ProAmerica Bank Reports Third Quarter Net Income of $185,000 and Appointment of Three Directors
LOS ANGELES, CA--(Marketwired - Oct 27, 2014) - ProAmérica Bank (OTCQB: PMRA) today reported Net Income of $185,000 or 7 cents per diluted common share for the three months ended September 30, 2014. For the nine months, the Bank reported Net Income of $444,000, or 16 cents per diluted common share. Total assets increased 9% to $161.4 million at September 30, 2014, as compared to September 30, 2013. "We are pleased with the Bank's strong growth and core earnings," stated L. Bruce Mills, Jr., President and CEO. "We have an excellent team with a sound approach to bringing value to our clients," continued Mills.
2014 Third Quarter Highlights
Adjusted income from operations (income before provisions for loan losses and income taxes) was $313,000 for the three months ended September 30, 2014, compared to $216,000 in the third quarter of 2013.
Three-month Net Income of $185,000, compared to $316,000 in the prior year third quarter.
Assets at September 30, 2014 totaled $161.4 million, an increase of $13.8 million or 9% from September 30, 2013.
Loans at September 30, 2014 totaled $121.0 million, an increase of $13.0 million or 12% from September 30, 2013.
Nonperforming Assets at September 30, 2014 totaled $174,000, a decrease of $212,000 or 55% from September 30, 2013.
Deposits at September 30, 2014 totaled $131.9 million, an increase of $9.2 million or 7% from September 30, 2013.
Capital ratios are in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 16.5% and a Total Risk-based Capital Ratio of 20.1% at September 30, 2014. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-based Capital Ratio.
ProAmérica Bank is proud to announce the appointment of three business executives -- Castulo de la Rocha, Mónica Gil and Roger Martinez -- to the Bank's Board of Directors.
"The Bank is privileged to add accomplished business leaders bringing a blend of experience in healthcare, marketing and finance. They not only bring executive management experience from the corporate and nonprofit sector, but they have deep ties to our target market," said ProAmérica Bank Chairwoman Maria S. Salinas. "Mr. de la Rocha, Ms. Gil and Mr. Martinez will bring decades of management experience to the Bank, as well as a rich understanding of the local marketplace."
Mr. Castulo de la Rocha is President and CEO of AltaMed Health Services Corporation and a long standing community health leader for more than 35 years. During this time, he has taken AltaMed, a non-profit community health clinic, from two employees to a fully-accredited Federally Qualified Health Center (FQHC) with over 1,900 employees. Today, AltaMed is the largest FQHC in the United States, delivering more than a million patient visits annually from 45 sites in Los Angeles and Orange Counties. Mr. de la Rocha was named one of the Top 10 Latinos in the health care industry by Latino Leaders Magazine and one of the top 100 Latino Influentials by Hispanic Business Magazine in 2008.
Ms. Monica Gil is Senior Vice President and General Manager of Multicultural Growth and Strategy at Nielsen, the leading global provider of information and insights into what consumers watch and buy. In this role she is responsible for driving growth and delivering comprehensive strategies to reach diverse consumer segments. Ms. Gil has received numerous recognitions including Hispanic Business Magazine's 50. In 2010 she received Nielsen's prestigious Chairman's Award. Diversity Magazine cited her as one of their "Women Worth Watching" and she has been featured in numerous publications.
Mr. Roger Martinez is a Partner and Audit Practice Leader with Vasquez & Company LLP, a certified public accounting and business consulting firm that serves governments, nonprofits, public and private company clients. He is a former Partner with KPMG and has the distinction of having been part of KPMG's Department of Professional Practice where he provided professional practice and risk management guidance to the firm's Audit and Advisory professionals. Mr. Martinez currently serves on the board of directors of LINC Housing, the International Trade Education Programs, Inc., the Advisory Board for the Salvation Army and the Latino Advisory Board of the Los Angeles County Medical Association.
Financial Results
Adjusted income from operations was $313,000 for the third quarter of 2014, as compared to $216,000 for the same period in 2013. Adjusted income from operations was $755,000 for the nine months ended September 30, 2014, as compared to $400,000 for the same period in 2013. Management believes adjusted income from operations is a better measure of core earnings performance. In 2013 Net Income included reversals of the Allowance for Loans Losses of $100,000 and $400,000 in the three and nine-month periods, respectively, due to strong improvement in asset quality. The Bank recognized a deferred tax asset of $2.9 million in the fourth quarter of 2013 and now shows a Provision for Income Taxes at its estimated statutory rate.
For the 2014 third quarter, Net Interest Income before the Provision for Loan Losses increased $118,000 compared to the 2013 third quarter. The Net Interest Margin increased to 4.1% for the quarter ended September 30, 2014 compared to 3.9% for the same period of 2013. For the nine months ended September 30 2014, Net Interest Income before the Provision for Loan Losses increased $277,000 compared to the same period in 2013. The Net Interest Margin increased to 4.2% for the nine-month period ended September 30, 2014, as compared to 4.0% in the same period in 2013. The increases were due to the increase in loans as a percentage of earning assets compared to the previous year periods. Loans are the highest earning asset of the Bank.
The Bank recorded reversals against the allowance for loan losses of $100,000 and $400,000 in the three and nine-month periods ending September 30, 2013, respectively. There were no reversals in 2014. The reversals were made as a result of significantly improved asset quality.
Noninterest Income increased $432,000, or 424% in the third quarter 2014 versus the third quarter of 2013 primarily due to recognizing a Bank Enterprise Award of $355,000 and greater gains on the sale of SBA loans. The Bank Enterprise Award resulted from the Bank's lending performance in lower income census tracts in 2013 and 2014. Noninterest Income increased $291,000, or 48% for the nine months ended September 30, 2014, versus the same period in 2013 primarily as a result of the Bank Enterprise Award and greater gains on SBA loan sales noted above. Noninterest income for the nine-month period ended 2013 included the recognition of prior years' interest income of $260,000 on nonaccrual loans that were paid off in the second quarter of 2013.
Noninterest Expense for the third quarter 2014 was $1,804,000, compared with $1,351,000 for the 2013 third quarter. Increased Operating Expense was the primary reason. For the three and nine-month periods of 2014, Operating Expense included the impact of recognizing a $339,000 contingent liability for the Bank's guarantee of the credit card balances of one of the Bank's troubled clients. Stock Based Compensation expense declined due primarily to a large employee stock option grant being fully vested in November 2013. The efficiency ratio was 85.2% for the 2014 third quarter, compared with 86.2% for the same period in 2013. Noninterest Expense for the nine months ended September 30, 2014 was $4,880,000, compared with $4,667,000 for the same period in 2013. The increase was due to the reasons stated above. The efficiency ratio was 86.6% for the 2014 nine month period, compared with 92.1% for the same period in 2013.
Loans, before the Allowance for Loan Losses, increased 12% to $121.0 million at September 30, 2014, compared to $108.0 million at September 30, 2013. Total Deposits increased nearly 8% to $131.9 million at September 30, 2014, up from $122.7 million at September 30, 2013. "We are pleased to see strong new loan and deposit production in the face of a competitive market," commented Mills.
Asset Quality
Nonperforming Assets decreased to 0.1% of total assets at September 30, 2014, compared with 0.3% at September 30, 2013. The Allowance for Loan Losses was $2.0 million, or 1.7% of loans, at September 30, 2014, compared with $2.5 million, or 2.3% of loans, at September 30, 2013. Net Charge-offs were 1.6% for the quarter ended September 30, 2014, compared to net recoveries of less than 0.1% for the 2013 third quarter. Net Charge-offs were 0.5% for the nine months ended September 30, 2014, compared to net recoveries of less than 0.1% for the same period of 2013. The increased Net Charge-offs in the 2014 periods reflect the charge-off of a single loan of $469,000 in September 30, 2014. The loan had previously been fully reserved for and was charged off against the Allowance for Loan Losses.
Capital Resources
Total Shareholders' Equity increased to $27.9 million at September 30, 2014, up from $23.7 million at September 30, 2013. The increase over 2013 includes the impact of the recognition of a deferred tax asset of $2.9 million in the fourth quarter of 2013. The Bank's book value available to common shareholders per common share increased to $8.71 at September 30, 2014, up from $7.19 at September 30, 2013.
At September 30, 2014, the Bank's Tier 1 Leverage Capital Ratio was 16.5% versus 15.6% at September 30, 2013. The Total Risk-based Capital Ratio was 20.1% as of September 30, 2014, as compared to 20.8% at September 30, 2013.
ProAmérica Bank provides a full range of financial services, including credit and deposit products, SBA loan products, cash management, and internet banking for businesses, professionals, nonprofits and high net worth individuals from its headquarters office at 888 West Sixth Street, Second Floor, Los Angeles, CA 90017-2728. Information on products and services may be obtained by calling (213) 613-5000 or visiting the Bank's website at www.PROAMERICABANK.com.
NOTE:
This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about ProAmérica Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: ProAmérica Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in ProAmérica Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and ProAmérica Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
PROAMÉRICA BANK BALANCE SHEETS | |||||||||||||
(Dollars in thousands) | |||||||||||||
September 30, | September 30, | % | |||||||||||
2014 | 2013 | Change | |||||||||||
Unaudited | Unaudited | ||||||||||||
Assets: | |||||||||||||
Cash and Due From Banks | $ | 1,355 | $ | 3,565 | -62.0 | % | |||||||
Federal Funds Sold | 24,500 | 26,875 | -8.8 | % | |||||||||
Interest-bearing Balances at Other Financial Institutions | 10,501 | 8,468 | 24.0 | % | |||||||||
Total Cash and Cash Equivalents | 36,356 | 38,908 | -6.6 | % | |||||||||
Loans Net of Deferred Loan Fees/Costs | 121,043 | 108,041 | 12.0 | % | |||||||||
Allowance for Loan Losses | 2,036 | 2,487 | -18.1 | % | |||||||||
Loans Net of Allowance for Loan Losses | 119,007 | 105,554 | 12.7 | % | |||||||||
Premises and Equipment, net | 800 | 957 | -16.4 | % | |||||||||
Federal Home Loan Bank Stock | 560 | 482 | 16.2 | % | |||||||||
Other Real Estate Owned | 0 | 0 | NA | ||||||||||
Accrued Interest Receivable and Other Assets | 4,634 | 1,661 | 179.0 | % | |||||||||
Total Assets | $ | 161,357 | $ | 147,562 | 9.3 | % | |||||||
Liabilities: | |||||||||||||
Noninterest-bearing Demand Deposits | $ | 28,572 | $ | 28,569 | 0.0 | % | |||||||
Interest-bearing Demand Deposits (NOW Deposits) | 4,979 | 3,134 | 58.9 | % | |||||||||
Savings and Money Market | 31,556 | 28,832 | 9.4 | % | |||||||||
Certificates of Deposit | 66,771 | 62,183 | 7.4 | % | |||||||||
Total Interest-bearing Deposits | 103,306 | 94,149 | 9.7 | % | |||||||||
Total Deposits | 131,878 | 122,718 | 7.5 | % | |||||||||
Other Borrowings | 0 | 0 | NA | ||||||||||
Accrued Interest Payable and Other Liabilities | 1,585 | 1,177 | 34.7 | % | |||||||||
Total Liabilities | 133,463 | 123,895 | 7.7 | % | |||||||||
Shareholders' Equity: | |||||||||||||
Common Stock | 27,308 | 27,308 | 0.0 | % | |||||||||
Additional Paid in Capital | 1,956 | 1,894 | 3.3 | % | |||||||||
Accumulated Deficit | (5,120 | ) | (9,285 | ) | -44.9 | % | |||||||
SBLF Preferred Stock | 3,750 | 3,750 | 0.0 | % | |||||||||
Total Shareholders' Equity | 27,894 | 23,667 | 17.9 | % | |||||||||
Total Liabilities and Shareholders' Equity | $ | 161,357 | $ | 147,562 | 9.3 | % | |||||||
Tier 1 leverage | 16.53 | % | 15.62 | % | |||||||||
Tier 1 risk-based capital | 18.81 | % | 19.54 | % | |||||||||
Total risk-based capital | 20.07 | % | 20.80 | % | |||||||||
PROAMÉRICA BANK STATEMENT OF OPERATIONS | ||||||||||||||||||||||
For the Periods Indicated | ||||||||||||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||
For The Period Ended September 30, | 2014 | 2013 | % Change | 2014 | 2013 | % Change | ||||||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||||||||
Interest Income: | ||||||||||||||||||||||
Interest and Fees on Loans | $ | 1,656 | $ | 1,544 | 7.25 | % | $ | 4,962 | $ | 4,705 | 5 | % | ||||||||||
Interest on Federal Funds Sold | 14 | 21 | -33.33 | % | 38 | 67 | -43 | % | ||||||||||||||
Interest on Balances at Other Financial Institutions | 16 | 12 | 33.33 | % | 40 | 34 | 18 | % | ||||||||||||||
Dividends on FHLB and PCBB Stock | 10 | 6 | 66.67 | % | 32 | 14 | 129 | % | ||||||||||||||
Total Interest Income | 1,696 | 1,583 | 7.14 | % | 5,072 | 4,820 | 5 | % | ||||||||||||||
Interest Expense: | ||||||||||||||||||||||
Interest on Deposit Accounts | 113 | 118 | -4.24 | % | 336 | 361 | -7 | % | ||||||||||||||
Net Interest Income | 1,583 | 1,465 | 8.05 | % | 4,736 | 4,459 | 6 | % | ||||||||||||||
Provision / (Reversal) for Loan Losses | 0 | (100 | ) | -100.00 | % | 0 | (400 | ) | -100 | % | ||||||||||||
Net Interest Income After Provision for Loan Losses | 1,583 | 1,565 | 1.15 | % | 4,736 | 4,859 | -3 | % | ||||||||||||||
Noninterest Income: | ||||||||||||||||||||||
Gain in Sale of SBA Loans | 44 | 35 | 25.71 | % | 232 | 165 | 41 | % | ||||||||||||||
Noninterest Income | 490 | 67 | 631.34 | % | 667 | 443 | 51 | % | ||||||||||||||
Total Non-Interest Income | 534 | 102 | 423.53 | % | 899 | 608 | 48 | % | ||||||||||||||
Noninterest Expense: | ||||||||||||||||||||||
Salaries and Employee Benefits | 870 | 835 | 4.19 | % | 2,858 | 2,840 | 1 | % | ||||||||||||||
Stock Based Compensation Expense | 14 | 58 | -75.86 | % | 74 | 214 | -65 | % | ||||||||||||||
Occupancy Expense | 152 | 151 | 0.66 | % | 450 | 457 | -2 | % | ||||||||||||||
Operating Expense | 768 | 307 | 150.16 | % | 1,498 | 1,156 | 30 | % | ||||||||||||||
Total Non-Interest Expense | 1,804 | 1,351 | 33.53 | % | 4,880 | 4,667 | 5 | % | ||||||||||||||
Pre-tax Income | 313 | 316 | -0.95 | % | 755 | 800 | -6 | % | ||||||||||||||
Provision for Income Taxes | 128 | 0 | NA | 311 | 0 | NA | ||||||||||||||||
Net Income | $ | 185 | $ | 316 | -41.46 | % | $ | 444 | $ | 800 | -45 | % | ||||||||||
Earnings Per Share - basic & diluted earnings per share | $ | 0.07 | $ | 0.11 | -41.62 | % | $ | 0.16 | $ | 0.29 | -45 | % | ||||||||||
PROAMÉRICA BANK FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||
For the Periods Indicated | ||||||||||||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||
For The Period Ended September 30, | 2014 | 2013 | % Change | 2014 | 2013 | % Change | ||||||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||||||||
Per Share: | ||||||||||||||||||||||
Net income, basic and diluted | $ | 0.07 | $ | 0.11 | -41.6 | % | $ | 0.16 | $ | 0.29 | -44.9 | % | ||||||||||
Book value - Common | $ | 8.71 | $ | 7.19 | 21.1 | % | ||||||||||||||||
Common Shares Outstanding | ||||||||||||||||||||||
End of period | 2,771,000 | 2,771,000 | 0.0 | % | 2,771,000 | 2,771,000 | 0.0 | % | ||||||||||||||
Average for period | 2,771,000 | 2,762,522 | 0.3 | % | 2,771,000 | 2,754,841 | 0.6 | % | ||||||||||||||
Financial Ratios: | ||||||||||||||||||||||
Performance Ratios: | ||||||||||||||||||||||
Return on average assets | 0.47 | % | 0.84 | % | -44.0 | % | 0.39 | % | 0.70 | % | -44.3 | % | ||||||||||
Return on average common equity | 3.09 | % | 6.44 | % | -52.0 | % | 2.48 | % | 5.55 | % | -55.3 | % | ||||||||||
Net interest margin | 4.10 | % | 3.88 | % | 5.7 | % | 4.24 | % | 3.98 | % | 6.5 | % | ||||||||||
Efficiency ratio | 85.21 | % | 86.22 | % | -1.2 | % | 86.60 | % | 92.11 | % | -6.0 | % | ||||||||||
Capital Adequacy Ratios (Period-end): | ||||||||||||||||||||||
Tier 1 leverage | 16.53 | % | 15.62 | % | 5.8 | % | ||||||||||||||||
Tier 1 risk-based capital | 18.81 | % | 19.54 | % | -3.7 | % | ||||||||||||||||
Total risk-based capital | 20.07 | % | 20.80 | % | -3.5 | % | ||||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||||
Allowance for loan and lease losses to total loans | 1.68 | % | 2.30 | % | -27.0 | % | ||||||||||||||||
Allowance for loan and lease losses to nonaccrual loans | 1165.92 | % | 643.89 | % | 81.1 | % | ||||||||||||||||
Nonperforming loans to total loans | 0.14 | % | 0.36 | % | -61.1 | % | ||||||||||||||||
Nonperforming assets to total assets | 0.11 | % | 0.26 | % | -57.7 | % | ||||||||||||||||
Net charge-offs (recoveries) to average loans (annualized) | 1.59 | % | -0.02 | % | -8050.0 | % | 0.52 | % | -0.02 | % | -2700.0 | % | ||||||||||
Asset Quality Measures: | ||||||||||||||||||||||
Nonaccrual loans (1) | 174 | $ | 386 | -54.9 | % | |||||||||||||||||
Other real estate owned | 0 | 0 | NA | |||||||||||||||||||
Total nonperforming assets | 174 | 386 | -54.9 | % | ||||||||||||||||||
(1) Nonaccrual loans less than 30 days past due | 174 | 386 | -54.9 | % | ||||||||||||||||||
