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Press Release

Presidio Bank Reports Results for the Third Quarter 2016

Company Release - 10/25/2016 9:00 AM ET

SAN FRANCISCO--(BUSINESS WIRE)-- Presidio Bank (OTCBB: PDOB), a Bay Area business bank, today reported unaudited results for the third quarter ended September 30, 2016 with Net Income of $1,184 thousand, up 3% from the quarter ended June 30, 2016 and up 72% from the third quarter 2015. For the nine months ended September 30, 2016, Net Income was $3,274 thousand, up 76% over the same period a year ago. Total assets were $738 million at September 30, 2016, up $90 million from June 30, 2016 and up $124 million over September 30, 2015.

“Presidio Bank posted another solid quarter,” said Presidio Bank President and CEO Steve Heitel. “With a record level of total assets, the Bank continues to show year-over-year improvement in profitability and efficiency.”

Financial Highlights

  • Total Loans Outstanding were essentially flat from the quarter ending June 30, 2016 despite good growth in both Commercial and Industrial Loans and Commercial Real Estate Loans, which were up a combined $15 million. Construction and Land Development Loans were down $19 million for the quarter as projects continue to sell or refinance ahead of schedule due to the robust economy. New loan Commitments for the quarter were strong at $68 million, up from $44 million in the second quarter.
  • Total Deposits increased by $116 million from the quarter ended June 30, 2016. The growth was aided by a single large money market deposit of $75 million that came in at the end of August and is expected to run-off in the fourth quarter. After declining in the second quarter, Demand Deposits rebounded with growth of $22 million in the quarter. Due to the large increase in Money Market Deposits, Demand Deposits declined to 34% of Total Deposits from 37% in the prior quarter.
  • Net Interest Income of $6.1 million in the third quarter of 2016 was up 4% from the second quarter of 2016 and up 19% from the third quarter of 2015. YTD Net Interest Income is up 24%. Net Interest Margin decreased during the quarter to 3.59% from 3.70% in the second quarter of 2016, due primarily to higher levels of lower yielding liquid assets carried during the quarter. Loan Yields and Deposit Costs were essentially flat for the quarter. YTD Net Interest Margin is 3.71% compared to 3.49% for the same period in 2015.
  • Operating Expenses increased by 2.4% over the second quarter of 2016. The majority of this increase came in Compensation and Benefits Expense and was related to growth-driven additions to staff and an increase to the accrual for incentive compensation due to higher than planned deposit balances. YTD Operating Expenses are up 11% compared to revenue growth of 23% during the same period. Net Income Applicable to Common Shareholders was $1,184 thousand for the third quarter of 2016, up 3% from the second quarter of 2016 and up 123% from the third quarter of 2015. The disproportionate increase over the third quarter of 2015 is due primarily 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 although the Classified to Capital Ratio increased from 3.9% at June 30, 2016 to 5.4% at September 30, 2016 due to the downgrade of a commercial borrower during the quarter. The number of classified relationships now totals five. The Allowance for Loans Losses increased by $274 thousand to $6.6 million due to the increase in Classified Assets during the quarter along with the increase in Commercial & Industrial Loans outstanding. The Allowance for Loan Losses covers Non-Performing Loans by six times. The Bank continues to have one non-performing loan totaling $1.1 million.
  • Diluted Earnings per Common Share were $0.19 for the quarter compared to $0.19 in the second quarter of 2016 and $0.09 in the third quarter of 2015.
  • Book Value per Share increased to $11.04 per share as of September 30, 2016 from $10.82 per share at June 30, 2016 and $10.37 per share at September 30, 2015.

“We enter into our second decade of serving Bay Area businesses, real estate professionals, not-for-profit organizations and financially sophisticated individuals with strong momentum,” said Presidio Bank Chairman and Founder, Jim Woolwine. “While we are pleased with our success so far, this is just the beginning of what we are striving to achieve.”

                 

3rd Quarter 2016 Financial Results

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

 

Condensed Balance Sheet

         
9/30/2016   6/30/2016   Change   9/30/2015   Change 12/31/2015   Change
 
Cash and due from banks 6,743 9,430 -28.5 % 8,984 -24.9 % 6,175 9.2 %
Interest bearing due from banks   168,954       73,324     130.4 %     108,898     55.1 %   103,211     63.7 %
Total cash and equivalents 175,697 82,754 112.3 % 117,882 49.0 % 109,386 60.6 %
Investment securities 13,955 14,456 -3.5 % 14,203 -1.7 % 15,034 -7.2 %
Loans, net of fees 542,867 544,577 -0.3 % 475,466 14.2 % 523,815 3.6 %
Allowance for loan losses   (6,642 )     (6,368 )   4.3 %     (5,594 )   18.7 %   (6,301 )   5.4 %
Net loans 536,225 538,209 -0.4 % 469,872 14.1 % 517,514 3.6 %
Premises and equipment, net 1,041 1,101 -5.4 % 1,313 -20.7 % 1,231 -15.4 %
Other assets and interest receivable   10,952       11,264     -2.8 %     10,829     1.1 %   11,102     -1.4 %
Total assets 737,870 647,784 13.9 % 614,099 20.2 % 654,267 12.8 %
 
Non-interest-bearing demand 222,877 201,121 10.8 % 204,348 9.1 % 210,997 5.6 %
Interest bearing transaction 80,112 83,121 -3.6 % 69,142 15.9 % 78,359 2.2 %
Money market and savings accounts 291,551 213,227 36.7 % 216,602 34.6 % 249,876 16.7 %
Time deposits   61,404       42,755     43.6 %     44,388     38.3 %   40,118     53.1 %
Total deposits 655,944 540,224 21.4 % 534,480 22.7 % 579,350 13.2 %
Borrowings 9,770 37,510 -74.0 % 9,767 0.0 % 9,891 -1.2 %
Other liabilities   6,531       6,272     4.1 %     15,020     -56.5 %   7,472     -12.6 %
Total liabilities 672,245 584,006 15.1 % 559,267 20.2 % 596,713 12.7 %
 
Common stock 63,492 62,807 1.1 % 56,789 11.8 % 58,796 8.0 %
Retained earnings 2,174 989 319.8 % (1,824 ) 219.2 % (1,100 ) 297.6 %
Other comprehensive income   (41 )     (18 )   -127.8 %     (133 )   69.2 %   (142 )   71.1 %
Total shareholder’s equity   65,625       63,778     2.9 %     54,832     19.7 %   57,554     14.0 %
Total liabilities and equity   737,870       647,784   13.9 %   614,099   20.2 %   654,267   12.8 %
 
Book value per share
Book value per share

$

11.04

$ 10.82 $ 10.37 $ 10.51
Total shares outstanding EOP 5,944 5,893 5,288 5,477
 
Capital Ratios
Common equity tier 1 capital ratio 10.3 % 10.1 % 9.7 % 9.4 %
Tier 1 risk-based capital ratio 10.3 % 10.1 % 9.7 % 9.4 %
Total risk-based capital ratio 12.9 % 12.8 % 12.6 % 12.2 %
Tier 1 leverage ratio 9.5 % 9.8 % 9.1 % 9.0 %
 
       

Condensed Statement of Income

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

 
For the three months ended For the nine months ended
9/30/2016   6/30/2016  

Change
Fav./
(Unfav.)

  9/30/2015  

Change
Fav./
(Unfav.)

9/30/2016   9/30/2015  

Change
Fav./
(Unfav.)

Interest income 6,575   6,309   4.2 %   5,557   18.3 % 19,257   15,723   22.5 %
Interest expense   471       436   (8.0 %)   421   (11.9 %)   1,320       1,253   (5.3 %)
Net interest income 6,104 5,873 3.9 % 5,136 18.8 % 17,937 14,470 24.0 %
Provision for loan loss   274       67   NM   422   NM   341       422   NM
Net interest income after provision 5,830 5,806 0.4 % 4,714 23.7 % 17,596 14,048 25.3 %
 
Other income 177 161 9.9 % 191 (7.3 %) 510 543 (6.1 %)
 
Compensation and benefit expenses 2,546 2,424 (5.0 %) 2,331 (9.2 %) 8,014 7,227 (10.9 %)
Occupancy and equipment expenses 531 531 0.0 % 445 (19.3 %) 1,578 1,324 (19.2 %)
Data processing 320 304 (5.3 %) 289 (10.7 %) 947 853 (11.0 %)
Professional and legal 142 141 (0.7 %) 116 (22.4 %) 418 417 (0.2 %)
Other operating expenses   548       593   7.6 %   557   1.6 %   1,697       1,610   (5.4 %)
Total operating expenses   4,087       3,993   (2.4 %)   3,738   (9.3 %)   12,654       11,431   (10.7 %)
Net income before taxes 1,920 1,974 (2.7 %) 1,167 64.5 % 5,452 3,160 72.5 %
Income taxes   736       825   10.8 %   480   (53.3 %)   2,178       1,294   (68.3 %)
Net income 1,184 1,149 3.0 % 687 72.3 % 3,274 1,866 75.5 %
Preferred dividends   -       -   NM   155   NM   -       431   100.0 %
Net income to common   1,184       1,149   3.0 %   532   122.6 %   3,274     1,435   128.2 %
 
Earnings Per Share
Basic earnings per share $ 0.20 $ 0.20 $ 0.10 $ 0.57 $ 0.30
Diluted earnings per share $ 0.19 $ 0.19 $ 0.09 $ 0.55 $ 0.29
Basic shares outstanding 5,926 5,713 5,263 5,738 4,588
Diluted shares outstanding 6,096 5,922 5,515 5,943 4,827
 
Performance Ratios
Return on average assets 0.68 % 0.71 % 0.45 % 0.66 % 0.44 %
Return on average common equity 7.22 % 7.46 % 3.84 % 7.04 % 4.11 %
Net interest margin 3.59 % 3.70 % 3.44 % 3.71 % 3.49 %
Cost of funds 0.29 % 0.30 % 0.30 % 0.30 % 0.32 %
Efficiency ratio 65.1 % 66.2 % 70.2 % 68.6 % 76.1 %
 
Average Balances
Total assets 694,088 653,042 606,234 661,177 567,354
Earning assets 679,353 638,560 592,748 646,505 554,891
Total loans 547,748 531,739 453,483 534,020 430,768
Total deposits 603,428 568,518 527,295 576,746 498,136
Common equity 65,228 61,945 54,963 62,096 46,638
 
NM = Not Meaningful
 
           

Condensed Balance Sheet (5 Quarter Data)

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

                 
9/30/2016   6/30/2016   3/31/2016   12/31/2015   9/30/2015
 
Cash and due from banks 6,743 9,430 12,723 6,175 8,984
Interest bearing due from banks   168,954       73,324       96,867       103,211       108,898  
Total cash and equivalents 175,697 82,754 109,590 109,386 117,882
Investment securities 13,955 14,456 14,548 15,034 14,203
Loans, net of fees 542,867 544,577 522,942 523,815 475,466
Allowance for loan losses   (6,642 )     (6,368 )     (6,301 )     (6,301 )     (5,594 )
Net loans 536,225 538,209 516,641 517,514 469,872
Premises and equipment, net 1,041 1,101 1,155 1,231 1,313
Other assets and interest receivable   10,952       11,264       11,274       11,102       10,829  
Total assets 737,870 647,784 653,208 654,267 614,099
 
Non-interest-bearing demand 222,877 201,121 210,872 210,997 204,348
Interest bearing transaction 80,112 83,121 104,147 78,359 69,142
Money market and savings accounts 291,551 213,227 220,936 249,876 216,602
Time deposits   61,404       42,755       40,827       40,118       44,388  
Total deposits 655,944 540,224 576,782 579,350 534,480
Borrowings 9,770 37,510 9,773 9,891 9,767
Other liabilities   6,531       6,272       6,629       7,472       15,020  
Total liabilities 672,245 584,006 593,184 596,713 559,267
 
Preferred stock - - -
Common stock 63,492 62,807 60,248 58,796 56,789
Retained earnings 2,174 989 (160 ) (1,100 ) (1,824 )
Other comprehensive income   (41 )     (18 )     (64 )     (142 )     (133 )
Total shareholder’s equity   65,625       63,778       60,024       57,554       54,832  
Total liabilities and equity   737,870       647,784       653,208       654,267       614,099  

 

 

Book value per share
Book value per share $ 11.04 $ 10.82 $ 10.75 $ 10.51 $ 10.37
Total shares outstanding EOP 5,944 5,893 5,581 5,477 5,288
 
Capital Ratios
Tier 1 leverage ratio 9.5 % 9.8 % 9.5 % 9.0 % 9.1 %
Tier 1 risk-based capital ratio 10.3 % 10.1 % 9.8 % 9.4 % 9.7 %
Total risk-based capital ratio 12.9 % 12.8 % 12.5 % 12.2 % 12.6 %
Tangible common risk-based ratio 10.3 % 10.1 % 9.8 % 9.4 % 9.7 %
 
   

Condensed Statement of Income (5 Quarter Data)

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

 
For the three months ended
9/30/2016   6/30/2016   3/31/2016   12/31/2015   9/30/2015
       
Interest income 6,575 6,309 6,372 5,860 5,557
Interest expense   471       436       413       409       421  
Net interest income 6,104 5,873 5,959 5,451 5,136
Provision for loan loss   274       67       -       707       422  
Net interest income after provision 5,830 5,806 5,959 4,744 4,714
 
Other income 177 161 171 158 191
 
Compensation and benefit expenses 2,546 2,424 3,044 2,441 2,331
Occupancy and equipment expenses 531 531 516 441 445
Data processing 320 304 323 299 289
Professional and legal 142 141 136 114 116
Other operating expenses   548       593       553       575       557  
Total operating expenses   4,087       3,993       4,572       3,870       3,738  
Net income before taxes 1,920 1,974 1,558 1,032 1,167
Income taxes   736       825       618       329       480  
Net income 1,184 1,149 940 703 687
Preferred dividends   -       -       -       -       155  
Net income to common   1,184       1,149       940       703       532  
 
Earnings Per Share
Basic earnings per share $ 0.20 $ 0.20 $ 0.17 $ 0.13 $ 0.10
Diluted earnings per share $ 0.19 $ 0.19 $ 0.16 $ 0.13 $ 0.09
Average shares outstanding 5,926 5,713 5,517 5,328 5,263
Average diluted shares 6,096 5,922 5,756 5,598 5,515
 
Performance Ratios
Return on average assets 0.68 % 0.71 % 0.59 % 0.41 % 0.45 %
Return on average common equity 7.22 % 7.46 % 6.38 % 4.62 % 3.84 %
Net interest margin 3.59 % 3.70 % 3.86 % 3.48 % 3.44 %
Cost of funds 0.29 % 0.30 % 0.29 % 0.29 % 0.30 %
Efficiency ratio 65.1 % 66.2 % 74.6 % 70.0 % 70.2 %
 
Average Balances
Total assets 694,088 653,042 636,043 638,463 606,234
Earning assets 679,353 638,560 621,240 624,057 592,748
Total loans 547,748 531,739 522,422 484,924 453,483
Total deposits 603,428 568,518 558,000 564,379 527,295
Common equity 65,228 61,945 59,117 56,197 54,963
 
           

Loans (5 Quarter Data)

(Dollars in Thousands, unaudited)

                 

9/30/2016

  6/30/2016   3/31/2016   12/31/2015   9/30/2015
 
Commercial real estate 248,646 244,457 226,555 224,220 207,595
Land and construction 20,025 38,714 47,960 42,493 35,109
Commercial 161,783 150,613 145,127 153,853 142,134
Personal 31,411 35,376 30,465 27,103 23,367
Residential 30,977 26,852 25,013 30,212 26,077
Multifamily 50,832 49,379 48,659 46,827 41,998
Deferred loan fees (806 )   (813 )   (837 )   (893 )   (813 )
Loans 542,867 544,577 522,942 523,814 475,466
Allowance for loan losses (6,642 )   (6,368 )   (6,301 )   (6,301 )   (5,594 )
Net loans 536,225 538,209 516,641 517,514 469,872
 
           

Non-Performing Assets (5 Quarter Data)

(Dollars in Thousands, unaudited)

                 

9/30/2016

 

6/30/2016

 

3/31/2016

 

12/31/2015

 

9/30/2015

 
Non-Accrual Loans 1,068 1,074 1,094 1,213 1,232
Non-Performing Loans (NPL) 1,068 1,074 1,094 1,213 1,232
Other Real Estate Owned - - - - -
Non-Performing Assets (NPA) 1,068 1,074 1,094 1,213 1,232
90+ Days Delinquent - - - - -
NPAs & 90 Day Delinquent 1,068 1,074 1,094 1,213 1,232
 
Quarterly Net Charge-off's - - - - -
NPAs / Assets % 0.14% 0.17% 0.17% 0.19% 0.20%
NPAs & 90 Day / Assets % 0.14% 0.17% 0.17% 0.19% 0.20%
NPAs / Actual Loans and OREO % 0.14% 0.17% 0.17% 0.19% 0.20%
Loan Loss Reserves / Loans (%) 1.22% 1.17% 1.20% 1.20% 1.18%
 
   

Net Interest Income (Quarter Data)

(Dollars in Thousands, unaudited)

 
For the Three Months Ended
9/30/2016     9/30/2015
  Interest     Interest  
Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate
Assets:
Interest-bearing deposits $ 117,438 $ 152 0.51 % $ 125,139 $ 74 0.23 %
Federal Reserve and Federal Home Loan Bank stock 4,114 78 7.52 3,540 71 7.91
Investment Securities 10,053 34 1.36 10,585 35 1.31
 
Loans: (2)
Commercial Real Estate 159,082 1,824 4.56 135,104 1,582 4.64
Land and Construction 32,357 444 5.46 32,908 452 5.45
Commercial Real Estate 245,259 2,833 4.60 201,246 2,418 4.77
Residential 28,502 301 4.20 24,860 258 4.12
Multifamily 49,347 582 4.69 39,482 468 4.70
Personal 33,202 327 3.91 19,883 200 3.99
Total Loans 547,748 6,311 4.58 453,483 5,377 4.70
Total Earning Assets 679,353 6,575 3.85 592,748 5,557 3.72
Allowance for loan losses (6,306) (6,306)
Cash and cash equivalents 9,824 7,651
Other assets 11,216 12,224
Total Assets $ 694,088 $ 606,317
 
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 84,990 $ 41 0.19 % $ 73,458 $ 38 0.21 %
Money market deposits 243,111 145 0.24 210,093 114 0.22
Savings deposits 3,306 1 0.11 2,065 1 0.11
Certificates and other time deposits 55,932 57 0.41 50,224 57 0.45
Total Interest-bearing Deposits 387,340 244 0.25 335,839 210 0.25
Borrowings 19,198 222 4.59 9,846 211 8.50
Total Interest-bearing Liabilities 406,538 466 0.45 345,685 421 0.48
Noninterest-bearing deposits 216,691 191,456
Other liabilities 5,633 7,494
Total Liabilities 628,862 544,634
Stockholders' Equity 65,226 61,683
Total Liabilities and Stockholders' Equity $ 694,088 $ 606,317
Net Interest Income $ 6,109 $ 5,136
Net Interest Margin 3.57 % 3.44 %
Cost of funds 0.30 % 0.31 %
 
   

Net Interest Income (YTD)

(Dollars in Thousands, unaudited)

 
For the Nine Months Ended
9/30/2016     9/30/2015
  Interest       Interest  
Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate
Assets:
Interest-bearing deposits $ 97,970 $ 379 0.52 % $ 109,910 $ 201 0.24 %
Federal Reserve and Federal Home Loan Bank stock 3,949 213 7.21 3,319 239 9.62
Investment Securities 10,566 109 1.38 10,894 106 1.30
 
Loans: (2)
Commercial Real Estate 152,684 5,363 4.69 133,519 4,606 4.61
Land and Construction 39,519 1,524 5.15 21,967 878 5.34
Commercial Real Estate 234,298 8,185 4.67 195,925 7,088 4.84
Residential 27,536 866 4.20 24,525 761 4.15
Multifamily 47,752 1,657 4.64 36,684 1,295 4.72
Personal 32,231   960 3.98 18,147   550 4.06
Total Loans 534,020   18,556 4.64 430,768   15,178 4.71
Total Earning Assets 646,505 19,257 3.98 554,891 15,723 3.79
Allowance for loan losses (6,306 ) (6,306 )
Cash and cash equivalents 9,485 7,762
Other assets 11,493   11,007  
Total Assets $ 661,177   $ 567,354  
 
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits $ 86,479 $ 130 0.20 % $ 71,717 $ 115 0.21 %
Money market deposits 228,441 395 0.23 199,383 328 0.22
Savings deposits 3,374 3 0.12 2,319 2 0.12
Certificates and other time deposits 45,874   141 0.41 50,681   175 0.46
Total Interest-bearing Deposits 364,167 668 0.25 324,099 620 0.26
Borrowings 15,499   652 5.62 9,880   633 8.57
Total Interest-bearing Liabilities 379,667 1,320 0.46 333,979 1,253 0.50
Noninterest-bearing deposits 212,579 174,037
Other liabilities 6,836   5,882  
Total Liabilities 599,081 513,897
Stockholders' Equity 62,096   53,457  
Total Liabilities and Stockholders' Equity $ 661,177   $ 567,354  
Net Interest Income $ 17,937 $ 14,470
Net Interest Margin 3.71 % 3.49 %
Cost of funds 0.30 % 0.33 %
 

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
Ed Murphy, 415-229-8403
EVP/CFO
or
MEDIA:
Annette Gelinas, 925-287-7881
SVP/Marketing Director
cell: 925-787-2956
agelinas@presidiobank.com

Source: Presidio Bank