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Press Release

Presidio Bank Reports Results for the First Quarter 2016

Company Release - 4/20/2016 9:00 AM ET

SAN FRANCISCO--(BUSINESS WIRE)-- Presidio Bank (OTCBB: PDOB), a Bay Area business bank, today reported unaudited results for the first quarter ended March 31, 2016 with Net Income of $940 thousand, up 34% from the quarter ended December 31, 2015 and up 95% from the first quarter of 2015. Total Assets were down $1 million from the record level recorded in the fourth quarter of 2015 but up $105 million (19%) from the first quarter of 2015.

“We are beginning to realize the earnings benefit of the strong growth year in 2015,” said Presidio Bank President and CEO Steve Heitel. “Despite seasonally high personnel expenses, the first quarter of 2016 represents the second most profitable quarter in the Bank’s history.”

Financial Highlights

  • Total Loans outstanding decreased by $1 million over the quarter ended December 31, 2015 and increased $106 million or 26.0% over the first quarter 2015. The first quarter is traditionally the slowest of the year but the loan pipeline remains solid.
  • Total Deposits decreased by $2.5 million from the quarter ended December 31, 2015 and increased by $94 million or 19.5% from the first quarter of 2015. A larger decline was expected based upon a build-up of temporary deposits in the fourth quarter that ran-off in January. The Bank was able to replace the majority of those deposits with new money that came in during the first quarter. Demand Deposits were stable at 36% of total deposits.
  • Net Interest Income of $6 million in the first quarter of 2016 was up 9% from the fourth quarter of 2015 and up 30% from the first quarter of 2015. The increase is the result of the significant loan growth that occurred in 2015. Net Interest Margin increased during the quarter to 3.86% from 3.48% in the fourth quarter of 2015 due to higher average loan balances, strong loan fees during the quarter and a small decrease in the cost of deposits. Yield on loans increased from 4.69% to 4.74% while cost of deposits declined from 0.16% to 0.14%.
  • Operating Expenses increased 18% over the fourth quarter of 2015. This was primarily due to seasonally high compensation and benefits expense and a new five-year lease extension for the Bank’s San Francisco headquarters at a significantly increased rate.
  • Net Income applicable to common shareholders was $940 thousand for the first quarter of 2016, up 34% from the fourth quarter of 2015 and up 139% from the first quarter of 2015. The disproportionate increase over the first quarter of 2015 is due to elimination of dividends on the Bank’s Perpetual Preferred Stock which was fully redeemed in the third quarter of 2015.
  • Credit quality remains strong with a classified loan to capital ratio of 3.8%, down from 6.3% at December 31, 2015. The Allowance for Loans Losses remained at $6.3 million or 1.2% of total loans at March 31, 2016. The Allowance for Loan Losses covers Non-Performing Loans by over five times. One of the Bank’s two Non-Performing Loans paid off in full during the quarter. The remaining loan totals $1.1 million. It is current as to principal and interest payments but will likely be a protracted work out.
  • Diluted earnings per common share were $0.16 for the quarter compared to $0.13 in the fourth quarter of 2015 and $0.08 in the first quarter of 2015.
  • Book value per share increased to $10.75 per share as of March 31, 2016 from $10.51 per share at December 31, 2015 and $9.83 per share at March 31, 2015.

“The first ten years of Presidio Bank has been an exciting and rewarding experience for me,” said Presidio Bank Chairman and Founder, Jim Woolwine. “I am honored by the clients that have chosen to do business with Presidio Bank and am proud of what the Presidio team has accomplished.”

 

1st Quarter 2016 Financial Results

(Dollars in thousands, except per share amounts, unaudited)

 

Condensed Balance Sheet

                   
3/31/2016   12/31/2015   Change 3/31/2015   Change
 
Cash and due from banks 12,723 6,175 106.0 % 7,094 79.3 %
Interest bearing due from banks   96,867       103,211   -6.1 %   102,700   -5.7 %
Total cash and equivalents 109,590 109,386 0.2 % 109,794 -0.2 %
Investment securities 14,548 15,034 -3.2 % 14,235 2.2 %
Loans, net of fees 522,942 523,815 -0.2 % 416,492 25.6 %
Allowance for loan losses   (6,301 )     (6,301 ) 0.0 %   (5,172 ) 21.8 %
Net loans 516,641 517,514 -0.2 % 411,320 25.6 %
Premises and equipment, net 1,155 1,231 -6.2 % 1,433 -19.4 %
Other assets and interest receivable   11,274       11,102   1.5 %   11,339   -0.6 %
Total assets 653,208 654,267 -0.2 % 548,121 19.2 %
 
Non-interest-bearing demand 210,872 210,997 -0.1 % 162,424 29.8 %
Interest bearing transaction 104,147 78,359 32.9 % 80,246 29.8 %
Money market and savings accounts 220,936 249,876 -11.6 % 188,849 17.0 %
Time deposits   40,827       40,118   1.8 %   51,029   -20.0 %
Total deposits 576,782 579,350 -0.4 % 482,548 19.5 %
Borrowings 9,773 9,891 -1.2 % 9,911 NM
Other liabilities   6,629       7,472   -11.3 %   7,190   -7.8 %
Total liabilities 593,184 596,713 -0.6 % 500,064 18.6 %
 
Preferred stock - - NM 6,869 -100.0 %
Common stock 60,248 58,796 2.5 % 44,466 35.5 %
Retained earnings (160 ) (1,100 ) 85.5 % (2,806 ) 94.3 %
Other comprehensive income   (64 )     (142 ) 54.9 %   (57 ) -12.3 %
Total shareholder’s equity   60,024       57,554   4.3 %   48,472   23.8 %
Total liabilities and equity   653,208       654,267   -0.2 %   548,121   19.2 %
 

Book value per share

Book value per share $ 10.75 $ 10.51 $ 9.83
Total shares outstanding EOP 5,581 5,477 4,231
 

Capital Ratios

Tier 1 leverage ratio 9.5 % 9.0 % 9.3 %
Tier 1 risk-based capital ratio 9.8 % 9.4 % 10.0 %
Total risk-based capital ratio 12.5 % 12.2 % 13.2 %
Tangible common risk-based ratio 9.8 % 9.4 % 8.6 %
 
 

Condensed Statement of Income

  For the three months ended
3/31/2016   12/31/2015  

Change
Fav./
(Unfav.)

  3/31/2015  

Change
Fav./
(Unfav.)

       
Interest income 6,372 5,860 8.7 % 4,995 27.6 %
Interest expense   413       409   (1.0 %)   404   (2.2 %)
Net interest income 5,959 5,451 9.3 % 4,591 29.8 %
Provision for loan loss   -       707   NM   -   NM
Net interest income after provision 5,959 4,744 25.6 % 4,591 29.8 %
 
Other income 171 158 8.2 % 169 1.2 %
 
Compensation and benefit expenses 3,044 2,441 (24.7 %) 2,595 (17.3 %)
Occupancy and equipment expenses 516 441 (17.0 %) 446 (15.7 %)
Data processing 323 299 (8.0 %) 287 (12.5 %)
Professional and legal 136 114 (19.3 %) 110 (23.6 %)
Other operating expenses   553       575   3.9 %   511   (8.2 %)
Total operating expenses   4,572       3,870   (18.1 %)   3,949   (15.8 %)
Net income before taxes 1,558 1,032 51.0 % 811 92.1 %
Income taxes   618       329   (87.8 %)   328   (88.4 %)
Net income 940 703 33.7 % 483 94.6 %
Preferred dividends   -       -  

NM

  89   NM
Net income to common   940       703   33.7 %   394   138.6 %
 
Earnings Per Share
Basic earnings per share $ 0.17 $ 0.13 $ 0.09
Diluted earnings per share $ 0.16 $ 0.13 $ 0.09
Average shares outstanding 5,517 5,328 4,221
Average diluted shares 5,756 5,598 4,462
 
Performance Ratios
Return on average assets 0.59 % 0.41 % 0.38 %
Return on average common equity 6.38 % 4.62 % 3.52 %
Net interest margin 3.86 % 3.48 % 3.65 %
Cost of funds 0.29 % 0.29 % 0.35 %
Efficiency ratio 74.6 % 70.0 % 83.0 %
 
Average Balances
Total assets 636,043 638,463 519,565
Earning assets 621,240 624,057 509,764
Total loans 522,422 484,924 413,932
Total deposits 558,000 564,379 458,016
Common equity 59,117 56,197 41,603
 

NM = Not Meaningful

 
 

Condensed Balance Sheet (5 Quarter Data)

   
3/31/2016   12/31/2015   9/30/2015   6/30/2015   3/31/2015
       
Cash and due from banks 12,723 6,175 8,984 501 7,094
Interest bearing due from banks   96,867       103,211       108,898       126,275       102,700  
Total cash and equivalents 109,590 109,386 117,882 126,776 109,794
Investment securities 14,548 15,034 14,203 14,191 14,235
Loans, net of fees 522,942 523,815 475,466 446,068 416,492
Allowance for loan losses   (6,301 )     (6,301 )     (5,594 )     (5,172 )     (5,172 )
Net loans 516,641 517,514 469,872 440,896 411,320
Premises and equipment, net 1,155 1,231 1,313 1,381 1,433
Other assets and interest receivable   11,274       11,102       10,829       10,660       11,339  
Total assets 653,208 654,267 614,099 593,904 548,121
 
Non-interest-bearing demand 210,872 210,997 204,348 190,129 162,424
Interest bearing transaction 104,147 78,359 69,142 67,403 80,246
Money market and savings accounts 220,936 249,876 216,602 207,446 188,849
Time deposits   40,827       40,118       44,388       51,046       51,029  
Total deposits 576,782 579,350 534,480 516,024 482,548
Borrowings 9,773 9,891 9,767 9,880 9,911
Other liabilities   6,629       7,472       15,020       7,079       7,190  
Total liabilities 593,184 596,713 559,267 532,983 499,649
 
Preferred stock - - - 6,869 6,869
Common stock 60,248 58,796 56,789 56,375 44,466
Retained earnings (160 ) (1,100 ) (1,824 ) (2,264 ) (2,806 )
Other comprehensive income   (64 )     (142 )     (133 )     (59 )     (57 )
Total shareholder’s equity   60,024       57,554       54,832       60,921       48,472  
Total liabilities and equity   653,208       654,267       614,099       593,904       548,121  
 

Book value per share

Book value per share $ 10.75 $ 10.51 $ 10.37 $ 10.27 $ 9.83
Total shares outstanding EOP 5,581 5,477 5,288 5,261 4,231
 
Capital Ratios
Tier 1 leverage ratio 9.5 % 9.0 % 9.1 % 10.6 % 9.3 %
Tier 1 risk-based capital ratio 9.8 % 9.4 % 9.7 % 11.6 % 10.0 %
Total risk-based capital ratio 12.5 % 12.2 % 12.6 % 14.6 % 13.2 %
Tangible common risk-based ratio 9.8 % 9.4 % 9.7 % 10.3 % 8.6 %
 
 

Condensed Statement of Income (5 Quarter Data)

 
  For the three months ended
3/31/2016   12/31/2015   9/30/2015   6/30/2015   3/31/2015
       
Interest income 6,372 5,860 5,557 5,171 4,995
Interest expense   413       409       421       428       404  
Net interest income 5,959 5,451 5,136 4,743 4,591
Provision for loan loss   -       707       422       -       -  
Net interest income after provision 5,959 4,744 4,714 4,743 4,591
 
Other income 171 158 191 183 169
 
Compensation and benefit expenses 3,044 2,441 2,331 2,301 2,595
Occupancy and equipment expenses 516 441 445 432 446
Data processing 323 299 289 277 287
Professional and legal 136 114 116 191 110
Other operating expenses   553       575       584       542       511  
Total operating expenses   4,572       3,870       3,765       3,743       3,949  
Net income before taxes 1,558 1,032 1,140 1,183 811
Income taxes   618       329       480       487       328  
Net income 940 703 660 696 483
Preferred dividends   -       -       231       155       89  
Net income to common   940       703       429       541       394  
 
Earnings Per Share
Basic earnings per share $ 0.17 $ 0.13 $ 0.04 $ 0.13 $ 0.09
Diluted earnings per share $ 0.16 $ 0.13 $ 0.08 $ 0.12 $ 0.09
Average shares outstanding 5,517 5,328 5,263 4,296 4,221
Average diluted shares 5,756 5,598 5,515 4,526 4,462
 
Performance Ratios
Return on average assets 0.59 % 0.41 % 0.45 % 0.48 % 0.38 %
Return on average common equity 6.38 % 4.62 % 3.84 % 5.00 % 3.52 %
Net interest margin 3.86 % 3.48 % 3.45 % 3.40 % 3.65 %
Cost of funds 0.29 % 0.29 % 0.30 % 0.32 % 0.35 %
Efficiency ratio 74.6 % 70.0 % 70.2 % 76.1 % 83.0 %
 
Average Balances
Total assets 636,043 638,463 606,634 576,058 519,565
Earning assets 621,240 624,057 592,748 561,247 509,764
Total loans 522,422 484,924 453,483 424,455 413,932
Total deposits 558,000 564,379 527,295 508,336 458,016
Common equity 59,117 56,197 54,963 43,205 41,603
 

 

Loans (5 Quarter Data)

                   
3/31/2016   12/31/2015   9/30/2015   6/30/2015   3/31/2015
Commercial real estate 226,555   224,220   207,595   205,796   191,291
Land and construction 47,960 42,493 35,109 29,380 11,078
Commercial 145,127 153,853 142,134 131,263 138,255
Personal 30,465 27,103 23,367 17,214 17,943
Residential 25,013 30,212 26,077 27,589 23,784
Multifamily 48,659 46,827 41,998 35,584 34,752
Deferred loan fees (837 )   (893 )   (813 )   (758 )   (610 )
Loans 522,942 523,814 475,466 446,068 416,492

Allowance for loan losses

(6,301 )   (6,301 )   (5,594 )   (5,172 )   (5,172 )
Net loans 516,641 517,514 469,872 440,896 411,320
 
 

Non-Performing Assets (5 Quarter Data)

                   
3/31/2016   12/31/2015   9/30/2015   6/30/2015   3/31/2015
Non-Accrual Loans 1,094   1,213   1,232   1,252   1,272
Non-Performing Loans (NPL) 1,094 1,213 1,232 1,252 1,272
Other Real Estate Owned - - - - -
Non-Performing Assets (NPA) 1,094 1,213 1,232 1,252 1,272
90+ Days Delinquent - - - - -
NPAs & 90 Day Delinquent 1,094 1,213 1,232 1,252 1,272
 
Quarterly Net Charge-offs - - - - -
NPAs / Assets % 0.17 % 0.19 % 0.20 % 0.21 % 0.23 %
NPAs & 90 Day / Assets % 0.17 % 0.19 % 0.20 % 0.21 % 0.23 %
NPAs / Actual Loans and OREO % 0.17 % 0.19 % 0.20 % 0.21 % 0.23 %
Loan Loss Reserves / Loans (%) 1.20 % 1.20 % 1.18 % 1.16 % 1.24 %
 
 

Net Interest Income

  For the Three Months Ended
3/31/2016   3/31/2015
  Interest     Interest  

Average

Income/ Average Average Income/ Average

Balance

Expense Rate Balance Expense Rate
Assets:
Interest-bearing deposits $ 83,993 $ 116 0.56 % $ 81,554 $ 48 0.24 %
Federal Reserve and Federal Home Loan Bank stock 3,760 66 7.07 3,092 51 6.73
Investment Securities 11,065 38 1.39 11,186 36 1.29
 
Loans: (2)
Commercial Real Estate 150,622 1,845 4.93 130,666 1,513 4.69
Land and Construction 44,929 583 5.21 14,613 210 5.84
Commercial Real Estate 224,565 2,620 4.69 193,478 2,319 4.86
Residential 27,707 289 4.20 23,945 246 4.17
Multifamily 44,933 520 4.65 34,546 398 4.68
Personal   29,667     295 4.00   16,684     173 4.21
Total Loans   522,422     6,152 4.74   413,932     4,860 4.76
Total Earning Assets 621,240   6,372 4.13 509,764   4,995 3.97
Allowance for loan losses (6,306 ) (6,306 )
Cash and cash equivalents 9,328 8,002
Premises and equipment 1,202 1,202
Other assets   10,196     6,478  
Total Assets $ 635,661   $ 519,140  
 
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 82,817 $ 42 0.21 % $ 68,877 $ 38 0.22 %
Money market deposits 218,945 123 0.23 180,810 96 0.22
Savings deposits 3,149 1 0.13 2,541 1 0.13
Certificates and other time deposits   40,231     34 0.34   50,903     58 0.47
Total Interest-bearing Deposits 345,142 200 0.23 303,130 193 0.26
Borrowings   11,018     212 7.75   9,898     211 8.65
Total Interest-bearing Liabilities 356,161 413 0.47 313,029 404 0.52
Noninterest-bearing deposits 212,857 154,886
Other liabilities   7,530     2,755  
Total Liabilities 576,548 470,670
Stockholders' Equity   59,113         48,470    

Total Liabilities and Stockholders' Equity

$ 635,661     413 0.26 $ 519,140     404 0.32
Net Interest Income $ 5,959 $ 4,591
Net Interest Margin 3.86 % 3.65 %
 

About Presidio Bank

Presidio Bank celebrates ten years of providing business banking services to small and mid-size businesses, including professional service firms, real estate developers and investors, and not-for-profit organizations, and to their owners who desire personalized, responsive service with access to local decision makers. Presidio Bank offers clients the resources of a large bank combined with the personalized services of a neighborhood bank. Presidio Bank is headquartered in San Francisco, California and currently operates five banking offices in San Francisco, Walnut Creek, San Rafael, San Mateo and Palo Alto. More information is available at www.presidiobank.com. Presidio Bank is a member of FDIC and an Equal Housing Lender.

This press release contains certain forward-looking statements that involve risk and uncertainties. These statements are identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “plan,” “estimate,” “project,” or similar expressions. The risks and uncertainties that may affect the operations, performance, development, growth projections and results of Presidio Bank’s business include, but are not limited to, the growth of the economy, interest rate movements, timely development by Presidio Bank of technology enhancements for its products and operating systems, the impact of competitive products, services and pricing, client-based requirements, Congressional legislation, changes in regulatory or generally accepted accounting principles and similar matters. Readers are cautioned not to place undue reliance on forward-looking statements which are subject to influence by the named risk factors and unanticipated future events. Actual results, accordingly, may differ materially from management expectations.

Presidio Bank
Steve Heitel, 415-229-8428
President & CEO
or
Ed Murphy, 415-229-8403
EVP/CFO
or
MEDIA:
Annette Gelinas, 415-229-8415 (o) / 925-787-2956 (c)
SVP/Marketing Director
agelinas@presidiobank.com

Source: Presidio Bank