Loading...
Docoh

Bank of Commerce (BOCH)

Filed: 23 Jul 21, 9:00am

Exhibit 99.1

 

 

 logo1.jpg

 


For Immediate Release:

 

Bank of Commerce Holdings Announces Results for the Second Quarter of 2021


 

SACRAMENTO, California, July 23, 2021 / GLOBE NEWSWIRE—Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.917 billion asset bank holding company and parent company of Merchants Bank of Commerce (the “Bank”), today announced financial results for the quarter and six months ended June 30, 2021. Net income for the quarter ended June 30, 2021 was $4.1 million or $0.25 per share – diluted, compared with net income of $3.8 million or $0.23 per share – diluted, for the same period of 2020. Net income for the six months ended June 30, 2021 was $9.1 million or $0.54 per share – diluted, compared with net income of $4.8 million or $0.28 per share – diluted, for the same period of 2020.

 

Significant Items for the Second Quarter of 2021:

 

On June 23, 2021, we entered into a Merger Agreement with Columbia Banking Systems, Inc. with Columbia as the surviving entity; which was previously announced. The closing of the merger transaction is expected to occur during the fourth quarter of 2021.

The Bank continued to experience significant growth in deposits, which increased $83 million during the current quarter and increased $71 million during the previous quarter.

During the second quarter of 2021, we received $67.3 million in repayments on PPP loans.

The Company’s net interest margin declined to 3.16% for the current quarter compared to 3.46% for the prior quarter.

 

Randall S. Eslick, President and CEO commented: “The second quarter was a very exciting time for the company. In June, we announced that we entered into a merger agreement with Columbia Banking Systems, Inc. which we believe will, upon consummation, enhance financial returns to our shareholders and provide our customers with a more comprehensive range of loan and deposit products. We also continued to report very strong growth in deposits and competitive profits during a time when our industry is challenged by declining margins. I remain proud of all of our employees as they respond and adapt to the various changes facing them, our Company and our industry.”

 

Financial Highlights for the Second Quarter of 2021:

 

Net income of $4.1 million was an increase of $292 thousand (8%) from $3.8 million earned during the same period in the prior year. Earnings of $0.25 per share – diluted was an increase of $0.02 (9%) from $0.23 per share – diluted earned during the same period in the prior year and reflects the impact of the following:

 

o

$817 thousand in costs for the second quarter of 2021 associated with the merger with Columbia Banking Systems, Inc., most of which are not tax deductible.

 

o

$1.3 million provision for loan and leases losses for the second quarter of 2020.

Return on average assets decreased to 0.89% compared to 0.95% for the same period in the prior year.

Return on average equity was unchanged at 9.26% compared to the same period in the prior year.

Net interest income increased $181 thousand (1%) to $14.0 million compared to $13.8 million for the same period in the prior year.

Net interest margin declined to 3.16% compared to 3.64% for the same period in the prior year.

Average loans totaled $1.136 billion, a decrease of $45 million (4%) compared to average loans for the same period in the prior year.

Average earning assets totaled $1.775 billion, an increase of $252 million (17%) compared to average earning assets for the same period in the prior year.

Average deposits totaled $1.653 billion, an increase of $247 million (18%) compared to average deposits for the same period in the prior year.

 

o

Average non-maturing deposits totaled $1.514 billion, an increase of $251 million (20%) compared to the same period in the prior year.

 

o

Average certificates of deposit totaled $139.4 million, a decrease of $3.6 million (2%) compared to the same period in the prior year.

 

1

 

logo2.jpg
 

The Company’s efficiency ratio was 61.5% compared to 56.1% during the same period in the prior year.

 

o

The Company’s efficiency ratio of 61.5% for the second quarter of 2021 included $817 thousand of merger related costs, which increased the efficiency ratio by 5.4%.

Nonperforming assets at June 30, 2021 totaled $3.8 million or 0.20% of total assets, a decrease of $2.9 million (43%) since June 30, 2020. The decrease in nonperforming assets resulted from repayment of a $3.0 million nonaccrual borrowing relationship during the first quarter of 2021.

Book value per common share was $10.78 at June 30, 2021 compared to $10.13 at June 30, 2020.

Tangible book value per common share was $9.87 at June 30, 2021 compared to $9.17 at June 30, 2020.

 

Financial Highlights for the Six Months Ended June 30, 2021:

 

Net income of $9.1 million was an increase of $4.3 million (90%) from $4.8 million earned during the same period in the prior year. Earnings of $0.54 per share – diluted was an increase of $0.26 (93%) per share from $0.28 per share – diluted earned during the same period in the prior year and reflects the impact of the following:

 

o

$817 thousand in costs during the first six months of 2021 associated with the merger with Columbia Banking Systems, Inc., most of which was not tax deductible.

 

o

$4.2 million provision for loan and lease losses during the six months ended June 30, 2020.

 

o

$1.1 million in non-recurring costs during the first quarter of 2020 associated with the termination of a technology management services contract and a severance agreement; both previously announced.

 

o

1.0 million shares of common stock repurchased during the six months ended June 30, 2020.

Return on average assets increased to 1.00% compared to 0.62% for the same period in the prior year.

Return on average equity increased to 10.22% compared to 5.65% for the same period in the prior year.

Net interest income increased $1.6 million (6%) to $28.4 million compared to $26.8 million for the same period in the prior year.

Net interest margin declined to 3.30% compared to 3.74% for the same period in the prior year.

Average loans totaled $1.138 billion, an increase of $31 million (3%) compared to average loans for the same period in the prior year.

Average earning assets totaled $1.734 billion, an increase of $296 million (21%) compared to average earning assets for the same period in the prior year.

Average deposits totaled $1.613 billion, an increase of $287 million (22%) compared to average deposits for the same period in the prior year.

 

o

Average non-maturing deposits totaled $1.476 billion, an increase of $295 million (25%) compared to the same period in the prior year.

 

o

Average certificates of deposit totaled $137.0 million, a decrease of $8.1 million (6%) compared to the same period in the prior year.

The Company’s efficiency ratio was 59.3% compared to 63.1% for the same period in the prior year.

 

o

The Company’s efficiency ratio of 59.3% for the first six months of 2021 included $817 thousand of merger related costs, which increased the efficiency ratio by 2.7%.

 

o

The Company’s efficiency ratio of 63.1% for the first six months of 2020 included $1.1 million of non-recurring costs, which increased the efficiency ratio by 3.9%.

Nonperforming assets at June 30, 2021 totaled $3.8 million or 0.20% of total assets, a decrease of $3.2 million (92% annualized) since December 31, 2020. The decrease in nonperforming assets resulted from repayment of a $3.0 million nonaccrual borrowing relationship during the first quarter of 2021.

Book value per common share was $10.78 at June 30, 2021 compared to $10.58 at December 31, 2020.

Tangible book value per common share was $9.87 at June 30, 2021 compared to $9.64 at December 31, 2020.

 

Impact of COVID-19:

 

During 2020, we funded 606 loans totaling $163.5 million under the first Small Business Administration Paycheck Protection Program (“PPP”). We continue to process loan forgiveness applications and, at June 30, 2021, we have 47 loans totaling $12.3 million remaining to be forgiven compared to 228 loans totaling $79.0 million at March 31, 2021.

 

2

 

logo2.jpg
 

During 2021, we funded an additional 247 loans totaling $47.3 million under the second PPP. The application period for the second PPP loan program ended on May 31, 2021. We began to process loan forgiveness applications during June, and at June 30, 2021, we have 234 loans totaling $46.7 million remaining to be forgiven.

We have experienced significant increases in deposit balances during the past year. All PPP loan funds were deposited into customer accounts at our bank and customer behavior has emphasized savings during the economic slowdown.

During the first quarter of 2021, the SBA extended their debt relief program and resumed making principal and interest payments on all of our SBA 7(a) loans, which totaled $29.0 million at June 30, 2021. Payment assistance varies by borrower, will continue for no more than eight months and is limited to a maximum $9 thousand per borrower per month.

At June 30, 2021, approximately 30% of our workforce is working remotely.

As of April 12, 2021, all of our offices have returned to pre-pandemic operating hours.

 

 

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.

 

3

 

logo2.jpg

 

TABLE 1

 

SELECTED FINANCIAL INFORMATION - UNAUDITED

 

(dollars 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

 

2021

  

2020

  

2021

  

2021

  

2020

 

Net income

 $4,139  $3,847  $4,920  $9,059  $4,763 

Average total assets

 $1,869,294  $1,626,827  $1,790,447  $1,830,089  $1,540,423 

Average total earning assets

 $1,775,020  $1,523,157  $1,692,281  $1,733,879  $1,438,127 

Average shareholders' equity

 $179,329  $167,036  $178,162  $178,748  $169,578 
                     

Selected performance ratios

                    

Return on average assets

  0.89

%

  0.95

%

  1.11

%

  1.00

%

  0.62

%

Return on average equity

  9.26

%

  9.26

%

  11.20

%

  10.22

%

  5.65

%

Efficiency ratio

  61.5

%

  56.1

%

  57.1

%

  59.3

%

  63.1

%

                     

Share and per share amounts

                    

Weighted average shares - basic (1)

  16,736   16,660   16,706   16,721   17,178 

Weighted average shares - diluted (1)

  16,823   16,689   16,778   16,803   17,217 

Earnings per share - basic

 $0.25  $0.23  $0.29  $0.54  $0.28 

Earnings per share - diluted

 $0.25  $0.23  $0.29  $0.54  $0.28 
                     
  

At June 30,

  

At March 31,

         

Share and per share amounts

 

2021

  

2020

  

2021

         

Common shares outstanding (2)

  16,896   16,739   16,876         

Book value per common share (2)

 $10.78  $10.13  $10.50         

Tangible book value per common share (2)(3)

 $9.87  $9.17  $9.58         
                     

Capital ratios (4)

                    

Bank of Commerce Holdings

                    

Common equity tier 1 capital ratio

  13.04

%

  12.34

%

  12.99

%

        

Tier 1 capital ratio

  13.84

%

  13.18

%

  13.81

%

        

Total capital ratio

  15.89

%

  15.27

%

  15.87

%

        

Tier 1 leverage ratio

  9.37

%

  9.82

%

  9.61

%

        

Tangible common equity ratio (5)

  8.77

%

  9.05

%

  8.91

%

        
                     

Merchants Bank of Commerce

                    

Common equity tier 1 capital ratio

  14.48

%

  13.72

%

  14.41

%

        

Tier 1 capital ratio

  14.48

%

  13.72

%

  14.41

%

        

Total capital ratio

  15.74

%

  14.97

%

  15.66

%

        

Tier 1 leverage ratio

  9.80

%

  10.21

%

  10.03

%

        

 

(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.

 

4

 

 

logo2.jpg

 

BALANCE SHEET OVERVIEW

 

As of June 30, 2021, the Company had total consolidated assets of $1.917 billion, gross loans of $1.091 billion, allowance for loan and lease losses (“ALLL”) of $17 million, total deposits of $1.697 billion, and shareholders’ equity of $182 million. Certain amounts for prior periods have been reclassified to conform to the current presentation. The results of reclassifications are not considered material and have no effect on previously reported equity or net income.

 

TABLE 2

 

LOAN BALANCES BY TYPE - UNAUDITED

 

(dollars in thousands)

 
                                 
  

At June 30,

          

At March 31,

 
      

% of

      

% of

  

Change

      

% of

 
  

2021

  

Total

  

2020

  

Total

  

Amount

  

%

  

2021

  

Total

 

Commercial

 $93,650   9

%

 $126,024   10

%

 $(32,374)  (26)% $117,597   10

%

Paycheck Protection Program ("PPP")

  59,058   5   162,189   13   (103,131)  (64)%  117,991   10 

Commercial real estate:

                                

Construction and land development

  30,494   3   41,371   3   (10,877)  (26)%  32,145   3 

Non-owner occupied

  626,819   57   557,466   47   69,353   12

%

  592,157   52 

Owner occupied

  168,296   15   179,337   15   (11,041)  (6)%  165,367   14 

Residential real estate:

                                

Individual Tax Identification Number ("ITIN")

  26,912   2   31,083   3   (4,171)  (13)%  27,839   2 

1-4 family mortgage

  50,259   5   60,756   5   (10,497)  (17)%  54,562   5 

Equity lines

  17,827   2   20,938   2   (3,111)  (15)%  18,600   2 

Consumer and other

  17,430   2   27,176   2   (9,746)  (36)%  19,685   2 

Gross loans

  1,090,745   100

%

  1,206,340   100

%

  (115,595)  (10)%  1,145,943   100

%

Deferred (fees) and costs

  551       (1,603)      2,154       143     

Loans, net of deferred fees and costs

  1,091,296       1,204,737       (113,441)      1,146,086     

Allowance for loan and lease losses

  (17,194)      (16,089)      (1,105)      (17,027)    

Net loans

 $1,074,102      $1,188,648      $(114,546)     $1,129,059     
                                 

Average loans during the quarter

 $1,135,521      $1,180,915      $(45,394)  (4)% $1,140,315     

Average loans during the quarter

(excluding PPP)

 $1,031,484      $1,048,139      $(16,655)  (2)% $1,017,123     

Average yield on loans during the quarter

  4.39

%

      4.50

%

      (0.11)  (2)%  4.70

%

    

Average yield on loans during the quarter (excluding PPP)

  4.42

%

      4.76

%

      (0.34)  (7)%  4.60

%

    

Average yield on loans year to date

  4.54

%

      4.64

%

      (0.10)  (2)%  4.70

%

    

Average yield on loans year to date (excluding PPP)

  4.51

%

      4.78

%

      (0.27)  (6)%  4.60

%

    

 

The Company recorded gross loan balances of $1.091 billion at June 30, 2021, compared with $1.206 billion and $1.146 billion at June 30, 2020 and March 31, 2021, respectively, a decrease of $116 million and $55 million, respectively. The improving economic environment is reflected in the growth of our gross loans (excluding PPP loans) which increased $22.8 million (5% annualized) since December 31, 2020.

 

Gross loan balances in the table above include a net fair value discount for loans acquired from Merchants of $694 thousand, $1.3 million and $810 thousand at June 30, 2021, June 30, 2020 and March 31, 2021, respectively. We recorded $115 thousand, $216 thousand and $110 thousand in accretion of the discount for these loans during the quarters ended June 30, 2021, June 30, 2020 and March 31, 2021, respectively.

 

5

 

 

logo2.jpg

 

Paycheck Protection Program (PPP)

 

We have funded 853 loans totaling $210.8 million under the two PPP loan programs through June 30, 2021.

 

First PPP Loan Program - 2020

 

During 2020, we originated 606 loans totaling $163.5 million in the first PPP loan program. Most of the loans have subsequently been forgiven and repaid. At June 30, 2021, we have 47 loans totaling $12.3 million in the program. The majority of the first program loans have a two-year term over which the loan fee income (net of loan origination costs) is earned. When a PPP loan is repaid prior to maturity, all unamortized fees and cost associated with the loan are accelerated into income. During the current quarter, 181 loans totaling $66.7 million were repaid and we recognized $560 thousand in accelerated net fee income compared to 259 loans repaid totaling $51.8 million and $1.0 million in accelerated net fee income in the prior quarter. At June 30, 2021, net loan fees totaling $142 thousand remain to be earned and we anticipate that most of it will be recognized during the third quarter of 2021.

 

Second PPP Loan Program - 2021

 

During the first quarter of 2021, the SBA announced a second PPP loan program. The SBA’s second PPP loan program provided first draw PPP loans to borrowers who were ineligible under the first PPP loan program (sole proprietors, ITIN business owners, small business owners with non-fraud felony convictions and small business owners who have struggled with student loan debt) and allowed second draw PPP loans to qualifying businesses that received a first draw under SBA’s first PPP loan program. The loans were available until May 31, 2021, were limited to $2 million, had a five-year term and SBA increased the lender fees for loans under $50 thousand to incentivize lenders to work with smaller borrowers.

 

During 2021, we originated 247 loans totaling $47.3 million in the second PPP loan program. During the second quarter, we began to process loan forgiveness applications. At June 30, 2021, we have 234 loans totaling $46.7 million in the program. We anticipate that the loans in the second PPP loan program will have a lower yield as net loan fee income will be recognized over a five-year term instead of the two-year term of the first program. Borrowers may submit a loan forgiveness application after using the loan proceeds and submitting an application for forgiveness of their first PPP loan. When a PPP loan is repaid prior to maturity, all unamortized fees and cost associated with the loan are accelerated into income. During the current quarter, 13 loans totaling $629 thousand were repaid and we recognized $28 thousand in accelerated net fee income. At June 30, 2021, net loan fees totaling $1.5 million remain to be earned.

 

The following tables provide additional information on the PPP loans by industry and by loan balance at June 30, 2021 for loans in both PPP loan programs.

 

TABLE 3

 

PPP LOANS BY INDUSTRY - UNAUDITED

 

(dollars in thousands)

 
         
  

At June 30, 2021

 
  

Number

  

Balance

 

Construction

  39  $15,634 

Healthcare and Social Assistance

  42   4,326 

Professional, Scientific and Tech Services

  37   5,711 

Accommodation and Food Services

  39   9,185 

Admin, Support, Waste Management and Remediation Services

  9   2,064 

Primary Metal Manufacturing

  7   558 

Retail Trade

  19   3,340 

Other

  89   18,240 

Total

  281  $59,058 

 

6

 

logo2.jpg

 

TABLE 4

 

PPP LOANS BY LOAN SIZE - UNAUDITED

 

(dollars in thousands)

 
             
  

At June 30, 2021

 
  

Balance

  

Number

  

Average Loan

Size

 

$50,000 or less

 $2,232   101  $22 

$50,001 to $150,000

  7,047   83  $85 

$150,001 to $350,000

  10,723   51  $210 

$350,001 to $1,999,999

  31,884   43  $741 

$2,000,000 or greater

  7,172   3  $2,391 

Total

 $59,058   281  $210 

 

 

The following table presents the status of our loans in the forgiveness process.

 

TABLE 5

 

PPP LOANS FORGIVENESS APPLICATION STATUS - UNAUDITED

 

(dollars in thousands)

 
                         
  

At June 30, 2021

  

At March 31, 2021

 
  

Balance

  

Number

  

Average Loan Size

  

Balance

  

Number

  

Average Loan Size

 

First PPP loan program - 2020

                        

Borrower has not started application

 $314   7  $45  $5,425   49  $111 

Borrower is working on application

  3,348   15  $223   9,345   65  $144 

Borrower has completed application and the bank is reviewing it

  2,744   16  $172   6,381   35  $182 

Bank has approved application and submitted it to SBA

  5,804   6  $967   57,901   78  $742 

Loans partially repaid (1)

  137   3  $46   4   1  $4 

PPP loans not fully repaid

  12,347   47  $263   79,056   228  $347 
                         

Repayments

  151,146   559  $270   84,437   378  $223 

Total first PPP loan program - 2020

  163,493   606  $270   163,493   606  $270 
                         

Second PPP loan program - 2021

                        

Borrower has not started application

  42,506   221  $192   38,935   196  $199 

Borrower is working on application

  2,224   6  $371        $ 

Borrower has completed application and the bank is reviewing it

  1,911   6  $319        $ 

Bank has approved application and submitted it to SBA

  70   1  $70        $ 

PPP loans not fully repaid

  46,711   234  $200   38,935   196  $199 
                         

Repayments

  629   13  $48        $ 

Total second PPP loan program - 2021

  47,340   247  $192   38,935   196  $199 
                         

Total PPP loans originated by bank

 $210,833   853  $247  $202,428   802  $252 

 

(1) Borrowers who participated in the Economic Injury Disaster Loan ("EIDL") program had their forgiveness payment reduced by their EIDL advance. This reduction has subsequently been repealed and the SBA has remitted a reconciliation payment for previously-deducted EIDL advance amounts, plus interest.

 

7

 

logo2.jpg

 

TABLE 6

 

CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED

 

(dollars in thousands)

 
                                 
  

At June 30,

          

At March 31,

 
      

% of

      

% of

  

Change

      

% of

 
  

2021

  

Total

  

2020

  

Total

  

Amount

  

%

  

2021

  

Total

 

Cash and due from banks

 $21,011   3

%

 $29,630   7

%

 $(8,619)  (29)% $20,053   3

%

Interest-bearing deposits in other banks

  156,107   21   126,132   29   29,975   24

%

  74,804   12 

Total cash and cash equivalents

  177,118   24   155,762   36   21,356   14

%

  94,857   15 
                                 

Investment securities:

                                

U.S. government and agencies

  29,691   4   33,195   8   (3,504)  (11)%  31,060   5 

Obligations of state and political subdivisions

  136,467   18   76,888   18   59,579   77

%

  128,841   21 

Residential mortgage backed securities and collateralized mortgage obligations

  317,842   41   137,120   30   180,722   132

%

  277,547   46 

Corporate securities

        1,000      (1,000)  (100)%      

Commercial mortgage backed securities

  52,718   7   16,329   4   36,389   223

%

  38,582   6 

Other asset backed securities

  42,946   6   15,668   4   27,278   174

%

  41,345   7 

Total investment securities - AFS

  579,664   76   280,200   64   299,464   107

%

  517,375   85 
                                 

Total cash, cash equivalents and investment securities

 $756,782   100

%

 $435,962   100

%

 $320,820   74

%

 $612,232   100

%

                                 

Average yield on interest-bearing due
from banks during the quarter

  0.10

%

      0.12

%

      (0.02)      0.11

%

    

Average yield on investment securities during the quarter - nominal

  1.70

%

      2.61

%

      (0.91)      1.84

%

    

Average yield on investment securities during the quarter - tax equivalent

  1.82

%

      2.78

%

      (0.96)      1.96

%

    

 

As of June 30, 2021, we maintained noninterest-bearing cash positions of $21.0 million and interest-bearing deposits of $156.1 million at the Federal Reserve Bank and correspondent banks. During the current quarter, we continued to invest our increased liquidity into our investment securities portfolio.

 

Unprecedented deposit growth during the last year as a result of PPP programs and changes in customer behavior has led to a significant increase in the size of our investment securities portfolio. Investment securities totaled $579.7 million at June 30, 2021, compared with $280.2 million and $517.4 million at June 30, 2020 and March 31, 2021, respectively.

 

During the second quarter of 2021, we purchased securities with a par value of $110.0 million and weighted average yield of 1.52% (1.57% tax equivalent). Investment purchases were comprised primarily of municipal bonds and mortgage backed securities. We sold securities with a par value of $26.1 million resulting in net realized gain of $64 thousand for the quarter ended June 30, 2021.

 

At June 30, 2021, our net unrealized gains on available-for-sale investment securities were $6.3 million compared with net unrealized gains of $10.1 million and $4.0 million at June 30, 2020 and March 31, 2021, respectively. The fluctuation in net unrealized gains was due to changes in market interest rates.

 

8

 

logo2.jpg

 

TABLE 7

 

DEPOSITS BY TYPE - UNAUDITED

 

(dollars in thousands)

 
                                 
  

At June 30,

          

At March 31,

 
      

% of

      

% of

  

Change

      

% of

 
  

2021

  

Total

  

2020

  

Total

  

Amount

  

%

  

2021

  

Total

 

Demand - noninterest-bearing

 $627,911   37

%

 $521,751   35

%

 $106,160   20

%

 $603,991   37

%

Demand - interest-bearing

  306,565   18   287,198   19   19,367   7

%

  290,687   18 

Money market

  463,639   27   405,322   27   58,317   14

%

  425,251   26 

Total demand

  1,398,115   82   1,214,271   81   183,844   15

%

  1,319,929   81 
                                 

Savings

  162,325   10   142,389   10   19,936   14

%

  160,834   10 

Total non-maturing deposits

  1,560,440   92   1,356,660   91   203,780   15

%

  1,480,763   91 
                                 

Certificates of deposit

  136,898   8   137,647   9   (749)  (1)%  133,630   9 

Total deposits

 $1,697,338   100

%

 $1,494,307   100

%

 $203,031   14

%

 $1,614,393   100

%

 

Total deposits at June 30, 2021, increased $203 million or 14% to $1.697 billion compared to June 30, 2020 and increased $83 million or 21% annualized compared to March 31, 2021. Total non-maturing deposits increased $203.8 million or 15% compared to the same date a year ago and increased $79.7 million or 22% annualized compared to March 31, 2021. The increase in non-maturing deposits compared to the same period one year ago was due to PPP loan program disbursements and changes in customer behavior, which is placing greater emphasis on savings during the economic slowdown. Management assumes that depositor behavior will change at a later date, but is unable to predict the timing of that change. Certificates of deposit decreased $749 thousand or 1% compared to the same date a year ago and increased $3.3 million or 10% annualized compared to March 31, 2021.

 

The following table presents the average cost of interest-bearing deposits, all deposits and all interest-bearing liabilities for the periods indicated.

 

TABLE 8

 

AVERAGE COST OF FUNDS - UNAUDITED

 

For The Three Months Ended

 
                                 
  

June 30,

  

March 31,

  

December 31,

  

September 30,

  

June 30,

  

March 31,

  

December 31,

  

September 30,

 
  

2021

  

2021

  

2020

  

2020

  

2020

  

2020

  

2019

  

2019

 

Interest-bearing deposits

  0.22

%

  0.26

%

  0.29

%

  0.36

%

  0.43

%

  0.53

%

  0.56

%

  0.56

%

Interest-bearing deposits and noninterest-bearing demand

  0.14

%

  0.16

%

  0.19

%

  0.23

%

  0.28

%

  0.35

%

  0.38

%

  0.38

%

All interest-bearing liabilities

  0.29

%

  0.32

%

  0.37

%

  0.44

%

  0.52

%

  0.65

%

  0.68

%

  0.68

%

All interest-bearing liabilities and noninterest-bearing demand

  0.18

%

  0.21

%

  0.24

%

  0.29

%

  0.34

%

  0.43

%

  0.46

%

  0.46

%

 

 

Equity

 

As detailed in Table 1, management believes the capital ratios remain adequate for the Company’s risk profile.

 

In late 2019, we announced a program to repurchase 1.0 million shares of common stock, which was later increased to 1.5 million shares of common stock. Between October of 2019 and April of 2020, all 1.5 million shares were repurchased at a total cost of $13.6 million including commissions, or an average of $9.11 per share.

 

In late 2020, we announced a new share repurchase program to repurchase up to 1.0 million shares of common stock over a period ending December 31, 2021. As of June 30, 2021, no shares have been repurchased under this plan.

 

9

 

 

logo2.jpg

 

INCOME STATEMENT OVERVIEW

 

TABLE 9

 

SUMMARY INCOME STATEMENT - UNAUDITED

 

(dollars in thousands, except per share data)

 
                             
  

For The Three Months Ended

 
  

June 30,

  

Change

  

March 31,

  

Change

 
  

2021

  

2020

  

Amount

  

%

  

2021

  

Amount

  

%

 

Interest income

 $14,728  $14,997  $(269)  (2)% $15,240  $(512)  (3)%

Interest expense

  764   1,214   (450)  (37)%  822   (58)  (7)%

Net interest income

  13,964   13,783   181   1

%

  14,418   (454)  (3)%

Provision for loan and lease losses

     1,300   (1,300)  (100)%        

%

Noninterest income

  1,131   955   176   18

%

  1,163   (32)  (3)%

Noninterest expense

  9,279   8,270   1,009   12

%

  8,897   382   4

%

Income before provision for income taxes

  5,816   5,168   648   13

%

  6,684   (868)  (13)%

Provision for income taxes

  1,677   1,321   356   27

%

  1,764   (87)  (5)%

Net income

 $4,139  $3,847  $292   8

%

 $4,920  $(781)  (16)%
                             

Earnings per share - basic

 $0.25  $0.23  $0.02   9

%

 $0.29  $(0.04)  (14)%

Weighted average shares - basic

  16,736   16,660   76   

%

  16,706   30   

%

Earnings per share - diluted

 $0.25  $0.23  $0.02   9

%

 $0.29  $(0.04)  (14)%

Weighted average shares - diluted

  16,823   16,689   134   1

%

  16,778   45   

%

Dividends declared per common share

 $0.06  $0.05  $0.01   20

%

 $0.06  $   

%

 

 

Second Quarter of 2021 Compared with the Second Quarter of 2020

 

Net income for the second quarter of 2021 increased $292 thousand compared to the second quarter of 2020. In the current quarter, net interest income was $181 thousand higher, provision for loan and lease losses was $1.3 million lower and noninterest income was $176 thousand higher. These positive changes were partially offset by noninterest expense that was $1.0 million higher and a provision for income taxes that was $356 thousand higher.

 

Net Interest Income

 

Net interest income increased $181 thousand compared to the same period a year ago.

 

Interest income for the second quarter of 2021 decreased $269 thousand or 2% to $14.7 million.

 

During the second quarter of 2021, we recognized $588 thousand in accelerated net fee income on PPP loans forgiven and repaid during the quarter. These accelerated loan fees increased the average yield on loans for the second quarter of 2021 by 21 basis points and increased the net interest margin for the second quarter of 2021 by 13 basis points.

PPP loans had an average balance of $104.0 million and yield of 4.10% (1.83% excluding accelerated fee income) for the second quarter of 2021 compared to an average balance of $132.8 million and yield of 2.46% for the same period a year ago.

Excluding PPP loans, interest and fees on loans decreased $1.0 million due to a $16.7 million decrease in average loan balances and a 34 basis point decrease in average yield.

Interest on investment securities increased $520 thousand due to a $265.6 million increase in average investment securities balances partially offset by a 91 basis point decrease in average yield.

Interest on interest-bearing deposits due from banks increased $6 thousand due to a $31.6 million increase in average interest-bearing deposit balances partially offset by a 1 basis point decrease in average yield. During 2020, in response to the economic effects of the COVID-19 pandemic, the Federal Reserve cut short-term interest rates by 150 to 175 basis points and has provided guidance that it expects interest rates to remain low for an extended period of time.

 

10

 

logo2.jpg

 

Interest expense for the second quarter of 2021 decreased $450 thousand or 37% to $764 thousand.

 

Interest expense on interest-bearing deposits decreased $385 thousand. Average interest-bearing demand and savings deposit balances increased $141.6 million, while average certificate of deposit balances decreased $3.6 million. The average rate paid on interest-bearing deposits decreased 21 basis points from 0.43% to 0.22%.

Interest expense on FHLB borrowings decreased $5 thousand. There were no FHLB borrowings during the current quarter. Average FHLB borrowings were $16.0 million during the same period a year ago. During the second quarter of 2020, we took advantage of a program offered by the FHLB that bore no interest. The average rate paid on FHLB borrowings was 0.13% during the second quarter of 2020.

Interest expense on other term debt decreased $46 thousand. The average debt balance was essentially unchanged, while the average rate paid decreased 188 basis points.

Interest expense on junior subordinated debentures decreased $14 thousand. The average debt balance was unchanged, while the average rate paid decreased 55 basis points.

 

Provision for Loan and Lease Losses

 

Many of our asset quality concerns from 2020 have moderated. No provision for loan and lease losses was necessary for the current quarter compared to a provision for loan and lease losses of $1.3 million in the same quarter a year ago. Nonaccrual loans decreased 43% since June 30, 2020 primarily due to repayment of two commercial real estate loans totaling $4.1 million. Net loan recoveries were $167 thousand during the current quarter compared to net loan charge-offs of $278 thousand during the same period a year ago. Most COVID-19 related loan payment deferrals have ended with limited negative impact on delinquencies. A more in depth discussion of our provision is provided below under the heading Provision for Loan and Lease Losses.

 

Noninterest Income

 

Noninterest income for the three months ended June 30, 2021 increased $176 thousand compared to the same period a year previous. The increase was primarily due to $138 thousand increase in ATM and point of sales fees and a $90 thousand increase in FHLB dividends partially offset by a $76 thousand decrease in gain on sale of investment securities.

 

Noninterest Expense

 

Noninterest expense for the three months ended June 30, 2021 increased $1.0 million compared to the same period a year previous, mostly resulting from $817 thousand of merger related costs.

 

The Company’s efficiency ratio was 61.5% for the second quarter of 2021. The ratio during the same period in 2020 was 56.1%. The Company’s efficiency ratio of 61.5% for the second quarter of 2021 included $817 thousand of merger related costs, which increased the efficiency ratio by 5.4%.

 

Income Tax Provision

 

For the three months ended June 30, 2021, our income tax provision of $1.7 million on pre-tax income of $5.8 million was an effective tax rate of 28.8%. The tax provision for the second quarter of the prior year was $1.3 million on pre-tax income of $5.2 million for an effective rate of 25.6%.

 

The current quarter income tax calculation included the impact of $772 thousand of non-deductible merger related costs, which increased the effective tax rate by 2.4%.

 

Second Quarter of 2021 Compared with the First Quarter of 2021

 

Net income for the second quarter of 2021 decreased $781 thousand compared to the first quarter of 2021. In the current quarter, net interest income was $454 thousand lower, noninterest income was $32 thousand lower and noninterest expense was $382 thousand higher. These negative variances were partially offset by a provision for income taxes that was $87 thousand lower.

 

Net Interest Income

 

Net interest income decreased $454 thousand over the prior quarter.

 

Interest income for the three months ended June 30, 2021 decreased $512 thousand or 3% to $14.7 million.

 

11

 

logo2.jpg

 

During the second quarter of 2021, we recognized $588 thousand in accelerated net fee income on PPP loans forgiven and repaid during the quarter compared to $1.0 million in the prior quarter. These accelerated loan fees increased the average yield on loans for the second and first quarter of 2021 by 21 basis points and 36 basis points, respectively. The accelerated loan fees increased the net interest margin for the second and first quarter of 2021 by 13 basis points and 24 basis points, respectively.

PPP loans had an average balance of $104.0 million and yield of 4.10% (1.83% excluding accelerated fee income) for the second quarter of 2021 compared to an average balance of $123.2 million and yield of 5.49% (2.20% excluding accelerated fee income) for the prior quarter.

Excluding PPP loans, interest and fees on loans decreased $181 thousand due to a 15 basis point decrease in average yield partially offset by a $14.4 million increase in average loan balances.

During the first quarter of 2021, we recognized $251 thousand in interest income from the repayment of a nonaccrual loan. The interest income recognized from that repayment increased the average yield on loans for the first quarter of 2021 by 9 basis points.

Interest on investment securities increased $276 thousand due to a $94.7 million increase in average investment security balances partially offset by a 13 basis point decrease in average yield.

Interest on interest-bearing deposits due from banks decreased $2 thousand due to a $7.2 million decrease in average balances and a 1 basis point decrease in average yield.

 

Interest expense for the three months ended June 30, 2021 decreased $58 thousand or 7% to $764 thousand.

 

Interest expense on interest-bearing deposits decreased $60 thousand. Average interest-bearing demand and savings deposit balances increased $32.6 million and average certificates of deposit increased $4.9 million. The average rate paid on interest-bearing deposits decreased 4 basis points from 0.26% to 0.22%.

There were no FHLB borrowings during the current quarter. Average FHLB borrowings were $3.9 million in the prior quarter. The borrowings bore no interest under a program offered by the FHLB and were fully repaid at March 31, 2021.

Interest expense on other term debt decreased $1 thousand. The average debt balance remained unchanged, while the average rate paid decreased 2 basis points.

Interest expense on junior subordinated debentures decreased $1 thousand. The average debt balance remained unchanged, while the average rate paid decreased 2 basis points.

 

Provision for Loan and Lease Losses

 

Many of our asset quality concerns from 2020 have moderated. Net loan recoveries were $167 thousand for the current quarter compared to net loan recoveries of $117 thousand for the prior quarter. No provision for loan and lease losses was necessary for the current or prior quarter. A more in depth discussion of our provision is provided below under the heading Provision for Loan and Lease Losses.

 

Noninterest Income

 

Noninterest income for the three months ended June 30, 2021 decreased $32 thousand compared to the prior quarter. The first quarter of 2021 included a $221 thousand legal settlement, which was partial recovery of an investment security impairment loss recorded during the second quarter of 2016. The decrease was partially offset by an $83 thousand increase in ATM and point of sale fees, $57 thousand gain on sale of investment securities and $33 thousand increase in FHLB dividends.

 

Noninterest Expense

 

Noninterest expense for the three months ended June 30, 2021 increased $382 thousand compared to the prior quarter. The increase included $817 thousand of merger related costs in the current quarter. This increase was partially offset by a decrease in accrued vacation, salaries and related benefit costs of $434.

 

The Company’s efficiency ratio was 61.5% for the second quarter of 2021 compared with 57.1% for the prior quarter. The Company’s efficiency ratio of 61.5% for the second quarter of 2021 included $817 thousand of merger related costs, which increased the efficiency ratio by 5.4%.

 

12

 

logo2.jpg

 

Income Tax Provision

 

For the three months ended June 30, 2021, our income tax provision of $1.7 million on pre-tax income of $5.8 million was an effective tax rate of 28.8%. The income tax provision for the prior quarter of $1.8 million on pre-tax income of $6.7 million was an effective tax rate of 26.4%.

 

The current quarter income tax calculation included the impact of $772 thousand of non-deductible merger related costs, which increased the effective tax rate by 2.4%.

 

Earnings Per Share

 

Diluted earnings per share were $0.25 for the three months ended June 30, 2021 compared with diluted earnings per share of $0.23 for the same period a year ago and diluted earnings per share of $0.29 for the prior period. Net income and weighted average shares used to calculate earnings per share – diluted are summarized in Table 9 presented earlier in this press release.

 

13

 

logo2.jpg

 

TABLE 10a

 

NET INTEREST MARGIN - UNAUDITED

 

(dollars in thousands)

 
                                     
  

For The Three Months Ended

 
  

June 30, 2021

  

June 30, 2020

  

March 31, 2021

 
  

Average

      

Yield /

  

Average

      

Yield /

  

Average

      

Yield /

 
  

Balance

  

Interest(1)

  

Rate (5)

  

Balance

  

Interest(1)

  

Rate (5)

  

Balance

  

Interest(1)

  

Rate (5)

 

Interest-earning assets:

                                    

Loans net of PPP (2)

 $1,031,484  $11,366   4.42

%

 $1,048,139  $12,411   4.76

%

 $1,017,123  $11,547   4.60

%

PPP loans

  104,037   1,063   4.10

%

  132,776   813   2.46

%

  123,192   1,668   5.49

%

Taxable securities

  437,710   1,697   1.56

%

  211,195   1,329   2.53

%

  358,291   1,485   1.68

%

Tax-exempt securities (3)

  97,637   575   2.36

%

  58,540   423   2.91

%

  82,355   511   2.52

%

Interest-bearing deposits in other banks

  104,152   27   0.10

%

  72,507   21   0.12

%

  111,320   29   0.11

%

Average interest-earning assets

  1,775,020   14,728   3.33

%

  1,523,157   14,997   3.96

%

  1,692,281   15,240   3.65

%

Cash and due from banks

  21,819           21,564           21,744         

Premises and equipment, net

  14,715           15,428           15,001         

Goodwill

  11,671           11,671           11,671         

Other intangible assets, net

  3,743           4,508           3,934         

Other assets

  42,326           50,499           45,816         

Average total assets

 $1,869,294          $1,626,827          $1,790,447         
                                     

Interest-bearing liabilities:

                                    

Interest-bearing demand

 $301,052   55   0.07

%

 $261,907   85   0.13

%

 $295,388   58   0.08

%

Money market

  443,067   180   0.16

%

  365,368   317   0.35

%

  425,113   195   0.19

%

Savings

  163,227   41   0.10

%

  138,500   95   0.28

%

  154,199   48   0.13

%

Certificates of deposit

  139,391   303   0.87

%

  142,955   467   1.31

%

  134,520   338   1.02

%

Federal Home Loan Bank of San Francisco ("FHLB") borrowings

        

%

  16,044   5   0.13

%

  3,889      

%

Other borrowings

  10,000   138   5.54

%

  9,976   184   7.42

%

  10,000   137   5.56

%

Junior subordinated debentures

  10,310   47   1.83

%

  10,310   61   2.38

%

  10,310   46   1.81

%

Average interest-bearing liabilities

  1,067,047   764   0.29

%

  945,060   1,214   0.52

%

  1,033,419   822   0.32

%

Noninterest-bearing demand

  606,625           497,636           562,155         

Other liabilities

  16,293           17,095           16,711         

Shareholders’ equity

  179,329           167,036           178,162         

Average liabilities and shareholders’ equity

 $1,869,294          $1,626,827          $1,790,447         

Net interest income and net interest margin (4)

     $13,964   3.16

%

     $13,783   3.64

%

     $14,418   3.46

%

 

(1) Interest income on loans, net of PPP includes net fees and costs of approximately $249 thousand, $138 thousand, and $204 thousand for the three months ended June 30, 2021 and 2020 and March 31, 2021, respectively. Interest income on PPP loans includes $806 thousand, $476 thousand and $1.4 million of net fees and costs for the three months ended June 30, 2021 and 2020 and March 31, 2021, respectively.

(2) Loans, net of PPP includes average nonaccrual loans of $3.9 million, $5.6 million and $6.2 million for the three months ended June 30, 2021 and 2020 and March 31, 2021, respectively.

(3) Interest income and yields on tax-exempt securities are presented on a nominal basis, not on a tax equivalent basis.

(4) Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income for the three months ended June 30, 2021 and 2020 and March 31, 2021 included $115 thousand, $216 thousand and $110 thousand, respectively, in accretion of the discount on the loans acquired from Merchants Holding Company, which improved the net interest margin by 4, 7 and 4 basis points, respectively.

(5) Yields and rates are calculated by dividing income or expense by the average balance of assets or liabilities, respectively.

 

14

 

logo2.jpg

 

TABLE 10b

 

NET INTEREST MARGIN - UNAUDITED

 

(dollars in thousands)

 
                         
  

For The Six Months Ended

 
  

June 30, 2021

  

June 30, 2020

 
  

Average

      

Yield /

  

Average

      

Yield /

 
  

Balance

  

Interest(1)

  

Rate (5)

  

Balance

  

Interest(1)

  

Rate (5)

 

Interest-earning assets:

                        

Loans net of PPP (2)

 $1,024,343  $22,913   4.51

%

 $1,040,914  $24,749   4.78

%

PPP loans

  113,562   2,731   4.85

%

  66,388   813   2.46

%

Taxable securities

  398,220   3,182   1.61

%

  224,300   2,911   2.61

%

Tax-exempt securities (3)

  90,038   1,086   2.43

%

  46,705   694   2.99

%

Interest-bearing deposits in other banks

  107,716   56   0.10

%

  59,820   175   0.59

%

Average interest-earning assets

  1,733,879   29,968   3.49

%

  1,438,127   29,342   4.10

%

Cash and due from banks

  21,781           21,775         

Premises and equipment, net

  14,858           15,591         

Goodwill

  11,671           11,671         

Other intangible assets, net

  3,838           4,604         

Other assets

  44,062           48,655         

Average total assets

 $1,830,089          $1,540,423         
                         

Interest-bearing liabilities:

                        

Interest-bearing demand

 $298,236   113   0.08

%

 $247,641   185   0.15

%

Money market

  434,140   375   0.17

%

  336,477   720   0.43

%

Savings

  158,738   89   0.11

%

  137,002   213   0.31

%

Certificates of deposit

  136,969   641   0.94

%

  145,098   931   1.29

%

Federal Home Loan Bank of San Francisco ("FHLB") borrowings

  1,934      

%

  8,132   5   0.12

%

Other borrowings

  10,000   275   5.55

%

  9,970   368   7.42

%

Junior subordinated debentures

  10,310   93   1.82

%

  10,310   151   2.95

%

Average interest-bearing liabilities

  1,050,327   1,586   0.30

%

  894,630   2,573   0.58

%

Noninterest-bearing demand

  584,513           459,241         

Other liabilities

  16,501           16,974         

Shareholders’ equity

  178,748           169,578         

Average liabilities and shareholders’ equity

 $1,830,089          $1,540,423         

Net interest income and net interest margin (4)

     $28,382   3.30

%

     $26,769   3.74

%

 

(1) Interest income on loans, net of PPP includes net fees and costs of approximately $453 thousand and $395 thousand for the six months ended June 30, 2021 and 2020, respectively. Interest income on PPP loans includes $2.2 million and $476 thousand of net fees and costs for the six months ended June 30, 2021 and 2020, respectively.

(2) Loans, net of PPP includes average nonaccrual loans of $5.0 million and $5.5 million for the six months ended June 30, 2021 and 2020, respectively.

(3) Interest income and yields on tax-exempt securities are presented on a nominal basis, not on a tax equivalent basis.

(4) Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income for the six months ended June 30, 2021 and 2020 included $225 thousand and $379 thousand, respectively, in accretion of the discount on the loans acquired from Merchants Holding Company, which improved the net interest margin by 4 and 7 basis points, respectively.

(5) Yields and rates are calculated by dividing income or expense by the average balance of the assets or liabilities, respectively.

 

15

 

logo2.jpg

 

TABLE 11

 

ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED

 

(dollars in thousands)

 
                     
  

For The Three Months Ended

 
  

June 30,

  

March 31,

  

December 31,

  

September 30,

  

June 30,

 
  

2021

  

2021

  

2020

  

2020

  

2020

 

ALLL beginning balance

 $17,027  $16,910  $16,873  $16,089  $15,067 

Provision for loan and lease losses charged to expense

           1,100   1,300 

Loans charged-off

  (72)  (90)  (86)  (502)  (356)

Loan and lease loss recoveries

  239   207   123   186   78 

ALLL ending balance

 $17,194  $17,027  $16,910  $16,873  $16,089 

 

  

At June 30,

  

At March 31,

  

At December 31,

  

At September 30,

  

At June 30,

 
  

2021

  

2021

  

2020

  

2020

  

2020

 

Nonaccrual loans:

                    

Commercial

 $1,506  $1,520  $1,535  $1,549  $7 

Commercial real estate:

                    

Non-owner occupied

  606   626   640   1,712   1,717 

Owner occupied

  89   95   3,094   3,100   2,992 

Residential real estate:

                    

ITIN

  1,463   1,529   1,585   1,574   1,738 

1-4 family mortgage

  133   137   141   145   180 

Consumer and other

  16   17   18   18   37 

Total nonaccrual loans

  3,813   3,924   7,013   8,098   6,671 

Accruing troubled debt restructured loans:

                    

Commercial

  430   494   498   531   592 

Residential real estate:

                    

ITIN

  3,374   3,420   3,466   3,597   3,642 

Equity lines

  112   121   126   131   221 

Total accruing restructured loans

  3,916   4,035   4,090   4,259   4,455 

Total impaired loans

 $7,729  $7,959  $11,103  $12,357  $11,126 
                     

Gross loans at period end

 $1,090,745  $1,145,943  $1,139,732  $1,206,065  $1,206,340 
                     

Impaired loans to gross loans

  0.71

%

  0.69

%

  0.97

%

  1.02

%

  0.92

%

Impaired loans to gross loans (excluding PPP) (1)

  0.75

%

  0.77

%

  1.10

%

  1.19

%

  1.07

%

Nonaccrual loans to gross loans

  0.35

%

  0.34

%

  0.62

%

  0.67

%

  0.55

%

Nonaccrual loans to gross loans (excluding PPP) (2)

  0.37

%

  0.38

%

  0.70

%

  0.78

%

  0.64

%

                     

Allowance for loan and lease losses as a percent of:

             

Gross loans

  1.58

%

  1.49

%

  1.48

%

  1.40

%

  1.33

%

Gross loans (excluding PPP) (3)

  1.67

%

  1.66

%

  1.68

%

  1.62

%

  1.54

%

Nonaccrual loans

  450.93

%

  433.92

%

  241.12

%

  208.36

%

  241.18

%

Impaired loans

  222.46

%

  213.93

%

  152.30

%

  136.55

%

  144.61

%

 

(1) Impaired loans to gross loans (excluding PPP) is computed by dividing the impaired loans by total gross loans excluding gross PPP loans. Management believes that the ratio excluding PPP loans is meaningful when comparing to periods that do not include PPP loans, which are guaranteed by the SBA, and are expected to be forgiven and repaid by the SBA.

(2) Nonaccrual loans to gross loans (excluding PPP) is computed by dividing the nonaccrual loans by total gross loans excluding gross PPP loans. Management believes that the ratio excluding PPP loans is meaningful when comparing to periods that do not include PPP loans, which are guaranteed by the SBA, and are expected to be forgiven and repaid by the SBA.

(3) ALLL to gross loans (excluding PPP) is computed by dividing the ALLL by total gross loans excluding gross PPP loans. Management believes that the ratio excluding PPP loans is meaningful when comparing to periods that do not include PPP loans, which are guaranteed by the SBA, and are expected to be forgiven and repaid by the SBA.

 

16

 

logo2.jpg

 

Provision for Loan and Lease Losses

 

We monitor credit quality and the general economic environment to ensure that the ALLL is maintained at a level that is adequate to cover estimated credit losses in the loan and lease portfolio. Our review of ALLL adequacy utilizes both quantitative and qualitative factors. The quantitative analysis relies on historical loss rates which, unfortunately, may not be indicative of future losses. In response to quantitative data deficiencies, we have placed greater reliance on qualitative factors (Q-Factors).

 

Many of our COVID-19 related credit concerns have moderated and no provision for loan and lease losses was required during the first or second quarter of 2021. Net loan loss recoveries were $167 thousand during the second quarter of 2021, $117 thousand during the first quarter of 2021 and most of our borrowers who received a COVID-19 related loan payment deferral have resumed making their payments. This compares with the second quarter of 2020 when concerns over COVID-19 necessitated a provision for loan and lease losses of $1.3 million.

 

Our ALLL methodology supported an ALLL of $17.2 million at June 30, 2021, an increase of 2% compared to our ALLL of $16.9 million at December 31, 2020 and an increase of 7% compared to our ALLL of $16.1 million at June 30, 2020. Management believes the Company’s ALLL is adequate at June 30, 2021. 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, 2021, the recorded investment in loans classified as impaired totaled $7.7 million, with a corresponding specific reserve of $159 thousand compared to impaired loans of $8.0 million, with a corresponding specific reserve of $188 thousand at March 31, 2021 and impaired loans of $11.1 million with a corresponding specific reserve of $270 thousand at June 30, 2020.

 

TABLE 12

 

TROUBLED DEBT RESTRUCTURINGS - UNAUDITED

 

(dollars in thousands)

 
                     
  

At June 30,

  

At March 31,

  

At December 31,

  

At September 30,

  

At June 30,

 
  

2021

  

2021

  

2020

  

2020

  

2020

 

Nonaccrual

 $1,869  $1,947  $2,007  $2,063  $2,194 

Accruing

  3,916   4,035   4,090   4,259   4,455 

Total troubled debt restructurings

 $5,785  $5,982  $6,097  $6,322  $6,649 
                     

Troubled debt restructurings as a percent of:

                    

Gross loans

  0.53

%

  0.52

%

  0.53

%

  0.52

%

  0.55

%

Gross loans (excluding PPP) (1)

  0.56

%

  0.58

%

  0.60

%

  0.61

%

  0.64

%

 

(1) Troubled debt restructuring to gross loans (excluding PPP) is computed by dividing troubled debt restructurings by total gross loans excluding gross PPP loans. Management believes that the ratio excluding PPP loans is meaningful when comparing to periods that do not include PPP loans, which are guaranteed by the SBA, and are expected to be forgiven and repaid by the SBA.

 

 

There were no new troubled debt restructurings during the three months ended June 30, 2021. As of June 30, 2021, 89 loans were classified as troubled debt restructurings, of which 88 were performing according to their restructured terms. Of the 89 troubled debt restructurings, 81 were ITIN loans totaling $4.6 million which are serviced by a third party.

 

Troubled Debt Restructuring Guidance

 

Financial institution regulators and the CARES Act have changed the treatment of short-term loan modifications for borrowers impacted by COVID-19. The change provides that modifications made in response to COVID-19, to borrowers under certain circumstances, should not be considered a troubled debt restructuring.

 

We have responded to the needs of our borrowers in accordance with the CARES Act and regulatory guidance to grant short-term COVID-19 related loan modifications. These modified loans are not troubled debt restructurings and are not considered to be past due or non-performing. We have granted payment deferrals ranging from one to six months determined on a case-by-case basis considering the nature of the business and the impact of COVID-19. For some borrowers who were initially granted a payment deferral of less than six months, we have granted an additional payment deferral period on a case-by-case basis.

 

17

 

logo2.jpg

 

We maintain close contact with our borrowers to update our understanding of the impact of the pandemic on them, their businesses and the underlying collateral for our loans. For borrowers who continue to have been granted a loan payment deferral, we have evaluated their credit quality position and the potential for loss of principal.

 

Most loan payment deferrals have ended and borrowers have resumed making payments. At June 30, 2021, payment deferrals were extant for 16 loans totaling $4.1 million compared to 26 loans totaling $4.1 million at March 31, 2021. Loans with a payment deferral at June 30, 2021 consisted of two SBA 504 commercial real estate loans totaling $3.2 million and 14 first trust deed residential mortgage loans totaling $827 thousand.

 

Past Due Loans

 

Past due loans as of June 30, 2021 decreased $3.3 million to $1.9 million, compared to $5.2 million as of June 30, 2020 and decreased $1.9 million compared to $3.8 million as of March 31, 2021. The decreases in past due loans was primarily due to collection of our largest nonaccrual borrowing relationship totaling $3.0 million that was repaid in the first quarter of 2021, a $1.1 million commercial real estate loan that was repaid in the current quarter and a $626 thousand nonaccrual commercial real estate loan that was brought current in the current quarter.

 

The following table presents nonperforming assets at the dates indicated.

 

TABLE 13

 

NONPERFORMING ASSETS - UNAUDITED

 

(dollars in thousands)

 
                     
  

At June 30,

  

At March 31,

  

At December 31,

  

At September 30,

  

At June 30,

 
  

2021

  

2021

  

2020

  

2020

  

2020

 

Total nonaccrual loans

 $3,813  $3,924  $7,013  $8,098  $6,671 

90 days past due and still accruing

               

Total nonperforming loans

  3,813   3,924   7,013   8,098   6,671 
                     

Other real estate owned ("OREO")

        8   8   8 

Total nonperforming assets

 $3,813  $3,924  $7,021  $8,106  $6,679 
                     

Gross loans

 $1,090,745  $1,145,943  $1,139,732  $1,206,065  $1,206,340 

PPP loans (1)

  59,058   117,991   130,814   163,493   162,189 

Total gross loans, net of PPP loans

 $1,031,687  $1,027,952  $1,008,918  $1,042,572  $1,044,151 
                     

Nonperforming loans to gross loans

  0.35

%

  0.34

%

  0.62

%

  0.67

%

  0.55

%

Nonperforming loans to gross loans (excluding PPP) (2)

  0.37

%

  0.38

%

  0.70

%

  0.78

%

  0.64

%

Nonperforming assets to total assets

  0.20

%

  0.21

%

  0.40

%

  0.47

%

  0.39

%

 

(1) PPP loans are fully guaranteed by SBA and no allowance is provided for them.

(2) Nonperforming loans to gross loans (excluding PPP) is computed by dividing nonperforming loans by total gross loans excluding gross PPP loans. Management believes that the ratio excluding PPP loans is meaningful when comparing to periods that do not include PPP loans, which are guaranteed by the SBA, and are expected to be forgiven and repaid by the SBA.

 

18

 

logo2.jpg

 

The following table summarizes when loans are projected to reprice by year and rate index as of June 30, 2021.

 

TABLE 14

 

LOANS BY RATE INDEX AND PROJECTED REPRICING PERIOD - UNAUDITED

 

(dollars in thousands)

 
                                 
  

At June 30, 2021

 
                      

Years 6

         
                      

Through

  

Beyond

     

Rate Index:

 

Year 1

  

Year 2

  

Year 3

  

Year 4

  

Year 5

  

Year 10

  

Year 10

  

Total

 

Fixed

 $59,225  $67,622  $46,869  $44,062  $39,279  $217,043  $39,971  $514,071 

Variable:

                                

Prime

  61,925   4,939   6,593   5,116   8,584   329      87,486 

5 Year Treasury

  51,583   70,562   54,639   95,601   100,033   50,097      422,515 

7 Year Treasury

  2,901   4,465   5,315               12,681 

1 Year LIBOR

  16,772                     16,772 

Other Indexes

  3,432   2,206   2,063   10,427   2,183   12,284   1,363   33,958 

Total accruing variable rate loans

  136,613   82,172   68,610   111,144   110,800   62,710   1,363   573,412 
                                 

Nonaccrual

  796   770   721   434   234   747   111   3,813 

Total

 $196,634  $150,564  $116,200  $155,640  $150,313  $280,500  $41,445  $1,091,296 

 

 

For variable rate loans, the following table summarizes those that are at or above their floor rate, and those that do not possess a contractual floor rate.

 

TABLE 15

 

LOAN FLOORS - UNAUDITED

 

(dollars in thousands)

 
                     
  

Variable Rate Loans at June 30, 2021

 
  

With Floors

  

Without

     
  

At Floor Rate

  

Above Floor Rate

  

Total

  

Floors

  

Total

 

Prime

 $43,035  $6,055  $49,090  $38,396  $87,486 

5 year Treasury

  356,362   43,826   400,188   22,327   422,515 

7 Year Treasury

  12,681      12,681      12,681 

1 Year LIBOR

     701   701   16,071   16,772 

Other Indexes

  16,639   815   17,454   16,504   33,958 

Total accruing variable rate loans

 $428,717  $51,397  $480,114  $93,298   573,412 
                     

Nonaccrual

                  3,813 

Total variable rate loans

                 $577,225 

 

19

 

logo2.jpg

 

TABLE 16

UNAUDITED

CONSOLIDATED BALANCE SHEET

(dollars in thousands, except per share data)

 

  At June 30,  Change  At March 31, 
  2021  2020  $  %  2021 

Assets:

                    

Cash and due from banks

 $21,011  $29,630  $(8,619)  (29)% $20,053 

Interest-bearing deposits in other banks

  156,107   126,132   29,975   24

%

  74,804 

Total cash and cash equivalents

  177,118   155,762   21,356   14

%

  94,857 
                     

Securities available-for-sale, at fair value

  579,664   280,200   299,464   107

%

  517,375 

Loans, net of deferred fees and costs

  1,091,296   1,204,737   (113,441)  (9)%  1,146,086 

Allowance for loan and lease losses

  (17,194)  (16,089)  (1,105)  (7)%  (17,027)

Net loans

  1,074,102   1,188,648   (114,546)  (10)%  1,129,059 
                     

Premises and equipment, net

  14,514   15,466   (952)  (6)%  14,792 

Life insurance

  24,462   23,968   494   2

%

  24,320 

Deferred tax asset, net

  5,234   2,645   2,589   98

%

  5,929 

Goodwill

  11,671   11,671      

%

  11,671 

Other intangible assets, net

  3,661   4,426   (765)  (17)%  3,852 

Other assets

  26,727   29,110   (2,383)  (8)%  27,247 

Total assets

 $1,917,153  $1,711,896  $205,257   12

%

 $1,829,102 
                     

Liabilities and shareholders' equity:

                    

Demand - noninterest-bearing

 $627,911  $521,751  $106,160   20

%

 $603,991 

Demand - interest-bearing

  306,565   287,198   19,367   7

%

  290,687 

Money market

  463,639   405,322   58,317   14

%

  425,251 

Savings

  162,325   142,389   19,936   14

%

  160,834 

Certificates of deposit

  136,898   137,647   (749)  (1)%  133,630 

Total deposits

  1,697,338   1,494,307   203,031   14

%

  1,614,393 
                     

Term debt:

                    

Federal Home Loan Bank of San Francisco ("FHLB") borrowings

     10,000   (10,000)  (100)%   

Other borrowings

  10,000   10,000      

%

  10,000 

Unamortized debt issuance costs

     (19)  19   100

%

   

Net term debt

  10,000   19,981   (9,981)  (50)%  10,000 
                     

Junior subordinated debentures

  10,310   10,310      

%

  10,310 

Other liabilities

  17,368   17,743   (375)  (2)%  17,259 

Total liabilities

  1,735,016   1,542,341   192,675   12

%

  1,651,962 
                     

Shareholders' equity:

                    

Common stock

  59,422   58,749   673   1

%

  59,215 

Retained earnings

  118,276   103,658   14,618   14

%

  115,142 

Accumulated other comprehensive income, net of tax

  4,439   7,148   (2,709)  (38)%  2,783 

Total shareholders' equity

  182,137   169,555   12,582   7

%

  177,140 
                     

Total liabilities and shareholders' equity

 $1,917,153  $1,711,896  $205,257   12

%

 $1,829,102 
                     

Total interest-earning assets

 $1,820,765  $1,600,922  $219,843   14

%

 $1,734,314 

Shares outstanding

  16,896   16,739   157   1

%

  16,876 

Book value per share (1)

 $10.78  $10.13  $0.65   6

%

 $10.50 

Tangible book value per share (1)

 $9.87  $9.17  $0.70   8

%

 $9.58 

 

(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.

 

20

 

logo2.jpg

 

TABLE 17

UNAUDITED

INCOME STATEMENT

(dollars in thousands, except per share data)

  

  For The Three Months Ended  For The Six Months Ended 
  June 30,  Change  March 31,  June 30, 
  2021  2020  $  %  2021  2021  2020 

Interest income:

                            

Interest and fees on loans

 $12,429  $13,224  $(795)  (6)% $13,215  $25,644  $25,562 

Interest on taxable securities

  1,697   1,329   368   28

%

  1,485   3,182   2,911 

Interest on tax-exempt securities

  575   423   152   36

%

  511   1,086   694 

Interest on interest-bearing deposits in other banks

  27   21   6   29

%

  29   56   175 

Total interest income

  14,728   14,997   (269)  (2)%  15,240   29,968   29,342 

Interest expense:

                            

Interest on demand deposits

  55   85   (30)  (35)%  58   113   185 

Interest on money market

  180   317   (137)  (43)%  195   375   720 

Interest on savings

  41   95   (54)  (57)%  48   89   213 

Interest on certificates of deposit

  303   467   (164)  (35)%  338   641   931 

Interest on FHLB borrowings

     5   (5)  (100)%        5 

Interest on other borrowings

  138   184   (46)  (25)%  137   275   368 

Interest on junior subordinated debentures

  47   61   (14)  (23)%  46   93   151 

Total interest expense

  764   1,214   (450)  (37)%  822   1,586   2,573 

Net interest income

  13,964   13,783   181   1

%

  14,418   28,382   26,769 

Provision for loan and lease losses

     1,300   (1,300)  (100)%        4,150 

Net interest income after provision for loan and lease losses

  13,964   12,483   1,481   12

%

  14,418   28,382   22,619 

Noninterest income:

                            

Service charges on deposit accounts

  160   152   8   5

%

  148   308   321 

ATM and point of sale fees

  401   263   138   52

%

  318   719   531 

Payroll and benefit processing fees

  160   143   17   12

%

  169   329   313 

Life insurance

  123   148   (25)  (17)%  121   244   271 

Gain on investment securities, net

  64   140   (76)  (54)%  7   71   224 

FHLB dividends

  126   36   90   250

%

  93   219   166 

Legal settlement

           

%

  221   221    

Other income

  97   73   24   33

%

  86   183   21 

Total noninterest income

  1,131   955   176   18

%

  1,163   2,294   1,847 

 

21

 

logo2.jpg

 

TABLE 17 - CONTINUED

UNAUDITED

INCOME STATEMENT

(dollars in thousands, except per share data)

 

  For The Three Months Ended  For The Six Months Ended 
  June 30,  Change  March 31,  June 30, 
  2021  2020  $  %  2021  2021  2020 

Noninterest expense:

                            

Salaries and related benefits

  5,205   4,965   240   5

%

  5,639   10,844   10,852 

Premises and equipment

  973   826   147   18

%

  959   1,932   1,680 

FDIC insurance premium

  124   90   34   38

%

  110   234   126 

Data processing

  546   585   (39)  (7)%  548   1,094   1,116 

Professional services

  278   469   (191)  (41)%  301   579   803 

Telecommunications

  145   156   (11)  (7)%  170   315   327 

Merger costs

  817      817   100

%

     817    

Other expenses

  1,191   1,179   12   1

%

  1,170   2,361   3,149 

Total noninterest expense

  9,279   8,270   1,009   12

%

  8,897   18,176   18,053 

Income before provision for income taxes

  5,816   5,168   648   13

%

  6,684   12,500   6,413 

Provision for income taxes

  1,677   1,321   356   27

%

  1,764   3,441   1,650 

Net income

 $4,139  $3,847  $292   8

%

 $4,920  $9,059  $4,763 
                             

Earnings per share - basic

 $0.25  $0.23  $0.02   9

%

 $0.29  $0.54  $0.28 

Weighted average shares - basic

  16,736   16,660   76   

%

  16,706   16,721   17,178 

Earnings per share - diluted

 $0.25  $0.23  $0.02   9

%

 $0.29  $0.54  $0.28 

Weighted average shares - diluted

  16,823   16,689   134   1

%

  16,778   16,803   17,217 

 

22

 

 

logo2.jpg

 

TABLE 18

 

UNAUDITED CONDENSED CONSOLIDATED

 

QUARTERLY AVERAGE BALANCE SHEETS

 

(dollars in thousands)

 
                     
  

For The Three Months Ended

 
  

June 30,

  

March 31,

  

December 31,

  

September 30,

  

June 30,

 
  

2021

  

2021

  

2020

  

2020

  

2020

 

Earning assets:

                    

Loans

 $1,135,521  $1,140,315  $1,172,705  $1,209,277  $1,180,915 

Taxable securities

  437,710   358,291   304,242   228,045   211,195 

Tax-exempt securities

  97,637   82,355   73,207   68,766   58,540 

Interest-bearing deposits in other banks

  104,152   111,320   124,390   95,348   72,507 

Total earning assets

  1,775,020   1,692,281   1,674,544   1,601,436   1,523,157 
                     

Cash and due from banks

  21,819   21,744   22,413   23,381   21,564 

Premises and equipment, net

  14,715   15,001   15,162   15,365   15,428 

Life insurance

  24,395   24,265   24,147   24,028   23,899 

Deferred tax asset, net

  5,599   4,287   2,738   2,501   3,016 

Goodwill

  11,671   11,671   11,671   11,671   11,671 

Other intangible assets, net

  3,743   3,934   4,126   4,318   4,508 

Other assets

  12,332   17,264   20,136   21,416   23,584 

Total assets

 $1,869,294  $1,790,447  $1,774,937  $1,704,116  $1,626,827 
                     

Liabilities and shareholders' equity:

                    

Demand - noninterest-bearing

 $606,625  $562,155  $552,601  $531,459  $497,636 

Demand - interest-bearing

  301,052   295,388   283,213   279,744   261,907 

Money market

  443,067   425,113   430,014   387,995   365,368 

Savings

  163,227   154,199   151,223   146,074   138,500 

Certificates of deposit

  139,391   134,520   138,380   139,757   142,955 

Total deposits

  1,653,362   1,571,375   1,555,431   1,485,029   1,406,366 
                     

Federal Home Loan Bank of San Francisco ("FHLB") borrowings

     3,889   7,120   10,000   16,044 

Other borrowings

  10,000   10,000   9,999   9,988   9,976 

Junior subordinated debentures

  10,310   10,310   10,310   10,310   10,310 

Other liabilities

  16,293   16,711   17,557   17,356   17,095 

Total liabilities

  1,689,965   1,612,285   1,600,417   1,532,683   1,459,791 
                     

Shareholders' equity

  179,329   178,162   174,520   171,433   167,036 

Liabilities & shareholders' equity

 $1,869,294  $1,790,447  $1,774,937  $1,704,116  $1,626,827 

 

23

 

 

logo2.jpg

 

TABLE 19

 

UNAUDITED CONDENSED CONSOLIDATED

 

YEAR TO DATE AVERAGE BALANCE SHEETS

 

(dollars in thousands)

 
                     
  

For The Six Months Ended

  

For The Twelve Months Ended

 
  

June 30,

  

June 30,

  

December 31,

  

December 31,

  

December 31,

 
  

2021

  

2020

  

2020

  

2019

  

2018

 

Earning assets:

                    

Loans

 $1,137,905  $1,107,302  $1,149,375  $1,020,801  $915,360 

Taxable securities

  398,220   224,300   245,336   246,723   207,407 

Tax-exempt securities

  90,038   46,705   58,912   38,706   50,330 

Interest-bearing deposits in other banks

  107,716   59,820   84,982   54,095   47,038 

Total earning assets

  1,733,879   1,438,127   1,538,605   1,360,325   1,220,135 
                     

Cash and due from banks

  21,781   21,775   22,339   22,806   20,468 

Premises and equipment, net

  14,858   15,591   15,426   15,598   13,952 

Life insurance

  24,330   23,968   23,960   23,371   22,148 

Deferred tax asset, net

  4,947   2,645   3,126   5,430   7,567 

Goodwill

  11,671   11,671   11,671   10,758   665 

Other intangible assets, net

  3,838   4,604   4,412   4,807   1,252 

Other assets

  14,785   22,042   20,980   15,017   2,654 

Total assets

 $1,830,089  $1,540,423  $1,640,519  $1,458,112  $1,288,841 
                     

Liabilities and shareholders' equity:

                    

Demand - noninterest-bearing

 $584,513  $459,241  $500,862  $400,588  $332,197 

Demand - interest-bearing

  298,236   247,641   264,652   242,516   238,328 

Money market

  434,140   336,477   372,939   304,340   250,685 

Savings

  158,738   137,002   142,857   136,733   109,025 

Certificates of deposit

  136,969   145,098   142,067   160,550   168,183 

Total deposits

  1,612,596   1,325,459   1,423,377   1,244,727   1,098,418 
                     

Federal Home Loan Bank of San Francisco ("FHLB") borrowings

  1,934   8,132   8,347   9,644   22,466 

Other borrowings

  10,000   9,970   9,981   10,895   15,143 

Junior subordinated debentures

  10,310   10,310   10,310   10,310   10,310 

Other liabilities

  16,501   16,974   17,217   17,894   12,286 

Total liabilities

  1,651,341   1,370,845   1,469,232   1,293,470   1,158,623 
                     

Shareholders' equity

  178,748   169,578   171,287   164,642   130,218 

Liabilities & shareholders' equity

 $1,830,089  $1,540,423  $1,640,519  $1,458,112  $1,288,841 

 

24

 

 

logo2.jpg

 

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 in northern California along the Interstate 5 corridor from Sacramento to Yreka and in the wine region north of San Francisco. 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 Officer

Telephone Direct (916) 677-5800

 

 

James A. Sundquist, Executive Vice President and Chief Financial Officer

Telephone Direct (916) 677-5825

 

 

Andrea M. Newburn, Vice President and Senior Administrative Officer / Corporate Secretary

Telephone Direct (530) 722-3959

 

25