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home / news releases / PDOB - Presidio Bank Reports Results for the First Quarter of 2018

PDOB - Presidio Bank Reports Results for the First Quarter of 2018

Presidio Bank (San Francisco)

Presidio Bank (OTCBB:PDOB), a Bay Area business bank, today reported unaudited results for the first quarter ended March 31, 2018 with Net Income of $2.2 million, up $1.6 million from the fourth quarter of 2017 and up $1 million (85%) from the first quarter of 2017. The fourth quarter of 2017 included a $1.5 million revaluation of Deferred Tax Assets and Low Income Housing Investments due to tax reform legislation. Net Income in the first quarter of 2018 benefited from a lower Federal Income Tax rate which resulted in a savings of approximately $330 thousand. Total Assets were $850 million at March 31, 2018, up 7% from December 31, 2017. Both Total Loans and Total Deposits grew to record high levels during the quarter.

“We were pleased to achieve such strong growth in the traditionally slow first quarter of the year,” said Presidio Bank President and CEO Steve Heitel. “In addition, our Net Interest Margin continues to expand resulting in a solid year over year increase in profitability.”

Financial Highlights

  • Total Loans Outstanding were up $24 million from the quarter ending December 31, 2017 and up $72 million from March 31, 2017 or 12%. New Loan Originations were strong at $80 million up from $69 million in the fourth quarter of 2017. Loan growth was centered in Commercial Real Estate, $12 million and Land and Construction, $9 million. Commercial and Industrial loans were also up modestly.
  • Total Deposits increased by $54 million from the quarter ended December 31, 2017 and increased by $150 million from March 31, 2017 or 25%. This type of deposit growth is unusual for the first quarter of the year when the Bank tends to see modest growth or even net outflows. While the Bank continues to add new deposit relationships, a significant portion of the growth in the first quarter was transactional in nature and will likely normalize during the next two quarters.
  • Net Interest Income of $8 million in the first quarter of 2018 was up 4% from the fourth quarter of 2017 and up 26% from the first quarter of 2017. This increase is due to higher average loan balances, increased loan yields, and increased interest rates on liquid assets invested by the Bank. Net Interest Margin increased during the quarter to 4.27% from 4.11% in the fourth quarter of 2017 due to higher Loan Yields and flat Cost of Funds.
  • Operating Expenses increased by 13% over the fourth quarter of 2017. This increase was largely due to the seasonal increase in Employer Paid Taxes and Employee Benefits Expense along with an increase in the Loan Loss Provision for Unfunded Loans as a result of growth in unfunded construction loans during the quarter. Operating Expenses increased 11% over the first quarter of 2017 due to growth related increases in Compensation and Benefits, higher occupancy costs due to the lease and leasehold improvements on our new Walnut Creek facility and higher data processing costs. The Bank’s efficiency ratio improved from 71% in the first quarter of 2017 to 62% in the first quarter of 2018.
  • Year-over-year revenue growth is 27% while year-over-year expense growth is 11%.
  • Credit Quality remains stable and strong with a Classified to Capital Ratio of 3.4% at March 31, 2018. The Loan Loss Provision Expense for the first quarter was $159 thousand driven by growth in the loan portfolio. Total Criticized and Classified Loans are flat from December 31, 2017 and represents only 3% of Loan Commitments and 4% of Loans Outstanding at March 31, 2018. The Bank has no Non-Performing Loans.
  • Diluted Earnings per Common Share were $0.34 for the quarter, up from $0.09 in the fourth quarter of 2017 and up from $0.19 in the first quarter of 2017.
  • Book Value per Share increased to $12.68 per share at March 31, 2018 from $12.29 per share at December 31, 2017 and $11.50 per share at March 31, 2017.

“While we are proud of our financial results, we are equally proud of our commitment to giving back to the communities we serve as evidenced by our Outstanding rating in Community Reinvestment and our perennial inclusion on the San Francisco Business Times list of top corporate philanthropists,” said Presidio Bank Chairman and Founder, Jim Woolwine.”

 

1st Quarter 2018 Financial Results

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

 

Condensed Balance Sheet

 
 
 
3/31/2018
 
 
12/31/2017
 
 
Change
 
 
3/31/2017
 
 
Change
 
 
 
 
 
 
 
 
Cash and due from banks
14,682
7,613
92.9%
6,239
135.3%
Interest bearing due from banks
 
154,434
 
 
 
129,952
18.8%
 
88,944
73.6%
Total cash and equivalents
169,116
137,565
22.9%
95,183
77.7%
Investment securities
11,810
12,313
(4.1%)
12,893
(8.4%)
Loans, net of fees
649,994
626,282
3.8%
578,033
12.4%
Allowance for loan losses
 
(7,325)
 
 
 
(7,166)
(2.2%)
 
(6,868)
(6.7%)
Net loans
642,669
619,116
3.8%
571,165
12.5%
Premises and equipment, net
2,537
2,627
(3.5%)
1,005
152.4%
Other assets and interest receivable
 
23,796
 
 
 
22,237
7.0%
 
11,610
105.0%
Total assets
849,928
793,858
7.1%
691,856
22.8%
 
Non-interest-bearing demand
337,201
295,070
14.3%
233,059
44.7%
Interest bearing transaction
108,399
120,109
(9.7%)
98,560
10.0%
Money market and savings accounts
262,503
238,706
10.0%
228,801
14.7%
Time deposits
 
50,082
 
 
 
50,269
(0.4%)
 
48,016
4.3%
Total deposits
758,185
704,154
7.7%
608,436
24.6%
Borrowings
10,059
10,174
(1.1%)
9,860
2.0%
Other liabilities
 
4,466
 
 
 
4,767
(6.3%)
 
4,233
5.5%
Total liabilities
772,710
719,095
7.5%
622,529
24.1%
 
Common stock
66,241
65,960
0.4%
64,801
2.2%
Retained earnings
11,079
8,854
25.1%
4,581
141.8%
Other comprehensive income
 
(102)
 
 
 
(51)
(98.3%)
 
(55)
(85.4%)
Total shareholder’s equity
 
77,218
 
 
 
74,763
3.3%
 
69,327
11.4%
Total liabilities and equity
 
849,928
 
 
 
793,858
7.1%
 
691,856
22.8%
 
Book value per share
Book value per share
$
12.68
$
12.29
$
11.50
Total shares outstanding EOP
6,090
6,084
6,030
 
Capital Ratios
Tier 1 leverage ratio
9.7%
9.7%
9.7%
Tier 1 risk-based capital ratio
9.5%
9.8%
10.1%
Tangible common risk-based ratio
9.5%
9.8%
10.1%
Total risk-based capital ratio
11.7%
12.1%
12.6%
 
 
Condensed Statement of Income

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

 
 
 
For the three months ended
 
 
 
 
Change
 
 
 
 

Change

3/31/2018

12/31/2017

Fav./

3/31/2017

Fav./

 

 
 

 

 
 
(Unfav.)
 
 

 

 
 

(Unfav.)

 
Interest income
8,570
8,236
4.1%
6,853
25.1%
Interest expense
 
487
 
 
 
483
(1.0%)
 
422
(15.5%)
Net interest income
8,083
7,753
4.2%
6,431
25.7%
Provision for loan loss
 
159
 
 
 
-
NM
 
-
NM
Net interest income after provision
7,924
7,753
2.2%
6,431
23.2%
 
Other income
320
287
11.3%
202
58.2%
 
Compensation and benefit expenses
3,283
2,814
(16.7%)
2,938
(11.8%)
Occupancy and equipment expenses
616
617
0.1%
520
(18.5%)
Data processing
385
388
0.9%
306
(25.7%)
Professional and legal
147
155
5.0%
139
(5.8%)
Other operating expenses
 
777
 
 
 
627
(23.9%)
 
801
3.0%
Total operating expenses
 
5,208
 
 
 
4,601
(13.2%)
 
4,704
(10.7%)
Net income before taxes
3,036
3,439
(11.7%)
1,929
57.4%
Income taxes
 
811
 
 
 
2,838
71.4%
 
725
(11.9%)
Net income
 
2,225
 
 
 
601
270.0%
 
1,204
84.8%
 
Earnings Per Share
Basic earnings per share
$
0.36
$
0.10
$
0.20
Diluted earnings per share
$
0.34
$
0.09
$
0.19
Average shares outstanding
6,025
6,009
5,932
Average diluted shares
6,398
6,328
6,185
 
Performance Ratios
Return on average assets
1.14%
0.32%
0.69%
Return on average common equity
11.78%
3.25%
7.09%
Net interest margin
4.27%
4.11%
3.74%
Cost of funds
0.28%
0.28%
0.27%
Efficiency ratio
62.1%
57.4%
71.0%
 
Average Balances
Total assets
794,442
774,015
712,119
Earning assets
768,150
747,679
698,171
Total loans
635,039
608,584
567,792
Total deposits
703,081
684,233
628,228
Common equity
76,591
75,531
68,760
 
NM = Not Meaningful
 
 
Condensed Balance Sheet (5 Quarter Data)

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

 
 
 
3/31/2018
 
 
12/31/2017
 
 
9/30/2017
 
 
6/30/2017
 
 
3/31/2017
 
 
 
 
 
 
 
 
Cash and due from banks
14,682
7,613
10,677
9,789
6,239
Interest bearing due from banks
 
154,434
 
 
 
129,952
 
 
 
126,277
 
 
 
101,532
 
 
 
88,944
Total cash and equivalents
169,116
137,565
136,954
111,321
95,183
Investment securities
11,810
12,313
12,801
12,736
12,893
Loans, net of fees
649,994
626,282
617,269
603,689
578,033
Allowance for loan losses
 
(7,325)
 
 
 
(7,166)
 
 
 
(7,166)
 
 
 
(7,014)
 
 
 
(6,868)
Net loans
642,669
619,116
610,103
596,675
571,165
Premises and equipment, net
2,537
2,627
2,452
1,335
1,005
Other assets and interest receivable
 
23,796
 
 
 
22,237
 
 
 
23,312
 
 
 
24,159
 
 
 
11,610
Total assets
849,928
793,858
785,622
746,226
691,856
 
Non-interest-bearing demand
337,201
295,070
304,726
250,344
233,059
Interest bearing transaction
108,399
120,109
98,019
103,727
98,560
Money market and savings accounts
262,503
238,706
247,857
258,564
228,801
Time deposits
 
50,082
 
 
 
50,269
 
 
 
46,871
 
 
 
47,293
 
 
 
48,016
Total deposits
758,185
704,154
697,473
659,928
608,436
Borrowings
10,059
10,174
10,346
10,152
9,860
Other liabilities
 
4,466
 
 
 
4,767
 
 
 
4,001
 
 
 
4,837
 
 
 
4,233
Total liabilities
772,710
719,095
711,820
674,917
622,529
 
Common stock
66,241
65,960
65,585
65,185
64,801
Retained earnings
11,079
8,854
8,252
6,173
4,581
Other comprehensive income
 
(102)
 
 
 
(51)
 
 
 
(35)
 
 
 
(49)
 
 
 
(55)
Total shareholder’s equity
 
77,218
 
 
 
74,763
 
 
 
73,802
 
 
 
71,309
 
 
 
69,327
Total liabilities and equity
 
849,928
 
 
 
793,858
 
 
 
785,622
 
 
 
746,226
 
 
 
691,856
 
Book value per share
Book value per share
$
12.68
$
12.29
$
12.15
$
11.75
$
11.50
Total shares outstanding EOP
6,090
6,084
6,074
6,069
6,030
 
Capital Ratios
Tier 1 leverage ratio
9.7%
9.7%
9.9%
10.0%
9.7%
Common equity tier 1 capital ratio
9.5%
9.8%
9.8%
9.6%
10.1%
Tier 1 risk-based capital ratio
9.5%
9.8%
9.8%
9.6%
10.1%
Total risk-based capital ratio
11.7%
12.1%
12.2%
12.0%
12.6%
 
 
Condensed Statement of Income (5 Quarter Data)

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

 
 
 
For the three months ended
3/31/2018
 
 
12/31/2017
 
 
9/30/2017
 
 
6/30/2017
 
 
3/31/2017
 
 
 
 
 
 
 
 
Interest income
8,570
8,236
8,362
7,349
6,853
Interest expense
 
487
 
 
 
483
 
 
 
472
 
 
 
442
 
 
 
422
Net interest income
8,083
7,753
7,890
6,907
6,431
Provision for loan loss
 
159
 
 
 
-
 
 
 
100
 
 
 
198
 
 
 
-
Net interest income after provision
7,924
7,753
7,790
6,709
6,431
 
Other income
320
287
268
191
202
 
Compensation and benefit expenses
3,283
2,814
3,036
2,736
2,938
Occupancy and equipment expenses
616
617
628
518
520
Data processing
385
388
346
326
306
Professional and legal
147
155
77
203
139
Other operating expenses
 
777
 
 
 
627
 
 
 
533
 
 
 
586
 
 
 
801
Total operating expenses
 
5,208
 
 
 
4,601
 
 
 
4,620
 
 
 
4,369
 
 
 
4,704
Net income before taxes
3,036
3,439
3,438
2,531
1,929
Income taxes
 
811
 
 
 
2,838
 
 
 
1,358
 
 
 
939
 
 
 
725
Net income
 
2,225
 
 
 
601
 
 
 
2,080
 
 
 
1,592
 
 
 
1,204
 
Earnings Per Share
Basic earnings per share
$
0.36
$
0.10
$
0.33
$
0.27
$
0.20
Diluted earnings per share
$
0.34
$
0.09
$
0.32
$
0.26
$
0.19
Average shares outstanding
6,025
6,009
6,001
5,899
5,932
Average diluted shares
6,398
6,328
6,277
6,157
6,185
 
Performance Ratios
Return on average assets
1.14%
0.32%
1.10%
0.90%
0.69%
Return on average common equity
11.78%
3.25%
11.31%
9.03%
7.09%
Net interest margin
4.27%
4.11%
4.34%
3.98%
3.74%
Cost of funds
0.28%
0.28%
0.28%
0.28%
0.27%
Efficiency ratio
62.1%
57.4%
57.0%
61.6%
71.0%
 
Average Balances
Total assets
794,442
774,015
748,229
711,847
712,119
Earning assets
768,150
747,679
721,374
695,297
698,171
Total loans
635,039
608,584
612,493
588,980
567,792
Total deposits
703,081
684,233
660,790
627,004
628,228
Common equity
76,591
75,531
73,108
70,741
68,760
 
 

Loans (5 Quarter Data)

(Dollars in Thousands, unaudited)

 
 
 
3/31/2018
 
 
12/31/2017
 
 
9/30/2017
 
 
6/30/2017
 
 
3/31/2017
 
 
 
 
 
 
 
 
Commercial real estate
283,238
271,346
268,357
275,189
268,334
Land and construction
54,088
44,714
39,599
22,657
13,629
Commercial
201,094
197,748
194,884
187,537
176,073
Personal
17,172
16,295
21,292
23,008
30,992
Residential
33,114
34,174
34,389
33,671
27,077
Multifamily
62,325
63,024
59,764
62,634
62,898
Deferred loan fees
(1,037)
 
 
(1,019)
 
 
(1,016)
 
 
(1,007)
 
 
(970)
Loans
649,994
626,282
617,269
603,689
578,033
Allowance for loan losses
(7,325)
 
 
(7,166)
 
 
(7,166)
 
 
(7,015)
 
 
(6,868)
Net loans
642,669
619,116
610,103
596,675
571,165
 
 
Non-Performing Assets (5 Quarter Data)

(Dollars in Thousands, unaudited)

 
 
 
3/31/2018
 
 
12/31/2017
 
 
9/30/2017
 
 
6/30/2017
 
 
3/31/2017
 
 
 
 
 
 
 
 
Non-Accrual Loans
-
-
-
991
1,042
Non-Performing Loans (NPL)
-
-
-
991
1,042
Other Real Estate Owned
-
-
-
-
-
Non-Performing Assets (NPA)
-
-
-
991
1,042
90+ Days Delinquent
-
-
-
-
-
NPAs & 90 Day Delinquent
-
-
-
991
1,042
Quarterly Net Charge-offs
-
-
(51)
51
-
 
NPAs / Assets %
0.00%
0.00%
0.00%
0.13%
0.15%
NPAs & 90 Day / Assets %
0.00%
0.00%
0.00%
0.13%
0.15%
NPAs / Actual Loans and OREO %
0.00%
0.00%
0.00%
0.13%
0.15%
Loan Loss Reserves / Loans (%)
1.13%
1.14%
1.16%
1.16%
1.19%
 
 
Net Interest Income (Quarterly Data)

(Dollars in Thousands, unaudited)

 
 
 
For the Three Months Ended
3/31/2018
 
 
12/31/2017
 
 
Interest
 
 
 
 
Interest
 
 
Average
Income /
Average
Average
Income/
Average
Balance
Expense
Rate
Balance
Expense
Rate
Assets:
Interest-bearing deposits
$
121,072
$
501
1.68
%
$
126,532
$
375
1.18
%
Federal Reserve and Federal Home Loan Bank stock
4,655
77
6.70
4,644
77
6.56
Investment Securities
7,384
31
1.69
7,919
32
1.61
Loans: (2)
Commercial
199,340
2,579
5.25
185,629
2,448
5.23
Land and Construction
45,791
772
6.83
42,055
655
6.18
Commercial Real Estate
278,540
3,317
4.83
267,166
3,334
4.95
Residential
32,592
412
5.12
33,500
414
4.90
Multifamily
62,715
708
4.58
62,002
712
4.56
Personal
 
16,061
 
 
173
4.37
 
18,232
 
 
189
4.12
Total Loans
 
635,039
 
 
7,961
5.08
 
608,584
 
 
7,752
5.05
Total Earning Assets
768,150
 
8,570
4.52
747,679
 
8,236
4.37
Allowance for loan losses
(7,219
)
(7,166
)
Cash and cash equivalents
9,543
8,441
Other assets
 
23,968
 
 
25,061
 
Total Assets
$
794,442
 
$
774,015
 
 
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits
$
107,657
$
41
0.15
%
$
107,767
$
41
0.15
%
Money market deposits
236,876
138
0.24
241,802
143
0.23
Savings deposits
3,812
1
0.14
4,341
1
0.11
Certificates and other time deposits
 
50,230
 
 
96
0.78
 
49,965
 
 
87
0.69
Total Interest-bearing Deposits
398,575
276
0.28
403,875
272
0.27
Borrowings
 
10,088
 
 
211
8.48
 
10,161
 
 
211
8.24
Total Interest-bearing Liabilities
408,663
487
0.48
414,036
483
0.46
Noninterest-bearing deposits
304,506
280,358
Other liabilities
 
4,682
 
 
4,090
 
Total Liabilities
717,851
698,484
Stockholders' Equity
 
76,591
 
 
75,531
 
Total Liabilities and Stockholders' Equity
$
794,442
 
$
774,015
 
Net Interest Income
$
8,083
$
7,753
Net Interest Margin
4.27
%
4.11
%
Cost of Funds
0.28
%
0.28
%
Cost of Deposits
0.16
%
0.16
%
 
 
Net Interest Income (Annual Data)

(Dollars in Thousands, unaudited)

 
 
 
For the Three Months Ended
3/31/2018
 
 
3/31/2017
 
 
Interest
 
 
 
 
Interest
 
 
Average
Income/
Average
Average
Income/
Average
Balance
Expense
Rate
Balance
Expense
Rate
Assets:
Interest-bearing deposits
$
121,072
$
501
1.68
%
$
117,365
$
260
0.90
%
Federal Reserve and Federal Home Loan Bank stock
4,655
77
6.70
4,229
82
7.83
Investment Securities
7,384
31
1.69
8,785
33
1.50
Loans: (2)
Commercial
199,340
2,579
5.25
166,682
1,942
4.72
Land and Construction
45,791
772
6.83
13,628
199
5.94
Commercial Real Estate
278,540
3,317
4.83
268,000
3,043
4.61
Residential
32,592
412
5.12
27,735
301
4.40
Multifamily
62,715
708
4.58
59,453
675
4.60
Personal
 
16,061
 
 
173
4.37
 
32,294
 
 
318
4.00
Total Loans
 
635,039
 
 
7,961
5.08
 
567,792
 
 
6,478
4.63
Total Earning Assets
768,150
 
8,570
4.52
698,171
 
6,853
3.98
Allowance for loan losses
(7,219
)
(6,868
)
Cash and cash equivalents
9,543
9,234
Other assets
 
23,968
 
 
11,582
 
Total Assets
$
794,442
 
$
712,119
 
 
Liabilities:
Interest-bearing deposits:
Interest-bearing NOW deposits
$
107,657
$
41
0.15
%
$
101,019
$
44
0.18
%
Money market deposits
236,876
138
0.24
234,129
115
0.20
Savings deposits
3,812
1
0.14
3,519
1
0.09
Certificates and other time deposits
 
50,230
 
 
96
0.78
 
46,494
 
 
51
0.45
Total Interest-bearing Deposits
398,575
276
0.28
385,162
211
0.22
Borrowings
 
10,088
 
 
211
8.48
 
9,786
 
 
211
8.74
Total Interest-bearing Liabilities
408,663
487
0.48
394,948
422
0.43
Noninterest-bearing deposits
304,506
243,067
Other liabilities
 
4,682
 
 
5,344
 
Total Liabilities
717,851
643,358
Stockholders' Equity
 
76,591
 
 
68,760
 
Total Liabilities and Stockholders' Equity
$
794,442
 
$
712,119
 
Net Interest Income
$
8,083
$
6,431
Net Interest Margin
4.27
%
3.74
%
Cost of Funds
0.28
%
0.27
%
Cost of Deposits
0.16
%
0.14
%
 

About Presidio Bank

Presidio Bank provides 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180425005386/en/

Presidio Bank
Steve Heitel, 415-229-8428
President & CEO
or
Ed Murphy, 415-229-8403
EVP/CFO
or
MEDIA:
Annette Gelinas, 925-287-7881 (o) / 925-787-2956 (c)
SVP/Marketing Director
agelinas@presidiobank.com

Copyright Business Wire 2018
Stock Information
Company Name: Presidio Bank (San Francisco)
Stock Symbol: PDOB
Market: OTC
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