ProAmerica Bank Reports 2015 First Quarter Results of Operations and Appointment of Director

LOS ANGELES, CA--(Marketwired - Apr 30, 2015) - ProAmérica Bank (OTCQB: PMRA) today reported a Net Loss of $79,000 for the first quarter of 2015, or $0.03 per common share. Net Income was $76,000, or $0.03 per diluted common share for the quarter ended March 31, 2014. "The Bank's first quarterly loss in over three years resulted primarily from nonrecurring personnel expense," stated Sal Varela, Interim President and CEO. "While this impacted our quarter, we have a strong loan pipeline and have implemented strategies to expand deposits. With feedback from our customers, we have put a plan in place to improve overall service levels designed to expand our customer base and to keep the Bank competitive," said Varela.

"In positioning the Bank for new leadership, executive management and the Board of Directors recognize that we have a strong platform to build upon. We continue to move through the executive search process with the utmost diligence," stated Maria S. Salinas, Chairwoman of ProAmérica. "While the Bank and its Board of Directors remain committed to the mission of ProAmérica Bank, increasing shareholder value and building a stronger financial institution remain our top priority."

2015 First Quarter Highlights

• Three-month Operating Loss (income before taxes and provision for loan losses) of $134,000, compared to Operating Income of $132,000 in the prior year first quarter, a decrease of $266,000. The decline resulted from the nonrecurring items mentioned above and no gains on sales of SBA loans in 2015 versus $94,000 in 2014.
  
  
• Total Assets at March 31, 2015 were $160.4 million, a decrease of $3.7 million or 2% from March 31, 2014.
  
  
• Total Loans at March 31, 2015 increased to $126.1 million, an increase of $6.5 million or 5% from March 31, 2014.
  
  
• Total Deposits at March 31, 2015 decreased to $131.0 million, a decrease of $4.4 million or 3% from March 31, 2014. Deposits at March 31, 2014 included $6.3 million of temporary deposits from clients contributing to the decline in 2015.
  
  
• Shareholders' Equity increased $0.5 million, or 2%, to $28.0 million at March 31, 2015, up from $27.5 million at March 31, 2014.
  
  
• Nonperforming assets remained low at $357,000 at March 31, 2015, up from $196,000 at March 31, 2014.
  
  
• Capital ratios were in excess of all minimums required to be "Well Capitalized" by regulatory agencies, with a Tier 1 Leverage Ratio of 16.7% and a Total Risk-Based Capital Ratio of 20.3% at March 31, 2015. Regulatory "Well Capitalized" definitions are 5% for the Tier 1 Leverage Ratio and 10% for the Total Risk-Based Capital Ratio.
  
  

ProAmérica Bank also announced the appointment of Francesca Sweet to the Bank's Board of Directors. Ms. Sweet is Director of Product Management for Beats by Dr. Dre, a premier consumer electronics and audio brand. She has been managing the company's speaker category and works to grow the brand's revenue and market share.

"Ms. Sweet has developed a strong network in the technology field, and a deep understanding of the emerging millennial consumer, as well as the growth of the millennial entrepreneur," said ProAmérica Bank Chairwoman Maria S. Salinas. "She offers us an entry point to this strong and thriving segment of the market, which is having an explosive impact on the economy."

Financial Results
The Net Loss for the three months ended March 31, 2015 was $79,000, compared to Net Income of $76,000 for the same period in 2014. The Operating Loss was $134,000 for the first quarter of 2015, as compared to the Operating Income of $132,000 for the same period in 2014. Management believes income from operations is a better measure of core earnings performance.

Net Interest Income before the Provision for Loan Losses increased $21,000 for the first quarter of 2015 compared to the 2014 first quarter. The Net Interest Margin decreased to 4.01% for the quarter ended March 31, 2015, down from 4.25% in the first quarter of 2014. The decrease was primarily due to lower interest yields on loans in 2015 as compared to 2014.

No Provision for Loan Losses was required in the first quarter of 2015 or 2014. 

Noninterest Income decreased $115,000, or 71% in the first quarter of 2015 versus 2014 due to decreased gains on the sales of SBA loans and lower other service charges and fees. The Bank had no sales of SBA loans in the first quarter of 2015. Gains on sales of SBA loans were $94,000 in 2014.

Noninterest Expense for the three months ended March 31, 2015 was $1,728,000, compared with $1,556,000 for the 2014 first quarter, an increase of $172,000. Nonrecurring increases in Salaries and Employee Benefits expense were $104,000. Other costs increased $68,000 primarily due to annual stock option grants.

The efficiency ratio (Total Noninterest Expense divided by the sum of Net Interest Income and Noninterest Income) was 108% for the 2015 first quarter, compared with 92% for the same period in 2014. The increase in 2015 was the result of higher expenses and lower gains from SBA loan sales as discussed above.

Cash and Cash Equivalents declined $10.1 million from the first quarter of 2014 to 2015 in order to fund the increase in loans. Loans, before the allowance for loan losses, increased 5% to $126.1 million at March 31, 2015, compared to $119.6 million at March 31, 2014. Total Deposits decreased 3% to $131.0 million at March 31, 2015, down from $135.4 million at March 31, 2014. Deposits at March 31, 2014 included $6.3 million of temporary deposits from clients contributing to the decline in 2015.

Asset Quality
Nonperforming Assets (the sum of loans past due 90 days and accruing, nonaccrual loans and other real estate owned) were $357,000, or 0.2% of total assets at March 31, 2015, compared with $196,000, or 0.1% of total assets at March 31, 2014. All of the nonaccrual loans are current in their payments. The Allowance for Loan Losses was $2.1 million, or 1.7% of loans, at March 31, 2015, compared with $2.5 million, or 2.1% of loans, at March 31, 2014. The Bank had net recoveries to average loans outstanding of 0.10% and 0.02% in the first quarters of 2015 and 2014, respectively.

Capital Resources
Total Shareholders' Equity increased to $28.0 million at March 31, 2015, up from $27.5 million at March 31, 2014. The Bank's book value available to common shareholders per common share increased to $8.77 at March 31, 2015, up from $8.56 at March 31, 2014. The Bank's Tier 1 Leverage Capital Ratio was 16.7% at March 31, 2015 and 2014. The Total Risk-based Capital Ratio was 20.3% as of March 31, 2015, versus 20.0% at March 31, 2014. The Common Equity Tier One Capital Ratio, a new regulatory ratio under Basel III (Basel Committee on Bank Supervision guidelines for determining regulatory capital), was 17.0% at March 31, 2015. All capital ratios are well above regulatory requirements for a well-capitalized institution under the new requirements that took effect January 1, 2015.

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)
				March 31,				March 31,				%
				2015				2014				Change
				Unaudited				Unaudited
Assets:
	Cash and Due From Banks			$	1,713			$	1,842			-7.0	%
	Federal Funds Sold				17,695				29,940			-40.9	%
	Interest-bearing Balances at Other Financial Institutions				11,531				9,235			24.9	%
		Total Cash and Cash Equivalents			30,939				41,017			-24.6	%
	Loans Net of Deferred Loan Fees/Costs				126,107				119,644			5.4	%
	Allowance for Loan Losses				2,147				2,498			-14.1	%
		Loans Net of Allowance for Loan Losses			123,960				117,146			5.8	%
	Premises and Equipment, net				747				893			-16.3	%
	Federal Home Loan Bank Stock				568				482			17.8	%
	Other Real Estate Owned				0				0			NA
	Accrued Interest Receivable and Other Assets				4,162				4,610			-9.7	%
		Total Assets		$	160,376			$	164,148			-2.3	%
Liabilities:
	Noninterest-bearing Demand Deposits			$	28,819			$	30,957			-6.9	%
	Interest-bearing Demand Deposits (NOW Deposits)				2,986				3,853			-22.5	%
	Savings and Money Market				27,740				35,181			-21.2	%
	Certificates of Deposit				71,501				65,429			9.3	%
		Total Interest-bearing Deposits			102,227				104,463			-2.1	%
		Total Deposits			131,046				135,420			-3.2	%
	Other Borrowings				0				0			NA
	Accrued Interest Payable and Other Liabilities				1,289				1,246			3.5	%
Total Liabilities					132,335				136,666			-3.2	%
Shareholders' Equity:
	Common Stock				27,308				27,308			0.0	%
	Additional Paid in Capital				2,001				1,913			4.6	%
	Accumulated Deficit				(5,018	)			(5,489	)		-8.6	%
	SBLF Preferred Stock				3,750				3,750			0.0	%
		Total Shareholders' Equity			28,041				27,482			2.0	%
		Total Liabilities and Shareholders' Equity		$	160,376			$	164,148			-2.3	%
		Tier 1 leverage			16.70	%			16.74	%
		Common equity tier 1 capital			16.97	%			N/A
		Tier 1 risk-based capital			19.04	%			18.70	%
		Total risk-based capital			20.29	%			19.96	%

PROAMÉRICA BANK STATEMENT OF OPERATIONS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months
For The Period Ended March 31,				2015				2014			% Change
				Unaudited				Unaudited
Interest Income:
	Interest and Fees on Loans			$	1,628			$	1,605		1	%
	Interest on Federal Funds Sold				14				14		0	%
	Interest on Balances at Other Financial Institutions				18				9		100	%
	Dividends on FHLB and PCBB Stock				10				8		25	%
		Total Interest Income			1,670				1,636		2	%
Interest Expense:
	Interest on Deposit Accounts				124				111		12	%
	Net Interest Income				1,546				1,525		1	%
Provision / (Reversal) for Loan Losses					0				0		NA
	Net Interest Income After Provision (Reversal) for Loan Losses				1,546				1,525		1	%
Noninterest Income:
	Gain on Sale of SBA Loans				0				94		-100	%
	Noninterest Income				48				69		-30	%
		Total Non-Interest Income			48				163		-71	%
Noninterest Expense:
	Salaries and Employee Benefits				1,143				1,039		10	%
	Stock Based Compensation Expense				54				12		350	%
	Occupancy Expense				151				149		1	%
	Operating Expense				380				356		7	%
		Total Non-Interest Expense			1,728				1,556		11	%
	Pre-tax (Loss) Income				(134	)			132		-202	%
(Benefit) Provision for Income Taxes					(55	)			56		-198	%
	Net (Loss) Income			$	(79	)		$	76		-204	%
	(Loss) Earnings Per Share - basic and diluted			$	(0.03	)		$	0.03		-204	%

PROAMÉRICA BANK FINANCIAL HIGHLIGHTS
For the Periods Indicated
(Dollars in thousands except per share data)
				Three Months
For The Period Ended March 31,				2015				2014				% Change
				Unaudited				Unaudited
Per Share:
	Net income, basic and diluted			$	(0.03	)		$	0.03			-203.9	%
	Book value - Common			$	8.77			$	8.56			2.5	%
Common Shares Outstanding
	End of period				2,771,000				2,771,000			0.0	%
	Average for period				2,771,000				2,771,000			0.0	%
Financial Ratios:
	Performance Ratios:
		Return on average assets			-0.20	%			0.20	%		-200.0	%
		Return on average common equity			-1.29	%			1.28	%		-200.8	%
		Net interest margin			4.01	%			4.25	%		-5.6	%
		Efficiency ratio			108.41	%			92.18	%		17.6	%
	Capital Adequacy Ratios (Period-end):
		Tier 1 leverage			16.70	%			16.74	%		-0.2	%
		Common equity tier 1 capital			16.97	%			N/A			N/A
		Tier 1 risk-based capital			19.04	%			18.70	%		1.8	%
		Total risk-based capital			20.29	%			19.96	%		1.7	%
Asset Quality Ratios:
	Allowance for loan and lease losses to total loans				1.70	%			2.09	%		-18.7	%
	Allowance for loan and lease losses to nonperforming loans				600.82	%			1276.09	%		-52.9	%
	Nonperforming loans to total loans				0.28	%			0.16	%		75.0	%
	Nonperforming assets to total assets				0.22	%			0.12	%		83.3	%
	Net charge-offs (recoveries) to average loans (annualized)				-0.09	%			-0.02	%		350.0	%
Asset Quality Measures:
	Nonaccrual loans (1)			$	357			$	196			82.1	%
	Loans past due 90 days or more and still accruing				0				0			NA
	Other real estate owned				0				0			NA
		Total nonperforming assets			357				196			82.1	%
(1) Nonaccrual loans less than 30 days past due					357				196			82.1	%