SOURCE: Premier Commercial Bancorp

Premier Commercial Bancorp

April 21, 2016 18:33 ET

Premier Commercial Bancorp Reports First Quarter 2016 Results

HILLSBORO, OR--(Marketwired - Apr 21, 2016) - Premier Commercial Bancorp (OTC PINK: PRCB), a single bank holding company for Premier Community Bank based in Hillsboro, Oregon, today reported net income of $775,000, or $0.13 per diluted share for the first quarter of 2016 compared to net income of $529,000, or $0.09 per diluted share for the first quarter of 2015.

Highlights for the quarter included:

  • Loans grew $4.5 million over the past quarter and $29.9 million, or 11.4%, over the past year to $293.6 million as of March 31, 2016.
  • Deposits grew $6.9 million over the past quarter and $11.5 million, or 4.3% over the past year to $280.1 million as of March 31, 2016, despite the planned roll-off of almost $13.5 million of non-traditional out-of-area time deposits over the past year.
  • Net interest income at $3.5 million for first quarter 2016 increased $486,000, or 16.0% compared to the $3.0 million for first quarter 2015.
  • Net interest margin at 4.32% for first quarter 2016 continued an upward trend compared to 4.20% for fourth quarter 2015 and 4.06% for first quarter 2015.
  • ROE and ROA for first quarter 2016 were 9.24% and 0.89%, respectively, compared to 6.97 % and 0.65% for first quarter 2015.

"We continue to be encouraged by the economic growth that is occurring in our core markets of Hillsboro, Beaverton, Forest Grove, and Newberg, as well as the entire Portland MSA. And we believe the growth of these markets coupled with the growth of our lender base will provide for continued strong growth in both loans and deposits for the remainder of 2016 and into the future," stated Rick A. Roby, the Company's President and CEO. 

Earnings

Driving the increase in interest income to $4.0 million for first quarter 2016 relative to $3.9 million for fourth quarter 2015 and $3.5 million for first quarter 2015 was the growth in outstanding loans over these periods. However, the Bank also observed slight increases in loan yields which increased from 5.21% for first quarter 2015, to 5.27% for fourth quarter 2015, and to 5.34% for first quarter 2016. With minimal changes in interest income on other yielding assets over the reporting periods and interest expense of $489,000 for first quarter 2016 being relatively unchanged as well, net interest income at $3.5 million for first quarter 2016 was up only modestly over the fourth quarter amount, but was up $486,000, or 16.0% when compared to the $3.0 million for first quarter 2015. Net interest margin at 4.32% for first quarter 2016 was up relative to the fourth and first quarters of 2015 when they were 4.20% and 4.06%, respectively. 

Non-interest income at $170,000 for first quarter 2016 was consistent with the prior quarter and was up $13,000, or 8.3% when compared to first quarter 2015. Non-interest expense at $2.6 million for first quarter 2016 was up $148,000, or 6.1%, compared to first quarter 2015 and was up $231,000, or 9.8% relative to fourth quarter 2015. Driving the increase in non-interest expense was the increase in salaries and benefits for existing employees which are adjusted at the beginning of every calendar year (vs. anniversary dates), the addition of a couple of new lenders, and also during first quarter 2016 the Company had $90,000 in non-recurring legal and professional fees. 

As a result of changes in the above components, net income for first quarter 2016 at $775,000 was down $121,000 or 13.5% when compared to fourth quarter 2015 results but was up $246,000 or 46.5% when compared to the $529,000 for first quarter 2015. The Company's return on equity was 9.24% for first quarter 2016 compared to 10.81% for fourth quarter 2015 and 6.97% for first quarter 2015. The Company's return on assets was 0.89%, 1.02%, and 0.65% for the first quarter of 2016 and the fourth and first quarters of 2015, respectively. 

Assets

Total assets as of March 31, 2016 were $355.2 million which was a $8.6 million, or 2.5% increase since the December 31, 2015 total of $346.5 million, and a $16.4 million, or 4.9% increase since the March 31, 2015 amount of $338.7 million. Driving the continued increases in total assets was the Bank's growth in loans which at $293.6 million as of March 31, 2016 were up $4.5 million, or 1.5% over the past quarter and were up $29.9 million, or 11.4%, when compared to the $263.7 million as of March 31, 2015. Fred Johnson, the Bank's Chief Credit Officer, stated, "A continually improving local economy and increasing business confidence along with our experienced and growing team of lenders continues to result in steady loan growth for the Bank, despite considerable competition. And even more importantly than growth, the quality of the Bank's loan portfolio has strengthened as credit quality remains a very important discipline for us in both originating new loans and managing our existing relationships." While loan growth is coming in all categories, non-real estate commercial and industrial (C&I) loans grew $13.6 million or 18.9% over the past year and were $85.2 million, or 29.0% of total loans outstanding as of March 31, 2016. Other major loan categories as of March 31, 2016 include owner-occupied commercial real estate loans of $86.0 million, or 29.3% of total loans, non-owner occupied commercial real estate loans of $60.3 million, or 20.5% of total loans, while real estate acquisition, development, and construction loans totaled $36.9 million, or 12.6% of the total loan portfolio.

The allowance for loan losses as of March 31, 2016 at $4.3 million was consistent with the year-end and March 31, 2015 amounts, however the amount as a percentage of loans at 1.48% as of March 31, 2016 and 1.51% and 1.63% as of December 31 and March 31, 2015, respectively, has steadily declined due to the increases in outstanding loans but was also supported by the continually improved credit metrics of the Bank's loan portfolio. During first quarter 2016, the Bank had $46,000 in loan charge-offs and $8,000 in recoveries, or net charge-offs of $38,000, compared to first quarter 2015 when the Bank had $90,000 in charge-offs and $23,000 in recoveries, or $67,000 in net charge-offs; and relative to the full-year 2015 when the Bank had $98,000 in charge-offs, $91,000 in recoveries, or net charge-offs of $7,000. The Bank had no loan loss provision expense for first quarter 2016 or for the full-year 2015. 

The Bank had no loans that were past due over 30 days and still accruing interest as of March 31, 2016, or as of December 31 and March 31, 2015. Non-performing assets (consisting of loans on nonaccrual status and other real estate owned-OREO) were $7.0 million as of March 31, 2016 compared to $7.3 million as of December 31, 2015; and were down $2.1 million, or 22.8%, over the past year when compared to the $9.1 million as of March 31, 2015. As of March 31, 2016 the Bank had one loan for $2.9 million in non-accrual status while OREO was $4.1 million and consisted of four properties with carrying amounts ranging from $183,000 to $2.8 million.

Deposits

Deposits continue to rise and totaled $280.1 million as of March 31, 2016 which was a $6.9 million, or 2.5%, increase over the past quarter and an $11.5 million, or 4.3%, increase when compared to the $268.6 million as of March 31, 2015. Bob Ekblad, the Company's Chief Financial Officer, commented, "While total deposits continue on an upward trend, if you take into consideration that over the past twelve months the Bank intentionally rolled-off almost $13.5 million of non-traditional out-of-area time deposits, core deposit growth would have been over $25.0 million and that's impressive." Mr. Ekblad continued, "And besides solid overall growth in core deposits, the mix continued to improve in that time deposits as a percentage of total deposits decreased to less than 27.0% at the end of this quarter compared to almost 33.0% at this time last year." As of March 31, 2016, the Bank's demand deposits and NOW accounts totaled $99.8 million, or 35.6% of total deposits, money market and savings accounts were $105.3 million, or 37.5% of total deposits, while time deposits aggregated to $75.6 million, or 26.9% of total deposits. 

As of March 31, 2016, the Bank had $2.7 million in reciprocal brokered deposits while non-traditional out-of-area time deposits totaled $27.6 million compared to December 31, 2015 when the Bank had $2.2 million in reciprocal brokered deposits and non-traditional out-of-area time deposits were $33.0 million and compared to March 31, 2015 when the Bank had no reciprocal brokered deposits and non-traditional out-of-area time deposits were $41.0 million. 

Borrowings, Equity and Capital

Federal Home Loan Bank (FHLB) debt totaled $21.6 million at both March 31, 2016 and December 31, 2015, and was up $2.3 million from the $19.3 million as of March 31, 2015. As of March 31, 2016, the Bank's FHLB debt consisted of eight separate notes at a weighted average cost of 2.68% with rates ranging from 1.08% to 3.28% and maturities that range from December 2017 to April 2020. During second quarter 2015, the $1.2 million of other borrowings as of March 31, 2015, which was a holding company note at a rate of 7.30%, was paid in full, without penalty, through a cash dividend paid by the Bank to the holding company. 

At the Bank level, capital ratios over the past year have declined due to asset growth and the non-recurring $1.2 million dividend paid to the holding company to retire the aforementioned note during second quarter 2015. The Bank's leverage ratio and total risk-based capital ratios as of March 31, 2016 were approximately 11.7% and 13.2%, respectively, compared to 11.9% and 14.1% as of March 31, 2015. However, without the non-recurring dividend, retained earnings have supported growth as evidenced by current capital ratios being relatively consistent with those at year-end 2015 when the Bank's leverage ratio and total risk-based capital ratios were approximately 11.6% and 13.3 %, respectively. These capital ratios continue to be above amounts required for the Bank to be considered "well-capitalized" according to traditional regulatory standards. 

About Premier Commercial Bancorp:

Information about the Company's stock may be obtained through the over-the-counter marketplace at www.otcmarkets.com. Premier Commercial Bancorp's stock symbol is "PRCB." 

Premier Commercial Bancorp was formed in 2002 as a holding company for Premier Community Bank which was opened in 1999 by local business people to deliver loan and deposit product solutions through experienced and professional bankers to businesses, nonprofits, professionals, and individuals. The Bank serves the greater Portland Metropolitan area with four offices in Washington County and also serves Yamhill County with an office in Newberg. 

For more information about Premier Commercial Bancorp, or its subsidiary, Premier Community Bank, call (503) 693-7500 or visit our website at www.pcboregon.com. Information contained in or linked to our website is not incorporated as a part of this release.

Certain statements in this release may constitute forward-looking statements within the definition of the "safe-harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to significant uncertainties, which could cause actual results to differ materially from those set forth in such statements. Forward-looking statements are those that incorporate management's current expectations and plans based on information currently known to them. These statements can sometimes be identified by words such as "believe," "estimate," "anticipate," "expect," "intend," "will," "may," "should," or other similar phrases or words. Readers are cautioned not to place undue reliance on forward-looking statements. In particular, they should not be construed as assurances of a given level of performance or as promises of a given set of management's actions. Some of the factors that could cause management to deviate from its current plans, or could cause the Company's results to differ from current expectations, include the effect of localized or regional economic shifts that may affect the collectability of loans or the value of the collateral underlying those loans; the effects of laws, regulations, policies and government actions upon the Company's assets and operations; sensitivity to the Northwestern Oregon geographic markets and events affecting those markets; and the impacts of new government initiatives upon us and our borrowers. The Company does not intend to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

 
Consolidated Balance Sheets
Unaudited
(amounts in 000s, except per share data and ratios)
                           
    March 31,     % Change 2016 vs. 2015   December 31, 2015     % Change Quarter
    2016     2015          
                           
ASSETS                                
  Cash & due from banks   $ 26,104     $ 31,794     -17.9%   $ 21,372     22.1%
  Investment securities - available for sale     17,466       22,826     -23.5%     18,111     -3.6%
  Investments - other     3,250       3,994     -18.6%     3,232     0.6%
                                   
  Gross loans     293,600       263,669     11.4%     289,128     1.5%
  Allowance for loan losses     (4,331 )     (4,295 )   0.8%     (4,369 )   -0.9%
    Net loans     289,269       259,374     11.5%     284,759     1.6%
                                   
  Other real estate owned     4,080       5,346     -23.7%     4,241     -3.8%
  Other assets     14,989       15,378     -2.5%     14,808     1.2%
                                   
    Total Assets   $ 355,158     $ 338,712     4.9%   $ 346,523     2.5%
                                 
LIABILITIES                                
  Deposits   $ 280,127     $ 268,593     4.3%   $ 273,220     2.5%
  Repurchase agreements     6,980       6,712     4.0%     6,328     10.3%
  FHLB borrowings     21,550       19,300     11.7%     21,550     0.0%
  Other borrowings     -       1,215     -100.0%     -     0.0%
  Junior subordinated debentures     8,248       8,248     0.0%     8,248     0.0%
  Other liabilities     4,293       3,650     17.6%     4,081     5.2%
    Total Liabilities     321,198       307,718     4.4%     313,427     2.5%
                                 
STOCKHOLDERS' EQUITY     33,960       30,994     9.6%     33,096     2.6%
                                     
    Total Liabilities and Stockholders' Equity   $ 355,158     $ 338,712     4.9%   $ 346,523     2.5%
                                 
Shares outstanding at end-of-period     5,840,609       5,795,415           5,824,541      
Book value per share   $ 5.81     $ 5.35         $ 5.68      
Allowance for loan losses to total loans     1.48%       1.63%           1.51%      
Non-performing assets (non-accrual loans & OREO)   $ 7,040     $ 9,116         $ 7,285      
                                 
Bank Tier 1 leverage ratio     11.74%       11.90%           11.55%      
Bank Tier 1 risk-based capital ratio     11.95%       12.75%           12.03%      
Bank Total risk-based capital ratio     13.20%       14.00%           13.28%      
                                 
                                 
 
Consolidated Statements of Net Income
Unaudited
(amounts in 000s, except per share data and ratios)
                           
    Three Months Ended      
% Change
  Three Months Ended      
% Change
    3/31/2016     3/31/2015       12/31/2015    
INTEREST INCOME                                
  Loans   $ 3,873     $ 3,375     14.8%   $ 3,815     1.5%
  Investments - available for sale     93       115     -19.1%     97     -4.1%
  Federal funds sold and other     50       31     61.3%     36     38.9%
    Total interest income     4,016       3,521     14.1%     3,948     1.7%
                                   
INTEREST EXPENSE                                
  Deposits     279       266     4.9%     286     -2.4%
  Repurchase agreements and federal funds purchased     3       6     -50.0%     3     0.0%
  FHLB borrowings     146       131     11.5%     147     -0.7%
  Other borrowings     -       23     -100.0%     -     0.0%
  Junior subordinated debentures     61       54     13.0%     57     7.0%
    Total interest expense     489       480     1.9%     493     -0.8%
                                 
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES     3,527       3,041     16.0%     3,455     2.1%
                                 
PROVISION FOR LOAN LOSSES     -       -     0.0%     -     0.0%
                                 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     3,527       3,041     16.0%     3,455     2.1%
                                 
NON-INTEREST INCOME     170       157     8.3%     168     1.2%
                                 
NON-INTEREST EXPENSE     2,594       2,446     6.1%     2,363     9.8%
                                 
OREO VALUATIONS ADJS & GAINS/(LOSSES) ON SALES - NET     112       55     103.6%     138     -18.8%
                                 
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES     1,215       807     50.6%     1,398     -13.1%
                                 
PROVISION (BENEFIT) FOR INCOME TAXES     440       278     58.3%     502     -12.4%
                                 
NET INCOME (LOSS)   $ 775     $ 529     46.5%   $ 896     -13.5%
                                 
Earnings (Loss) per share - Basic   $ 0.13     $ 0.09         $ 0.15      
                                 
Earnings (Loss) per share - Diluted   $ 0.13     $ 0.09         $ 0.15      
                                 
Return on average equity     9.24%       6.97%           10.81%      
Return on average assets     0.89%       0.65%           1.02%      
Net interest margin     4.32%       4.06%           4.20%      
Efficiency ratio     70.2%       76.5%           65.2%      
                                 
                                 

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