Pacific City Financial Corporation Reports Earnings of $4.8 million for Q2 2018
Los Angeles, California - August 21, 2018 - Pacific City Financial Corporation (the “Company”) (NASDAQ: PCB), the holding company of Pacific City Bank (the “Bank”), today reported net income of $4.8 million, or $0.35 per diluted common share for the second quarter of 2018, compared with $6.3 million, or $0.46 per diluted common share, in the previous quarter and $4.9 million, or $0.36 per diluted common share, in the second quarter of 2017.
On August 14, 2018, the Company issued and sold 2,385,000 shares of its common stock in an underwritten public offering, for net proceeds of approximately $43.2 million after deducting underwriting discounts and commissions and estimated offering expenses. The underwriters have a 30-day option to purchase up to an additional 357,750 shares of common stock at the initial public offering price less the underwriting discount. The Company intends to use the proceeds for general corporate purposes, including maintenance of its required regulatory capital, to support future organic growth and other strategic alternatives.
Q2 2018 Highlights
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| • | Net income totaled $4.8 million or $0.35 per diluted common share; |
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| • | Total assets were $1.62 billion at June 30, 2018, an increase of $40.2 million, or 2.5%, from $1.58 billion at March 31, 2018 and an increase of $177.2 million, or 12.3%, from $1.44 billion at December 31, 2017; |
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| • | Loans held-for-investment, net of deferred costs (fees), were $1.25 billion at June 30, 2018, an increase of $31.6 million, or 2.6%, from $1.22 billion at March 31, 2018 and an increase of $64.9 million, or 5.5%, from $1.19 billion at December 31, 2017; and |
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| • | Total deposits were $1.43 billion, an increase of $45.3 million, or 3.3%, from $1.38 billion at March 31, 2018 and an increase of $176.0 million, or 14.1%, from $1.25 billion at December 31, 2017. |
"We are pleased to report another strong quarter that was highlighted by the continuing growth in our total assets supported by strong growth in loans and deposits,” stated Henry Kim, President and CEO. “Our total loans and deposits increased by $79.9 million and $176.0 million, respectively, which represented annualized growth rates of 13.4% and 28.1%, respectively, for the current year.” Mr. Kim continued, “We were able to maintain net interest margin above 4%, while growing our deposit accounts, despite the increase in our deposit cost due to the strong competition in our deposit target markets, as our asset-sensitive balance sheet continues to contribute positive impacts to our net interest margin."
Financial Highlights
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| | | Three Months Ended | | Six Months Ended |
| ($ in thousands, except per share data) | | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | % Change | | (Unaudited)
6/30/2017 | | % Change | | (Unaudited)
6/30/2018 | | (Unaudited)
6/30/2017 | | % Change |
| Net income | | $ | 4,762 |
| | $ | 6,264 |
| | (24.0 | )% | | $ | 4,860 |
| | (2.0 | )% | | $ | 11,026 |
| | $ | 9,258 |
| | 19.1 | % |
| Diluted earnings per common share | | $ | 0.35 |
| | $ | 0.46 |
| | (24.0 | )% | | $ | 0.36 |
| | (2.8 | )% | | $ | 0.81 |
| | $ | 0.68 |
| | 19.1 | % |
| | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 15,882 |
| | $ | 15,294 |
| | 3.8 | % | | $ | 13,384 |
| | 18.7 | % | | $ | 31,176 |
| | $ | 25,854 |
| | 20.6 | % |
| Provision (reversal) for loan losses | | 425 |
| | 95 |
| | 347.4 | % | | (274 | ) | | (255.1 | )% | | 520 |
| | (472 | ) | | (210.2 | )% |
| Noninterest income | | 2,273 |
| | 3,362 |
| | (32.4 | )% | | 3,582 |
| | (36.5 | )% | | 5,635 |
| | 7,071 |
| | (20.3 | )% |
| Noninterest expense | | 10,940 |
| | 9,631 |
| | 13.6 | % | | 8,796 |
| | 24.4 | % | | 20,571 |
| | 17,317 |
| | 18.8 | % |
| | | | | | | | | | | | | | | | | |
Return on average assets (1) | | 1.20 | % | | 1.73 | % | | | | 1.49 | % | | | | 1.45 | % | | 1.46 | % | | |
Return on average shareholders' equity (1), (2) | | 12.74 | % | | 17.50 | % | | | | 14.49 | % | | | | 15.07 | % | | 14.14 | % | | |
Net interest margin (1) | | 4.08 | % | | 4.33 | % | | | | 4.21 | % | | | | 4.20 | % | | 4.18 | % | | |
Efficiency ratio (3) | | 60.26 | % | | 51.62 | % | | | | 51.84 | % | | | | 55.88 | % | | 52.60 | % | | |
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| ($ in thousands, except per share data) | | (Unaudited) 6/30/2018 | | (Unaudited) 3/31/2018 | | % Change | | 12/31/2017 | | % Change | | (Unaudited)
6/30/2017 | | % Change |
| Total assets | | $ | 1,619,169 |
| | $ | 1,578,970 |
| | 2.5 | % | | $ | 1,441,999 |
| | 12.3 | % | | $ | 1,363,130 |
| | 18.8 | % |
| Net loans held-for-investment | | 1,242,235 |
| | 1,210,901 |
| | 2.6 | % | | 1,177,775 |
| | 5.5 | % | | 1,068,620 |
| | 16.2 | % |
| Total deposits | | 1,427,245 |
| | 1,381,925 |
| | 3.3 | % | | 1,251,290 |
| | 14.1 | % | | 1,178,211 |
| | 21.1 | % |
Book value per common share (2), (4) | | $ | 11.27 |
| | $ | 10.97 |
| | 2.8 | % | | $ | 10.60 |
| | 6.4 | % | | $ | 10.14 |
| | 11.2 | % |
| Tier 1 leverage ratio (consolidated) | | 9.58 | % | | 10.09 | % | | | | 10.01 | % | | | | 10.37 | % | | |
Total shareholders' equity to total assets (2) | | 9.35 | % | | 9.32 | % | | | | 9.86 | % | | | | 9.97 | % | | |
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| (1) | Ratios are presented on an annualized basis. |
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| (2) | The Company did not have any intangible equity component for the presented periods. |
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| (3) | The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
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| (4) | The ratios are calculated by dividing total shareholders' equity by the number of outstanding common shares. |
Result of Operations
Net Income
Net income was $4.8 million for the three months ended June 30, 2018, a decrease of $1.5 million, or 24.0%, from $6.3 million for the three months ended March 31, 2018, and a decrease of $98 thousand, or 2.0%, from $4.9 million for the three months ended June 30, 2017. Diluted earnings per common share was $0.35, $0.46 and $0.36, respectively, for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017. These decreases were primarily due to increases in noninterest expense and provision for loan losses and a decrease in noninterest income, partially offset by an increase in net interest income and a decrease in income tax expense. For the six months ended June 30, 2018, net income was $11.0 million, an increase of $1.8 million, or 19.1%, from $9.3 million for the six months ended June 30, 2017. Diluted earnings per common share was $0.81 and $0.68 for the six months ended June 30, 2018 and 2017, respectively. The increase was primarily due to an increase in net interest income and a decrease in income tax expense, partially offset by increases in noninterest expense and provision for loan losses and a decrease in noninterest income.
Net Interest Income and Net Interest Margin
Net interest income was $15.9 million for the three months ended June 30, 2018, an increase of $588 thousand, or 3.8%, from $15.3 million for the three months ended March 31, 2018, and an increase of $2.5 million, or 18.7%, from $13.4 million for the three months ended June 30, 2017. For the six months ended June 30, 2018, net interest income was $31.2 million, an increase of $5.3 million, or 20.6%, from $25.9 million for the six months ended June 30, 2017. These increases were primarily due to an increase in average balance of interest-earning assets, partially offset by increases in average balance and average cost of interest-bearing liabilities.
Interest income on loans was $18.6 million for the three months ended June 30, 2018, an increase of $1.2 million, or 6.7%, from $17.4 million for the three months ended March 31, 2018, and an increase of $3.8 million, or 25.7%, from $14.8 million for the three months ended June 30, 2017. For the six months ended June 30, 2018, interest income on loans was $36.1 million, an increase of $7.4 million, or 25.7%, from $28.7 million for the six months ended June 30, 2017. These increases were primarily due to increases in average balance and average yield of total loans. The increase in average yield on total loans was due to the Company's high proportion of variable rates loans that reprice in the current rising interest rate environment. Average balance of loans was $1.24 billion for the three months ended June 30, 2018, compared with $1.22 billion for the three months ended March 31, 2018 and $1.08 billion for the three months ended June 30, 2017, and average yield was 6.04% for the three months ended June 30, 2018 compared with 5.80% for the three months ended March 31, 2018 and 5.51% for the three months ended June 30, 2017. For the six months ended June 30, 2018, average balance and average yield were $1.23 billion and 5.92%, respectively, compared with $1.07 billion and 5.42%, respectively, for the six months ended June 30, 2017.
The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of dates indicated:
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| | | (Unaudited) 6/30/2018 | | (Unaudited) 3/31/2018 | | 12/31/2017 | | (Unaudited) 6/30/2017 |
| | | % to Total Loans | | Weighted-Average Contractual Rate | | % to Total Loans | | Weighted-Average Contractual Rate | | % to Total Loans | | Weighted-Average Contractual Rate | | % to Total Loans | | Weighted-Average Contractual Rate |
| Fixed rate loans | | 26.6 | % | | 5.08 | % | | 26.8 | % | | 5.07 | % | | 26.6 | % | | 5.09 | % | | 28.1 | % | | 5.09 | % |
| Variable rate loans | | 73.4 | % | | 5.85 | % | | 73.2 | % | | 5.62 | % | | 73.4 | % | | 5.38 | % | | 71.9 | % | | 5.16 | % |
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Interest income on investment securities was $869 thousand for the three months ended June 30, 2018, an increase of $21 thousand, or 2.5%, from $848 thousand for the three months ended March 31, 2018 and an increase of $281 thousand, or 47.8%, from $588 thousand for the three months ended June 30, 2017. For the six months ended June 30, 2018, interest income on investment securities was $1.7 million, an increase of $621 thousand, or 56.7%, from $1.1 million for the six months ended June 30, 2017. The increase compared with the three months ended March 31, 2018 was primarily due to an increase in average yield, partially offset by a decrease in average balance. The increases compared with the three and six month ended June 30, 2017 were primarily due to increases in average balance and average yield. The increase in average yield was due to additional purchases of investment securities in the current rising rate environment. Average balance of investment securities was $147.9 million for the three months ended June 30, 2018, compared with $149.4 million for the three months ended March 31, 2018 and $115.3 million for the three months ended June 30, 2017, and average yield was 2.36% for the three months ended June 30, 2018 compared with 2.30% for the three months ended March 31, 2018 and 2.07% for the three months ended June 30, 2017. For the six months ended June 30, 2018, average balance and average yield were $148.7 million and 2.33%, respectively, compared with $109.8 million and 2.01%, respectively, for the six months ended June 30, 2018.
Total interest expense was $4.5 million for the three months ended June 30, 2018, an increase of $1.1 million, or 33.8%, from $3.3 million for the three months ended March 31, 2018 and an increase $2.2 million, or 93.6%, compared with $2.3 million in the three months ended June 30, 2017. For the six months ended June 30, 2018, total interest expense was $7.8 million, an increase of $3.3 million or 75.1%, from $4.5 million for the six months ended June 30, 2017. These increases were primarily due to increases in average balance and average cost of interest-bearing liabilities that resulted from the Company's deposit promotion during the three months ended March 31, 2018 as well as a continuous growth in deposits. During the promotion, the Company raised $122.7 million of interest-bearing deposits at a weighted average rate of 2.21%.
Net interest margin was 4.08% for the three months ended June 30, 2018 compared with 4.33% for the three months ended March 31, 2018, and 4.21% for the year-ago quarter. For the six months ended June 30, 2018, net interest margin was 4.20% compared with 4.18% for the six months ended June 30, 2017.
Provision for Loan Losses
Provision (reversal) for loan losses was $425 thousand for the three months ended June 30, 2018 compared with $95 thousand for the three months ended March 31, 2018 and $(274) thousand for the three months ended June 30, 2017. For the six months ended June 30, 2018, provision for loan losses was $520 thousand compared with $(472) thousand for the six months ended June 30, 2017. The increases were primarily due to an increase in loans held-for-investment balance. During the three months June 30, 2018, the Company recorded a net charge-off of $175 thousand compared with a net recovery of $52 thousand for the three months ended March 31, 2018 and a net charge-off of $12 thousand for the three months ended June 30, 2017. Allowance for loan losses to total loans held-for-investment ratio was 1.01% at June 30, 2018 and March 31, 2018, 1.03% at December 31, 2017, and 1.02% at June 30, 2017.
Noninterest Income
Noninterest income was $2.3 million for the three months ended June 30, 2018, a decrease of $1.1 million, or 32.4%, from $3.4 million for the three months ended March 31, 2018 and a decrease of $1.3 million, or 36.5%, from $3.6 million for the three months ended June 30, 2017. For the six months ended June 30, 2018, noninterest income was $5.6 million, a decrease of $1.4 million, or 20.3%, from $7.1 million for the six months ended June 30, 2017. These decreases were primarily due to a decrease in gain on sale of SBA loans. At June 30, 2018, SBA loan sales commitments of $16.7 million were not settled, all of which were included in loans held-for-sale at June 30, 2018 and subsequently settled during early July 2018. The Company sold guaranteed portion of SBA loans of $12.6 million, $29.9 million, $32.2 million, respectively, and recognized gain on sale of SBA loans of $863 thousand, $2.0 million and $2.3 million, respectively, for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017. For the six months ended June 30, 2018 and 2017, The Company sold guaranteed portion of SBA loans of $42.5 million and $68.3 million, respectively, and recognized gain on sale of SBA loans of $2.9 million and $4.6 million, respectively.
Noninterest Expense
Noninterest expense was $10.9 million for the three months ended June 30, 2018, an increase of $1.3 million, or 13.6%, from $9.6 million for the three months ended March 31, 2018 and an increase of $2.1 million, or 24.4%, from $8.8 million for the three months ended June 30, 2017. For the six months ended June 30, 2018, noninterest expense was $20.6 million, an increase of $3.3 million, or 18.8%, from $17.3 million for the six months ended June 30, 2017. These increases were primarily due to growth in operations, as well as increases of additional legal and professional expense related to the preparation and filing of our S-1 registration statement with the SEC and listing our shares of common stock on the Nasdaq Global Select Market, and a reimbursement paid to SBA. During the three months ended June 30, 2018, the SBA requested us to reimburse for a SBA loan guarantee previously paid by the SBA on a loan we originated in 2007 that subsequently defaulted, which ultimately was determined to be ineligible for SBA guaranty. We incurred a one-time expense of $577 thousand for this reimbursement and a write-off of certain receivables related to collection activities of the loan.
Efficiency ratio was 60.26% for the three months ended June 30, 2018 compared with 51.62% for the three months ended March 31, 2018 and 51.84% for the three months ended June 30, 2017. For the six months ended June 30, 2018, efficiency ratio was 55.88% compared with 52.60% for the six months ended June 30, 2017.
Income Tax Provision
Effective income tax rate was 29.9% for the three and six months ended June 30, 2018, as well as the previous quarter, compared with 42.4% for the three and six months ended June 30, 2017. The decrease was primarily due to the enactment of H.R. 1, also known as the Tax Cuts and Jobs Act, on December 22, 2017. Beginning in 2018, H.R. 1 reduced the U.S. federal corporate tax rate from 35% to 21% and changed or limited certain tax deductions.
Balance Sheet
Total Assets
Total assets were $1.62 billion at June 30, 2018, an increase of $40.2 million, or 2.5%, from $1.58 billion at March 31, 2018, an increase of $177.2 million, or 12.3%, from $1.44 billion at December 31, 2017, and an increase of $256.0 million, or 18.8%, from $1.36 billion at June 30, 2017.
Loans
Loans held-for-investment, net of deferred costs (fees), were $1.25 billion at June 30, 2018, an increase of $31.6 million, or 2.6%, from $1.22 billion at March 31, 2018 and an increase of $64.9 million, or 5.5%, from $1.19 billion at December 31, 2017, and an increase of $175.2 million, or 16.2%, from $1.08 billion at June 30, 2017. The increase for the three months ended June 30, 2018 was primarily due to new funding of $137.9 million and advances on lines of credit of $38.3 million, partially offset by pay-downs and pay-offs of $110.8 million, sales of $20.1 million and charge-offs of $296 thousand. The increase for the six months ended June 30, 2018 was primarily due to new funding of $271.6 million and advances on lines of credit of $69.7 million, partially offset by pay-downs and pay-offs of $209.3 million, sales of $52.3 million and charge-offs of $435 thousand.
The table presents a composition of total loans by loan type as of the dates indicated:
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| ($ in thousands) | | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | % Change | | 12/31/2017 | | % Change | | (Unaudited)
6/30/2017 | | % Change |
| Commercial property | | $ | 674,599 |
| | $ | 675,729 |
| | (0.2 | )% | | $ | 662,840 |
| | 1.8 | % | | $ | 606,952 |
| | 11.1 | % |
| Residential property | | 197,598 |
| | 184,752 |
| | 7.0 | % | | 168,898 |
| | 17.0 | % | | 143,117 |
| | 38.1 | % |
| SBA property | | 133,081 |
| | 134,240 |
| | (0.9 | )% | | 130,438 |
| | 2.0 | % | | 115,683 |
| | 15.0 | % |
| Construction | | 28,659 |
| | 26,089 |
| | 9.9 | % | | 23,215 |
| | 23.5 | % | | 22,355 |
| | 28.2 | % |
| Commercial term | | 80,791 |
| | 79,763 |
| | 1.3 | % | | 77,438 |
| | 4.3 | % | | 77,998 |
| | 3.6 | % |
| Commercial lines of credit | | 72,799 |
| | 58,195 |
| | 25.1 | % | | 60,850 |
| | 19.6 | % | | 49,473 |
| | 47.1 | % |
| SBA commercial term | | 28,276 |
| | 29,337 |
| | (3.6 | )% | | 30,199 |
| | (6.4 | )% | | 29,463 |
| | (4.0 | )% |
| International | | 7,734 |
| | 2,115 |
| | 265.7 | % | | 1,920 |
| | 302.8 | % | | 1,638 |
| | 372.2 | % |
| Consumer loans | | 30,775 |
| | 32,704 |
| | (5.9 | )% | | 33,870 |
| | (9.1 | )% | | 32,375 |
| | (4.9 | )% |
| Loans held-for-investment | | 1,254,312 |
| | 1,222,924 |
| | 2.6 | % | | 1,189,668 |
| | 5.4 | % | | 1,079,054 |
| | 16.2 | % |
| Deferred loan costs (fees) | | 544 |
| | 348 |
| | 56.3 | % | | 331 |
| | 64.4 | % | | 595 |
| | (8.6 | )% |
Loans held-for-investment, net of deferred loan costs (fees) (1) | | 1,254,856 |
| | 1,223,272 |
| | 2.6 | % | | 1,189,999 |
| | 5.5 | % | | 1,079,649 |
| | 16.2 | % |
| Loans held-for-sale | | 20,331 |
| | 6,182 |
| | 228.9 | % | | 5,297 |
| | 283.8 | % | | 9,888 |
| | 105.6 | % |
| Total loans | | $ | 1,275,187 |
| | $ | 1,229,454 |
| | 3.7 | % | | $ | 1,195,296 |
| | 6.7 | % | | $ | 1,089,537 |
| | 17.0 | % |
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| (1) | Referred as total loans held-for-investment elsewhere in this report. |
Non-Performing Assets
Non-performing loans (“NPLs”) were $2.0 million at June 30, 2018, a decrease of $371 thousand, or 15.5%, from $2.4 million at March 31, 2018 and a decrease of $1.2 million, or 37.4%, from $3.2 million at December 31, 2017, but an increase of $584 thousand, or 40.5%, from $1.4 million at June 30, 2017. NPLs to total loans held-for-investment ratio was 0.16% at June 30, 2018, 0.20% at March 31, 2018, 0.27% at December 31, 2017, and 0.13% at June 30, 2017.
The Company had no other real estate owned (“OREO”) at June 30, 2018 and March 31, 2018 compared with $99 thousand at December 31, 2017 and $209 thousand at June 30, 2017. The Company sold an OREO with a gain of $3 thousand during the three months ended March 31, 2018.
Non-performing assets (“NPAs”), which consist of NPL and OREO, and the NPAs to total assets ratio were $2.0 million and 0.13%, respectively, at June 30, 2018, $2.4 million and 0.15%, respectively, at March 31, 2018, $3.3 million and 0.23%, respectively, at December 31, 2017, and $1.7 million and 0.12%, respectively, at June 30, 2017.
The following table presents compositions of NPLs and NPAs as of the dates indicated:
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| ($ in thousands) | | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | % Change | | 12/31/2017 | | % Change | | (Unaudited)
6/30/2017 | | % Change |
| Nonaccrual loans: | | | | | | | | | | | | | | |
| Commercial property | | $ | 240 |
| | $ | 311 |
| | (22.8 | )% | | $ | 318 |
| | (24.5 | )% | | $ | 338 |
| | (29.0 | )% |
| Residential property | | — |
| | 730 |
| | (100.0 | )% | | 730 |
| | (100.0 | )% | | — |
| | — | % |
| SBA property | | 1,203 |
| | 1,022 |
| | 17.7 | % | | 1,810 |
| | (33.5 | )% | | 483 |
| | 149.1 | % |
| Commercial term | | — |
| | — |
| | — | % | | 4 |
| | (100.0 | )% | | 128 |
| | (100.0 | )% |
| Commercial lines of credit | | 39 |
| | — |
| | — | % | | 10 |
| | 290.0 | % | | 41 |
| | (4.9 | )% |
| SBA commercial term | | 519 |
| | 318 |
| | 63.2 | % | | 338 |
| | 53.6 | % | | 449 |
| | 15.6 | % |
| Consumer loans | | 25 |
| | 16 |
| | 56.3 | % | | 24 |
| | 4.2 | % | | 3 |
| | 733.3 | % |
| Total nonaccrual loans held-for-investment | | 2,026 |
| | 2,397 |
| | (15.5 | )% | | 3,234 |
| | (37.4 | )% | | 1,442 |
| | 40.5 | % |
| Loans past due 90 days or more and still accruing | | — |
| | — |
| | — | % | | — |
| | — | % | | — |
| | — | % |
| NPLs | | 2,026 |
| | 2,397 |
| | (15.5 | )% | | 3,234 |
| | (37.4 | )% | | 1,442 |
| | 40.5 | % |
| OREO | | — |
| | — |
| | — | % | | 99 |
| | (100.0 | )% | | 209 |
| | (100.0 | )% |
| NPAs | | $ | 2,026 |
| | $ | 2,397 |
| | (15.5 | )% | | $ | 3,333 |
| | (39.2 | )% | | $ | 1,651 |
| | 22.7 | % |
| Loans modified as troubled debt restructurings (TDRs) | | | | | | | | | | | | | | |
| Accruing TDRs | | $ | 453 |
| | $ | 554 |
| | (18.2 | )% | | $ | 592 |
| | (23.5 | )% | | $ | 1,704 |
| | (73.4 | )% |
| Nonaccrual TDRs | | 548 |
| | 595 |
| | (7.9 | )% | | 1,675 |
| | (67.3 | )% | | 695 |
| | (21.2 | )% |
| Total TDRs | | $ | 1,001 |
| | $ | 1,149 |
| | (12.9 | )% | | $ | 2,267 |
| | (55.8 | )% | | $ | 2,399 |
| | (58.3 | )% |
| NPLs to total loans held-for-investment | | 0.16 | % | | 0.20 | % | | | | 0.27 | % | | | | 0.13 | % | | |
| NPAs to total assets | | 0.13 | % | | 0.15 | % | | | | 0.23 | % | | | | 0.12 | % | | |
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Classified Assets
Classified loans were $4.3 million, a decrease of $45 thousand, or 1.0%, from $4.4 million at March 31, 2018, a decrease of $648 thousand, or 13.0%, from $5.0 million at December 31, 2017 and a decrease of $2.0 million, or 31.7%, from $6.4 million at June 30, 2017. Classified assets, which consist of classified loans and OREO, and the classified assets to total assets ratios were $4.3 million and 0.27%, respectively, at June 30, 2018, $4.4 million and 0.28%, respectively, at March 31, 2018, $5.1 million and 0.35%, respectively, at December 31, 2017, and $6.6 million and 0.48%, respectively, at June 30, 2017.
Investment Securities
Total investment securities were $152.5 million, an increase of $5.7 million, or 3.9%, from $146.8 million at March 31, 2018, an increase of $1.7 million, or 1.2%, from $150.8 million at December 31, 2017 and an increase of $23.8 million, or 18.5%, from $128.7 million at June 30, 2017. The increase for the three months ended June 30, 2018 was primarily due to purchases of $12.8 million, partially offset by principal pay-downs of $5.5 million, net premium amortization of $209 thousand and a decrease in fair value of securities available-for-sale of $514 thousand during the three months ended June 30, 2018. The increase for the six months ended June 30, 2018 was primarily due to purchases of $16.1 million, partially offset by principal pay-downs of $12.0 million, net premium amortization of $424 thousand and a decrease in fair value of securities available-for-sale of $2.0 million.
Deposits
Total deposits were $1.43 billion at June 30, 2018, an increase of $45.3 million, or 3.3%, from $1.38 billion at March 31, 2018, an increase of $176.0 million, or 14.1%, from $1.25 billion at December 31, 2017 and an increase of $249.0 million, or 21.1%, from $1.18 billion at June 30, 2017. The increase for the three months ended June 30, 2018 was primarily due to new accounts of $118.6 million, partially offset by closed accounts of $71.4 million and net balance decreases of $2.1 million. The increase for the six months ended June 30, 2018 was primarily due to new accounts of $383.4 million, partially offset by closed accounts of $168.7 million and net balance decreases of $39.0 million. During the three months ended March 31, 2018, the Company launched a deposit promotion that resulted new interest-bearing deposits of $122.7 million at a weighted average rate of 2.21%.
The following table presents deposit mix as of the dates indicated:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | 12/31/2017 | | (Unaudited)
6/30/2017 |
| ($ in thousands) | | Amount | | % to Total | | Amount | | % to Total | | Amount | | % to Total | | Amount | | % to Total |
| Noninterest-bearing demand deposits | | $ | 347,342 |
| | 24.3 | % | | $ | 321,109 |
| | 23.2 | % | | $ | 319,026 |
| | 25.5 | % | | $ | 318,901 |
| | 27.1 | % |
| Interest-bearing deposits: | | | | | | | | | | | | | | | | |
| NOW | | 13,812 |
| | 1.0 | % | | 9,716 |
| | 0.7 | % | | 10,324 |
| | 0.8 | % | | 9,195 |
| | 0.8 | % |
| Money market accounts | | 259,098 |
| | 18.2 | % | | 272,208 |
| | 19.7 | % | | 299,390 |
| | 23.9 | % | | 317,409 |
| | 26.9 | % |
| Savings | | 9,886 |
| | 0.7 | % | | 8,181 |
| | 0.6 | % | | 8,164 |
| | 0.7 | % | | 8,668 |
| | 0.7 | % |
| Time deposits under $250,000 | | 393,053 |
| | 27.5 | % | | 382,826 |
| | 27.8 | % | | 295,274 |
| | 23.6 | % | | 267,655 |
| | 22.8 | % |
| Time deposits of $250,000 and over | | 251,554 |
| | 17.6 | % | | 235,385 |
| | 17.0 | % | | 166,612 |
| | 13.3 | % | | 143,877 |
| | 12.2 | % |
| State and brokered time deposits | | 152,500 |
| | 10.7 | % | | 152,500 |
| | 11.0 | % | | 152,500 |
| | 12.2 | % | | 112,506 |
| | 9.5 | % |
| Total interest-bearing deposits | | 1,079,903 |
| | 75.7 | % | | 1,060,816 |
| | 76.8 | % | | 932,264 |
| | 74.5 | % | | 859,310 |
| | 72.9 | % |
| Total deposits | | $ | 1,427,245 |
| | 100.0 | % | | $ | 1,381,925 |
| | 100.0 | % | | $ | 1,251,290 |
| | 100.0 | % | | $ | 1,178,211 |
| | 100.0 | % |
| | | | | | | | | | | | | | | | | |
Borrowings
Borrowings from Federal Home Loan Bank (“FHLB”) were $30.0 million at June 30, 2018 and $40.0 million at March 31, 2018, December 31, 2017 and June 30, 2017. At June 30, 2018, borrowings from FHLB bore fixed interest rates with original maturity terms ranging from two to five years.
Shareholders’ Equity
Shareholders’ equity were $151.4 million, an increase of $4.2 million, or 2.9%, from $147.2 million at March 31, 2018, an increase of $9.2 million, or 6.5%, from $142.2 million at December 31, 2017 and an increase of $15.5 million, or 11.4%, from $136.0 million at June 30, 2017.
Capital Ratios
The following table presents capital ratios for the Company and the Bank as of dates indicated:
|
| | | | | | | | | | | | |
| | | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | 12/31/2017 | | (Unaudited)
6/30/2017 |
| Pacific City Financial Corporation | | | | | | | | |
| Common tier 1 capital (to risk-weighted assets) | | 12.43 | % | | 12.32 | % | | 12.15 | % | | 12.64 | % |
| Total capital (to risk-weighted assets) | | 13.46 | % | | 13.36 | % | | 13.20 | % | | 13.69 | % |
| Tier 1 capital (to risk-weighted assets) | | 12.43 | % | | 12.32 | % | | 12.15 | % | | 12.64 | % |
| Tier 1 capital (to average assets) | | 9.58 | % | | 10.09 | % | | 10.01 | % | | 10.37 | % |
| Pacific City Bank | | | | | | | | |
| Common tier 1 capital (to risk-weighted assets) | | 12.37 | % | | 12.25 | % | | 12.06 | % | | 12.56 | % |
| Total capital (to risk-weighted assets) | | 13.40 | % | | 13.29 | % | | 13.12 | % | | 13.61 | % |
| Tier 1 capital (to risk-weighted assets) | | 12.37 | % | | 12.25 | % | | 12.06 | % | | 12.56 | % |
| Tier 1 capital (to average assets) | | 9.53 | % | | 10.03 | % | | 9.94 | % | | 10.31 | % |
| | | | | | | | | |
About Pacific City Financial Corporation
Pacific City is the bank holding company for Pacific City Bank, a $1.6 billion asset bank, offering a full suite of commercial banking services through its wholly owned subsidiary, Pacific City Bank, a California state chartered bank, to small to medium-sized businesses, individuals and professionals, primarily in Southern California, and predominantly in Korean-American and other minority communities.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as ‘‘may,’’ “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
Contact:
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000
Pacific City Financial Corporation and Subsidiary
Consolidated Balance Sheets
($ in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | % Change | | 12/31/2017 | | % Change | | (Unaudited)
6/30/2017 | | % Change |
| Assets | | | | | | | | | | | | | |
| Cash and due from banks | $ | 33,800 |
| | $ | 16,765 |
| | 101.6 | % | | $ | 16,662 |
| | 102.9 | % | | $ | 22,591 |
| | 49.6 | % |
| Interest-bearing deposits in financial institutions | 134,846 |
| | 164,788 |
| | (18.2 | )% | | 56,996 |
| | 136.6 | % | | 99,035 |
| | 36.2 | % |
| Total cash and cash equivalents | 168,646 |
| | 181,553 |
| | (7.1 | )% | | 73,658 |
| | 129.0 | % | | 121,626 |
| | 38.7 | % |
| Securities available-for-sale, at fair value | 132,106 |
| | 125,940 |
| | 4.9 | % | | 129,689 |
| | 1.9 | % | | 110,015 |
| | 20.1 | % |
| Securities held-to-maturity | 20,390 |
| | 20,826 |
| | (2.1 | )% | | 21,070 |
| | (3.2 | )% | | 18,663 |
| | 9.3 | % |
| Total investment securities | 152,496 |
| | 146,766 |
| | 3.9 | % | | 150,759 |
| | 1.2 | % | | 128,678 |
| | 18.5 | % |
| Loans held-for-sale | 20,331 |
| | 6,182 |
| | 228.9 | % | | 5,297 |
| | 283.8 | % | | 9,888 |
| | 105.6 | % |
| Loans held-for-investment, net of deferred loan costs (fees) | 1,254,856 |
| | 1,223,272 |
| | 2.6 | % | | 1,189,999 |
| | 5.5 | % | | 1,079,649 |
| | 16.2 | % |
| Allowance for loan losses | (12,621 | ) | | (12,371 | ) | | 2.0 | % | | (12,224 | ) | | 3.2 | % | | (11,029 | ) | | 14.4 | % |
| Net loans held-for-investments | 1,242,235 |
| | 1,210,901 |
| | 2.6 | % | | 1,177,775 |
| | 5.5 | % | | 1,068,620 |
| | 16.2 | % |
| Premises and equipment, net | 4,892 |
| | 5,069 |
| | (3.5 | )% | | 4,723 |
| | 3.6 | % | | 4,317 |
| | 13.3 | % |
| Federal Home Loan Bank and other bank stock | 7,433 |
| | 6,589 |
| | 12.8 | % | | 6,589 |
| | 12.8 | % | | 6,589 |
| | 12.8 | % |
| Other real estate owned, net | — |
| | — |
| | — | % | | 99 |
| | (100.0 | )% | | 209 |
| | (100.0 | )% |
| Deferred tax assets, net | 4,360 |
| | 4,239 |
| | 2.9 | % | | 3,847 |
| | 13.3 | % | | 5,791 |
| | (24.7 | )% |
| Servicing assets | 8,390 |
| | 8,890 |
| | (5.6 | )% | | 8,973 |
| | (6.5 | )% | | 8,801 |
| | (4.7 | )% |
| Accrued interest receivable and other assets | 10,386 |
| | 8,781 |
| | 18.3 | % | | 10,279 |
| | 1.0 | % | | 8,611 |
| | 20.6 | % |
| Total assets | $ | 1,619,169 |
| | $ | 1,578,970 |
| | 2.5 | % | | $ | 1,441,999 |
| | 12.3 | % | | $ | 1,363,130 |
| | 18.8 | % |
| Liabilities | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | |
| Noninterest-bearing demand | $ | 347,342 |
| | $ | 321,109 |
| | 8.2 | % | | $ | 319,026 |
| | 8.9 | % | | $ | 318,901 |
| | 8.9 | % |
| Savings, NOW and money market accounts | 282,796 |
| | 290,105 |
| | (2.5 | )% | | 317,878 |
| | (11.0 | )% | | 335,272 |
| | (15.7 | )% |
| Time deposits under $250,000 | 445,553 |
| | 435,326 |
| | 2.3 | % | | 347,774 |
| | 28.1 | % | | 280,161 |
| | 59.0 | % |
| Time deposits $250,000 and over | 351,554 |
| | 335,385 |
| | 4.8 | % | | 266,612 |
| | 31.9 | % | | 243,877 |
| | 44.2 | % |
| Total deposits | 1,427,245 |
| | 1,381,925 |
| | 3.3 | % | | 1,251,290 |
| | 14.1 | % | | 1,178,211 |
| | 21.1 | % |
| Borrowings from Federal Home Loan Bank | 30,000 |
| | 40,000 |
| | (25.0 | )% | | 40,000 |
| | (25.0 | )% | | 40,000 |
| | (25.0 | )% |
| Accrued interest payable and other liabilities | 10,493 |
| | 9,812 |
| | 6.9 | % | | 8,525 |
| | 23.1 | % | | 8,966 |
| | 17.0 | % |
| Total liabilities | 1,467,738 |
| | 1,431,737 |
| | 2.5 | % | | 1,299,815 |
| | 12.9 | % | | 1,227,177 |
| | 19.6 | % |
| Commitments and contingent liabilities | | | | | | | | | | | | | |
| Shareholders' equity | | | | | | | | | | | | | |
| Common stock | 125,579 |
| | 125,511 |
| | 0.1 | % | | 125,430 |
| | 0.1 | % | | 125,354 |
| | 0.2 | % |
| Additional paid-in capital | 3,206 |
| | 3,072 |
| | 4.4 | % | | 2,941 |
| | 9.0 | % | | 2,611 |
| | 22.8 | % |
| Retained earnings | 25,258 |
| | 20,898 |
| | 20.9 | % | | 15,036 |
| | 68.0 | % | | 8,454 |
| | 198.8 | % |
| Accumulated other comprehensive loss, net | (2,612 | ) | | (2,248 | ) | | 16.2 | % | | (1,223 | ) | | 113.6 | % | | (466 | ) | | 460.5 | % |
| Total shareholders’ equity | 151,431 |
| | 147,233 |
| | 2.9 | % | | 142,184 |
| | 6.5 | % | | 135,953 |
| | 11.4 | % |
| Total liabilities and shareholders’ equity | $ | 1,619,169 |
| | $ | 1,578,970 |
| | 2.5 | % | | $ | 1,441,999 |
| | 12.3 | % | | $ | 1,363,130 |
| | 18.8 | % |
| | | | | | | | | | | | | | |
| Outstanding common share | 13,435,214 |
| | 13,424,777 |
| | | | 13,417,899 |
| | | | 13,412,059 |
| | |
Book value per common share (1) | $ | 11.27 |
| | $ | 10.97 |
| | | | $ | 10.60 |
| | | | $ | 10.14 |
| | |
| Total loan to total deposit ratio | 89.35 | % | | 88.97 | % | | | | 95.53 | % | | | | 92.47 | % | | |
| Noninterest-bearing deposits to total deposits | 24.34 | % | | 23.24 | % | | | | 25.50 | % | | | | 27.07 | % | | |
| | | | | | | | | | | | | | |
| |
| (1) | The ratios are calculated by dividing total shareholders' equity by the number of outstanding common shares. The Company did not have any intangible equity component for the presented periods. |
Pacific City Financial Corporation and Subsidiary
Consolidated Statements of Income
($ in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | % Change | | (Unaudited)
6/30/2017 | | % Change | | (Unaudited)
6/30/2018 | | (Unaudited)
6/30/2017 | | % Change |
| Interest income: | | | | | | | | | | | | | | | |
| Interest and fees on loans | $ | 18,610 |
| | $ | 17,440 |
| | 6.7 | % | | $ | 14,807 |
| | 25.7 | % | | $ | 36,050 |
| | $ | 28,684 |
| | 25.7 | % |
| Interest on investment securities | 869 |
| | 848 |
| | 2.5 | % | | 588 |
| | 47.8 | % | | 1,717 |
| | 1,096 |
| | 56.7 | % |
| Interest and dividend on other interest-earning assets | 865 |
| | 340 |
| | 154.4 | % | | 294 |
| | 194.2 | % | | 1,205 |
| | 526 |
| | 129.1 | % |
| Total interest income | 20,344 |
| | 18,628 |
| | 9.2 | % | | 15,689 |
| | 29.7 | % | | 38,972 |
| | 30,306 |
| | 28.6 | % |
| Interest expense: | | | | | | | | | | | | | | | |
| Interest on deposits | 4,292 |
| | 3,166 |
| | 35.6 | % | | 2,302 |
| | 86.4 | % | | 7,458 |
| | 4,449 |
| | 67.6 | % |
| Interest on other borrowings | 170 |
| | 168 |
| | 1.2 | % | | 3 |
| | 5,566.7 | % | | 338 |
| | 3 |
| | 11,166.7 | % |
| Total interest expense | 4,462 |
| | 3,334 |
| | 33.8 | % | | 2,305 |
| | 93.6 | % | | 7,796 |
| | 4,452 |
| | 75.1 | % |
| Net interest income | 15,882 |
| | 15,294 |
| | 3.8 | % | | 13,384 |
| | 18.7 | % | | 31,176 |
| | 25,854 |
| | 20.6 | % |
| Provision (reversal) for loan losses | 425 |
| | 95 |
| | 347.4 | % | | (274 | ) | | (255.1 | )% | | 520 |
| | (472 | ) | | (210.2 | )% |
| Net interest income after provision (reversal) for loan losses | 15,457 |
| | 15,199 |
| | 1.7 | % | | 13,658 |
| | 13.2 | % | | 30,656 |
| | 26,326 |
| | 16.4 | % |
| Noninterest income: | | | | | | | | | | | | | | | |
| Gain on sale of SBA loans | 863 |
| | 2,049 |
| | (57.9 | )% | | 2,320 |
| | (62.8 | )% | | 2,912 |
| | 4,635 |
| | (37.2 | )% |
| Gain on sale of residential property loans | 170 |
| | 22 |
| | 672.7 | % | | 50 |
| | 240.0 | % | | 192 |
| | 79 |
| | 143.0 | % |
| Gain on sale of other loans | — |
| | 45 |
| | (100.0 | )% | | — |
| | — | % | | 45 |
| | — |
| | — | % |
| Service charges and fees on deposits | 376 |
| | 349 |
| | 7.7 | % | | 337 |
| | 11.6 | % | | 725 |
| | 687 |
| | 5.5 | % |
| Servicing income | 585 |
| | 626 |
| | (6.5 | )% | | 601 |
| | (2.7 | )% | | 1,211 |
| | 1,167 |
| | 3.8 | % |
| Other income | 279 |
| | 271 |
| | 3.0 | % | | 274 |
| | 1.8 | % | | 550 |
| | 503 |
| | 9.3 | % |
| Total noninterest income | 2,273 |
| | 3,362 |
| | (32.4 | )% | | 3,582 |
| | (36.5 | )% | | 5,635 |
| | 7,071 |
| | (20.3 | )% |
| Noninterest expense: | | | | | | | | | | | | | | | |
| Salaries and employee benefits | 6,153 |
| | 6,246 |
| | (1.5 | )% | | 5,574 |
| | 10.4 | % | | 12,399 |
| | 11,095 |
| | 11.8 | % |
| Occupancy and equipment | 1,246 |
| | 1,144 |
| | 8.9 | % | | 1,090 |
| | 14.3 | % | | 2,390 |
| | 2,186 |
| | 9.3 | % |
| Professional fees | 988 |
| | 523 |
| | 88.9 | % | | 476 |
| | 107.6 | % | | 1,511 |
| | 896 |
| | 68.6 | % |
| Marketing and business promotion | 541 |
| | 388 |
| | 39.4 | % | | 419 |
| | 29.1 | % | | 929 |
| | 720 |
| | 29.0 | % |
| Data processing | 295 |
| | 302 |
| | (2.3 | )% | | 261 |
| | 13.0 | % | | 597 |
| | 510 |
| | 17.1 | % |
| Director fees and expenses | 211 |
| | 230 |
| | (8.3 | )% | | 180 |
| | 17.2 | % | | 441 |
| | 343 |
| | 28.6 | % |
| Loan related expense | 63 |
| | 59 |
| | 6.8 | % | | 92 |
| | (31.5 | )% | | 122 |
| | 203 |
| | (39.9 | )% |
| Regulatory assessments | 145 |
| | 132 |
| | 9.8 | % | | 103 |
| | 40.8 | % | | 277 |
| | 201 |
| | 37.8 | % |
| Other expenses | 1,298 |
| | 607 |
| | 113.8 | % | | 601 |
| | 116.0 | % | | 1,905 |
| | 1,163 |
| | 63.8 | % |
| Total noninterest expense | 10,940 |
| | 9,631 |
| | 13.6 | % | | 8,796 |
| | 24.4 | % | | 20,571 |
| | 17,317 |
| | 18.8 | % |
| Income before income taxes | 6,790 |
| | 8,930 |
| | (24.0 | )% | | 8,444 |
| | (19.6 | )% | | 15,720 |
| | 16,080 |
| | (2.2 | )% |
| Income tax expense | 2,028 |
| | 2,666 |
| | (23.9 | )% | | 3,584 |
| | (43.4 | )% | | 4,694 |
| | 6,822 |
| | (31.2 | )% |
| Net income | $ | 4,762 |
| | $ | 6,264 |
| | (24.0 | )% | | $ | 4,860 |
| | (2.0 | )% | | $ | 11,026 |
| | $ | 9,258 |
| | 19.1 | % |
| Earnings per common share | | | | | | | | | | | | | | | |
| Basic | $ | 0.35 |
| | $ | 0.47 |
| | | | $ | 0.36 |
| | | | $ | 0.82 |
| | $ | 0.69 |
| | |
| Diluted | $ | 0.35 |
| | $ | 0.46 |
| | | | $ | 0.36 |
| | | | $ | 0.81 |
| | $ | 0.68 |
| | |
| Average common shares outstanding | | | | | | | | | | | | | | | |
| Basic | 13,432,775 |
| | 13,418,259 |
| | | | 13,408,282 |
| | | | 13,425,557 |
| | 13,401,859 |
| | |
| Diluted | 13,628,677 |
| | 13,586,759 |
| | | | 13,542,538 |
| | | | 13,607,834 |
| | 13,523,128 |
| | |
| | | | | | | | | | | | | | | | |
| Dividend paid per common share | $ | 0.03 |
| | $ | 0.03 |
| | | | $ | 0.03 |
| | | | $ | 0.06 |
| | $ | 0.06 |
| | |
Common stock dividend payout ratio (1) | 8.57 | % | | 6.38 | % | | | | 8.33 | % | | | | 7.32 | % | | 8.70 | % | | |
Return on average assets (2) | 1.20 | % | | 1.73 | % | | | | 1.49 | % | | | | 1.45 | % | | 1.46 | % | | |
Return on average shareholders’ equity (2), (3) | 12.74 | % | | 17.50 | % | | | | 14.49 | % | | | | 15.07 | % | | 14.14 | % | | |
Efficiency ratio (2), (4) | 60.26 | % | | 51.62 | % | | | | 51.84 | % | | | | 55.88 | % | | 52.60 | % | | |
| | | | | | | | | | | | | | | | |
| |
| (1) | The ratios are calculated by dividing dividends declared per common share by basic earnings per share. |
| |
| (2) | Ratios are presented on an annualized basis. |
| |
| (3) | The Company did not have any intangible equity component for the presented periods. |
| |
| (4) | The ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
Pacific City Financial Corporation and Subsidiary
Average Balance, Average Yield, and Average Rate
($ in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | (Unaudited)
6/30/2018 | | (Unaudited)
3/31/2018 | | (Unaudited)
6/30/2017 |
| | | Average Balance | | Interest Income/ Expense | | Avg. Yield/Rate | | Average Balance | | Interest Income/ Expense | | Avg. Yield/Rate | | Average Balance | | Interest Income/ Expense | | Avg. Yield/Rate |
| Assets | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | |
Total loans (1) | | $ | 1,236,075 |
| | $ | 18,610 |
| | 6.04 | % | | $ | 1,219,867 |
| | $ | 17,440 |
| | 5.80 | % | | $ | 1,077,835 |
| | $ | 14,807 |
| | 5.51 | % |
| U.S. government agency securities | | 23,212 |
| | 141 |
| | 2.44 | % | | 24,350 |
| | 137 |
| | 2.28 | % | | 24,753 |
| | 145 |
| | 2.35 | % |
| Mortgage-backed securities | | 65,708 |
| | 378 |
| | 2.31 | % | | 67,484 |
| | 391 |
| | 2.35 | % | | 51,808 |
| | 246 |
| | 1.90 | % |
| Collateralized mortgage obligation | | 52,455 |
| | 309 |
| | 2.36 | % | | 50,974 |
| | 280 |
| | 2.23 | % | | 29,977 |
| | 149 |
| | 1.99 | % |
Municipal bonds (2) | | 6,552 |
| | 41 |
| | 2.51 | % | | 6,583 |
| | 40 |
| | 2.46 | % | | 8,777 |
| | 48 |
| | 2.19 | % |
| Other interest-earning assets | | 175,615 |
| | 865 |
| | 1.98 | % | | 63,981 |
| | 340 |
| | 2.16 | % | | 80,676 |
| | 294 |
| | 1.46 | % |
| Total interest-earning assets | | 1,559,617 |
| | 20,344 |
| | 5.23 | % | | 1,433,239 |
| | 18,628 |
| | 5.27 | % | | 1,273,826 |
| | 15,689 |
| | 4.94 | % |
| Noninterest-earning assets: | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | 18,530 |
| | | | | | 20,329 |
| | | | | | 16,085 |
| | | | |
| Allowance for loan losses | | (12,446 | ) | | | | | | (12,366 | ) | | | | | | (11,266 | ) | | | | |
| Other assets | | 27,460 |
| | | | | | 26,746 |
| | | | | | 26,839 |
| | | | |
| Total noninterest-earning assets | | 33,544 |
| | | | | | 34,709 |
| | | | | | 31,658 |
| | | | |
| Total assets | | $ | 1,593,161 |
| | | | | | $ | 1,467,948 |
| | | | | | $ | 1,305,484 |
| | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | |
| NOW and money market accounts | | $ | 279,515 |
| | 773 |
| | 1.11 | % | | $ | 297,947 |
| | 760 |
| | 1.03 | % | | $ | 323,657 |
| | 813 |
| | 1.01 | % |
| Savings | | 8,739 |
| | 6 |
| | 0.28 | % | | 8,632 |
| | 6 |
| | 0.28 | % | | 8,810 |
| | 6 |
| | 0.27 | % |
| Time deposits | | 790,430 |
| | 3,513 |
| | 1.78 | % | | 654,124 |
| | 2,400 |
| | 1.49 | % | | 523,502 |
| | 1,483 |
| | 1.14 | % |
| Total interest-bearing deposits | | 1,078,684 |
| | 4,292 |
| | 1.60 | % | | 960,703 |
| | 3,166 |
| | 1.34 | % | | 855,969 |
| | 2,302 |
| | 1.08 | % |
| Borrowings from Federal Home Loan Bank | | 39,782 |
| | 170 |
| | 1.71 | % | | 40,000 |
| | 168 |
| | 1.70 | % | | 879 |
| | 3 |
| | 1.37 | % |
| Total interest-bearing liabilities | | 1,118,466 |
| | 4,462 |
| | 1.60 | % | | 1,000,703 |
| | 3,334 |
| | 1.35 | % | | 856,848 |
| | 2,305 |
| | 1.08 | % |
| Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand | | 315,232 |
| | | | | | 313,660 |
| | | | | | 305,267 |
| | | | |
| Other liabilities | | 9,533 |
| | | | | | 8,384 |
| | | | | | 8,837 |
| | | | |
| Total noninterest-bearing liabilities | | 324,765 |
| | | | | | 322,044 |
| | | | | | 314,104 |
| | | | |
| Total liabilities | | 1,443,231 |
| | | | | | 1,322,747 |
| | | | | | 1,170,952 |
| | | | |
| Total shareholders' equity | | 149,930 |
| | | | | | 145,201 |
| | | | | | 134,532 |
| | | | |
| Total liabilities and shareholders’ equity | | $ | 1,593,161 |
| | | | | | $ | 1,467,948 |
| | | | | | $ | 1,305,484 |
| | | | |
| Net interest income | | | | $ | 15,882 |
| | | | | | $ | 15,294 |
| | | | | | $ | 13,384 |
| | |
Net interest spread (3) | | | | | | 3.63 | % | | | | | | 3.92 | % | | | | | | 3.86 | % |
Net interest margin (4) | | | | | | 4.08 | % | | | | | | 4.33 | % | | | | | | 4.21 | % |
| Total deposits | | $ | 1,393,916 |
| | $ | 4,292 |
| | 1.24 | % | | $ | 1,274,363 |
| | $ | 3,166 |
| | 1.01 | % | | $ | 1,161,236 |
| | $ | 2,302 |
| | 0.80 | % |
Total funding (5) | | $ | 1,433,698 |
| | $ | 4,462 |
| | 1.25 | % | | $ | 1,314,363 |
| | $ | 3,334 |
| | 1.03 | % | | $ | 1,162,115 |
| | $ | 2,305 |
| | 0.80 | % |
| | | | | | | | | | | | | | | | | | | |
| |
| (1) | Total loans include both loans held-for-sale and loans held-to-investment, net of deferred loan costs (fees). |
| |
| (2) | The yield on municipal bonds has not been computed on a tax-equivalent basis. |
| |
| (3) | Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets. |
| |
| (4) | Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. |
| |
| (5) | Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
Pacific City Financial Corporation and Subsidiary
Average Balance, Average Yield, and Average Rate (Continued)
($ in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended |
| | | (Unaudited)
6/30/2018 | | (Unaudited)
6/30/2017 |
| | | Average Balance | | Interest Income/ Expense | | Avg. Yield/Rate | | Average Balance | | Interest Income/ Expense | | Avg. Yield/Rate |
| Assets | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | |
Total loans (1) | | $ | 1,228,015 |
| | $ | 36,050 |
| | 5.92 | % | | $ | 1,066,900 |
| | $ | 28,684 |
| | 5.42 | % |
| U.S. government agency securities | | 23,778 |
| | 278 |
| | 2.36 | % | | 23,733 |
| | 275 |
| | 2.34 | % |
| Mortgage-backed securities | | 66,591 |
| | 769 |
| | 2.33 | % | | 50,476 |
| | 466 |
| | 1.86 | % |
| Collateralized mortgage obligation | | 51,719 |
| | 589 |
| | 2.30 | % | | 26,834 |
| | 259 |
| | 1.95 | % |
Municipal bonds (2) | | 6,567 |
| | 81 |
| | 2.49 | % | | 8,785 |
| | 96 |
| | 2.20 | % |
| Other interest-earning assets | | 120,107 |
| | 1,205 |
| | 2.02 | % | | 69,746 |
| | 526 |
| | 1.52 | % |
| Total interest-earning assets | | 1,496,777 |
| | 38,972 |
| | 5.25 | % | | 1,246,474 |
| | 30,306 |
| | 4.90 | % |
| Noninterest-earning assets: | | | | | | | | | | | | |
| Cash and cash equivalents | | 19,425 |
| | | | | | 16,513 |
| | | | |
| Allowance for loan losses | | (12,406 | ) | | | | | | (11,372 | ) | | | | |
| Other assets | | 27,105 |
| | | | | | 27,145 |
| | | | |
| Total noninterest-earning assets | | 34,124 |
| | | | | | 32,286 |
| | | | |
| Total assets | | $ | 1,530,901 |
| | | | | | $ | 1,278,760 |
| | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| NOW and money market accounts | | $ | 288,680 |
| | 1,533 |
| | 1.07 | % | | $ | 322,963 |
| | 1,589 |
| | 0.99 | % |
| Savings | | 8,686 |
| | 12 |
| | 0.28 | % | | 8,762 |
| | 12 |
| | 0.28 | % |
| Time deposits | | 722,654 |
| | 5,913 |
| | 1.65 | % | | 515,998 |
| | 2,848 |
| | 1.11 | % |
| Total interest-bearing deposits | | 1,020,020 |
| | 7,458 |
| | 1.47 | % | | 847,723 |
| | 4,449 |
| | 1.06 | % |
| Borrowings from Federal Home Loan Bank | | 39,890 |
| | 338 |
| | 1.71 | % | | 442 |
| | 3 |
| | 1.37 | % |
| Total interest-bearing liabilities | | 1,059,910 |
| | 7,796 |
| | 1.48 | % | | 848,165 |
| | 4,452 |
| | 1.06 | % |
| Noninterest-bearing liabilities | | | | | | | | | | | | |
| Noninterest-bearing demand | | 314,450 |
| | | | | | 290,292 |
| | | | |
| Other liabilities | | 8,962 |
| | | | | | 8,267 |
| | | | |
| Total noninterest-bearing liabilities | | 323,412 |
| | | | | | 298,559 |
| | | | |
| Total liabilities | | 1,383,322 |
| | | | | | 1,146,724 |
| | | | |
| Total shareholders' equity | | 147,579 |
| | | | | | 132,036 |
| | | | |
| Total liabilities and shareholders’ equity | | $ | 1,530,901 |
| | | | | | $ | 1,278,760 |
| | | | |
| Net interest income | | | | $ | 31,176 |
| | | | | | $ | 25,854 |
| | |
Net interest spread (3) | | | | | | 3.77 | % | | | | | | 3.84 | % |
Net interest margin (4) | | | | | | 4.20 | % | | | | | | 4.18 | % |
| Total deposits | | $ | 1,334,470 |
| | $ | 7,458 |
| | 1.13 | % | | $ | 1,138,015 |
| | $ | 4,449 |
| | 0.79 | % |
Total funding (5) | | $ | 1,374,360 |
| | $ | 7,796 |
| | 1.14 | % | | $ | 1,138,457 |
| | $ | 4,452 |
| | 0.79 | % |
| | | | | | | | | | | | | |
| |
| (1) | Total loans include both loans held-for-sale and loans held-to-investment, net of deferred loan costs (fees). |
| |
| (2) | The yield on municipal bonds has not been computed on a tax-equivalent basis. |
| |
| (3) | Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets. |
| |
| (4) | Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. |
| |
| (5) | Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
