8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 30, 2009

Bank of Commerce Holdings

California	0-25135	94-2823865
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File	Identification Number)
	Number)

1901 Churn Creek Road
Redding, California	96002
(Address of principal	(Zip Code)
executive offices)

Registrant’s telephone number, including area code: (530) 772-3955

N/A
(Former Name or Former Address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value per share

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 142-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4© under the Exchange Act (17 CFR 240.13e-4(c ))

Indicate the number of shares outstanding of each of the issuer’s class of common stock, as of the latest practicable date. October 29, 2009 8,711,495

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1   Press Announcement 3rd Quarter Earnings Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

October 30, 2009	/s/ Samuel D. Jimenez
	By: Samuel D. Jimenez
	Senior Vice President and Chief Financial Officer

2

EX-99.1

Exhibit 99.1

For immediate release:

Bank of Commerce Holdings™ announces Third Quarter 2009 Operating Results

REDDING, California, October 30, 2009/ PR Newswire— Patrick J. Moty, President & CEO of Bank of Commerce Holdings (NASDAQ:BOCH), a $814 million financial services holding company, and parent company of Redding Bank of Commerce™, Roseville Bank of Commerce™, and Bank of Commerce Mortgage™ today announced the Company’s third consecutive quarter of strong earnings.

“Our third consecutive quarter of strong earnings illustrates our Company’s ability to profitably grow, even through the current downward economic cycle and despite elevated provisioning for credit losses,” said Patrick J. Moty, President and CEO. “We have significantly built capital and continue to strengthen our balance sheet. Operationally and financially the company’s performance is exceeding our projections.”

3rd Quarter 2009 Highlights

• Net Income of $1,713,000 up 139% over third quarter 2008

• Diluted EPS of $0.17 compared to $0.08 over third quarter 2008 up 113%

• Average earning assets up $132.2 million or 21.6% over the prior year

• Average loans up $70.5 million or 13.6% over the prior year

• Average core deposits up $97.2 million or 20.1% over the prior year

• Strong provision for loan loss of $1.8 million for the quarter

• Total risk based capital of 12.83% at September 30, 2009

Nine months 2009 Highlights

• Net income of $4,599,000 up 61% over prior year

• Top line revenues up $7.5 million or 24.7%

• Diluted EPS of $0.45 compared to $0.33 prior year up 36% over the prior year

• Strong provision for loan losses of $6.3 million

• Year to date non-performing assets/total assets decreased to 2.04% compared to 2.98% at December 31, 2009.

Balance Sheet

During 2009 and 2008, the focus of the Company has been on strengthening the balance sheet, by providing appropriate reserves, strong capital, and significant liquidity. Our strength and security continue to compare favorably with our industry peers.

Our balance sheet increased by $40.0 million or 5.2% over year end 2008, and $163 million or 25.1% over the same period a year ago. During the second quarter the Company completed a business combination with Simonich Corporation d.b.a. BWC Mortgage services resulting in a 51% controlling interest in the acquired company. Mortgage loans held for sale represent warehouse lines outstanding at our subsidiary Bank of Commerce Mortgage™. Total assets acquired as a result of the business combination were $15.6 million. Additionally, the Company recorded $2.9 million in goodwill.

The loan portfolio, the single largest asset class of the Company grew by $72.0 million over year-end 2008 and $88.0 million over the same period a year ago.

The Company’s primary funding source, deposits, reflected increases of $44.6 million from year-end 2008 and $96.8 million year-over-year.

1

The deposit growth was centered in time deposits; time deposits increased by $48.7 million or 18% since year-end 2008 and $97.8 million or 46% year-over-year. Management primarily attributes deposit growth to the current economic environment and our customers’ concern with alternative investments such as stocks and bonds. Therefore, it is possible that with an economic recovery, our customers could migrate back into these other asset classes.

Asset Quality

The Commercial and Industrial loan portfolio is performing well given the current market conditions while real estate development properties and construction related lending remains under stress. Our loan portfolio will likely continue to be influenced by weakness in real estate values, the effects of higher energy prices and higher unemployment levels.

Net charge offs were $5.9 million at September 30, 2009 compared to net charge offs of $5.0 million for the same period a year ago.

The charge-offs were centered in commercial and real estate development loans. One development property was taken into other real estate owned (OREO) during 2008 and one commercial lot loan was added in the second quarter 2009. OREO was $2.9 million at September 30, 2009 and $4.9 million for the same period a year ago.

The second OREO property of approximately $300,000 was sold and settled on July 22, 2009 with no loss recorded. We are committed to working with our customers to find potential solutions when our customers experience financial difficulties.

Management has taken aggressive actions in provisioning for loan losses, charging down impairments and keeping an attentive eye on expenses. As long as the U.S. economy remains weak, losses in the loan portfolio may increase. Our Company continues to take actions to enable us to navigate through this current economic and credit cycle.

Capital

The capital ratios of Redding Bank of Commerce continue to be above the well-capitalized guidelines established by bank regulatory agencies. Total risk-based capital to risk-weighted assets was 12.83% at September 30, 2009.

Net Interest Margin

Average portfolio loans, the largest component of average earning assets, increased $70.5 million or 13.6% on average compared with same period a year ago. Average securities including federal funds sold increased $61.6 million over the same period a year ago. The yield on earning assets decreased to 5.53% for the nine-month period ended September 30, 2009 compared to 6.17% for the same period in the prior year. The decrease is primarily due to multiple interest rate drops on earning assets during the period.

Average interest-bearing deposits for the nine-months ended September 30, 2009 increased $91.8 million or 21.4% compared with the same period in the prior year. Average non-interest bearing deposits have increased by $2.8 million or 4.1% over the prior year nine-month period. The overall cost of interest-bearing liabilities for the first nine-months of 2009 was 1.94% compared with 3.21% for the first nine-months of 2008. The decreased cost was primarily a result of the drop in interest rates during the period coupled with refinancing of FHLB borrowings at lower interest rates.

2

The net effect of the changes discussed above resulted in an increase of $5.6 million or 35.6% in net interest income for the nine-month period ended September 30, 2009 from the same period in 2008. The net interest margin increased 39 basis points to 3.81% from 3.42% over the same period a year ago.

Non Performing Assets and ALLL

The Company continues to be aggressive in identifying non-performing assets. Non-performing assets decreased to 2.04% of total assets as of June 30, 2009 compared to 2.98% at December 31, 2008.

Elevated provisions are associated with an aggressive reclassification of loans and management’s aggressive stance in recognizing impaired loans. The Company’s allowance for loan losses was 1.48% of total loans at September 30, 2009 and 1.20% at September 30, 2008. Year to date provisions for loan losses at September 30, 2009 were $6,325,000 compared to $2,900,000 for the same period in 2008.

Liquidity

Our Company continues to maintain a relatively low-risk, liquid and valuable available-for-sale investment portfolio. This resource is utilized as a source of liquidity as opportunities to reposition the balance sheet present themselves. During the nine months ended September 30, 2009, the Company has recorded $2.0 million in gains on sales of securities. Proceeds from the sales were used to fund loan growth.

The Company’s consolidated liquidity position remains ample to meet short-term and long-term future contingencies. At September 30, 2009, the Company had overnight investments of $76.6 million, available lines of credit at the Federal Home Loan bank of approximately $30.3 million, and two federal funds borrowing line with correspondent banks of $25.0 million.

Bank of Commerce Holdings, with administrative offices in Redding, California is a financial service holding company that owns Redding Bank of Commerce™, Roseville Bank of Commerce™, and Bank of Commerce Mortgage™.

The Company is a federally insured California banking corporation and opened on October 22, 1982.

BOCH is a NASDAQ National Market listed stock. Please contact your local investment advisor for purchases and sales. Investment firms making a market in BOCH stock are:

Howe Barnes Hoefer & Arnett Investment Inc. /
John T. Cavender
555 Market Street
San Francisco, CA (800) 346-5544

Hill, Thompson, Magid & Co. Inc /
R.J. Dragani
15 Exchange Place, Suite 800
Jersey City, New Jersey 07030 (201) 369-2908

Keefe, Bruyette & Woods, Inc. /
Dave Bonaccorso
101 California Street, 37^th Floor
San Francisco, CA 94105 (415) 591-5063

3

Sandler & O’Neil /Bryan Sullivan
919 Third Avenue, 6^th Floor
New York, NY 10022 (888) 383-3112

Raymond James Financial/ Geoff Ball
1805 Hilltop Drive, Suite 106
Redding, CA (800) 926-5040

This quarterly press release includes forward-looking information, which is subject to the “safe harbor” created by the Securities Act of 1933, and Securities Act of 1934. These forward-looking statements (which involve the Company’s plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors:

• Competitive pressure in the banking industry and changes in the regulatory environment.

• Changes in the interest rate environment and volatility of rate sensitive assets and liabilities.

• The health of the economy declines nationally or regionally which could reduce the demand for loans or reduce the value of real estate collateral securing most of the Company’s loans.

• Credit quality deteriorates which could cause an increase in the provision for loan losses.

• Losses in the Company’s merchant credit card processing business.

• Asset/Liability matching risks and liquidity risks.

• Changes in the securities markets.

For additional information concerning risks and uncertainties related to the Company and its operations please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and under the heading:

“Risk factors that may affect results” and subsequent reports on Form 10-Q and current reports on Form 8-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

4

BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)

	September 30,		December 31,			September 30,
Dollars in thousands	2009		2008			2008
ASSETS
Cash and due from banks, non interest bearing	$	20,224	$	10,216		$	12,617
Interest bearing due from banks		56,208		23,500			—
Federal funds sold and securities purchased under agreements to resell		—		51,475			20,135
Cash and cash equivalents		76,432		85,191			32,752
Securities available-for-sale, at fair value (including pledged collateral of $61,345 at September 30, 2009, $68,735 at December 31, 2008 and $58,939 at September 30, 2008)		86,499		131,687			74,863
Portfolio Loans, net of the allowance for loan losses of $8,899 at September 30, 2009, $8,429 at December 31, 2008 and $6,128 at September 30, 2008		590,885		518,946			503,348
Mortgages held for sale, at fair value		16,787		—			—
Bank premises and equipment, net		10,201		10,672			10,893
Goodwill		2,927		—			—
Other real estate owned		2,934		2,934			4,869
Other assets		27,215		24,784			23,819
TOTAL ASSETS	$	813,880	$	774,214		$	650,544
LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand — noninterest bearing	$	70,491	$	79,988		$	80,168
Demand — interest bearing		156,233		143,871			138,319
Savings accounts		59,982		67,136			69,469
Certificates of deposit		312,968		264,287			215,095
Total deposits		599,674		555,282			503,051
Securities sold under agreements to repurchase		10,038		13,853			13,580
Federal Home Loan Bank and Federal Reserve Bank borrowings		100,000		120,000			65,000
Mortgage warehouse lines of credit		12,285		—			—
Other liabilities		8,967		7,036			7,863
Junior subordinated debt payable to unconsolidated subsidiary grantor trust		15,465		15,465			15,465
Total Liabilities		746,429		711,636			604,959
Commitments and contingencies
Stockholders’ Equity:
Preferred stock (liquidation preference of $1,000 per share; issued 2008) 2,000,000 authorized; 17,000 shares issued and outstanding in 2009, and December 31, 2008, none outstanding at September 30, 2008		16,619		16,551			—
Common stock , no par value, 50,000,000 shares authorized; 8,711,495 shares issued and outstanding at September 30, 2009, December 31, 2008 and at September 30, 2008		9,709		9,650			9,619
Common Stock Warrant		449		449			—
Retained earnings		38,355		36,009			37,364
Accumulated other comprehensive income (loss), net of tax		827		(81	)		(1,398	)
Total Equity — Bank of Commerce Holdings		65,959		62,578			45,585
Non controlling interest in subsidiary		1,492		—			—
Total stockholders’ equity		67,451		62,578			45,585
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	813,880	$	774,214		$	650,544

5

BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)

	Three months ended:					Nine months ended:
	September 30,			September 30,		September 30,			September 30,
Amounts in thousands, except for per share data	2009			2008		2009			2008
Interest income:
Interest and fees on loans	$	9,355		$	8,252	$	26,676		$	25,554
Interest on tax-exempt securities		278			308		853			884
Interest on U.S. government securities		628			582		2,774			1,596
Interest on federal funds sold and securities purchased under agreements to resell		1			116		31			264
Interest on other securities		309			13		557			58
Total interest income		10,571			9,271		30,891			28,356
Interest expense:
Interest on demand deposits		240			514		786			1,762
Interest on savings deposits		223			543		742			1,193
Interest on certificates of deposit		1,941			1,963		5,722			6,577
Securities sold under agreements to repurchase		13			32		38			151
Interest on FHLB and other borrowings		514			662		1,634			2,174
Interest on junior subordinated debt payable to unconsolidated subsidiary grantor trust		234			317		665			793
Total interest expense		3,165			4,031		9,587			12,650
Net interest income		7,406			5,240		21,304			15,706
Provision for loan and lease losses		1,844			1,300		6,325			2,900
Net interest income after provision for loan losses		5,562			3,940		14,979			12,806
Noninterest income:
Service charges on deposit accounts		108			91		296			203
Payroll and benefit processing fees		109			107		347			335
Earnings on cash surrender value — Bank owned life insurance		108			86		311			254
Net gain on sale of securities available-for-sale		506			159		1,984			595
Net gain on transfer of financial assets		—			—		340			—
Net loss on sale of derivative swap transaction		—			—		—			(225	)
Merchant credit card service income, net		80			99		229			279
Mortgage brokerage fee income		1,913			2		3,215			17
Other income		120			207		282			575
Total noninterest income		2,944			751		7,004			2,033
Noninterest expense:
Salaries and related benefits		2,902			1,909		7,673			5,750
Occupancy and equipment expense		1,124			613		2,426			1,897
FDIC insurance premium		421			113		995			284
Data processing fees		52			81		231			224
Professional service fees		220			146		674			397
Payroll and benefit fees		27			26		88			86
Deferred compensation expense		118			118		360			342
Stationery and supplies		62			50		141			192
Postage		(46	)		32		111			104
Directors’ expense		75			81		232			223
Other expenses		699			443		1,576			1,290
Total noninterest expense		5,654			3,612		14,507			10,789
Income before provision for income taxes		2,852			1,079		7,476			4,050
Provision for income taxes		1,010			362		2,647			1,197
Net Income		1,842			717		4,829			2,853
Less: Net income attributable to non-controlling interest		(129	)		—		(230	)		—
Net Income attributable to Bank of Commerce Holdings	$	1,713		$	717	$	4,599		$	2,853
Less: preferred dividend and accretion on preferred stock		235					707			—
Income available to common shareholders	$	1,478		$	717	$	3,892		$	2,853
Basic earnings per share	$	0.17		$	0.08	$	0.45		$	0.33
Weighted average shares — basic		8,711			8,711		8,711			8,713
Diluted earnings per share	$	0.17		$	0.08	$	.45		$	0.33
Weighted average shares — diluted		8,711			8,713		8,712			8,729
Cash Dividends declared	$	0.12		$	0.08	$	0.18		$	0.24

6

Average Balances, Interest Income/Expense and Yields/Rates Paid
(Unaudited, Dollars in thousands)

	Nine Months Ended								Nine Months Ended
	September 30, 2009								September 30, 2008
	Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate
Earning Assets
Portfolio Loans1	$	589,802		$	26,676		6.03	%	$	519,255		$	25,554		6.56	%
Tax-exempt Securities2		27,859			853		4.08	%		29,754			884		3.96	%
US Government Securities		7,721			251		4.33	%		9,124			395		5.77	%
Mortgage backed Securities		59,282			2,522		5.61	%		36,266			1,201		4.42	%
Federal Funds Sold		41,996			30		0.23	%		16,498			264		2.13	%
Other Securities		17,499			559		1.77	%		1,730			58		4.47	%
Average Earning Assets	$	744,796		$	30,891		5.53	%	$	612,627		$	28,356		6.17	%
Cash & Due From Banks	$	21,890							$	13,287
Bank Premises		10,435								11,191
Allowance for Loan Losses		(8,475	)							( 6,630	)
Other Assets		32,230								11,556
Average Total Assets	$	798,876							$	642,031
Interest Bearing Liabilities
Demand Interest Bearing	$	141,493		$	786		0.74	%	$	138,034		$	1,762		1.70	%
Savings Deposits		62,554			742		1.58	%		53,244			1,193		2.99	%
Certificates of Deposit		305,237			5,723		2.50	%		223,630			6,577		3.92	%
Repurchase Agreements		11,202			38		0.45	%		13,814			151		1.46	%
FHLB Borrowings		122,601			1,660		1.81	%		81,587			2,174		3.55	%
Trust Preferred Borrowings		15,000			638		5.67	%		15,000			793		7.05	%
		658,087			9,587		1.94	%		525,309		$	12,650		3.21	%
Noninterest bearing demand		71,718								68,920
Other Liabilities		3,827								890
Stockholders’ Equity		65,244								46,912
Average Liabilities and Stockholders’ Equity	$	798,876							$	642,031
Net Interest Income and Net Interest Margin				$	21,304		3.81	%				$	15,706		3.42	%

1	Average non-performing loans of $14.2 million are included
2	The yield on tax-exempt securities has not been adjusted to a tax-equivalent yield basis.

7

BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Quarterly Financial Condition Data
(Unaudited)

	September 30,			June 30,			March 31,			December 31,			September 30,
Dollars in thousands, except for per share data	2009			2009			2009			2008			2008
Interest income:
Interest and fees on loans	$	9,355		$	9,272		$	8,049		$	8,028		$	8,252
Interest on tax-exempt securities		278			279			296			313			308
Interest on U.S. government securities		628			954			1,192			873			582
Interest on federal funds sold and securities repurchased under agreements to resell		1			5			25			39			116
Interest on other securities		346			131			117			81			13
Total interest income		10,608			10,641			9,679			9,334			9,271
Interest expense:
Interest on demand deposits		240			239			307			411			514
Interest on savings deposits		223			238			281			383			543
Interest on certificates of deposit		1,978			1,900			1,881			1,975			1,963
Securities sold under repurchase agreements		13			11			14			22			32
Interest on FHLB and other borrowings		514			539			581			638			662
Interest on junior subordinated debt payable to unconsolidated subsidiary grantor trust		234			216			215			263			317
Total interest expense		3,202			3,143			3,279			3,692			4,031
Net interest income		7,406			7,498			6,400			5,642			5,240
Provision for loan and lease losses		1,844			3,056			1,425			3,620			1,300
Net interest income after provision for loan and lease losses		5,562			4,442			4,975			2,022			3,940
Noninterest income:
Service charges on deposit accounts		108			96			92			108			91
Payroll and benefit processing fees		109			104			134			118			107
Earnings on cash surrender value — bank owned life insurance		108			117			86			86			86
Net gain on sale of securities available-for-sale		506			1,074			404			33			159
Transfer of financial assets		—			340			—			—			—
Merchant credit card service income, net		80			75			74			85			99
Mortgage brokerage fee income		1,913			1,302			—			4			2
Other income		120			87			75			156			207
Total noninterest income		2,944			3,195			865			590			751
Noninterest expense:
Salaries and related benefits		2,902			2,644			2,127			2,001			1,909
Occupancy and equipment expense		1,124			730			572			1,339			613
FDIC insurance premium		421			301			273			99			113
Data processing fees		52			68			111			52			81
Professional service fees		220			295			159			270			146
Payroll processing fees		27			27			34			30			26
Deferred compensation expense		118			123			119			120			118
Stationery and supplies		62			26			53			70			50
Postage		(46	)		76			81			30			32
Directors’ expense		75			120			37			71			81
Other expenses		699			483			394			425			443
Total noninterest expense		5,654			4,893			3,960			4,507			3,612
Income (loss) before provision for income taxes		2,852			2,744			1,882			(1,895	)		1,079
Provision (benefit) for income taxes		1,010			1,027			610			(1,237	)		362
Less: Income non-controlling interest		(129	)		101			—			—			—
Net income (loss)	$	1,713		$	1,616		$	1,270		$	(658	)	$	717
Less preferred dividend and accretion on preferred stock		(235	)		($235	)		($237	)		($0	)		($0	)
Income available to common shareholders	$	1,478		$	1,381		$	1,033		$	(658	)	$	717
Basic earnings (loss) per share	$	0.17		$	0.16		$	0.12			($0.07	)	$	0.08
Weighted average shares — basic		8,711			8,711			8,711			8,755			8,711
Diluted earnings (loss) per share	$	0.17		$	0.16		$	0.12			($0.07	)	$	0.08
Weighted average shares — diluted		8,711			8,712			8,711			8,802			8,713
Cash dividends per share	$	0.12		$	0.00		$	0.06		$	0.08		$	0.08

8