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45
Premises andEquipment
(dollars in thousands)
Land
3,019
$
-
$
3,019
$
3,019 $
-
$
3,019
$
2,607 $
-
$
2,607
$
Buildings
16,398
8,523
7,875
16,348
8,105
8,243
15,818
7,689
8,129
Furniture and equipment
18,166
12,936
5,230
18,397
13,919
4,478
17,829
14,487
3,342
Leasehold improvements
11,049
5,367
5,682
10,850
4,784
6,066
10,536
4,226
6,310
Construction in progress
184
-
184
47
-
47
5
-
5
Total
48,816
$
26,826
$
21,990
$
48,661 $
26,808
$
21,853
$
46,795 $
26,402
$
20,393
$
2015
2014
2013
Cost
Accumulated
Depreciation and
Ammortization Net Book Value Cost
Accumulated
Depreciation and
Ammortization Net Book Value Cost
Accumulated
Depreciation and
Ammortization Net Book Value
As of December 31,
Net premises and equipment increased by $137,000, or less than 1%, in 2015, due mainly to the capitalization of im-
provements at the SCVB branches less depreciation on all premises and equipment. The net book value of the Com-
pany’s premises and equipment was 1.2% of total assets at December 31, 2015 and 1.3% at December 31, 2014.
Depreciation and amortization included in occupancy and equipment expense totaled $2.3 million in 2015, as compared
to $2.1 million for 2014.
Other Assets
The Company’s goodwill and other intangible assets totaled $7.8 million at December 31, 2015, relative to $8.0 million
at December 31, 2014. The decline during 2015 represents amortization of the core deposit intangible created by our
acquisition of Santa Clara Valley Bank. The Company’s goodwill and other intangible assets are evaluated annually
for potential impairment, and pursuant to that analysis management has determined that no impairment exists as of
December 31, 2015.
The net cash surrender value of bank-owned life insurance increased to $44.1 million at December 31, 2015 from $43.0
million at December 31, 2014, due to the addition of BOLI income to the outstanding net cash surrender value during
the course of the year. Refer to the “Non-Interest Revenue and Operating Expense” section above for a more detailed
discussion of BOLI and the income it generates.
The line item for “other assets” on the Company’s balance sheet totaled $38.6 million at December 31, 2015, an increase
of $1.1 million relative to $37.5 million at December 31, 2014. At year-end 2015, other assets included as its largest
components a net deferred tax asset of $12.3 million, a $7.5 million investment in restricted stock, accrued interest
receivable totaling $5.8 million, a $4.9 million investment in low-income housing tax credit funds, and a $1.4 million
investment in a small business investment corporation. Restricted stock is comprised primarily of FHLB stock held in
conjunction with our FHLB borrowings, and is not deemed to be marketable or liquid. Our net deferred tax asset is
evaluated as of every reporting date pursuant to FASB guidance, and we have determined that no impairment exists.
Deposits
Deposits are another key balance sheet component impacting the Company’s net interest margin and other profitability
metrics. Deposits provide liquidity to fund growth in earning assets, and the Company’s net interest margin is improved
to the extent that growth in deposits is concentrated in less volatile and typically less costly non-maturity deposits such
as demand deposit accounts, NOW accounts, savings accounts, and money market demand accounts. Information
concerning average balances and rates paid by deposit type for the past three fiscal years is contained in the Distribution,
Rate, and Yield table located in the previous section under Results of Operations–Net Interest Income and Net Interest
Margin. A distribution of the Company’s deposits showing the balance and percentage of total deposits by type is
presented for the noted periods in the following table: