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):
July 20, 2018

Bank of Commerce Holdings

 (Exact name of registrant as specified in its charter)

California

(State or other jurisdiction of incorporation)

000-25135	94-2823865
(Commission File Number)	IRS Employer Identification No.

555 Capitol Mall, Suite 1255
Sacramento, California 95814
(Address of principal executive offices) (zip code)

Registrant's telephone number, including area code: (800) 421-2575

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):

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

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 – Results of Operations and Financial Condition

On July 20, 2018, Bank of Commerce Holdings (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2018. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information in this Item 2.02 and Exhibit 99.1 attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such document or filing.

Item 9.01 – Financial Statements and Exhibits

 (d) Exhibits:

99.1 Press Release dated July 20, 2018 announcing financial results for the quarter ended June 30, 2018.

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.

July 20, 2018
	/s/ Samuel D. Jimenez
	By: Samuel D. Jimenez
	Executive Vice President - Chief Operating Officer

EX-99.1

Exhibit 99.1

For Immediate Release:

Bank of Commerce Holdings Announces Results for the Second Quarter of 2018

SACRAMENTO, California, July 20, 2018 / GLOBE NEWSWIRE—Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.3 billion asset bank holding company and parent company of Redding Bank of Commerce (the “Bank”), today announced financial results for the quarter and the six months ended June 30, 2018. Net income for the quarter ended June 30, 2018 was $3.6 million or $0.22 per share – diluted, compared with net income of $2.2 million or $0.15 per share – diluted for the same period of 2017. Net income for the six months ended June 30, 2018 was $6.9 million or $0.42 per share – diluted, compared with net income of $4.5 million or $0.31 per share – diluted for the same period of 2017.

Financial highlights for the second quarter of 2018:

● Net income of $3.6 million was an increase of $1.4 million (64%) from $2.2 million earned during the same period in the prior year. Earnings of $0.22 per share – diluted was an increase of $0.07 (47%) from $0.15 per share – diluted earned during the same period in the prior year and reflects the impact of 2,738,096 shares of common stock sold and issued in the second quarter of 2017.

● Net interest income increased $1.4 million (14%) to $11.6 million compared to $10.2 million for the same period in the prior year.

● Return on average assets improved to 1.14% compared to 0.76% for the same period in the prior year.

● Return on average equity improved to 11.32% compared to 7.85% for the same period in the prior year.

● Average loans totaled $922.7 million, an increase of $101.4 million (12%) compared to average loans for the same period in the prior year.

● Average earning assets totaled $1.2 billion, an increase of $110.6 million (10%) compared the same period in the prior year.

● Average deposits totaled $1.1 billion, an increase of $39.3 million (4%) compared the same period in the prior year.

o Average non-maturing deposits totaled $884.0 million, an increase of $77.2 million (10%) compared to the same period in the prior year.

o Average certificates of deposit totaled $170.8 million, a decrease of $37.9 million (18%) compared to the same period in the prior year.

● The Company’s efficiency ratio was 61.16% compared to 69.17% for the same period in the prior year.

● Nonperforming assets at June 30, 2018 totaled $4.4 million or 0.34% of total assets, a decrease of $6.3 million (59%) compared to June 30, 2017.

● Book value per common share was $7.97 at June 30, 2018 compared to $7.75 at June 30, 2017.

● Tangible book value per common share was $7.85 at June 30, 2018 compared to $7.61 at June 30, 2017.

Financial highlights for the six months ended June 30, 2018:

● Net income of $6.9 million was an increase of $2.4 million (54%) from $4.5 million earned during the same period in the prior year. Earnings of $0.42 per share – diluted was an increase of $0.11 (35%) from $0.31 per share – diluted earned during the same period in the prior year and reflects the impact of 2,738,096 shares of common stock sold and issued in the second quarter of 2017.

● Net interest income increased $3.0 million (15%) to $22.9 million compared to $19.9 million for the same period in the prior year.

● Return on average assets improved to 1.10% compared to 0.78% for the same period in the prior year.

● Return on average equity improved to 10.84% compared to 8.66% for the same period in the prior year.

● Average loans totaled $903.4 million, an increase of $89.3 million (11%) compared to average loans for the same period in the prior year.

● Average earning assets totaled $1.2 billion, an increase of $108.8 million (10%) compared to average earning assets for the same period in the prior year.

● Average deposits totaled $1.1 billion, an increase of $48.8 million (5%) compared to average deposits for the same period in the prior year.

o Average non-maturing deposits totaled $886.2 million, an increase of $68.3 million (11%) compared to average non-maturing deposits for the same period in the prior year.

o Average certificates of deposit totaled $176.3 million, a decrease of $35.6 million (17%) compared to average certificates of deposit for the same period in the prior year.

● The Company’s efficiency ratio was 63.15% compared to 70.24% during the same period in the prior year.

● Nonperforming assets at June 30, 2018 totaled $4.4 million or 0.34% of total assets, a decrease of $1.5 million (51% annualized) since December 31, 2017.

● Book value per common share was $7.97 at June 30, 2018 compared to $7.82 at December 31, 2017.

● Tangible book value per common share was $7.85 at June 30, 2018 compared to $7.70 at December 31, 2017.

1

Randall S. Eslick, President and CEO commented: “I am pleased to report another quarter of improved earnings. The diligence and hard work of our dedicated employees resulted in net income for the second quarter of $3.6 million ($0.22 per share) which was a ROAA of 1.14% and a ROAE of 11.32%. These earnings supported our decision to increase our quarterly cash dividend per share from $0.03 to $0.04.”

Forward-Looking Statements

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 our 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

● A decline in the health of the economy nationally or regionally which could reduce the demand for loans or reduce the value of real estate collateral securing most of our loans

● Credit quality deterioration which could cause an increase in the provision for loan and lease losses

● 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 fiscal year ended December 31, 2017 under the heading “Risk Factors” and to 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. The Company undertakes no obligation and specifically disclaims any obligation to revise or publicly release the results of any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date the statements were made.

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TABLE 1

SELECTED FINANCIAL INFORMATION - UNAUDITED

(amounts in thousands except per share data)

	For The Three Months Ended									For The Six Months Ended
Net income, average assets and	June 30,						March 31,			June 30,
average shareholders' equity	2018			2017			2018			2018			2017
Net income	$	3,618		$	2,209		$	3,241		$	6,859		$	4,461
Average total assets	$	1,276,697		$	1,170,447		$	1,248,563		$	1,262,710		$	1,159,438
Average total earning assets	$	1,208,281		$	1,097,644		$	1,181,857		$	1,195,154		$	1,086,404
Average shareholders' equity	$	128,181		$	112,855		$	127,069		$	127,628		$	103,888
Selected performance ratios
Return on average assets		1.14	%		0.76	%		1.05	%		1.10	%		0.78	%
Return on average equity		11.32	%		7.85	%		10.34	%		10.84	%		8.66	%
Efficiency ratio		61.16	%		69.17	%		65.17	%		63.15	%		70.24	%
Share and per share amounts
Weighted average shares - basic (1)		16,245			15,014			16,225			16,237			14,220
Weighted average shares - diluted		16,325			15,113			16,310			16,319			14,321
Earnings per share - basic	$	0.22		$	0.15		$	0.20		$	0.42		$	0.31
Earnings per share - diluted	$	0.22		$	0.15		$	0.20		$	0.42		$	0.31

	At June 30,						At March 31,
Share and per share amounts	2018			2017			2018
Common shares outstanding (2)		16,318			16,260			16,315
Book value per common share	$	7.97		$	7.75		$	7.83
Tangible book value per common share (3)	$	7.85		$	7.61		$	7.71
Capital ratios (4)
Bank of Commerce Holdings
Common equity tier 1 capital ratio		12.15	%		12.55	%		12.35	%
Tier 1 capital ratio		13.07	%		13.56	%		13.31	%
Total capital ratio		15.20	%		15.83	%		15.52	%
Tier 1 leverage ratio		11.11	%		11.38	%		11.11	%
Tangible common equity ratio (5)		10.02	%		10.23	%		10.11	%
Redding Bank of Commerce
Common equity tier 1 capital ratio		12.51	%		12.66	%		12.62	%
Tier 1 capital ratio		12.51	%		12.66	%		12.62	%
Total capital ratio		13.72	%		13.91	%		13.87	%
Tier 1 leverage ratio		10.60	%		10.64	%		10.51	%

⁽¹⁾ Excludes unvested restricted shares issued in accordance with the Company's equity incentive plan, as they are non participative in dividends or voting rights.

⁽²⁾ Includes unvested restricted shares issued in accordance with the Company's equity incentive plan.

⁽³⁾ Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.

⁽⁴⁾ The Company and the Bank continue to meet all capital adequacy requirements to which they are subject. Capital ratios for the Company include the benefit of $26.8 million net proceeds from the sale of 2,738,096 shares of common stock in the second quarter of 2017.

⁽⁵⁾ Management believes the tangible common equity ratio is a useful measure of capital adequacy because it provides a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability of the Company to absorb potential losses. The tangible common equity ratio is calculated as total shareholders' equity less goodwill and core deposit intangible, net divided by total assets less goodwill and core deposit intangible, net.

3

BALANCE SHEET OVERVIEW

As of June 30, 2018, the Company had total consolidated assets of $1.3 billion, gross loans of $936.8 million, allowance for loan and lease losses (“ALLL”) of $12.4 million, total deposits of $1.1 billion, and shareholders’ equity of $130.1 million.

	TABLE 2
	LOAN BALANCES BY TYPE - UNAUDITED
	(amounts in thousands)
	At June 30,																		At March 31,
				% of						% of			Change									% of
	2018			Total			2017			Total			Amount			%			2018			Total
Commercial	$	139,670			15	%	$	145,335			18	%	$	(5,665	)		(4	%)	$	137,870			15	%
Real estate - construction and land development		21,292			2			22,275			3			(983	)		(4	%)		14,723			2
Real estate - commercial non-owner occupied		427,088			46			310,995			38			116,093			37	%		405,192			46
Real estate - commercial owner occupied		199,412			21			191,737			24			7,675			4	%		193,286			22
Real estate - residential - ITIN		39,424			4			43,229			5			(3,805	)		(9	%)		40,425			4
Real estate - residential - 1-4 family mortgage		33,391			4			18,904			2			14,487			77	%		30,247			3
Real estate - residential - equity lines		28,879			3			32,133			4			(3,254	)		(10	%)		30,520			3
Consumer and other		47,660			5			50,780			6			(3,120	)		(6	%)		48,157			5
Gross loans		936,816			100	%		815,388			100	%		121,428			15	%		900,420			100	%
Deferred fees and costs		1,763						1,541						222						1,713
Loans, net of deferred fees and costs		938,579						816,929						121,650						902,133
Allowance for loan and lease losses		(12,388	)					(11,688	)					(700	)					(12,295	)
Net loans	$	926,191					$	805,241					$	120,950					$	889,838
Average yield on loans during the quarter		4.85	%					4.77	%					0.08						4.92	%

The Company recorded gross loan balances of $936.8 million at June 30, 2018, compared with $815.4 million and $900.4 million at June 30, 2017 and March 31, 2018, respectively, an increase of $121.4 million and $36.4 million, respectively. The increase in gross loans compared to the same period a year ago and the prior period was organic and did not rely on loan pool purchases.

Average loan balances were $922.7 million for the quarter ended June 30, 2018, compared with $821.3 million for the quarter ended June 30, 2017 and $883.9 million for the quarter ended March 31, 2018, an increase of $101.4 million or 12% and an increase of $38.8 million or 18% annualized, respectively.

The average yield on loans during the current quarter was 4.85% compared to 4.77% and 4.92% for the quarters ended June 30, 2017 and March 31, 2018, respectively. The previous quarter income on loans of $10.7 million included $229 thousand from prepayment penalties and interest income from nonaccrual loans that were sold or repaid during the quarter which enhanced the average yield on a non-recurring basis by ten basis points.

4

TABLE 3

CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED

(amounts in thousands)

	At June 30,																		At March 31,
				% of						% of			Change									% of
	2018			Total			2017			Total			Amount			%			2018			Total
Cash and due from banks	$	23,996			9	%	$	23,420			7	%	$	576			2	%	$	16,247			6	%
Interest-bearing deposits in other banks		15,690			5			73,434			22			(57,744	)		(79	%)		17,376			6
Total cash and cash equivalents		39,686			14			96,854			29			(57,168	)		(59	%)		33,623			12
Investment securities:
U.S. government and agencies		38,994			14			24,231			7			14,763			61	%		41,179			14
Obligations of state and political subdivisions		58,479			20			58,400			17			79			—	%		59,408			21
Residential mortgage backed securities and collateralized mortgage obligations		121,218			42			91,375			28			29,843			33	%		125,567			43
Corporate securities		3,987			1			8,312			2			(4,325	)		(52	%)		3,958			1
Commercial mortgage backed securities		24,742			9			23,421			7			1,321			6	%		25,520			9
Other asset backed securities		219			—			3,870			1			(3,651	)		(94	%)		285			—
Total investment securities - AFS		247,639			86			209,609			62			38,030			18	%		255,917			88
Obligations of state and political subdivisions - HTM		—			—			31,329			9			(31,329	)		(100	%)		—			—
Total investment securities - AFS and HTM		247,639			86			240,938			71			6,701			3	%		255,917			88
Total cash, cash equivalents and investment securities	$	287,325			100	%	$	337,792			100	%	$	(50,467	)		(15	%)	$	289,540			100	%
Average yield on interest-bearing due from banks and investment securities during the quarter - (nominal)		2.56	%					2.27	%					0.29						2.45	%

As of June 30, 2018, we maintained noninterest-bearing cash positions of $24.0 million and interest-bearing deposits of $15.7 million at the Federal Reserve Bank and correspondent banks. The reduction in cash and cash equivalents compared to a year previous reflects the seasonal decline in deposits which, in 2018, has been greater than it was in the prior two years.

Investment securities totaled $247.6 million at June 30, 2018, compared with $240.9 million and $255.9 million at June 30, 2017 and March 31, 2018, respectively. Our investment securities portfolio provides us with a secondary source of liquidity to fund higher yielding asset opportunities, such as loan originations. During the second quarter of 2018, we purchased one security with a par value of $1.2 million and weighted average yield of 3.0% and sold two securities with a par value of $1.1 million and weighted average yield of 3.04%. The sales activity on available-for-sale securities resulted in $4 thousand in net realized gains. During the same period, we received $6.8 million in proceeds from principal payments, calls and maturities within the investment securities portfolio.

Average securities balances and weighted average tax equivalent yields for the quarters ended June 30, 2018 and 2017 were $256.6 million and 2.82% compared to $217.6 million and 3.10%, respectively. The current quarter tax equivalent yields were reduced by 16 basis points as a result of the Tax Cuts and Jobs Act of 2017 which reduced the federal corporate tax rate from a graduated rate of 35% to a flat rate of 21%.

At June 30, 2018, our net unrealized losses on available-for-sale investment securities were $4.9 million compared with net unrealized gains of $682 thousand and net unrealized losses of $3.9 million at June 30, 2017 and March 31, 2018, respectively. The changes in the net unrealized loss on the investment securities portfolio are due to changes in market interest rates and the reclassification of all HTM securities to AFS during the fourth quarter of 2017.

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TABLE 4

DEPOSITS BY TYPE - UNAUDITED

(amounts in thousands)

	At June 30,																At March 31,
			% of					% of			Change								% of
	2018		Total			2017		Total			Amount			%			2018		Total
Demand - noninterest-bearing	$	316,347		30	%	$	303,560		29	%	$	12,787			4	%	$	301,981		29	%
Demand - interest-bearing		465,087		44			426,798		41			38,289			9	%		462,551		44
Total demand		781,434		74			730,358		70			51,076			7	%		764,532		73
Savings		106,170		10			109,472		10			(3,302	)		(3	%)		107,986		10
Total non-maturing deposits		887,604		84			839,830		80			47,774			6	%		872,518		83
Certificates of deposit		166,925		16			206,395		20			(39,470	)		(19	%)		176,233		17
Total deposits	$	1,054,529		100	%	$	1,046,225		100	%	$	8,304			1	%	$	1,048,751		100	%

Total deposits at June 30, 2018, increased $8.3 million or 1% to $1.1 billion compared to June 30, 2017, and increased $5.8 million or 2% annualized compared to March 31, 2018. Total non-maturing deposits increased $47.8 million or 6% compared to the same date a year ago and increased $15.1 million or 7% annualized compared to March 31, 2018. Certificates of deposit decreased $39.5 million or 19% compared to the same date a year ago and decreased $9.3 million or 21% annualized compared to March 31, 2018.

TABLE 5

WHOLESALE AND RECIPROCAL DEPOSITS - UNAUDITED

(amounts in thousands)

	At June 30,				At March 31,
	2018		2017		2018
CDARS / ICS reciprocal deposits	$	60,538	$	56,803	$	56,732
Online listing service wholesale time deposits		25,491		42,709		29,159
Total wholesale and reciprocal deposits	$	86,029	$	99,512	$	85,891

For calendar quarters prior to June 30, 2018, CDARS/ ICS reciprocal deposits were considered to be brokered deposits by regulatory authorities and were reported as such on quarterly Call Reports. With passage of The Economic Growth, Regulatory Relief and Consumer Protection Act in May 2018, this is no longer so.

6

AVERAGE COST OF FUNDS

The following table presents the average cost of interest-bearing deposits, all deposits and all interest-bearing liabilities for the periods indicated.

	TABLE 6
	AVERAGE COST OF FUNDS - UNAUDITED
	For The Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			March 31,			December 31,			September 30,
	2018			2018			2017			2017			2017			2017			2016			2016
Interest-bearing deposits		0.41	%		0.41	%		0.42	%		0.43	%		0.42	%		0.39	%		0.40	%		0.39	%
Interest-bearing deposits and noninterest-bearing demand		0.29	%		0.29	%		0.30	%		0.31	%		0.31	%		0.29	%		0.29	%		0.29	%
All interest-bearing liabilities		0.68	%		0.60	%		0.59	%		0.60	%		0.60	%		0.56	%		0.57	%		0.56	%
All interest-bearing liabilities and noninterest-bearing demand		0.50	%		0.43	%		0.42	%		0.43	%		0.44	%		0.42	%		0.42	%		0.42	%

7

INCOME STATEMENT OVERVIEW

TABLE 7

SUMMARY INCOME STATEMENT - UNAUDITED

(amounts in thousands, except per share data)

For The Three Months Ended

	June 30,				Change						March 31,		Change
	2018		2017		Amount			%			2018		Amount			%
Interest income	$	12,990	$	11,320	$	1,670			15	%	$	12,530	$	460			4	%
Interest expense		1,410		1,145		265			23	%		1,185		225			19	%
Net interest income		11,580		10,175		1,405			14	%		11,345		235			2	%
Provision for loan and lease losses		—		300		(300	)		(100	%)		—		—			—	%
Noninterest income		962		995		(33	)		(3	%)		982		(20	)		(2	%)
Noninterest expense		7,671		7,726		(55	)		(1	%)		8,033		(362	)		(5	%)
Income before provision for income taxes		4,871		3,144		1,727			55	%		4,294		577			13	%
Provision for income taxes		1,253		935		318			34	%		1,053		200			19	%
Net income	$	3,618	$	2,209	$	1,409			64	%	$	3,241	$	377			12	%
Basic earnings per share	$	0.22	$	0.15	$	0.07			47	%	$	0.20	$	0.02			10	%
Average basic shares		16,245		15,014		1,231			8	%		16,225		20			—	%
Diluted earnings per share	$	0.22	$	0.15	$	0.07			47	%	$	0.20	$	0.02			10	%
Average diluted shares		16,325		15,113		1,212			8	%		16,310		15			—	%
Dividends declared per common share	$	0.04	$	0.03	$	0.01			33	%	$	0.03	$	0.01			33	%

Second Quarter of 2018 Compared With Second Quarter of 2017

Net income for the second quarter of 2018 increased $1.4 million compared to the second quarter of 2017. In the current quarter, net interest income was $1.4 million higher, provision for loan and lease losses was $300 thousand lower and noninterest expense was $55 thousand lower. These positive changes were offset by noninterest income that was $33 thousand lower, and a provision for income taxes that was $318 thousand higher.

Net Interest Income

Net interest income increased $1.4 million compared to the same period a year ago.

Interest income for the three months ended June 30, 2018 increased $1.7 million or 15% to $13.0 million:

● Interest and fees on loans increased $1.4 million due to a $101.4 million increase in average loan balances and an eight basis point increase in the average yield on the loan portfolio.

● Interest on securities increased $285 thousand due to a $38.9 million increase in average securities balances and a five basis point increase in the average yield on the securities portfolio.

● Interest on interest-bearing deposits due from banks decreased $21 thousand primarily due to a $29.7 million decrease in average interest-bearing deposit balances, partially offset by an 80 basis point increase in average yield resulting from increased fed funds rates.

Interest expense for the second quarter of 2018 increased $265 thousand or 23% to $1.4 million:

● Interest expense on interest bearing deposits decreased $9 thousand. Average interest-bearing demand and savings deposit balances increased $43.0 million, while average certificate of deposit balances decreased $37.9 million. The average rate paid on interest-bearing deposits decreased one basis point.

● Interest expense on other interest bearing liabilities increased $274 thousand primarily due to increased borrowing from the Federal Home Loan Bank of San Francisco.

8

Provision for loan and lease loss

As a result of continued improved asset quality and net loan loss recoveries, no provision for loan and lease losses was necessary during the current quarter compared with a provision for loan and lease losses of $300 thousand for the same quarter a year ago.

Noninterest Income

Noninterest income for the three months ended June 30, 2018 decreased $33 thousand compared to the second quarter for 2017, a variance not concentrated in any one item.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2018 decreased $55 thousand compared to the same period a year previous. The net decrease was due to the following:

● $145 thousand in decreased professional fees.

● $137 thousand decrease related to software development project costs that were written off in the same period a year previous.

● $87 thousand decrease in telecommunications and occupancy costs.

● $366 thousand increase in salaries and related benefit costs that increased primarily as a result of additional employees hired in our Sacramento market.

The Company’s efficiency ratio was 61.16% for the second quarter of 2018 compared to 69.17% during the same period in 2017.

Income Tax Provision

For the three months ended June 30, 2018, our income tax provision of $1.3 million on pre-tax income of $4.9 million was an effective tax rate of 25.7%. The current quarter effective tax rate reflects the benefits of the Tax Cuts and Jobs Act of 2017 which reduced the federal corporate tax rate from a graduated rate of 35% to a flat rate of 21%. This compares with a provision for income taxes for the second quarter of the prior year of $935 thousand on pre-tax income of $3.1 million (29.7% effective tax rate).

Second Quarter of 2018 Compared With First Quarter of 2018

Net income for the second quarter of 2018 increased $377 thousand compared to the first quarter of 2018. In the current quarter, net interest income was $235 thousand higher and noninterest expense was $362 thousand lower. These positive changes were offset by noninterest income that was $20 thousand lower and a provision for income taxes that was $200 thousand higher.

Net Interest Income

Net interest income increased $235 thousand over the prior quarter.

Interest income for the three months ended June 30, 2018 increased $460 thousand or 4% to $13.0 million.

● Interest and fees on loans increased $435 thousand due to a $38.8 million increase in average loan balances and a seven basis point decrease in the average yield on the loan portfolio.

● Interest on investment securities increased $19 thousand due to an eight basis point increase in average yield partially offset by an $8.5 million decrease in average securities balances.

● Interest on interest-bearing deposits due from banks increased $6 thousand due to a 27 basis point increase average yields partially offset by a $3.8 million decrease in average balances.

9

Interest expense for the three months ended June 30, 2018 increased $225 thousand or 19% to $1.4 million.

● Interest expense on deposits declined $8 thousand as average interest-bearing demand and savings deposits decreased $6.4 million, average certificates of deposit declined $11.1 million and the average rate paid on these deposits was unchanged.

● Interest expense on borrowings from the Federal Home loan Bank of San Francisco increased $220 thousand. Federal Home loan Bank of San Francisco borrowings averaged $55.3 million compared to an average balance of $12.4 million for the prior quarter.

● Interest expense on other term debt increased $13 thousand.

Provision for loan and lease loss

As a result of continued improved asset quality and net loan loss recoveries, no provision for loan and lease losses was necessary during the current or previous quarter.

Noninterest Income

Noninterest income for the three months ended June 30, 2018 decreased $20 thousand, a variance not concentrated in any one item.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2018 decreased $362 thousand compared to the first quarter of 2018. The decrease was primarily related to employee compensation.

The Company’s efficiency ratio was 61.16% for the second quarter of 2018 compared to 65.17% during the prior quarter.

Income Tax Provision

For the three months ended June 30, 2018, our income tax provision of $1.3 million on pre-tax income of $4.9 million with an effective tax rate of 25.72%. This compares with a provision for income taxes for the prior quarter of $1.1 million on pretax income of $4.3 million (24.5% effective tax rate).

Earnings Per Share

Diluted earnings per share were $0.22 for the three months ended June 30, 2018 compared with diluted earnings per share of $0.15 for the same period a year ago and diluted earnings per share of $0.20 for the prior period. Net income and weighted average shares used to calculate earnings per share – diluted are summarized in table 6 presented earlier in this press release.

10

TABLE 8a
NET INTEREST MARGIN - UNAUDITED
(amounts in thousands)
	For The Three Months Ended
	June 30, 2018							June 30, 2017							March 31, 2018
	Average				Yield /			Average				Yield /			Average				Yield /
(Amounts in thousands)	Balance		Interest(1)		Rate (5)			Balance		Interest(1)		Rate (5)			Balance		Interest(1)		Rate (5)
Interest-earning assets:
Net loans (2)	$	922,687	$	11,164		4.85	%	$	821,321	$	9,758		4.77	%	$	883,876	$	10,729		4.92	%
Taxable securities		206,247		1,278		2.49	%		143,705		872		2.43	%		205,302		1,209		2.39	%
Tax-exempt securities		50,306		413		3.29	%		73,927		534		2.90	%		59,789		463		3.14	%
Interest-bearing deposits in other banks		29,041		135		1.86	%		58,691		156		1.07	%		32,890		129		1.59	%
Average interest-earning assets		1,208,281		12,990		4.31	%		1,097,644		11,320		4.14	%		1,181,857		12,530		4.30	%
Cash and due from banks		19,880							17,364							17,666
Premises and equipment, net		14,167							15,809							14,557
Other assets		34,369							39,630							34,483
Average total assets	$	1,276,697						$	1,170,447						$	1,248,563
Interest-bearing liabilities:
Interest-bearing demand	$	467,651		215		0.18	%	$	421,888		184		0.17	%	$	470,440		221		0.19	%
Savings deposits		107,108		64		0.24	%		109,857		47		0.17	%		110,725		59		0.22	%
Certificates of deposit		170,824		488		1.15	%		208,703		545		1.05	%		181,901		495		1.10	%
Federal Home Loan Bank of San Francisco borrowings		55,275		267		1.94	%		1,209		3		1.00	%		12,444		47		1.53	%
Other borrowings net of unamortized debt issuance costs		15,614		279		7.17	%		18,330		295		6.46	%		16,528		281		6.90	%
Junior subordinated debentures		10,310		97		3.77	%		10,310		71		2.76	%		10,310		82		3.23	%
Average interest-bearing liabilities		826,782		1,410		0.68	%		770,297		1,145		0.60	%		802,348		1,185		0.60	%
Noninterest-bearing demand		309,199							275,039							307,397
Other liabilities		12,535							12,256							11,749
Shareholders’ equity		128,181							112,855							127,069
Average liabilities and shareholders’ equity	$	1,276,697						$	1,170,447						$	1,248,563
Net interest income and net interest margin (4)			$	11,580		3.84	%			$	10,175		3.72	%			$	11,345		3.89	%
Tax equivalent net interest margin (3)						3.88	%						3.82	%						3.94	%

⁽¹⁾ Interest income on loans is net of deferred fees and costs of approximately $145 thousand, $131 thousand, and $137 thousand for the three months ended June 30, 2018, and 2017 and March 31, 2018, respectively.

⁽²⁾ Net loans includes average nonaccrual loans of $4.2 million, $9.8 million and $4.8 million for the three months ended June 30, 2018 and 2017 and March 31, 2018, respectively.

⁽³⁾ Tax-exempt income has been adjusted to tax equivalent basis at a 21% for 2018 and at a 34% tax rate for 2017. The amount of such adjustments was an addition to recorded income of approximately $110 thousand, $275 thousand and $123 thousand for the three months ended June 30, 2018 and 2017 and March 31, 2018, respectively.

⁽⁴⁾ Net interest margin is net interest income expressed as a percentage of average interest-earning assets.

⁽⁵⁾ Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result.

11

TABLE 8b
NET INTEREST MARGIN - UNAUDITED
(amounts in thousands)
	For The Six Months Ended
	June 30, 2018							June 30, 2017
	Average				Yield /			Average				Yield /
(Amounts in thousands)	Balance		Interest(1)		Rate (5)			Balance		Interest(1)		Rate (5)
Interest-earning assets:
Net loans (2)	$	903,389	$	21,893		4.89	%	$	814,098	$	19,142		4.74	%
Taxable securities		205,777		2,487		2.44	%		140,660		1,661		2.38	%
Tax-exempt securities		55,021		876		3.21	%		73,726		1,064		2.91	%
Interest-bearing deposits in other banks		30,967		264		1.72	%		57,920		270		0.94	%
Average interest-earning assets		1,195,154		25,520		4.31	%		1,086,404		22,137		4.11	%
Cash and due from banks		18,767							17,120
Premises and equipment, net		14,361							15,986
Other assets		34,428							39,928
Average total assets	$	1,262,710						$	1,159,438
Interest-bearing liabilities:
Interest-bearing demand	$	469,038		436		0.19	%	$	421,156		332		0.16	%
Savings deposits		108,907		123		0.23	%		111,742		94		0.17	%
Certificates of deposit		176,332		983		1.12	%		211,934		1,074		1.02	%
Federal Home Loan Bank of San Francisco borrowings		33,978		314		1.86	%		608		3		1.00	%
Other borrowings net of unamortized debt issuance costs		16,069		560		7.03	%		18,463		588		6.42	%
Junior subordinated debentures		10,310		179		3.50	%		10,310		137		2.68	%
Average interest-bearing liabilities		814,634		2,595		0.64	%		774,213		2,228		0.58	%
Noninterest-bearing demand		308,304							268,994
Other liabilities		12,144							12,343
Shareholders’ equity		127,628							103,888
Average liabilities and shareholders’ equity	$	1,262,710						$	1,159,438
Net interest income and net interest margin (4)			$	22,925		3.87	%			$	19,909		3.70	%
Tax equivalent net interest margin (3)						3.91	%						3.80	%

⁽¹⁾ Interest income on loans is net of deferred fees and costs of approximately $282 thousand and $328 thousand for the six months ended June 30, 2018 and 2017, respectively.

⁽²⁾ Net loans includes average nonaccrual loans of $4.5 million and $10.3 million for the six months ended June 30, 2018 and 2017, respectively.

⁽³⁾ Tax-exempt income has been adjusted to tax equivalent basis at a 21% tax rate for 2018 and at a 34% tax rate for 2017. The amount of such adjustments was an addition to recorded income of approximately $233 thousand and $548 thousand for the six months ended June 30, 2018 and 2017, respectively.

⁽⁴⁾ Net interest margin is net interest income expressed as a percentage of average interest-earning assets.

⁽⁵⁾ Yields and rates are calculated by dividing the income or expense by the average balance of the assets or liabilities, respectively, and annualizing the result.

12

TABLE 9

ALLOWANCE FOR LOAN AND LEASE LOSSES ROLL FORWARD AND IMPAIRED LOAN TOTALS - UNAUDITED

(amounts in thousands)

	For The Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2018			2018			2017			2017			2017
Beginning balance ALLL	$	12,295		$	11,925		$	11,692		$	11,688		$	11,641
Provision for loan and lease losses		—			—			450			—			300
Loans charged-off		(382	)		(390	)		(451	)		(245	)		(359	)
Loan loss recoveries		475			760			234			249			106
Ending balance ALLL	$	12,388		$	12,295		$	11,925		$	11,692		$	11,688

	At June 30,			At March 31,			At December 31,			At September 30,			At June 30,
	2018			2018			2017			2017			2017
Nonaccrual loans:
Commercial	$	1,358		$	1,109		$	1,603		$	2,309		$	2,410
Real estate - commercial non-owner occupied		—			—			—			—			1,196
Real estate - commercial owner occupied		—			—			600			617			639
Real estate - residential - ITIN		2,613			2,839			2,909			3,201			3,346
Real estate - residential - 1-4 family mortgage		184			188			606			626			653
Real estate - residential - equity lines		44			45			45			815			872
Consumer and other		33			35			36			37			38
Total nonaccrual loans		4,232			4,216			5,799			7,605			9,154
Accruing troubled debt restructured loans:
Commercial		1,420			1,516			1,551			671			703
Real estate - commercial non-owner occupied		799			800			803			805			806
Real estate - residential - ITIN		4,592			4,554			4,614			4,655			4,712
Real estate - residential - equity lines		372			376			380			441			445
Total accruing troubled debt restructured loans		7,183			7,246			7,348			6,572			6,666
All other accruing impaired loans		—			—			—			—			—
Total impaired loans	$	11,415		$	11,462		$	13,147		$	14,177		$	15,820
Gross loans outstanding at period end	$	936,816		$	900,420		$	879,835		$	824,874		$	815,388
Impaired loans to gross loans		1.22	%		1.27	%		1.49	%		1.72	%		1.94	%
Nonaccrual loans to gross loans		0.45	%		0.47	%		0.66	%		0.92	%		1.12	%
Allowance for loan and lease losses as a percent of:
Gross loans		1.32	%		1.37	%		1.36	%		1.42	%		1.43	%
Nonaccrual loans		292.72	%		291.63	%		205.64	%		153.74	%		127.68	%
Impaired loans		108.52	%		107.27	%		90.71	%		82.47	%		73.88	%

We continue to monitor credit quality and adjust the ALLL to ensure that the ALLL is maintained at a level that is adequate to cover estimated credit losses in the loan and lease portfolio. As a result of continued improved asset quality and net loan loss recoveries, no provision for loan and lease losses was necessary during the current or prior quarter. This compared with a provision of $300 thousand for the three months ended June 30, 2017. Our ALLL as a percentage of gross loans was 1.32% as of June 30, 2018 compared to 1.43% as of June 30, 2017 and 1.37% as of March 31, 2018. Based on the Bank’s ALLL methodology, which uses criteria such as risk factors and historical loss rates, and given the ongoing improvements in asset quality, management believes the Company’s ALLL is adequate at June 30, 2018. There is, however, no assurance that future loan and lease losses will not exceed the levels provided for in the ALLL and could possibly result in future charges to the provision for loan and lease losses.

13

At June 30, 2018, the recorded investment in loans classified as impaired totaled $11.4 million, with a corresponding specific reserve of $1.2 million compared to impaired loans of $15.8 million with a corresponding specific reserve of $1.1 million at June 30, 2017 and impaired loans of $11.5 million, with a corresponding specific reserve of $1.1 million at March 31, 2018.

TABLE 10
TROUBLED DEBT RESTRUCTURINGS - UNAUDITED
(amounts in thousands)
	At June 30,			At March 31,			At December 31,			At September 30,			At June 30,
	2018			2018			2017			2017			2017
Nonaccrual	$	3,218		$	3,237		$	3,581		$	4,403		$	4,630
Accruing		7,183			7,246			7,348			6,572			6,666
Total troubled debt restructurings	$	10,401		$	10,483		$	10,929		$	10,975		$	11,296
Troubled debt restructurings as a percentage of total gross loans		1.11	%		1.16	%		1.24	%		1.33	%		1.39	%

There were no new troubled debt restructurings during the three months ended June 30, 2018. As of June 30, 2018, we had 110 restructured loans that qualified as troubled debt restructurings, of which all were performing according to their restructured terms.

TABLE 11
NONPERFORMING ASSETS - UNAUDITED
(amounts in thousands)
	At June 30,			At March 31,			At December 31,			At September 30,			At June 30,
	2018			2018			2017			2017			2017
Total nonaccrual loans	$	4,232		$	4,216		$	5,799		$	7,605		$	9,154
90 days past due and still accruing		—			—			—			—			—
Total nonperforming loans		4,232			4,216			5,799			7,605			9,154
Other real estate owned ("OREO")		140			60			35			699			1,517
Total nonperforming assets	$	4,372		$	4,276		$	5,834		$	8,304		$	10,671
Nonperforming loans to gross loans		0.45	%		0.47	%		0.66	%		0.92	%		1.12	%
Nonperforming assets to total assets		0.34	%		0.34	%		0.46	%		0.67	%		0.88	%

The June 30, 2018 OREO balance consists of five 1-4 family residential real estate properties in the amount of $140 thousand. The increase in the OREO balance compared to the prior quarter is due to the transfer of three 1-4 family residential properties to OREO totaling $79 thousand. There were no OREO dispositions in the current quarter compared to sales resulting in net gains of $12 thousand and net gains of $16 thousand in the same quarter a year ago and in the prior quarter, respectively.

14

TABLE 12
UNAUDITED CONSOLIDATED
BALANCE SHEET
(amounts in thousands, except per share data)
	At June 30,			At June 30,			Change						At March 31,
	2018			2017			$			%			2018
Assets:
Cash and due from banks	$	23,996		$	23,420		$	576			2	%	$	16,247
Interest-bearing deposits in other banks		15,690			73,434			(57,744	)		(79	%)		17,376
Total cash and cash equivalents		39,686			96,854			(57,168	)		(59	%)		33,623
Securities available-for-sale, at fair value		247,639			209,609			38,030			18	%		255,917
Securities held-to-maturity, at amortized cost		—			31,329			(31,329	)		(100	%)		—
Loans, net of deferred fees and costs		938,579			816,929			121,650			15	%		902,133
Allowance for loan and lease losses		(12,388	)		(11,688	)		(700	)		6	%		(12,295	)
Net loans		926,191			805,241			120,950			15	%		889,838
Premises and equipment, net		13,908			15,417			(1,509	)		(10	%)		14,214
Other real estate owned		140			1,517			(1,377	)		(91	%)		60
Life insurance		22,155			21,629			526			2	%		22,027
Deferred tax asset, net		7,815			8,723			(908	)		(10	%)		7,523
Goodwill and core deposit intangible, net		1,920			2,141			(221	)		(10	%)		1,975
Other assets		22,050			19,634			2,416			12	%		20,398
Total assets	$	1,281,504		$	1,212,094		$	69,410			6	%	$	1,245,575
Liabilities and shareholders' equity:
Demand - noninterest-bearing	$	316,347		$	303,560		$	12,787			4	%	$	301,981
Demand - interest-bearing		465,087			426,798			38,289			9	%		462,551
Savings		106,170			109,472			(3,302	)		(3	%)		107,986
Certificates of deposit		166,925			206,395			(39,470	)		(19	%)		176,233
Total deposits		1,054,529			1,046,225			8,304			1	%		1,048,751
Term debt:
Federal Home Loan Bank of San Francisco borrowings		60,000			—			60,000			100	%		30,000
Other borrowings		15,296			18,300			(3,004	)		(16	%)		16,196
Unamortized debt issuance costs		(115	)		(161	)		46			(29	%)		(127	)
Net term debt		75,181			18,139			57,042			314	%		46,069
Junior subordinated debentures		10,310			10,310			—			—	%		10,310
Other liabilities		11,406			11,468			(62	)		(1	%)		12,723
Total liabilities		1,151,426			1,086,142			65,284			6	%		1,117,853
Shareholders' equity:
Common stock		52,043			51,651			392			1	%		51,959
Retained earnings		81,475			73,789			7,686			10	%		78,507
Accumulated other comprehensive (loss) income, net of tax		(3,440	)		512			(3,952	)		(772	%)		(2,744	)
Total shareholders' equity		130,078			125,952			4,126			3	%		127,722
Total liabilities and shareholders' equity	$	1,281,504		$	1,212,094		$	69,410			6	%	$	1,245,575
Total interest-earning assets	$	1,206,791		$	1,130,619		$	76,172			7	%	$	1,179,321
Shares outstanding		16,318			16,260			58			—	%		16,315
Book value per share	$	7.97		$	7.75		$	0.22			3	%	$	7.83
Tangible book value per share (1)	$	7.85		$	7.61		$	0.24			3	%	$	7.71

⁽¹⁾ Tangible book value per share is computed by dividing total shareholders’ equity less goodwill and core deposit intangible, net by shares outstanding. Management believes that tangible book value per share is meaningful because it is a measure that the Company and investors commonly use to assess capital adequacy.

15

TABLE 13
UNAUDITED
INCOME STATEMENT
(amounts in thousands, except per share data)
	For The Three Months Ended												For The Six Months Ended
	June 30,				Change						March 31,		June 30,
	2018		2017		$			%			2018		2018		2017
Interest income:
Interest and fees on loans	$	11,164	$	9,758	$	1,406			14	%	$	10,729	$	21,893	$	19,142
Interest on taxable securities		1,278		872		406			47	%		1,209		2,487		1,661
Interest on tax-exempt securities		413		534		(121	)		(23	%)		463		876		1,064
Interest on interest-bearing deposits in other banks		135		156		(21	)		(13	%)		129		264		270
Total interest income		12,990		11,320		1,670			15	%		12,530		25,520		22,137
Interest expense:
Interest on demand deposits		215		184		31			17	%		221		436		332
Interest on savings deposits		64		47		17			36	%		59		123		94
Interest on certificates of deposit		488		545		(57	)		(10	%)		495		983		1,074
Interest on Federal Home Loan Bank of San Francisco borrowings		267		3		264			8,800	%		47		314		3
Interest on other borrowings		279		295		(16	)		(5	%)		281		560		588
Interest on junior subordinated debentures		97		71		26			37	%		82		179		137
Total interest expense		1,410		1,145		265			23	%		1,185		2,595		2,228
Net interest income		11,580		10,175		1,405			14	%		11,345		22,925		19,909
Provision for loan and lease losses		—		300		(300	)		(100	%)		—		—		500
Net interest income after provision for loan and lease losses		11,580		9,875		1,705			17	%		11,345		22,925		19,409
Noninterest income:
Service charges on deposit accounts		175		142		33			23	%		176		351		269
ATM and point of sale fees		300		288		12			4	%		266		566		554
Fees on payroll and benefit processing		146		147		(1	)		(1	%)		169		315		338
Life insurance		127		135		(8	)		(6	%)		129		256		781
Gain (loss) on investment securities, net		4		35		(31	)		(89	%)		36		40		101
Federal Home Loan Bank of San Francisco dividends		95		54		41			76	%		80		175		157
Gain (loss) on sale of OREO		—		12		(12	)		(100	%)		16		16		(59	)
Insured cash sweep fees		—		73		(73	)		(100	%)		—		—		105
Other income		115		109		6			6	%		110		225		220
Total noninterest income		962		995		(33	)		(3	%)		982		1,944		2,466

16

TABLE 13 - CONTINUED
UNAUDITED
INCOME STATEMENT
(amounts in thousands, except per share data)
	For The Three Months Ended												For The Six Months Ended
	June 30,				Change						March 31,		June 30,
	2018		2017		$			%			2018		2018		2017
Noninterest expense:
Salaries and related benefits		4,513		4,147		366			9	%		4,855		9,368		9,005
Premises and equipment		1,016		1,054		(38	)		(4	%)		1,071		2,087		2,102
Federal Deposit Insurance Corporation insurance premium		93		104		(11	)		(11	%)		96		189		152
Data processing fees		471		451		20			4	%		432		903		857
Professional service fees		314		459		(145	)		(32	%)		345		659		843
Telecommunications		178		223		(45	)		(20	%)		216		394		434
Other expenses		1,086		1,288		(202	)		(16	%)		1,018		2,104		2,323
Total noninterest expense		7,671		7,726		(55	)		(1	%)		8,033		15,704		15,716
Income before provision for income taxes		4,871		3,144		1,727			55	%		4,294		9,165		6,159
Provision for income taxes		1,253		935		318			34	%		1,053		2,306		1,698
Net income	$	3,618	$	2,209	$	1,409			64	%	$	3,241	$	6,859	$	4,461
Basic earnings per share	$	0.22	$	0.15	$	0.07			47	%	$	0.20	$	0.42	$	0.31
Average basic shares		16,245		15,014		1,231			8	%		16,225		16,237		14,220
Diluted earnings per share	$	0.22	$	0.15	$	0.07			47	%	$	0.20	$	0.42	$	0.31
Average diluted shares		16,325		15,113		1,212			8	%		16,310		16,319		14,321

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TABLE 14
UNAUDITED CONDENSED CONSOLIDATED
YEAR TO DATE AVERAGE BALANCE SHEETS
(amounts in thousands)
	For the Six Months Ended				For the Twelve Months Ended
	June 30,		June 30,		December 31,		December 31,		December 31,
	2018		2017		2017		2016		2015
Earning assets:
Loans	$	903,389	$	814,098	$	818,119	$	752,938	$	699,227
Taxable securities		205,777		140,660		165,333		120,884		120,897
Tax exempt securities		55,021		73,726		74,231		75,303		77,089
Interest-bearing deposits in other banks		30,967		57,920		66,872		58,668		30,323
Total earning assets		1,195,154		1,086,404		1,124,555		1,007,793		927,536
Cash and due from banks		18,767		17,120		18,301		15,831		11,220
Premises and equipment, net		14,361		15,986		15,567		15,078		11,552
Other assets		34,428		39,928		39,828		41,048		42,423
Total assets	$	1,262,710	$	1,159,438	$	1,198,251	$	1,079,750	$	992,731
Liabilities and shareholders' equity:
Demand - noninterest-bearing	$	308,304	$	268,994	$	289,735	$	226,368	$	156,578
Demand - interest-bearing		469,038		421,156		434,705		374,170		283,105
Savings		108,907		111,742		111,376		104,771		92,659
Certificates of deposit		176,332		211,934		205,648		221,074		238,626
Total deposits		1,062,581		1,013,826		1,041,464		926,383		770,968
Federal Home Loan Bank of San Francisco borrowings		33,978		608		302		17,856		87,548
Other borrowings net of unamortized debt issuance costs		16,069		18,463		17,981		19,430		1,326
Junior subordinated debentures		10,310		10,310		10,310		10,310		10,310
Other liabilities		12,144		12,343		12,293		13,217		16,588
Total liabilities		1,135,082		1,055,550		1,082,350		987,196		886,740
Shareholders' equity		127,628		103,888		115,901		92,554		105,991
Liabilities & shareholders' equity	$	1,262,710	$	1,159,438	$	1,198,251	$	1,079,750	$	992,731

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TABLE 15
UNAUDITED CONDENSED CONSOLIDATED
QUARTERLY AVERAGE BALANCE SHEETS
(amounts in thousands)
	For The Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2018		2018		2017		2017		2017
Earning assets:
Loans	$	922,687	$	883,876	$	839,004	$	805,144	$	821,321
Taxable securities		206,247		205,302		199,849		179,362		143,705
Tax exempt securities		50,306		59,789		72,152		77,303		73,927
Interest-bearing deposits in other banks		29,041		32,890		67,032		84,323		58,691
Total earning assets		1,208,281		1,181,857		1,178,037		1,146,132		1,097,644
Cash and due from banks		19,880		17,666		19,783		19,143		17,364
Premises and equipment, net		14,167		14,557		14,948		15,362		15,809
Other assets		34,369		34,483		39,192		40,263		39,630
Total assets	$	1,276,697	$	1,248,563	$	1,251,960	$	1,220,900	$	1,170,447
Liabilities and shareholders' equity:
Demand - noninterest-bearing	$	309,199	$	307,397	$	316,961	$	303,314	$	275,039
Demand - interest-bearing		467,651		470,440		459,451		436,614		421,888
Savings		107,108		110,725		111,725		110,305		109,857
Certificates of deposit		170,824		181,901		194,886		204,044		208,703
Total deposits		1,054,782		1,070,463		1,083,023		1,054,277		1,015,487
Federal Home Loan Bank of San Francisco borrowings		55,275		12,444		—		—		1,209
Other borrowings net of unamortized debt issuance costs		15,614		16,528		17,211		17,804		18,330
Junior subordinated debentures		10,310		10,310		10,310		10,310		10,310
Other liabilities		12,535		11,749		12,554		11,935		12,256
Total liabilities		1,148,516		1,121,494		1,123,098		1,094,326		1,057,592
Shareholders' equity		128,181		127,069		128,862		126,574		112,855
Liabilities & shareholders' equity	$	1,276,697	$	1,248,563	$	1,251,960	$	1,220,900	$	1,170,447

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About Bank of Commerce Holdings

Bank of Commerce Holdings is a bank holding company headquartered in Sacramento, California and is the parent company for Redding Bank of Commerce which operates under two separate names (Redding Bank of Commerce and Sacramento Bank of Commerce, a division of Redding Bank of Commerce). The Bank is an FDIC-insured California banking corporation providing community banking and financial services through nine offices located in northern California. The Bank was incorporated as a California banking corporation on November 25, 1981 and opened for business on October 22, 1982. The Company’s common stock is listed on the NASDAQ Global Market and trades under the symbol “BOCH”.

Contact Information:

Randall S. Eslick, President and Chief Executive Officer

Telephone Direct (916) 677-5800

James A. Sundquist, Executive Vice President and Chief Financial Officer

Telephone Direct (916) 677-5825

Samuel D. Jimenez, Executive Vice President and Chief Operating Officer

Telephone Direct (530) 722-3952

Andrea Schneck, Vice President and Senior Administrative Officer

Telephone Direct (530) 722-3959

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