SOURCE: Plaza Bank

Plaza Bank

October 19, 2016 12:38 ET

Plaza Bancorp, the Holding Company of Plaza Bank, Announces Financial Results for the Third Quarter Ended September 30, 2016 (unaudited)

IRVINE, CA--(Marketwired - Oct 19, 2016) -  Plaza Bancorp (OTCBB: PLZZ)

Third quarter 2016 highlights - compared to prior quarter

  • 51% annualized growth in deposits
  • Assets up 29% annualized to $1.2 billion
  • Loans held for investment increased $41 million
  • Net interest margin improved to 4.77%

Plaza Bancorp (OTCBB: PLZZ) (the "Company"), the holding company of Plaza Bank (the "Bank"), reported unaudited net income for the quarter ended September 30, 2016 of $2.8 million, or $0.09 per share on a diluted basis compared with $3.0 million, or $0.10 per diluted share for the second quarter of 2016. For the quarter ended September 30, 2016, the Company's annualized return on average assets was 1.00% and annualized return on average equity was 9.79%, down from an annualized return on average assets of 1.09% and an annualized return on average equity of 10.58% for the second quarter of 2016.

For the first nine months of 2016, the Company recorded net income of $8.1 million, or $0.27 per diluted share. For the same period in 2015, the Company recorded net income of $931,000, or $0.03, per diluted share. For the three quarters ended September 30, 2016, the Company's annualized return on average assets was 1.00% and annualized return on average equity was 9.64%, up from an annualized return on average assets of 0.18% and an annualized return on average equity of 3.19% for the same period in 2015. The Company's results for the first nine months of 2015 included $4.9 million in merger related expenses.

Gene Galloway, President and Chief Executive Officer of the Company and the Bank, commented on the third quarter results, stating "We are very pleased with the strong performance by our Bank's personnel to increase our total assets by $82 million or 7% during the quarter to $1.2 billion. The balance sheet growth was driven by the successful implementation of our plan to grow the three major deposit categories, non-interest checking, money market and certificates of deposit. These categories, during the third quarter, grew by $25 million, $81 million and $8 million, respectively, increasing our total deposits by $114 million or 13% over the second quarter of 2016."

Mr. Galloway concluded with, "Our loan production continued to be robust as our loan originations were $113 million in the third quarter. Additionally, our loan pipeline is strong and we expect to close out the year with another stellar loan production quarter."

Other highlights for quarter ended September 30, 2016 included:

  • Loans held for investment grew $40.8 million, or 17.1% annualized, to $997.1 million during the third quarter compared to loan growth of $37.8 million, or 16.5% annualized, for the second quarter of 2016
  • Loan originations by the Bank in the third quarter totaled $113.2 million, an increase of $29.3 million compared to the originations for the second quarter of 2016. Loan originations year-to-date total $283.7 million
  • Net interest income increased $892,000, or 7.4%, to $13.0 million for the third quarter of 2016 compared to $12.1 million for the second quarter of 2016
  • The Company's net interest margin ("NIM") increased in the third quarter to 4.77% compared to the prior linked quarter's NIM of 4.68%. The NIM for the first nine months of 2016 was 4.72%
  • The Company's loans held for investment to deposits ratio decreased from 105.9% as of June 30, 2016 to 98.0% as of September 30, 2016
  • Total revenues increased $280,000, or 1.7%, to $16.5 million for the third quarter of 2016 compared to $16.2 million for the second quarter of 2016
  • During the quarter, the Company realized a gain of $625,000 on the sale of $9.1 million of SBA 7(a) loans compared to a gain $1.2 million on the sale of $17.5 million of SBA 7(a) loans in the second quarter of 2016
  • Nonperforming assets totaled $2.0 million, or 0.17% of total assets at September 30, 2016 compared to $1.2 million, or 0.11% at June 30, 2016
  • The ratio of allowance for loan losses to total loans held for investment was 1.29% at September 30, 2016. Including the credit discount on acquired loans of $1.8 million in the ratio, the ratio increases to 1.47%
  • The Company's efficiency ratio for the quarter was 63% compared to the 62% for the second quarter in 2016
  • Tangible book value per diluted share increased $0.10 to $3.52 during the third quarter

Net interest income for the quarter ended September 30, 2016 totaled $13.0 million. Loan interest income totaled $14.5 million, the average total outstanding loans for the quarter were $981.6 million and the annualized yield was 5.86%. Interest expense related to deposits was $1.2 million for the quarter, or 49 basis points annualized. The interest expense related to the subordinated debentures for the quarter was $453,000, or 7.245% annualized.

The Company recorded a $494,000 provision for loan losses during the third quarter of 2016 principally as a result of the $40.8 million loan growth. For the third quarter, total charge-offs were $74,000 and recoveries were $25,000. Non-accrual loans net of discounts totaled $1.8 million at September 30, 2016 of which $652,000 is covered under a FDIC share-loss agreement or SBA guaranty. 

Non-interest income for the third quarter of 2016 was $1.8 million. Non-interest income for the third quarter is primarily comprised of a net gain from the sale of loans of $625,000, loan servicing income of $333,000, deposit fee income of $299,000, loan referral fee income of $92,000 and other fee income totaling $457,000.

Non-interest expense totaled $9.5 million for the third quarter of 2016. Compensation and benefits comprises approximately 65%, or $6.2 million, of the total non-interest expense. The Company had 161 full-time equivalent employees as of September 30, 2016.

For the third quarter of 2016, the Company's effective tax rate was 40.8% for a total tax expense of $1.9 million for the quarter.

At September 30, 2016, the Company had a tier 1 leverage capital ratio of 9.25%, common equity tier 1 capital ratio of 9.87%, tier 1 capital ratio of 9.87% and total capital ratio of 13.51%. At September 30, 2016, the Bank exceeded all regulatory capital requirements with a tier 1 leverage capital ratio of 10.86%, common equity tier 1 capital ratio of 11.57%, tier 1 capital ratio of 11.57% and total capital ratio of 12.82%. These capital ratios exceeded the "well capitalized" standards defined by the federal banking regulators of 5.00% for tier 1 leverage capital, 6.5% for common equity tier 1 capital, 8.00% for tier 1 capital and 10.00% for total capital.

                   
Plaza Bancorp   9/30/2016     6/30/2016     12/31/2015  
  Tier 1 leverage ratio   9.25 %   9.12 %   8.56 %
  Tier 1 capital ratio   9.87 %   9.76 %   9.35 %
  Common equity tier 1 capital ratio   9.87 %   9.76 %   9.35 %
  Total capital ratio   13.51 %   13.49 %   13.24 %
                   
Plaza Bank                  
  Tier 1 leverage ratio   10.86 %   10.97 %   10.48 %
  Tier 1 capital ratio   11.57 %   11.74 %   11.44 %
  Common equity tier 1 capital ratio   11.57 %   11.74 %   11.44 %
  Total capital ratio   12.82 %   12.99 %   12.70 %
                   

About Plaza Bancorp
Plaza Bancorp is the holding company of Plaza Bank. Plaza Bank is a full service community bank serving the business and professional communities in Southern California and Southern 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. Plaza Bank meets its customers' needs through its eight regional offices located in the cities of El Segundo, Glendale, Irvine, Las Vegas, Manhattan Beach, Montebello, Pasadena and San Diego. 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 Company, 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 Bancorp  
Consolidated Condensed Statements of Financial Condition  
(Unaudited)  
                 
(dollars in thousands) September 30,   June 30,   December 31,   September 30,  
ASSETS 2016   2016   2015   2015  
                         
Cash and cash equivalents $ 138,085   $ 92,203   $ 97,576   $ 135,225  
Investment securities - available for sale   25,570     28,467     28,215     29,149  
                         
Loans held for sale   3,338     2,720     4,535     4,972  
                         
Loans held for investment   997,051     956,229     882,199     829,280  
Allowance for loan losses   (12,856 )   (12,411 )   (11,506 )   (10,398 )
Net loans held for investment   984,195     943,818     870,693     818,882  
                         
Goodwill and other intangibles   9,134     9,298     9,692     9,895  
Mortgage servicing rights   2,929     2,968     2,719     2,552  
Indemnification asset   420     519     762     762  
Accrued interest and other assets   32,108     34,020     36,540     36,737  
                         
TOTAL ASSETS $ 1,195,779   $ 1,114,013   $ 1,050,732   $ 1,038,174  
                         
LIABILITIES AND EQUITY                        
                         
Deposits                        
  Noninterest-bearing demand $ 295,371   $ 270,000   $ 316,516   $ 295,096  
  Savings, now and money market accounts   477,265     396,277     355,515     357,899  
  Time deposits   244,407     236,617     211,998     221,863  
    Total Deposits   1,017,043     902,894     884,029     874,858  
                         
Borrowings   54,720     89,712     48,696     49,000  
Accrued interest and other liabilities   8,309     8,622     10,738     10,125  
    Total Liabilities   1,080,072     1,001,228     943,463     933,983  
                         
                         
Total stockholder's equity   115,707     112,785     107,269     104,191  
                         
TOTAL LIABILITIES AND EQUITY $ 1,195,779   $ 1,114,013   $ 1,050,732   $ 1,038,174  
                         
BASIC BOOK VALUE PER SHARE $ 3.85   $ 3.75   $ 3.57   $ 3.47  
                         
BASIC BOOK VALUE PER DILUTED SHARE $ 3.83   $ 3.73   $ 3.54   $ 3.42  
                         
TANGIBLE BOOK VALUE PER SHARE $ 3.55   $ 3.45   $ 3.25   $ 3.13  
                         
TANGIBLE BOOK VALUE PER DILUTED SHARE $ 3.52   $ 3.42   $ 3.22   $ 3.09  
                         
BASIC SHARES OUTSTANDING   30,039,244     30,039,244     30,034,244     30,040,003  
                         
DILUTED SHARES OUTSTANDING   30,244,080     30,228,651     30,296,867     30,473,026  
                         
                         
Capital Ratios:                        
      Tier 1 leverage ratio   9.25 %   9.12 %   8.56 %   8.27 %
      Tier 1 risk-based capital ratio   9.87 %   9.76 %   9.35 %   9.55 %
      Common equity tier 1 capital ratio   9.87 %   9.76 %   9.35 %   9.55 %
      Risk-based capital ratio   13.51 %   13.49 %   13.24 %   13.61 %
                         
                         
                         
Plaza Bancorp  
Consolidated Condensed Statements of Operations  
(Unaudited)  
                     
  Quarter-to-Date   Quarter-to-Date   Quarter-to-Date   Year-to-Date   Year-to-Date  
  September 30,   June 30,   September 30,   September 30,   September 30,  
  2016   2016   2015   2016   2015 *  
                               
(dollars in thousands)                              
Interest income $ 14,684   $ 13,685   $ 12,464   $ 41,553   $ 38,349  
Interest expense   1,705     1,598     1,462     4,792     3,561  
  Net Interest Income   12,979     12,087     11,002     36,761     34,788  
                               
Provision for loan losses   494     310     209     1,391     939  
Net interest income after provision for loan losses   12,485     11,777     10,793     35,370     33,849  
                               
Noninterest income   1,806     2,525     2,407     6,616     6,835  
Noninterest expense   9,549     9,304     9,428     28,567     33,080  
Income before income taxes   4,742     4,998     3,772     13,419     7,604  
Provision for income taxes   1,933     2,043     1,636     5,332     2,639  
Income from continuing operations   2,809     2,955     2,136     8,087     4,965  
                               
Loss on discontinued operations   -     -     (32 )   -     (3,698 )
                               
Net income before noncontrolling interest in Plaza Bank   2,809     2,955     2,104     8,087     1,267  
Less: Net income attributed to noncontrolling interest in Plaza Bank   -     -     -     -     (336 )
Net income $ 2,809   $ 2,955   $ 2,104   $ 8,087   $ 931  
                               
EARNINGS PER SHARE - BASIC $ 0.09   $ 0.10   $ 0.07   $ 0.27   $ 0.03  
                               
EARNINGS PER SHARE - DILUTED $ 0.09   $ 0.10   $ 0.07   $ 0.27   $ 0.03  
                               
BASIC WEIGHTED AVERAGE SHARES   30,039,244     30,038,145     29,587,799     30,037,218     29,597,394  
                               
DILUTED WEIGHTED AVERAGE SHARES   30,238,438     30,237,144     30,110,273     30,239,430     30,109,679  
                               
RETURN ON AVERAGE ASSETS   1.00 %   1.09 %   0.81 %   1.00 %   0.18 %
                               
RETURN ON AVERAGE EQUITY   9.79 %   10.58 %   8.18 %   9.64 %   3.19 %
                               
*Pooling of Interest with Manhattan Bancorp effected in June 2015  
   
   
   
Plaza Bancorp  
Loans Held for Investment Portfolio Composition  
(Unaudited)  
                       
  September 30,     June 30,     December 31,     September 30,  
  2016     2016     2015     2015  
(dollars in thousands)                              
Construction and land development $ 11,502     $ 15,259     $ 12,906     $ 11,394  
Commercial real estate and other   606,680       569,246       522,739       506,150  
Commercial   182,366       174,547       162,485       149,310  
Residential real estate   136,873       138,647       131,051       112,511  
Consumer   63,769       62,482       56,656       53,238  
Total   1,001,190       960,181       885,837       832,603  
Deferred loan fees and discounts, net of costs   (4,139 )     (3,952 )     (3,638 )     (3,323 )
Loans held for investment   997,051       956,229       882,199       829,280  
Allowance for loan losses   (12,856 )     (12,411 )     (11,506 )     (10,398 )
Total net loans $ 984,195     $ 943,818     $ 870,693     $ 818,882  
                               
                               
                               
Non-Performing Assets
         
    September 30,   June 30,   December 31,   September 30,
    2016   2016   2015   2015
(dollars in thousands)                        
Non-Accrual Assets                        
                         
Loans (net of discounts)   $ 1,768   $ 866   $ 1,236   $ 1,716
OREO     206     206     206     206
                         
Delinquent Loans (net of discounts)                        
30 - 89 days past due   $ 3,461   $ 492   $ 3,487   $ 667
90 days and greater     1,363     435     109     109

Contact Information

  • Media Contacts:
    Gene Galloway
    President and Chief Executive Officer
    (702) 277-2221 or (949) 502-4309
    Email Contact

    John Shindler
    Executive Vice President and Chief Financial Officer
    (949) 225-3704
    Email Contact