SAN DIEGO—In late October, locally based Vibra Bank revealed that it had entered into a merger agreement with Los Angeles based Pacific Commerce Bank. Frank Mercardante, who took the helm of Vibra Bank last February, will become CEO of the merged bank.
The Federal Reserve Bank of San Francisco approved the merger earlier this month. Approval by the Department of Business Oversight is pending and the shareholder meetings of both banks are scheduled for Feb. 23, 2015 to approve the transaction. The transaction is expected to close early in the second quarter of 2015.
Mercardante explains that “The combination of the two banks will provide a solid opportunity for the shareholders and employees of both banks to become part of a growing organization with a keen focus on creating shareholder value in the future. I am confident this transaction will benefit the customers of the combined bank with an expanded array of deposit and treasury management products and services, as well as the ability to offer larger loans to our business clients.”
The combined footprint of the two banks, he adds, “will also enable us to more effectively compete for business in the greater Southern California marketplace.”
In a recent net earnings report for year end for Vibra Bank, earnings for the fourth quarter of 2014 totaled $600,000 compared to $44,000 for the same period in 2013. The fourth quarter earnings represent an annualized return on average shareholders' equity and average assets of 17.2% and 1.7% respectively compared with 1.3% and 0.1% for the fourth quarter of 2013.
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Mercardante says “The Bank's performance for 2014 reflects solid improvements in both earnings and credit quality during the year.”
Net interest income grew 7.5% to $5.8 million in 2014 from $5.4 million a year ago. Total revenues, (net interest income plus noninterest income) grew 5.7% to $7.3 million in 2014 from $6.9 million in 2013. Noninterest income for 2014 remained relatively the same at $1.47 million compared to $1.48 million in 2013. Noninterest expenses decreased by (0.6%) to $6.56 million compared to $6.60 million in 2013, due largely to reductions in salaries & benefits and marketing expense.
Also, noninterest expense for 2014 includes $0.1 million in merger related expenses. The net interest margin in 2014 decreased to 3.97% from 4.47% a year ago due largely to the significant increase in Federal Funds during the year. The Bank remains asset sensitive, meaning that net interest income is expected to increase in a rising interest rate environment.
The Bank's efficiency ratio, which measures total revenue to total operating expense, improved to 90.2% in 2014 from 95.9% in 2013. In the fourth quarter of 2014, the efficiency ratio was 77.3% compared to 89.1% in the fourth quarter of 2013.
After adjusting for the planned exit of two large relationships totaling $19 million in deposits and $11.5 million in loans, the Bank's total deposits increased 8.3% to $125.2 million compared to a year ago. Noninterest bearing deposits grew a record 33.3% to $47.9 million from $35.9 million a year ago.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
