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): January 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 Number)	Identification 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. January 29, 2009 8,711,495

Section 9 — Financial Statements and Exhibits.

Bank of Commerce Holdings announces 2008 Operating Results

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press Announcement 4th Quarter Earnings Release

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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.

January 30, 2009	/s/ Linda J. Miles By: Linda J. Miles
	Executive Vice President and
	Chief Financial Officer

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EX-99.1

Exhibit 99.1

For immediate release:

Bank of Commerce Holdings™ announces 2008 Operating Results

REDDING, California, January 30, 2009/ PR Newswire— Patrick J. Moty, President & CEO of Bank of Commerce Holdings (NASDAQ:BOCH), a $775 million financial services holding company, and parent company of Redding Bank of Commerce™, Roseville Bank of Commerce™, Sutter Bank of Commerce™ and Bank of Commerce Mortgage™ today announced 2008 operating results.

2008 Highlights

• Net Income of $2.19 million

• Average earning assets up $62.1 million or 11.2%

• Average loans up $81.5 million or 18.6%

• Core deposits up $31.1 million or 10.7%

• Provision for loan loss of $6.5 million

• Total risk based capital of 12.84%

• Diluted EPS of $0.25

• 2008 cash dividends paid of $2.79 million

“We believe that 2008 and beyond may be redefining the financial services industry. Despite the dramatic changes in our industry and the economic environment, Bank of Commerce Holdings achieved solid growth in loans and deposits, and our strength and security continue to compare favorably with our industry peers” said Patrick J. Moty, President and CEO of the Company. “We have taken aggressive actions through the year in provisioning for loan losses, charging down impairments, and keeping an attentive eye on expenses. We continue our focus on building relationships with our customers and communities, and are well positioned and optimistic about 2009.”

Financial Performance

Despite a very challenging 2008, our Company earned $2.19 million or $0.25 per diluted share for the year ended 2008. Our pre-tax pre-provision profits (revenue less non interest expense) rose to $8.7 million. The Company has provided $6.5 million in provisions for loan and lease losses. Elevated provisions are associated with an aggressive reclassification of loans, following completion of a total portfolio review, and management’s aggressive stance in recognizing impaired loans. With our strong capital position, we find significantly more opportunities now for acquisitions, portfolio purchases and attractive loan and asset purchases.

The Company continued to pay an $0.08 quarterly cash dividend returning $2.79 million to our shareholders.

Our balance sheet grew by $156.0 million or 25.2% over the prior year end. Loans, the single largest asset of the Company grew by $32.7 million or 6.7%, an all time high for the Company, indicating the Companies willingness to invest in our customers.

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Deposit growth was up $81.7 million or 17.2% of which $31.1 million was centered in core checking and savings accounts. Our new Buenaventura office in Redding, California surpassed their deposit goals in only eight months after opening its doors.

Revenues

Top line revenues fell by $5.4 million or 13.5% due to the dramatic drop in interest rates throughout the year coupled with a prior year key life settlement of $2.4 million. Because of our Company’s predisposition to variable rate pricing and noninterest bearing demand deposit accounts, the Company is asset sensitive. As a result, management anticipates that, in a declining interest rate environment, the Company’s net interest income and margin would be expected to decline.

In an increasing interest rate environment, the Company’s net interest income and margin would be expected to increase.

Loans

Our loan portfolio increased $32.7 million or 6.7% compared to a year ago. The increase is primarily in commercial real estate, while the construction and development portfolio fell by $22.8 million or 21.3%. Our Company concentrates its lending activities primarily within the California counties of Shasta, El Dorado, Placer, Sacramento, Sutter, Yuba and Tehama and the location of our five full service offices of the Bank.

Our Company has a diversified loan portfolio. A significant portion of our customer’s ability to repay their loans is dependent upon the professional services and investor commercial real estate sectors.

Deposits

Deposits increased by $81.7 million or 17.2% over the prior year. Average core deposits grew by $31.1 million or 11.9%. The opening of our Buenaventura office in Redding, California brought on new deposit relationships of over $18.0 million in the first eight months of business. Our Company is participating in the FDIC Deposit Guarantee program effectively increasing deposit insurance to $250,000 per customer. Funds held in non-interest bearing accounts have unlimited FDIC deposit insurance.

Net Interest Income

Net interest income decreased $665,000 or 3.0% over the prior year. Average balances of total earning assets increased to $615.0 million in 2008 compared to $552.9 million in 2007, an 11.2% increase. Yields on portfolio loans decreased 179 basis points to 6.47% compared to 8.26% in 2007. Yields on all earning assets decreased to 6.13% compared to 7.45% in 2007. Funding costs decreased 106 basis points to 3.02% compared to 4.08% in 2007. The net interest margin compressed to 3.47% compared to 3.98% in 2007. The compression is primarily due to the drop in interest rates.

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Non Interest Income

Non interest income consists of service charges on deposit accounts, payroll processing fees, earnings on key life investments, gains on sale of investment securities, and merchant bankcard fees. For the year ended December 31, 2008, non interest income represented 6.5% of total revenues. Gains on investment securities sold during the year were approximately $628,000 compared to approximately $46,000 a year ago. Our Company continues to maintain a relatively low-risk, liquid and valuable available-for-sale investment portfolio.

Non Interest Expense

Non interest expense decreased $448,000 or 2.9% to $15.3 million compared to $15.7 million in 2007. Management kept a sharp eye on controllable expenses through out the year. Non interest expense consists of salaries and benefits, occupancy and equipment expenses, data processing fees, professional fees, OREO expense and other operating expenses.

Credit Quality

2008 was an extremely challenging year for credit, and management took an aggressive stance in recognizing impaired loans. The Commercial and Industrial portfolio is performing well given the current market conditions while real estate development properties and construction related lending remains under stress.

Our 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 $6.3 million at December 31, 2008 compared to net recoveries of approximately $38,000 in 2007 and were centered in real estate development loans.

One real estate development property was taken into other real estate owned (OREO). OREO was $2.9 million at December 31, 2008 and zero at December 31, 2007. $735,000 in expenses related to OREO was recorded in the fourth quarter of 2008.

Non Performing Assets

Total non performing assets totaled $23.1 million or 2.98% of total assets at December 31, 2008 compared to $12.4 million or 2.01% of total assets at December 31, 2007. A significant portion of non performing assets are a direct result of conditions in the real estate market and general economy. Home builders, contractors, commercial properties, suppliers and others in the real estate related segments of the portfolio continue to be stressed as this credit cycle plays out.

Allowance for Loan and Lease Losses

The Company has provided $6.5 million in build up provisions for loan and lease losses compared to $3.3 million a year ago.

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Elevated provisions are associated with an aggressive reclassification of loans, following completion of a total portfolio review, and management’s aggressive stance in recognizing impaired loans. The Company’s allowance for loan losses was 1.60% of total loans at December 31, 2008 compared to 1.66% of total loans a year ago. The drop in ratio is directly related to growth in the loan portfolio.

Capital

The capital ratios of Bank of Commerce continue to be well above well-capitalized guidelines established by regulatory agencies. The Company announced approval of its application for the United States Treasury to invest $17.0 million in the Company’s preferred stock and common stock warrants.

The U.S. Treasury introduced the Capital Purchase Program on October 14, 2008, under which the Treasury will make up to $250 billion in equity capital available to qualifying healthy financial institutions. Bank of Commerce Holdings has qualified for this highly selective program and received the capital investment in November of this year.

The capital investment enabled the Company to leverage investments of $50.0 million in mortgage backed securities intended to support the housing markets, as well as to increase local lending limits to support our communities.

With our strong capital position, we find significantly more opportunities now for loan growth, investment portfolio purchases and attractive loan and asset purchases.

Dividends

The Company paid a quarterly dividend of $0.08 per share totaling $0.32 per share annualized. The dividend represents an 8% return on the closing market price. In total, $2.79 million were returned to shareholders in 2008.

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™, Sutter 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.

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This 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 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.

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

	2008			2007
ASSETS
Cash and due from banks	$	33,716,062		$	13,839,123
Federal funds sold and securities purchased under agreements to resell		51,475,000			8,395,000
Cash and cash equivalents		85,191,062			22,234,123
Securities available-for-sale (including pledged collateral of $68,735,000 at December 31, 2008 and $61,329,000 at December 31, 2007)		131,686,600			67,906,386
Securities held-to-maturity, at cost (estimated fair value of $0 at December 31, 2008 and $10,632,208 at December 31, 2007)		0			10,558,765
Loans, net of the allowance for loan and lease losses of $8,429,383 at December 31, 2008 and $8,232,970 at December 31, 2007		518,946,461			486,282,571
Bank premises and equipment, net		10,672,211			10,963,975
Other assets		27,717,626			20,381,095
TOTAL ASSETS	$	774,213,960		$	618,326,915
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand — noninterest bearing	$	79,988,122		$	75,717,742
Demand — interest bearing		143,871,441			142,820,773
Savings accounts		67,135,736			41,376,296
Certificates of deposit		264,286,604			213,716,486
Total Deposits		555,281,903			473,631,297
Securities sold under agreements to repurchase		13,853,255			15,513,211
Federal Home Loan Bank borrowings		120,000,000			60,000,000
Other liabilities		7,036,161			7,553,559
Junior subordinated debt payable to unconsolidated subsidiary grantor trust		15,465,000			15,465,000
Total liabilities		711,636,319			572,163,067
Stockholders’ equity:
Preferred stock, no par value; 2,000,000 shares authorized; 17,000 shares issued and outstanding in 2008 and no shares outstanding in 2007		16,551,268			—
U.S. Treasury Warrants		448,732			—
Common stock, no par value; 50,000,000 shares authorized; 8,711,495 shares issued and outstanding in 2008 and 8,757,445 shares issued and outstanding in 2007		9,649,672			9,995,517
Retained earnings		36,008,866			36,604,902
Accumulated other comprehensive loss, net of tax		(80,897	)		(436,571	)
Total stockholders’ equity		62,577,641			46,163,848
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	774,213,960		$	618,326,915

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

	2008			2007		2006
Interest income:
Interest and fees on loans	$	33,582,112		$	36,134,170	$	32,394,766
Interest on tax-exempt securities		1,196,662			1,228,944		786,972
Interest on U.S. government securities		2,468,749			3,084,672		3,421,191
Interest on federal funds sold and securities purchased under agreement to resell		303,227			680,578		871,879
Interest on other securities		138,645			89,686		135,651
Total interest income		37,689,395			41,218,050		37,610,459
Interest expense:
Interest on demand deposits		2,172,704			2,735,170		1,504,180
Interest on savings deposits		1,576,351			1,215,920		288,883
Interest on certificates of deposit		8,552,217			10,570,776		8,485,799
Interest on securities sold under repurchase agreements		172,743			1,177,417		1,138,242
Interest on FHLB borrowings		2,811,982			2,421,636		3,079,432
Interest on junior subordinated debt payable to unconsolidated subsidiary grantor trusts		1,056,284			1,084,990		1,078,884
Total interest expense		16,342,280			19,205,909		15,575,420
Net interest income		21,347,115			22,012,141		22,035,039
Provision for loan and lease losses		6,520,000			3,291,250		225,900
Net interest income after provision for loan and lease losses		14,827,115			18,720,891		21,809,139
Noninterest income:
Service charges on deposit accounts		311,266			277,769		345,737
Payroll and benefit processing fees		452,852			382,738		385,867
Earnings on cash surrender value - Bank owned life insurance		340,220			331,251		328,743
Life Insurance policy benefits		0			2,400,000		0
Net gain (loss) on sale of securities available-for-sale		627,879			45,670		(170,524	)
Net loss on sale of derivative swap transaction		(225,442	)		0		0
Net gain on sale of loans		0			0		89,851
Merchant credit card service income, net		364,391			388,438		380,066
Mortgage brokerage fee income		21,019			49,995		71,350
Other income		731,233			658,893		497,141
Total noninterest income		2,623,418			4,534,754		1,928,231
Noninterest expense:
Salaries and related benefits		7,750,980			8,665,679		8,020,136
Occupancy and equipment expense		2,500,557			2,372,617		1,845,664
OREO expense		735,000			0		0
FDIC insurance premium		382,722			51,077		47,670
Data processing fees		276,165			395,558		216,313
Professional service fees		667,015			1,027,671		683,602
Payroll processing fees		115,932			107,856		103,518
Deferred compensation expense		461,640			411,191		368,809
Stationery and supplies		262,087			256,799		230,843
Postage		133,909			137,740		112,740
Directors’ expenses		293,918			311,777		243,428
Other expenses		1,715,747			2,005,729		1,460,008
Total noninterest expense		15,295,672			15,743,694		13,332,731
Income before provision for income taxes		2,154,861			7,511,951		10,404,639
Provision for income taxes		(39,526	)		1,405,053		3,836,930
Net Income	$	2,194,387		$	6,106,898	$	6,567,709
Basic earnings per share	$	0.25		$	0.69	$	0.75
Weighted average shares		8,712,873			8,857,627		8,759,568
Diluted earnings per share	$	0.25		$	0.68	$	0.74
Weighted average shares — diluted		8,724,550			8,937,736		8,931,584

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Bank of Commerce Holdings & Subsidiaries
Average Balances, Interest Income/Expense and Yields/Rates Paid
Years Ended December 31,
(Unaudited, Dollars in thousands)

(Dollars in thousands)	2008							2007							2006
	Average							Average							Average
	Balance		Interest		Yield/Rate			Balance		Interest		Yield/Rate			Balance		Interest		Yield/Rate
Interest Earning Assets
Portfolio loans	$	518,759	$	33,582		6.47	%	$	437,217	$	36,134		8.26	%	$	394,152	$	32,394		8.22	%
Tax-exempt securities		24,399		1,197		4.91	%		30,727		1,229		4.00	%		21,112		787		3.73	%
US government securities		13,637		553		4.06	%		26,782		1,112		4.15	%		39,576		1,593		4.03	%
Mortgage backed securities		37,328		1,916		5.13	%		43,122		1,973		4.58	%		42,476		1,828		4.30	%
Federal funds sold		17,987		303		1.68	%		13,099		681		5.20	%		17,124		872		5.09	%
Other securities		2,918		139		4.76	%		2,000		90		4.50	%		3,075		136		4.42	%
Average Earning Assets	$	615,028	$	37,690		6.13	%	$	552,947	$	41,219		7.45	%	$	517,515	$	37,610		7.27	%
Cash & due from banks		16,298							14,273							14,113
Bank premises and fixed assets		11,097							10,155							6,878
Other assets		19,866							17,986							11,022
Average Total Assets	$	662,289						$	595,361						$	549,528
Interest Bearing Liabilities
Interest bearing demand	$	138,743	$	2,173		1.57	%	$	121,281	$	2,735		2.26	%	$	108,066	$	1,504		1.39	%
Savings deposits		56,914		1,576		2.77	%		39,565		1,216		3.07	%		24,633		289		1.17	%
Certificates of deposit		234,493		8,552		3.65	%		215,511		10,571		4.91	%		190,568		8,486		4.45	%
Repurchase Agreements		13,043		173		1.33	%		32,237		1,177		3.65	%		29,708		1,138		3.83	%
Other borrowings		98,518		3,868		3.93	%		62,095		3,507		5.65	%		69,014		4,158		6.02	%
Average Interest Liabilities	$	541,711	$	16,342		3.02	%	$	470,689	$	19,206		4.08	%	$	421,989		15,575		3.69	%
Noninterest bearing Demand		70,933							72,545							79,245
Other liabilities		5,660							6,502							6,154
Stockholders’ equity		43,985							45,625							42,140
Average Liabilities and Stockholders’ equity	$	662,289						$	595,361						$	549,528
Net Interest Income and Net Interest Margin			$	21,348		3.47	%			$	22,013		3.98	%			$	22,035		4.26	%

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BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
Quarterly Financial Condition Data
(Unaudited)
For the Quarter Ended

	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,
	2008			2008			2008			2008			2007
Cash and due from banks	$	33,716		$	12,617		$	16,660		$	12,737		$	13,839
Federal funds sold and securities purchased under agreements to resell		51,475			20,135			11,585			25,995			8,395
Total Cash & Equivalents		85,191			32,752			28,245			38,732			22,234
Securities available-for-sale		131,687			74,863			66,728			62,090			67,906
Securities held to maturity, at cost		0			0			10,385			10,421			10,559
Loans, net of allowance for loan losses		518,946			503,348			507,651			506,374			486,283
Bank premises and equipment, net		10,672			10,893			11,068			11,370			10,964
Other assets		27,718			28,688			22,531			22,248			20,381
TOTAL ASSETS	$	774,214		$	650,544		$	646,608		$	651,235		$	618,327
Liabilities:
Demand — noninterest bearing		79,988			80,168			68,625		$	71,722		$	75,718
Demand — interest bearing		143,871			138,319			128,994			140,624			142,821
Savings		67,136			69,469			52,453			42,946			41,376
Certificates of deposit		264,287			215,095			218,303			229,006			213,716
Total deposits		555,282			503,051			468,375			484,298			473,631
Securities sold under agreements to repurchase		13,853			13,580			14,343			12,455			15,513
Federal Home Loan Bank borrowings		120,000			65,000			95,000			85,000			60,000
Other liabilities		7,036			7,863			7,396			7,633			7,554
Junior subordinated debt payable to subsidiary grantor trust		15,465			15,465			15,465			15,465			15,465
Total liabilities		711,636			604,959			600,579			604,851			572,163
Stockholders equity:
Preferred Stock		16,551			0			0			0			0
US Treasury Warrants		449			0			0			0			0
Common stock		9,650			9,619			9,590			9,550			9,996
Retained earnings		36,009			37,364			37,344			37,135			36,605
Accumulated other comprehensive (loss), net		(81	)		(1,398	)		(905	)		(301	)		(437	)
Total stockholders’ equity		62,578			45,585			46,029			46,384			46,164
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	774,214		$	650,544		$	646,608		$	651,235		$	618,327
Interest Income:
Net interest income		5,642			5,240			5,046			5,420			5,585
Provision for loan losses		3,620			1,300			1,000			600			3,170
Net interest income after provision for loan losses		2,022			3,940			4,046			4,820			2,415
Noninterest Income:
Service charges		108			91			50			62			63
Merchant credit card service income, net		85			99			97			83			91
Net gain on sale of securities available-for-sale		33			159			194			242			0
Net (loss) on sale of derivatives		0			0			0			(225	)		0
Mortgage brokerage fee income		4			2			5			10			(6	)
Other income		360			400			371			393			2,745
Total noninterest income		590			751			717			565			2,893
Noninterest Expense:
Salaries and related benefits		2,001			1,909			1,892			1,949			2,208
Net Occupancy and equipment expense		604			613			640			644			737
Oreo Expense		735			0			0			0			0
Professional service fees		270			146			133			118			365
Other expenses		897			944			948			854			1,218
Total noninterest expense		4,507			3,612			3,613			3,565			4,528
Income before income taxes		(1,895	)		1,079			1,150			1,820			780
Provision for income taxes		(1,237	)		362			244			591			(910	)
Net Income	$	(658	)	$	717		$	906		$	1,229		$	1,690

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BANK OF COMMERCE HOLDINGS & SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA

In Thousands (Except Ratios and Per Share Data)

	2008			2007			2006			2005			2004
Statements of Income
Total Interest Income	$	37,690		$	41,128		$	37,610		$	27,864		$	20,996
Net Interest Income	$	21,348		$	22,012		$	22,035		$	20,238		$	16,887
Provision for Loan Losses	$	6,520		$	3,291		$	226		$	448		$	554
Total Noninterest Income	$	2,623		$	4,535		$	1,928		$	2,124		$	2,196
Total Noninterest Expense	$	15,296		$	15,744		$	13,333		$	11,749		$	10,620
Total Revenues	$	40,313		$	45,753		$	39,539		$	29,988		$	23,192
Net Income	$	2,194		$	6,107		$	6,568		$	6,278		$	4,978
Balance Sheets
Total Assets	$	774,214		$	618,327		$	583,442		$	511,644		$	438,545
Total Net Loans	$	518,947		$	486,283		$	408,989		$	363,305		$	318,801
Allowance for Loan Losses	$	8,429		$	8,233		$	4,904		$	4,316		$	3,866
Total Deposits	$	555,282		$	473,631		$	439,407		$	372,116		$	352,878
Stockholders’ Equity	$	62,578		$	46,164		$	43,916		$	39,138		$	35,283
Performance Ratios 1
Return on Average Assets 2		0.33	%		1.04	%		1.20	%		1.34	%		1.22	%
Return on Average Stockholders’ Equity 3		4.99	%		13.39	%		15.59	%		18.35	%		18.18	%
Dividend Payout		127.04	%		46.47	%		40.36	%		35.74	%		39.29	%
Average Equity to Average Assets		8.91	%		9.43	%		9.49	%		9.43	%		7.91	%
Tier 1 Risk-Based Capital-Bank		11.58	%		9.97	%		11.42	%		12.08	%		10.80	%
Total Risk-Based Capital-Bank		12.84	%		11.22	%		12.54	%		13.11	%		11.88	%
Net Interest Margin 4		3.47	%		3.98	%		4.26	%		4.59	%		4.45	%
Average Earning Assets to Total Average Assets		92.86	%		93.74	%		94.20	%		94.04	%		92.62	%
Nonperforming Assets to Total Assets 5		2.98	%		2.01	%		0.00	%		0.08	%		0.54	%
Net Charge-offs to Average Loans		1.22	%		.00	%		-.09	%		0.00	%		0.12	%
Allowance for Loan Losses to Total Loans		1.60	%		1.66	%		1.18	%		1.17	%		1.20	%
Nonperforming Loans to Allowance for Loan Losses		239.10	%		150.72	%		0.00	%		9.15	%		61.64	%
Efficiency Ratio 6		63.81	%		59.31	%		55.64	%		52.54	%		55.65	%
Share Data
Average Common Shares Outstanding — basic		8,713			8,858			8,760			8,600			8,283
Average Common Shares Outstanding — diluted		8,724			8,938			8,932			8,845			8,703
Book Value Per Common Share	$	7.18		$	5.27		$	4.96		$	4.52		$	4.27
Basic Earnings Per Common Share	$	0.25		$	0.69		$	0.75		$	0.73		$	0.60
Diluted Earnings Per Common Share	$	0.25		$	0.68		$	0.74		$	0.71		$	0.57
Cash Dividends Per Common Share 7	$	0.32		$	0.33		$	0.29		$	0.26		$	0.23

1	Regulatory Capital Ratios and Asset Quality Ratios are end of period ratios. With the exception of end of period ratios, all ratios are based on average daily balances during the indicated period.
2	Return on average assets is net income divided by average total assets.
3	Return on average equity is net income divided by average stockholders’ equity.
4	Net interest margin equals net interest income as a percent of average interest-earning assets.
5	Non-performing assets includes all nonperforming loans (nonaccrual loans, loans 90 days past due and still accruing interest and restructured loans) and real estate acquired by foreclosure.
6	The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and noninterest income. The efficiency ratio measures how the Company spends in order to generate each dollar of net revenue.
7	Cash dividends declared during the current fiscal year

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