BANK OF COMM 
By
2008 Highlights
* Net Income of $2.19 million
* Average earning assets up $62.1 million or 11.2%
* Average loans up $81.5 million or 18.6%
* Core deposits up $31.1 million or 10.7%
* Provision for loan loss of $6.5 million
* Total risk based capital of 12.84%
* Diluted EPS of $0.25
* 2008 cash dividends paid of $2.79 million
"We believe that 2008 and beyond may be redefining the financial services
industry. Despite the dramatic changes in our industry and the economic
environment, Bank of Commerce Holdings achieved solid growth in loans and
deposits, and our strength and security continue to compare favorably with our
industry peers," said
Financial Performance
Despite a very challenging 2008, our Company earned
The Company continued to pay an
Our balance sheet grew by
Revenues
Top line revenues fell by
In an increasing interest rate environment, the Company's net interest income and margin would be expected to increase.
Loans
Our loan portfolio increased
Our Company has a diversified loan portfolio. A significant portion of our customers' ability to repay their loans is dependent upon the professional services and investor commercial real estate sectors.
Deposits
Deposits increased by
Net Interest Income
Net interest income decreased
Non Interest Income
Non interest income consists of service charges on deposit accounts,
payroll processing fees, earnings on key life investments, gains on sale of
investment securities, and merchant bankcard fees. For the year ended
Non Interest Expense
Non interest expense decreased
Credit Quality
2008 was an extremely challenging year for credit, and management took an aggressive stance in recognizing impaired loans. The Commercial and Industrial portfolio is performing well given the current market conditions while real estate development properties and construction related lending remains under stress.
Our portfolio will likely continue to be influenced by weakness in real
estate values, the effects of higher energy prices and higher unemployment
levels. Net charge offs were
One real estate development property was taken into other real estate
owned (OREO). OREO was
Non Performing Assets
Total non performing assets totaled
Allowance for Loan and Lease Losses
The Company has provided
Capital
The capital ratios of Bank of Commerce continue to be well above well- capitalized guidelines established by regulatory agencies.
The Company announced approval of its application for the United States
Treasury to invest
The U.S. Treasury introduced the Capital Purchase Program on
The capital investment enabled the Company to leverage investments of
With our strong capital position, we find significantly more opportunities now for loan growth, investment portfolio purchases and attractive loan and asset purchases.
Dividends
The Company paid a quarterly dividend of
Bank of Commerce Holdings, with administrative offices in
The Company is a federally insured
BOCH is a NASDAQ National Market listed stock. Please contact your local investment advisor for purchases and sales.
This press release includes forward-looking information, which is subject to the "safe harbor" created by the Securities Act of 1933, and Securities Act of 1934. These forward-looking statements (which involve the Company's plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors:
* Competitive pressure in the banking industry and changes in the
regulatory environment.
* Changes in the interest rate environment and volatility of rate
sensitive assets and liabilities.
* The health of the economy declines nationally or regionally which could
reduce the demand for loans or reduce the value of real estate
collateral securing most of the Company's loans.
* Credit quality deteriorates which could cause an increase in the
provision for loan losses.
* Losses in the Company's merchant credit card processing business.
* Asset/Liability matching risks and liquidity risks.
* Changes in the securities markets.
For additional information concerning risks and uncertainties related to
the Company and its operations please refer to the Company's Annual Report on
Form 10-K for the year ended
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
ASSETS 2008 2007
Cash and due from banks $33,716,062 $13,839,123
Federal funds sold and securities
purchased under agreements to resell 51,475,000 8,395,000
Cash and cash equivalents 85,191,062 22,234,123
Securities available-for-sale
(including pledged collateral of
$68,735,000 at December 31, 2008 and
$61,329,000 at December 31, 2007) 131,686,600 67,906,386
Securities held-to-maturity, at cost
(estimated fair value of $0 at
December 31, 2008 and $10,632,208
at December 31, 2007) 0 10,558,765
Loans, net of the allowance for loan
and lease losses of $8,429,383 at
December 31, 2008 and $8,232,970 at
December 31, 2007 518,946,461 486,282,571
Bank premises and equipment, net 10,672,211 10,963,975
Other assets 27,717,626 20,381,095
TOTAL ASSETS $774,213,960 $618,326,915
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand - noninterest bearing $79,988,122 $75,717,742
Demand - interest bearing 143,871,441 142,820,773
Savings accounts 67,135,736 41,376,296
Certificates of deposit 264,286,604 213,716,486
Total Deposits 555,281,903 473,631,297
Securities sold under agreements to
repurchase 13,853,255 15,513,211
Federal Home Loan Bank borrowings 120,000,000 60,000,000
Other liabilities 7,036,161 7,553,559
Junior subordinated debt payable to
unconsolidated subsidiary grantor trust 15,465,000 15,465,000
Total liabilities 711,636,319 572,163,067
Stockholders' equity:
Preferred stock, no par value; 2,000,000
shares authorized; 17,000 shares issued
and outstanding in 2008 and no shares
outstanding in 2007 16,551,268 -
U.S. Treasury Warrants 448,732 -
Common stock, no par value;
50,000,000 shares authorized;
8,711,495 shares issued and outstanding
in 2008 and 8,757,445 shares issued and
outstanding in 2007 9,649,672 9,995,517
Retained earnings 36,008,866 36,604,902
Accumulated other comprehensive loss,
net of tax (80,897) (436,571)
Total stockholders' equity 62,577,641 46,163,848
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $774,213,960 $618,326,915
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
2008 2007 2006
Interest income:
Interest and fees
on loans $33,582,112 $36,134,170 $32,394,766
Interest on tax-exempt
securities 1,196,662 1,228,944 786,972
Interest on U.S. government
securities 2,468,749 3,084,672 3,421,191
Interest on federal funds
sold and securities
purchased under agreement
to resell 303,227 680,578 871,879
Interest on other
securities 138,645 89,686 135,651
Total interest income 37,689,395 41,218,050 37,610,459
Interest expense:
Interest on demand deposits 2,172,704 2,735,170 1,504,180
Interest on savings
deposits 1,576,351 1,215,920 288,883
Interest on certificates
of deposit 8,552,217 10,570,776 8,485,799
Interest on securities sold
under repurchase agreements 172,743 1,177,417 1,138,242
Interest on FHLB
borrowings 2,811,982 2,421,636 3,079,432
Interest on junior
subordinated debt payable
to unconsolidated
subsidiary grantor trusts 1,056,284 1,084,990 1,078,884
Total interest expense 16,342,280 19,205,909 15,575,420
Net interest income 21,347,115 22,012,141 22,035,039
Provision for loan and
lease losses 6,520,000 3,291,250 225,900
Net interest income after
provision for loan and
lease losses 14,827,115 18,720,891 21,809,139
Noninterest income:
Service charges on
deposit accounts 311,266 277,769 345,737
Payroll and benefit
processing fees 452,852 382,738 385,867
Earnings on cash
surrender value -
Bank owned life insurance 340,220 331,251 328,743
Life Insurance policy
benefits 0 2,400,000 0
Net gain (loss) on sale of
securities available-
for-sale 627,879 45,670 (170,524)
Net loss on sale of
derivative swap
transaction (225,442) 0 0
Net gain on sale of loans 0 0 89,851
Merchant credit card
service income, net 364,391 388,438 380,066
Mortgage brokerage
fee income 21,019 49,995 71,350
Other income 731,233 658,893 497,141
Total noninterest income 2,623,418 4,534,754 1,928,231
Noninterest expense:
Salaries and related
benefits 7,750,980 8,665,679 8,020,136
Occupancy and
equipment expense 2,500,557 2,372,617 1,845,664
OREO expense 735,000 0 0
FDIC insurance premium 382,722 51,077 47,670
Data processing fees 276,165 395,558 216,313
Professional service fees 667,015 1,027,671 683,602
Payroll processing fees 115,932 107,856 103,518
Deferred compensation expense 461,640 411,191 368,809
Stationery and supplies 262,087 256,799 230,843
Postage 133,909 137,740 112,740
Directors' expenses 293,918 311,777 243,428
Other expenses 1,715,747 2,005,729 1,460,008
Total noninterest
expense 15,295,672 15,743,694 13,332,731
Income before provision
for income taxes 2,154,861 7,511,951 10,404,639
Provision for income taxes (39,526) 1,405,053 3,836,930
Net Income $2,194,387 $6,106,898 $6,567,709
Basic earnings per share $0.25 $0.69 $0.75
Weighted average shares 8,712,873 8,857,627 8,759,568
Diluted earnings per share $0.25 $0.68 $0.74
Weighted average shares -
diluted 8,724,550 8,937,736 8,931,584
Bank of Commerce Holdings & Subsidiaries
Average Balances, Interest Income/Expense and Yields/Rates Paid
Years Ended December 31,
(Unaudited, Dollars in thousands)
(Dollars in thousands) 2008 2007
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
Interest
Earning Assets
Portfolio loans $518,759 $33,582 6.47% $437,217 $36,134 8.26%
Tax-exempt
securities 24,399 1,197 4.91% 30,727 1,229 4.00%
US government
securities 13,637 553 4.06% 26,782 1,112 4.15%
Mortgage backed
securities 37,328 1,916 5.13% 43,122 1,973 4.58%
Federal funds
sold 17,987 303 1.68% 13,099 681 5.20%
Other securities 2,918 139 4.76% 2,000 90 4.50%
Average Earning
Assets $615,028 $37,690 6.13% $552,947 $41,219 7.45%
Cash & due
from banks 16,298 14,273
Bank premises and
fixed assets 11,097 10,155
Other assets 19,866 17,986
Average Total
Assets $662,289 $595,361
Interest Bearing
Liabilities
Interest bearing
demand $138,743 $2,173 1.57% $121,281 $2,735 2.26%
Savings deposits 56,914 1,576 2.77% 39,565 1,216 3.07%
Certificates of
deposit 234,493 8,552 3.65% 215,511 10,571 4.91%
Repurchase
Agreements 13,043 173 1.33% 32,237 1,177 3.65%
Other borrowings 98,518 3,868 3.93% 62,095 3,507 5.65%
Average Interest
Liabilities $541,711 $16,342 3.02% $470,689 $19,206 4.08%
Noninterest
bearing Demand 70,933 72,545
Other liabilities 5,660 6,502
Stockholders'
equity 43,985 45,625
Average
Liabilities and
Stockholders'
equity $662,289 $595,361
Net Interest
Income and Net
Interest Margin $21,348 3.47% $22,013 3.98%
(Dollars in thousands) 2006
Average Interest Yield/
Balance Rate
Interest Earning Assets
Portfolio loans $394,152 $32,394 8.22%
Tax-exempt securities 21,112 787 3.73%
US government securities 39,576 1,593 4.03%
Mortgage backed securities 42,476 1,828 4.30%
Federal funds sold 17,124 872 5.09%
Other securities 3,075 136 4.42%
Average Earning Assets $517,515 $37,610 7.27%
Cash & due from banks 14,113
Bank premises and fixed assets 6,878
Other assets 11,022
Average Total Assets $549,528
Interest Bearing Liabilities
Interest bearing demand $108,066 $1,504 1.39%
Savings deposits 24,633 289 1.17%
Certificates of deposit 190,568 8,486 4.45%
Repurchase Agreements 29,708 1,138 3.83%
Other borrowings 69,014 4,158 6.02%
Average Interest Liabilities $421,989 15,575 3.69%
Noninterest bearing Demand 79,245
Other liabilities 6,154
Stockholders' equity 42,140
Average Liabilities and
Stockholders' equity $549,528
Net Interest Income and
Net Interest Margin $22,035 4.26%
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Quarterly Financial Condition Data
(Unaudited)
For the Quarter Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2008 2008 2008 2007
Cash and due from
banks $33,716 $12,617 $16,660 $12,737 $13,839
Federal funds sold
and securities
purchased under
agreements to
resell 51,475 20,135 11,585 25,995 8,395
Total Cash &
Equivalents 85,191 32,752 28,245 38,732 22,234
Securities
available-for-sale 131,687 74,863 66,728 62,090 67,906
Securities held to
maturity, at cost 0 0 10,385 10,421 10,559
Loans, net of
allowance for loan
losses 518,946 503,348 507,651 506,374 486,283
Bank premises and
equipment, net 10,672 10,893 11,068 11,370 10,964
Other assets 27,718 28,688 22,531 22,248 20,381
TOTAL ASSETS $774,214 $650,544 $646,608 $651,235 $618,327
Liabilities:
Demand -
noninterest bearing 79,988 80,168 68,625 $71,722 $75,718
Demand - interest
bearing 143,871 138,319 128,994 140,624 142,821
Savings 67,136 69,469 52,453 42,946 41,376
Certificates of
deposit 264,287 215,095 218,303 229,006 213,716
Total deposits 555,282 503,051 468,375 484,298 473,631
Securities sold
under agreements
to repurchase 13,853 13,580 14,343 12,455 15,513
Federal Home Loan
Bank borrowings 120,000 65,000 95,000 85,000 60,000
Other liabilities 7,036 7,863 7,396 7,633 7,554
Junior subordinated
debt payable to
subsidiary grantor
trust 15,465 15,465 15,465 15,465 15,465
Total liabilities 711,636 604,959 600,579 604,851 572,163
Stockholders equity:
Preferred Stock 16,551 0 0 0 0
US Treasury
Warrants 449 0 0 0 0
Common stock 9,650 9,619 9,590 9,550 9,996
Retained earnings 36,009 37,364 37,344 37,135 36,605
Accumulated other
comprehensive
(loss), net (81) (1,398) (905) (301) (437)
Total
stockholders'
equity 62,578 45,585 46,029 46,384 46,164
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY $774,214 $650,544 $646,608 $651,235 $618,327
Interest Income:
Net interest income 5,642 5,240 5,046 5,420 5,585
Provision for
loan losses 3,620 1,300 1,000 600 3,170
Net interest income
after provision for
loan losses 2,022 3,940 4,046 4,820 2,415
Noninterest
Income:
Service charges 108 91 50 62 63
Merchant credit
card service
income, net 85 99 97 83 91
Net gain on sale
of securities
available-for-sale 33 159 194 242 0
Net (loss) on sale of
derivatives 0 0 0 (225) 0
Mortgage brokerage
fee income 4 2 5 10 (6)
Other income 360 400 371 393 2,745
Total noninterest
income 590 751 717 565 2,893
Noninterest
Expense:
Salaries and
related benefits 2,001 1,909 1,892 1,949 2,208
Net Occupancy
and equipment
expense 604 613 640 644 737
Oreo Expense 735 0 0 0 0
Professional
service fees 270 146 133 118 365
Other expenses 897 944 948 854 1,218
Total
noninterest
expense 4,507 3,612 3,613 3,565 4,528
Income before
income taxes (1,895) 1,079 1,150 1,820 780
Provision for
income taxes (1,237) 362 244 591 (910)
Net Income ($658) $717 $906 $1,229 $1,690
BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
In Thousands (Except Ratios and Per Share Data)
2008 2007 2006 2005 2004
Statements of
Income
Total Interest
Income $37,690 $41,128 $37,610 $27,864 $20,996
Net Interest
Income $21,348 $22,012 $22,035 $20,238 $16,887
Provision for
Loan Losses $6,520 $3,291 $226 $448 $554
Total
Noninterest
Income $2,623 $4,535 $1,928 $2,124 $2,196
Total
Noninterest
Expense $15,296 $15,744 $13,333 $11,749 $10,620
Total
Revenues $40,313 $45,753 $39,539 $29,988 $23,192
Net Income $2,194 $6,107 $6,568 $6,278 $4,978
Balance Sheets
Total Assets $774,214 $618,327 $583,442 $511,644 $438,545
Total Net
Loans $518,947 $486,283 $408,989 $363,305 $318,801
Allowance
for Loan
Losses $8,429 $8,233 $4,904 $4,316 $3,866
Total
Deposits $555,282 $473,631 $439,407 $372,116 $352,878
Stockholders'
Equity $62,578 $46,164 $43,916 $39,138 $35,283
Performance
Ratios (1)
Return on
Average
Assets (2) 0.33% 1.04% 1.20% 1.34% 1.22%
Return on
Average
Stockholders'
Equity (3) 4.99% 13.39% 15.59% 18.35% 18.18%
Dividend
Payout 127.04% 46.47% 40.36% 35.74% 39.29%
Average Equity
to Average
Assets 8.91% 9.43% 9.49% 9.43% 7.91%
Tier 1
Risk-Based
Capital-Bank 11.58% 9.97% 11.42% 12.08% 10.80%
Total
Risk-Based
Capital-Bank 12.84% 11.22% 12.54% 13.11% 11.88%
Net Interest
Margin (4) 3.47% 3.98% 4.26% 4.59% 4.45%
Average Earning
Assets to
Total Average
Assets 92.86% 93.74% 94.20% 94.04% 92.62%
Nonperforming
Assets to
Total
Assets (5) 2.98% 2.01% 0.00% 0.08% 0.54%
Net Charge-offs
to Average
Loans 1.22% .00% -.09% 0.00% 0.12%
Allowance for
Loan Losses
to Total Loans 1.60% 1.66% 1.18% 1.17% 1.20%
Nonperforming
Loans to
Allowance for
Loan Losses 239.10% 150.72% 0.00% 9.15% 61.64%
Efficiency
Ratio (6) 63.81% 59.31% 55.64% 52.54% 55.65%
Share Data
Average Common
Shares
Outstanding -
basic 8,713 8,858 8,760 8,600 8,283
Average Common
Shares
Outstanding -
diluted 8,724 8,938 8,932 8,845 8,703
Book Value
Per Common
Share $7.18 $5.27 $4.96 $4.52 $4.27
Basic Earnings
Per Common
Share $0.25 $0.69 $0.75 $0.73 $0.60
Diluted
Earnings Per
Common Share $0.25 $0.68 $0.74 $0.71 $0.57
Cash Dividends
Per Common
Share (7) $0.32 $0.33 $0.29 $0.26 $0.23
(1) Regulatory Capital Ratios and Asset Quality Ratios are end of period
ratios. With the exception of end of period ratios, all ratios are
based on average daily balances during the indicated period.
(2) Return on average assets is net income divided by average total
assets.
(3) Return on average equity is net income divided by average
stockholders' equity.
(4) Net interest margin equals net interest income as a percent of average
interest-earning assets.
(5) Non-performing assets includes all nonperforming loans (nonaccrual
loans, loans 90 days past due and still accruing interest and
restructured loans) and real estate acquired by foreclosure.
(6) The efficiency ratio is calculated by dividing non-interest expense by
the sum of net interest income and noninterest income. The efficiency
ratio measures how the Company spends in order to generate each dollar
of net revenue.
(7) Cash dividends declared during the current fiscal year
SOURCE Bank of Commerce Holdings