Bank of Commerce Holdings announces Fourth Quarter Results

REDDING, Calif., Jan. 31, 2014

Financial highlights for the quarter:

• Net income available to common shareholders of $2.0 million reflects an 11% increase over the $1.8 million recorded for the prior quarter and a 67% increase compared to $1.2 million reported for the fourth quarter of 2012.
• Diluted EPS attributable to continuing operations of $0.14 compared to $0.12 for the prior quarter and $0.08 reported for the fourth quarter of 2012.
• Loan loss provisions for the fourth quarter were $0 compared to $300 thousand for the prior quarter and $4.6 million for the fourth quarter of 2012.
• Nonperforming assets were reduced by 17% from the prior quarter and represent 3.23% of total assets versus 3.95% for the prior quarter and 4.25% for the fourth quarter of 2012.

Financial highlights for the full year 2013:

• Net income available to common shareholders of $7.7 million reflects an 18% increase over the $6.5 million reported for the full year 2012.
• Diluted EPS attributable to continuing operations of $0.52 compares to $0.41 diluted EPS attributable to continuing operations for the prior year. Diluted EPS attributable to discontinued operations of $0.00 compares to $(0.01) reported for the same period a year ago.
• Provision for loan losses decreased 71% to $2.8 million compared to $9.4 million for year end 2012.
• Nonperforming assets were reduced by 26% from the prior year to $30.7 million and represent 3.23% of total assets compared to $41.6 million and 4.25% of total assets at year end 2012.
• Other Real Estate Owned was reduced by 70% from $3.0 million at year end 2012 to $913 thousand at year end 2013.
• Non-maturing core deposits increased $45.2 million or 11% from prior year.
• Purchased the full amount of common shares authorized under two separate common stock repurchase plans and subsequently retired 2.0 million in common stock shares at a weighted average cost of $5.31 per share.

Randy Eslick, President and CEO commented:  "In light of the current banking environment, I am especially pleased to report net income available to common shareholders of $7.7 million, an 18% increase over last year's performance. We once again realized growth in non maturing core deposits with an 11% increase over prior year, with continuing improvement in our asset quality.  While 2014 will likely present ongoing challenges, there are also opportunities which our team is excited to pursue as we continue on the path of building long-term value for our shareholders."

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

• Competitive pressure in the banking industry and changes in the regulatory environment
• Changes in the interest rate environment and volatility of rate sensitive assets and liabilities
• A decline in the health of the economy nationally or regionally which could further reduce the demand for loans or reduce the value of real estate collateral securing most of the Company's loans
• Credit quality deterioration which could cause an increase in the provision for loan 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 year ended December 31, 2013 and under the heading: "Risk Factors" and subsequent reports on Form 10-Q and current reports on Form 8-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Table 1 below shows summary financial information for the quarters ended December 31, 2013 and 2012, and September 30, 2013.