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Plaza Bank Reports Improved Earnings

IRVINE, CA--(Marketwired - Jul 23, 2013) - Plaza Bank ( OTCQB : PLZB ) (the "Bank") reported unaudited net income for the three months ended June 30, 2013 of $1,637,000 or $0.09 per share on a diluted basis, a 150% increase from the second quarter of 2012 of $656,000 or $0.04 per share on a diluted basis. For the three months ended June 30, 2013, Plaza Bank's return on average assets was 1.51% and return on average equity was 12.8%, up from a return on average assets of 0.70% and a return on average equity of 5.57% for the comparable period of 2012.

For the six months ended June 30, 2013, net income improved to $2,896,000, and $0.16 per diluted share, from $950,000, and $0.06 per diluted share, in the first six months of 2012. For the six months ended June 30, 2013, the Bank's return on average assets was 1.37% and return on average equity was 11.47%, up from a return on average assets of 0.53% and a return on average equity of 4.04% for the first half of 2012.

Gene Galloway, President and Chief Executive Officer of Plaza Bank, commented on the earnings momentum that the Bank has experienced since it turned profitable 36 months ago, "In late 2012, we reached a critical mass of loans outstanding that is generating interest income greater than the total of our interest expense, provision for loan losses and non-interest expense on a monthly basis. So far for 2013 our interest income, up 32.5% compared to the first six months of the prior year, exceeds the above-mentioned expenses by $900,000. Prior to reaching this mass, we were dependent on non-interest income, primarily gain on loan sales, for our profitability."

Mr. Galloway concluded his comments on earnings with, "For the first six months of 2013 the Bank has earned $2.9 million which is $500,000 more than we earned for all of 2012." 

Highlights for 2013's second quarter included:

  • The Bank acquired certain assets and assumed the deposits of 1st Commerce Bank, North Las Vegas, Nevada under a purchase and assumption agreement with the Federal Deposit Insurance Corporation on June 6, 2013. As of June 30, 2013, loans and deposits related to the acquisition totaled $12.1 million and $19.7 million, respectively.
  • Net interest margin for the second quarter was 4.88% up 93 basis points compared to the same period a year-ago of 3.95% primarily due to an increase in loan yields of 45 basis points and a decrease in funding costs of 27 basis points.
  • During the quarter the Bank sold $9.5 million of SBA 7A loans that generated $722,000 in gains, a decrease in income on both a linked quarter and year-over-year basis of $446,000 and $671,000, respectively.
  • Non-interest deposits grew in the last 12 months by $34.6 million, or 88%, to $74.0 million as of June 30, 2013.
  • Loan volume for the three and six months ended June 30, 2013 was $47.0 million and $106.1 million, respectively.
  • Loans outstanding totaled $375.4 million at the end of the quarter, an increase on both a linked quarter and year-over-year basis of $23.6 million and $89.5 million, respectively.
  • Total non-performing assets were $7.0 million at June 30, 2013 which includes $2.6 million of non-performing loans ("NPLs") that we received in the 1st Commerce Bank acquisition. The non-performing asset to total assets ratio decreased on both a linked quarter and year-over-year basis to 1.50% from 1.58% and 3.80%, respectively, despite the acquired NPLs. 
  • Efficiency ratio for the quarter improved on both a linked quarter and year-over-year basis to 58.7% from 64.4% and 69.7%, respectively.

About Plaza Bank
Plaza Bank is full service community bank serving the business and professional communities in Southern California and Las Vegas, Nevada. The Bank is committed to meeting the financial needs of small to middle market businesses and professional firms with loans for working capital, equipment and owner-occupied commercial real estate financing and a full array of cash management services. Our bankers are experienced, professional and knowledgeable. For more information, visit www.plazabank.net or call President and CEO Gene Galloway at (949) 502-4309.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by that Act. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on currently available information, expectations, assumptions, projections, and management's judgment about the Bank, the banking industry and general economic conditions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.

Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that might cause such differences include, but are not limited to: the Bank's ability to successfully execute its business plans and achieve its objectives; changes in general economic, real estate and financial market conditions, either nationally or locally in areas in which the Bank conducts its operations; changes in interest rates; new litigation or changes in existing litigation; future credit loss experience; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Bank's operations or business; loss of key personnel; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; and the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control.

Balance Sheet    
For the Quarter-ended:    
Plaza Bank    
Statement of Financial Condition    
    June 30,   December 31,   June 30,    
ASSETS   2013   2012   2012    
    Unaudited   (Audited)   Unaudited    
Cash and cash equivalents   $ 47,236,000   $ 41,668,000   $ 56,401,000      
Investment securities - available for sale     23,066,000     23,116,000     23,568,000      
Net loans     371,014,000     331,025,000     282,960,000      
Goodwill and Other intangibles     5,640,000     5,346,000     5,292,000      
Idemnification Asset     2,848,000     3,574,000     3,782,000      
Accrued interest and Other Assets     14,122,000     15,812,000     14,972,000      
TOTAL ASSETS   $ 463,926,000   $ 420,541,000   $ 386,975,000      
Noninterest-bearing Demand   $ 74,004,000   $ 70,062,000   $ 39,409,000      
Savings, Now and Money Market Accounts     148,209,000     142,084,000     142,205,000      
Time Deposits     153,473,000     140,522,000     142,341,000      
  Total Deposits   $ 375,686,000   $ 352,668,000   $ 323,955,000      
Borrowings     32,000,000     12,000,000     12,000,000      
Accrued Interest and Other Liabilities     4,219,000     7,091,000     3,353,000      
  Total liabilities     411,905,000     371,759,000     339,308,000      
Total Stockholders' Equity     52,021,000     48,782,000     47,667,000      
    $ 463,926,000   $ 420,541,000   $ 386,975,000      
BASIC BOOK VALUE PER SHARE   $ 3.04   $ 2.86   $ 2.79      
DILUTED BOOK VALUE PER SHARE   $ 2.94   $ 2.83   $ 2.77      
BASIC SHARES OUTSTANDING AT PERIOD END     17,100,071     17,084,010     17,071,284      
DILUTED SHARES OUTSTANDING AT PERIOD END     17,664,730     17,226,800     17,226,800      
Capital Ratios End of Period:                        
  Tier 1 leverage ratio     10.98%     10.89%     11.39%      
  Tier 1 risk-based capital ratio     12.09%     13.05%     15.01%      
  Risk-based capital ratio     13.29%     14.23%     16.08%      
Plaza Bank  
Statement of Operations  
    Quarter-to-Date   Year-to-Date   Quarter-to-Date   Year-to-Date
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
    June 30,   June 30   June 30,   June 30
    2013   2013   2012   2012
Interest Income     5,820,000     11,418,000     4,393,000     8,613,000
Interest Expense     739,000     1,471,000     861,000     1,649,000
  Net Interest Income   $ 5,081,000   $ 9,947,000   $ 3,532,000   $ 6,964,000
Provisions for Loan Losses     377,000     645,000     511,000     635,000
Net Interest Income after                        
  Provisions for Loan Losses     4,704,000     9,302,000     3,021,000     6,329,000
Noninterest Income     1,681,000     3,538,000     1,994,000     2,803,000
Noninterest Expense     4,022,000     8,402,000     3,900,000     7,518,000
Income before Income Taxes     2,363,000     4,438,000     1,115,000     1,614,000
Provisions (benefits) for Income Taxes     726,000     1,542,000     459,000     664,000
Net Income   $ 1,637,000   $ 2,896,000   $ 656,000   $ 950,000
EARNINGS PER SHARE - BASIC     0.10     0.17     0.04     0.06
EARNINGS PER SHARE - DILUTED     0.09     0.16     0.04     0.06
BASIC WEIGHTED AVERAGE SHARES     17,096,894     17,090,488     17,071,284     17,065,857
DILUTED WEIGHTED AVERAGE SHARES     17,666,761     17,650,294     17,226,800     17,232,129