Plaza Bank Announces 2014 Third Quarter Financial Results

IRVINE, CA--(Marketwired - Oct 21, 2014) -  Plaza Bank (OTCBB: PLZB) (the "Bank") today reported unaudited net income for the quarter ended September 30, 2014 of $1,363,000, representing an increase of $862,000, or 172%, from $501,000 for the quarter ended June 30, 2014, and representing a decrease of $26,000, or 2%, from net income of $1,389,000 for the same period one year ago. 

For the quarter ended September 30, 2014, the Bank reported earnings per diluted share of $0.08, compared with $0.03 for the quarter ended June 30, 2014 and $0.08 for the quarter ended September 30, 2013.

For the nine months ended September 30, 2014, the Bank reported net income of $3,574,000, representing a $711,000, or 16.6%, decrease compared to net income of $4,285,000 for the same period one year ago. For the nine months ended September 30, 2014, the Bank reported earnings per diluted share of $0.20, compared to $0.23 for the nine months ended September 30, 2013.

For the quarter ended September 30, 2014, the Bank's annualized return on average assets and return on average equity were 1.04% and 9.42%, respectively, and compared to 0.40% and 3.53%, respectively, for the quarter ended June 30, 2014 and 1.18% and 10.50%, respectively, for the same period in 2013. For the nine months ended September 30, 2014, the Bank's annualized return on average assets and return on average equity were 0.94% and 8.41%, respectively, compared to 1.30% and 11.14%, respectively, for the same period in 2013.

Gene Galloway, Plaza Bank's President and Chief Executive Officer, stated, "Over the last 33 months, Plaza has had loan volume totaling approximately $550 million, or $16.5 million per month. This has led to continuous growth in the Bank's loan interest revenue which is up $2.0 million, or 11.5%, year-to-date compared to the same period in 2013. Additionally, Plaza's loans outstanding have grown $61 million, or 16%, since September 30, 2013."

In conclusion Mr. Galloway said, "Plaza's success in these challenging economic times is attributable to our loan generation teams and the support they get from the communities we serve. The key to our continuing success is staying true to who and what we are: a small business oriented community bank that provides excellent service and strives to exceed the expectations of our clients, shareholders and employees."

Highlights for the nine months and quarter ended September 30, 2014 included:

• Loan interest for the quarter ended September 30, 2014 was $6.6 million, an increase on both a linked quarter and year-over-year basis of $105,000 and $627,000, respectively.
• For the quarter, the Bank's loan portfolio yielded 6.05% and net interest margin ("NIM") was 4.61%. For the nine months ended September 30, 2014 the Bank's loan yield and NIM were 6.00% and 4.65%, respectively.
• Total loans outstanding grew by $14.5 million, or 3.4%, to $445.5 million during the quarter compared to the prior quarter. For the last twelve months, total loans increased by $61.3 million, or 16.0%.
• Loan originations increased in the third quarter on both a linked quarter and prior year same quarter basis to $67.9 million from $49.0 million and $43.8 million, respectively.
• For the quarter, net charge-offs totaled $66,000 and for the nine months the Bank has a net recovery of $17,000. Total provision expense for the nine months was $745,000.
• During the quarter, the Bank sold $15.4 million of SBA 7a loans that generated $1.1 million in gains, an increase in gain on sale income on both a linked quarter and year-over-year basis of $406,000 and $428,000, respectively.
• Total assets as of September 30, 2014 were $524.5 million, down $8.8 million, or1.6%, from the second quarter of 2014 and up $33.3 million, or 6.8%, year-to-date.
• Tangible book value per share at quarter-end was up $0.29, or 10%, to $3.16 compared to $2.87 a year earlier.

At September 30, 2014, the Bank exceeded all regulatory capital requirements with a ratio for tier 1 leverage capital of 10.11%, tier 1 risked-based capital of 11.68% and total risk-based capital of 12.93%. These capital ratios exceeded the "well capitalized" standards defined by the federal banking regulators of 5.00% for tier 1 leverage capital, 6.00% for tier 1 risked-based capital and 10.00% for total risk-based capital.

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.com or call President and CEO Gene Galloway at (949) 502-4309 or (702) 277-2221.

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 claims or changes in existing litigation or claims; 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.

Plaza Bank
Statement of Financial Condition
For the Quarter and Year Ended:
			September 30,				December 31,				September 30,
ASSETS			2014				2013				2013
			(unaudited)				(Audited)				(unaudited)
Cash and cash equivalents			$	47,877,000			$	39,315,000			$	46,488,000
Investment securities - available for sale				16,503,000				25,416,000				24,222,000
Loans held for sale				7,346,000				4,521,000				801,000
Loans held for investment				438,142,000				399,096,000				383,390,000
Allowance for possible credit losses				(5,758,000	)			(4,995,000	)			(4,599,000	)
Net loans held for investment				432,384,000				394,101,000				378,791,000
Goodwill and Other intangibles				6,066,000				5,692,000				5,816,000
Idemnification Asset				2,116,000				2,517,000				2,987,000
Accrued interest and Other Assets				12,238,000				19,702,000				14,527,000
TOTAL ASSETS			$	524,530,000			$	491,264,000			$	473,632,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing Demand			$	85,491,000			$	85,685,000			$	80,063,000
Savings, Now and Money Market Accounts				176,664,000				169,120,000				167,825,000
Time Deposits				178,902,000				145,779,000				149,751,000
	Total Deposits		$	441,057,000			$	400,584,000			$	397,639,000
Borrowings				18,000,000				31,000,000				18,000,000
Accrued Interest and Other Liabilities				7,287,000				5,644,000				4,719,000
	Total Liabilities			466,344,000				437,228,000				420,358,000
Total Stockholders' Equity				58,186,000				54,036,000				53,274,000
			$	524,530,000			$	491,264,000			$	473,632,000
BASIC BOOK VALUE PER SHARE			$	3.39			$	3.15			$	3.11
DILUTED BOOK VALUE PER SHARE			$	3.22			$	2.98			$	2.87
TANGIBLE BOOK VALUE PER SHARE			$	3.16			$	2.91			$	2.87
BASIC SHARES OUTSTANDING AT PERIOD END				17,139,300				17,130,739				17,130,739
DILUTED SHARES OUTSTANDING AT PERIOD END				18,083,879				18,117,148				18,577,184
Capital Ratios End of Period:
	Tier 1 leverage ratio			10.11	%			10.25	%			10.45	%
	Tier 1 risk-based capital ratio			11.68	%			11.22	%			12.15	%
	Risk-based capital ratio			12.93	%			12.43	%			13.34	%

 

Plaza Bank
Statement of Operations
			Quarter-to-Date			Quarter-to-Date			Quarter-to-Date			Year-to-Date			Year-to-Date
			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
			September 30,			June 30,			September 30,			September 30,			September 30,
			2014			2014			2013			2014			2013
	Loans		$	6,564,000		$	6,459,000		$	5,937,000		$	19,072,000		$	17,101,000
	Other interest-earning assets			147,000			156,000			136,000			468,000			390,000
		Net Interest Income		6,711,000			6,615,000			6,073,000			19,540,000			17,491,000
INTEREST EXPENSE:
	Transaction account deposits			261,000			242,000			242,000			748,000			653,000
	Retail certificates of deposit Provisions for Loan Losses			355,000			309,000			293,000			940,000			875,000
	Wholesale/Brokered certificates of deposit			140,000			146,000			176,000			438,000			491,000
				756,000			697,000			711,000			2,126,000			2,019,000
	FHLB and other borrowings			51,000			70,000			93,000			229,000			256,000
		Total interest expense		807,000			767,000			804,000			2,355,000			2,275,000
		NET INTEREST INCOME		5,904,000			5,848,000			5,269,000			17,185,000			15,216,000
PROVISION FOR LOAN LOSSES				228,000			498,000			181,000			745,000			826,000
NET INTEREST INCOME AFTER				5,676,000			5,350,000			5,088,000			16,440,000			14,390,000
NONINTEREST INCOME:
	Loan servicing and other fees			243,000			272,000			253,000			747,000			685,000
	Bank and other fee income			79,000			101,000			90,000			275,000			264,000
	Net gain (loss) from loan sales			1,110,000			704,000			682,000			2,736,000			2,572,000
	Net gain (loss) from other real estate owned sales			5,000			(121,000	)		(1,000	)		(116,000	)		109,000
	Net gain (loss) on sale of securities			-			-			-			(21,000	)		-
	Acquisition-related gain			-			-			624,000			-			624,000
	Other income			245,000			255,000			256,000			283,000			353,000
		Total noninterest (loss) income		1,682,000			1,082,000			1,888,000			4,400,000			5,426,000
NONINTEREST EXPENSE
	Compensation and benefits			3,082,000			2,816,000			2,876,000			8,843,000			8,268,000
	Premises and occupancy			326,000			320,000			378,000			974,000			1,039,000
	Data processing			254,000			256,000			282,000			761,000			745,000
	Other real estate owned expenses			1,000			2,000			2,000			4,000			151,000
	FDIC insurance premiums			74,000			72,000			66,000			212,000			211,000
	Professional Fees			566,000			1,161,000			462,000			2,019,000			1,036,000
	Marketing expense			127,000			105,000			92,000			356,000			286,000
	Office and postage expense			34,000			33,000			43,000			100,000			121,000
	Other expense			481,000			316,000			388,000			1,115,000			1,134,000
		Total noninterest expense		4,945,000			5,081,000			4,589,000			14,384,000			12,991,000
INCOME BEFORE INCOME TAXES				2,413,000			1,351,000			2,387,000			6,456,000			6,825,000
PROVISION FOR INCOME TAXES				1,050,000			850,000			998,000			2,882,000			2,540,000
NET INCOME			$	1,363,000		$	501,000		$	1,389,000		$	3,574,000		$	4,285,000
EARNINGS PER SHARE - BASIC			$	0.08		$	0.03			0.08		$	0.21		$	0.25
EARNINGS PER SHARE - DILUTED			$	0.08		$	0.03			0.08		$	0.20		$	0.23
BASIC WEIGHTED AVERAGE SHARES				17,139,300			17,137,514			17,121,826			17,137,348			17,101,048
DILUTED WEIGHTED AVERAGE SHARES				18,083,879			18,384,724			18,035,835			18,259,004			18,500,368
RETURN ON AVERAGE ASSETS				1.04	%		0.40	%		1.18	%		0.94	%		1.30	%
RETURN ON AVERAGE EQUITY				9.42	%		3.53	%		10.50	%		8.41	%		11.14	%
EFFICIENCY RATIO				64.48	%		72.54	%		63.36	%		65.89	%		62.17	%