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Pacific Commerce Bank Reports 2011 First Quarter and Revised Fourth Quarter 2010 Financial Results

^{Published on 2011-04-28 03:40:56 - Market Wire}
 

LOS ANGELES--([ BUSINESS WIRE ])--Pacific Commerce Bank (OTCBB: PFCI) today reported financial results for the first quarter ended March 31, 2011 and revised financial results for the fourth quarter ended December 31, 2010.

"We are pleased to report a profitable quarter, despite the generally challenging economic environment"

For the first quarter 2011, net income was $299,000, or $0.09 per share, which included a loan loss provision of $250,000. This compares with net income of $203,000, or $0.08 per share, for the first quarter of 2010.

As previously announced on January 24, 2011, the Bank raised $5 million in capital through a private placement sale of its common stock to a limited group of accredited investors, which strengthened its capital base.

aWe are pleased to report a profitable quarter, despite the generally challenging economic environment,a said Tom Iino, chairman of Pacific Commerce Bank. aAt the end of the quarter, we implemented a number of cost reduction initiatives that we expect will generate significant cost savings on an annualized basis.a

Selected financial highlights for the first quarter of 2011 versus the first quarter of 2010:

• Total assets were $195.6 million at March 31, 2011, a decrease of $1.2 million
• Investment portfolio was $37.5 million, a decrease of $8.9 million
• Gross loans were $145.0 million, an increase of $6.9 million
• Allowance for loan losses increased $1.6 million to $5.63 million
• Net charge-off for the quarter was $408,000
• Total deposits at the end of the quarter increased $5.4 million to $175.3 million
• Total shareholdersa™ equity at March 31, 2011 was $19.2 million, an increase of $700,000
• Non-accrual loans increased by $2.0 million to $8.4 million year-over-year
• Net interest margin was 3.87% for the 2011 first quarter vs. 3.79% for the 2010 first quarter
• Average cost of funds was 0.48% for the 2011 first quarter vs. 0.75% for the 2010 first quarter
• Liquidity, defined as cash, due from banks and investment securities, was $54.5 million
• Allowance for loan losses to total loans was 3.89% versus 2.90%, a year ago
• Allowance for loan losses to non-accrual loans was 67% versus 63%, a year ago

The Banka™s March 31, 2011 capital ratios were as follows:

A fourth quarter 2010 earnings release was not previously issued due to pending issues and ongoing discussions with the Bank's regulators. After discussions with the regulators, the Bank submitted a revised Call Report for the fourth quarter 2010, increasing the allowance for loan losses by $2.82 million to $5.79 million from $2.97 million. If the future credit quality of the loan portfolio does not require an allowance at this level, appropriate portions may be reversed, and income could be enhanced in subsequent periods.

In addition, due to the increase in the allowance for loan losses, the Bank reduced its net deferred tax asset to zero in the fourth quarter of 2010, which required a non-recurring charge to net income of $1.9 million. To the extent the Bank can demonstrate consistent profitability in future periods, it may be able to recapture this amount.

Including the increased amount for loan losses, the net loss for the 2010 fourth quarter was $4.7 million, or $1.93 per share, compared with a net loss of $952,000, or $0.39 per share, for the same quarter a year ago. For the 2010 full year, the net loss was $4.3 million, or $1.75 per share, compared with a net loss of $758,000, or $0.31 per share, for 2009.

aOur operations remain solid, and the recent capital investment of $5 million mentioned above is a vote of confidence and helps provide a strong foundation for the Banka™s return to profitability, long-term growth and development,a said Mr. Iino.

Selected financial highlights at December 31, 2010, compared with December 31, 2009:

• Total assets were $189.3 million, a decrease of $11.1 million from $200.4 million a year ago
• Investment portfolio was $31.7 million, a decrease of $10 million versus $41.7 million
• Total loans were $147.0 million, an increase of $800,000 compared with $146.2 million last year
• Total deposits were $174.2 million, an increase of $4.2 million compared with $170.0 million
• Total non-accrual loans were $8.9 million, a slight decrease from $9.0 million at December 31, 2009
• Net loan charge-off for the year was $2,759,000
• Liquidity, defined as cash, due from banks and investment securities, was $46 million
• Allowance for loan losses to total loans was 3.94%, compared with 2.75% last year
• Allowance for loan losses to non-accrual loans was 65%, compared with 45% a year ago

About Pacific Commerce Bank

Established in 2002, Pacific Commerce Bank is a community bank with offices in downtown Los Angeles and West Los Angeles. Founded by local business owners and professionals, it is focused on meeting the diverse needs of its clients. The bank offers small business loans, asset-based loans, construction and permanent real estate financing, SBA government-guaranteed loans, as well as personal and professional credit lines. Information about the bank can be obtained on its website: [ www.pacificcommercebank.com ].

Forward Looking Information

The financial information in this press release is based on unaudited financial results. Certain statements in this press release, including, but not limited to, achieving cost savings of approximately $300,000 on an annualized basis, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements are subject to risks and uncertainties and therefore the bank's actual results may differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that the bank is subject to include, but are not limited to, risks related to the local and national economy, including fluctuations in interest rates and costs and changes in economic policy; the ability of the bank to perform in accordance with its plans; competition; regulatory matters; and other risks detailed in its filings with the State of California Department of Financial Institutions and the Federal Deposit Insurance Corporation. The bank cautions readers not to place undue reliance on any forward-looking statements. The bank does not undertake, and specifically disclaims any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.