Plaza Bank Announces Financial Results for the Year and Quarter Ended December 31, 2014

IRVINE, CA--(Marketwired - Jan 28, 2015) - January 28, 2015: Plaza Bank (OTCBB: PLZB) (the "Bank") reported unaudited net income for the year ended December 31, 2014 of $5.2 million or $0.29 per share on a diluted basis, the same as the prior year period. For the year ended December 31, 2014, the Bank's return on average assets was 1.01% and return on average equity was 9.07%, down from a return on average assets of 1.16% and a return on average equity of 10.05% for 2013.

Net income for the quarter ended December 31, 2014 was $1.6 million or $0.09 per share on a diluted basis, a $683,000, or 72%, increase compared to the fourth quarter of 2013's results of $944,000 or $0.05 per share on a diluted basis. For the quarter ended December 31, 2014, the Bank's return on average assets was 1.22% and return on average equity was 10.96%, up from a return on average assets of 0.79% and a return on average equity of 6.97% for the 2013 comparable period.

Gene Galloway, President and Chief Executive Officer of Plaza Bank, commenting on the 2014 net income, stated, "Our 2014 income numbers were affected by legal expenses and a settlement accrual that total $1.0 million after taxes for an investigation involving a third party payment processor that was a depositor with the Bank from 2007 through 2010. We do not expect future legal expenses related to the investigation to be material."

Mr. Galloway further commented on the Bank's overall results, "We have benefitted by the improving economies in the two communities that we serve, Southern California and Clark County, Nevada. In 2014, our non-performing assets decreased by 52%, net interest income increased by 14%, or $3.0 million, and noninterest expenses were higher by 5.9%, or $1.0 million which includes the aforementioned legal fees and settlement accrual. Excluding the expenses and accrual related to the investigation from both years' noninterest expenses, the increase is only 2%."

In conclusion, Mr. Galloway stated, "I am looking forward to our upcoming merger with Bank of Manhattan, that was announced on January 14, 2015, and working with their staff."

Results for the full year of 2014 included:

• The Bank's net interest margin for the year was 4.70%, a slight decrease of 9 basis points compared to the prior year.
• Loan interest income increased 13.1% to $26.1 million in 2014 compared to the prior year's loan interest income of $23.1 million.
• Loans held for investment increased by $80.0 million, or 20.0%, in 2014 to $479.1 million from $399.1 million at the start of the year.
• New loan commitments for 2014 totaled $209.0 million.
• SBA 7A loan sales for 2014 totaled $50.0 million and generated gains on sale of $3.6 million.
• Total assets grew by 12.7%, or $62.5 million, in 2014, a decrease from asset growth in 2013 of 16.7%, or $70.4 million.
• Deposits grew by $62.6 million, or 12.7%, to $463.2 million during 2014 primarily driven by 52.1% and 9.8% increases in retail certificates of deposit and noninterest checking accounts, respectively.
• Net charge-off was $195,000, or 0.05% of the beginning of year's loans held for investment outstanding balance. Provision expense for the year was $1.3 million.
• Non-performing loans totaled $3.0 million, representing 0.62% of the Bank's loans held for investment, down from $5.5 million, or 1.37% of loans held for investments, at December 31, 2013.
• The Bank had no foreclosed real estate at December 31, 2014, compared to prior year-end foreclosed real estate balance of $666,000.
• The Bank's efficiency ratio improved from 64.4% for 2013 to 63.6% for 2014.
• The tangible book value per share at December 31, 2014 was $3.26, an increase of $0.35 over the prior year-end's value.

At December 31, 2014, the Bank exceeded all regulatory capital requirements with a ratio for tier 1 leverage capital of 10.28%, tier 1 risked-based capital of 11.28% and total risk-based capital of 12.55%. 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.

On January 14, 2015, Plaza announced the execution of a definitive agreement providing for the merger of Bank of Manhattan with and into Plaza Bank. The combined bank will continue to serve its Southern California and Southern Nevada customer base and all existing branches of both banks will remain open after the merger. On a pro forma basis, based on financial information as of December 31, 2014, the banks together have assets of approximately $1.0 billion, with deposits of approximately $850 million.

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:
			December 31,			September 30,					December 31,
ASSETS			2014				2014				2013
			(Unaudited)				(Unaudited)				(Audited)
Cash and cash equivalents			$	41,003,000			$	47,877,000			$	39,315,000
Investment securities - available for sale				16,492,000				16,503,000				25,416,000
Loans held for sale				3,159,000				7,346,000				4,521,000
Loans held for investment				479,086,000				438,142,000				399,096,000
Allowance for possible credit losses				(6,119,000	)			(5,758,000	)			(4,995,000	)
Net loans held for investment				472,967,000				432,384,000				394,101,000
Goodwill and Other intangibles				6,159,000				6,066,000				5,692,000
Idemnification Asset				1,920,000				2,116,000				2,517,000
Accrued interest and Other Assets				12,405,000				12,238,000				19,702,000
TOTAL ASSETS			$	554,105,000			$	524,530,000			$	491,264,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing Demand			$	94,164,000			$	85,491,000			$	85,685,000
Savings, Now and Money Market Accounts				169,893,000				176,664,000				169,120,000
Time Deposits				199,169,000				178,902,000				145,779,000
	Total Deposits		$	463,226,000			$	441,057,000			$	400,584,000
Borrowings				23,000,000				18,000,000				31,000,000
Accrued Interest and Other Liabilities				7,931,000				7,287,000				5,644,000
	Total Liabilities			494,157,000				466,344,000				437,228,000
Total Stockholders' Equity				59,948,000				58,186,000				54,036,000
			$	554,105,000			$	524,530,000			$	491,264,000
BASIC BOOK VALUE PER SHARE			$	3.49			$	3.39			$	3.15
DILUTED BOOK VALUE PER SHARE			$	3.31			$	3.22			$	2.98
TANGIBLE BOOK VALUE PER SHARE			$	3.26			$	3.16			$	2.91
BASIC SHARES OUTSTANDING AT PERIOD END				17,179,300				17,139,300				17,130,739
DILUTED SHARES OUTSTANDING AT PERIOD END				18,092,213				18,083,879				18,117,148
Capital Ratios End of Period:
	Tier 1 leverage ratio			10.27	%			10.12	%			10.25	%
	Tier 1 risk-based capital ratio			11.34	%			11.66	%			11.22	%
	Risk-based capital ratio			12.59	%			12.91	%			12.43	%

Plaza Bank
Statement of Operations
			Quarter-to-Date			Quarter-to-Date			Year-to-Date			Year-to-Date
			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
			December 31,			December 31,			December 31,			December 31,
			2014			2013			2014			2013
Interest Income				7,155,000			6,124,000			26,695,000			23,615,000
Interest Expense				836,000			794,000			3,191,000			3,069,000
	Net Interest Income		$	6,319,000		$	5,330,000		$	23,504,000		$	20,546,000
Provisions for Loan Losses				574,000			544,000			1,319,000			1,370,000
Net Interest Income after
	Provisions for Loan Losses			5,745,000			4,786,000			22,185,000			19,176,000
Noninterest Income				1,483,000			1,441,000			5,883,000			6,867,000
Noninterest Expense				4,530,000			4,875,000			18,914,000			17,866,000
Income before Income Taxes				2,698,000			1,352,000			9,154,000			8,177,000
Provisions for Income Taxes				1,071,000			408,000			3,953,000			2,948,000
Net Income			$	1,627,000		$	944,000		$	5,201,000		$	5,229,000
EARNINGS PER SHARE - BASIC				0.09			0.06			0.30			0.31
EARNINGS PER SHARE - DILUTED				0.09			0.05			0.29			0.29
BASIC WEIGHTED AVERAGE SHARES				17,168,974			17,130,739			17,145,319			17,108,532
DILUTED WEIGHTED AVERAGE SHARES				18,119,327			18,538,802			18,229,563			18,118,518

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 (unaudited) September 30, 2014			Quarter-to-Date (unaudited) June 30, 2014			Quarter-to-Date (unaudited) September 30, 2013			Year-to-Date (unaudited) September 30, 2014			Year-to-Date (unaudited) September 30, 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	%

Plaza Bank
Statement of Financial Condition
For the Quarter and Year Ended:
			December 31,			September 30,					December 31,
ASSETS			2013				2013				2012
			(Audited)				(Unaudited)				(Audited)
Cash and cash equivalents			$	39,315,000			$	46,488,000			$	41,668,000
Investment securities - available for sale				25,416,000				24,222,000				23,116,000
Loans held for sale				4,521,000				801,000				7,726,000
Loans held for investment				399,096,000				383,390,000				327,208,000
Allowance for possible credit losses				(4,995,000	)			(4,599,000	)			(3,909,000	)
Net loans held for investment				394,101,000				378,791,000				323,299,000
Goodwill and Other intangibles				5,692,000				5,816,000				5,347,000
Idemnification Asset				2,517,000				2,987,000				3,575,000
Accrued interest and Other Assets				19,702,000				14,527,000				15,812,000
TOTAL ASSETS			$	491,264,000			$	473,632,000			$	420,541,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing Demand			$	85,685,000			$	80,063,000			$	70,062,000
Savings, Now and Money Market Accounts				169,120,000				167,825,000				142,084,000
Time Deposits				145,779,000				149,751,000				140,522,000
	Total Deposits		$	400,584,000			$	397,639,000			$	352,668,000
Borrowings				31,000,000				18,000,000				12,000,000
Accrued Interest and Other Liabilities				5,644,000				4,719,000				7,091,000
	Total Liabilities			437,228,000				420,358,000				371,759,000
Total Stockholders' Equity				54,036,000				53,274,000				48,782,000
			$	491,264,000			$	473,632,000			$	420,541,000
BASIC BOOK VALUE PER SHARE			$	3.16			$	3.11			$	2.86
DILUTED BOOK VALUE PER SHARE			$	3.06			$	3.00			$	2.83
BASIC SHARES OUTSTANDING AT PERIOD END				17,130,739				17,130,739				17,084,010
DILUTED SHARES OUTSTANDING AT PERIOD END				18,117,148				17,751,910				17,226,800
Capital Ratios End of Period:
	Tier 1 leverage ratio			10.25	%			10.45	%			10.89	%
	Tier 1 risk-based capital ratio			11.22	%			12.12	%			13.05	%
	Risk-based capital ratio			12.43	%			13.32	%			14.23	%

 

Plaza Bank
Statement of Operations
			Quarter-to-Date			Quarter-to-Date			Year-to-Date			Year-to-Date
			(Unaudited)			(Unaudited)			(Audited)			(Audited)
			December 31,			December 31,			December 31,			December 31,
			2013			2012			2013			2012
Interest Income				6,124,000			5,072,000			23,615,000			18,487,000
Interest Expense				794,000			807,000			3,069,000			3,322,000
	Net Interest Income		$	5,330,000		$	4,265,000		$	20,546,000		$	15,165,000
Provisions for Loan Losses				544,000			865,000			1,370,000			2,317,000
Net Interest Income after
	Provisions for Loan Losses			4,786,000			3,400,000			19,176,000			12,848,000
Noninterest Income				1,441,000			1,588,000			6,867,000			5,925,000
Noninterest Expense				4,875,000			3,986,000			17,866,000			15,071,000
Income before Income Taxes				1,352,000			1,002,000			8,177,000			3,702,000
Provisions for Income Taxes				408,000			415,000			2,948,000			1,305,000
Net Income			$	944,000		$	587,000		$	5,229,000		$	2,397,000
EARNINGS PER SHARE - BASIC				0.06			0.03			0.31			0.14
EARNINGS PER SHARE - DILUTED				0.05			0.03			0.29			0.14
BASIC WEIGHTED AVERAGE SHARES				17,130,739			17,079,399			17,108,532			17,070,643
DILUTED WEIGHTED AVERAGE SHARES				18,538,802			17,226,800			18,118,518			17,229,450