U.S. Markets closed

Bank of Commerce Holdings (BOCH)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
Add to watchlist
8.38+0.14 (+1.70%)
At close: 4:00PM EDT
Full screen
Trade prices are not sourced from all markets
Gain actionable insight from technical analysis on financial instruments, to help optimize your trading strategies
Chart Events
Neutralpattern detected
Previous Close8.24
Open8.33
Bid4.90 x 900
Ask11.88 x 1300
Day's Range8.25 - 8.40
52 Week Range5.68 - 12.31
Volume19,841
Avg. Volume29,942
Market Cap140.717M
Beta (5Y Monthly)N/A
PE Ratio (TTM)10.84
EPS (TTM)0.77
Earnings DateJan 15, 2021 - Jan 19, 2021
Forward Dividend & Yield0.20 (2.39%)
Ex-Dividend DateSep 28, 2020
1y Target Est8.75
  • Should Value Investors Buy Bank of Commerce (BOCH) Stock?
    Zacks

    Should Value Investors Buy Bank of Commerce (BOCH) Stock?

    Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

  • GlobeNewswire

    Bank of Commerce Holdings Announces Results for the Third Quarter of 2020

    SACRAMENTO, Calif., Oct. 16, 2020 (GLOBE NEWSWIRE) -- Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.740 billion asset bank holding company and parent company of Merchants Bank of Commerce (the “Bank”), today announced financial results for the quarter and nine months ended September 30, 2020. Net income for the quarter ended September 30, 2020 was $4.3 million or $0.26 per share – diluted, compared with net income of $4.6 million or $0.26 per share – diluted for the same period of 2019. Net income for the nine months ended September 30, 2020 was $9.1 million or $0.53 per share – diluted, compared with net income of $10.6 million or $0.59 per share – diluted for the same period of 2019. Significant Items for the third quarter of 2020: * $1.1 million provision for loan and lease losses. * COVID-19 loan deferrals totaled $38.6 million at September 30, 2020. Loans with payment deferrals at June 30, 2020 totaling $82.5 million have resumed making payments.Randall S. Eslick, President and CEO commented: “Throughout this unusual year we have not forgotten that we are responsible to many constituents. The pandemic has prompted us to physically modify our banking offices and many of our employees continue to work remotely. But these changes have not hindered our ability to diligently meet the needs of our depositors, borrowers and communities. We remain committed to protecting the health of our employees and customers and also to protecting the investment our owners have made in us.”Financial highlights for the third quarter of 2020: * Net income of $4.3 million was a decrease of $313 thousand (7%) from $4.6 million earned during the same period in the prior year. Earnings of $0.26 per share – diluted was the same compared to the same period in the prior year and reflects the impact of the following: * 1.5 million shares of common stock repurchased between October of 2019 and April of 2020. * $1.1 million provision for loan and lease losses for the current quarter. * Net interest income increased $408 thousand (3%) to $14.1 million compared to $13.7 million for the same period in the prior year. * Net interest margin declined to 3.51% compared to 4.00% for the same period in the prior year. * Return on average assets decreased to 1.01% compared to 1.26% for the same period in the prior year. * Return on average equity decreased to 10.05% compared to 10.86% for the same period in the prior year. * Average loans totaled $1.209 billion, an increase of $180 million (17%) compared to average loans for the same period in the prior year. * Average earning assets totaled $1.601 billion, an increase of $241 million (18%) compared to average earning assets for the same period in the prior year. * Average deposits totaled $1.485 billion, an increase of $231 million (18%) compared to average deposits for the same period in the prior year. * Average non-maturing deposits totaled $1.345 billion, an increase of $248 million (23%) compared to the same period in the prior year. * Average certificates of deposit totaled $139.8 million, a decrease of $17.9 million (11%) compared to same period in the prior year. * The Company’s efficiency ratio was 54.8% compared to 56.4% during the same period in the prior year. * Nonperforming assets at September 30, 2020 totaled $8.1 million or 0.47% of total assets, a decrease of $4.7 million (37%) since September 30, 2019. The decrease in nonperforming assets results from one $10.9 million commercial real estate loan which was placed in nonaccrual status in the first quarter of 2019 and sold in the fourth quarter of 2019. * Book value per common share was $10.32 at September 30, 2020 compared to $9.42 at September 30, 2019. * Tangible book value per common share was $9.38 at September 30, 2020 compared to $8.51 at September 30, 2019. Financial highlights for the nine months ended September 30, 2020: * Net income of $9.1 million was a decrease of $1.5 million (14%) from $10.6 million earned during the same period in the prior year. Earnings of $0.53 per share – diluted was a decrease of $0.06 (10%) per share from $0.59 per share – diluted earned during the same period in the prior year and reflects the impact of the following: * 1.5 million shares of common stock repurchased between October of 2019 and April of 2020. * $5.3 million provision for loan and lease losses for the nine months ended September 30, 2020. * $1.1 million in non-recurring costs for the first quarter of 2020 associated with the termination of a technology management services contract and a previously announced severance agreement. * $2.7 million in non-recurring costs recorded during the nine months ended September 30, 2019 associated with our January 31, 2019 acquisition of Merchants National Bank of Sacramento and the name change of our subsidiary bank. * Net interest income increased $678 thousand (2%) to $40.9 million compared to $40.2 million for the same period in the prior year. * Net interest margin declined to 3.66% compared to 3.98% for the same period in the prior year. * Return on average assets decreased to 0.76% compared to 0.98% for the same period in the prior year. * Return on average equity decreased to 7.14% compared to 8.74% for the same period in the prior year. * Average loans totaled $1.142 billion, an increase of $124 million (12%) compared to average loans for the same period in the prior year. * Average earning assets totaled $1.493 billion, an increase of $143 million (11%) compared to the same period in the prior year. * Average deposits totaled $1.379 billion, an increase of $147 million (12%) compared to the same period in the prior year. * Average non-maturing deposits totaled $1.236 billion, an increase of $167 million (16%) compared to the same period in the prior year. * Average certificates of deposit totaled $143.3 million, a decrease of $19.7 million (12%) compared to the same period in the prior year. * The Company’s efficiency ratio was 60.2% compared to 66.5% for the same period in the prior year. * The Company’s efficiency ratio of 60.2% for the first nine months of 2020 included $1.1 million in non-recurring costs. The efficiency ratio excluding these costs was 57.7%. * The Company’s efficiency ratio of 66.5% for the first nine months of 2019 includes $2.7 million in non-recurring costs. The efficiency ratio excluding these non-recurring costs was 60.3%. * Nonperforming assets at September 30, 2020 totaled $8.1 million or 0.47% of total assets, an increase of $2.5 million (36% annualized) since December 31, 2019. * Book value per common share was $10.32 at September 30, 2020 compared to $9.62 at December 31, 2019. * Tangible book value per common share was $9.38 at September 30, 2020 compared to $8.71 at December 31, 2019.Impact of COVID-19: * We have funded 606 loans totaling $163.5 million for the Small Business Administration’s Paycheck Protection Program (“PPP”) through September 30, 2020. The growth in our assets resulting from the PPP has impacted our Tier 1 Leverage capital ratio as we have not utilized the liquidity available to us from the Federal Reserve’s PPP Liquidity Facility and its associated beneficial capital treatment. Substantially all of the loans were made to existing customers and were funded under the two-year PPP loan program. * We have experienced significant increased deposit balances as all of the PPP loan funds were deposited into customer accounts at our bank and as a result of customer behavior that is focused on maintaining greater non-maturing deposit balances. * Organic loan growth continues to be slow as we maintain credit underwriting discipline in light of the current economic environment. * For the six month period from April through September SBA has made principal and interest payments on all our SBA 7(a) loans. The borrowers will resume responsibility for making their payments in October. * After considering qualitative factors, management determined that the Company’s goodwill was not impaired at September 30, 2020. * At September 30, 2020, our workforce totaled 211 employees of which 107 are working remotely. * All of our branch offices remain open, although they are operating under a reduced schedule. Our pandemic response team is continuing to modify and enhance our workforce and customer protection as additional information or requirements are promulgated by the state of California. Forward-Looking StatementsBank of Commerce Holdings wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. This news release includes statements by the Company, which describe management’s expectations and developments, which may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21B of the Securities Act of 1934, as amended. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in the Company's public filings, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are less favorable than expected or have a more direct and pronounced effect on the Company than expected and adversely affect the Company's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new banks and/or branches are lower than expected; (4) our concentration in lending tied to real estate exposes us to the adverse effects of material increases in interest rates, declines in the general economy, tightening credit markets or declines in real estate values; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which the Company is engaged; and (7) technological changes could expose us to new risks. TABLE 1  SELECTED FINANCIAL INFORMATION - UNAUDITED  (dollars in thousands except per share data)                          For The Three Months Ended For The Nine Months Ended  Net income, average assets and September 30,   June 30, September 30,   average shareholders' equity 2020  2019  2020 2020  2019  Net income $4,329  $4,642  $3,847  $9,092  $10,592  Average total assets $1,704,116  $1,462,444  $1,626,827  $1,595,386  $1,446,476  Average total earning assets $1,601,436  $1,360,006  $1,523,157  $1,492,961  $1,350,173  Average shareholders' equity $171,433  $169,608  $167,036  $170,201  $162,032                        Selected performance ratios                     Return on average assets  1.01%  1.26%  0.95%  0.76%  0.98% Return on average equity  10.05%  10.86%  9.26%  7.14%  8.74% Efficiency ratio  54.8%  56.4%  56.1%  60.2%  66.5%                       Share and per share amounts                     Weighted average shares - basic (1)  16,660   18,130   16,660   17,004   17,918  Weighted average shares - diluted (1)  16,696   18,196   16,689   17,044   17,981  Earnings per share - basic $0.26  $0.26  $0.23  $0.53  $0.59  Earnings per share - diluted $0.26  $0.26  $0.23  $0.53  $0.59                          At September 30,   At June 30,    Share and per share amounts 2020  2019  2020       Common shares outstanding (2)  16,792   18,212   16,739          Book value per common share (2) $10.32  $9.42  $10.13          Tangible book value per common share (2)(3) $9.38  $8.51  $9.17                                Capital ratios (4)                    Bank of Commerce Holdings                    Common equity tier 1 capital ratio  12.61%  12.85%  12.34%         Tier 1 capital ratio  13.44%  13.69%  13.18%         Total capital ratio  15.53%  15.62%  15.27%         Tier 1 leverage ratio  9.60%  11.28%  9.82%         Tangible common equity ratio (5)  9.13%  10.64%  9.05%                               Merchants Bank of Commerce                     Common equity tier 1 capital ratio  14.01%  14.25%  13.72%         Tier 1 capital ratio  14.01%  14.25%  13.72%         Total capital ratio  15.26%  15.34%  14.97%         Tier 1 leverage ratio  9.99%  11.74%  10.21%                               (1) Excludes unvested restricted shares issued in accordance with the Company's equity incentive plan, as they are non-participative in dividends or voting rights. (2) Includes unvested restricted shares issued in accordance with the Company's equity incentive plan. (3) Book value per share is computed by dividing total shareholders’ equity by shares outstanding. Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy. (4) The Company and the Bank continue to meet all capital adequacy requirements to which they are subject. (5) Management believes the tangible common equity ratio is a useful measure of capital adequacy because it provides a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability of the Company to absorb potential losses. The tangible common equity ratio is calculated as total shareholders' equity less goodwill and core deposit intangible, net divided by total assets less goodwill and core deposit intangible, net. BALANCE SHEET OVERVIEWAs of September 30, 2020, the Company had total consolidated assets of $1.740 billion, gross loans of $1.206 billion, allowance for loan and lease losses (“ALLL”) of $17 million, total deposits of $1.518 billion, and shareholders’ equity of $173 million.TABLE 2 LOAN BALANCES BY TYPE - UNAUDITED (dollars in thousands)                           At September 30,       At June 30,    % of    % of  Change   % of  2020  Total 2019  Total Amount % 2020  Total Commercial$121,025  10% $152,195  15% $(31,170) (20)% $126,024  10% Paycheck protection program 163,493  14   —  —   163,493  100 %  162,189  13  Real estate - construction and land development 40,289  3   35,606  3   4,683  13 %  41,371  3  Real estate - commercial non-owner occupied 538,079  45   475,678  47   62,401  13 %  521,004  44  Real estate - commercial owner occupied 210,455  17   210,767  20   (312) — %  215,799  18  Real estate - residential - ITIN 30,071  2   34,036  3   (3,965) (12)%  31,083  3  Real estate - residential - 1-4 family mortgage 57,867  5   64,747  6   (6,880) (11)%  60,756  5  Real estate - residential - equity lines 20,296  2   22,729  2   (2,433) (11)%  20,938  2  Consumer and other 24,490  2   37,324  4   (12,834) (34)%  27,176  2  Gross loans 1,206,065  100%  1,033,082  100%  172,983  17 %  1,206,340  100% Deferred fees and costs (1,037)     1,980      (3,017)     (1,603)    Loans, net of deferred fees and costs 1,205,028      1,035,062      169,966      1,204,737     Allowance for loan and lease losses (16,873)     (12,285)     (4,588)     (16,089)    Net loans$1,188,155     $1,022,777     $165,378     $1,188,648                              Average loans during the quarter$1,209,277     $1,029,534     $179,743  17 % $1,180,915     Average loans during the quarter (excluding PPP)$1,046,187     $1,029,534     $16,653  2 % $1,048,139     Average yield on loans during the quarter 4.42 %    5.01 %    (0.59) (12)%  4.50 %   Average yield on all loans during the quarter (excluding PPP) 4.75 %    5.01 %    (0.26) (5)%  4.76 %   Average yield on all loans year to date 4.56 %    4.98 %    (0.42) (8)%  4.64 %   Average yield on all loans year to date (excluding PPP) 4.77 %    4.98 %    (0.21) (4)%  4.78 %   The Company recorded gross loan balances of $1.206 billion at September 30, 2020, compared with $1.033 billion and $1.206 billion at September 30, 2019 and June 30, 2020, respectively, an increase of $173 million and a decrease of $275 thousand, respectively.The average yield on loans during the quarter was 4.42% compared to 5.01% and 4.50% for the quarters ended September 30, 2019 and June 30, 2020, respectively. Yields in the current quarter were negatively impacted by PPP loans, which averaged $163.1 million and yielded 2.31%.Gross loan balances in the table above include a net fair value discount for loans acquired from Merchants of $1.1 million, $1.3 million and $1.9 million at September 30, 2020, June 30, 2020 and September 30, 2019, respectively. We recorded $233 thousand, $216 thousand and $193 thousand in accretion of the discount for these loans during the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively.We have funded 606 PPP loans totaling $163.5 million through September 30, 2020. Substantially all of the loans were made to existing customers and the loan proceeds were initially deposited with our institution. At origination, loan fee income net of loan origination costs totaled $4.3 million and is being earned over the 24-month life of the loans as a part of the loan yield. At September 30, 2020, $3.3 million remains to be earned in future quarters. The following tables provide additional information on the PPP loans by industry and by loan balance at September 30, 2020. TABLE 3 PPP LOANS BY INDUSTRY - UNAUDITED (dollars in thousands)          At September 30, 2020   Number Balance Construction 98 $64,750 Healthcare and Social Assistance 96  17,701 Professional, Scientific and Tech Services 78  12,155 Accommodation and Food Services 51  10,328 Admin, Support, Waste Management and Remediation Services 20  7,383 Primary Metal Manufacturing 16  6,641 Retail Trade 59  8,050 Other 188  36,485 Total 606 $163,493 TABLE 4 PPP LOANS BY LOAN SIZE - UNAUDITED (dollars in thousands)           At September 30, 2020  Balance Number Average Loan Size $150,000 or less$20,604 390 $53 $150,001 to $350,000 25,406 110  231 $350,001 to $1,999,999 73,927 94  786 $2,000,000 or greater 43,556 12  3,630 Total$163,493 606 $270 During the third quarter of 2020, the SBA began accepting applications for PPP loan forgiveness. The bank has 60 days to review and approve an application before submitting it to SBA, and then the SBA has 90 days to process it for forgiveness. The following table presents the progress of our loans in the forgiveness process. TABLE 5 PPP LOANS FORGIVENESS APPLICATION STATUS - UNAUDITED (dollars in thousands)           At September 30, 2020  Balance Number Average Loan Size Borrower has not started application$78,930 390 $202 Borrower is working on application 38,624 123  314 Borrower has completed application and the bank is reviewing it 32,400 73  444 Bank has approved application and submitted it to the SBA 13,539 20  677 SBA has approved the application and the loan has been repaid — —  — Total$163,493 606 $270 As of October 13, 2020, two of our PPP loans totaling $95 thousand that were outstanding on September 30, 2020 have been forgiven by the SBA. TABLE 6 CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED (dollars in thousands)                             At September 30,        At June 30,     % of    % of  Change   % of   2020 Total 2019 Total Amount % 2020 Total Cash and due from banks $22,884 5% $32,505 9% $(9,621) (30)% $29,630 7% Interest-bearing deposits in other banks  104,999 23   56,099 16   48,900  87 %  126,132 29  Total cash and cash equivalents  127,883 28   88,604 25   39,279  44 %  155,762 36                            Investment securities:                         U.S. government and agencies  31,811 7   40,467 11   (8,656) (21)%  33,195 8  Obligations of state and political subdivisions  91,863 20   39,004 11   52,859  136 %  76,888 18  Residential mortgage backed securities and collateralized mortgage obligations  165,693 35   165,994 46   (301) — %  137,120 30  Corporate securities  — —   2,992 1   (2,992) (100)%  1,000 —  Commercial mortgage backed securities  19,576 4   22,822 6   (3,246) (14)%  16,329 4  Other asset backed securities  28,089 6   1,062 —   27,027  2,545 %  15,668 4  Total investment securities - AFS  337,032 72   272,341 75   64,691  24 %  280,200 64                            Total cash, cash equivalents and investment securities $464,915 100% $360,945 100% $103,970  29 % $435,962 100% Average yield on interest-bearing due from banks during the quarter  0.12%    2.07%    (1.95)     0.12%   Average yield on investment securities during the quarter - nominal  2.33%    2.75%    (0.42)     2.61%   Average yield on investment securities during the quarter - tax equivalent  2.50%    2.85%    (0.35)     2.78%   As of September 30, 2020, we maintained noninterest-bearing cash positions of $22.9 million and interest-bearing deposits of $105.0 million at the Federal Reserve Bank and correspondent banks.Investment securities totaled $337.0 million at September 30, 2020, compared with $272.3 million and $280.2 million at September 30, 2019 and June 30, 2020, respectively. During the third quarter of 2020, we continued the deployment of excess cash into investment securities as deposits continued to grow. Investment purchases were comprised primarily of longer duration municipal bonds and lower coupon mortgage backed securities. During the third quarter of 2020, we purchased securities with a par value of $84.1 million and weighted average yield of 1.75% (2.09% tax equivalent) and sold securities with a par value of $5.8 million and weighted average yield of 2.67% (3.16% tax equivalent). The sales resulted in net realized gains of $258 thousand and $482 thousand for the quarter and nine months ended September 30, 2020, respectively.Average securities balances for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019 were $296.8 million, $269.7 million and $271.6 million, respectively. Weighted average yields on securities balances for those same periods were 2.33%, 2.61% and 2.75%, respectively.At September 30, 2020, our net unrealized gains on available-for-sale investment securities were $10.4 million compared with net unrealized gains of $3.3 million and $10.1 million at September 30, 2019 and June 30, 2020, respectively. The changes in net unrealized gains on the investment securities portfolio were due to changes in market interest rates. TABLE 7 DEPOSITS BY TYPE - UNAUDITED (dollars in thousands)                           At September 30,        At June 30,    % of    % of   Change   % of  2020 Total 2019 Total Amount % 2020 Total Demand - noninterest-bearing$542,060 36% $412,410 33% $129,650  31 % $521,751 35% Demand - interest-bearing 280,370 18   239,547 19   40,823  17 %  287,198 19  Money market 403,785 27   317,120 25   86,665  27 %  405,322 27  Total demand 1,226,215 81   969,077 77   257,138  27 %  1,214,271 81                           Savings 151,016 10   137,441 11   13,575  10 %  142,389 10  Total non-maturing deposits 1,377,231 91   1,106,518 88   270,713  24 %  1,356,660 91                           Certificates of deposit 140,900 9   155,621 12   (14,721) (9)%  137,647 9  Total deposits$1,518,131 100% $1,262,139 100% $255,992  20 % $1,494,307 100%                          Total deposits at September 30, 2020, increased $256 million or 20% to $1.518 billion compared to September 30, 2019 and increased $23.8 million or 6% annualized compared to June 30, 2020. Total non-maturing deposits increased $270.7 million or 24% compared to the same date a year ago and increased $20.6 million or 6% annualized compared to June 30, 2020. 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 increasing non-maturing deposit balances. Certificates of deposit decreased $14.7 million or 9% compared to the same date a year ago and increased $3.3 million or 9% annualized compared to June 30, 2020. The decrease in certificates of deposits compared to the same period one year ago reflects our decision to reduce reliance on public deposits. 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                                   September 30,  June 30, March 31, December 31,  September 30,  June 30, March 31, December 31,  2020 2020 2020 2019 2019 2019 2019 2018 Interest-bearing deposits 0.36%  0.43%  0.53%  0.56%  0.56%  0.54%  0.49%  0.45% Interest-bearing deposits and noninterest-bearing demand 0.23%  0.28%  0.35%  0.38%  0.38%  0.37%  0.34%  0.31% All interest-bearing liabilities 0.44%  0.52%  0.65%  0.68%  0.68%  0.74%  0.67%  0.61% All interest-bearing liabilities and noninterest-bearing demand 0.29%  0.34%  0.43%  0.46%  0.46%  0.52%  0.46%  0.42% Stock Repurchase ProgramWe previously announced a program to repurchase 1.5 million common shares. 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. INCOME STATEMENT OVERVIEWTABLE 9 SUMMARY INCOME STATEMENT - UNAUDITED (dollars in thousands, except per share data)                        For The Three Months Ended  September 30,  Change June 30, Change  2020 2019 Amount % 2020 Amount % Interest income$15,218 $15,201 $17  0 % $14,997 $221  1 % Interest expense 1,088  1,479  (391) (26)%  1,214  (126) (10)% Net interest income 14,130  13,722  408  3 %  13,783  347  3 % Provision for loan and lease losses 1,100  —  1,100  100 %  1,300  (200) (15)% Noninterest income 1,189  1,006  183  18 %  955  234  25 % Noninterest expense 8,390  8,300  90  1 %  8,270  120  1 % Income before provision for income taxes 5,829  6,428  (599) (9)%  5,168  661  13 % Provision for income taxes 1,500  1,786  (286) (16)%  1,321  179  14 % Net income$4,329 $4,642 $(313) (7)% $3,847 $482  13 %                       Earnings per share - basic$0.26 $0.26 $—  — % $0.23 $0.03  13 % Weighted average shares - basic 16,660  18,130  (1,470) (8)%  16,660  —  — % Earnings per share - diluted$0.26 $0.26 $—  — % $0.23 $0.03  13 % Weighted average shares - diluted 16,696  18,196  (1,500) (8)%  16,689  7  — % Dividends declared per common share$0.05 $0.05 $—  — % $0.05 $—  — % Third Quarter of 2020 Compared With The Third Quarter of 2019Net income for the third quarter of 2020 decreased $313 thousand compared to the third quarter of 2019. In the current quarter, net interest income was $408 thousand higher, noninterest income was $183 thousand higher and income taxes were $286 thousand lower. These changes were partially offset by a provision for loan and lease losses that was $1.1 million higher and noninterest expense that was $90 thousand higher.Net Interest IncomeNet interest income increased $408 thousand compared to the same period a year ago.Interest income for the third quarter of 2020 increased $17 thousand or less than 1% to $15.2 million. * Interest and fees on loans increased $435 thousand due to a $179.7 million increase in average loan balances partially offset by a 59 basis point decrease in the average yield. Much of the 59 basis point decrease was caused by PPP loans which yielded only 2.31%. The yield on loans exclusive of PPP loans declined 26 basis points. * Interest on investment securities decreased $139 thousand due to a 41 basis point decrease in average yield partially offset by a $25.2 million increase in average securities balances. * Interest on interest-bearing deposits due from banks decreased $279 thousand due to a 195 basis point decrease in average yield that was partially offset by a $36.4 million increase in average interest-bearing deposit balances. During 2020, in response to the economic effects of the COVID-19 pandemic, the Federal Reserve cut its interest rates by 150 to 175 basis points which has resulted in a decrease in our interest income.Interest expense for the third quarter of 2020 decreased $391 thousand or 26% to $1.1 million. * Interest expense on interest-bearing deposits decreased $336 thousand. Average interest-bearing demand and savings deposit balances increased $122.8 million, while average certificate of deposit balances decreased $17.9 million. The average rate paid on interest-bearing deposits decreased 20 basis points. * Average FHLB borrowings were $10.0 million in the current quarter. The borrowings bear no interest under a program offered by the FHLB during the second quarter of 2020 in response to COVID-19 liquidity concerns. There were no borrowings during the same period a year ago. * Interest expense on other term debt increased $1 thousand. The average rate paid on other term debt increased three basis points. * Interest expense on junior subordinated debentures decreased $56 thousand. The average rate paid on junior subordinated debentures decreased 215 basis points.Provision for Loan and Lease LossesNet loan loss charge-offs were $316 thousand for the current quarter compared to net loan loss charge-offs of $160 thousand for the same period a year ago. Net loan charge-offs during the current quarter were primarily related to the unguaranteed portion of two commercial loans that are partially guaranteed under the California Capital Access Program for Small Business.We recognized deterioration in the credit environment due to the economic effects of COVID-19 and have made changes to our qualitative factors (Q-Factors) in calculating our ALLL. As a result we recorded a provision for loan and lease losses of $1.1 million for the third quarter of 2020. There was no provision for loan and lease losses in the third quarter of 2019. A discussion of our provision is provided following Table 11.Noninterest IncomeNoninterest income for the three months ended September 30, 2020 increased $183 thousand compared to the same period a year previous. The increase was due $246 thousand in net gains on sale of investment securities during the third quarter of 2020.Noninterest ExpenseNoninterest expense for the three months ended September 30, 2020 increased $90 thousand compared to the same period a year previous. Increases in noninterest expense included the following items: * $121 thousand increase in salaries and related benefits. * $205 thousand increase in FDIC insurance premiums.These increases were partially offset by decreases in travel, sponsorship and other noninterest expenses as a result of the pandemic. The Company’s efficiency ratio was 54.8% for the third quarter of 2020. The ratio during the same period in 2019 was 56.4%.Income Tax ProvisionFor the three months ended September 30, 2020, our income tax provision of $1.5 million on pre-tax income of $5.8 million was an effective tax rate of 25.7%. The tax provision for the third quarter of the prior year was $1.8 million on pre-tax income of $6.4 million for an effective rate of 27.8%. The effective tax rate has declined in the current period as a result of increased income from tax-exempt securities.Third Quarter of 2020 Compared With The Second Quarter of 2020Net income for the third quarter of 2020 increased $482 thousand compared to the second quarter of 2020. In the current quarter, net interest income was $347 thousand higher, provision for loan and lease losses was $200 thousand lower, noninterest income was $234 thousand higher. These changes were partially offset by noninterest expense that was $120 thousand higher and a provision for income taxes that was $179 thousand higher.Net Interest IncomeNet interest income increased $347 thousand over the prior quarter.Interest income for the three months ended September 30, 2020 increased $221 thousand or 1% to $15.2 million. * Interest and fees on loans increased $224 thousand due to a $28.4 million increase in average loan balances partially offset by an eight basis point decrease in the average yield. Much of the eight basis point decrease was caused by PPP loans. * Interest on investment securities decreased $11 thousand due to a 28 basis point decrease in average yield partially offset by a $27.1 million increase in average securities balances. * Interest on interest-bearing deposits due from banks increased $8 thousand due to a $22.8 million increase in average balances.Interest expense for the three months ended September 30, 2020 decreased $126 thousand or 10% to $1.1 million. * Interest expense on interest-bearing deposits decreased $110 thousand. Average interest-bearing demand and savings deposit balances increased $48.0 million, while average certificates of deposit decreased $3.2 million. The average rate paid on interest-bearing deposits decreased by seven basis points. * Interest expense on FHLB borrowings decreased $5 thousand. Average FHLB borrowings were $10.0 million in the current quarter compared to $16.0 million in the prior quarter. During the second quarter of 2020, we took an advance under our FHLB line of credit for $10.0 million, which bears no interest under a program offered by the FHLB during the second quarter of 2020 in response to COVID-19 liquidity concerns. * Interest expense on other term debt was unchanged at $184 thousand for both quarters. * Interest expense on other junior subordinated debentures decreased $11 thousand due to a 45 basis point decrease in the average rate paid.Provision for Loan and Lease LossesNet loan charge-offs were $316 thousand in the current quarter compared to $278 thousand in the prior quarter. As illustrated in Table 11 total nonaccrual loans increased by $1.4 million during the three months ended September 30, 2020 when compared to the previous quarter. Net loan charge-offs during the current quarter were primarily related to the unguaranteed portion of two commercial loans that are partially guaranteed under the California Capital Access Program for Small Business. Both loans were also placed in nonaccrual status during the quarter. We recorded a provision for loan and lease losses of $1.3 million and $1.1 million for the second and third quarters of 2020, respectively. A discussion of our provision is provided following Table 11.Noninterest IncomeNoninterest income for the three months ended September 30, 2020 increased $234 thousand including a $118 thousand increase in gain on sale of investment securities and $73 thousand increase in FHLB dividends.Noninterest ExpenseNoninterest expense for the three months ended September 30, 2020 increased $120 thousand compared to the prior quarter. The increase was primarily due to a deferred PPP loan origination cost benefit of approximately $600 recorded in the prior quarter which did not recur in the current quarter. This was offset during the current quarter by accruals for incentives and unused vacation which were $408 thousand lower.The Company’s efficiency ratio was 54.8% for the third quarter of 2020 compared with 56.1% for the prior quarter.Income Tax ProvisionFor the three months ended September 30, 2020, our income tax provision of $1.5 million on pre-tax income of $5.8 million was an effective tax rate of 25.7%. The income tax provision for the prior quarter of $1.3 thousand on pre-tax income of $5.2 million was an effective tax rate of 25.6%. Earnings Per ShareDiluted earnings per share were $0.26 for the three months ended September 30, 2020 compared with diluted earnings per share of $0.26 for the same period a year ago and diluted earnings per share of $0.23 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.TABLE 10a NET INTEREST MARGIN - UNAUDITED (dollars in thousands)                                For The Three Months Ended   September 30, 2020 September 30, 2019 June 30, 2020   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) $1,046,187 $12,499 4.75% $1,029,534 $13,013 5.01% $1,048,139 $12,411 4.76% PPP loans  163,090  949 2.31%  —  — —%  132,776  813 2.46% Taxable securities  228,045  1,284 2.24%  238,601  1,609 2.68%  211,195  1,329 2.53% Tax-exempt securities (3)  68,766  457 2.64%  32,974  271 3.26%  58,540  423 2.91% Interest-bearing deposits in other banks  95,348  29 0.12%  58,897  308 2.07%  72,507  21 0.12% Average interest- earning assets  1,601,436  15,218 3.78%  1,360,006  15,201 4.43%  1,523,157  14,997 3.96% Cash and due from banks  23,381        23,822        21,564       Premises and equipment, net  15,365        15,922        15,428       Goodwill  11,671        11,686        11,671       Other intangible assets, net  4,318        5,083        4,508       Other assets  47,945        45,925        50,499       Average total assets $1,704,116       $1,462,444       $1,626,827                                    Interest-bearing liabilities:                            Interest-bearing demand $279,744  71 0.10% $243,553  117 0.19% $261,907  85 0.13% Money market  387,995  289 0.30%  309,188  451 0.58%  365,368  317 0.35% Savings  146,074  74 0.20%  138,296  131 0.38%  138,500  95 0.28% Certificates of deposit  139,757  420 1.20%  157,620  491 1.24%  142,955  467 1.31% Federal Home Loan Bank of San Francisco borrowings  10,000  — —%  —  — —%  16,044  5 0.13% Other borrowings net of unamortized debt issuance costs  9,988  184 7.33%  9,942  183 7.30%  9,976  184 7.42% Junior subordinated debentures  10,310  50 1.93%  10,310  106 4.08%  10,310  61 2.38% Average interest- bearing liabilities  983,868  1,088 0.44%  868,909  1,479 0.68%  945,060  1,214 0.52% Noninterest-bearing demand  531,459        405,853        497,636       Other liabilities  17,356        18,074        17,095       Shareholders’ equity  171,433        169,608        167,036       Average liabilities and shareholders’ equity $1,704,116       $1,462,444       $1,626,827       Net interest income and net interest margin (4)    $14,130 3.51%    $13,722 4.00%    $13,783 3.64%                              (1) Interest income on loans includes deferred fees and costs of approximately $240 thousand, $161 thousand, and $138 thousand for the three months ended September 30, 2020 and 2019 and June 30, 2020, respectively. Interest income on PPP loans includes $538 thousand and $476 thousand of fee income for the three months ended September 30, 2020 and June 30, 2020, respectively. (2) Loans net of PPP includes average nonaccrual loans of $6.6 million, $13.2 million and $5.6 million for the three months ended September 30, 2020 and 2019 and June 30, 2020, respectively. (3) Interest income and yields on tax-exempt securities are not presented on a taxable 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 September 30, 2020 and 2019 and June 30, 2020 included $233 thousand, $193 thousand and $216 thousand in accretion of the discount on the loans acquired from Merchants Holding Company, which improved the net interest margin by 7 basis points. Net interest income for the three months ended September 30, 2020 included $949 thousand in interest and fee income from PPP loans with an average balance of $163.1 million for the quarter, which decreased the net interest margin by 14 basis points. (5) Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result. TABLE 10b NET INTEREST MARGIN - UNAUDITED (dollars in thousands)                       For The Nine Months Ended   September 30, 2020 September 30, 2019   Average    Yield / Average    Yield /   Balance Interest(1) Rate (5) Balance Interest(1) Rate (5) Interest-earning assets:                   Loans net of PPP (2) $1,042,685 $37,248 4.77% $1,017,127 $37,891 4.98% PPP loans  98,857  1,762 2.38%  —  — —% Taxable securities  225,558  4,195 2.48%  247,139  5,106 2.76% Tax-exempt securities (3)  54,112  1,151 2.84%  40,912  986 3.22% Interest-bearing deposits in other banks  71,749  204 0.38%  44,995  772 2.29% Average interest- earning assets  1,492,961  44,560 3.99%  1,350,173  44,755 4.43% Cash and due from banks  22,314        22,375       Premises and equipment, net  15,514        15,445       Goodwill  11,671        10,450       Other intangible assets, net  4,508        4,780       Other assets  48,418        43,253       Average total assets $1,595,386       $1,446,476                           Interest-bearing liabilities:                   Interest-bearing demand $258,420  256 0.13% $241,924  372 0.21% Money market  353,775  1,009 0.38%  299,694  1,120 0.50% Savings  140,048  287 0.27%  136,254  365 0.36% Certificates of deposit  143,305  1,351 1.26%  163,020  1,478 1.21% Federal Home Loan Bank of San Francisco borrowings  8,759  5 0.08%  12,894  247 2.56% Other borrowings net of unamortized debt issuance costs  9,976  552 7.39%  11,213  623 7.43% Junior subordinated debentures  10,310  201 2.60%  10,310  329 4.27% Average interest- bearing liabilities  924,593  3,661 0.53%  875,309  4,534 0.69% Noninterest-bearing demand  483,490        391,208       Other liabilities  17,102        17,927       Shareholders’ equity  170,201        162,032       Average liabilities and shareholders’ equity $1,595,386       $1,446,476       Net interest income and net interest margin (4)    $40,899 3.66%    $40,221 3.98%                     (1) Interest income on loans includes deferred fees and costs of approximately $636 thousand and $433 thousand for the nine months ended September 30, 2020 and 2019, respectively. Interest income on PPP loans includes $1.0 million of fee income for the nine months ended September 30, 2020. (2) Loans net of PPP includes average nonaccrual loans of $5.8 million and $11.8 million for the nine months ended September 30, 2020 and 2019, respectively. (3) Interest income and yields on tax-exempt securities are not presented on a taxable equivalent basis. (4) Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income for the nine months ended September 30, 2020 and 2019 included $612 thousand and $431 thousand in accretion of the discount on the loans acquired from Merchants Holding Company, which improved the net interest margin by 7 and 6 basis points, respectively. Net interest income for the nine months ended September 30, 2020 included $1.8 million in interest and fee income from PPP loans with an average balance of $98.9 million for the nine months ended September 30, 2020, which decreased the net interest margin by 9 basis points. (5) Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result. TABLE 11  ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED  (dollars in thousands)                        For The Three Months Ended  September 30,  June 30, March 31, December 31,  September 30,  2020 2020 2020 2019 2019 Beginning balance ALLL$16,089   $15,067   $12,231   $12,285   $12,445   Provision for loan and lease losses 1,100    1,300    2,850    —    —   Loans charged-off (502)   (356)   (169)   (174)   (319)  Loan loss recoveries 186    78    155    120    159   Ending balance ALLL$16,873   $16,089   $15,067   $12,231   $12,285                         At September 30,  At June 30, At March 31, At December 31,  At September 30,  2020 2020 2020 2019 2019 Nonaccrual loans:                    Commercial$1,549   $7   $39   $61   $139   Real estate - commercial non-owner occupied 1,062    1,062    —    —    10,099   Real estate - commercial owner occupied 3,750    3,647    3,103    3,103    —   Real estate - residential - ITIN 1,574    1,738    1,878    2,221    2,339   Real estate - residential - 1-4 family mortgage 145    180    184    191    198   Consumer and other 18    37    39    40    21   Total nonaccrual loans 8,098    6,671    5,243    5,616    12,796   Accruing troubled debt restructured loans:                    Commercial 531    592    592    595    629   Real estate - residential - ITIN 3,597    3,642    3,891    3,957    4,072   Real estate - residential - equity lines 131    221    226    231    236   Total accruing troubled debt restructured loans 4,259    4,455    4,709    4,783    4,937                        All other accruing impaired loans —    —    —    —    —                        Total impaired loans$12,357   $11,126   $9,952   $10,399   $17,733                        Gross loans outstanding at period end$1,206,065   $1,206,340   $1,052,245   $1,032,903   $1,033,082                        Impaired loans to gross loans 1.02 %  0.92 %  0.95 %  1.01 %  1.72 % Nonaccrual loans to gross loans 0.67 %  0.55 %  0.50 %  0.54 %  1.24 %                      Allowance for loan and lease losses as a percent of:              Gross loans 1.40 %  1.33 %  1.43 %  1.18 %  1.19 % Nonaccrual loans 208.36 %  241.18 %  287.37 %  217.79 %  96.01 % Impaired loans 136.55 %  144.61 %  151.40 %  117.62 %  69.28 % TABLE 12  ALLOWANCE, RESERVE AND DISCOUNT - UNAUDITED  (dollars in thousands)                        At September 30,  At June 30, At March 31, At December 31,  At September 30,  2020 2020 2020 2019 2019 ALLL$16,873  $16,089  $15,067  $12,231  $12,285  Reserve for unfunded commitments 800   800   695   695   695  Discount on acquired loans (1) 1,060   1,293   1,509   1,672   1,860  Total allowance, reserve and discount$18,733  $18,182  $17,271  $14,598  $14,840                       Gross loans$1,206,065  $1,206,340  $1,052,245  $1,032,903  $1,033,082  PPP loans 163,493   162,189   —   —   —  Total gross loans net of PPP loans$1,042,572  $1,044,151  $1,052,245  $1,032,903  $1,033,082                       Total allowance, reserve and discount as a percentage of total gross loans net of PPP loans 1.80%  1.74%  1.64%  1.41%  1.44% (1) Discount on acquired loans includes fair value discount for loans acquired from Merchants in January of 2019. COVID‐19 Loan AnalysisDuring the third quarter of 2020, we continued to proactively monitor our loan portfolio by maintaining 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.We have segmented our commercial loan and commercial real estate loan portfolios (86% of gross loans excluding PPP loans) to identify those loans in industries that are most at risk or where other information indicates the borrower may be significantly impacted by the effects of COVID-19. The following table presents loans by industry that are most at risk or where other information indicates the loan or borrower may be highly impacted by COVID-19 and the related loan modifications. The table below includes $10.0 million and $21.3 million of SBA 7(a) (generally 75% guaranteed) loans in the high risk and low to moderate risk categories, respectively.TABLE 13 COVID-19 LOAN ANALYSIS - UNAUDITED (dollars in thousands)                                At September 30, 2020  Individually Analyzed Loans With a COVID-19 Risk Of        Loan Modifications        Low and              Low and  High Moderate PPP Total High Moderate   Amount Amount Amount Amount  Amount  Amount CRE and C&I                             Industries highly impacted by COVID-19:                             Retail trade12 $15,896  $24,641  $8,050  $48,587 — $—  — $—  Health care and social assistance46  14,148   12,847   17,701   44,696 6  3,608  1  954  Hotels, motels and bed-and-breakfast inns17  34,635   —   1,402   36,037 3  9,986  —  —  Other services7  6,014   18,318   2,967   27,299 1  2,032  1  231  Restaurants, bars and caterers20  11,103   —   6,370   17,473 2  1,606  —  —  Educational services3  7,348   303   2,693   10,344 —  —  —  —  Arts, entertainment and recreation20  4,200   60   4,579   8,839 5  1,698  —  —  Other industries22  17,255   739,069   119,731   876,055 3  4,032  10  10,757  Residential, Consumer and All Other not individually analyzed—  —   136,735   —   136,735 —  —  116  3,714  Total147 $110,599  $931,973  $163,493  $1,206,065 20 $22,962  128 $15,656                                % to gross loans   9.17%  77.27%  13.56%       1.90%    1.30% Provision for Loan and Lease LossesWe 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, are not indicative of potential losses related to a pandemic such as we are currently experiencing with COVID-19. In response to quantitative data deficiencies, we have placed greater reliance on qualitative factors (Q-Factors).At September 30, 2020, our review of the adequacy of our allowance for loan and lease losses (ALLL) focused on our Q-Factor for “changes in the volume and severity of past due loans and other similar conditions”. We considered concentrations of credit in industries that are more likely to be significantly impacted by the effects of COVID-19. We evaluated our C&I portfolio by NAICS code and our CRE portfolio for concentrations of tenants and businesses in higher risk industries or for loans with higher LTVs. We also completed analyses on individual borrowers who may be higher risk. After updating this work, during the third quarter we significantly increased our Q-Factor for “changes in the volume and severity of past due loans and other similar conditions”. Our ALLL methodology, adjusted for the revised Q-Factor discussed above necessitated an ALLL of $16.9 million at September 30, 2020, an increase of 38% compared to our ALLL of $12.2 million at December 31, 2019. A provision for loan and lease losses of $1.1 million was recorded during the current quarter compared to $1.3 million in the prior quarter. There was no provision for loan and lease loss during the same quarter a year ago. Our ALLL as a percentage of gross loans was 1.40% as of September 30, 2020 compared to 1.19% as of September 30, 2019 and 1.33% as of June 30, 2020. Excluding SBA guaranteed PPP loans our ALLL as a percentage of gross loans was 1.62% as of September 30, 2020 compared to 1.54% as of June 30, 2020.Management believes the Company’s ALLL is adequate at September 30, 2020. 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 September 30, 2020, the recorded investment in loans classified as impaired totaled $12.4 million, with a corresponding specific reserve of $204 thousand compared to impaired loans of $17.7 million with a corresponding specific reserve of $335 thousand at September 30, 2019 and impaired loans of $11.1 million, with a corresponding specific reserve of $270 thousand at June 30, 2020. The increase in impaired loans during the current quarter was due to two commercial loans totaling $1.4 million that were placed on nonaccrual status during the third quarter of 2020.TABLE 14 TROUBLED DEBT RESTRUCTURINGS - UNAUDITED (dollars in thousands)                         At September 30,  At June 30, At March 31, At December 31,  At September 30,   2020 2020 2020 2019 2019 Nonaccrual $2,063  $2,194  $1,611  $1,680  $1,746  Accruing  4,259   4,455   4,709   4,783   4,937  Total troubled debt restructurings $6,322  $6,649  $6,320  $6,463  $6,683                        Troubled debt restructurings as a percentage of total gross loans  0.52%  0.55%  0.60%  0.63%  0.65% There were no new troubled debt restructurings during the three months ended September 30, 2020. As of September 30, 2020, we had 92 restructured loans that qualified as troubled debt restructurings, of which 91 were performing according to their restructured terms.Troubled Debt Restructuring GuidanceFinancial 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 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 that where initially granted a deferral of less than 6 months, we have granted an additional deferral period on a case-by-case basis. Since March of 2020, we have granted 261 payment deferrals totaling $125.3 million. As of September 30, 2020 loans totaling $82.5 million have resumed making payments.The following tables present approved loan deferrals that are still in effect at September 30, 2020. For the loans with payment deferrals at September 30, 2020, nine borrowers also received a PPP loan through our U.S. Small Business Administration (“SBA”) department. TABLE 15a COVID-19 LOAN DEFERRALS - UNAUDITED (dollars in thousands)                    Payments Scheduled to Resume In The Three Months Ended      December 31, 2020 March 31, 2021         Amount  Amount  Total Length of 1st deferral granted:                3 months 2 $1,748 — $— 2 $1,748 5 months 2  935 —  — 2  935 6 months 18  19,986 3  484 21  20,470 Length of 2nd deferral granted:                2 months 1  2,873 —  — 1  2,873 3 months 7  6,865 1  2,033 8  8,898 Total loan deferrals 30  32,407 4  2,517 34  34,924                  Loans serviced by others (1) —  — —  — 114  3,694 Total 60 $64,814 8 $5,034 182 $73,542 (1) Loans serviced by others are small residential mortgages and consumer home improvement loans, which are deferred on a short-term basis up to a maximum of six months. TABLE 15b COVID-19 LOAN DEFERRALS BY INDUSTRY - UNAUDITED (dollars in thousands)                    Payments Scheduled to Resume In The Three Months Ended      December 31, 2020 March 31, 2021      Industry:  Amount  Amount  Total Health care and social assistance 6 $4,550 1 $12 7 $4,562 Hotels, motels and bed-and-breakfast inns 3  9,986 —  — 3  9,986 Other services 1  231 1  2,033 2  2,264 Restaurants, bars and caterers 2  1,605 —  — 2  1,605 Arts, entertainment and recreation 5  1,698 —  — 5  1,698 Other industries 13  14,337 2  472 15  14,809 Total loan deferrals 30  32,407 4  2,517 34  34,924                  Loans serviced by others (1) —  — —  — 114  3,694 Total 60 $64,814 8 $5,034 182 $73,542 (1) Loans serviced by others are small residential mortgages and consumer home improvement loans, which are deferred on a short-term basis up to a maximum of six months. The following table presents nonperforming assets at the dates indicated.TABLE 16 NONPERFORMING ASSETS - UNAUDITED (dollars in thousands)                         At September 30,  At June 30, At March 31, At December 31,  At September 30,   2020 2020 2020 2019 2019 Total nonaccrual loans $8,098  $6,671  $5,243  $5,616  $12,796  90 days past due and still accruing  —   —   2   —   —  Total nonperforming loans  8,098   6,671   5,245   5,616   12,796                        Other real estate owned ("OREO")  8   8   8   35   58  Total nonperforming assets $8,106  $6,679  $5,253  $5,651  $12,854                        Nonperforming loans to gross loans  0.67%  0.55%  0.50%  0.54%  1.24% Nonperforming assets to total assets  0.47%  0.39%  0.36%  0.38%  0.87% The following table summarizes when loans are projected to reprice by year and rate index as of September 30, 2020.TABLE 17 LOANS BY RATE INDEX AND PROJECTED REPRICING - UNAUDITED (dollars in thousands)                            At September 30, 2020                  Years 6                        Through Beyond     Rate Index: Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 10 Total Fixed $151,140 $112,246 $80,366 $31,253 $28,809 $163,536 $22,862 $590,212 Variable:                         Prime  84,620  4,712  7,187  6,788  7,724  1,412  —  112,443 5 Year Treasury  46,749  60,366  87,327  66,646  105,976  48,013  —  415,077 7 Year Treasury  3,252  609  4,764  5,631  368  13,560  —  28,184 1 Year LIBOR  21,748  —  —  —  —  —  —  21,748 Other Indexes  5,627  1,668  2,030  1,443  7,314  10,278  906  29,266 Total variable  161,996  67,355  101,308  80,508  121,382  73,263  906  606,718                           Nonaccrual  2,109  1,026  994  695  498  2,015  761  8,098 Total $315,245 $180,627 $182,668 $112,456 $150,689 $238,814 $24,529 $1,205,028 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 18 LOAN FLOORS - UNAUDITED (dollars in thousands)              At September 30, 2020   Loans At Loans Above      Floor Rate Floor Rate Total Variable rate loans with floors:          Prime $58,674 $4,977 $63,651 5 year Treasury  339,407  47,132  386,539 7 Year Treasury  28,184  —  28,184 1 Year LIBOR  —  726  726 Other Indexes  15,141  1,260  16,401   $441,406 $54,095  495,501            Variable rate loans without floors:          Prime        48,792 5 year Treasury        28,538 1 Year LIBOR        21,022 Other Indexes        12,865          111,217            Total accruing variable rate loans       $606,718            Nonaccrual        8,098 Total variable rate loans       $614,816 TABLE 19 UNAUDITED CONSOLIDATED BALANCE SHEET (dollars in thousands, except per share data)                   At September 30,  Change At June 30,   2020  2019  $ % 2020  Assets:                Cash and due from banks $22,884   $32,505   $(9,621) (30)% $29,630   Interest-bearing deposits in other banks  104,999    56,099    48,900   87  %  126,132   Total cash and cash equivalents  127,883    88,604    39,279   44  %  155,762                    Securities available-for-sale, at fair value  337,032    272,341    64,691   24  %  280,200   Loans, net of deferred fees and costs  1,205,028    1,035,062    169,966   16  %  1,204,737   Allowance for loan and lease losses  (16,873)  (12,285)  (4,588) (37)%  (16,089) Net loans  1,188,155    1,022,777    165,378   16  %  1,188,648                    Premises and equipment, net  15,210    16,084    (874) (5)%  15,466   Other real estate owned  8    58    (50) (86)%  8   Life insurance  24,086    23,576    510   2  %  23,968   Deferred tax asset, net  2,571    4,818    (2,247) (47)%  2,645   Goodwill  11,671    11,671    —  — %  11,671   Other intangible assets, net  4,235    5,001    (766) (15)%  4,426   Other assets  29,037    27,497    1,540   6  %  29,102   Total assets $1,739,888   $1,472,427   $267,461   18  % $1,711,896                    Liabilities and shareholders' equity:                Demand - noninterest-bearing $542,060   $412,410   $129,650   31  % $521,751   Demand - interest-bearing  280,370    239,547    40,823   17  %  287,198   Money market  403,785    317,120    86,665   27  %  405,322   Savings  151,016    137,441    13,575   10  %  142,389   Certificates of deposit  140,900    155,621    (14,721) (9)%  137,647   Total deposits  1,518,131    1,262,139    255,992   20  %  1,494,307                    Term debt:                Federal Home Loan Bank of San Francisco borrowings  10,000    —   10,000   100  %  10,000   Other borrowings  10,000    10,000    —  — %  10,000   Unamortized debt issuance costs  (7)  (55)  48   87  %  (19) Net term debt  19,993    9,945    10,048   101  %  19,981                    Junior subordinated debentures  10,310    10,310    —  — %  10,310   Other liabilities  18,104    18,396    (292) (2)%  17,743   Total liabilities  1,566,538    1,300,790    265,748   20  %  1,542,341                    Shareholders' equity:                Common stock  58,872    72,200    (13,328) (18)%  58,749   Retained earnings  107,154    97,100    10,054   10  %  103,658   Accumulated other comprehensive income, net of tax  7,324    2,337    4,987   213  %  7,148   Total shareholders' equity  173,350    171,637    1,713   1  %  169,555                    Total liabilities and shareholders' equity $1,739,888   $1,472,427   $267,461   18  % $1,711,896                    Total interest-earning assets $1,636,661   $1,360,184   $276,477   20  % $1,600,922   Shares outstanding  16,792    18,212    (1,420) (8)%  16,739   Book value per share (1) $10.32   $9.42   $0.90   10  % $10.13   Tangible book value per share (1) $9.38   $8.51   $0.87   10  % $9.17                     (1) Book value per share is computed by dividing total shareholders’ equity by shares outstanding. Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy. TABLE 20 UNAUDITED INCOME STATEMENT (dollars in thousands, except per share data)   For The Three Months Ended For The Nine Months Ended   September 30,  Change June 30, September 30,   2020 2019 $ % 2020 2020  2019 Interest income:                      Interest and fees on loans $13,448 $13,013 $435  3 % $13,224 $39,010  $37,891 Interest on taxable securities  1,284  1,609  (325) (20)%  1,329  4,195   5,106 Interest on tax-exempt securities  457  271  186  69 %  423  1,151   986 Interest on interest-bearing deposits in other banks  29  308  (279) (91)%  21  204   772 Total interest income  15,218  15,201  17  — %  14,997  44,560   44,755 Interest expense:                      Interest on demand deposits  71  117  (46) (39)%  85  256   372 Interest on money market  289  451  (162) (36)%  317  1,009   1,120 Interest on savings  74  131  (57) (44)%  95  287   365 Interest on certificates of deposit  420  491  (71) (14)%  467  1,351   1,478 Interest on Federal Home Loan Bank of San Francisco borrowings  —  —  —  — %  5  5   247 Interest on other borrowings  184  183  1  1 %  184  552   623 Interest on junior subordinated debentures  50  106  (56) (53)%  61  201   329 Total interest expense  1,088  1,479  (391) (26)%  1,214  3,661   4,534 Net interest income  14,130  13,722  408  3 %  13,783  40,899   40,221 Provision for loan and lease losses  1,100  —  1,100  100 %  1,300  5,250   — Net interest income after provision for loan and lease losses  13,030  13,722  (692) (5)%  12,483  35,649   40,221 Noninterest income:                      Service charges on deposit accounts  142  177  (35) (20)%  152  463   532 ATM and point of sale fees  297  293  4  1 %  263  828   876 Payroll and benefit processing fees  152  158  (6) (4)%  143  465   486 Life insurance  125  126  (1) (1)%  148  396   410 Gain on investment securities, net  258  12  246  2,050 %  140  482   137 Federal Home Loan Bank of San Francisco dividends  109  131  (22) (17)%  36  275   376 (Loss) gain on sale of OREO  —  —  —  — %  —  (23)  41 Other income  106  109  (3) (3)%  73  150   305 Total noninterest income  1,189  1,006  183  18 %  955  3,036   3,163 TABLE 20 - CONTINUED UNAUDITED INCOME STATEMENT (dollars in thousands, except per share data)                          For The Three Months Ended For The Nine Months Ended   September 30,  Change June 30, September 30,   2020 2019  $ % 2020 2020 2019 Noninterest expense:                      Salaries and related benefits  5,126  5,005   121  2 %  4,965  15,978  15,880 Premises and equipment  951  933   18  2 %  826  2,631  2,836 Federal Deposit Insurance Corporation insurance premium  101  (104)  205  197 %  90  227  91 Data processing  581  582   (1) — %  585  1,697  1,796 Professional services  342  392   (50) (13)%  469  1,145  1,230 Telecommunications  157  194   (37) (19)%  156  484  547 Acquisition and merger  —  (113)  113  100 %  —  —  2,193 Other expenses  1,132  1,411   (279) (20)%  1,179  4,281  4,261 Total noninterest expense  8,390  8,300   90  1 %  8,270  26,443  28,834 Income before provision for income taxes  5,829  6,428   (599) (9)%  5,168  12,242  14,550 Provision for income taxes  1,500  1,786   (286) (16)%  1,321  3,150  3,958 Net income $4,329 $4,642  $(313) (7)% $3,847 $9,092 $10,592                        Earnings per share - basic $0.26 $0.26  $—  — % $0.23 $0.53 $0.59 Weighted average shares - basic  16,660  18,130   (1,470) (8)%  16,660  17,004  17,918 Earnings per share - diluted $0.26 $0.26  $—  — % $0.23 $0.53 $0.59 Weighted average shares - diluted  16,696  18,196   (1,500) (8)%  16,689  17,044  17,981 TABLE 21 UNAUDITED CONDENSED CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS (dollars in thousands)                    For The Three Months Ended   September 30,  June 30, March 31, December 31,  September 30,   2020 2020 2020 2019 2019 Earning assets:                Loans $1,209,277 $1,180,915 $1,033,689 $1,031,702 $1,029,534 Taxable securities  228,045  211,195  237,405  245,487  238,601 Tax-exempt securities  68,766  58,540  34,869  32,158  32,974 Interest-bearing deposits in other banks  95,348  72,507  47,135  81,099  58,897 Total earning assets  1,601,436  1,523,157  1,353,098  1,390,446  1,360,006                  Cash and due from banks  23,381  21,564  21,987  24,083  23,822 Premises and equipment, net  15,365  15,428  15,753  16,049  15,922 Goodwill  11,671  11,671  11,671  11,671  11,686 Other intangible assets, net  4,318  4,508  4,701  4,890  5,083 Other assets  47,945  50,499  46,809  45,504  45,925 Total assets $1,704,116 $1,626,827 $1,454,019 $1,492,643 $1,462,444                  Liabilities and shareholders' equity:                Demand - noninterest-bearing $531,459 $497,636 $420,847 $428,420 $405,853 Demand - interest-bearing  279,744  261,907  233,375  244,276  243,553 Money market  387,995  365,368  307,587  318,127  309,188 Savings  146,074  138,500  135,504  138,155  138,296 Certificates of deposit  139,757  142,955  147,241  153,223  157,620 Total deposits  1,485,029  1,406,366  1,244,554  1,282,201  1,254,510                  Federal Home Loan Bank of San Francisco borrowings  10,000  16,044  220  —  — Other borrowings net of unamortized debt issuance costs  9,988  9,976  9,963  9,952  9,942 Junior subordinated debentures  10,310  10,310  10,310  10,310  10,310 Other liabilities  17,356  17,095  16,852  17,795  18,074 Total liabilities  1,532,683  1,459,791  1,281,899  1,320,258  1,292,836                  Shareholders' equity  171,433  167,036  172,120  172,385  169,608 Liabilities & shareholders' equity $1,704,116 $1,626,827 $1,454,019 $1,492,643 $1,462,444 TABLE 22 UNAUDITED CONDENSED CONSOLIDATED YEAR TO DATE AVERAGE BALANCE SHEETS (dollars in thousands)                   For the Nine Months Ended For the Twelve Months Ended   September 30,  September 30,  December 31, December 31, December 31,   2020 2019 2019 2018 2017 Earning assets:               Loans $1,141,542 $1,017,127 $1,020,801 $915,360 $818,119 Taxable securities  225,558  247,139  246,723  207,407  165,333 Tax-exempt securities  54,112  40,912  38,706  50,330  74,231 Interest-bearing deposits in other banks  71,749  44,995  54,095  47,038  66,872 Total earning assets  1,492,961  1,350,173  1,360,325  1,220,135  1,124,555                  Cash and due from banks  22,314  22,375  22,806  20,468  18,301 Premises and equipment, net  15,514  15,445  15,598  13,952  15,567 Goodwill  11,671  10,450  10,758  665  665 Other intangible assets, net  4,508  4,780  4,807  1,252  1,471 Other assets  48,418  43,253  43,818  32,369  37,692 Total assets $1,595,386 $1,446,476 $1,458,112 $1,288,841 $1,198,251                  Liabilities and shareholders' equity:                Demand - noninterest-bearing $483,490 $391,208 $400,588 $332,197 $289,735 Demand - interest-bearing  258,420  241,924  242,516  238,328  209,792 Money market  353,775  299,694  304,340  250,685  224,913 Savings  140,048  136,254  136,733  109,025  111,376 Certificates of deposit  143,305  163,020  160,550  168,183  205,648 Total deposits  1,379,038  1,232,100  1,244,727  1,098,418  1,041,464                  Federal Home Loan Bank of San Francisco borrowings  8,759  12,894  9,644  22,466  302 Other borrowings net of unamortized debt issuance costs  9,976  11,213  10,895  15,143  17,981 Junior subordinated debentures  10,310  10,310  10,310  10,310  10,310 Other liabilities  17,102  17,927  17,894  12,286  12,293 Total liabilities  1,425,185  1,284,444  1,293,470  1,158,623  1,082,350                  Shareholders' equity  170,201  162,032  164,642  130,218  115,901 Liabilities & shareholders' equity $1,595,386 $1,446,476 $1,458,112 $1,288,841 $1,198,251 About Bank of Commerce HoldingsBank 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 from Sacramento to Yreka along the Interstate 5 corridor. 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) 677-5800James A. Sundquist, Executive Vice President and Chief Financial Officer Telephone Direct (916) 677-5825Andrea M. Newburn, Vice President and Senior Administrative Officer / Corporate Secretary Telephone Direct (530) 722-395

  • Analysts Estimate Bank of Commerce (BOCH) to Report a Decline in Earnings: What to Look Out for
    Zacks

    Analysts Estimate Bank of Commerce (BOCH) to Report a Decline in Earnings: What to Look Out for

    Bank of Commerce (BOCH) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.