Premier Commercial Bancorp :PRCB-US: Earnings Analysis: 2016 By the Numbers : January 31, 2017

Premier Commercial Bancorp reports financial results for the year ended December 31, 2016.

We analyze the earnings along side the following peers of Premier Commercial Bancorp – Bank of the James Financial Group, Inc., Peoples Bancorp Inc. and Fidelity Southern Corporation (BOTJ-US, PEBO-US and LION-US) that have also reported for this period.

Highlights

  • Net interest income margins widened from 92.50% to 94.34% compared to the same period last year.
  • Net loan assets changed 9.98% compared to same period last year and 9.98% from previous period, total deposits changed 16.28% compared to same period last year and 16.28% from previous period.
  • Earnings growth from operating margin improvements as well as from one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2016 2015 2014 2013 2012
Relevant Numbers (Annual)
Revenues 15.54 13.85 12.56 11.52 10.57
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 3.54 2.77 0.59 1.09 1.25
Earnings Growth (YOY) 27.76 371.85 -46.09 -12.57 577.08
Net Margin 22.77 20 4.67 9.46 11.78
EPS 0.6 0.48 0.1 0.25 0.39
Return on Equity 10.17 8.73 2 4.36 6.31
Return on Assets 0.96 0.82 0.18 0.33 0.37

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Earnings Growth Analysis

The company’s earnings growth was influenced by the following factors: (1) Year-on-year improvements in net interest income margins from 92.50% to 94.34% and (2) improvement in loan loss provisions. As a result, net interest income after provisions margins improved from 92.50% to 94.34% compared to the same period last year. Loan loss provisions as a percentage of net interest income were 0% this period and 0% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (HY YOY)
Total Deposits Growth Rate History (HY YOY)

The firm’s improvement in net interest income margins came in spite of relative drop in the levels of net loan assets. On an absolute basis, net loan assets changed 9.98% compared to the same period last year and 9.98% from the previous period. Total deposits changed 16.28% compared to the same period last year and 16.28% from the previous period.

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating margins from 30.89% to 35.72% and (2) one-time items. The company’s pretax margins are now 35.72%, compared to 30.89% for the same period last year.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

Access our Ratings and Scores for Premier Commercial Bancorp

Company Profile

Premier Commercial Bancorp operates as a bank holding company for Premier Community Bank. It provides banking services to businesses and individuals located primarily in the markets from which the bank operates its five full service branches in Hillsboro, Forest Grove, Tanasbourne, Durham, and Newberg, Oregon. It provides business banking, personal banking and industry specialties services. The company was founded in 2002 and is headquartered in Hillsboro, OR.

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