net of deferred fees and costs 1,038,729      938,579      100,150      1,036,598    Allowance for loan and lease losses (12,445)     (12,388)     (57)     (12,242)   Net loans$1,026,284     $926,191     $100,093     $1,024,356                            Average loans$1,028,187     $922,687     $105,500  11 % $993,261    Average yield on loans during the quarter 5.01%     4.85%     0.16      4.91%   Average yield on loans during the year 4.96%     4.89%     0.07      4.91%    The Company recorded gross loan balances of $1.037 billion at June 30, 2019, compared with $937 million and $1.035 billion at June 30, 2018 and March 31, 2019, respectively, an increase of $100 million and $2 million, respectively. During the first quarter of 2019, Merchants Holding Company acquisition provided an additional $85.3 million of loans. At June 30, 2019, gross loans from the acquisition totaled $83.4 million. The average yield on loans during the quarter was 5.01% compared to 4.85% and 4.91% for the quarters ended June 30, 2018 and March 31, 2019, respectively. During the first quarter of 2019, a $10.3 million commercial real estate loan was placed on nonaccrual status. The uncollected interest on the loan was reversed which reduced our average yield on loans by 5 basis points. During the second quarter of 2019, we received a loan prepayment penalty that increased the average yield by 5 basis points. Gross loan balances in the table above include a fair value discount for loans acquired from Merchants during the first quarter of 2019 of $2.0 million and $2.2 million at June 30, 2019 and March 31, 2019, respectively. We recorded $48 thousand and $195 thousand in accretion of the discount for these loans during the first and second quarters of 2019, respectively.                                                   TABLE 3CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED(amounts in thousands)                           At June 30,        At March 31,    % of    % of  Change   % of   2019  Total 2018  Total Amount % 2019  TotalCash and due from banks $21,306  7% $23,996  8% $(2,690) (11)% $32,104  9%Interest-bearing deposits in other banks  19,319  6   15,690  5   3,629  23 %  30,425  9 Total cash and cash equivalents  40,625  13   39,686  13   939  2 %  62,529  18                          Investment securities:                        U.S. government and agencies  44,837  14   38,994  14   5,843  15 %  46,451  13 Obligations of state and political subdivisions  45,003  14   58,479  20   (13,476) (23)%  48,935  14 Residential mortgage backed securities and collateralized mortgage obligations  168,085  50   121,218  43   46,867  39 %  171,814  47 Corporate securities  2,978  1   3,987  1   (1,009) (25)%  2,958  1 Commercial mortgage backed securities  24,868  8   24,742  9   126  1 %  23,864  7 Other asset backed securities  48  —   219  0   (171) (78)%  95  — Total investment securities - AFS  285,819  87   247,639  87   38,180  15 %  294,117  82                          Total cash, cash equivalents and investment securities $326,444  100% $287,325  100% $39,119  14 % $356,646  100%Average yield on interest-bearing due from banks and investment securities during the quarter - nominal  2.81%     2.56%     0.25      2.83%   Average yield on interest-bearing due from banks and investment securities during the quarter - tax equivalent  2.92%     2.72%     0.20      2.95%    As of June 30, 2019, we maintained noninterest-bearing cash positions of $21.3 million and interest-bearing deposits of $19.3 million at the Federal Reserve Bank and correspondent banks. Investment securities totaled $285.8 million at June 30, 2019, compared with $247.6 million and $294.1 million at June 30, 2018 and March 31, 2019, respectively. During the first quarter of 2019, the Merchants acquisition included securities with a par value of $107.4 million. Management elected to sell securities with a par value of $67.8 million and $18.5 million during the first and second quarters of 2019, respectively. The sales resulted in net realized gains of $92 thousand and $33 thousand for the first and second quarters of 2019, respectively. Average securities balances and weighted average tax equivalent yields for the quarters ended June 30, 2019 and 2018 were $289.4 million and 2.98% compared to $256.6 million and 2.82%, respectively. At June 30, 2019, our net unrealized gains on available-for-sale investment securities were $3.4 million compared with net unrealized losses of $4.9 million and $701 thousand at June 30, 2018 and March 31, 2019, respectively. The changes in net unrealized losses on the investment securities portfolio were due to changes in market interest rates.                                                 TABLE 4DEPOSITS BY TYPE - UNAUDITED(amounts in thousands)                         At June 30,        At March 31,   % of    % of   Change   % of  2019 Total 2018 Total Amount % 2019 TotalDemand - noninterest-bearing$397,349 32% $316,347 30% $81,002  26 % $385,696 31%Demand - interest-bearing 238,175 19   217,674 21   20,501  9 %  241,292 19 Money market 300,847 24   247,413 23   53,434  22 %  311,853 25 Total demand 936,371 75   781,434 74   154,937  20 %  938,841 75                         Savings 138,591 11   106,170 10   32,421  31 %  139,237 11 Total non-maturing deposits 1,074,962 86   887,604 84   187,358  21 %  1,078,078 86                         Certificates of deposit 160,556 14   166,925 16   (6,369) (4)%  170,216 14 Total deposits$1,235,518 100% $1,054,529 100% $180,989  17 % $1,248,294 100%                         Total deposits at June 30, 2019, increased $181 million or 17% to $1.236 billion compared to June 30, 2018 and decreased $13 million or 4% annualized compared to March 31, 2019. Total non-maturing deposits increased $187.4 million or 21% compared to the same date a year ago and decreased $3.2 million or less than 1% annualized compared to March 31, 2019. Certificates of deposit decreased $6.4 million or 4% compared to the same date a year ago and decreased $9.7 million or 23% annualized compared to March 31, 2019. During the first quarter of 2019, Merchants Holding Company acquisition provided an additional $190.2 million of deposits. The decrease in the acquired deposits of $16.5 million at June 30, 2019 is not attributable to the loss of any significant relationships. As illustrated in the following table, legacy deposits have experienced their seasonal decline, while wholesale time deposits have matured and were not renewed.                               TABLE 5YEAR TO DATE CHANGES IN DEPOSITS(amounts in thousands)     Change In Acquired Change In Legacy     Acquired Deposits For The Five Deposits For The Six   Legacy Deposits Merchants Deposits Months Ended Months Ended Deposits At At December 31, At January 31, June 30,  June 30,  At June 30,  2018 2019 2019 2019 2019Demand - noninterest-bearing$347,199 $51,880 $(2,777) $1,047  $397,349Demand - interest-bearing 252,202  28,231  (5,695)  (36,563)  238,175Money market 265,093  43,316  (1,805)  (5,757)  300,847Total demand 864,494  123,427  (10,277)  (41,273)  936,371               Savings 114,840  28,786  (1,998)  (3,037)  138,591Total non-maturing deposits 979,334  152,213  (12,275)  (44,310)  1,074,962               Certificates of deposit 152,382  38,003  (4,174)  (25,655)  160,556Total deposits$1,131,716 $190,216 $(16,449) $(69,965) $1,235,518                   TABLE 6WHOLESALE AND RECIPROCAL DEPOSITS - UNAUDITED(amounts in thousands)          At June 30,  At March 31, 2019 2018 2019CDARS / ICS reciprocal deposits$60,492 $60,538 $65,192Online listing service wholesale time deposits 248  25,491  1,683Total wholesale and reciprocal deposits$60,740 $86,029 $66,875 For calendar quarters prior to April 1, 2018, CDARS/ ICS reciprocal deposits were considered to be brokered deposits by regulatory authorities and were reported as such on quarterly Call Reports. With passage of The Economic Growth, Regulatory Relief and Consumer Protection Act in May 2018, this is no longer so. AVERAGE COST OF FUNDS The following table presents the average cost of interest-bearing deposits, all deposits and all interest-bearing liabilities for the periods indicated.                                                                 TABLE 7AVERAGE COST OF FUNDS - UNAUDITEDFor The Three Months Ended                                 June 30,  March 31, December 31, September 30, June 30,  March 31, December 31, September 30, 2019 2019 2018 2018 2018 2018 2017 2017Interest-bearing deposits 0.54%  0.49%  0.45%  0.42%  0.41%  0.41%  0.42%  0.43%Interest-bearing deposits andnoninterest-bearing demand 0.37%  0.34%  0.31%  0.29%  0.29%  0.29%  0.30%  0.31%All interest-bearing liabilities 0.74%  0.67%  0.61%  0.64%  0.68%  0.60%  0.59%  0.60%All interest-bearing liabilities andnoninterest-bearing demand 0.52%  0.46%  0.42%  0.45%  0.50%  0.43%  0.42%  0.43% INCOME STATEMENT OVERVIEW                                           TABLE 8SUMMARY INCOME STATEMENT - UNAUDITED(amounts in thousands, except per share data)                     For The Three Months Ended June 30,  Change March 31, Change 2019 2018 Amount % 2019 Amount %Interest income$15,127 $12,990 $2,137  16 % $14,427 $700  5 %Interest expense 1,632  1,410  222  16 %  1,423  209  15 %Net interest income 13,495  11,580  1,915  17 %  13,004  491  4 %Provision for loan and lease losses —  —  —  — %  —  —  — %Noninterest income 1,100  962  138  14 %  1,057  43  4 %Noninterest expense 9,611  7,671  1,940  25 %  10,923  (1,312) (12)%Income before provision for income taxes 4,984  4,871  113  2 %  3,138  1,846  59 %Provision for income taxes 1,340  1,253  87  7 %  832  508  61 %Net income$3,644 $3,618 $26  1 % $2,306 $1,338  58 %                     Basic earnings per share$0.20 $0.22 $(0.02) (9)% $0.13 $0.07  54 %Average basic shares 18,134  16,245  1,889  12 %  17,489  645  4 %Diluted earnings per share$0.20 $0.22 $(0.02) (9)% $0.13 $0.07  54 %Average diluted shares 18,194  16,325  1,869  11 %  17,552  642  4 %Dividends declared per common share$0.05 $0.04 $0.01  25 % $0.04 $0.01  25 % Second Quarter of 2019 Compared With Second Quarter of 2018 Net income for the second quarter of 2019 increased $26 thousand compared to the second quarter of 2018. In the current quarter, net interest income was $1.9 million higher and noninterest income was $138 thousand higher. These positive changes were offset by noninterest expenses that were $1.9 million higher and the provision for income taxes was $87 thousand higher. Net Interest Income Net interest income increased $1.9 million compared to the same period a year ago. Interest income for the second quarter of 2019 increased $2.1 million or 16% to $15.1 million. Interest and fees on loans increased $1.7 million due to a $105.5 million increase in average loan balances and a 16 basis point increase in the average yield on the loan portfolio.Interest on securities increased $370 thousand due to a $32.9 million increase in average securities balances and a 21 basis point increase in average yield on the securities portfolio.Interest on interest-bearing deposits due from banks increased $84 thousand due to a $6.6 million increase in average interest-bearing deposit balances, and a 60 basis point increase in average yield. Interest expense for the second quarter of 2019 increased $222 thousand or 16% to $1.6 million. Interest expense on interest bearing deposits increased $362 thousand. Average interest-bearing demand and savings deposit balances increased $99.7 million, while average certificate of deposit balances decreased $6.7 million. The average rate paid on interest-bearing deposits increased 13 basis points.Interest expense on borrowings from the Federal Home Loan Bank of San Francisco decreased $75 thousand. Average Federal Home Loan Bank of San Francisco borrowings outstanding in the current quarter were $30.0 million compared to $55.3 million in the same quarter a year ago.Interest expense on other term debt and junior subordinated debentures decreased $65 thousand. During the current quarter, we completed the early repayment of our variable rate senior debt. Provision for loan and lease losses As illustrated in Table 10, the nonaccrual status of a $10.3 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, net loan loss recoveries totaled $203 thousand for the current quarter and no provision for loan and lease losses was necessary. There was no provision for loan and lease losses in the second quarter of 2018. Noninterest Income Noninterest income for the three months ended June 30, 2019 increased $138 thousand compared to the second quarter for 2018. Gains on sale of investment securities increased $29 thousand and dividends on Federal Home Loan Bank of San Francisco stock increased $29 thousand. Noninterest Expense Noninterest expense for the three months ended June 30, 2019 increased $1.9 million compared to the same period a year previous, which included: $464 thousand in costs related to the name change.$376 thousand in acquisition costs.$739 thousand increase in operating expenses from the Merchants acquisition. The Company’s efficiency ratio was 65.9% for the second quarter of 2019 (60.1% (non-GAAP) exclusive of non-recurring acquisition and name change costs). The ratio during the same period in 2018 was 61.2%. Management believes the efficiency ratio exclusive of non-recurring acquisition and name change cost is a useful measure because it provides more meaningful period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the Company’s performance. Income Tax Provision For the three months ended June 30, 2019, our income tax provision of $1.3 million on pre-tax income of $5.0 million was an effective tax rate of 26.9%. The tax provision for the second quarter of the prior year was $1.3 million on pre-tax income of $4.9 million for an effective tax rate of 25.7%. The current quarter includes $28 thousand, of acquisition costs which are not tax deductible. Second Quarter of 2019 Compared With First Quarter of 2019 Net income for the second quarter of 2019 increased $1.3 million compared to the first quarter of 2019. In the current quarter, net interest income was $491 thousand higher, noninterest income was $43 thousand higher and noninterest expense was $1.3 million lower. These positive changes were offset by the provision for income taxes that was $508 thousand higher. Net Interest Income Net interest income increased $491 thousand over the prior quarter. The second quarter includes three months of income and expense associated with the January 31, 2019 acquisition of Merchants. The first quarter includes two months. Interest income for the three months ended June 30, 2019 increased $700 thousand or 5% to $15.1 million. Interest and fees on loans increased $816 thousand due to a $34.9 million increase in average loan balances and a ten basis point increase in the average yield on the loan portfolio.Interest on investment securities decreased $90 thousand due to a $14.1 million decrease in average securities balances partially offset by a 27 basis point increase in average yield on the investment portfolio.Interest on interest-bearing deposits due from banks decreased $26 thousand due to a $4.6 million decrease in average balances. Interest expense for the three months ended June 30, 2019 increased $209 thousand or 15% to $1.6 million. Interest expense on deposits increased $113 thousand as average interest-bearing demand and savings deposits increased $6.6 million, average certificates of deposit decreased $3.4 million and the average rate paid on these deposits increased by five basis points.Interest expense on borrowings from the Federal Home Loan Bank of San Francisco increased $137 thousand. Average Federal Home Loan Bank of San Francisco borrowings outstanding in the current quarter were $30.0 million, compared to $8.8 million in the prior quarterInterest expense on other term debt and junior subordinated debentures decreased $41 thousand. During the second quarter of 2019 we completed the early repayment and termination of our senior debt agreement. Provision for loan and lease losses As illustrated in Table 10, the nonaccrual status of a $10.3 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, net loan loss recoveries totaled $203 thousand for the current quarter and no provision for loan and lease losses was necessary. There was no provision for loan and lease losses in the first quarter of 2019. Noninterest Income Noninterest income for the three months ended June 30, 2019 increased $43 thousand, the increase was not concentrated in any one item. Noninterest Expense Noninterest expense for the three months ended June 30, 2019 decreased $1.3 million. The decrease was due to a $1.6 million decrease in acquisition costs partially offset by $464 thousand increase in name change costs. The Company’s efficiency ratio was 65.9% for the second quarter of 2019 (60.1% (non-GAAP) exclusive of non-recurring acquisition and name change costs). The ratio during the prior quarter was 77.7% (64.0% exclusive of acquisition costs). Management believes the efficiency ratio exclusive of non-recurring acquisition and name change cost is a useful measure because it provides more meaningful period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the Company’s performance. Income Tax Provision For the three months ended June 30, 2019, our income tax provision of $1.3 million on pre-tax income of $5.0 million was an effective tax rate of 26.9%. The income tax provision for the prior quarter of $832 thousand on pre-tax income of $3.1 million was an effective tax rate of 26.5%. The current and prior quarter include $28 thousand and $150 thousand, respectively, of acquisition costs which are not tax deductible. Earnings Per Share Diluted earnings per share were $0.20 for the three months ended June 30, 2019 compared with diluted earnings per share of $0.22 for the same period a year ago and diluted earnings per share of $0.13 for the prior period. Net income and weighted average shares used to calculate earnings per share – diluted are summarized in Table 8 presented earlier in this press release.                                                         TABLE 9aNET INTEREST MARGIN - UNAUDITED(amounts in thousands)                              For The Three Months Ended  June 30, 2019 June 30, 2018 March 31, 2019  Average    Yield / Average    Yield / Average    Yield /  Balance Interest(1) Rate (5) Balance Interest(1) Rate (5) Balance Interest(1) Rate (5)Interest-earning assets:                           Net loans (2) $1,028,187 $12,847 5.01% $922,687 $11,164 4.85% $993,261 $12,031 4.91%Taxable securities  249,907  1,733 2.78%  206,247  1,278 2.49%  253,068  1,764 2.83%Tax-exempt securities  39,501  328 3.33%  50,306  413 3.29%  50,454  387 3.11%Interest-bearing deposits in other banks  35,605  219 2.47%  29,041  135 1.86%  40,223  245 2.47%Average interest- earning assets  1,353,200  15,127 4.48%  1,208,281  12,990 4.31%  1,337,006  14,427 4.38%Cash and due from banks  21,942        19,880        21,392      Premises and equipment, net  15,819        14,167        14,581      Goodwill and core deposit intangible, net  16,995        1,943        11,872      Other assets  42,769        32,426        41,009      Average total assets $1,450,725       $1,276,697       $1,425,860                                  Interest-bearing liabilities:                           Interest-bearing demand $238,840  129 0.22% $225,927  80 0.14% $243,376  126 0.21%Money market  296,326  380 0.51%  241,724  135 0.22%  293,396  289 0.40%Savings  139,307  123 0.35%  107,108  64 0.24%  131,081  111 0.34%Certificates of deposit  164,084  497 1.21%  170,824  488 1.15%  167,463  490 1.19%Federal Home Loan Bank of San Francisco borrowings  30,000  192 2.57%  55,275  267 1.94%  8,778  55 2.54%Other borrowings net of unamortized debt issuance costs  10,841  201 7.44%  15,614  279 7.17%  12,889  239 7.52%Junior subordinated debentures  10,310  110 4.28%  10,310  97 3.77%  10,310  113 4.44%Average interest- bearing liabilities  889,708  1,632 0.74%  826,782  1,410 0.68%  867,293  1,423 0.67%Noninterest-bearing demand  379,173        309,199        388,410      Other liabilities  18,246        12,535        17,452      Shareholders’ equity  163,598        128,181        152,705      Average liabilities and shareholders’ equity $1,450,725       $1,276,697       $1,425,860      Net interest income and net interest margin (4)    $13,495 4.00%    $11,580 3.84%    $13,004 3.94%Tax equivalent net   interest margin (3)       4.03%       3.88%       3.98%                            (1) Interest income on loans includes deferred fees and costs of approximately $91 thousand, $145 thousand and $181 thousand for the three months ended June 30, 2019 and 2018 and March 31, 2019, respectively.(2) Net loans includes average nonaccrual loans of $13.7 million, $4.2 million and $8.5 million for the three months ended June 30, 2019 and 2018 and March 31, 2019, respectively.(3) Tax-exempt income has been adjusted to tax equivalent basis at a 21% tax rate for 2019 and 2018. The amount of such adjustments was an addition to recorded income of approximately $87 thousand, $110 thousand and $103 thousand for the three months ended June 30, 2019 and 2018 and March 31, 2019, respectively.(4) Net interest margin is annualized net interest income expressed as a percentage of average interest-earning assets.(5) Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result.                                         TABLE 9b NET INTEREST MARGIN - UNAUDITED (amounts in thousands)                       For The Six Months Ended   June 30, 2019 June 30, 2018   Average    Yield / Average    Yield /   Balance Interest(1) Rate (5) Balance Interest(1) Rate (5) Interest-earning assets:                   Net loans (2) $1,010,821 $24,878 4.96% $903,389 $21,893 4.89% Taxable securities  251,479  3,497 2.80%  205,777  2,487 2.44% Tax-exempt securities  44,947  715 3.21%  55,021  876 3.21% Interest-bearing deposits in other banks  37,930  464 2.47%  30,967  264 1.72% Average interest- earning assets  1,345,177  29,554 4.43%  1,195,154  25,520 4.31% Cash and due from banks  21,640        18,767       Premises and equipment, net  15,203        14,361       Goodwill and core deposit intangible, net  14,447        1,971       Other assets  41,894        32,457       Average total assets $1,438,361       $1,262,710                           Interest-bearing liabilities:                   Interest-bearing demand $241,095  255 0.21% $230,075  169 0.15% Money market  294,869  669 0.46%  238,963  267 0.23% Savings  135,217  234 0.35%  108,907  123 0.23% Certificates of deposit  165,764  987 1.20%  176,332  983 1.12% Federal Home Loan Bank of San Francisco borrowings  19,448  247 2.56%  33,978  314 1.86% Other borrowings net of unamortized debt issuance costs  11,859  440 7.48%  16,069  560 7.03% Junior subordinated debentures  10,310  223 4.36%  10,310  179 3.50% Average interest- bearing liabilities  878,562  3,055 0.70%  814,634  2,595 0.64% Noninterest-bearing demand  383,766        308,304       Other liabilities  17,851        12,144       Shareholders’ equity  158,182        127,628       Average liabilities and shareholders’ equity $1,438,361       $1,262,710       Net interest income and net interest margin (4)    $26,499 3.97%    $22,925 3.87% Tax equivalent net   interest margin (3)       4.00%       3.91%                     (1) Interest income on loans includes deferred fees and costs of approximately $272 thousand and $282 thousand for the six months ended June 30, 2019 and 2018, respectively.(2) Net loans includes average nonaccrual loans of $11.1 million and $4.5 million for the six months ended June 30, 2019 and 2018, respectively.(3) Tax-exempt income has been adjusted to tax equivalent basis at a 21% tax rate for 2019 and 2018. The amount of such adjustments was an addition to recorded income of approximately $190 thousand and $233 thousand for the six months ended June 30, 2019 and 2018, respectively.(4) Net interest margin is annualized net interest income expressed as a percentage of average interest-earning assets.(5) Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result.                               TABLE 10ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED(amounts in thousands)                For The Three Months Ended June 30,  March 31, December 31, September 30, June 30,  2019 2019 2018 2018 2018Beginning balance ALLL$12,242  $12,292  $12,392  $12,388  $12,295 Provision for loan and lease losses —   —   —   —   — Loans charged-off (659)  (348)  (279)  (198)  (382)Loan loss recoveries 862   298   179   202   475 Ending balance ALLL$12,445  $12,242  $12,292  $12,392  $12,388                 At June 30,  At March 31, At December 31, At September 30, At June 30,  2019 2019 2018 2018 2018Nonaccrual loans:              Commercial$194  $1,018  $959  $899  $1,358 Real estate - construction and land development —   —   —   —   — Real estate - commercial non-owner occupied 10,690   10,878   —   —   — Real estate - commercial owner occupied —   —   548   —   — Real estate - residential - ITIN 2,389   2,392   2,388   2,571   2,613 Real estate - residential - 1-4 family mortgage 217   182   185   179   184 Real estate - residential - equity lines —   42   43   44   44 Consumer and other 22   23   23   24   33 Total nonaccrual loans 13,512   14,535   4,146   3,717   4,232 Accruing troubled debt restructured loans:              Commercial 1,092   1,187   1,224   1,291   1,420 Real estate - commercial non-owner occupied 791   793   795   797   799 Real estate - residential - ITIN 4,300   4,342   4,484   4,535   4,592 Real estate - residential - equity lines 242   358   363   367   372 Total accruing troubled debt restructured loans 6,425   6,680   6,866   6,990   7,183                All other accruing impaired loans —   —   —   —   —                Total impaired loans$19,937  $21,215  $11,012  $10,707  $11,415                Gross loans outstanding at period end$1,036,724  $1,034,606  $946,251  $927,480  $936,816                Impaired loans to gross loans 1.92%  2.05%  1.16%  1.15%  1.22%Nonaccrual loans to gross loans 1.30%  1.40%  0.44%  0.40%  0.45%               Allowance for loan and lease losses as a percent of:         Gross loans 1.20%  1.18%  1.30%  1.34%  1.32%Nonaccrual loans 92.10%  84.22%  296.48%  333.39%  292.72%Impaired loans 62.42%  57.70%  111.62%  115.74%  108.52% We continue to monitor credit quality and adjust the ALLL to ensure that the ALLL is maintained at a level that is adequate to cover estimated credit losses in the loan and lease portfolio. As illustrated in Table 10, the nonaccrual status of a $10.3 million commercial real estate loan has resulted in a deterioration in our asset quality metrics for the first two quarters of 2019. Net loan loss recoveries totaled $203 thousand for the quarter ended June 30, 2019 and no provision for loan and lease losses was necessary for the quarter. There was no provision for loan and lease loss during the prior quarter or during the same quarter a year ago. The loans acquired from Merchants were recorded at fair value which included a discount for credit risk which is not a part of the ALLL. As a result, our ALLL as a percentage of gross loans declined to 1.20% as of June 30, 2019 compared to 1.32% as of June 30, 2018 and increased compared to 1.18% as of March 31, 2019. Based on the Bank’s ALLL methodology, which uses criteria such as risk factors and historical loss rates, and given the ongoing improvements in asset quality, management believes the Company’s ALLL is adequate at June 30, 2019. There is, however, no assurance that future loan and lease losses will not exceed the levels provided for in the ALLL and could possibly result in future charges to the provision for loan and lease losses. At June 30, 2019, the recorded investment in loans classified as impaired totaled $19.9 million, with a corresponding specific reserve of $727 thousand compared to impaired loans of $11.4 million with a corresponding specific reserve of $1.2 million at June 30, 2018 and impaired loans of $21.2 million, with a corresponding specific reserve of $1.4 million at March 31, 2019. The increase in loans classified as impaired compared to the same period a year ago results from one $10.3 million commercial real estate loan.                                           TABLE 11TROUBLED DEBT RESTRUCTURINGS - UNAUDITED(amounts in thousands)                       At June 30,  At March 31, At December 31, At September 30, At June 30,   2019 2019 2018 2018 2018Nonaccrual $1,828  $2,725  $2,693  $2,720  $3,218 Accruing  6,425   6,680   6,866   6,990   7,183 Total troubled debt restructurings $8,253  $9,405  $9,559  $9,710  $10,401                      Troubled debt restructurings as a percentage of total gross loans  0.80%  0.91%  1.01%  1.05%  1.11% There were two new troubled debt restructurings to grant a payment deferral modification and a maturity modification during the three months ended June 30, 2019. As of June 30, 2019, we had 103 restructured loans that qualified as troubled debt restructurings, of which 101 were performing according to their restructured terms.                                           TABLE 12NONPERFORMING ASSETS - UNAUDITED(amounts in thousands)                       At June 30,  At March 31, At December 31, At September 30, At June 30,   2019 2019 2018 2018 2018Total nonaccrual loans $13,512  $14,535  $4,146  $3,717  $4,232 90 days past due and still accruing  —   —   —   —   — Total nonperforming loans  13,512   14,535   4,146   3,717   4,232                      Other real estate owned ("OREO")  —   34   31   136   140 Total nonperforming assets $13,512  $14,569  $4,177  $3,853  $4,372                      Nonperforming loans to gross loans  1.30%  1.40%  0.44%  0.40%  0.45%Nonperforming assets to total assets  0.94%  0.99%  0.32%  0.29%  0.34% The following table summarizes as of June 30, 2019 when loans are projected to reprice by year and rate index.                                                   TABLE 13LOANS BY RATE INDEX AND PROJECTED REPAYMENT - UNAUDITED(amounts in thousands)At June 30, 2019                                          Years 6                       Through Beyond      Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 10 TotalRate Index:                        Fixed $48,588 $56,475 $47,676 $62,631 $41,420 $160,327 $35,466 $452,583Variable:                        Prime  107,931  2,634  6,032  7,495  9,420  1,737  —  135,2495 Year Treasury  29,766  29,299  81,885  89,985  67,317  38,093  —  336,3457 Year Treasury  892  943  11,370  4,855  5,671  14,005  —  37,7361 Year LIBOR  23,347  —  —  —  —  —  —  23,347Other Indexes  8,328  1,943  4,503  2,082  1,496  19,682  1,923  39,957Nonaccrual  1,515  10,019  292  277  256  826  327  13,512Total $220,367 $101,313 $151,758 $167,325 $125,580 $234,670 $37,716 $1,038,729                                 TABLE 14UNAUDITED CONSOLIDATEDBALANCE SHEET(amounts in thousands, except per share data)                 At June 30,  Change At March 31,  2019  2018  $ % 2019 Assets:               Cash and due from banks $21,306  $23,996  $(2,690) (11)% $32,104 Interest-bearing deposits in other banks  19,319   15,690   3,629  23 %  30,425 Total cash and cash equivalents  40,625   39,686   939  2 %  62,529                 Securities available-for-sale, at fair value  285,819   247,639   38,180  15 %  294,117 Loans, net of deferred fees and costs  1,038,729   938,579   100,150  11 %  1,036,598 Allowance for loan and lease losses  (12,445)  (12,388)  (57) — %  (12,242)Net loans  1,026,284   926,191   100,093  11 %  1,024,356                 Premises and equipment, net  15,836   13,908   1,928  14 %  15,391 Other real estate owned  —   140   (140) (100)%  34 Life insurance  23,449   22,155   1,294  6 %  23,294 Deferred tax asset, net  4,791   7,815   (3,024) (39)%  6,072 Goodwill and core deposit intangible, net  16,900   1,920   14,980  780 %  17,094 Other assets  28,282   22,050   6,232  28 %  28,604 Total assets $1,441,986  $1,281,504  $160,482  13 % $1,471,491                 Liabilities and shareholders' equity:               Demand - noninterest-bearing $397,349  $316,347  $81,002  26 % $385,696 Demand - interest-bearing  238,175   217,674   20,501  9 %  241,292 Money market  300,847   247,413   53,434  22 %  311,853 Savings  138,591   106,170   32,421  31 %  139,237 Certificates of deposit  160,556   166,925   (6,369) (4)%  170,216 Total deposits  1,235,518   1,054,529   180,989  17 %  1,248,294                 Term debt:               Federal Home Loan Bank of San Francisco borrowings  —   60,000   (60,000) (100)%  20,000 Other borrowings  10,000   15,296   (5,296) (35)%  12,596 Unamortized debt issuance costs  (67)  (115)  48  (42)%  (79)Net term debt  9,933   75,181   (65,248) (87)%  32,517                 Junior subordinated debentures  10,310   10,310   —  — %  10,310 Other liabilities  18,372   11,406   6,966  61 %  18,272 Total liabilities  1,274,133   1,151,426   122,707  11 %  1,309,393                 Shareholders' equity:               Common stock  72,087   52,043   20,044  39 %  71,966 Retained earnings  93,363   81,475   11,888  15 %  90,626 Accumulated other comprehensive income (loss), net of tax  2,403   (3,440)  5,843  (170)%  (494)Total shareholders' equity  167,853   130,078   37,775  29 %  162,098                 Total liabilities and shareholders' equity $1,441,986  $1,281,504  $160,482  13 % $1,471,491                 Total interest-earning assets $1,340,456  $1,206,791  $133,665  11 % $1,361,841 Shares outstanding  18,214   16,318   1,896  12 %  18,213 Book value per share $9.22  $7.97  $1.25  16 % $8.90 Tangible book value per share (1) $8.29  $7.85  $0.44  6 % $7.96                 (1)  Book value per share is computed by dividing total shareholders’ equity by shares outstanding. Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.                                             TABLE 15UNAUDITEDINCOME STATEMENT(amounts in thousands, except per share data)  For The Three Months Ended For The Six Months Ended  June 30,  Change March 31, June 30,   2019 2018 $ % 2019 2019 2018Interest income:                     Interest and fees on loans $12,847 $11,164 $1,683  15 % $12,031 $24,878 $21,893Interest on taxable securities  1,733  1,278  455  36 %  1,764  3,497  2,487Interest on tax-exempt securities  328  413  (85) (21)%  387  715  876Interest on interest-bearing deposits in other banks  219  135  84  62 %  245  464  264Total interest income  15,127  12,990  2,137  16 %  14,427  29,554  25,520Interest expense:                     Interest on demand deposits  129  80  49  61 %  126  255  169Interest on money market  380  135  245  181 %  289  669  267Interest on savings  123  64  59  92 %  111  234  123Interest on certificates of deposit  497  488  9  2 %  490  987  983Interest on Federal Home Loan Bank of San Francisco borrowings  192  267  (75) (28)%  55  247  314Interest on other borrowings  201  279  (78) (28)%  239  440  560Interest on junior subordinated debentures  110  97  13  13 %  113  223  179Total interest expense  1,632  1,410  222  16 %  1,423  3,055  2,595Net interest income  13,495  11,580  1,915  17 %  13,004  26,499  22,925Provision for loan and lease losses  —  —  —  — %  —  —  —Net interest income after provision for loan and lease losses  13,495  11,580  1,915  17 %  13,004  26,499  22,925Noninterest income:                     Service charges on deposit accounts  187  175  12  7 %  168  355  351ATM and point of sale fees  318  300  18  6 %  265  583  566Fees on payroll and benefit processing  157  146  11  8 %  171  328  315Life insurance  155  127  28  22 %  129  284  256Gain on investment securities, net  33  4  29  725 %  92  125  40Federal Home Loan Bank of San Francisco dividends  124  95  29  31 %  121  245  175Gain on sale of OREO  18  —  18  100 %  23  41  16Other income  108  115  (7) (6)%  88  196  225Total noninterest income  1,100  962  138  14 %  1,057  2,157  1,944                                             TABLE 15 - CONTINUEDUNAUDITEDINCOME STATEMENT(amounts in thousands, except per share data)                        For The Three Months Ended For The Six Months Ended  June 30,  Change March 31, June 30,   2019 2018 $ % 2019 2019 2018Noninterest expense:                     Salaries and related benefits  5,146  4,513  633  14 %  5,729  10,875  9,368Premises and equipment  945  1,016  (71) (7)%  992  1,937  2,087Federal Deposit Insurance Corporation insurance premium  95  93  2  2 %  100  195  189Data processing fees  621  471  150  32 %  559  1,180  903Professional service fees  535  314  221  70 %  303  838  659Telecommunications  180  178  2  1 %  173  353  394Acquisition  376  —  376  100 %  1,930  2,306  —Other expenses  1,713  1,086  627  58 %  1,137  2,850  2,104Total noninterest expense  9,611  7,671  1,940  25 %  10,923  20,534  15,704Income before provision for income taxes  4,984  4,871  113  2 %  3,138  8,122  9,165Provision for income taxes  1,340  1,253  87  7 %  832  2,172  2,306Net income $3,644 $3,618 $26  1 % $2,306 $5,950 $6,859                      Basic earnings per share $0.20 $0.22 $(0.02) (9)% $0.13 $0.33 $0.42Average basic shares  18,134  16,245  1,889  12 %  17,489  17,816  16,237Diluted earnings per share $0.20 $0.22 $(0.02) (9)% $0.13 $0.33 $0.42Average diluted shares  18,194  16,325  1,869  11 %  17,552  17,878  16,319                                 TABLE 16UNAUDITED CONDENSED CONSOLIDATEDQUARTERLY AVERAGE BALANCE SHEETS(amounts in thousands)                  For The Three Months Ended  June 30,  March 31, December 31, September 30, June 30,   2019 2019 2018 2018 2018Earning assets:               Loans $1,028,187 $993,261 $923,409 $930,863 $922,687Taxable securities  249,907  253,068  218,137  199,883  206,247Tax-exempt securities  39,501  50,454  42,868  48,561  50,306Interest-bearing deposits in other banks  35,605  40,223  75,295  50,397  29,041Total earning assets  1,353,200  1,337,006  1,259,709  1,229,704  1,208,281                Cash and due from banks  21,942  21,392  22,447  21,834  19,880Premises and equipment, net  15,819  14,581  13,331  13,768  14,167Goodwill and core deposit intangible, net  16,995  11,872  1,842  1,888  1,943Other assets  42,769  41,009  31,488  33,084  32,426Total assets $1,450,725 $1,425,860 $1,328,817 $1,300,278 $1,276,697                Liabilities and shareholders' equity:               Demand - noninterest-bearing $379,173 $388,410 $367,457 $343,948 $309,199Demand - interest-bearing  238,840  243,376  257,227  235,664  225,927Money market  296,326  293,396  265,190  259,242  241,724Savings  139,307  131,081  110,934  107,349  107,108Certificates of deposit  164,084  167,463  157,035  163,302  170,824Total deposits  1,217,730  1,223,726  1,157,843  1,109,505  1,054,782                Federal Home Loan Bank of San Francisco borrowings  30,000  8,778  —  22,283  55,275Other borrowings net of unamortized debt issuance costs  10,841  12,889  13,785  14,681  15,614Junior subordinated debentures  10,310  10,310  10,310  10,310  10,310Other liabilities  18,246  17,452  12,846  12,000  12,535Total liabilities  1,287,127  1,273,155  1,194,784  1,168,779  1,148,516                Shareholders' equity  163,598  152,705  134,033  131,499  128,181Liabilities & shareholders' equity $1,450,725 $1,425,860 $1,328,817 $1,300,278 $1,276,697                                 TABLE 17UNAUDITED CONDENSED CONSOLIDATEDYEAR TO DATE AVERAGE BALANCE SHEETS(amounts in thousands)                 For the Six Months Ended For the Twelve Months Ended  June 30,  June 30,  December 31, December 31, December 31,  2019 2018 2018 2017 2016Earning assets:              Loans $1,010,821 $903,389 $915,360 $818,119 $752,938Taxable securities  251,479  205,777  207,407  165,333  120,884Tax-exempt securities  44,947  55,021  50,330  74,231  75,303Interest-bearing deposits in other banks  37,930  30,967  47,038  66,872  58,668Total earning assets  1,345,177  1,195,154  1,220,135  1,124,555  1,007,793                Cash and due from banks  21,640  18,767  20,468  18,301  15,831Premises and equipment, net  15,203  14,361  13,952  15,567  15,078Goodwill and core deposit intangible, net  14,447  1,971  1,917  2,136  1,888Other assets  41,894  32,457  32,369  37,692  39,160Total assets $1,438,361 $1,262,710 $1,288,841 $1,198,251 $1,079,750                Liabilities and shareholders' equity:               Demand - noninterest-bearing $383,766 $308,304 $332,197 $289,735 $226,368Demand - interest-bearing  241,095  230,075  238,328  209,792  172,011Money market  294,869  238,963  250,685  224,913  202,159Savings  135,217  108,907  109,025  111,376  104,771Certificates of deposit  165,764  176,332  168,183  205,648  221,074Total deposits  1,220,711  1,062,581  1,098,418  1,041,464  926,383                Federal Home Loan Bank of San Francisco borrowings  19,448  33,978  22,466  302  17,856Other borrowings net of unamortized debt issuance costs  11,859  16,069  15,143  17,981  19,430Junior subordinated debentures  10,310  10,310  10,310  10,310  10,310Other liabilities  17,851  12,144  12,286  12,293  13,217Total liabilities  1,280,179  1,135,082  1,158,623  1,082,350  987,196                Shareholders' equity  158,182  127,628  130,218  115,901  92,554Liabilities & shareholders' equity $1,438,361 $1,262,710 $1,288,841 $1,198,251 $1,079,750 About Bank of Commerce Holdings Bank of Commerce Holdings is a bank holding company headquartered in Sacramento, California and is the parent company for Merchants Bank of Commerce. The Bank is an FDIC-insured California banking corporation providing community banking and financial services through twelve locations in northern California. The Bank was incorporated as a California banking corporation on November 25, 1981 and opened for business on October 22, 1982. The Company’s common stock is listed on the NASDAQ Global Market and trades under the symbol “BOCH”. Contact Information: Randall S. Eslick, President and Chief Executive OfficerTelephone Direct (916) 677-5800 James A. Sundquist, Executive Vice President and Chief Financial OfficerTelephone Direct (916) 677-5825 Samuel D. Jimenez, Executive Vice President and Chief Operating OfficerTelephone Direct (530) 722-3952 Andrea M. Newburn, Vice President and Senior Administrative Officer / Corporate SecretaryTelephone Direct (530) 722-3959 Source: Bank of Commerce Holdings

In This Story