Exhibit 99.1

For Immediate Release:

Bank of Commerce Holdings Announces Results for the Second Quarter of 2019

SACRAMENTO, California, July 19, 2019 / GLOBE NEWSWIRE—Bank of Commerce Holdings (NASDAQ: BOCH) (the “Company”), a $1.442 billion asset bank holding company and parent company of Merchants Bank of Commerce (the “Bank”), today announced financial results for the quarter ended June 30, 2019. Net income for the quarter ended June 30, 2019 was $3.6 million or $0.20 per share – diluted, compared with net income of $3.6 million or $0.22 per share – diluted for the same period of 2018. Net income for the six months ended June 30, 2019 was $6.0 million or $0.33 per share – diluted, compared with net income of $6.9 million or $0.42 per share – diluted for the same period of 2018.

The current year includes the benefits of our January 31, 2019 acquisition of Merchants National Bank of Sacramento (“Merchants”). In May, we successfully converted all of Merchant’s computer records onto our core system. As previously announced, the Company’s subsidiary bank, which had been operating under multiple names, simultaneously changed the name for all locations to Merchants Bank of Commerce. To date, acquisition related costs have totaled $2.3 million and costs related to the name change have totaled $464 thousand. All significant costs for these two projects have now been absorbed.

Randall S. Eslick, President and CEO commented: “I am very pleased with our second quarter accomplishments which are the result of the hard work of our dedicated and talented employees. The changes made during the second quarter reflect the continued execution of our strategic plan. I am particularly excited that with the successful integration of Merchant’s data systems along with our name change, we now operate our bank under one name and one computer system. These changes will lead to greater efficiencies and reinforce a consistent message throughout our company.”

Financial highlights for the second quarter of 2019:

● Net income of $3.6 million was an increase of $26 thousand (1%) from $3.6 million earned during the same period in the prior year. Earnings of $0.20 per share – diluted was a decrease of $0.02 (9%) from $0.22 per share – diluted earned during the same period in the prior year and reflects the impact of 1,834,142 shares of common stock issued during the first quarter of 2019 as part of our acquisition of Merchants.

● Acquisition costs associated with our acquisition of Merchants totaled $376 thousand. Costs related to the name change of our subsidiary bank totaled $464 thousand.

● Net interest income increased $1.9 million (17%) to $13.5 million compared to $11.6 million for the same period in the prior year.

● Return on average assets decreased to 1.01% compared to 1.14% for the same period in the prior year.

● Return on average equity decreased to 8.93% compared to 11.32% for the same period in the prior year.

● Average loans totaled $1.028 billion, an increase of $106 million (11%) compared to average loans for the same period in the prior year.

● Average earning assets totaled $1.353 billion, an increase of $145 million (12%) compared to average earning assets for the same period in the prior year.

● Average deposits totaled $1.218 billion, an increase of $163 million (15%) compared to average deposits for the same period in the prior year.

o Average non-maturing deposits totaled $1.054 billion, an increase of $170 million (19%) compared to the same period in the prior year.

o Average certificates of deposit totaled $164.1 million, a decrease of $6.7 million (4%) compared to same period in the prior year.

● The Company’s efficiency ratio was 65.9% compared to 61.2% during the same period in the prior year.

o The Company’s efficiency ratio of 65.9% for the second quarter of 2019 includes $376 thousand in acquisition costs and $464 thousand in name change costs. The efficiency ratio excluding these non-recurring costs was 60.1%.

● Nonperforming assets at June 30, 2019 totaled $13.5 million or 0.94% of total assets, an increase of $9.1 million since June 30, 2018. The increase in nonperforming assets results from one $10.3 million commercial real estate loan.

● Book value per common share was $9.22 at June 30, 2019 compared to $7.97 at June 30, 2018.

● Tangible book value per common share was $8.29 at June 30, 2019 compared to $7.85 at June 30, 2018.

Financial highlights for the six months ended June 30, 2019:

● Net income of $6.0 million ($0.33 per share – diluted) was a decrease of $909 thousand (13%) from $6.9 million ($0.42 per share – diluted) earned during the same period in the prior year.

● Acquisition costs associated with our acquisition of Merchants totaled $2.3 million. Costs related to the name change of our subsidiary bank totaled $464 thousand.

● Net interest income increased $3.6 million (16%) to $26.5 million compared to $22.9 million for the same period in the prior year.

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● Return on average assets decreased to 0.83% compared to 1.10% for the same period in the prior year.

● Return on average equity decreased to 7.59% compared to 10.84% for the same period in the prior year.

● Average loans totaled $1.011 billion, an increase of $107 million (12%) compared to average loans for the same period in the prior year.

● Average earning assets totaled $1.345 billion, an increase of $150 million (13%) compared the same period in the prior year.

● Average deposits totaled $1.221 billion, an increase of $158 million (15%) compared the same period in the prior year.

o Average non-maturing deposits totaled $1.055 billion, an increase of $169 million (19%) compared to the same period in the prior year.

o Average certificates of deposit totaled $165.8 million, a decrease of $10.6 million (6%) compared to the same period in the prior year.

● The Company’s efficiency ratio was 71.7% compared to 63.1% for the same period in the prior year.

o The Company’s efficiency ratio of 71.7% for the first six months of 2019 includes $2.3 million in acquisition costs and $464 thousand in name change costs. The efficiency ratio excluding these non-recurring costs was 62.0%.

● Nonperforming assets at June 30, 2019 totaled $13.5 million or 0.94% of total assets, an increase of $9.3 million since December 31, 2018. The increase in nonperforming assets results from one $10.3 million commercial real estate loan.

● Book value per common share was $9.22 at June 30, 2019 compared to $8.47 at December 31, 2018.

● Tangible book value per common share was $8.29 at June 30, 2019 compared to $8.36 at December 31, 2018.

Forward-Looking Statements

Bank of Commerce Holdings wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. This news release includes statements by the Company, which describe management’s expectations and developments, which may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21B of the Securities Act of 1934, as amended. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in the Company's public filings, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are less favorable than expected or have a more direct and pronounced effect on the Company than expected and adversely affect the Company's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new banks and/or branches are lower than expected; (4) our concentration in lending tied to real estate exposes us to the adverse effects of material increases in interest rates, declines in the general economy, tightening credit markets or declines in real estate values; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which the Company is engaged; and (7) technological changes could expose us to new risks.

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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	2019			2018			2019			2019			2018
Net income	$	3,644		$	3,618		$	2,306		$	5,950		$	6,859
Average total assets	$	1,450,725		$	1,276,697		$	1,425,860		$	1,438,361		$	1,262,710
Average total earning assets	$	1,353,200		$	1,208,281		$	1,337,006		$	1,345,177		$	1,195,154
Average shareholders' equity	$	163,598		$	128,181		$	152,705		$	158,182		$	127,628
Selected performance ratios
Return on average assets		1.01	%		1.14	%		0.66	%		0.83	%		1.10	%
Return on average equity		8.93	%		11.32	%		6.12	%		7.59	%		10.84	%
Efficiency ratio		65.9	%		61.2	%		77.7	%		71.7	%		63.1	%
Share and per share amounts
Weighted average shares - basic (1)		18,134			16,245			17,489			17,816			16,237
Weighted average shares - diluted (1)		18,194			16,325			17,552			17,878			16,319
Earnings per share - basic	$	0.20		$	0.22		$	0.13		$	0.33		$	0.42
Earnings per share - diluted	$	0.20		$	0.22		$	0.13		$	0.33		$	0.42

	At June 30,						At March 31,
Share and per share amounts	2019			2018			2019
Common shares outstanding (2)		18,214			16,318			18,213
Book value per common share (2)	$	9.22		$	7.97		$	8.90
Tangible book value per common share (2)(3)	$	8.29		$	7.85		$	7.96
Capital ratios (4)
Bank of Commerce Holdings
Common equity tier 1 capital ratio		12.56	%		12.15	%		12.40	%
Tier 1 capital ratio		13.41	%		13.07	%		13.25	%
Total capital ratio		15.35	%		15.20	%		15.19	%
Tier 1 leverage ratio		11.08	%		11.07	%		11.05	%
Tangible common equity ratio (5)		10.59	%		10.02	%		9.97	%
Merchants Bank of Commerce
Common equity tier 1 capital ratio		14.06	%		12.51	%		13.98	%
Tier 1 capital ratio		14.06	%		12.51	%		13.98	%
Total capital ratio		15.16	%		13.72	%		15.08	%
Tier 1 leverage ratio		11.61	%		10.60	%		11.66	%

⁽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⁾ Book value per share is computed by dividing total shareholders’ equity by shares outstanding. 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.

⁽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.

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BALANCE SHEET OVERVIEW

As of June 30, 2019, the Company had total consolidated assets of $1.442 billion, gross loans of $1.037 billion, allowance for loan and lease losses (“ALLL”) of $12 million, total deposits of $1.236 billion, and shareholders’ equity of $168 million.

TABLE 2

LOAN BALANCES BY TYPE - UNAUDITED

(amounts in thousands)

	At June 30,																		At March 31,
				% of						% of			Change									% of
	2019			Total			2018			Total			Amount			%			2019			Total
Commercial	$	152,303			15	%	$	139,670			15	%	$	12,633			9	%	$	149,575			14	%
Real estate - construction and land development		37,685			4			21,292			2			16,393			77	%		30,335			3
Real estate - commercial non-owner occupied		468,706			45			427,088			46			41,618			10	%		469,048			46
Real estate - commercial owner occupied		210,711			21			199,412			21			11,299			6	%		209,099			20
Real estate - residential - ITIN		35,162			3			39,424			4			(4,262	)		(11	%)		36,145			3
Real estate - residential - 1-4 family mortgage		67,092			6			33,391			4			33,701			101	%		68,092			7
Real estate - residential - equity lines		23,656			2			28,879			3			(5,223	)		(18	%)		26,162			3
Consumer and other		41,409			4			47,660			5			(6,251	)		(13	%)		46,150			4
Gross loans		1,036,724			100	%		936,816			100	%		99,908			11	%		1,034,606			100	%
Deferred fees and costs		2,005						1,763						242						1,992
Loans, net of deferred fees and costs		1,038,729						938,579						100,150						1,036,598
Allowance for loan and lease losses		(12,445	)					(12,388	)					(57	)					(12,242	)
Net loans	$	1,026,284					$	926,191					$	100,093					$	1,024,356
Average loans	$	1,028,187					$	922,687					$	105,500			11	%	$	993,261
Average yield on loans during the quarter		5.01	%					4.85	%					0.16						4.91	%
Average yield on loans during the year		4.96	%					4.89	%					0.07						4.91	%

The Company recorded gross loan balances of $1.037 billion at June 30, 2019, compared with $937 million and $1.035 billion at June 30, 2018 and March 31, 2019, respectively, an increase of $100 million and $2 million, respectively. During the first quarter of 2019, Merchants Holding Company acquisition provided an additional $85.3 million of loans. At June 30, 2019, gross loans from the acquisition totaled $83.4 million.

The average yield on loans during the quarter was 5.01% compared to 4.85% and 4.91% for the quarters ended June 30, 2018 and March 31, 2019, respectively. During the first quarter of 2019, a $10.3 million commercial real estate loan was placed on nonaccrual status. The uncollected interest on the loan was reversed which reduced our average yield on loans by 5 basis points. During the second quarter of 2019, we received a loan prepayment penalty that increased the average yield by 5 basis points.

Gross loan balances in the table above include a fair value discount for loans acquired from Merchants during the first quarter of 2019 of $2.0 million and $2.2 million at June 30, 2019 and March 31, 2019, respectively. We recorded $48 thousand and $195 thousand in accretion of the discount for these loans during the first and second quarters of 2019, respectively.

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TABLE 3

CASH, CASH EQUIVALENTS, AND INVESTMENT SECURITIES - UNAUDITED

(amounts in thousands)

	At June 30,																		At March 31,
				% of						% of			Change									% of
	2019			Total			2018			Total			Amount			%			2019			Total
Cash and due from banks	$	21,306			7	%	$	23,996			8	%	$	(2,690	)		(11	%)	$	32,104			9	%
Interest-bearing deposits in other banks		19,319			6			15,690			5			3,629			23	%		30,425			9
Total cash and cash equivalents		40,625			13			39,686			13			939			2	%		62,529			18
Investment securities:
U.S. government and agencies		44,837			14			38,994			14			5,843			15	%		46,451			13
Obligations of state and political subdivisions		45,003			14			58,479			20			(13,476	)		(23	%)		48,935			14
Residential mortgage backed securities and collateralized mortgage obligations		168,085			50			121,218			43			46,867			39	%		171,814			47
Corporate securities		2,978			1			3,987			1			(1,009	)		(25	%)		2,958			1
Commercial mortgage backed securities		24,868			8			24,742			9			126			1	%		23,864			7
Other asset backed securities		48			—			219			0			(171	)		(78	%)		95			—
Total investment securities - AFS		285,819			87			247,639			87			38,180			15	%		294,117			82
Total cash, cash equivalents and investment securities	$	326,444			100	%	$	287,325			100	%	$	39,119			14	%	$	356,646			100	%
Average yield on interest-bearing due from banks and investment securities during the quarter - nominal		2.81	%					2.56	%					0.25						2.83	%
Average yield on interest-bearing due from banks and investment securities during the quarter - tax equivalent		2.92	%					2.72	%					0.20						2.95	%

As of June 30, 2019, we maintained noninterest-bearing cash positions of $21.3 million and interest-bearing deposits of $19.3 million at the Federal Reserve Bank and correspondent banks.

Investment securities totaled $285.8 million at June 30, 2019, compared with $247.6 million and $294.1 million at June 30, 2018 and March 31, 2019, respectively. During the first quarter of 2019, the Merchants acquisition included securities with a par value of $107.4 million. Management elected to sell securities with a par value of $67.8 million and $18.5 million during the first and second quarters of 2019, respectively. The sales resulted in net realized gains of $92 thousand and $33 thousand for the first and second quarters of 2019, respectively.

Average securities balances and weighted average tax equivalent yields for the quarters ended June 30, 2019 and 2018 were $289.4 million and 2.98% compared to $256.6 million and 2.82%, respectively.

At June 30, 2019, our net unrealized gains on available-for-sale investment securities were $3.4 million compared with net unrealized losses of $4.9 million and $701 thousand at June 30, 2018 and March 31, 2019, respectively. The changes in net unrealized losses on the investment securities portfolio were due to changes in market interest rates.

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TABLE 4

DEPOSITS BY TYPE - UNAUDITED

(amounts in thousands)

	At June 30,																At March 31,
			% of					% of			Change								% of
	2019		Total			2018		Total			Amount			%			2019		Total
Demand - noninterest-bearing	$	397,349		32	%	$	316,347		30	%	$	81,002			26	%	$	385,696		31	%
Demand - interest-bearing		238,175		19			217,674		21			20,501			9	%		241,292		19
Money market		300,847		24			247,413		23			53,434			22	%		311,853		25
Total demand		936,371		75			781,434		74			154,937			20	%		938,841		75
Savings		138,591		11			106,170		10			32,421			31	%		139,237		11
Total non-maturing deposits		1,074,962		86			887,604		84			187,358			21	%		1,078,078		86
Certificates of deposit		160,556		14			166,925		16			(6,369	)		(4	%)		170,216		14
Total deposits	$	1,235,518		100	%	$	1,054,529		100	%	$	180,989			17	%	$	1,248,294		100	%

Total deposits at June 30, 2019, increased $181 million or 17% to $1.236 billion compared to June 30, 2018 and decreased $13 million or 4% annualized compared to March 31, 2019. Total non-maturing deposits increased $187.4 million or 21% compared to the same date a year ago and decreased $3.2 million or less than 1% annualized compared to March 31, 2019. Certificates of deposit decreased $6.4 million or 4% compared to the same date a year ago and decreased $9.7 million or 23% annualized compared to March 31, 2019.

During the first quarter of 2019, Merchants Holding Company acquisition provided an additional $190.2 million of deposits. The decrease in the acquired deposits of $16.5 million at June 30, 2019 is not attributable to the loss of any significant relationships. As illustrated in the following table, legacy deposits have experienced their seasonal decline, while wholesale time deposits have matured and were not renewed.

TABLE 5

YEAR TO DATE CHANGES IN DEPOSITS

(amounts in thousands)

	Legacy Deposits		Acquired Merchants Deposits		Change In Acquired Deposits For The Five Months Ended			Change In Legacy Deposits For The Six Months Ended			Deposits At
	At December 31,		At January 31,		June 30,			June 30,			At June 30,
	2018		2019		2019			2019			2019
Demand - noninterest-bearing	$	347,199	$	51,880	$	(2,777	)	$	1,047		$	397,349
Demand - interest-bearing		252,202		28,231		(5,695	)		(36,563	)		238,175
Money market		265,093		43,316		(1,805	)		(5,757	)		300,847
Total demand		864,494		123,427		(10,277	)		(41,273	)		936,371
Savings		114,840		28,786		(1,998	)		(3,037	)		138,591
Total non-maturing deposits		979,334		152,213		(12,275	)		(44,310	)		1,074,962
Certificates of deposit		152,382		38,003		(4,174	)		(25,655	)		160,556
Total deposits	$	1,131,716	$	190,216	$	(16,449	)	$	(69,965	)	$	1,235,518

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TABLE 6

WHOLESALE AND RECIPROCAL DEPOSITS - UNAUDITED

(amounts in thousands)

	At June 30,				At March 31,
	2019		2018		2019
CDARS / ICS reciprocal deposits	$	60,492	$	60,538	$	65,192
Online listing service wholesale time deposits		248		25,491		1,683
Total wholesale and reciprocal deposits	$	60,740	$	86,029	$	66,875

For calendar quarters prior to April 1, 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.

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 7

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,
	2019			2019			2018			2018			2018			2018			2017			2017
Interest-bearing deposits		0.54	%		0.49	%		0.45	%		0.42	%		0.41	%		0.41	%		0.42	%		0.43	%
Interest-bearing deposits and noninterest-bearing demand		0.37	%		0.34	%		0.31	%		0.29	%		0.29	%		0.29	%		0.30	%		0.31	%
All interest-bearing liabilities		0.74	%		0.67	%		0.61	%		0.64	%		0.68	%		0.60	%		0.59	%		0.60	%
All interest-bearing liabilities and noninterest-bearing demand		0.52	%		0.46	%		0.42	%		0.45	%		0.50	%		0.43	%		0.42	%		0.43	%

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INCOME STATEMENT OVERVIEW

TABLE 8

SUMMARY INCOME STATEMENT - UNAUDITED

(amounts in thousands, except per share data)

	For The Three Months Ended
	June 30,				Change						March 31,		Change
	2019		2018		Amount			%			2019		Amount			%
Interest income	$	15,127	$	12,990	$	2,137			16	%	$	14,427	$	700			5	%
Interest expense		1,632		1,410		222			16	%		1,423		209			15	%
Net interest income		13,495		11,580		1,915			17	%		13,004		491			4	%
Provision for loan and lease losses		—		—		—			—	%		—		—			—	%
Noninterest income		1,100		962		138			14	%		1,057		43			4	%
Noninterest expense		9,611		7,671		1,940			25	%		10,923		(1,312	)		(12	%)
Income before provision for income taxes		4,984		4,871		113			2	%		3,138		1,846			59	%
Provision for income taxes		1,340		1,253		87			7	%		832		508			61	%
Net income	$	3,644	$	3,618	$	26			1	%	$	2,306	$	1,338			58	%
Basic earnings per share	$	0.20	$	0.22	$	(0.02	)		(9	%)	$	0.13	$	0.07			54	%
Average basic shares		18,134		16,245		1,889			12	%		17,489		645			4	%
Diluted earnings per share	$	0.20	$	0.22	$	(0.02	)		(9	%)	$	0.13	$	0.07			54	%
Average diluted shares		18,194		16,325		1,869			11	%		17,552		642			4	%
Dividends declared per common share	$	0.05	$	0.04	$	0.01			25	%	$	0.04	$	0.01			25	%

Second Quarter of 2019 Compared With Second Quarter of 2018

Net income for the second quarter of 2019 increased $26 thousand compared to the second quarter of 2018. In the current quarter, net interest income was $1.9 million higher and noninterest income was $138 thousand higher. These positive changes were offset by noninterest expenses that were $1.9 million higher and the provision for income taxes was $87 thousand higher.

Net Interest Income

Net interest income increased $1.9 million compared to the same period a year ago.

Interest income for the second quarter of 2019 increased $2.1 million or 16% to $15.1 million.

● Interest and fees on loans increased $1.7 million due to a $105.5 million increase in average loan balances and a 16 basis point increase in the average yield on the loan portfolio.

● Interest on securities increased $370 thousand due to a $32.9 million increase in average securities balances and a 21 basis point increase in average yield on the securities portfolio.

● Interest on interest-bearing deposits due from banks increased $84 thousand due to a $6.6 million increase in average interest-bearing deposit balances, and a 60 basis point increase in average yield.

Interest expense for the second quarter of 2019 increased $222 thousand or 16% to $1.6 million.

● Interest expense on interest bearing deposits increased $362 thousand. Average interest-bearing demand and savings deposit balances increased $99.7 million, while average certificate of deposit balances decreased $6.7 million. The average rate paid on interest-bearing deposits increased 13 basis points.

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● Interest expense on borrowings from the Federal Home Loan Bank of San Francisco decreased $75 thousand. Average Federal Home Loan Bank of San Francisco borrowings outstanding in the current quarter were $30.0 million compared to $55.3 million in the same quarter a year ago.

● Interest expense on other term debt and junior subordinated debentures decreased $65 thousand. During the current quarter, we completed the early repayment of our variable rate senior debt.

Provision for loan and lease losses

As illustrated in Table 10, the nonaccrual status of a $10.3 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, net loan loss recoveries totaled $203 thousand for the current quarter and no provision for loan and lease losses was necessary. There was no provision for loan and lease losses in the second quarter of 2018.

Noninterest Income

Noninterest income for the three months ended June 30, 2019 increased $138 thousand compared to the second quarter for 2018. Gains on sale of investment securities increased $29 thousand and dividends on Federal Home Loan Bank of San Francisco stock increased $29 thousand.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2019 increased $1.9 million compared to the same period a year previous, which included:

● $464 thousand in costs related to the name change.

● $376 thousand in acquisition costs.

● $739 thousand increase in operating expenses from the Merchants acquisition.

The Company’s efficiency ratio was 65.9% for the second quarter of 2019 (60.1% (non-GAAP) exclusive of non-recurring acquisition and name change costs). The ratio during the same period in 2018 was 61.2%. Management believes the efficiency ratio exclusive of non-recurring acquisition and name change cost is a useful measure because it provides more meaningful period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the Company’s performance.

Income Tax Provision

For the three months ended June 30, 2019, our income tax provision of $1.3 million on pre-tax income of $5.0 million was an effective tax rate of 26.9%. The tax provision for the second quarter of the prior year was $1.3 million on pre-tax income of $4.9 million for an effective tax rate of 25.7%. The current quarter includes $28 thousand, of acquisition costs which are not tax deductible.

Second Quarter of 2019 Compared With First Quarter of 2019

Net income for the second quarter of 2019 increased $1.3 million compared to the first quarter of 2019. In the current quarter, net interest income was $491 thousand higher, noninterest income was $43 thousand higher and noninterest expense was $1.3 million lower. These positive changes were offset by the provision for income taxes that was $508 thousand higher.

Net Interest Income

Net interest income increased $491 thousand over the prior quarter. The second quarter includes three months of income and expense associated with the January 31, 2019 acquisition of Merchants. The first quarter includes two months.

Interest income for the three months ended June 30, 2019 increased $700 thousand or 5% to $15.1 million.

● Interest and fees on loans increased $816 thousand due to a $34.9 million increase in average loan balances and a ten basis point increase in the average yield on the loan portfolio.

● Interest on investment securities decreased $90 thousand due to a $14.1 million decrease in average securities balances partially offset by a 27 basis point increase in average yield on the investment portfolio.

● Interest on interest-bearing deposits due from banks decreased $26 thousand due to a $4.6 million decrease in average balances.

9

Interest expense for the three months ended June 30, 2019 increased $209 thousand or 15% to $1.6 million.

● Interest expense on deposits increased $113 thousand as average interest-bearing demand and savings deposits increased $6.6 million, average certificates of deposit decreased $3.4 million and the average rate paid on these deposits increased by five basis points.

● Interest expense on borrowings from the Federal Home Loan Bank of San Francisco increased $137 thousand. Average Federal Home Loan Bank of San Francisco borrowings outstanding in the current quarter were $30.0 million, compared to $8.8 million in the prior quarter

● Interest expense on other term debt and junior subordinated debentures decreased $41 thousand. During the second quarter of 2019 we completed the early repayment and termination of our senior debt agreement.

Provision for loan and lease losses

As illustrated in Table 10, the nonaccrual status of a $10.3 million commercial real estate loan has resulted in a deterioration in our asset quality metrics. However, net loan loss recoveries totaled $203 thousand for the current quarter and no provision for loan and lease losses was necessary. There was no provision for loan and lease losses in the first quarter of 2019.

Noninterest Income

Noninterest income for the three months ended June 30, 2019 increased $43 thousand, the increase was not concentrated in any one item.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2019 decreased $1.3 million. The decrease was due to a $1.6 million decrease in acquisition costs partially offset by $464 thousand increase in name change costs.

The Company’s efficiency ratio was 65.9% for the second quarter of 2019 (60.1% (non-GAAP) exclusive of non-recurring acquisition and name change costs). The ratio during the prior quarter was 77.7% (64.0% exclusive of acquisition costs). Management believes the efficiency ratio exclusive of non-recurring acquisition and name change cost is a useful measure because it provides more meaningful period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the Company’s performance.

Income Tax Provision

For the three months ended June 30, 2019, our income tax provision of $1.3 million on pre-tax income of $5.0 million was an effective tax rate of 26.9%. The income tax provision for the prior quarter of $832 thousand on pre-tax income of $3.1 million was an effective tax rate of 26.5%. The current and prior quarter include $28 thousand and $150 thousand, respectively, of acquisition costs which are not tax deductible.

Earnings Per Share

Diluted earnings per share were $0.20 for the three months ended June 30, 2019 compared with diluted earnings per share of $0.22 for the same period a year ago and diluted earnings per share of $0.13 for the prior period. Net income and weighted average shares used to calculate earnings per share – diluted are summarized in Table 8 presented earlier in this press release.

10

TABLE 9a

NET INTEREST MARGIN - UNAUDITED

(amounts in thousands)

	For The Three Months Ended
	June 30, 2019							June 30, 2018							March 31, 2019
	Average				Yield /			Average				Yield /			Average				Yield /
	Balance		Interest(1)		Rate (5)			Balance		Interest(1)		Rate (5)			Balance		Interest(1)		Rate (5)
Interest-earning assets:
Net loans (2)	$	1,028,187	$	12,847		5.01	%	$	922,687	$	11,164		4.85	%	$	993,261	$	12,031		4.91	%
Taxable securities		249,907		1,733		2.78	%		206,247		1,278		2.49	%		253,068		1,764		2.83	%
Tax-exempt securities		39,501		328		3.33	%		50,306		413		3.29	%		50,454		387		3.11	%
Interest-bearing deposits in other banks		35,605		219		2.47	%		29,041		135		1.86	%		40,223		245		2.47	%
Average interest-earning assets		1,353,200		15,127		4.48	%		1,208,281		12,990		4.31	%		1,337,006		14,427		4.38	%
Cash and due from banks		21,942							19,880							21,392
Premises and equipment, net		15,819							14,167							14,581
Goodwill and core deposit intangible, net		16,995							1,943							11,872
Other assets		42,769							32,426							41,009
Average total assets	$	1,450,725						$	1,276,697						$	1,425,860
Interest-bearing liabilities:
Interest-bearing demand	$	238,840		129		0.22	%	$	225,927		80		0.14	%	$	243,376		126		0.21	%
Money market		296,326		380		0.51	%		241,724		135		0.22	%		293,396		289		0.40	%
Savings		139,307		123		0.35	%		107,108		64		0.24	%		131,081		111		0.34	%
Certificates of deposit		164,084		497		1.21	%		170,824		488		1.15	%		167,463		490		1.19	%
Federal Home Loan Bank of San Francisco borrowings		30,000		192		2.57	%		55,275		267		1.94	%		8,778		55		2.54	%
Other borrowings net of unamortized debt issuance costs		10,841		201		7.44	%		15,614		279		7.17	%		12,889		239		7.52	%
Junior subordinated debentures		10,310		110		4.28	%		10,310		97		3.77	%		10,310		113		4.44	%
Average interest-bearing liabilities		889,708		1,632		0.74	%		826,782		1,410		0.68	%		867,293		1,423		0.67	%
Noninterest-bearing demand		379,173							309,199							388,410
Other liabilities		18,246							12,535							17,452
Shareholders’ equity		163,598							128,181							152,705
Average liabilities and shareholders’ equity	$	1,450,725						$	1,276,697						$	1,425,860
Net interest income and net interest margin (4)			$	13,495		4.00	%			$	11,580		3.84	%			$	13,004		3.94	%
Tax equivalent net interest margin (3)						4.03	%						3.88	%						3.98	%

⁽¹⁾ Interest income on loans includes deferred fees and costs of approximately $91 thousand, $145 thousand and $181 thousand for the three months ended June 30, 2019 and 2018 and March 31, 2019, respectively.

⁽²⁾ Net loans includes average nonaccrual loans of $13.7 million, $4.2 million and $8.5 million for the three months ended June 30, 2019 and 2018 and March 31, 2019, respectively.

⁽³⁾ Tax-exempt income has been adjusted to tax equivalent basis at a 21% tax rate for 2019 and 2018. The amount of such adjustments was an addition to recorded income of approximately $87 thousand, $110 thousand and $103 thousand for the three months ended June 30, 2019 and 2018 and March 31, 2019, respectively.

⁽⁴⁾ Net interest margin is annualized 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 9b

NET INTEREST MARGIN - UNAUDITED

(amounts in thousands)

	For The Six Months Ended
	June 30, 2019							June 30, 2018
	Average				Yield /			Average				Yield /
	Balance		Interest(1)		Rate (5)			Balance		Interest(1)		Rate (5)
Interest-earning assets:
Net loans (2)	$	1,010,821	$	24,878		4.96	%	$	903,389	$	21,893		4.89	%
Taxable securities		251,479		3,497		2.80	%		205,777		2,487		2.44	%
Tax-exempt securities		44,947		715		3.21	%		55,021		876		3.21	%
Interest-bearing deposits in other banks		37,930		464		2.47	%		30,967		264		1.72	%
Average interest-earning assets		1,345,177		29,554		4.43	%		1,195,154		25,520		4.31	%
Cash and due from banks		21,640							18,767
Premises and equipment, net		15,203							14,361
Goodwill and core deposit intangible, net		14,447							1,971
Other assets		41,894							32,457
Average total assets	$	1,438,361						$	1,262,710
Interest-bearing liabilities:
Interest-bearing demand	$	241,095		255		0.21	%	$	230,075		169		0.15	%
Money market		294,869		669		0.46	%		238,963		267		0.23	%
Savings		135,217		234		0.35	%		108,907		123		0.23	%
Certificates of deposit		165,764		987		1.20	%		176,332		983		1.12	%
Federal Home Loan Bank of San Francisco borrowings		19,448		247		2.56	%		33,978		314		1.86	%
Other borrowings net of unamortized debt issuance costs		11,859		440		7.48	%		16,069		560		7.03	%
Junior subordinated debentures		10,310		223		4.36	%		10,310		179		3.50	%
Average interest-bearing liabilities		878,562		3,055		0.70	%		814,634		2,595		0.64	%
Noninterest-bearing demand		383,766							308,304
Other liabilities		17,851							12,144
Shareholders’ equity		158,182							127,628
Average liabilities and shareholders’ equity	$	1,438,361						$	1,262,710
Net interest income and net interest margin (4)			$	26,499		3.97	%			$	22,925		3.87	%
Tax equivalent net interest margin (3)						4.00	%						3.91	%

⁽¹⁾ Interest income on loans includes deferred fees and costs of approximately $272 thousand and $282 thousand for the six months ended June 30, 2019 and 2018, respectively.

⁽²⁾ Net loans includes average nonaccrual loans of $11.1 million and $4.5 million for the six months ended June 30, 2019 and 2018, respectively.

⁽³⁾ Tax-exempt income has been adjusted to tax equivalent basis at a 21% tax rate for 2019 and 2018. The amount of such adjustments was an addition to recorded income of approximately $190 thousand and $233 thousand for the six months ended June 30, 2019 and 2018, respectively.

⁽⁴⁾ Net interest margin is annualized 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 10

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,
	2019			2019			2018			2018			2018
Beginning balance ALLL	$	12,242		$	12,292		$	12,392		$	12,388		$	12,295
Provision for loan and lease losses		—			—			—			—			—
Loans charged-off		(659	)		(348	)		(279	)		(198	)		(382	)
Loan loss recoveries		862			298			179			202			475
Ending balance ALLL	$	12,445		$	12,242		$	12,292		$	12,392		$	12,388

	At June 30,			At March 31,			At December 31,			At September 30,			At June 30,
	2019			2019			2018			2018			2018
Nonaccrual loans:
Commercial	$	194		$	1,018		$	959		$	899		$	1,358
Real estate - construction and land development		—			—			—			—			—
Real estate - commercial non-owner occupied		10,690			10,878			—			—			—
Real estate - commercial owner occupied		—			—			548			—			—
Real estate - residential - ITIN		2,389			2,392			2,388			2,571			2,613
Real estate - residential - 1-4 family mortgage		217			182			185			179			184
Real estate - residential - equity lines		—			42			43			44			44
Consumer and other		22			23			23			24			33
Total nonaccrual loans		13,512			14,535			4,146			3,717			4,232
Accruing troubled debt restructured loans:
Commercial		1,092			1,187			1,224			1,291			1,420
Real estate - commercial non-owner occupied		791			793			795			797			799
Real estate - residential - ITIN		4,300			4,342			4,484			4,535			4,592
Real estate - residential - equity lines		242			358			363			367			372
Total accruing troubled debt restructured loans		6,425			6,680			6,866			6,990			7,183
All other accruing impaired loans		—			—			—			—			—
Total impaired loans	$	19,937		$	21,215		$	11,012		$	10,707		$	11,415
Gross loans outstanding at period end	$	1,036,724		$	1,034,606		$	946,251		$	927,480		$	936,816
Impaired loans to gross loans		1.92	%		2.05	%		1.16	%		1.15	%		1.22	%
Nonaccrual loans to gross loans		1.30	%		1.40	%		0.44	%		0.40	%		0.45	%
Allowance for loan and lease losses as a percent of:
Gross loans		1.20	%		1.18	%		1.30	%		1.34	%		1.32	%
Nonaccrual loans		92.10	%		84.22	%		296.48	%		333.39	%		292.72	%
Impaired loans		62.42	%		57.70	%		111.62	%		115.74	%		108.52	%

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 illustrated in Table 10, the nonaccrual status of a $10.3 million commercial real estate loan has resulted in a deterioration in our asset quality metrics for the first two quarters of 2019. Net loan loss recoveries totaled $203 thousand for the quarter ended June 30, 2019 and no provision for loan and lease losses was necessary for the quarter. There was no provision for loan and lease loss during the prior quarter or during the same quarter a year ago.

13

The loans acquired from Merchants were recorded at fair value which included a discount for credit risk which is not a part of the ALLL. As a result, our ALLL as a percentage of gross loans declined to 1.20% as of June 30, 2019 compared to 1.32% as of June 30, 2018 and increased compared to 1.18% as of March 31, 2019.

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, 2019. 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.

At June 30, 2019, the recorded investment in loans classified as impaired totaled $19.9 million, with a corresponding specific reserve of $727 thousand compared to impaired loans of $11.4 million with a corresponding specific reserve of $1.2 million at June 30, 2018 and impaired loans of $21.2 million, with a corresponding specific reserve of $1.4 million at March 31, 2019. The increase in loans classified as impaired compared to the same period a year ago results from one $10.3 million commercial real estate loan.

TABLE 11

TROUBLED DEBT RESTRUCTURINGS - UNAUDITED

(amounts in thousands)

	At June 30,			At March 31,			At December 31,			At September 30,			At June 30,
	2019			2019			2018			2018			2018
Nonaccrual	$	1,828		$	2,725		$	2,693		$	2,720		$	3,218
Accruing		6,425			6,680			6,866			6,990			7,183
Total troubled debt restructurings	$	8,253		$	9,405		$	9,559		$	9,710		$	10,401
Troubled debt restructurings as a percentage of total gross loans		0.80	%		0.91	%		1.01	%		1.05	%		1.11	%

There were two new troubled debt restructurings to grant a payment deferral modification and a maturity modification during the three months ended June 30, 2019. As of June 30, 2019, we had 103 restructured loans that qualified as troubled debt restructurings, of which 101 were performing according to their restructured terms.

TABLE 12

NONPERFORMING ASSETS - UNAUDITED

(amounts in thousands)

	At June 30,			At March 31,			At December 31,			At September 30,			At June 30,
	2019			2019			2018			2018			2018
Total nonaccrual loans	$	13,512		$	14,535		$	4,146		$	3,717		$	4,232
90 days past due and still accruing		—			—			—			—			—
Total nonperforming loans		13,512			14,535			4,146			3,717			4,232
Other real estate owned ("OREO")		—			34			31			136			140
Total nonperforming assets	$	13,512		$	14,569		$	4,177		$	3,853		$	4,372
Nonperforming loans to gross loans		1.30	%		1.40	%		0.44	%		0.40	%		0.45	%
Nonperforming assets to total assets		0.94	%		0.99	%		0.32	%		0.29	%		0.34	%

14

The following table summarizes as of June 30, 2019 when loans are projected to reprice by year and rate index.

TABLE 13

LOANS BY RATE INDEX AND PROJECTED REPAYMENT - UNAUDITED

(amounts in thousands)

At June 30, 2019

											Years 6
											Through		Beyond
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 10		Year 10		Total
Rate Index:
Fixed	$	48,588	$	56,475	$	47,676	$	62,631	$	41,420	$	160,327	$	35,466	$	452,583
Variable:
Prime		107,931		2,634		6,032		7,495		9,420		1,737		—		135,249
5 Year Treasury		29,766		29,299		81,885		89,985		67,317		38,093		—		336,345
7 Year Treasury		892		943		11,370		4,855		5,671		14,005		—		37,736
1 Year LIBOR		23,347		—		—		—		—		—		—		23,347
Other Indexes		8,328		1,943		4,503		2,082		1,496		19,682		1,923		39,957
Nonaccrual		1,515		10,019		292		277		256		826		327		13,512
Total	$	220,367	$	101,313	$	151,758	$	167,325	$	125,580	$	234,670	$	37,716	$	1,038,729

15

TABLE 14

UNAUDITED CONSOLIDATED

BALANCE SHEET

(amounts in thousands, except per share data)

	At June 30,						Change						At March 31,
	2019			2018			$			%			2019
Assets:
Cash and due from banks	$	21,306		$	23,996		$	(2,690	)		(11	%)	$	32,104
Interest-bearing deposits in other banks		19,319			15,690			3,629			23	%		30,425
Total cash and cash equivalents		40,625			39,686			939			2	%		62,529
Securities available-for-sale, at fair value		285,819			247,639			38,180			15	%		294,117
Loans, net of deferred fees and costs		1,038,729			938,579			100,150			11	%		1,036,598
Allowance for loan and lease losses		(12,445	)		(12,388	)		(57	)		—	%		(12,242	)
Net loans		1,026,284			926,191			100,093			11	%		1,024,356
Premises and equipment, net		15,836			13,908			1,928			14	%		15,391
Other real estate owned		—			140			(140	)		(100	%)		34
Life insurance		23,449			22,155			1,294			6	%		23,294
Deferred tax asset, net		4,791			7,815			(3,024	)		(39	%)		6,072
Goodwill and core deposit intangible, net		16,900			1,920			14,980			780	%		17,094
Other assets		28,282			22,050			6,232			28	%		28,604
Total assets	$	1,441,986		$	1,281,504		$	160,482			13	%	$	1,471,491
Liabilities and shareholders' equity:
Demand - noninterest-bearing	$	397,349		$	316,347		$	81,002			26	%	$	385,696
Demand - interest-bearing		238,175			217,674			20,501			9	%		241,292
Money market		300,847			247,413			53,434			22	%		311,853
Savings		138,591			106,170			32,421			31	%		139,237
Certificates of deposit		160,556			166,925			(6,369	)		(4	%)		170,216
Total deposits		1,235,518			1,054,529			180,989			17	%		1,248,294
Term debt:
Federal Home Loan Bank of San Francisco borrowings		—			60,000			(60,000	)		(100	%)		20,000
Other borrowings		10,000			15,296			(5,296	)		(35	%)		12,596
Unamortized debt issuance costs		(67	)		(115	)		48			(42	%)		(79	)
Net term debt		9,933			75,181			(65,248	)		(87	%)		32,517
Junior subordinated debentures		10,310			10,310			—			—	%		10,310
Other liabilities		18,372			11,406			6,966			61	%		18,272
Total liabilities		1,274,133			1,151,426			122,707			11	%		1,309,393
Shareholders' equity:
Common stock		72,087			52,043			20,044			39	%		71,966
Retained earnings		93,363			81,475			11,888			15	%		90,626
Accumulated other comprehensive income (loss), net of tax		2,403			(3,440	)		5,843			(170	%)		(494	)
Total shareholders' equity		167,853			130,078			37,775			29	%		162,098
Total liabilities and shareholders' equity	$	1,441,986		$	1,281,504		$	160,482			13	%	$	1,471,491
Total interest-earning assets	$	1,340,456		$	1,206,791		$	133,665			11	%	$	1,361,841
Shares outstanding		18,214			16,318			1,896			12	%		18,213
Book value per share	$	9.22		$	7.97		$	1.25			16	%	$	8.90
Tangible book value per share (1)	$	8.29		$	7.85		$	0.44			6	%	$	7.96

⁽¹⁾ Book value per share is computed by dividing total shareholders’ equity by shares outstanding. 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.

16

TABLE 15

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,
	2019		2018		$			%			2019		2019		2018
Interest income:
Interest and fees on loans	$	12,847	$	11,164	$	1,683			15	%	$	12,031	$	24,878	$	21,893
Interest on taxable securities		1,733		1,278		455			36	%		1,764		3,497		2,487
Interest on tax-exempt securities		328		413		(85	)		(21	%)		387		715		876
Interest on interest-bearing deposits in other banks		219		135		84			62	%		245		464		264
Total interest income		15,127		12,990		2,137			16	%		14,427		29,554		25,520
Interest expense:
Interest on demand deposits		129		80		49			61	%		126		255		169
Interest on money market		380		135		245			181	%		289		669		267
Interest on savings		123		64		59			92	%		111		234		123
Interest on certificates of deposit		497		488		9			2	%		490		987		983
Interest on Federal Home Loan Bank of San Francisco borrowings		192		267		(75	)		(28	%)		55		247		314
Interest on other borrowings		201		279		(78	)		(28	%)		239		440		560
Interest on junior subordinated debentures		110		97		13			13	%		113		223		179
Total interest expense		1,632		1,410		222			16	%		1,423		3,055		2,595
Net interest income		13,495		11,580		1,915			17	%		13,004		26,499		22,925
Provision for loan and lease losses		—		—		—			—	%		—		—		—
Net interest income after provision for loan and lease losses		13,495		11,580		1,915			17	%		13,004		26,499		22,925
Noninterest income:
Service charges on deposit accounts		187		175		12			7	%		168		355		351
ATM and point of sale fees		318		300		18			6	%		265		583		566
Fees on payroll and benefit processing		157		146		11			8	%		171		328		315
Life insurance		155		127		28			22	%		129		284		256
Gain on investment securities, net		33		4		29			725	%		92		125		40
Federal Home Loan Bank of San Francisco dividends		124		95		29			31	%		121		245		175
Gain on sale of OREO		18		—		18			100	%		23		41		16
Other income		108		115		(7	)		(6	%)		88		196		225
Total noninterest income		1,100		962		138			14	%		1,057		2,157		1,944

17

TABLE 15 - 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,
	2019		2018		$			%			2019		2019		2018
Noninterest expense:
Salaries and related benefits		5,146		4,513		633			14	%		5,729		10,875		9,368
Premises and equipment		945		1,016		(71	)		(7	%)		992		1,937		2,087
Federal Deposit Insurance Corporation insurance premium		95		93		2			2	%		100		195		189
Data processing fees		621		471		150			32	%		559		1,180		903
Professional service fees		535		314		221			70	%		303		838		659
Telecommunications		180		178		2			1	%		173		353		394
Acquisition		376		—		376			100	%		1,930		2,306		—
Other expenses		1,713		1,086		627			58	%		1,137		2,850		2,104
Total noninterest expense		9,611		7,671		1,940			25	%		10,923		20,534		15,704
Income before provision for income taxes		4,984		4,871		113			2	%		3,138		8,122		9,165
Provision for income taxes		1,340		1,253		87			7	%		832		2,172		2,306
Net income	$	3,644	$	3,618	$	26			1	%	$	2,306	$	5,950	$	6,859
Basic earnings per share	$	0.20	$	0.22	$	(0.02	)		(9	%)	$	0.13	$	0.33	$	0.42
Average basic shares		18,134		16,245		1,889			12	%		17,489		17,816		16,237
Diluted earnings per share	$	0.20	$	0.22	$	(0.02	)		(9	%)	$	0.13	$	0.33	$	0.42
Average diluted shares		18,194		16,325		1,869			11	%		17,552		17,878		16,319

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TABLE 16

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,
	2019		2019		2018		2018		2018
Earning assets:
Loans	$	1,028,187	$	993,261	$	923,409	$	930,863	$	922,687
Taxable securities		249,907		253,068		218,137		199,883		206,247
Tax-exempt securities		39,501		50,454		42,868		48,561		50,306
Interest-bearing deposits in other banks		35,605		40,223		75,295		50,397		29,041
Total earning assets		1,353,200		1,337,006		1,259,709		1,229,704		1,208,281
Cash and due from banks		21,942		21,392		22,447		21,834		19,880
Premises and equipment, net		15,819		14,581		13,331		13,768		14,167
Goodwill and core deposit intangible, net		16,995		11,872		1,842		1,888		1,943
Other assets		42,769		41,009		31,488		33,084		32,426
Total assets	$	1,450,725	$	1,425,860	$	1,328,817	$	1,300,278	$	1,276,697
Liabilities and shareholders' equity:
Demand - noninterest-bearing	$	379,173	$	388,410	$	367,457	$	343,948	$	309,199
Demand - interest-bearing		238,840		243,376		257,227		235,664		225,927
Money market		296,326		293,396		265,190		259,242		241,724
Savings		139,307		131,081		110,934		107,349		107,108
Certificates of deposit		164,084		167,463		157,035		163,302		170,824
Total deposits		1,217,730		1,223,726		1,157,843		1,109,505		1,054,782
Federal Home Loan Bank of San Francisco borrowings		30,000		8,778		—		22,283		55,275
Other borrowings net of unamortized debt issuance costs		10,841		12,889		13,785		14,681		15,614
Junior subordinated debentures		10,310		10,310		10,310		10,310		10,310
Other liabilities		18,246		17,452		12,846		12,000		12,535
Total liabilities		1,287,127		1,273,155		1,194,784		1,168,779		1,148,516
Shareholders' equity		163,598		152,705		134,033		131,499		128,181
Liabilities & shareholders' equity	$	1,450,725	$	1,425,860	$	1,328,817	$	1,300,278	$	1,276,697

19

TABLE 17

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,
	2019		2018		2018		2017		2016
Earning assets:
Loans	$	1,010,821	$	903,389	$	915,360	$	818,119	$	752,938
Taxable securities		251,479		205,777		207,407		165,333		120,884
Tax-exempt securities		44,947		55,021		50,330		74,231		75,303
Interest-bearing deposits in other banks		37,930		30,967		47,038		66,872		58,668
Total earning assets		1,345,177		1,195,154		1,220,135		1,124,555		1,007,793
Cash and due from banks		21,640		18,767		20,468		18,301		15,831
Premises and equipment, net		15,203		14,361		13,952		15,567		15,078
Goodwill and core deposit intangible, net		14,447		1,971		1,917		2,136		1,888
Other assets		41,894		32,457		32,369		37,692		39,160
Total assets	$	1,438,361	$	1,262,710	$	1,288,841	$	1,198,251	$	1,079,750
Liabilities and shareholders' equity:
Demand - noninterest-bearing	$	383,766	$	308,304	$	332,197	$	289,735	$	226,368
Demand - interest-bearing		241,095		230,075		238,328		209,792		172,011
Money market		294,869		238,963		250,685		224,913		202,159
Savings		135,217		108,907		109,025		111,376		104,771
Certificates of deposit		165,764		176,332		168,183		205,648		221,074
Total deposits		1,220,711		1,062,581		1,098,418		1,041,464		926,383
Federal Home Loan Bank of San Francisco borrowings		19,448		33,978		22,466		302		17,856
Other borrowings net of unamortized debt issuance costs		11,859		16,069		15,143		17,981		19,430
Junior subordinated debentures		10,310		10,310		10,310		10,310		10,310
Other liabilities		17,851		12,144		12,286		12,293		13,217
Total liabilities		1,280,179		1,135,082		1,158,623		1,082,350		987,196
Shareholders' equity		158,182		127,628		130,218		115,901		92,554
Liabilities & shareholders' equity	$	1,438,361	$	1,262,710	$	1,288,841	$	1,198,251	$	1,079,750

20

About Bank of Commerce Holdings

Bank of Commerce Holdings is a bank holding company headquartered in Sacramento, California and is the parent company for Merchants Bank of Commerce. The Bank is an FDIC-insured California banking corporation providing community banking and financial services through twelve locations 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 M. Newburn, Vice President and Senior Administrative Officer / Corporate Secretary

Telephone Direct (530) 722-3959

21